Document:

lantronix_10k-ex1035.htm

Exhibit 10.35

 

 

LANTRONIX, INC.

 

2000 STOCK PLAN

 

Amended and Restated August 18, 2009

 

1.           Purposes of the Plan.  The purposes of this 2000 Stock Plan are:

 

	
  
	
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to attract and retain the best available personnel for positions of substantial responsibility,

 

	
  
	
·
	
to provide additional incentive to Employees, Directors and Consultants, and

 

	
  
	
·
	
to promote the success of the Company’s business.

 

Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant.  Restricted Stock and Restricted Stock Units also may be granted under the Plan.

 

2.           Definitions.  As used herein, the following definitions shall apply:

 

(a)           “Administrator” means the Board or any of its Committees as shall be administering the Plan, in accordance with Section 4 of the Plan.

 

(b)           “Applicable Laws” means the requirements relating to the administration of stock option plans under U. S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

 

(c)           “Award” means, individually or collectively, a grant under the Plan of Options, Restricted Stock or Restricted Stock Units.

 

(d)           “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan.  The Award Agreement
is subject to the terms and conditions of the Plan.

 

(e)           “Board” means the Board of Directors of the Company.

 

(f)           “Cause” means (i) any act of personal dishonesty taken by the Participant in connection with his responsibilities as an Employee which is intended to result in personal
enrichment of the Participant, (ii) the Participant’s conviction of a felony, (iii) any act by the Participant that constitutes misconduct, and (iv) continued violations by the Participant of the Participant’s obligations to the Company.

 

 

 

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(g)           “Change of Control” means the occurrence of any of the following events:

 

(i)      Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%)
or more of the total voting power represented by the Company’s then outstanding voting securities; or

 

(ii)      The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; or

 

(iii)      The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity or its parent) at least seventy percent (70%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

 

(h)           “Code” means the Internal Revenue Code of 1986, as amended.

 

(i)           “Committee” means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan.

 

(j)           “Common Stock” means the common stock of the Company.

 

(k)           “Company” means Lantronix, Inc., a Delaware corporation.

 

(l)           “Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.

 

(m)           “Director” means a member of the Board.

 

(n)           “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.

 

(o)           “Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company.  A Service Provider shall not cease
to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor.  For purposes of Incentive Stock Options, no such leave may exceed ninety days, unless reemployment upon expiration of such leave is guaranteed by statute or contract.  If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 181st
day of such leave any Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option.  Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

 

 

 

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(p)           “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(q)           “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

 

(i)      If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Market, the Nasdaq Global Select Market or the Nasdaq Capital Market, its Fair Market Value shall be the closing sales price for such stock
(or the closing bid, if no sales were reported) as quoted on such exchange or system for the market trading day on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

 

(ii)      If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the market trading day on the day
of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

 

(iii)     In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator.

 

(r)           “Imputed Value” means, with respect to any Nonstatutory Stock Option granted under Section 14 hereof, the value of the option on the applicable grant date as determined in accordance
with FAS 123R/ FASB ASC Topic 718 as the same may be amended from time to time.

 

(s)          “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

 

(t)           “Inside Director” means a Director who is an Employee.

 

(u)          “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

 

(v)          “Notice of Grant” means a written or electronic notice evidencing certain times and conditions of an individual Award grant.  The Notice of Grant is part of the Award Agreement.

 

(w)         “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

 

(x)          “Option” means a stock option granted pursuant to the Plan.

 

(y)          “Option Exchange Program” means a program whereby outstanding Options are surrendered in exchange for Options with a lower exercise price.

 

(z)          “Outside Director” means a Director who is not an Employee.

 

 

 

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(aa)           “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

 

(bb)          “Participant” means the holder or an outstanding Award granted under the Plan.

 

(cc)           “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture.  Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.

 

(dd)          “Plan” means this 2000 Stock Plan, as amended and restated.

 

(ee)           “Restricted Stock” means Shares issued pursuant to an Award of Restricted Stock under Section 11 of the Plan.

 

(ff)            “Restricted Stock Unit” means a bookkeeping entry representing one Share granted under Section 12 of the Plan.  Each Restricted Stock Unit represents an unfunded
and unsecured obligation of the Company.

 

(gg)          “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

 

(hh)          “Section 16(b)” means Section 16(b) of the Exchange Act.

 

(ii)            “Service Provider” means an Employee, Director or Consultant.

 

(jj)            “Share” means a share of the Common Stock, as adjusted in accordance with Section 15 of the Plan.

 

(kk)          “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code.

 

3.           Stock Subject to the Plan.  Subject to the provisions of Section 15 of the Plan, the maximum aggregate number of Shares which may be optioned and sold under the Plan is 1,000,000 Shares.  The
number of Shares reserved for issuance under the Plan shall increase annually on the first day of the Company’s fiscal year beginning in 2001 by an amount of Shares equal to the lesser of (i) 2,000,000 Shares, (ii) 5% of the outstanding Shares on such date or (iii) an amount determined by the Board.  The Shares may be authorized, but unissued, or reacquired Common Stock.

 

If an Option expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, or with respect to Restricted Stock and Restricted Stock Units, is forfeited to or repurchased by the Company, the unpurchased Shares (or for Restricted Stock and Restricted Stock
Units the forfeited or repurchased Shares) which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated).  Shares that have actually been issued under the Plan under any Award shall not be returned to the Plan and shall not become available for future distribution under the Plan; provided, however, that if unvested Shares of Restricted Stock or Restricted Stock Units are repurchased by the Company or are forfeited to the Company, such Shares
shall become available for future grant under the Plan.

 

 

 

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4.           Administration of the Plan.

 

(a)           Procedure.

 

(i)      Multiple Administrative Bodies.  The Plan may be administered by different Committees with respect to different groups of Service Providers.

 

(ii)     Section 162(m).  To the extent that the Administrator determines it to be desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of Section 162(m)
of the Code, the Plan shall be administered by a Committee of two or more “outside directors” within the meaning of Section 162(m) of the Code.

 

(iii)    Rule 16b-3.  To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.

 

(iv)    Other Administration.  Other than as provided above, the Plan shall be administered by (A) the Board or (B) a Committee, which committee shall be constituted to satisfy Applicable Laws.

 

(b)           Powers of the Administrator.  Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee,
the Administrator shall have the authority, in its discretion:

 

(i)      to determine the Fair Market Value;

 

(ii)     to select the Service Providers to whom Awards may be granted hereunder;

 

(iii)    to determine the number of shares of Common Stock to be covered by each Award granted hereunder;

 

(iv)    to approve forms of Award Agreements for use under the Plan;

 

(v)     to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder.  Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

 

 

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(vi)    to reduce the exercise price of any Option to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option shall have declined since the date the Option was granted;

 

(vii)   to institute an Option Exchange Program;

 

(viii)  to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

 

(ix)     to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to subplans established for the purpose of qualifying for preferred tax treatment under foreign tax laws;

 

(x)      to modify or amend each Award (subject to Section 18(c) of the Plan), including the discretionary authority to extend the post-termination exercisability period of Options longer than is otherwise provided for in the Plan;

 

(xi)     to allow Participants to satisfy tax withholding obligations by electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld.  The Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be determined.  All elections by a Participant to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable;

 

(xii)    to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;

 

(xiii)   to make all other determinations deemed necessary or advisable for administering the Plan.

 

(c)           Effect of Administrator’s Decision.  The Administrator’s decisions, determinations and interpretations shall be final and binding on all Participants and any other
holders of Awards.

 

5.           Eligibility.  Nonstatutory Stock Options, Restricted Stock and Restricted Stock Units may be granted to Service Providers.  Incentive Stock Options may be granted only
to Employees.

 

6.           Limitations.

 

(a)           Each Option shall be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.  However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect
to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options.  For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they were granted.  The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares
is granted.

 

 

 

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(b)           Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor shall they interfere in any way with the Participant’s right or
the Company’s right to terminate such relationship at any time, with or without Cause.

 

7.           Term of Plan.  Subject to Section 22 of the Plan, the Plan shall become effective upon its adoption by the Board.  It shall continue in effect for a term of ten
(10) years unless terminated earlier under Section 18 of the Plan.

 

8.           Term of Option.  The term of each Option shall be stated in the Option Agreement.  In the case of an Incentive Stock Option, the term shall be ten (10) years from
the date of grant or such shorter term as may be provided in the Option Agreement.  Moreover, in the case of an Incentive Stock Option granted to an Optionee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option shall be five (5) years from the date of grant or such shorter term as may be provided in the
Option Agreement.

 

9.           Option Exercise Price and Consideration.

 

(a)           Exercise Price.  The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator, subject to the following:

 

(i)      In the case of an Incentive Stock Option

 

(A)           granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price
shall be no less than 110% of the Fair Market Value per Share on the date of grant.

 

(B)           granted to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

 

(ii)     In the case of a Nonstatutory Stock Option, the per Share exercise price shall be determined by the Administrator.  In the case of a Nonstatutory Stock Option intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the
Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

 

(iii)    Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a merger or other corporate transaction.

 

(b)           Waiting Period and Exercise Dates.  At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any
conditions that must be satisfied before the Option may be exercised.

 

 

 

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(c)           Form of Consideration.  The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment.  In the case
of an Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at the time of grant.  Such consideration may consist entirely of:

 

(i)      cash;

 

(ii)     check;

 

(iii)    promissory note;

 

(iv)    other vested Shares owned by the Participant;

 

(v)     consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan;

 

(vi)    any combination of the foregoing methods of payment; or

 

(vii)   such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.

 

10.           Exercise of Option.

 

(a)           Procedure for Exercise; Rights as a Shareholder.  Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Award Agreement.  Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of absence.  An Option may not be exercised for a fraction of a Share.

 

An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised.  Full payment may
consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan.  Shares issued upon exercise of an Option shall be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse.  Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the Shares, notwithstanding the exercise of the Option.  The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised.  No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 16 of the Plan.

 

Exercising an Option in any manner shall decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

 

 

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(b)           Termination of Relationship as a Service Provider.  Subject to Section 16, if an Optionee ceases to be a Service Provider (but not in the event of an Optionee's change of
status from Employee to Consultant (in which case an Employee's Incentive Stock Option shall automatically convert to a Nonstatutory Stock Option on the ninety-first (91st) day following such change of status) or from Consultant to Employee), such Optionee may, but only within such period of time as is specified in the Option Agreement (but in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), exercise his or her Option to the extent that Optionee was entitled
to exercise it at the date of such termination.  In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the Optionee's termination.  If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan.  If, after termination, the Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

 

(c)           Disability of Participant.  If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may, but only within twelve (12) months
from the date of such termination (and in no event later than the expiration date of the term of such Option as set forth in the Award Agreement), exercise his or her Option to the extent that the Option is vested on the date of termination.  If, on the date of termination, the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan.  If, after termination, the Participant does not exercise his or her Option
within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

 

(d)           Death of Participant.  If a Participant dies while a Service Provider, the Option may be exercised at any time within twelve (12) months following the date of death (but in no
event later than the expiration of the term of such Option as set forth in the Notice of Grant), by the Participant’s estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death.  If, at the time of death, the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan.  The Option may be exercised
by the executor or administrator of the Participant’s estate or, if none, by the person(s) entitled to exercise the Option under the Participant’s will or the laws of descent or distribution.  If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

 

(e)           Buyout Provisions.  The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted based on such terms and conditions as the
Administrator shall establish and communicate to the Participant at the time that such offer is made.

 

11.           Restricted Stock.

 

(a)           Grant of Restricted Stock.  Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, shall determine.

 

 

 

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(b)           Restricted Stock Agreement.  Each Award of Restricted Stock shall be evidenced by an Award Agreement that shall specify the Period of Restriction, the number of Shares granted,
and such other terms and conditions as the Administrator, in its sole discretion, shall determine.  Unless the Administrator determines otherwise, Shares of Restricted Stock shall be held by the Company as escrow agent until the restrictions on such Shares have lapsed.

 

(c)           Transferability.  Except as provided in this Section 11, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until
the end of the applicable Period of Restriction.

 

(d)           Other Restrictions.  The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

 

(e)           Removal of Restrictions.  Except as otherwise provided in this Section 11, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan shall be released
from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine.  The Administrator, in its discretion, may accelerate the time at which any restrictions shall lapse or be removed.

 

(f)           Return of Restricted Stock to Company.  On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed shall revert to the Company
and again shall become available for grant under the Plan.

 

12.           Restricted Stock Units.

 

(a)           Grant.  Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator.  After the Administrator determines that it shall
grant Restricted Stock Units under the Plan, it shall advise the Participant in an Award Agreement of the terms, conditions, and restrictions related to the grant, including the number of Restricted Stock Units.

 

(b)           Vesting Criteria and Other Terms.  The Administrator shall set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, shall determine
the number of Restricted Stock Units that shall be paid out to the Participant.  The Administrator may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment or service), or any other basis determined by the Administrator in its discretion.

 

(c)           Earning Restricted Stock Units.  Upon meeting the applicable vesting criteria, the Participant shall be entitled to receive a payout as determined by the Administrator.  Notwithstanding
the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.

 

(d)           Form and Timing of Payment.  Payment of earned Restricted Stock Units shall be made as soon as practicable after the date(s) determined by the Administrator and set forth in
the Award Agreement.  Restricted Stock Units may only be settled in Shares.

 

 

 

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(e)           Cancellation.  On the date set forth in the Award Agreement, all unearned Restricted Stock Units shall be forfeited to the Company.

 

13.           Non-Transferability of Awards.  Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant.  If the Administrator makes an Award transferable, such Award shall contain such additional terms and conditions as the Administrator deems appropriate.

 

14.           Awards to Outside Directors.  Outside Directors shall be granted Awards in accordance with the following provisions:

 

(a)           General.  Outside Directors shall be entitled to receive all types of Awards (except Incentive Stock Options) under this Plan, including discretionary Awards not covered under
this Section 14.  All grants of Awards to Outside Directors pursuant to this Section shall be automatic and nondiscretionary (except that the Administrator may provide that Restricted Stock Units may be granted in lieu of Restricted Stock, subject to the same general terms and conditions, and shall be made in accordance with the following provisions:

 

(b)           Initial Award.  Each person who first becomes an Outside Director on or after the 2009 annual meeting of stockholders of the Company, whether through election by the stockholders
of the Company or appointment by the Board to fill a vacancy, automatically shall be granted Restricted Stock covering a number of Shares equal to the Director Equity Shares, as defined below or, at the prior request of the Outside Director and in lieu of such initial Restricted Stock Grant, a Nonstatutory Stock Option covering that number of Shares resulting in the Option having an Imputed Value of $50,000  (an “Initial Award”).  Notwithstanding
the foregoing, an Inside Director who ceases to be an Inside Director, but who remains a Director, shall not receive an Initial Award.

 

(c)           Annual Award.  Each Outside Director automatically shall be granted on the date of each annual meeting of stockholders of the Company held on and after the 2009 annual stockholders
meeting, Restricted Stock covering a number of Shares equal to the Director Equity Shares, as defined below, or, at the prior request of the Outside Director and in lieu of any such annual Restricted Stock Grant, a Nonstatutory Stock Option covering that number of Shares resulting in the Option having an Imputed Value of $50,000  (an “Annual Award”).

 

(d)           Terms.  The terms of Initial and Annual Awards granted pursuant to this Section 14 shall be as follows:

 

(i)      Restricted Stock granted under this Section 14 shall be issued for no cash consideration (par value shall be deemed paid through the provision of future services) and , to the extent not yet vested, shall be forfeited and automatically transferred to and reacquired by the Company
at no cost to the Company upon the date the Director ceases to provide services as a member of the Board (the “Forfeiture Provision”).

 

 

 

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(ii)      With respect to Restricted Stock granted as an Initial Award the Forfeiture Provision shall lapse as to one hundred percent (100%) of the Shares subject to the Initial Award on the one year anniversary of the grant date, provided that the Participant continues to serve as a Director
through such date.  Restricted Stock granted as the Initial Award shall cover a number of Shares determined by dividing (A) $50,000, by (B) the Fair Market Value of a Share on the date of grant, with the number of shares rounded up to the nearest whole Share (the “Director Equity Shares”).

 

(iii)     With respect to Restricted Stock granted as an Annual Award, the Forfeiture Provision shall lapse as to one hundred percent (100%) of the Shares subject to the Annual Award on the date that is one day prior to the next regularly scheduled annual meeting of stockholders of the Company
following the grant date, provided that the Participant continues to serve as a Director through such date.  Restricted Stock granted as the Annual Award shall cover a number of Shares equal to the Director Equity Shares.

 

(iv)     Nonstatutory Stock Options granted as Initial Awards and Annual Awards shall have the following terms and conditions:

 

(A)           the term of the Option shall be the lesser of ten (10) years or one year following the termination of the Participant’s service as a Director;

 

(B)           the exercise price per Share shall be 100% of the Fair Market Value per Share on the date of grant of the Option.

 

(C)           For Initial Awards, 50% of the Shares subject to the Option shall vest twelve months after the date of grant, and 1/24th of the remaining unvested Shares shall vest each month
thereafter, so as to be 100% vested three years following the grant date, subject to earlier 100% vesting acceleration upon the Company being acquired in a change of control transaction, provided that the Participant continues to serve as a Director through such dates.

 

(D)           For Annual Awards, 50% of the Shares subject to the Option shall on the day prior to the next year’s regularly scheduled annual stockholders meeting, and 1/24th of the
remaining unvested Shares shall vest each month thereafter, so as to be 100% vested approximately three years following the grant date, subject to earlier 100% vesting acceleration upon the Company being acquired in a change of control transaction, provided that the Participant continues to serve as a Director through such dates.

 

15.           Adjustments Upon Changes in Capitalization, Merger or Asset Sale.

 

(a)           Changes in Capitalization.  Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Award, and the
number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option or forfeiture or repurchase of Restricted Stock or Restricted Stock Units, as well as the price per share of Common Stock covered by each such outstanding Award, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company.  The conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Award.

 

 

 

12

 

 

(b)           Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Participant as soon as practicable prior
to the effective date of such proposed transaction.  The Administrator in its discretion may provide for a Participant to have the right to exercise his or her Option until fifteen (15) days prior to such transaction as to all of the Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable.  In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of an Option shall lapse as
to all such Shares, and all restrictions on Restricted Stock and Restricted Stock Units shall lapse, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated.  To the extent it has not been previously exercised, an Option shall terminate immediately prior to the consummation of such proposed action.

 

(c)           Merger or Asset Sale.  Subject to Section 16 below, in the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets
of the Company (a “Merger”), each outstanding Award shall be assumed or an equivalent award substituted by the successor corporation or a Parent or Subsidiary of the successor corporation (the “Successor Corporation”).  In the event that the Successor Corporation refuses to assume or substitute for the Award, the Participant shall fully vest in and
have the right to exercise the Option as to all of the Stock covered by the Option, including Shares as to which it would not otherwise be vested or exercisable, and all restrictions on Restricted Stock and Restricted Stock Units shall lapse.  If an Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Merger, the Administrator shall notify the Participant in writing or electronically that the Option shall be fully vested and exercisable for a period of
fifteen (15) days from the date of such notice, and the Option shall terminate upon the expiration of such period.  For the purposes of this Section 15(c), the Award shall be considered assumed if, following the Merger, the award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Merger, the consideration (whether stock, cash, or other securities or property) received in the Merger by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Merger is not solely common stock of the Successor Corporation or its Parent, the Administrator may, with the consent of the Successor Corporation, provide for the consideration to be received upon the exercise of the Option or upon the payout of a Restricted Stock Unit, for each Share
subject to such Award, to be solely common stock of the Successor Corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Merger.

 

 

 

13

 

 

16.           Change of Control.  In the event of a Change of Control, each outstanding Award granted to an Outside Director pursuant to Section 14 shall automatically and immediately
vest 100%.  If an Option becomes fully vested and exercisable as provided in this paragraph, the Administrator shall notify the Participant in writing or electronically that the Option shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the Option shall terminate upon the expiration of such period.

 

17.           Date of Grant.  The date of grant of an Award shall be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later
date as is determined by the Administrator.  Notice of the determination shall be provided to each Participant within a reasonable time after the date of such grant.

 

18.           Amendment and Termination of the Plan.

 

(a)           Amendment and Termination.  The Board may at any time amend, alter, suspend or terminate the Plan.

 

(b)           Shareholder Approval.  The Company shall obtain shareholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

 

(c)           Effect of Amendment or Termination.  No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant, unless mutually agreed otherwise
between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company.  Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

 

19.           Conditions Upon Issuance of Shares.

 

(a)           Legal Compliance.  Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares shall comply
with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.

 

(b)           Investment Representations.  As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

 

20.           Inability to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

 

 

14

 

 

21.           Reservation of Shares.  The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements
of the Plan.

 

22.           Shareholder Approval.  The Plan shall be subject to approval by the shareholders of the Company within twelve (12) months after the date the Plan is adopted.  Such
shareholder approval shall be obtained in the manner and to the degree required under Applicable Laws.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15Exhibit 4.4

 

DESARROLLADORA
HOMEX, S.A.B. DE C.V.,

 

 

AND

 

THE BANK OF NEW YORK MELLON,

 

as TRUSTEE

 

 

	
   

  	
  FORM OF INDENTURE

  
	
   

  	
   

  
	
   

  	
  Dated as of

  

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE ONE

  
	
   

  
	
  DEFINITIONS
  AND OTHER PROVISIONS

  
	
  OF
  GENERAL APPLICATION

  
	
   

  	
   

  	
   

  
	
  SECTION 101.

  	
  Definitions

  	
  1

  
	
   

  	
  Act

  	
  1

  
	
   

  	
  Additional Amounts

  	
  2

  
	
   

  	
  ADSs

  	
  2

  
	
   

  	
  ADS Deposit Agreement

  	
  2

  
	
   

  	
  ADS Depositary

  	
  2

  
	
   

  	
  Affiliate

  	
  2

  
	
   

  	
  Agent

  	
  2

  
	
   

  	
  Applicable Procedures

  	
  2

  
	
   

  	
  Authenticating Agent

  	
  2

  
	
   

  	
  Board of Directors

  	
  2

  
	
   

  	
  Board Resolution

  	
  2

  
	
   

  	
  Business Day

  	
  2

  
	
   

  	
  Closing Price

  	
  2

  
	
   

  	
  Commission

  	
  2

  
	
   

  	
  Common Shares

  	
  2

  
	
   

  	
  Common Stock

  	
  2

  
	
   

  	
  Company

  	
  3

  
	
   

  	
  Company Order or Company
  Request

  	
  3

  
	
   

  	
  Constituent Person

  	
  3

  
	
   

  	
  Conversion Agent

  	
  3

  
	
   

  	
  Conversion Rate

  	
  3

  
	
   

  	
  Convertible Security

  	
  3

  
	
   

  	
  Corporate Trust Office

  	
  3

  
	
   

  	
  Covenant Defeasance

  	
  3

  
	
   

  	
  Defaulted Interest

  	
  3

  
	
   

  	
  Defeasance

  	
  3

  
	
   

  	
  Depositary

  	
  3

  
	
   

  	
  Dollar and $

  	
  3

  
	
   

  	
  Event of Default

  	
  3

  
	
   

  	
  Excess Payments

  	
  3

  
	
   

  	
  Exchange Act

  	
  3

  
	
   

  	
  Expiration Date

  	
  3

  
	
   

  	
  Global Security

  	
  4

  
	
   

  	
  Holder

  	
  4

  
	
   

  	
  Indebtedness

  	
  4

  
	
   

  	
  Indenture

  	
  4

  
	
   

  	
  Interest Payment Date

  	
  4

  
	
   

  	
  Judgment Currency

  	
  4

  
	
   

  	
  Material Subsidiary

  	
  4

  
	
   

  	
  Maturity

  	
  4

  
	
   

  	
  Mexican Taxes

  	
  4

  
	
   

  	
  Non-electing Share

  	
  4

  

 

i

 

	
   

  	
  Notice of Default

  	
  4

  
	
   

  	
  Obligations

  	
  4

  
	
   

  	
  Officer

  	
  4

  
	
   

  	
  Officers’ Certificate

  	
  5

  
	
   

  	
  Opinion of Counsel

  	
  5

  
	
   

  	
  Original Issue Discount Security

  	
  5

  
	
   

  	
  Outstanding

  	
  5

  
	
   

  	
  Paying Agent

  	
  5

  
	
   

  	
  Person

  	
  5

  
	
   

  	
  Place of Payment

  	
  6

  
	
   

  	
  Predecessor Security

  	
  6

  
	
   

  	
  Redemption Date

  	
  6

  
	
   

  	
  Redemption Price

  	
  6

  
	
   

  	
  Reference Date

  	
  6

  
	
   

  	
  Regular Record Date

  	
  6

  
	
   

  	
  Rule I.3.22.8

  	
  6

  
	
   

  	
  Securities

  	
  6

  
	
   

  	
  Securities Act

  	
  6

  
	
   

  	
  Security Register and
  Security Registrar

  	
  6

  
	
   

  	
  Special Record Date

  	
  6

  
	
   

  	
  Stated Maturity

  	
  6

  
	
   

  	
  Subsidiary

  	
  6

  
	
   

  	
  Trading Day

  	
  6

  
	
   

  	
  Trigger Event

  	
  6

  
	
   

  	
  Trust Indenture Act

  	
  6

  
	
   

  	
  Trustee

  	
  6

  
	
   

  	
  Trust Officer

  	
  7

  
	
   

  	
  United States

  	
  7

  
	
   

  	
  U.S. Government Obligation

  	
  7

  
	
   

  	
  Vice President

  	
  7

  
	
  SECTION 102.

  	
  Compliance Certificates and Opinions

  	
  7

  
	
  SECTION 103.

  	
  Form of Documents Delivered to Trustee

  	
  7

  
	
  SECTION 104.

  	
  Acts of Holders; Record Dates

  	
  8

  
	
  SECTION 105.

  	
  Notices, Etc., to Trustee and the Company

  	
  9

  
	
  SECTION 106.

  	
  Notice to Holders; Waiver

  	
  9

  
	
  SECTION 107.

  	
  Conflict with Trust Indenture Act

  	
  10

  
	
  SECTION 108.

  	
  Effect of Headings and Table of Contents

  	
  10

  
	
  SECTION 109.

  	
  Successors and Assigns

  	
  10

  
	
  SECTION 110.

  	
  Separability Clause

  	
  10

  
	
  SECTION 111.

  	
  Benefits of Indenture

  	
  10

  
	
  SECTION 112.

  	
  Counterparts

  	
  10

  
	
  SECTION 113.

  	
  Governing Law

  	
  10

  
	
  SECTION 114.

  	
  Legal Holidays

  	
  11

  
	
  SECTION 115.

  	
  Consent to Service; Jurisdiction

  	
  11

  
	
  SECTION 116.

  	
  Language of Notices, Etc.

  	
  11

  
	
  SECTION 117.

  	
  Waiver of Jury Trial

  	
  11

  
	
  SECTION 118.

  	
  No Recourse Against Others

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  
	
   

  	
   

  	
   

  
	
  SECURITY
  FORMS

  
	
   

  	
   

  	
   

  
	
  SECTION 201.

  	
  Forms Generally

  	
  11

  
	
  SECTION 202.

  	
  Form of Face of Security

  	
  12

  

 

ii

 

	
  SECTION 203.

  	
  Form of Reverse of Security

  	
  13

  
	
  SECTION 204.

  	
  Form of Trustee’s Certificate of Authentication

  	
  18

  
	
  SECTION 205.

  	
  Form of Conversion Notice

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  
	
   

  	
   

  	
   

  
	
  THE
  SECURITIES

  
	
   

  	
   

  	
   

  
	
  SECTION 301.

  	
  Amount Unlimited; Issuable in Series

  	
  19

  
	
  SECTION 302.

  	
  Denominations

  	
  21

  
	
  SECTION 303.

  	
  Execution, Authentication, Delivery and Dating

  	
  22

  
	
  SECTION 304.

  	
  Temporary Securities

  	
  23

  
	
  SECTION 305.

  	
  Registration, Registration of Transfer and Exchange

  	
  23

  
	
  SECTION 306.

  	
  Mutilated, Destroyed, Lost and Stolen Securities

  	
  25

  
	
  SECTION 307.

  	
  Payment of Interest; Interest Rights Preserved

  	
  25

  
	
  SECTION 308.

  	
  Persons Deemed Owners

  	
  26

  
	
  SECTION 309.

  	
  Cancellation

  	
  26

  
	
  SECTION 310.

  	
  Computation of Interest

  	
  27

  
	
  SECTION 311.

  	
  CUSIP Numbers

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR

  
	
   

  	
   

  	
   

  
	
  SATISFACTION
  AND DISCHARGE

  
	
   

  	
   

  	
   

  
	
  SECTION 401.

  	
  Satisfaction and Discharge of Indenture

  	
  27

  
	
  SECTION 402.

  	
  Application of Trust Money

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  
	
   

  	
   

  	
   

  
	
  REMEDIES

  
	
   

  	
   

  	
   

  
	
  SECTION 501.

  	
  Events of Default

  	
  28

  
	
  SECTION 502.

  	
  Acceleration of Maturity; Rescission and Annulment

  	
  29

  
	
  SECTION 503.

  	
  Collection of Indebtedness and Suits for Enforcement
  by Trustee

  	
  30

  
	
  SECTION 504.

  	
  Trustee May File Proofs of Claim

  	
  30

  
	
  SECTION 505.

  	
  Trustee May Enforce Claims Without Possession
  of Securities

  	
  31

  
	
  SECTION 506.

  	
  Application of Money Collected

  	
  31

  
	
  SECTION 507.

  	
  Limitation on Suits

  	
  31

  
	
  SECTION 508.

  	
  Unconditional Right of Holders to Receive Principal,
  Premium and Interest and to Convert

  	
  32

  
	
  SECTION 509.

  	
  Restoration of Rights and Remedies

  	
  32

  
	
  SECTION 510.

  	
  Rights and Remedies Cumulative

  	
  32

  
	
  SECTION 511.

  	
  Delay or Omission Not Waiver

  	
  32

  
	
  SECTION 512.

  	
  Control by Holders

  	
  32

  
	
  SECTION 513.

  	
  Waiver of Past Defaults

  	
  33

  
	
  SECTION 514.

  	
  Undertaking for Costs

  	
  33

  
	
  SECTION 515.

  	
  Waiver of Usury, Stay or Extension Laws

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  
	
   

  	
   

  	
   

  
	
  THE
  TRUSTEE

  
	
   

  	
   

  	
   

  
	
  SECTION 601.

  	
  Certain Duties and Responsibilities

  	
  33

  

 

iii

 

	
  SECTION 602.

  	
  Notice of Defaults

  	
  33

  
	
  SECTION 603.

  	
  Certain Rights of Trustee

  	
  34

  
	
  SECTION 604.

  	
  Not Responsible for Recitals or Issuance of
  Securities

  	
  34

  
	
  SECTION 605.

  	
  May Hold Securities

  	
  35

  
	
  SECTION 606.

  	
  Money Held in Trust

  	
  35

  
	
  SECTION 607.

  	
  Compensation and Reimbursement

  	
  35

  
	
  SECTION 608.

  	
  Disqualification; Conflicting Interests

  	
  35

  
	
  SECTION 609.

  	
  Corporate Trustee Required; Eligibility

  	
  36

  
	
  SECTION 610.

  	
  Resignation and Removal; Appointment of Successor

  	
  36

  
	
  SECTION 611.

  	
  Acceptance of Appointment by Successor

  	
  37

  
	
  SECTION 612.

  	
  Merger, Conversion, Consolidation or Succession to
  Business

  	
  37

  
	
  SECTION 613.

  	
  Preferential Collection of Claims Against Company

  	
  38

  
	
  SECTION 614.

  	
  Appointment of Authenticating Agent

  	
  38

  
	
  SECTION 615.

  	
  Trustee’s Application for Instructions from the
  Company

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  
	
   

  	
   

  	
   

  
	
  HOLDERS’
  LISTS AND REPORTS BY TRUSTEE AND COMPANY

  
	
   

  	
   

  	
   

  
	
  SECTION 701.

  	
  Company to Furnish Trustee Names and Addresses of
  Holders

  	
  39

  
	
  SECTION 702.

  	
  Preservation of Information; Communications to
  Holders

  	
  39

  
	
  SECTION 703.

  	
  Reports by Trustee

  	
  40

  
	
  SECTION 704.

  	
  Reports by Company

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  
	
   

  	
   

  	
   

  
	
  CONSOLIDATION,
  MERGERS AND SALES

  
	
   

  	
   

  	
   

  
	
  SECTION 801.

  	
  Company May Consolidate, Etc., Only on Certain
  Terms

  	
  40

  
	
  SECTION 802.

  	
  Successor Substituted

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  
	
   

  	
   

  	
   

  
	
  SUPPLEMENTAL
  INDENTURES

  
	
   

  	
   

  	
   

  
	
  SECTION 901.

  	
  Supplemental Indentures Without Consent of Holders

  	
  41

  
	
  SECTION 902.

  	
  Supplemental Indentures With Consent of Holders

  	
  42

  
	
  SECTION 903.

  	
  Execution of Supplemental Indentures

  	
  43

  
	
  SECTION 904.

  	
  Effect of Supplemental Indentures

  	
  43

  
	
  SECTION 905.

  	
  Conformity with Trust Indenture Act

  	
  43

  
	
  SECTION 906.

  	
  Reference in Securities to Supplemental Indentures

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  
	
   

  	
   

  	
   

  
	
  SECTION 1001.

  	
  Payment of Principal, Premium and Interest

  	
  43

  
	
  SECTION 1002.

  	
  Maintenance of Office or Agency

  	
  44

  
	
  SECTION 1003.

  	
  Money for Securities Payments to Be Held in Trust

  	
  44

  
	
  SECTION 1004.

  	
  Statement by Officers as to Default

  	
  45

  
	
  SECTION 1005.

  	
  Existence

  	
  45

  
	
  SECTION 1006.

  	
  Waiver of Certain Covenants

  	
  45

  
	
  SECTION 1007.

  	
  Calculation of Original Issue Discount

  	
  45

  

 

iv

 

	
  SECTION 1008.

  	
  Payment of Additional Amounts

  	
  46

  
	
  SECTION 1009.

  	
  Indemnification of Judgment Currency

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN

  
	
   

  	
   

  	
   

  
	
  REDEMPTION
  OF SECURITIES

  
	
   

  	
   

  	
   

  
	
  SECTION 1101.

  	
  Right of Redemption

  	
  50

  
	
  SECTION 1102.

  	
  Notice of Redemption

  	
  50

  
	
  SECTION 1103.

  	
  Deposit of Redemption Price

  	
  51

  
	
  SECTION 1104.

  	
  Securities Payable on Redemption Date

  	
  51

  
	
  SECTION 1105.

  	
  Securities Redeemed in Part

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWELVE

  
	
   

  	
   

  	
   

  
	
  CONVERSION
  OF CONVERTIBLE SECURITIES

  
	
   

  	
   

  	
   

  
	
  SECTION 1201.

  	
  Conversion Privilege and Conversion Rate

  	
  52

  
	
  SECTION 1202.

  	
  Exercise of Conversion Privilege

  	
  52

  
	
  SECTION 1203.

  	
  Fractions of ADSs

  	
  53

  
	
  SECTION 1204.

  	
  Adjustment of Conversion Rate

  	
  53

  
	
  SECTION 1205.

  	
  Notice of Adjustments of Conversion Rate

  	
  56

  
	
  SECTION 1206.

  	
  Notice of Certain Corporate Action

  	
  56

  
	
  SECTION 1207.

  	
  Company to Reserve Common Shares; Depositary to
  Register ADSs[; Listing on NYSE]

  	
  57

  
	
  SECTION 1208.

  	
  Taxes and Fees on Conversions

  	
  57

  
	
  SECTION 1209.

  	
  Covenant as to Common Shares

  	
  58

  
	
  SECTION 1210.

  	
  Cancellation of Converted Convertible Securities

  	
  58

  
	
  SECTION 1211.

  	
  Provision in Case of Consolidation, Merger or Sale
  of Assets

  	
  58

  
	
  SECTION 1212.

  	
  Responsibility of Trustee for Conversion Provisions

  	
  59

  
	
  SECTION 1213.

  	
  Termination of Deposit Agreement

  	
  59

  
	
   

  	
   

  	
   

  
	
  ARTICLE THIRTEEN

  
	
   

  	
   

  	
   

  
	
  DEFEASANCE
  AND COVENANT DEFEASANCE

  
	
   

  	
   

  	
   

  
	
  SECTION 1301.

  	
  Company’s Option to Effect Defeasance or Covenant
  Defeasance

  	
  59

  
	
  SECTION 1302.

  	
  Defeasance and Discharge

  	
  59

  
	
  SECTION 1303.

  	
  Covenant Defeasance

  	
  60

  
	
  SECTION 1304.

  	
  Conditions to Defeasance or Covenant Defeasance

  	
  60

  
	
  SECTION 1305.

  	
  Repayment to Company

  	
  61

  
	
  SECTION 1306.

  	
  Deposited Money and U.S. Government Obligations to
  Be Held in Trust; Miscellaneous Provisions

  	
  61

  
	
  SECTION 1307.

  	
  Reinstatement

  	
  62

  

 

NOTE:  This table of contents shall not, for any
purpose, be deemed to be a part of the Indenture.

 

v

 

INDENTURE, dated as of
                          ,
between Desarrolladora Homex, S.A.B. de C.V., a corporation (sociedad anónima bursatil de capital variable)
organized and existing under the
laws of the United Mexican States (“Mexico”) (herein called the “Company”),
having its principal office at Boulevard Alfonso Zaragoza M. 2204 Norte,
Fraccionamiento Bonanza 80020, Culiacán, México, and The Bank of New York
Mellon, a corporation duly organized and existing under the laws of the State
of New York authorized to conduct a banking business, as Trustee (herein called
the “Trustee”).

 

RECITALS OF THE COMPANY

 

The Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of its debt securities (herein called the “Securities”),
to be issued in one or more series as in this Indenture provided.

 

All things necessary to make
this Indenture a valid agreement of the Company in accordance with its terms,
have been done.

 

NOW, THEREFORE, THIS
INDENTURE WITNESSETH:

 

For and in consideration of
the premises and the purchase of the Securities by the Holders thereof, it is
mutually agreed, for the equal and proportionate benefit of all Holders of the
Securities or of series thereof, as follows:

 

ARTICLE ONE

 

DEFINITIONS
AND OTHER PROVISIONS

OF
GENERAL APPLICATION

 

SECTION 101.      Definitions.

 

For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:

 

(1)           the terms defined in this Article have
the meanings assigned to them in this Article and include the plural as
well as the singular;

 

(2)           all other terms used herein which are
defined in the Trust Indenture Act, either directly or by reference therein,
have the meanings assigned to them therein;

 

(3)           all accounting terms not otherwise
defined herein have the meanings assigned to them in accordance with generally
accepted accounting principles in Mexico, and, except as otherwise herein
expressly provided, the term “generally accepted accounting principles” with respect
to any computation required or permitted hereunder shall mean such accounting
principles as are generally accepted in Mexico at the date of such computation;

 

(4)           unless the context otherwise
requires, any reference to an “Article” or a “Section” refers to an Article or
a Section, as the case may be, of this Indenture;

 

(5)           unless the context otherwise
requires, any reference to a statute, rule or regulation refers to the
same (including any successor statute, rule or regulation thereto) as it may
be amended from time to time; and

 

(6)           the words “herein”, “hereof” and “hereunder”
and other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.

 

“Act”, when used with
respect to any Holder, has the meaning specified in Section 104.

 

 

“Additional Amounts” has the
meaning specified in Section 1008.

 

“ADSs” means
American Depositary Shares, each initially representing six Common Shares.

 

“ADS Deposit
Agreement” means the Deposit Agreement dated as of June 28, 2004, amended
and restated as of September 29, 2005, among the Company, JPMorgan Chase
Bank, N.A., as depositary, and all holders from time to time of American
Depositary Receipts issued thereunder, as such agreement may be amended from
time to time.

 

“ADS
Depositary” means JPMorgan Chase Bank, N.A., as depositary under the ADS
Deposit Agreement, until a successor ADS Depositary shall have become such
pursuant to such agreement, and thereafter “ADS Depositary” shall mean such
successor ADS Depositary.

 

“Affiliate”
means, with respect to any specified Person, any other Person who directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such specified Person.  For purposes of this definition, the term “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.  For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” have correlative meanings.

 

“Agent” means any Paying
Agent, Security Registrar, Conversion Agent, Authenticating Agent or other
agent appointed pursuant to this Indenture.

 

“Applicable Procedures” of a
Depositary means, with respect to any matter at any time, the policies and
procedures of such Depositary, if any, that are applicable to such matter at
such time.

 

“Authenticating Agent” means
any Person authorized by the Trustee pursuant to Section 614 to act on
behalf of the Trustee to authenticate Securities of one or more series.

 

“Board of Directors” means,
as to any Person, the board of directors, management committee or similar
governing body of such Person or any duly authorized committee thereof.

 

“Board Resolution” means,
with respect to any Person, a copy of a resolution certified by the Secretary
or an Assistant Secretary of such Person to have been duly adopted by the Board
of Directors of such Person and to be in full force and effect on the date of
such certification, and delivered to the Trustee.

 

“Business Day” means a day
other than a Saturday, Sunday or other day on which (i) commercial banking
institutions in the City of New York or Mexico are authorized or required by
law or executive order to close.

 

“Closing Price” on any
Trading Day with respect to the per share price of ADSs means the last reported
sales price regular way or, in case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices regular way, in
either case on the New York Stock Exchange as reported in The Wall Street
Journal (or other similar newspaper). If the ADS Deposit Agreement is
terminated for any reason, Closing Price shall refer to the last reported sales
price quoted for the Common Shares on the Mexican Stock Exchange, converted
into U.S. Dollars at the noon exchange rate published by the Federal Reserve
Bank of New York on that date, and if no such rate is published by the Federal
Reserve Bank of New York, at the average of the bid and asked exchange rates
quoted by Banco de México on such date.

 

“Commission” means the U.S.
Securities and Exchange Commission, from time to time constituted, created
under the Exchange Act, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now
assigned to it under applicable law, then the body performing such duties at
such time.

 

“Common Shares” means the
shares of Common Stock, without par value, of the Company.

 

“Common Stock” of any Person
means any and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or non-voting) of such
Person’s common equity interests,

 

2

 

whether outstanding on the issue
date of the securities or issued after the issue date of the securities, and
includes, without limitation, all series and classes of such common equity
interests.

 

“Company” means the Person
named as the “Company” in the first paragraph of this instrument until a
successor Person shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter “Company” shall mean such successor Person.

 

“Company Order” or “Company
Request” means a written request or order signed in the name of the Company by
two Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company.

 

“Constituent Person” has the
meaning specified in Section 1211.

 

“Conversion Agent” has the
meaning specified in Section 1202.

 

“Conversion Rate” has the
meaning specified in Section 1201.

 

“Convertible Security” means
any Security that by its terms may be converted at the option of the Holder
thereof into ADSs in accordance with the provisions of Article Twelve.

 

“Corporate Trust Office”
means the office of the Trustee in New York, New York at which at any
particular time its corporate trust business shall be principally administered,
which office at the date hereof is located at 101 Barclay Street, New York, New
York 10286, Attn:  Corporate Trust
Administration:  Desarrolladora Homex,
S.A.B. de C.V., or any other address that the Trustee may designate with
respect to itself from time to time by notice to the Company and the Holders.

 

“Covenant Defeasance” has
the meaning specified in Section 1303.

 

“Defaulted Interest” has the
meaning specified in Section 307.

 

“Defeasance” has the meaning
specified in Section 1302.

 

“Depositary” means The
Depository Trust Company until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter “Depositary”
shall mean such successor Depositary.

 

“Dollar” and “$” mean a U.S.
Dollar or other equivalent unit in such coin or currency of the United States
of America as at the time shall be legal tender for the payment of public and
private debts.

 

“Event of Default” has the
meaning specified in Section 501.

 

“Excess Payments” means the
excess of (A) the aggregate of the cash and fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
evidence of such fair market value and described in a Board Resolution
delivered to the Trustee) or other consideration paid by the Company or any of
its Subsidiaries with respect to the Common Shares acquired in a tender or
exchange offer over (B) the price of a share of the relevant series of
Common Shares (as reported on the principal securities exchange on which such
series of Common Shares are listed) on the Trading Day immediately following
the completion of the tender or exchange offer multiplied by the number of
acquired shares.

 

“Exchange Act” means the
U.S. Securities Exchange Act of 1934 and any successor statute thereto, in each
case as amended from time to time.

 

“Expiration Date” has the
meaning specified in Section 104.

 

3

 

“Global Security” means a
Security that evidences all or part of the Securities of any series and bears
the legend set forth in Section 202 (or such legend as may be specified as
contemplated by Section 301 for such Securities).

 

“Holder” means a Person in
whose name a Security is registered in the Security Register.

 

“Indebtedness”
means any obligation, or the guarantee of any obligation, for the payment or
repayment of money borrowed, or otherwise evidenced by debentures, notes, bonds
or similar instruments.

 

“Indenture” means this
instrument as originally executed and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, including, for all purposes
of this instrument and any such supplemental indenture, the provisions of the
Trust Indenture Act that are deemed to be a part of and govern this instrument
and any such supplemental indenture, respectively.  The term “Indenture” shall also include the
terms of particular series of Securities established as contemplated by Section 301.

 

“Interest Payment Date”,
when used with respect to any Security, means the Stated Maturity of an
installment of interest on such Security.

 

“Judgment Currency” has the
meaning specified in Section 1009.

 

“Material Subsidiary” means
a Subsidiary of the Company constituting a “Significant Subsidiary” of the
Company in accordance with Rule 1-02(w) of Regulation S-X under the Securities
Act in effect on the date hereof.

 

“Maturity”, when used with
respect to any Security, means the date on which the principal of such Security
or an installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration,
call for redemption or otherwise.

 

“Mexican Taxes” has the
meaning specified in Section 1008.

 

“Non-electing Share” has the
meaning specified in Section 1211.

 

“Notice of Default” means a
written notice of the kind specified in Section 501.

 

“Obligations” means, with
respect to any Indebtedness, any principal, interest (including, without
limitation, all interest accrued or accruing after the commencement of any
insolvency or liquidation proceeding (and interest that would accrue but for
the commencement of any insolvency or liquidation proceeding) in accordance
with and at the contract rate (including, without limitation, any rate
applicable upon default) specified in the agreement or instrument creating,
evidencing or governing any Indebtedness, whether or not, pursuant to
applicable law or otherwise, the claim for such interest is allowed as a claim
in such insolvency or  liquidation
proceeding), penalties, fees, indemnifications, reimbursements, damages, and
other liabilities payable under the documentation governing such Indebtedness,
including in the case of the Securities, this Indenture.

 

“Officer” means, when used
in connection with any action to be taken by the Company, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Financial Officer,
the General Counsel, any Vice President, the Treasurer, the Controller or the
Secretary of the Company.

 

4

 

“Officers’ Certificate”
means, when used in connection with any action to be taken by the Company, a
certificate signed by any two Officers or by any Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company, and delivered to
the Trustee.

 

“Opinion of Counsel”  means a written opinion of counsel, who
may be an employee of or counsel for the Company (except as otherwise provided
in this Indenture) and which opinion shall be reasonably acceptable to the
Trustee.

 

“Original Issue Discount
Security” means any Security which provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502.

 

“Outstanding”, when used
with respect to Securities, means, as of the date of determination, all
Securities theretofore authenticated and delivered under this Indenture,
except:

 

(1)           Securities theretofore cancelled by
the Trustee or delivered to the Trustee for cancellation;

 

(2)           Securities for whose payment or
redemption money in the necessary amount has been theretofore deposited with
the Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company acts as its own Paying
Agent) for the Holders of such Securities; provided that, if such Securities
are to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been made;

 

(3)           Securities as to which Defeasance has
been effected pursuant to Section 1302; and

 

(4)           Securities which have been paid
pursuant to Section 306 or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Indenture,
other than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are held
by a protected purchaser in whose hands such Securities are valid obligations
of the Company;

 

provided, however, that
in determining whether the Holders of the requisite principal amount of the
Outstanding Securities have given, made or taken any request, demand,
authorization, direction, notice, consent, waiver or other action hereunder as
of any date, (A) the principal amount of an Original Issue Discount
Security which shall be deemed to be Outstanding shall be the amount of the
principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502,
(B) if, as of such date, the principal amount payable at the Stated
Maturity of a Security is not determinable, the principal amount of such
Security which shall be deemed to be Outstanding shall be the amount as
specified or determined as contemplated by Section 301, (C) the
principal amount of a Security denominated in one or more foreign currencies or
currency units which shall be deemed to be Outstanding shall be the U.S. dollar
equivalent, determined as of such date in the manner provided as contemplated
by Section 301, of the principal amount of such Security (or, in the case
of a Security described in Clause (A) or (B) above, of the
amount determined as provided in such Clause), and (D) Securities owned by
the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent, waiver or other action, only Securities which a Trust  Officer knows to be so owned shall be so disregarded.  Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor.

 

“Paying Agent” means any
Person authorized by the Company to pay the principal of or any premium or
interest on any Securities on behalf of the Company.

 

“Person” means an
individual, partnership, limited partnership, corporation, company, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.

 

5

 

“Place of Payment”, when
used with respect to the Securities of any series, means the place or places
where the principal of and any premium and interest on the Securities of that
series are payable as specified as contemplated by Section 301.

 

“Predecessor Security” of
any particular Security means every previous Security evidencing all or a
portion of the same debt as that evidenced by such particular Security; and,
for the purposes of this definition, any Security authenticated and delivered
under Section 306 in exchange for or in lieu of a mutilated, destroyed,
lost or stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.

 

“Redemption Date”, when used
with respect to any Security to be redeemed, means the date fixed for such
redemption by or pursuant to this Indenture.

 

“Redemption Price”, when
used with respect to any Security to be redeemed, means the price at which it
is to be redeemed pursuant to this Indenture.

 

“Reference Date” has the
meaning specified in Section 1204(4).

 

“Regular Record Date” for
the interest payable on any Interest Payment Date on the Securities of any
series means the date specified for that purpose as contemplated by Section 301.

 

“Rule I.3.22.8” means Rule I.3.22.8
issued by the Mexican Secretaría de Hacienda y
Crédito Público (Ministry of Finance and Public Credit) on April 29,
2009 (or a substantially similar successor rule), as the same may be amended
from time to time.

 

“Securities” has the meaning
stated in the first recital of this Indenture and more particularly means any
Securities authenticated and delivered under this Indenture.

 

“Securities Act” means the
U.S. Securities Act of 1933 and any statute successor thereto, in each case as
amended from time to time.

 

“Security Register” and “Security
Registrar” have the respective meanings specified in Section 305.

 

“Special Record Date” for
the payment of any Defaulted Interest means a date fixed by the Trustee
pursuant to Section 307.

 

“Stated Maturity”, when used
with respect to any Security or any installment of principal thereof or
interest thereon, means the date specified in such Security as the fixed date
on which the principal of such Security or such installment of principal or
interest is due and payable.

 

“Subsidiary” means, with
respect to any Person, a corporation more than 50% of the outstanding voting
Common Stock of which is owned, directly or indirectly, by such Person or by
one or more other Subsidiaries of such Person, or by such Person and one or
more other Subsidiaries of such Person.

 

“Trading Day” means, in the
case of ADSs, any day on which the New York Stock Exchange is open for business
and, in the case of Common Shares, any day on which the Mexican Stock Exchange
is open for business.

 

“Trigger Event” has the
meaning specified in Section 1204(7).

 

“Trust Indenture Act” means
the U.S. Trust Indenture Act of 1939 as in force at the date as of which this
instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939
is amended after such date, “Trust Indenture Act” means, to the extent required
by any such amendment, the Trust Indenture Act of 1939 as so amended.

 

“Trustee” means the Person
named as the “Trustee” in the first paragraph of this instrument until a
successor Trustee shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter

 

6

 

“Trustee” shall mean or
include each Person who is then a Trustee hereunder, and if at any time there
is more than one such Person, “Trustee” as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.

 

“Trust Officer” means, when
used with respect to the Trustee, any officer within the corporate trust
department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other
officer of the Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person’s
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.

 

“United States” means the
United States of America (including the States thereof and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction.

 

“U.S. Government Obligation”
has the meaning specified in Section 1304.

 

“Vice President”, when used
with respect to the Company or the Trustee, means any vice president, whether
or not designated by a number or a word or words added before or after the
title “vice president.”

 

SECTION 102.      Compliance Certificates and Opinions.

 

Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be reasonably required hereunder.  Each such certificate or opinion shall be
given in the form of an Officers’ Certificate, if to be given by an Officer of
the Company, or an Opinion of Counsel if to be given by counsel, and shall
comply with the requirements of the Trust Indenture Act and any other
requirements set forth in this Indenture.

 

Every certificate
or opinion with respect to compliance with a condition or covenant provided for
in this Indenture (except for certificates provided for in Section 904)
shall include,

 

(1) a
statement that each individual signing such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto;

 

(2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

 

(3) a
statement that, in the opinion of each such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

 

(4) a
statement as to whether, in the opinion of each such individual, such condition
or covenant has been complied with.

 

SECTION 103.      Form of Documents Delivered to
Trustee.

 

In any case where several
matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.

 

Any certificate or opinion
of an Officer of the Company may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such Officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters upon
which his certificate or opinion is based are erroneous.  Any such certificate or Opinion of Counsel
may be based,

 

7

 

insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
Officer or Officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.

 

Where any Person is required
to make, give or execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.

 

SECTION 104.      Acts of Holders; Record Dates.

 

(1) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become effective
when such instrument or instruments are delivered to the Trustee and, where it
is hereby expressly required, to the Company. 
Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of the Holders
signing such instrument or instruments. 
Proof of execution of any such instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Indenture and (subject
to Section 501) conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section.

 

(2) The fact and date
of the execution by any Person of any such instrument or writing may be proved
by the affidavit of a witness of such execution or by a certificate of a notary
public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing acknowledged
to him the execution thereof.  Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.  The fact and date of
the execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.

 

(3) The ownership of
Securities shall be proved by the Security Register.

 

(4) Any request,
demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and
the Holder of every Security issued upon the registration of transfer thereof
or in exchange therefor or in lieu thereof in respect of anything done, omitted
or suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.

 

(5) The Company may set
any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders of Securities of such
series, provided that the Company may not set a
record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. 
If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date, and no other
Holders, shall be entitled to take the relevant action, whether or not such
Holders remain Holders after such record date; provided
that no such action shall be effective hereunder unless taken on or prior to
the applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date.  Nothing in this paragraph shall be construed
to prevent the Company from setting a new record date for any action for which
a record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken.  Promptly after any record date
is set pursuant to this paragraph, the Company, at its own expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.

 

8

 

(6) The Trustee may set
any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to join in the giving or making
of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 402, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction
referred to in Section 512, in each case with respect to Securities of
such series.  If any record date is set
pursuant to this paragraph, the Holders of Outstanding Securities of such
series on such record date, and no other Holders, shall be entitled to join in
such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that
no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date.  Nothing in this paragraph shall be construed
to prevent the Trustee from setting a new record date for any action (whereupon
the record date previously set shall automatically and without any action by
any Person be canceled and of no effect), nor shall anything in this paragraph
be construed to render ineffective any action taken by Holders of the requisite
principal amount of Outstanding Securities of the relevant series on the date
such action is taken.  Promptly after any
record date is set pursuant to this paragraph, the Trustee, at the Company’s
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Company in writing and to
each Holder of Securities of the relevant series in the manner set forth in Section 106.

 

(7) With respect to any
record date set pursuant to this Section, the party hereto that sets such
record date may designate any day as the “Expiration Date” and from time to
time may change the Expiration Date to any earlier or later day, provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto
in writing, and to each Holder of Securities of the relevant series in the
manner set forth in Section 106, on or prior to the existing Expiration
Date.  If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph.  Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.

 

Without limiting the
foregoing, a Holder entitled hereunder to take any action hereunder with regard
to any particular Security may do so with regard to all or any part of the
principal amount of such Security or by one or more duly appointed agents each
of which may do so pursuant to such appointment with regard to all or any part
of such principal amount.

 

SECTION 105.      Notices, Etc., to Trustee and the Company.

 

Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,

 

(1) the Trustee by any Holder or by the Company
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing (which may be by facsimile or by electronic mail) to or with
the Trustee at its Corporate Trust Office, or

 

(2) the Company by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
the Company, addressed to it at the address of its principal office specified
in the first paragraph of this instrument, Attention: Chief Financial Officer,
or at any other address previously furnished in writing to the Trustee by the
Company,

 

provided, however, that notice to
the Trustee shall only be deemed effective upon actual receipt thereof by the
Trustee at its Corporate Trust Office.

 

In respect of this Indenture, the Trustee shall not have
any duty or obligation to verify or confirm that the Person sending
instructions, directions, reports, notices or other communications or
information by electronic transmission is, in fact, a Person authorized to give
such instructions, directions, reports, notices or other communications or
information on behalf of the party purporting to send such electronic
transmission; and the Trustee shall not have any liability for any losses,
liabilities, costs or expenses incurred or sustained by any party as a result
of such reliance upon or compliance with such instructions, directions,
reports, notices or other communications or information.

 

SECTION 106.      Notice to Holders; Waiver.

 

Where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date
(if any), and not earlier than the earliest date (if any), prescribed for the
giving of such notice.  In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders.  Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice.  Waivers
of notice by

 

9

 

Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.

 

In case by reason of the
suspension of regular mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.

 

Where this Indenture
provides for notice of any event to a Holder of a Global Security, such notice
shall be sufficiently given if given to the Depositary for such Security (or
its designee), pursuant to its Applicable Procedures, not later than the latest
date (if any), and not earlier than the earliest date (if any), prescribed for
the giving of such notice.

 

SECTION 107.      Conflict with Trust Indenture Act.

 

If any provision hereof
limits, qualifies or conflicts with a provision of the Trust Indenture Act that
is required under such Act to be a part of and govern this Indenture, the
latter provision shall control.  If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.

 

SECTION 108.      Effect of Headings and Table of Contents.

 

The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.

 

SECTION 109.      Successors and Assigns.

 

All covenants and agreements
in this Indenture by the Company shall bind its successors and assigns, whether
so expressed or not.

 

SECTION 110.      Separability Clause.

 

In case any one or more of
the provisions contained in this Indenture shall be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions contained in this Indenture, and to the
extent and only to the extent that any such provision is invalid, illegal or
unenforceable, this Indenture shall be construed as if such provision had never
been contained herein.

 

SECTION 111.      Benefits of Indenture.

 

Nothing in this Indenture or
in the Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.

 

SECTION 112.      Counterparts.

 

This Indenture
may be simultaneously executed and delivered in any number of counterparts,
each of which so executed and delivered shall be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.

 

SECTION 113.      Governing Law.

 

THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.

 

10

 

SECTION 114.      Legal Holidays.

 

In any case where any
Interest Payment Date, Redemption Date or Stated Maturity of any Security or
the last date on which a Holder has the right to convert his Securities shall
not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Securities) payment of interest or principal (and premium,
if any) or conversion of the Securities need not be made on such date, but may
be made on the next succeeding Business Day with the same force and effect as
if made on the Interest Payment Date, Redemption Date or at the Stated
Maturity, or on such last day for conversion, as the case may be; provided that no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date or Stated Maturity, as
the case may be.

 

SECTION 115.      Consent to Service; Jurisdiction.

 

The Company
and the Trustee agree that any legal suit, action or proceeding arising out of
or relating to this Indenture and/or the Securities may be instituted in any federal
or state court in the Borough of Manhattan, The City of New York and in the
courts of its own corporate domicile, and each waives any objection which it
may now or hereafter have to the laying of the venue of any such legal suit,
action or proceeding, waives any immunity from jurisdiction or to service of
process in respect of any such suit, action or proceeding, waives any right to
which it may be entitled on account of place of residence or domicile and
irrevocably submits to the jurisdiction of any such court in any such suit,
action or proceeding.  The Company hereby
designates and appoints CT Corporation System, 111 Eighth Avenue, 13th Floor,
New York, New York 10011, as its authorized agent upon which process may be
served in any legal suit, action or proceeding arising out of or relating to
this Indenture or the Securities which may be instituted in any federal or
state court in the Borough of Manhattan, The City of New York, New York, and
agrees that service of process upon such agent, and written notice of said
service to the Company by the Person serving the same, shall be deemed in every
respect effective service of process upon the Company in any such suit, action
or proceeding and further designates its domicile, the domicile of CT Corporation
System specified above and any domicile CT Corporation System may have in the
future as its domicile to receive any notice hereunder (including service of
process).  If for any reason CT
Corporation System (or any successor agent for this purpose) shall cease to act
as agent for service of process as provided above, the Company will promptly
appoint a successor agent for this purpose reasonably acceptable to the
Trustee.  The Company agrees to take any
and all actions as may be necessary to maintain such designation and
appointment of such agent in full force and effect.

 

SECTION 116.      Language of Notices, Etc.

 

Any request,
demand, authorization, direction, notice, consent or waiver required or
permitted under this Indenture shall be in the English language, except that
any published notice may be in an official language of the country of
publication.

 

SECTION 117.       Waiver of Jury Trial.

 

ALL PARTIES
HERETO HEREBY IRREVOCABLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

SECTION 118.       No Recourse Against Others.

 

An incorporator, director,
officer, employee, stockholder or controlling person, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture for any claim based on, in respect of or by reason
of such obligations or their creation. 
By accepting a Security, each Holder shall waive and release all such
liability.  The waiver and release shall
be part of the consideration for the issue of the Securities.

 

ARTICLE TWO

 

SECURITY
FORMS

 

SECTION 201.      Forms Generally.

 

The Securities and the
Trustee’s certificates of authentication shall be in substantially the forms
set forth in this Article or in such other form as shall be established by
or pursuant to a Board Resolution and, subject to Section 303, set forth or
determined in the manner provided in an Officers’ Certificate, or established in
one or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or Depositary
thereof or as may, consistently herewith, be determined by the Officers
executing such Securities, as evidenced by their execution of the
Securities.  If the form of Securities of
any series is established by action taken pursuant to a Board Resolution, a
copy of an appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Company Order contemplated by Section 303
for the authentication and delivery of such Securities.

 

11

 

The definitive Securities
shall be printed, lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the Officers executing such
Securities, as evidenced by their execution of such Securities.

 

SECTION 202.      Form of Face of Security.

 

The following legend shall
appear on the face of each Global Security:

 

THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE
TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER
OF THIS SECURITY FOR ALL PURPOSES.

 

The following legend shall
appear on the face of each Global Security for which The Depository Trust Company
is to be the Depositary:

 

UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR REGISTERED SECURITIES IN DEFINITIVE
REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE INDENTURE,
THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.

 

Desarrolladora Homex,
S.A.B. de C.V.

 

No.

 

CUSIP
No.

 

Desarrolladora Homex, S.A.B.
de C.V., a sociedad anónima de capital
variable organized and existing under the laws of Mexico (herein
called the “Company”, which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to
                   ,
or registered assigns, the principal sum of
                    
Dollars on
                      [ if the Security is to bear interest prior to
Maturity, insert  —, and to pay interest thereon from
                    
or from the most recent Interest Payment Date to which interest has been paid
or duly provided for, [ semi-annually/quarterly
] on
             and
             in
each year, commencing
            , and
at the Maturity thereof, at the rate of
        % per annum, until the
principal hereof is paid or made available for payment  [ if applicable, insert —, provided, that any principal  [
and premium ], and any such
installment of interest, which is overdue shall bear interest at the rate of
        % per annum (to the extent that
the payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand ].  The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the                 
or
                
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.  Any such interest
so payable, but not punctually

 

12

 

paid or duly provided for on
any Interest Payment Date will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities of this series not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which this Security may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture ].

 

[If the Security is not to
bear interest prior to Maturity, insert — The principal of this Security shall not bear interest except
in the case of a default in payment of principal upon acceleration, upon
redemption or at Stated Maturity and in such case the overdue principal  [
and any overdue premium ]  shall bear interest at the rate of
        % per annum (to the extent that
the payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or made available for payment.  Interest on any overdue principal  [
or premium ]  shall be payable on demand. ]

 

Payment of the principal of [(and premium, if any)] and [if applicable, insert — any such] interest on this Security will be made
pursuant to the Applicable Procedures of the Depositary as permitted in the
Indenture, provided, however, that if this Security is not a
Global Security, payment may be made at the office or agency of the Company
maintained for that purpose [insert applicable
jurisdiction — in New York, New York, in such coin or currency of the
United States of America] as at the time of payment is legal tender for payment
of public and private debts, against surrender of this Security in the case of
any payment due at the Maturity of the principal thereof (other than any
payment of interest that first becomes payable on a day other than an Interest
Payment Date); and provided, further,
that at the option of the Company, payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.

 

Reference is hereby made to
the further provisions of this Security set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
at this place.

 

Unless the certificate of
authentication hereon has been executed by the Trustee referred to on the
reverse hereof by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed.

 

	
  Dated:

  	
   

  	
   

  

 

Desarrolladora Homex, S.A.B. de C.V.

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title

  	
   

  

 

SECTION 203.      Form of Reverse of Security.

 

This Security is one of a
duly authorized issue of securities of the Company (herein called the “Securities”),
issued and to be issued in one or more series under an Indenture, dated as of [insert date] (herein called the “Indenture”, which term
shall have the meaning assigned to it in such instrument), between the Company
and The Bank of New York Mellon, as Trustee (herein called the “Trustee”, which
term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the

 

13

 

terms upon which the
Securities are, and are to be, authenticated and delivered.  This Security is one of the series designated
on the face hereof  [
if applicable, insert —, limited in aggregate principal amount to
$                     ].

 

[If applicable, insert — The Securities of this series are
subject to redemption upon not less than
         days’ nor more than
         days’ notice, at any time  [ if applicable, insert  — on or after
                    ,
20     ], as a
whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount):  If redeemed  [
if applicable, insert  — on or before
                ,
        %, and if redeemed ] 
during the 12-month period beginning
                    
of the years indicated,

 

	
  Year

  	
   

  	
  Redemption
  Price

  	
   

  	
  Year

  	
   

  	
  Redemption
  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

and thereafter at a
Redemption Price equal to         % of
the principal amount, together in the case of any such redemption with accrued
interest to the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holders of such
Securities or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture. ]

 

[If the Security is subject
to redemption of any kind, insert — In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof. ]

 

[If the Security is not an
Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. ]

 

[If the Security is an
Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this
series shall occur and be continuing, an amount of principal of the Securities
of this series may be declared due and payable in the manner and with the
effect provided in the Indenture.  Such
amount shall be equal to —  insert formula for determining the amount.  Upon payment (i) of the amount of
principal so declared due and payable and (ii) of interest on any overdue
principal, premium and interest (in each case to the extent that the payment of
such interest shall be legally enforceable), all of the Company’s obligations
in respect of the payment of the principal of and premium and interest, if any,
on the Securities of this series shall terminate. ]

 

[If the Security is a Convertible Security, insert —
Subject to and upon compliance with the provisions of the Indenture, the Holder
of this Security is entitled, at his option, at any time on or before the close
of business on
                ,
20    , or in case this Security or a portion hereof is
called for redemption, then in respect of this Security or such portion hereof
until and including, but (unless the Company defaults in making the payment due
upon redemption) not after, the close of business on the Business Day
immediately preceding the Redemption Date, to convert this Security (or any
portion of the principal amount hereof which is $[     ] or an integral multiple thereof), at the
principal amount at Stated Maturity hereof, or of such portion, into American
Depositary Shares (“ADSs”), each representing the right to receive six Common
Shares of the Company, at a conversion rate of
             ADSs
for each $[     ] principal amount at
Stated Maturity of Securities by surrender of this Security, duly endorsed or
assigned to the Company or in blank, to the Conversion Agent, accompanied by
written notice to the Company that the Holder hereof elects to convert this
Security, or if less than the entire principal amount hereof is to be
converted, the portion hereof to be converted, and, in case such surrender
shall be made during the period from the close of business on any Regular
Record Date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date (unless this Security or the portion thereof
being converted has been called for redemption on a Redemption Date within such
period), also accompanied by payment in New York Clearing House or other
funds acceptable to the Company of an amount equal to the accrued interest
payable on such Interest Payment Date on the principal amount of this Security
then being converted.  Subject to the
aforesaid requirement for payment and, in the case of a conversion after the
Regular Record Date next preceding any Interest Payment Date and on or before
such Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
installment of interest (with certain exceptions provided in the Indenture), no
payment or adjustment is to be made on conversion for interest accrued hereon
or for dividends on the Common Shares represented by ADSs issued

 

14

 

on conversion.  No fractions of ADSs or scrip representing
fractions of ADSs will be issued on conversion, but instead of any fractional
interest the Company shall pay a cash adjustment as provided in the Indenture.  The conversion rate is subject to adjustment
as provided in the Indenture.  In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the transfer of substantially all of
the assets of the Company, the Indenture shall be amended, without the consent
of any Holders of Securities, so that this Security, if then Outstanding, will
be convertible thereafter, during the period this Security shall be convertible
as specified above, only into the kind and amount of securities, cash and other
property receivable upon the consolidation, merger or transfer by a holder of
the number of Common Shares into which this Security might have been converted
(in the form of ADSs) immediately prior to such consolidation, merger or
transfer (assuming such holder of Common Shares failed to exercise any rights
of election and received per share the kind and amount received per share by a
plurality of non-electing shares).]

 

All payments of principal,
premium and interest in respect of the Securities shall be made after
withholding or deduction for any present or future taxes, duties, assessments
or governmental charges of whatever nature imposed, levied, collected, withheld
or assessed by or on behalf of Mexico or any authority therein or thereof
having power to tax (“Mexican Taxes”). 
In the event of any withholding or deduction for any Mexican Taxes, the
Company shall pay, in accordance with the Indenture, such additional amounts (“Additional
Amounts”) as will result in receipt by the Holders of Securities on the
respective due dates of such amounts as would have been received by them had no
such withholding or deduction (including for any Mexican Taxes payable in
respect of Additional Amounts) been required, except that no such Additional
Amounts shall be payable with respect to any payment on a Security to the
extent:

 

(i)            that any such taxes, duties, assessments or other
governmental charges would not have been imposed but for (A) a connection
between the Holder and Mexico other than the holding of such Security and the
receipt of payments with respect to such Security or (B) failure by the
Holder to comply with any certification, identification or other reporting
requirement concerning the nationality, residence, identity or connection with
Mexico of the Holder, if compliance is required by law, regulation or by an
applicable income tax treaty to which Mexico is a party and which is in effect,
as a precondition to exemption from, or reduction in the rate of, the tax, assessment
or other governmental charge and the Company has given the Holders at least
30 days’ notice that Holders will be required to provide such information
and identification;

 

(ii)           of any such taxes, duties, assessments or other
governmental charges with respect to a Security presented for payment more than
15 days after the date on which such payment became due and payable or the
date on which payment thereof is duly provided for and notice thereof given to
Holders, whichever occurs later, except to  the extent that the Holder of such Security
would have been entitled to such Additional Amounts on presenting such Security
for payment on any date during such 15-day period;

 

(iii)          of estate, inheritance, gift or other similar taxes imposed
with respect to a Security;

 

(iv)          any tax, duty, assessment or other governmental charge
payable otherwise than by deduction or withholding from payments on any series
of Securities;

 

(v)           any payment on a Security to a Holder who is a fiduciary
or partnership or a person other than the sole beneficial owner of any such
payment, to the extent that a beneficiary or settlor with respect to such
fiduciary, a member of such a partnership or the beneficial owner of such
payment would not have been entitled to the Additional Amounts had such
beneficiary, settlor, member or beneficial owner been the Holder of such
Security.

 

For purposes of the
provisions described in Clause (i) above, the term “Holder” of any
Security means the direct nominee of any beneficial owner of such Security,
which holds such beneficial owner’s interest in such Security.  Notwithstanding the foregoing, the
limitations on the Company’s obligation to pay Additional Amounts set forth in
Clause (i) above shall not apply if (a) the provision of
information, documentation or other evidence described in such Clause (i) would
be materially more onerous, in form, in procedure or in the substance of
information disclosed, to a Holder or beneficial owner of a Security (taking
into account any relevant differences between U.S. and Mexican law, regulation
or administrative practice) than comparable information or other reporting
requirements imposed under U.S. tax law (including the United States — Mexico
Income Tax Treaty), regulation (including proposed regulations) and administrative
practice or (b) Rule I.3.22.8, is in effect, unless the

 

15

 

provision of the
information, documentation or other evidence described in such Clause (i) is
expressly required by statute, regulation, rule or administrative practice
in order to apply Rule I.3.22.8 and the Company cannot obtain such
information, documentation or other evidence on its own through reasonable
diligence and the Company otherwise would meet the requirements for application
of Rule I.3.22.8.  In addition, such
Clause (i) shall not be construed to require that a non-Mexican
pension or retirement fund or a non-Mexican financial institution or any other
Person register with the Ministry of Finance and Public Credit for the purpose
of establishing eligibility for an exemption from or reduction of Mexican
withholding.

 

At the request of the
Trustee, the Company shall provide the Trustee with documentation (which may
consist of certified copies of such documentation) satisfactory to the Trustee
evidencing the payment of Mexican Taxes in respect of which the Company has
paid any Additional Amounts.  Copies of
such documentation shall be made available to the Holders of the Securities or
the Paying Agent, as applicable, upon request therefor.

 

The Company shall pay all
stamp, issue, registration, documentary or other similar duties, if any, which
may be imposed by Mexico or any governmental entity or political subdivision
therein or thereof, or any taxing authority of or in any of the foregoing, with
respect to the Indenture or the issuance of the Securities.

 

All references herein or in
the Indenture to principal, premium or interest in respect of any Security
shall be deemed to include all Additional Amounts, if any, payable in respect
of such principal, premium or interest, unless the context otherwise requires,
and express mention of the payment of Additional Amounts in any provision
hereof shall not be construed as excluding reference to Additional Amounts in
those provisions hereof where such express mention is not made.

 

In the event that Additional
Amounts actually paid with respect to the Securities pursuant to the preceding
paragraph are based on rates of deduction or withholding of withholding taxes
in excess of the appropriate rate applicable to the Holder of such Securities,
and, as a result thereof such Holder is entitled to make claim for a refund or
credit of such excess from the authority imposing such withholding tax, then
such Holder shall, by accepting such Securities, be deemed to have assigned and
transferred all right, title, and interest to any such claim for a refund or
credit of such excess to the Company. 
However, by making such assignment, the Holder makes no representation
or warranty that the Company will be entitled to receive such claim for a
refund or credit and incurs no other obligation with respect thereto.

 

All references in the
Indenture and the Securities to principal in respect of any Security shall be
deemed to mean and include any Redemption Price payable in respect of such
Security pursuant to any redemption right hereunder (and all such references to
the Stated Maturity of the principal in respect of any Security shall be deemed
to mean and include the Redemption Date with respect to any such Redemption
Price), and all such references to principal, premium, interest or Additional
Amounts shall be deemed to mean and include any amount payable in respect
hereof pursuant to Section 1009 of the Indenture, and express mention of
the payment of any Redemption Price or any such other amount in those
provisions hereof where such express reference is not made.

 

[ If the
Security is subject to redemption, insert— The Securities are
subject to redemption upon not less than 30 nor more than 60 days’ notice
by mail, at any time, as a whole but not in part, at the election of the
Company, at a cash price equal to the sum of (i) the principal amount of the
Securities being redeemed, (ii) any accrued original issue discount
thereon to the date fixed for redemption, (iii) accrued and unpaid current
interest thereon to the date fixed for redemption, (iv) any premium
applicable in the case of redemption prior to Maturity, and (v) any
Additional Amounts (as defined in the Indenture) which would otherwise be
payable, if, as a result of any amendment to, or change in, the laws (or any
laws, rules, or regulations thereunder) of Mexico or any political subdivision
or taxing authority thereof or therein affecting taxation or any amendment to
or change in an official interpretation, administration or application of such
laws, rules, or regulations (including a holding by a court of competent
jurisdiction), which amendment or change of such laws, rules, or regulations
becomes effective on or after the date of the Indenture, the Company would be
obligated, after making reasonable endeavors to avoid such requirement, to pay
Additional Amounts in excess of the Additional Amounts that the Company would
be obligated to pay if payments made on the Securities were subject to
withholding or deduction of Mexican Taxes at the rate of [    ] percent.]

 

16

 

The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in principal amount of the Securities at the time Outstanding of all
series to be affected.  The Indenture
also contains provisions (i) permitting the Holders of a majority in
principal amount of the Securities at the time Outstanding of all series to be
affected under the Indenture, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and (ii) permitting the Holders of a majority in principal
amount of the Securities at the time Outstanding of any series to be affected
under the Indenture (with each such series considered separately for this
purpose), on behalf of the Holders of all Securities of such series, to waive
certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

 

As provided in and subject
to the provisions of the Indenture, the Holder of this Security shall not have
the right to institute any proceeding with respect to the Indenture, or for the
appointment of a receiver or trustee, or for any other remedy thereunder,
unless such Holder shall have previously given the Trustee written notice of a
continuing Event of Default with respect to the Securities of this series, the
Holders of not less than 25% in principal amount of the Securities of this
series at the time Outstanding shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default as Trustee and
offered the Trustee indemnity reasonably satisfactory to it, and the Trustee shall
not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for
60 days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit
instituted by the Holder of this Security for the enforcement of any payment of
principal hereof or any  [ premium or ] 
interest hereon on or after the respective due dates expressed herein.

 

No reference herein to the
Indenture and no provision of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and any  [ premium and ] 
interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.

 

As provided in the Indenture
and subject to certain limitations therein set forth, the transfer of this
Security is registrable in the Security Register, upon surrender of this
Security for registration of transfer at the office or  agency of the Company in any place where the
principal of and any  [ premium and ] 
interest on this Security are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this
series are issuable only in registered form without coupons in denominations of
[    ] and any multiple thereof.  As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.

 

No service charge shall be
made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

 

Prior to due presentment of
this Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.

 

[If
applicable, insert—This Security is a Global Security and is subject
to the provisions of the Indenture relating to Global Securities, including the
limitations in Section 305 thereof on transfers and exchanges of Global
Securities.]

 

17

 

[Interest on the principal
balance of this Security shall be calculated on the basis of a [365- or 366-day
year, as appropriate, for the actual number of days elapsed] [360-day year of
twelve 30-day months.]]

 

This Security and the
Indenture shall be governed by and construed in accordance with the laws of the
State of New York.

 

All terms used in this
Security which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.

 

ABBREVIATIONS

 

The following abbreviations,
when used in the inscription of the face of this Security, shall be construed
as though they were written out in full according to applicable laws or
regulations:

 

	
  TEN COM — as
  tenants in common

  	
   

  	
  UNIF GIFT MIN
  ACT —                         

  
	
   

  	
   

  	
  (Cust)

  
	
  TEN ENT — as
  tenants by the entireties

  	
   

  	
   

  
	
   

  	
   

  	
  Custodian                           
  under Uniform

  
	
   

  	
   

  	
  (Minor)

  
	
  JT TEN — as
  joint tenants with right of survivorship and not as tenants in common

  	
   

  	
   

  
	
   

  	
   

  	
  Gifts to Minors
  Act                         

  
	
   

  	
   

  	
  (State)

  
	
   

  	
   

  	
   

  

 

Additional abbreviations may also be used

though not in the above list.

 

SECTION 204.      Form of Trustee’s Certificate of Authentication.

 

	
   

  	
  This is one of
  the Securities referred to in the within-mentioned Indenture.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE BANK OF NEW
  YORK MELLON,

  	
   

  
	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  	
   

  

 

SECTION 205.      Form of Conversion Notice.

 

The undersigned Holder of
this Security hereby irrevocably exercises the option to convert this Security,
or any portion of the principal amount hereof (which is an integral multiple of
$[     ], provided
that the unconverted portion of such principal amount is $[     ] or any integral multiple of $[     ] in excess thereof) below designated,
into American Depositary Shares (“ADSs”) of Desarrolladora Homex, S.A.B. de
C.V. in accordance with the terms of the Indenture referred to in this
Security, and directs that such ADSs deliverable on conversion, together with a
check in payment for any fractional ADS and any Securities representing any
unconverted principal amount hereof, be delivered to and be registered in the
name of the undersigned unless a different name has been indicated below.  If ADSs or Securities are to be delivered to
and registered in the name of a Person other than the undersigned, (a) the
undersigned will pay all transfer taxes payable with respect thereto and (b) signature(s) must
be guaranteed by an

 

18

 

Eligible Guarantor
Institution with membership in an approved signature guarantee program pursuant
to Rule 17Ad-15 under the Securities Exchange Act of 1934.  Any amount required to be paid by the undersigned
on account of accrued interest accompanies this Security.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature(s)

  

 

Fill in for registration of
ADSs if to be

issued, and Securities if to
be delivered,

other than to and in the
name of the

registered Holder:

 

	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address (including zip code number)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SOCIAL SECURITY
  OR TAXPAYER IDENTIFICATION NUMBER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Portion of
  Security to be converted (in an  integral multiple of $[    ],
  if less than all):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Account number at
  The Depository Trust  Company (if applicable):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

ARTICLE THREE

 

THE
SECURITIES

 

SECTION 301.      Amount Unlimited; Issuable in Series.

 

The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.

 

The Securities may be issued
in one or more series.  There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers’ Certificate or
established in one or more indentures supplemental hereto, prior to the
issuance of Securities of any series,

 

(1)           the title of the Securities,
including CUSIP numbers, of the series (which shall distinguish the Securities
of the series from Securities of any other series);

 

(2)           any limit upon the aggregate
principal amount of the Securities of the series which may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered upon registration

 

19

 

of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to Section 304,
305, 306, 906 or 1105 and except for any Securities which, pursuant to Section 303,
are deemed never to have been authenticated and delivered hereunder);

 

(3)           the Person to whom any interest on a
Security of the series shall be payable, if other than the Person in whose name
that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;

 

(4)           the date or dates on which the
principal of any Securities of the series is payable;

 

(5)           the rate or rates at which any
Securities of the series shall bear interest, if any, the date or dates from
which any such interest shall accrue, the Interest Payment Dates on which any
such interest shall be payable and the Regular Record Date for any such
interest payable on any Interest Payment Date;

 

(6)           the place or places where the
principal of and any premium and interest on any Securities of the series shall
be payable and the manner in which any payment may be made;

 

(7)           the period or periods within which,
the price or prices at which and the terms and conditions upon which any
Securities of the series may be redeemed, in whole or in part, at the option of
the Company and, if other than by a Board Resolution, the manner in which any
election by the Company to redeem the Securities shall be evidenced;

 

(8)           the obligation, if any, of the
Company to redeem or purchase any Securities of the series pursuant to any
sinking fund or analogous provisions or at the option of the Holder thereof and
the period or periods within which, the price or prices at which and the terms
and conditions upon which any Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;

 

(9)           if other than denominations of
$[     ] and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;

 

(10)         if the amount of principal of or any
premium or interest on any Securities of the series may be determined with
reference to a financial or economic measure or pursuant to a formula, the
manner in which such amounts shall be determined;

 

(11)         if other than the currency of the
United States of America, the currency, currencies or currency units in which
the principal of or any premium or interest on any Securities of the series
shall be payable and the manner of determining the equivalent thereof in the
currency of the United States of America for any purpose, including for the
purposes of making payment in the currency of the United States of America and
applying the definition of “Outstanding” in Section 101;

 

(12)         if the principal of or any premium or
interest on any Securities of the series is to be payable, at the election of
the Company or the Holder thereof, in one or more currencies or currency units
other than that or those in which such Securities are stated to be payable, the
currency, currencies or currency units in which the principal of or any premium
or interest on such Securities as to which such election is made shall be
payable, the periods within which and the terms and conditions upon which such
election is to be made and the amount so payable (or the manner in which such amount
shall be determined);

 

(13)         if other than the entire principal
amount thereof, the portion of the principal amount of any Securities of the
series which shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 502;

 

(14)         the applicability, nonapplicability, or
variation, of Section 1008 with respect to the Securities of such series;

 

20

 

(15)         if the principal amount
payable at the Stated Maturity of any Securities of the series will not be
determinable as of any one or more dates prior to the Stated Maturity, the
amount which shall be deemed to be the principal amount of such Securities as
of any such date for any purpose thereunder or hereunder, including the
principal amount thereof which shall be due and payable upon any Maturity other
than the Stated Maturity or which shall be deemed to be Outstanding as of any
date prior to the Stated Maturity (or, in any such case, the manner in which
such amount deemed to be the principal amount shall be determined);

 

(16)         if applicable, that the
Securities of the series shall be subject to either or both of Defeasance or
Covenant Defeasance as provided in Article Thirteen; provided,
that no series of Securities that is convertible for ADSs, Common Shares or
other securities pursuant to Section 301(20) or Section 301(21) shall
be subject to Defeasance pursuant to Section 1302;

 

(17)         if applicable, that any
Securities of the series shall be issuable in whole or in part in the form of
one or more Global Securities and, in such case, the respective Depositaries
for such Global Securities, the form of any legend or legends which shall be
borne by any such Global Security in addition to or in lieu of that set forth
in Section 202 and any addition to, elimination of or other changes in the
circumstances set forth in Clause (2) of the last paragraph of Section 305
in which any such Global Security may be transferred to, and registered and
exchanged in whole or in part for Securities registered, in the name or names
of Persons other than the Depositary for such Global Security or a nominee
thereof and in which any such transfer may be registered;

 

(18)         any addition to,
elimination of or other change in the Events of Default which applies to any
Securities of the series and any change in the right of the Trustee or the
requisite Holders of such Securities to declare the principal amount thereof
due and payable pursuant to Section 502;

 

(19)         any addition to,
elimination of or other change in the covenants set forth in Article Ten
or elsewhere herein which applies to Securities of the series;

 

(20)         the terms and conditions,
if any, pursuant to which the Securities are convertible into ADSs;

 

(21)         the terms and conditions,
if any pursuant to which the Securities are convertible into or exchangeable
for Common Shares or other securities;

 

(22)         the terms and conditions,
if any, providing collateral for the Securities;

 

(23)         the terms and conditions,
if any, providing for a guarantee of the Securities;

 

(24)         any other terms of the
series (which terms shall not be inconsistent with the provisions of this
Indenture, except as permitted by Section 901(5)); and

 

(25)         any
Agent or Agents appointed with respect to such Securities.

 

All Securities of any one
series shall be substantially identical except as to denomination and except as
may otherwise be provided in or pursuant to the Board Resolution referred to
above and (subject to Section 303) set forth, or determined in the manner
provided, in the Officers’ Certificate referred to above or in any such
indenture supplemental hereto.  All
Securities of any one series need not be issued at one time and, unless
otherwise provided or contemplated by this Section 301 with respect to a
series of Securities, additional Securities of a series may be issued at the
option of the Company, without the consent of any Holder, at any time and from
time to time.

 

The terms of the series shall
be established by action taken pursuant to a Board Resolution, and a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers’ Certificate setting forth the terms of the
series.

 

SECTION 302.     Denominations.

 

The Securities of each
series shall be issuable only in registered form without coupons and only in
such denominations as shall be specified as contemplated by Section 301.  In the absence of any such specified 

 

21

 

denomination with respect to
the Securities of any series, the Securities of such series shall be issuable
in denominations of $[     ] and any
integral multiple thereof.

 

SECTION 303.     Execution,
Authentication, Delivery and Dating.

 

The Securities shall be
executed on behalf of the Company by two Officers, one of whom shall be the
Chairman of the Board, the President, the Chief Executive Officer or the Chief
Financial Officer of the Company.  The
signature of any of these Officers on the Securities may be manual or
facsimile.

 

Securities bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.

 

At any time and from time to
time after the execution and delivery of this Indenture, the Company may
deliver Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities.  If the form or terms of the Securities of the
series have been established by or pursuant to one or more Board Resolutions as
permitted by Section 201 and 301, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to Section 701)
shall be fully protected in relying upon, an Opinion of Counsel stating,

 

(1)           if the form of such
Securities has been established by or pursuant to Board Resolution as permitted
by Section 201, that such form has been established in conformity with the
provisions of this Indenture;

 

(2)           if the terms of such Securities
have been established by or pursuant to a Board Resolution, that such terms
have been established in conformity with the provisions of this Indenture; and

 

(3)           that such Securities,
when authenticated and delivered by the Trustee and issued by the Company in
the manner and subject to any conditions specified in such Opinion of Counsel,
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles.

 

If such form or terms have
been so established, the Trustee shall not be required to authenticate such
Securities if, in the opinion of counsel to the Trustee, the issue of such
Securities pursuant to this Indenture will affect the Trustee’s own rights,
duties or immunities under the Securities and this Indenture.

 

Notwithstanding the
provisions of Section 301 and of the preceding paragraph, if all
Securities of a series are not to be originally issued at one time, including
where the size of an Outstanding series of Securities is increased, it shall
not be necessary to deliver the Officers’ Certificate otherwise required
pursuant to Section 301 or the Opinion of Counsel otherwise required
pursuant to such preceding paragraph at or prior to the authentication of each
Security of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such series to
be issued.

 

Each Security shall be dated
the date of its authentication.

 

No Security shall be
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by the Trustee by manual
signature, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.  Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section 309,

 

22

 

and for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.

 

SECTION 304.     Temporary Securities.

 

Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the Officers
executing such Securities may determine, as evidenced by their execution of
such Securities.

 

If temporary Securities of
any series are issued, the Company will cause definitive Securities of that
series to be prepared without unreasonable delay.  After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder.  Upon surrender for cancellation of any one or
more temporary Securities of any series, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and
of like tenor and aggregate principal amount. 
Until so exchanged, the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of such series and tenor.

 

SECTION 305.     Registration,
Registration of Transfer and Exchange.

 

The Company shall cause to
be kept by the Security Registrar a register (the “Security Register”) in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and of transfers of
Securities.  The Trustee is hereby
appointed “Security Registrar” for the purpose of registering Securities and
transfers of Securities as herein provided.

 

Subject to the other
provisions of this Section, upon surrender for registration of transfer of any
Security of a series at the office or agency of the Company in a Place of
Payment for that series, the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of like tenor and
aggregate principal amount.

 

Subject to the other
provisions of this Section, at the option of the Holder, Securities of any
series may be exchanged for other Securities of the same series, of any
authorized denominations and of like tenor and aggregate principal amount, upon
surrender of the Securities to be exchanged at such office or agency.  Subject to the other provisions of this
Section, whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.

 

All Securities issued upon
any registration of transfer or exchange of Securities shall be the valid
obligations of the Company, evidencing the same debt, and, subject to the other
provisions of this Section, entitled to the same benefits under this Indenture,
as the Securities surrendered upon such registration of transfer or exchange.

 

Every Security presented or
surrendered for registration of transfer or for exchange shall (if so required
by the Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed, by the Holder thereof or his attorney duly authorized
in writing.

 

No service charge shall be made
for any registration of transfer or exchange of Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in 

 

23

 

connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1105 not involving any transfer.

 

If the Securities of any
series (or of any series and specified tenor) are to be redeemed in part, the
Company shall not be required (A) to issue, register the transfer of or
exchange any Securities of that series (or of that series and specified tenor,
as the case may be) during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 1103 and ending at
the close of business on the day of such mailing, or (B) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.

 

The provisions of
Clauses (1), (2), (3), (4) and (5) below shall apply only to
Global Securities:

 

(1)           Each Global Security
authenticated under this Indenture shall be registered in the name of the
Depositary designated for such Global Security or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Security shall constitute a single Security for all purposes
of this Indenture.

 

(2)           Notwithstanding any
other provision in this Indenture or the Securities, no Global Security may be
exchanged in whole or in part for Securities registered, and no transfer of a
Global Security in whole or in part may be registered, in the name of any
Person other than the Depositary or a nominee thereof unless (A) the
Depositary (i) has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security or (ii) has ceased to be a
clearing agency registered under the Exchange Act, and the Company has not
appointed a successor Depositary within 90 days of receipt of such notice, (B) there
shall have occurred and be continuing an Event of Default with respect to such
Global Security or (C) a request for certificated Securities has been made
by the Company upon 60 days’ prior written notice given to the Trustee in
accordance with the Depositary’s customary procedures and a copy of such notice
has been received by the Company from the Trustee. Any Global Security exchanged
pursuant to Clause (A) above shall be so exchanged in whole and not in
part and any Global Security exchanged pursuant to Clause (B) or (C) above
may be exchanged in whole or from time to time in part as directed by the
Depositary. Subject to Clause 3 below, any Security issued in exchange for a
Global Security or any portion thereof shall be a Global Security, provided that any such Security so issued that is registered
in the name of a Person other than the Depositary or a nominee thereof shall not
be a Global Security.

 

(3)           Securities issued in
exchange for a Global Security or any portion thereof pursuant to Clause (2) above
shall be issued in definitive, fully registered form, without interest coupons,
shall have an aggregate principal amount equal to that of such Global Security
or portion thereof to be so exchanged, shall be registered in such names and be
in such authorized denominations as the Depositary shall designate and shall
bear any legends required hereunder. Any Global Security to be exchanged in
whole shall be surrendered by the Depositary to the Trustee, as Security
Registrar. With regard to any Global Security to be exchanged in part, either
such Global Security shall be so surrendered for exchange or, if the Trustee is
acting as custodian for the Depositary or its nominee with respect to such
Global Security, the principal amount thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by means of an appropriate
adjustment made on the records of the Trustee. Upon any such surrender or
adjustment, the Trustee shall authenticate and deliver the Security issuable on
such exchange to or upon the order of the Depositary or an authorized
representative thereof.

 

(4)           In the event of the
occurrence of any of the events specified in Clause (2) above, the Company
will promptly make available to the Trustee a reasonable supply of certificated
Securities in definitive, fully registered form, without interest coupons.

 

(5)           Neither any members of,
or participants in, the Depositary (“Agent Members”) nor any other Persons on
whose behalf Agent Members may act (including the Euroclear System
(“Euroclear”) and Clearstream Banking, S.A. (“Clearstream, Luxembourg”) and
account holders and participants therein) shall have any rights under this
Indenture with respect to any Global Security, or under any Global Security,
and the Depositary or such nominee, as the case may be, may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner and Holder of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from

 

24

 

giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or such nominee, as the case may be, or impair, as between the Depositary, its
Agent Members and any other person on whose behalf an Agent Member may act, the
operation of customary practices of such Persons governing the exercise of the
rights of a holder of any Security.

 

SECTION 306.     Mutilated,
Destroyed, Lost and Stolen Securities.

 

If any mutilated Security is
surrendered to the Trustee, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same series
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

 

If there shall be delivered
to the Company and the Trustee (i) evidence to their satisfaction of the
destruction, loss or theft of any Security and (ii) such security or
indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a protected purchaser, the
Company shall execute and the Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Security, a new Security of the same
series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

 

In case any such mutilated,
destroyed, lost or stolen Security has become or is about to become due and
payable, the Company in its discretion may, instead of issuing a new Security,
pay such Security.

 

Upon the issuance of any new
Security under this Section, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.

 

Every new Security of any
series issued pursuant to this Section in lieu of any destroyed, lost or
stolen Security shall constitute an original additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Security shall be
at any time enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Securities of
that series duly issued hereunder.

 

The provisions of this Section are
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities.

 

SECTION 307.     Payment
of Interest; Interest Rights Preserved.

 

Except as otherwise provided
as contemplated by Section 301 with respect to any series of Securities,
interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest or, if no
business is conducted by the Trustee at its Corporate Trust Office on such
date, at 5:00 P.M., New York City time, on such date.

 

Any interest on any Security
of any series which is payable, but is not punctually paid or duly provided
for, on any Interest Payment Date (herein called “Defaulted Interest”) shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in Clause (1) or
(2) below:

 

(1)           The Company may elect
to make payment of any Defaulted Interest to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee in
writing, in sufficient time to enable the Trustee to deliver notice in
accordance with this Clause (1), of the amount of Defaulted Interest proposed
to be paid on each Security of such series and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. 
Thereupon the Trustee shall fix a Special Record Date for the payment of
such

 

25

 

Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Company
of such Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be given to each Holder of Securities of such
series in the manner set forth in Section 106, not less than 10 days
prior to such Special Record Date. 
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following Clause (2).

 

(2)           The Company may make
payment of any Defaulted Interest on the Securities of any series in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.

 

Except as may be provided in
this Section 307 or as contemplated in Section 301 with respect to
any Securities of a series, the Person to whom interest shall be payable on any
Security that first becomes payable on a day that is not an Interest Payment
Date shall be the Holder of such Security on the day such interest is paid.

 

Subject to the
foregoing provisions of this Section, each Security delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any
other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.

 

In the case of
any Security which is converted after the close of business on any Regular
Record Date and on or prior to the next succeeding Interest Payment Date (other
than any Security that, if not converted, would have a Maturity prior to such
Interest Payment Date), interest whose Stated Maturity is on such Interest
Payment Date shall be payable on such Interest Payment Date notwithstanding
such conversion, and such interest (whether or not punctually paid or duly
provided for) shall be paid to the Person in whose name that Security (or one
or more Predecessor Securities) is registered at the close of business on such
Regular Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any Security which is converted, interest
whose Stated Maturity is after the date of conversion of such Security shall not
be payable.

 

SECTION 308.     Persons
Deemed Owners.

 

Prior to due presentment of
a Security for registration of transfer, the Company, the Trustee, any Agent
and any agent of the Company, the Trustee or any Agent may treat the Person in
whose name such Security is registered as the owner of such Security for the
purpose of receiving payment of principal of and any premium and (subject to Section 307)
any interest on such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any
Agent or agent of the Company or the Trustee shall be affected by notice to the
contrary.

 

SECTION 309.     Cancellation.

 

All Securities surrendered
for payment, redemption, or registration of transfer or exchange or conversion
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly cancelled by it. 
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee (or
to any other Person for delivery to the Trustee) for cancellation any
Securities previously authenticated hereunder which the Company has not issued
and sold, and all Securities so delivered shall be promptly cancelled by the
Trustee.  No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture.  All cancelled Securities held by the Trustee
shall be disposed of in accordance with its customary procedures unless
otherwise directed by a Company Order; provided, however, that the Trustee shall not be required to destroy
such cancelled Securities.

 

26

 

SECTION 310.     Computation
of Interest.

 

Except as otherwise
specified as contemplated by Section 301 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of a
[365- or 366-day year, as appropriate, for the actual number of days elapsed]
[360-day year of twelve 30-day months.]]

 

SECTION 311.     CUSIP
Numbers.

 

The Company in issuing the
Securities may use “CUSIP” numbers (if then generally in use), and, if so, the
Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to
Holders, provided, that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities.  Any such redemption shall
not be affected by any defect in or omission of such numbers.  The Company will promptly notify the Trustee
in writing of any change in the “CUSIP” numbers.

 

ARTICLE FOUR

SATISFACTION AND DISCHARGE

 

SECTION 401.     Satisfaction
and Discharge of Indenture.

 

This Indenture shall upon
Company Request cease to be of further effect (except as to any surviving
rights of conversion, registration of transfer or exchange of any Security
expressly provided for herein or in the terms of such Security), and the
Trustee, on written demand of and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when

 

(1)           either

 

(A)          all
Securities theretofore authenticated and delivered (other than (i) Securities
which have been mutilated, destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii) Securities for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation; or

 

(B)           all
such Securities not theretofore delivered to the Trustee for cancellation

 

(i)            have
become due and payable, or

 

(ii)           will
become due and payable at their Stated Maturity within one year, or

 

(iii)          are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption,

 

and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds money in an
amount sufficient to pay and discharge the entire Indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;

 

(2)           the Company has paid or
caused to be paid all other sums payable hereunder by the Company; and

 

(3)           the Company has
delivered to the Trustee an Officers’ Certificate  and an Opinion of Counsel each stating that
all conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.

 

27

 

Notwithstanding the
satisfaction and discharge of this Indenture, the obligations of the Company to
the Trustee under Section 607, the obligations to any Authenticating Agent
under Section 614 and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of Clause (1) of this Section,
the obligations of the Trustee under Section 402 and the last paragraph of
Section 1003 shall survive.

 

SECTION 402.     Application
of Trust Money.

 

Subject to the provisions of
the last paragraph of Section 1003, all money deposited with the Trustee
pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company acting
as its own Paying Agent) as the Trustee may determine, to the Holders entitled
thereto, of the principal and any premium and interest for whose payment such
money has been deposited with the Trustee. 
All moneys deposited with the Trustee pursuant to Section 401 (and
held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.

 

ARTICLE FIVE

REMEDIES

 

SECTION 501.     Events
of Default.

 

“Event of Default”, wherever
used herein with respect to Securities of any series, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

 

(1)           default
in the payment of any interest (including any Additional Amounts) upon any
Security of that series when it becomes due and payable, and continuance of such
default for a period of 30 days; or

 

(2)           default
in the payment of the principal (including any Redemption Price and any
Additional Amounts) of or premium on any Security of that series at its
Maturity; or

 

(3)           default
in the performance, or breach, of any covenant or warranty of the Company in
this Indenture (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a “Notice of Default” hereunder; or

 

(4)           a
default or defaults under any bond, debenture, note or other evidence of
indebtedness for money borrowed of the Company or any Material Subsidiary, or
under any mortgage, indenture, agreement or instrument under which there may be
issued or borrowed or by which there may be secured or evidenced any
indebtedness of the Company or any Material Subsidiary, whether such
indebtedness now exists or shall hereafter be created, provided that such
indebtedness, individually or in the aggregate, has an aggregate principal
amount then outstanding in excess of $50,000,000 (or the equivalent thereof in
other currencies or currency units) and that such default or defaults,
individually or in the aggregate, (A) shall constitute a failure to pay
the principal of such indebtedness (or any portion thereof having an aggregate
principal amount in excess of $50,000,000 or such equivalent thereof) when due
and payable after the expiration of any applicable grace period with respect
thereto or (B) shall have resulted in such indebtedness (or any portion
thereof having an aggregate principal amount in excess of $50,000,000 or
such equivalent thereof) becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable; or

 

28

 

(5)           a
final judgment or judgments (not subject to appeal) for the payment of money
are entered against the Company and/or any one or more Material Subsidiaries in
an aggregate amount in excess of $50,000,000 (or the equivalent thereof in
other currencies or currency units), by a court or courts of competent
jurisdiction, which judgment(s) (A) are neither discharged nor bonded
in full within 60 days after the right to appeal all such judgments has
expired or (B) if bonded in full within such 60-day period, cease to be
fully bonded; or

 

(6)           the
entry by a court having jurisdiction in the premises of (A) a decree or
order for relief in respect of the Company or any Material Subsidiary in an
involuntary case or proceeding under any applicable bankruptcy, insolvency,
suspension of payments, concurso mercantil,
reorganization or other similar law, or (B) a decree or order adjudging
the Company or any Material Subsidiary a bankrupt or insolvent, or suspending
payments, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or any
Material Subsidiary under any applicable law, or appointing a custodian,
receiver, liquidator, assignee, trustee, síndico, conciliador, sequestrator
or other similar official of the Company or any Material Subsidiary or of any
substantial part of the property of the Company or any Material Subsidiary, or
ordering the winding up or liquidation of the affairs of the Company or any
Material Subsidiary, and the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period of
60 consecutive days; or

 

(7)           the
commencement by the Company or any Material Subsidiary of a voluntary case or
proceeding under any applicable bankruptcy, insolvency, concurso
mercantil, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the
Company or any Material Subsidiary to the entry of a decree or order for relief
in respect of the Company or any Material Subsidiary in an involuntary case or
proceeding under any applicable bankruptcy, insolvency, suspension of payments,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company or any Material Subsidiary of
the Company, or the filing by the Company or any Material Subsidiary of a
petition or answer or consent seeking reorganization or relief under any
applicable law or the consent by the Company or any Material Subsidiary to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, síndico, conciliador,
sequestrator or similar official of the Company or any Material Subsidiary or
of any substantial part of the property of the Company or any Material Subsidiary,
or the making by the Company or any Material Subsidiary of an assignment for
the benefit of creditors, or the admission by the Company or any Material
Subsidiary in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company or any Material
Subsidiary in furtherance of any such action (evidenced by the adoption of a
corporate resolution in favor of any such actions or an action of any of the
Officers of the Company or such Material Subsidiary that similarly binds the
Company or such Material Subsidiary, as the case may be); or

 

(8)           any
other Event of Default provided with respect to Securities of that series.

 

SECTION 502.     Acceleration
of Maturity; Rescission and Annulment.

 

If an Event of
Default with respect to any series of Securities (other than an Event of
Default specified in Section 501(5) and Section 501(6)) occurs
and is continuing, then and in every such case the Trustee shall, at the
written request of the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series, by notice in writing to the Company,
declare the principal of all the Securities to be due and payable immediately,
and upon any such declaration such principal and any accrued interest and any
unpaid Additional Amounts thereon shall become immediately due and
payable.  If an Event of Default
specified in Section 501(5) and Section 501(6) with respect
to Securities of any series at the time Outstanding occurs and is continuing,
the principal and any accrued interest, together with any Additional Amounts
thereon, on all of the Securities of that series then Outstanding shall
automatically, and without any declaration or other action on the part of the
Trustee or any Holder, become immediately due and payable.

 

At any time
after such a declaration of acceleration with respect to Securities of any
series at the time Outstanding has been made and before a judgment or decree
for payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of
the Outstanding 

 

29

 

Securities of
that series, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if

 

(1)           the Company has paid or
deposited with the Trustee a sum sufficient to pay

 

(A)          all
overdue interest and any Additional Amounts thereon on all of the Securities of
that series,

 

(B)           the
principal of any Securities of that series which has become due otherwise than
by such declaration of acceleration,

 

(C)           to
the extent that payment of such interest is lawful, interest upon overdue
interest at the rate borne by the Securities of that series, and

 

(D)          all
sums paid or advanced by the Trustee hereunder and all amounts owing the
Trustee under Section 607;

 

and

 

(2)           all Events of Default,
other than the non-payment of the principal of Securities which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 513.

 

No such
rescission shall affect any subsequent default or impair any right consequent
thereon.

 

SECTION 503.     Collection
of Indebtedness and Suits for Enforcement by Trustee.

 

The Company covenants that
if

 

(1)           default is made in the
payment of any interest (including any Additional Amounts) on any Security when
such interest becomes due and payable and such default continues for a period
of 30 days, or

 

(2)           default is made in the
payment of the principal (including any Redemption Price) of (or premium, if
any, on) any Security at the Maturity thereof,

 

the Company
will, upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Securities, the whole amount then due and payable on such Securities for
principal and any premium and interest, and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and
premium and on any overdue interest, at the rate borne by such Securities,
together with any Additional Amounts thereon, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and all amounts due the
Trustee under Section 607.

 

If an Event of Default with
respect to Securities of any series occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders of that series by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.

 

SECTION 504.     Trustee
May File Proofs of Claim.

 

In case of any judicial
proceeding relative to the Company (or any other obligor upon the Securities),
its property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. 
In particular, the Trustee shall be authorized to collect and receive
any moneys or other property payable or deliverable on any such claims and to
distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding 

 

30

 

is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 607.

 

No provision of this
Indenture shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights
of any Holder thereof or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors’ or other similar committee.

 

SECTION 505.     Trustee
May Enforce Claims Without Possession of Securities.

 

All rights of action and
claims under this Indenture or the Securities may be prosecuted and enforced by
the Trustee without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.

 

SECTION 506.     Application
of Money Collected.

 

Any money collected by the
Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or any premium or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

 

FIRST:  To the payment of all amounts due the Trustee
under Section 607;

 

SECOND:  To the payment of the amounts then due and
unpaid for principal of and any premium and interest on the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal and any premium and interest,
respectively; and

 

THIRD:  Any remaining amounts shall be repaid to the
Company.

 

SECTION 507.     Limitation
on Suits.

 

No Holder of any Securities
of any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless

 

(1)           such Holder has
previously given written notice to the Trustee of a continuing Event of Default
with respect to the Securities of that series;

 

(2)           the Holders of not less
than 25% in principal amount of the Outstanding Securities of that series shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;

 

(3)           such Holder or Holders
have offered to the Trustee indemnity reasonably satisfactory to it against the
costs, expenses and liabilities to be incurred in compliance with such request;

 

(4)           the Trustee for
60 days after its receipt of such notice, request and offer of indemnity
has failed to institute any such proceeding; and

 

31

 

(5)           no direction
inconsistent with such written request has been given to the Trustee during
such 60-day period by the Holders of a majority in principal amount of the
Outstanding Securities of that series;

 

it being
understood and intended that no one or more of such Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other of such
Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.

 

SECTION 508.     Unconditional
Right of Holders to Receive Principal, Premium and Interest and to Convert.

 

Notwithstanding any other
provision in this Indenture, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive payment of the principal of and
any premium and (subject to Section 307) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and, if such Security is a Convertible
Security, to convert such Convertible Security in accordance with its term and
the provisions of Article Twelve, and to institute suit for the
enforcement of any such payment and right to convert, and such rights shall not
be impaired without the consent of such Holder.

 

SECTION 509.     Restoration
of Rights and Remedies.

 

If the Trustee or any Holder
has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.

 

SECTION 510.     Rights
and Remedies Cumulative.

 

Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise.  The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.

 

SECTION 511.     Delay
or Omission Not Waiver.

 

No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence
therein.  Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or
by the Holders, as the case may be.

 

SECTION 512.     Control
by Holders.

 

The Holders of a majority in
principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee, with respect to the Securities of such series, provided, that

 

(1)           such direction shall
not be in conflict with any rule of law or with this Indenture, and

 

(2)           the Trustee may take
any other action deemed proper by the Trustee which is not inconsistent with
such direction.

 

32

 

SECTION 513.     Waiver
of Past Defaults.

 

Subject to Section 502,
the Holders of not less than a majority in principal amount of the Outstanding
Securities of any series may on behalf of the Holders of all the Securities of
such series waive any past default hereunder with respect to such series and
its consequences, except a default

 

(1)           in the payment of the
principal of or any premium or interest on any Security of such series, or

 

(2)           in respect of a
covenant or provision hereof which under Article Nine cannot be modified
or amended without the consent of the Holder of each Outstanding Security of
such series affected.

 

Upon any such waiver, such
default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.

 

SECTION 514.     Undertaking
for Costs.

 

In any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an undertaking to pay the
costs of such suit, and may assess costs, including reasonable attorneys’ fees
and expenses, against any such party litigant, in the manner and to the extent
provided in the Trust Indenture Act;
provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company or the Trustee or
in any suit for the enforcement of the right to convert any Convertible
Security in accordance with its terms.

 

SECTION 515.     Waiver
of Usury, Stay or Extension Laws.

 

The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any usury, stay or extension law wherever enacted, now or at any
time hereafter in force, which may affect the covenants or the performance of
this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

 

ARTICLE SIX

THE TRUSTEE

 

SECTION 601.     Certain
Duties and Responsibilities.

 

The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture
Act.  Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.  Whether or not therein expressly so
provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

 

SECTION 602.     Notice
of Defaults.

 

If a default of which a
Trust Officer has actual knowledge occurs hereunder with respect to Securities
of any series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided by the Trust Indenture
Act; provided, however,
that in the case of any default of the character specified in Section 501(3) with
respect to Securities of such series, no such notice to Holders shall be given
until at least 

 

33

 

30 days after the
occurrence thereof.  For the purpose of
this Section, the term “default” means any event which is, or after notice or
lapse of time or both would become, an Event of Default with respect to Securities
of such series.

 

SECTION 603.     Certain
Rights of Trustee.

 

Subject to the provisions of
Section 601:

 

(1)           the Trustee may
conclusively rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document (whether in its original or
facsimile form) believed by it to be genuine and to have been signed or
presented by the proper party or parties;

 

(2)           any request or
direction of the Company mentioned herein shall be sufficiently evidenced by a
Company Request, Company Order or Officers’ Certificate, and any resolution of
the Board of Directors shall be sufficiently evidenced by a Board Resolution;

 

(3)           whenever in the
administration of this Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an
Officers’ Certificate;

 

(4)           the Trustee may consult
with counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;

 

(5)           the Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by
this Indenture at the request or direction of any of the Holders pursuant to
this Indenture, unless such Holders shall have offered to the Trustee security
or indemnity reasonably satisfactory to the Trustee against the costs, expenses
and liabilities which might be incurred by it in compliance with such request
or direction;

 

(6)           the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document in connection with this Indenture, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled
to examine the books, records and premises of the Company, personally or by
agent or attorney and shall incur no liability or additional liability of any
kind by reason of such inquiry or investigation;

 

(7)           the Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder; provided,
that the Trustee shall be required to terminate any such agent if it has actual
knowledge of any failure by such agent to perform its delegated duties;

 

(8)           notwithstanding any
provision herein to the contrary, in no event shall the Trustee be liable for
any failure or delay in the performance of its obligations under this Indenture
because of circumstances beyond its control, including, but not limited to,
acts of God, flood, war (whether declared or undeclared), terrorism, fire,
riot, strikes or work stoppages for any reason, embargo, government
action, including any laws, ordinances, regulations or the like which restrict
or prohibit the providing of the services contemplated by this Indenture,
inability to obtain material, equipment, or communications or computer
facilities, or the failure of equipment or interruption of communications or
computer facilities, and other causes beyond its control whether or not of the
same class or kind as specifically named above;

 

(9)           in no event shall the
Trustee be responsible or liable for special, indirect, consequential or
punitive loss or damage of any kind whatsoever (including, but not limited to,
loss of profit), irrespective of whether the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action;

 

(10)         the rights, privileges,
protections, immunities and benefits given to the Trustee, including, without
limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, each Agent,
and each agent, custodian and other Person employed to act hereunder;

 

(11)         the Trustee may at any time
reasonably request that the Company deliver an Officers’ Certificate setting
forth the specimen signatures and the names of individuals and/or titles of
Officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers’ Certificate may be signed by any Person authorized to
sign an Officers’ Certificate, including any Person specified as so authorized
in any such certificate previously delivered and not superseded; and

 

(12)         neither the Trustee nor any
Agent shall:  (i) have any duty to
monitor compliance with or with respect to any securities or tax laws
(including but not limited to any United States federal or state or other
securities or tax laws) or (ii) except as specifically provided herein,
have to obtain documentation on any transfers or exchanges of the Securities.

 

SECTION 604.     Not
Responsible for Recitals or Issuance of Securities.

 

The recitals contained
herein and in the Securities, except the Trustee’s certificates of
authentication, shall be taken as the statements of the Company, and neither
the Trustee nor any Agent assumes any responsibility for their
correctness.  Neither the Trustee nor any
Agent makes any representations as to the validity or sufficiency of any
offering materials, this Indenture or of the Securities.  Neither the Trustee nor any Agent shall be
accountable for the use or application by the Company of Securities or the
proceeds thereof.

 

34

 

SECTION 605.     May Hold
Securities.

 

The Trustee, any
Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Section 608 and Section 613,
may otherwise deal with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.

 

SECTION 606.     Money
Held in Trust.

 

Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law.  The Trustee shall be
under no liability for interest on or the investment of any money received by
it hereunder except as otherwise agreed in writing with the Company.

 

SECTION 607.     Compensation
and Reimbursement.

 

The Company agrees

 

(1)           to pay to the Trustee
from time to time such compensation as the Company and the Trustee shall from
time to time agree in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);

 

(2)           except as otherwise
expressly provided herein, to reimburse the Trustee upon its request for all
reasonable and documented expenses, disbursements and advances incurred or made
by the Trustee in accordance with any provision of this Indenture (including
the reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; 

 

(3)           to indemnify fully each
of the Trustee and any predecessor Trustee for, and to hold it harmless
against, any and all losses, liabilities, damages, claims costs or expenses
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim (whether asserted by the Company, a Holder or any other Person) or
liability in connection with the exercise or performance of any of its rights, powers
or duties hereunder; and

 

(4)           to secure the Company’s
obligation under this Section, the Trustee shall have a lien prior to the
Securities upon all money or property held or collected by the Trustee in its
capacity as Trustee, except for such money and property which is held in trust
to pay principal (and premium, if any) or interest on particular Securities.

 

When the Trustee incurs
expenses or renders services in connection with an Event of Default specified
in Section 501(5) or Section 501(6), the expenses (including the
reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Federal or State bankruptcy, insolvency or other similar law.

 

The provisions of this Section 607
shall survive the resignation and removal of the Trustee, payment of the
Securities and termination of this Indenture.

 

SECTION 608.     Disqualification;
Conflicting Interests.

 

If the Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Trustee shall either eliminate such interest or resign, to the extent and
in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.  To the
extent permitted by such Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.

 

35

 

SECTION 609.     Corporate
Trustee Required; Eligibility.

 

There shall at all times be
one (and only one) Trustee hereunder with respect to the Securities of each
series, which may be Trustee hereunder for Securities of one or more other
series.  Each Trustee shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and has a Corporate Trust
Office in the Borough of Manhattan, the City of New York.  If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section and
to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published.  If at any time the Trustee with respect to
the Securities of any series shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

 

SECTION 610.     Resignation
and Removal; Appointment of Successor.

 

No resignation or removal of
the Trustee and no appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Trustee
in accordance with the applicable requirements of Section 611.

 

The Trustee may resign at
any time with respect to the Securities of one or more series by giving written
notice thereof to the Company.  If the
instrument of acceptance by a successor Trustee required by Section 611
shall not have been delivered to the Trustee within 60 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

 

The Trustee may be removed
at any time with respect to the Securities of any series by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company.

 

If at any time:

 

(1)           the Trustee shall fail
to comply with Section 608 after written request therefor by the Company
or by any Holder who has been a protected Holder of a Security for at least six
months, or

 

(2)           the Trustee shall cease
to be eligible under Section 609 and shall fail to resign after written
request therefor by the Company or by any such Holder, or

 

(3)           the Trustee shall
become incapable of acting or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation,

 

then, in
any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514,
any Holder who has been a protected Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Securities and the appointment of a successor Trustee or Trustees.

 

If the Trustee shall resign,
be removed or become incapable of acting, or if a vacancy shall occur in the
office of Trustee for any cause, with respect to the Securities of one or more
series, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of Section 611.  If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements 

 

36

 

of Section 611, become
the successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company.  If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by Section 611,
any Holder who has been a protected Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.

 

The Company shall give
notice of each resignation and each removal of the Trustee with respect to the
Securities of any series and each appointment of a successor Trustee with
respect to the Securities of any series to all Holders of Securities of such
series in the manner provided in Section 106.  Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the address
of its Corporate Trust Office.

 

SECTION 611.     Acceptance
of Appointment by Successor.

 

In case of the appointment
hereunder of a successor Trustee with respect to all Securities, every such
successor Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the written request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.

 

In case of the appointment
hereunder of a successor Trustee with respect to the Securities of one or more
series, the Company, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on written request of the Company or any successor
Trustee and upon payment of any amounts owed to the retiring Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.

 

Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts referred to in the first or second preceding
paragraph, as the case may be.

 

No successor Trustee shall
accept its appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible under this Article.

 

SECTION 612.     Merger,
Conversion, Consolidation or Succession to Business.

 

Any Person into which the
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any 

 

37

 

Person succeeding to all or
substantially all the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such
Person shall be otherwise qualified and eligible under this Article, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto.

 

SECTION 613.     Preferential
Collection of Claims Against Company.

 

If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Securities), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of claims against the Company (or any
such other obligor).

 

SECTION 614.     Appointment
of Authenticating Agent.

 

The Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon original issue and upon exchange,
registration of transfer, partial conversion or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder.  Wherever reference is made in this Indenture
to the authentication and delivery of Securities by the Trustee or the
Trustee’s certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. 
Each Authenticating Agent shall be acceptable to the Company and shall
at all times be a Person organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. 
If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.  If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

 

Any Person into which an
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a party, or any
Person succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided such Person shall be otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.

 

An Authenticating Agent may
resign at any time by giving written notice thereof to the Trustee and to the
Company.  The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company.  Upon receiving such a notice of resignation
or upon such a termination, or in case at any time such Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to the Company and shall give notice of such appointment in the
manner provided in Section 106 to all Holders of Securities of the series
with respect to which such Authenticating Agent will serve, as their names and
addresses appear in the Security Register. 
Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent.  No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.

 

The Company agrees to pay to
each Authenticating Agent from time to time such reasonable compensation for
its services under this Section as the Company and the Authenticating
Agent shall from time to time agree in writing.

 

38

 

If an appointment with
respect to one or more series is made pursuant to this Section, the Securities
of such series may have endorsed thereon, in addition to the Trustee’s
certificate of authentication, an alternative certificate of authentication in
the following form:

 

This is one of the
Securities of the series designated therein referred to in the within-mentioned
Indenture.

 

	
  The Bank of New
  York Mellon,

  	
   

  
	
  As
  Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  As
  Authenticating Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  

 

SECTION 615.     Trustee’s  Application for Instructions from the Company.

 

Any application by the Trustee for written
instructions from the Company may, at the option of the Trustee, set forth in
writing any action proposed to be taken or omitted by the Trustee under this
Indenture and the date on and/or after which such action shall be taken or such
omission shall be effective. The Trustee shall not be liable for any action
taken by, or omission of, the Trustee in accordance with a proposal included in
such application on or after the date specified in such application (which date
shall not be less than five Business Days after the date any Officer of the
Company actually receives such application, unless any such Officer shall have
consented in writing to any earlier date) unless prior to taking any such
action (or the effective date in the case of an omission), the Trustee shall
have received written instructions in response to such application specifying
the action to be taken or omitted.

 

ARTICLE SEVEN

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

 

SECTION 701.     Company
to Furnish Trustee Names and Addresses of Holders.

 

The Company will furnish or
cause to be furnished to the Trustee

 

(1)           semi-annually, not
later than 15 days after each Regular Record Date with respect to each series
of Securities, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Holders of Securities of such series as of such
Regular Record Date, and

 

(2)           at such other times as
the Trustee may reasonably request in writing, within 30 days after the
receipt by the Company of any such request, a list of similar form and content
as of a date not more than 15 days prior to the time such list is
furnished,

 

excluding from any such list
names and addresses received by the Trustee in its capacity as Security
Registrar.

 

SECTION 702.     Preservation
of Information; Communications to Holders.

 

The Trustee shall preserve,
in as current a form as is reasonably practicable, the names and addresses of
Holders contained in the most recent list furnished to the Trustee as provided
in Section 701 and the names and 

 

39

 

addresses of Holders
received by the Trustee in its capacity as Security Registrar.  The Trustee may destroy any list furnished to
it as provided in Section 701 upon receipt of a new list so furnished.

 

The rights of Holders to communicate
with other Holders with respect to their rights under this Indenture or under
the Securities, and the corresponding rights and duties of the Trustee, shall
be as provided by the Trust Indenture Act.

 

Every Holder of Securities,
by receiving and holding the same, agrees with the Company and the Trustee that
none of the Company or the Trustee or any agent of any of them shall be held
accountable by reason of any disclosure of information as to names and
addresses of Holders made pursuant to the Trust Indenture Act.

 

SECTION 703.     Reports
by Trustee.

 

The Trustee shall transmit
to Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto. 
Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted within 60 days after the first
date of issuance of Securities and on each anniversary of such date.

 

A copy of each such report
shall, at the time of such transmission to Holders, be filed by the Trustee
with each stock exchange upon which any Securities are listed, with the
Commission and with the Company.  The
Company will promptly notify the Trustee in writing when any Securities are
listed on or delisted from any stock exchange.

 

SECTION 704.     Reports
by Company.

 

The Company shall file with
the Trustee and the Commission, and transmit to Holders, such information,
documents and other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act and this Indenture.

 

Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers’
Certificates).

 

ARTICLE EIGHT

CONSOLIDATION, MERGERS AND SALES

 

SECTION 801.     Company
May Consolidate, Etc., Only on Certain Terms.

 

The Company shall not
consolidate with or merge into any other Person, or, directly or indirectly, convey,
transfer, sell, lease or otherwise dispose of its properties and assets
substantially as an entirety and shall not permit any Person to consolidate
with or merge into the Company unless:

 

(1)           immediately after
giving effect to such transaction, no Event of Default, and no event or
condition which, after the giving of notice or lapse of time, or both, would
become an Event of Default with respect to any series of Securities shall have
occurred and be continuing;

 

(2)           the Person formed by
such consolidation or merger or the Person which acquires by transfer,
conveyance, sale, lease or other disposition of the properties and assets of
the Company substantially as an entirety shall be a corporation organized and
validly existing under the laws of Mexico or the United States of America or
any political subdivision thereof and, if not the Company, shall expressly
assume by an indenture supplemental hereto executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and punctual
payment of the principal of and any premium and interest on all the Securities
and the performance of every covenant of this Indenture on the part of the
Company to be performed or observed and, in the case of Convertible 

 

40

 

Securities, shall have
provided for conversion rights in accordance with the terms thereof and the
provisions of Article Twelve; and

 

(3)           the Company has
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article and that
all conditions precedent herein provided for relating to such transaction have
been complied with.

 

This Section 801 shall
not restrict any transaction other than a consolidation, merger, conveyance or
lease as specified above.

 

SECTION 802.      Successor
Substituted.

 

Upon any consolidation of
the Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 801, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.

 

ARTICLE NINE

SUPPLEMENTAL
INDENTURES

 

SECTION 901.      Supplemental
Indentures Without Consent of Holders.

 

Without the consent of any
Holders, the Company (when authorized by a Board Resolution) and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:

 

(1)           to evidence the
succession of another Person to the Company and the assumption by any such
successor of the covenants of the Company contained herein and in the
Securities; or

 

(2)           to add to the covenants
of the Company for the benefit of the Holders of all or any series of
Securities (and if such covenants are to be for the benefit of less than all
series of Securities, stating that such covenants are expressly being included
solely for the benefit of such series) or to surrender any right or power
herein conferred upon the Company; or

 

(3)           to add any additional
Events of Default for the benefit of the Holders of all or any series of
Securities (and if such additional Events of Default are to be for the benefit
of less than all series of Securities, stating that such additional Events of
Default are expressly being included solely for the benefit of such series); or

 

(4)           to add to or change any
of the provisions of this Indenture to such extent as shall be necessary to
permit or facilitate the issuance of Securities in bearer form, registrable or
not registrable as to principal, and with or without interest coupons, or to
permit or facilitate the issuance of Securities in uncertificated form; or

 

(5)           to add to, change or
eliminate any of the provisions of this Indenture in respect of one or more
series of Securities, provided that
any such addition, change or elimination (A) shall neither (i) apply
to any Security of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such provision nor (ii) modify
the rights of the Holder of any such Security with respect to such provision or
(B) shall become effective only when there is no such Security
Outstanding; or

 

(6)           to secure the
Securities; or

 

41

 

(7)           to establish the form
or terms of Securities of any series as permitted by Section 201 and Section 301;
or

 

(8)           to evidence and provide
for the acceptance of appointment hereunder by a successor Trustee with respect
to the Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 611; or

 

(9)           to make provision with
respect to the conversion rights of Holders of Convertible Securities pursuant
to the requirements of Section 1211; or

 

(10)         to add to, change or
eliminate any of the provisions of this Indenture to such extent as shall be
necessary to comply with the rules or regulations on any securities
exchange or automated quotation system on which any of the Securities may be
listed or traded; or

 

(11)         to cure any ambiguity, to
correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Indenture, provided, that such action pursuant to this Clause (11)
shall not adversely affect the interests of the Holders of Securities of any
series in any material respect.

 

[(12)      to add provisions allowing
for a guarantee of the Securities.]

 

SECTION 902.      Supplemental
Indentures With Consent of Holders.

 

With the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby,

 

(1)           change the Stated
Maturity of the principal of, or any installment of principal of or interest
on, any Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or reduce
the amount of the principal of an Original Issue Discount Security or any other
Security which would be due and payable upon a declaration of acceleration of
the Maturity thereof pursuant to Section 502, or modify in any way the
Company’s obligation to pay Additional Amounts pursuant to Section 1008,
or change any Place of Payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or adversely affect the right to convert any Security as provided in Article Twelve
(except as permitted by Section 901(9)), or

 

(2)           reduce the percentage
in principal amount of the Outstanding Securities of any series, the consent of
whose Holders is required for any such supplemental indenture, or the consent
of whose Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or

 

(3)           modify any of the
provisions of this Section, Section 513 or 1006, except to increase any
such percentage or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the
consent of any Holder with respect to changes in the references to the
“Trustee” and concomitant changes in this Section and Section 1006,
or the deletion of this proviso, in accordance with the requirements of Section 611
and 901(8).

 

42

 

A supplemental indenture
which changes or eliminates any covenant or other provision of this Indenture
which has expressly been included solely for the benefit of one or more
particular series of Securities, or which modifies the rights of the Holders of
Securities of such series with respect to such covenant or other provision,
shall be deemed not to affect the rights under this Indenture of the Holders of
Securities of any other series.

 

It shall not be necessary
for any Act of Holders under this Section to approve the particular form
of any proposed supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.

 

The Company
may, but shall not be obligated to, fix a record date for the purpose of
determining the Persons entitled to consent to any indenture supplemental
hereto.  If a record date is fixed, the
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to consent to such supplemental indenture, whether
or not such Holders remain Holders after such record date.

 

SECTION 903.       Execution
of Supplemental Indentures.

 

In executing, or accepting
the additional trusts created by, any supplemental indenture permitted by this Article or
the modifications thereby of the trusts created by this Indenture, the Trustee
shall be entitled to receive, and (subject to Section 601) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture.  The Trustee may, but shall not be obligated
to, enter into any such supplemental indenture which affects the Trustee’s own
rights, duties or immunities under this Indenture or otherwise.

 

SECTION 904.       Effect
of Supplemental Indentures.

 

Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

 

SECTION 905.       Conformity
with Trust Indenture Act.

 

Every supplemental indenture
executed pursuant to this Article shall conform to the requirements of the
Trust Indenture Act.

 

SECTION 906.       Reference
in Securities to Supplemental Indentures.

 

Securities of any series
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture.  If the Company
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Company, to any such supplemental indenture may be prepared
and executed by the Company and may be authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

 

ARTICLE TEN

COVENANTS

 

SECTION 1001.     Payment
of Principal, Premium and Interest.

 

The Company covenants and
agrees for the benefit of each series of Securities that it will duly and
punctually pay the principal of and any premium and interest (together with any
Additional Amounts payable thereon) on the Securities of that series in
accordance with the terms of the Securities and this Indenture.

 

43

 

SECTION 1002.     Maintenance
of Office or Agency.

 

With respect to any
securities that are not in the form of a Global Security, the Company will
maintain in the Borough of Manhattan, the City of New York, an office or agency
where Securities of that series may be presented or surrendered for payment,
where Securities of that series may be surrendered for registration of transfer
or exchange, where (in the case of Convertible Securities) conversion notices,
certificates and other items required to be delivered to effect conversion may
be delivered, and where notices and demands to or upon the Company (other than
the type contemplated by Section 115) in respect of the Securities of that
series and this Indenture may be served. 
The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency.

 

The Company may also from
time to time designate one or more other offices or agencies (in or outside the
Borough of Manhattan, the City of New York) where the Securities of one or more
series, notices and other items may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided, however, that
no such designation or rescission shall in any manner relieve the Company of
its obligation to maintain an office or agency in the Borough of Manhattan, the
City of New York for such purposes.  The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

 

With respect to any Global
Security, and except as otherwise may be specified for such Global Security as
contemplated by Section 301, the Corporate Trust Office of the Trustee or
any Paying Agent shall be the Place of Payment where such Global Security may
be presented or surrendered for payment or for registration of transfer or
exchange, or where successor Securities may be delivered in exchange therefor, provided, however, that
any such payment, presentation, surrender or delivery effected pursuant to the
Applicable Procedures of the Depositary for such Global Security shall be
deemed to have been effected at the Place of Payment for such Global Security
in accordance with the provisions of this Indenture.

 

SECTION 1003.     Money
for Securities Payments to Be Held in Trust.

 

If the Company shall at any
time act as its own Paying Agent with respect to any series of Securities, it
will, on or before each due date of the principal of or any premium or interest
on any of the Securities of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
and any premium and interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee in writing of its action or failure so to act.

 

Whenever the Company shall
have one or more Paying Agents for any series of Securities, it will, prior to
each due date of the principal of or any premium or interest on any Securities
of that series, deposit (or, if the Company has deposited any trust funds with
a trustee pursuant to Section 1304(1), cause such trustee to deposit) with
a Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.

 

The Company will cause each
Paying Agent for any series of Securities other than the Trustee to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Company, subject to the provisions of this Section, that such Paying
Agent will (1) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (2) during the continuance of any
default by the Company (or any other obligor upon the Securities of that
series) in the making of any payment in respect of the Securities of that
series, upon the written request of the Trustee, forthwith pay to the Trustee
all sums held in trust by such Paying Agent for payment in respect of the
Securities of that series.

 

The Company may at any time,
for the purpose of obtaining the satisfaction and discharge of this Indenture
or for any other purpose, pay, or by Company Order, direct any Paying Agent to
pay, to the Trustee all sums held in trust by the Company or such Paying Agent,
such sums to be held by the Trustee upon the same trusts as those upon 

 

44

 

which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.

 

Any money deposited with the
Trustee or any Paying Agent, or then held by the Company in trust for the
payment of the principal of or any premium or interest on any Security of any
series and remaining unclaimed for two years after such principal, premium or
interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, New York,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.

 

SECTION 1004.     Statement
by Officers as to Default.

 

The Company will deliver to
the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, an Officers’ Certificate stating whether
or not to the best knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.  For the
purposes of this Section, “fiscal year” means the fiscal year ending December
31, or any such other fiscal year which the Company may adopt in the future.

 

SECTION 1005.     Existence.

 

Subject to Article Eight,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, rights (charter and statutory) and
franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders of
Outstanding Securities.

 

SECTION 1006.     Waiver
of Certain Covenants.

 

Except as otherwise
specified as contemplated by Section 301 for Securities of a specific
series, the Company may, with respect to the Securities of any series, omit in
any particular instance to comply with any term, provision or condition set
forth in any covenant provided pursuant to Section 301(19), 901(2) or
901(7) for the benefit of the Holders of such series, in Article Eight,
or in Section 1005, if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.

 

SECTION 1007.     Calculation
of Original Issue Discount.

 

The Company shall file with
the Trustee promptly at the end of each calendar year (i) a written notice
specifying the amount of original issue discount (including daily rates and
accrual periods) accrued on Outstanding Securities as of the end of such year,
and (ii) such other specific information relating to such original issue
discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.

 

45

 

SECTION 1008.     Payment
of Additional Amounts.

 

(1)              The Company shall pay to Holders of the Securities all
additional amounts (“Additional Amounts”) that may be necessary so that every
net payment of interest (including any premium paid upon redemption of the
Securities) or principal to the Holder shall not be less than the amount
provided for in the Securities.  The term
“net payment” means the amount the Company or its Paying Agent pays the Holder
after deducting or withholding an amount for or on account of any present or
future taxes, duties, assessments or other governmental charges of whatever
nature imposed, levied, collected, withheld or assessed by or on behalf of
Mexico or any authority therein or thereof having power to tax (“Mexican
Taxes”) imposed with respect to that payment by a Mexican taxing authority
(“Taxing Authority”).

 

(2)             The Company shall not pay additional amounts to any
Holder for or solely on account of any of the following:

 

(A)        any taxes, duties, assessments or other governmental
charges imposed solely because at any time there is or was a connection between
the Holder or beneficial owner of the Security and Mexico (or any political
subdivision or territory or possession thereof), including such Holder or
beneficial owner (i) being or having been a citizen or resident thereof, (ii) maintaining
or having maintained an office, permanent establishment, or branch subject to
taxation therein, or (iii) being or having been present or engaged in a
trade or business therein (other than the mere receipt of a payment or the
ownership or holding of a Security),

 

(B)         any estate, inheritance, gift, transfer or similar
tax, assessment or other governmental charge imposed with respect to the
Securities,

 

(C)         any taxes, duties, assessments or other governmental
charges imposed solely because the Holder or any other person fails to comply
with any certification, identification, information, documentation or other
reporting requirement concerning the nationality, residence, identity or
connection with Mexico (or any political subdivision or territory or possession
thereof) of the Holder or any beneficial owner of the Security, if compliance
is required by statute, regulation, officially published administrative
practice of the taxing jurisdiction or by an applicable income tax treaty to
which Mexico is a party and which is in effect, as a precondition to exemption
from, or reduction in the rate of, the tax, assessment or other governmental
charge and the Company has given the Holders at least 30 days’ notice that
Holders will be required to provide such information and identification;

 

(D)        any tax, duty, assessment or other governmental
charge payable otherwise than by deduction or withholding from payments on the
Securities,

 

46

 

(E)         any taxes, duties, assessments or other governmental
charges with respect to such Security presented for payment more than
30 days after the date on which the payment became due and payable or the
date on which payment thereof is duly provided for and notice thereof given to
Holders, whichever occurs later, except to the extent that the Holders of such
Security would have been entitled to such additional amounts on presenting such
Security for payment on any date during such 30 day period, and

 

(F)         any payment on the Security to a Holder that is a
fiduciary or partnership or a person other than the sole beneficial owner of
any such payment, to the extent that a beneficiary or settlor with respect to
such fiduciary, a member of such a partnership or the beneficial owner of the
payment would not have been entitled to the additional amounts had the
beneficiary, settlor, member or beneficial owner been the Holder of the
Security.

 

(3)              (A) The limitations on
the Company’s obligations to pay Additional Amounts set forth in Section 1008(2)(C)
above shall not apply:

 

(i)          if the provision of information, documentation or
other evidence described in such Section 1008(2)(C) would be
materially more onerous, in form, in procedure or in the substance of
information disclosed, to a Holder or beneficial owner of a Security, taking
into account any relevant differences between U.S. and Mexican law,
regulation or administrative practice, than comparable information or other
reporting requirements imposed under U.S. tax law (including the United
States-Mexico income tax treaty), regulation (including proposed
regulations) and administrative practice.

 

(ii)         unless (i) the provision of the information,
documentation or other evidence described in such Section 1008(2)(C) becomes
expressly required by the applicable Mexican statutes, regulations and
administrative practices, and (ii) the Company otherwise would not meet
the requirements for application of the reduced Mexican tax rate.

 

(iii)        if the provisions of Article 195, Section II,
subsection a) of the Mexican Income Tax Law (or a substitute equivalent provision)
would apply.

 

(B) In addition, such Section 1008(2)(C) does
not require, and shall not be construed to require that any person, including
any non-Mexican pension fund, retirement fund or financial institution,
register with the Ministry of Finance and Public Credit to establish
eligibility for an exemption from, or a reduction of, Mexican withholding tax.

 

(4)              Upon request, the Company shall provide the Trustee
with documentation satisfactory to the Trustee evidencing the payment of
Mexican taxes in respect of which the Company has paid any Additional
Amount.  The Company shall 

 

47

 

make copies of such
documentation available to the Holders of the Securities or the Paying Agent
upon request.

 

(5)             In the event that Additional
Amounts actually paid with respect to the Securities pursuant to this Section 1008
are based on rates of deduction or withholding of withholding taxes in excess
of the appropriate rate applicable to the Holder of such Securities, and as a
result thereof such Holder is entitled to make a claim for a refund or credit
of such excess from the authority imposing such withholding tax, then such
Holder shall, by accepting such Securities, be deemed to have assigned and
transferred all right, title and interest to any such claim for a refund or
credit of such excess to the Company. 
However, by making such assignment, the Holder makes no representation
or warranty that the Company will be entitled to receive such claim for a
refund or credit and incurs no other obligation with respect thereto.

 

(6)             In the event of any merger
or other transaction described and permitted under Article Eight, then all
references to Mexico, Mexican law or regulations, and Mexican taxing
authorities under this Section 1008 (other than Section 1008(3)(A)) shall
be deemed to also include the United States and any political subdivision
therein or thereof, United States law or regulations, and any taxing authority
of the United States or any political subdivision therein or thereof,
respectively.

 

48

 

SECTION 1009.     Indemnification
of Judgment Currency.

 

The Company shall indemnify
the Trustee and any Holder of a Security against any loss incurred by the
Trustee or such Holder, as the case may be, as a result of any judgment or
order being given or made for any amount due under this Indenture or such
Security and being expressed and paid in a currency (the “Judgment Currency”)
other than Dollars, and as a result of any variation between (i) the rate
of exchange at which the Dollar amount is converted into the Judgment Currency
for the purpose of such judgment or order and (ii) the spot rate of
exchange in the City of New York at which the Trustee or such Holder, as the
case may be, on the date of payment of such judgment or order is able to
purchase Dollars with the amount of the Judgment Currency actually received by
the Trustee or such Holder.  The
foregoing indemnity shall constitute a separate and independent obligation of
the Company and shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid.  The
term “spot rate of exchange” shall include any premiums and costs of exchange
payable in connection with the purchase of, or conversion into, Dollars.

 

49

 

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

 

SECTION 1101.    Right
of Redemption.

 

(1)      The Securities of any series which are redeemable
before their Stated Maturity may not be redeemed at the election of the Company
except in accordance with their terms and (except as otherwise specified as
contemplated by Section 301 for such Securities) in accordance with the
provisions of this Article.

 

(2)      The election of the Company to redeem any Securities
shall be evidenced by a Board Resolution. 
In case of any redemption at the election of the Company of less than
all the Securities of any series, the Company shall, at least 45 days
prior to the Redemption Date fixed by the Company, notify the Trustee in writing
of such Redemption Date, of the principal amount of Securities of such series
to be redeemed and, if applicable, of the tenor of the Securities to be
redeemed, and provide to the Trustee the notice deliverable to the Holders
pursuant to Section 1102.

 

(3)      If, as a result of any amendment to, or change in, the
laws (or any rules or regulation thereunder) of Mexico or any political
subdivision or taxing authority thereof or therein affecting taxation or any
amendment to or change in an official interpretation or application of such
laws, rules or regulations, which amendment or change of such laws, rules or
regulations becomes effective on or after the date of this Indenture, the
Company would be obligated to pay on the next succeeding Interest Payment Date
Additional Amounts in respect of interest payments on the Securities of any
series pursuant to the terms and conditions thereof in excess of those
attributable to the Mexican withholding tax on the basis of a statutory rate of
4.9% imposed on interest payments with respect to such series of Securities,
and if such obligation cannot be avoided by the Company after taking measures
the Company considers reasonable to avoid it, then, at the Company’s option,
the Securities of such series may be redeemed in whole, but not in part, at any
time, on giving not less than 30 nor more than 60 days’ notice to the
Trustee and the Holders of such Securities, at a Redemption Price equal to 100%
of the principal amount thereof and any premium applicable thereto, together with
accrued interest up to but not including the Redemption Date and any Additional
Amounts which would otherwise be payable;
provided, however, that (1) no notice
of such redemption may be given earlier than 90 days prior to the earliest
date on which the Company would but for such redemption be obligated to pay
such Additional Amounts were a payment on such Securities then due, and (2) at
the time such notice is given, such obligation to pay such Additional Amounts
remains in effect.

 

(4)      Before any notice of redemption pursuant to Section 1101(3) is
given to the Trustee or the Holders of Securities of the relevant series, the
Company shall deliver to the Trustee (i) an Officers’ Certificate stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the condition or conditions precedent to the
right of the Company so to redeem have occurred or been satisfied and (ii) an
Opinion of Counsel to the effect that the Company has or shall become obligated
to pay such Additional Amounts as a result of such change or amendment.  Such notice, once given to the Trustee, shall
be irrevocable.

 

SECTION 1102.    Notice
of Redemption.

 

Notice of redemption shall
be given by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Redemption Date, to each Holder of Securities to
be redeemed, at his address appearing in the Security Register.

 

All notices of redemption
shall state:

 

(1)           the Redemption Date,

 

(2)           the Redemption Price
and amount of accrued interest, if any,

 

(3)           that on the Redemption
Date the Redemption Price and any accrued interest shall become due and payable
upon each Security to be redeemed and that interest thereon shall cease to
accrue on and after said date,

 

50

 

(4)           the Conversion Rate,
the date on which the right to convert the Securities to be redeemed shall
terminate and the place or places where such Securities may be surrendered for
conversion,

 

(5)           the place or places
where such Securities are to be surrendered for payment of the Redemption Price
and any accrued interest, and

 

(6)           applicable CUSIP
numbers.

 

Notice of redemption of
Securities to be redeemed at the election of the Company shall be given by the
Company or, at the Company’s request, by the Trustee in the name and at the
expense of the Company, and such notice, when given to the Holders, shall be
irrevocable.

 

SECTION 1103.    Deposit
of Redemption Price.

 

On or prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an
Interest Payment Date) accrued interest on, all the Securities which are to be
redeemed on that date other than any Securities called for redemption on that
date which have been converted prior to the date of such deposit.

 

If any Security called for
redemption is converted, any money deposited with the Trustee or with any
Paying Agent or so segregated and held in trust for the redemption of such
Security shall (subject to any right of the Holder of such Security or any
Predecessor Security to receive interest as provided in the last paragraph of Section 307)
be paid to the Company upon Company Request or, if then held by the Company,
shall be discharged from such trust.

 

SECTION 1104.    Securities
Payable on Redemption Date.

 

Notice of redemption having
been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price herein
specified, and from and after such date (unless the Company shall default in
the payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest.  Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date;
provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.

 

If any Security called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal shall, until paid, bear interest from the Redemption Date at the rate
borne by the Security.

 

SECTION 1105.    Securities
Redeemed in Part.

 

Any Security which is to be
redeemed only in part shall be surrendered at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Security
or Securities of the same series and of like tenor, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the Security
so surrendered.

 

51

 

ARTICLE TWELVE

 

CONVERSION OF CONVERTIBLE
SECURITIES

 

SECTION 1201.        Conversion Privilege and
Conversion Rate.

 

A Holder of Convertible Securities may
convert the principal amount thereof (or any portion thereof that is an
integral multiple of $[     ])
into fully paid and nonassessable ADSs of the Company at any time following the
date of original issuance thereof and prior to the close of business on the
Business Day immediately preceding the Convertible Securities’ Maturity at the
Conversion Rate then in effect for such series, except that, with respect to
any Convertible Securities called for redemption such conversion right shall
terminate at the close of business on the Business Day immediately preceding
the Redemption Date (unless the Company shall default in making the redemption
payment when it becomes due, in which case the conversion right shall terminate
on the date such default is cured).  The
rate at which ADSs shall be delivered upon conversion of Convertible Securities
(the “Conversion Rate”) shall be expressed as a number of ADSs per $[     ]
principal amount at Maturity of Convertible Securities.

 

The initial Conversion Rate with respect to
any series of Convertible Securities shall be stated in such Convertible
Securities and shall be subject to adjustment as provided in this Article.

 

A Holder of Convertible Securities is not
entitled to any rights of a holder of ADSs (other than as provided pursuant to
the Company’s shareholders rights plan, if any) until such Holder has converted
such Convertible Securities into ADSs, and only to the extent that such
Convertible Securities are deemed to have been converted into ADSs under this
Article.

 

SECTION 1202.        Exercise of Conversion
Privilege.

 

In order to exercise the conversion privilege
applicable to any series of Convertible Securities, the Holder of any
Convertible Security to be converted shall surrender such Convertible Security,
duly endorsed or assigned to the Company or in blank, at any office or agency
of the Company maintained for that purpose pursuant to Section 802 (a “Conversion
Agent”), accompanied by a duly signed conversion notice substantially in the
form set forth in Section 205 stating that the Holder elects to convert
such Convertible Security or, if less than the entire principal amount thereof
is to be converted, the portion thereof to be converted.  Each Convertible Security surrendered for
conversion (in whole or in part) during the period from the close of business
on any Regular Record Date next preceding any Interest Payment Date to the
opening of business on such Interest Payment Date shall (except in the case of
any Convertible Security or portion thereof which has been called for
redemption on a Redemption Date occurring within such period) be accompanied by
payment in New York Clearing House funds or other funds acceptable to the
Company of an amount equal to the interest payable on such Interest Payment
Date on such Convertible Security (or part thereof, as the case may be) being
surrendered for conversion.  The interest
so payable on such Interest Payment Date with respect to any Convertible
Security (or portion thereof, if applicable) which has been called for
redemption on a Redemption Date occurring during the period from the close of
business on any Regular Record Date with respect to such series next preceding
any Interest Payment Date to the opening of business on such Interest Payment
Date, which Convertible Security (or portion thereof, if applicable) is
surrendered for conversion during such period, shall be paid to the Holder of
such Convertible Security being converted in an amount equal to the interest
that would have been payable on such Convertible Security if such Convertible
Security had been converted as of the close of business on such Interest
Payment Date.  The interest so payable on
such Interest Payment Date in respect of any Convertible Security (or portion
thereof, as the case may be) which has not been called for redemption on a
Redemption Date occurring during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date, which Convertible Security (or portion
thereof, as the case may be) is surrendered for conversion during such period,
shall be paid to the Holder of such Convertible Security as of such Regular
Record Date.  Other than as set forth
above in this Section, no interest shall be payable in respect of any
Convertible Security surrendered for conversion.  Except as provided in this paragraph and
subject to the last paragraph of Section 307, no cash payment or
adjustment shall be made upon any conversion on account of any interest accrued
from the Interest Payment Date next preceding the conversion date, in respect
of any Convertible Security (or part thereof, as the case may be) surrendered
for conversion, or on account of any dividends on the ADSs issued upon
conversion.  The Company’s 

 

52

 

delivery to
the Holder of the number of ADSs (and cash in lieu of fractions thereof, as
provided in this Indenture) into which a Convertible Security is convertible
shall be deemed to satisfy the Company’s obligation to pay the principal amount
at Stated Maturity of the Convertible Security.

 

Convertible Securities shall be deemed to
have been converted immediately prior to the close of business on the day of
surrender of such Convertible Securities for conversion in accordance with the
foregoing provisions, and at such time the rights of the Holders of such
Convertible Securities as Holders shall cease, and the Person or Persons
entitled to receive the ADSs issuable upon conversion shall be treated for all
purposes as the record holder or holders of such ADSs at such time.  As promptly as practicable on or after the
conversion date, the Company shall issue and deliver to the ADS Depositary
Common Shares and shall cause the ADS Depositary to issue and deliver to the
Trustee, for delivery to the Holder, a certificate or certificates for the
number of full ADSs issuable upon conversion, together with payment in lieu of
any fraction of an ADS as provided in Section 1203.

 

In the case of any Convertible Security which
is converted in part only, upon such conversion the Company shall execute and
the Trustee shall authenticate and deliver to the Holder thereof, at the
expense of the Company, a new Convertible Security or Convertible Securities of
the same series and of like tenor, of authorized denominations in an aggregate
principal amount equal to the unconverted portion of the principal amount of
such Convertible Security.  A Convertible
Security may be converted in part, but only if the principal amount of such
Convertible Security to be converted is any integral multiple of $[     ] and the principal amount of such
Convertible Security to remain Outstanding after such conversion is equal to $[     ]
or any integral multiple of $[     ] in excess thereof.

 

SECTION 1203.        Fractions of ADSs.

 

No fractional ADSs shall be issued upon
conversion of any Convertible Security or Convertible Securities.  If more than one Convertible Security shall
be surrendered for conversion at one time by the same Holder, the number of
full ADSs which shall be issuable upon conversion thereof shall be computed on
the basis of the aggregate principal amount at Stated Maturity of the
Convertible Securities (or specified portions thereof) so surrendered.  Instead of any fractional ADSs which would
otherwise be issuable upon conversion of any Convertible Security or
Convertible Securities (or specified portions thereof), the Company shall
calculate and pay a cash adjustment in respect of such fraction (calculated to
the nearest 1/100th of an ADS) in an amount equal to the same fraction of the
Closing Price per ADS at the close of business on the day of conversion.

 

SECTION 1204.        Adjustment of Conversion
Rate.

 

The Conversion Rate shall be subject to
adjustments (or securities or other property other than ADSs representing the
right to receive Common Shares may become issuable) from time to time as set
forth below.  Any adjustment to the
Conversion Rate shall take into account the number of Common Shares represented
by each ADS before and after each such adjustment.

 

(1)                                  In
case the Company shall pay or make a dividend or other distribution on any
class of capital stock of the Company payable in Common Shares, the Conversion
Rate in effect at the opening of business on the day following the date fixed
for the determination of shareholders entitled to receive such dividend or
other distribution shall be increased by multiplying such Conversion Rate by a
fraction of which the numerator shall be the sum of the number of Common Shares
outstanding at the close of business on the date fixed for such determination
and the total number of shares constituting such dividend or other distribution
and the denominator shall be the number of Common Shares outstanding at the
close of business on the date fixed for such determination, such increase to
become effective immediately after the opening of business on the day following
the date fixed for such determination. 
For the purposes of this paragraph (1), the number of Common Shares
at any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of Common Shares. 
The Company shall not pay any dividend or make any distribution on
Common Shares held in the treasury of the Company.

 

(2)                                  Subject
to the last sentence of paragraph (7) of this Section, in case the
Company shall issue rights, options or warrants (expiring within 45 days
after the record date for the determination of shareholders entitled to receive
such rights, warrants or options) to all holders of its Common Shares entitling
them to subscribe for or purchase Common Shares at a price per share less than
the current market price per share (determined as 

 

53

 

provided in paragraph (8) of this Section)
of the Common Shares on the date fixed for the determination of stockholders
entitled to receive such rights, options or warrants, the Conversion Rate in
effect at the opening of business on the day following the date fixed for such
determination shall be increased by multiplying such Conversion Rate by a
fraction of which the numerator shall be the number of Common Shares
outstanding at the close of business on the date fixed for such determination
plus the number of Common Shares so offered for subscription or purchase and
the denominator shall be the number of Common Shares outstanding at the close
of business on the date fixed for such determination plus the number of Common
Shares which the aggregate of the offering price of the total number of Common
Shares so offered for subscription or purchase would purchase at such current
market price, such increase to become effective immediately after the opening
of business on the day following the date fixed for such determination.  For the purposes of this paragraph (2),
the number of Common Shares at any time outstanding shall not include shares
held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of Common
Shares.  The Company shall not issue any
rights, options or warrants in respect of Common Shares held in the treasury of
the Company.

 

(3)                                  In
case outstanding Common Shares shall be subdivided into a greater number of
Common Shares, the Conversion Rate in effect at the opening of business on the
day following the day upon which such subdivision becomes effective shall be
proportionately increased, and, conversely, in case outstanding Common Shares
shall each be combined into a smaller number of Common Shares, the Conversion
Rate in effect at the opening of business on the day following the day upon
which such combination becomes effective shall be proportionately reduced, such
increase or reduction, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such subdivision
or combination becomes effective.

 

(4)                                  Subject
to the last sentence of paragraph (7) of this Section, in case the
Company shall, by dividend or otherwise, distribute to all holders of its Common
Shares evidences of its Indebtedness, shares of any class of capital stock, or
other property (including securities, but excluding (i) any rights,
options or warrants referred to in paragraph (2) of this Section, (ii) any
dividend or distribution paid exclusively in cash, (iii) any dividend or
distribution referred to in paragraph (1) of this Section and (iv) any
distribution in connection with any merger or consolidation to which Section 1211
applies), the Conversion Rate shall be adjusted so that the same shall equal
the rate determined by multiplying the Conversion Rate in effect immediately
prior to the close of business on the date fixed for the determination of
shareholders entitled to receive such distribution by a fraction of which the
numerator shall be the current market price per share (determined as provided
in paragraph (8) of this Section) of the Common Shares on the date
fixed for such determination (the “Reference Date”) and the denominator shall
be the current market price per share of the Common Shares on the Reference
Date less the then fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution
filed with the Trustee) on the Reference Date of the portion of the assets,
shares or evidences of Indebtedness so distributed applicable to one share of
Common Shares, such adjustment to become effective immediately prior to the
opening of business on the day following the Reference Date.

 

(5)                                  In
case the Company shall, by dividend or otherwise (other than regular or
quarterly cash dividends), distribute to all holders of its Common Shares cash
in an aggregate amount that, combined together with (I) the aggregate
amount of any other cash distributions (other than regular or quarterly cash
dividends) to all holders of its Common Shares made exclusively in cash (and
not included in clause (II) of this sentence) within the
12 months preceding the date of payment of such distribution and in
respect of which no adjustment pursuant to this paragraph (5) has
been made and (II) the aggregate amount of all Excess Payments in respect
of any tender or exchange offer by the Company or any of its Subsidiaries for
all or any portion of the Common Shares concluded within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to paragraph (6) of this Section has been
made (the “combined cash and tender amount”), exceeds [    ]% of the product of the current market
price per share (determined as provided in paragraph (8) of this
Section) of the Common Shares on the date for the determination of holders of
Common Shares entitled to receive such distribution times the number of Common
Shares outstanding on such date (the “aggregate current market price”), then,
and in each such case, immediately after the close of business on such date for
determination, the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the date fixed for determination
of the shareholders entitled to receive such distribution by a fraction of
which the numerator shall be the current market price per share (determined as
provided in paragraph (8) of this Section) of the Common Shares on
the date fixed for such determination and the denominator shall be the current
market price per share (determined as provided in paragraph (8) of
this Section) of 

 

54

 

the Common Shares on such date for determination less
an amount equal to the quotient of (x) the excess of such combined cash
and tender amount over [    ]% of such
aggregate current market price divided by (y) the number of Common Shares
outstanding on such date for determination.

 

(6)                                  In
case a tender or exchange offer made by the Company or any Subsidiary for all
or any portion of the Common Shares shall expire and such tender or exchange
offer (as amended upon the expiration thereof) shall require the payment to
shareholders of Excess Payments in an aggregate amount that combined together
with (I) all Excess Payments payable in respect of any other tender or
exchange offer by the Company or any Subsidiary for all or any portion of the
Common Shares expiring within the 12 months preceding the expiration of
such tender or exchange offer and in respect of which no adjustment pursuant to
this paragraph (6) has been made and (II) the aggregate amount
of any cash distribution (other than regular or quarterly cash dividends) to
all holders of the Company’s Common Shares within 12 months preceding the
expiration of such tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (5) of this Section has been
made (the “combined tender and cash amount”) exceeds [    ]% of the product of the current market
price per share of the Common Shares (determined as provided in paragraph (8) of
this Section) as of the last time (the “Expiration Time”) tenders or exchanges
could have been made pursuant to such tender or exchange offer (as it may be
amended) times the number of Common Shares outstanding (including any tendered
or exchanged shares) as of the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after the date of the
Expiration Time, the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by multiplying the Conversion Rate immediately prior
to close of business on the date of the Expiration Time by a fraction of which (i) the
numerator shall be the product of (A) the current market price per share
of the Common Shares (determined as provided in paragraph (8) of this
Section) as of the Expiration Time multiplied by (B) the number of shares
of Common Stock outstanding (including any tendered or exchanged shares) as of
the Expiration Time less the number of all shares validly tendered or exchanged
and not withdrawn as of the Expiration Time, and (ii) the denominator
shall be (A) the product of (I) the current market price per share of
the Common Stock (determined as provided in paragraph (8) of this
Section) on the date of the Expiration Time multiplied by (II) the number
of Common Shares outstanding (including any tendered or exchanged shares) on
the date of the Expiration Time less (B) the combined tender and cash
amount.

 

(7)                                  The
reclassification of Common Shares into securities other than Common Shares
(other than any reclassification upon a consolidation or merger to which Section 1211
applies) shall be deemed to involve (a) a distribution of such securities
other than Common Shares to all holders of Common Shares (and the effective
date of such reclassification shall be deemed to be “the date fixed for the
determination of shareholders entitled to receive such distribution” and “the
date fixed for such determination” within the meaning of paragraph (4) of
this Section), and (b) a subdivision or combination, as the case may be,
of the number of Common Shares outstanding immediately prior to such
reclassification into the number of Common Shares outstanding immediately thereafter
(and the effective date of such reclassification shall be deemed to be “the day
upon which such subdivision becomes effective” or “the day upon which such
combination becomes effective”, as the case may be, and “the day upon which
such subdivision or combination becomes effective” within the meaning of
paragraph (3) of this Section). 
Rights or warrants issued by the Company to all holders of its Common
Shares entitling the holders thereof to subscribe for or purchase Common
Shares, which rights or warrants (i) are deemed to be transferred with
such Common Shares, (ii) are not exercisable and (iii) are also
issued in respect of future issuances of Common Shares, in each case in
clauses (i) through (iii) until the occurrences of a specified
event or events (“Trigger Event”), shall for the purposes of this Section not
be deemed issued until the occurrence of the earliest Trigger Event.

 

(8)                                  For
the purpose of any computation under paragraphs (2), (4), (5) and (6) of
this Section, the current market price per share of Common Shares on any date
shall be calculated by the Company and be deemed to be the average of the last
reported sale price of the Common Shares on the Mexican Stock Exchange for 30
consecutive Trading Days commencing not more than 45 Trading Days before, and
ending not later than, the earlier of the day in question and the day before
the “ex” date with respect to the issuance or distribution requiring such
computation.  For purposes of this
paragraph, the term “‘ex’ date”, when used with respect to any issuance or
distribution, means the first date on which the Common Shares trade regular way
in the applicable securities market or on the applicable securities exchange
without the right to receive such issuance or distribution.

 

(9)                                  No
adjustment in the Conversion Rate shall be required unless such adjustment
(plus any adjustments not previously made by reason of this paragraph (9))
would require an increase or decrease of at least 

 

55

 

one percent in such rate; provided,
however, that any adjustments which by
reason of this paragraph (9) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.  All calculations under this Article shall
be made to the nearest cent or to the nearest one-hundredth of a share, as the
case may be.

 

(10)                            The
Company may make such increases in the Conversion Rate, for the remaining term
of the Convertible Securities of any series or any shorter term, in addition to
those required by paragraphs (1), (2), (3), (4), (5) and (6) of
this Section, as it considers to be advisable in order to avoid or diminish any
income tax to any holders of Common Shares resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax purposes.

 

(11)                            In any
case in which this Section 1204 shall require that an adjustment shall
become effective immediately after a determination date for an event, the
Company may defer until the occurrence of such event (i) issuing to the
Holder of any Convertible Security converted after such record date and before
the occurrence of such event the additional ADSs issuable upon such conversion
by reason of the conversion rate adjustment required by such event over and
above the ADSs issuable upon such conversion before giving effect to such
conversion rate adjustment and (ii) paying to such Holder any amount in
cash in lieu of a fractional ADS pursuant to Section 1203; provided, however, that
the Company shall deliver to such Holder a due bill or other appropriate
instrument evidencing such Holder’s right to receive such additional ADSs, and
such cash, upon the occurrence of the event requiring such adjustment.

 

(12)                            The
initial Conversion Rate reflects that as of the date of this Indenture, each
ADS represents six Common Shares.  If the
number of Common Shares represented by an ADS should change, whether in
conjunction with one of the foregoing adjustment events or otherwise, the
Conversion Rate (as so changed) shall be adjusted proportionately.

 

SECTION 1205.        Notice of Adjustments of
Conversion Rate.

 

Whenever the Conversion Rate for the
Convertible Securities of any series is adjusted as herein provided:

 

(1)                                  the
Company shall compute the adjusted Conversion Rate in accordance with Section 1204
and shall prepare a certificate signed by the principal accounting or financial
officer of the Company setting forth the adjusted Conversion Rate and showing
in reasonable detail the facts upon which such adjustment is based, and such
certificate shall promptly be filed with the Trustee and with each Conversion
Agent; and

 

(2)                                  a
notice stating that the Conversion Rate has been adjusted and setting forth the
adjusted Conversion Rate shall forthwith be prepared, and as soon as
practicable after it is prepared, such notice shall be provided by the Company,
or the Company shall deliver the notice to the Trustee and cause such notice to
be provided by the Trustee to, all Holders of Convertible Securities of such
series in accordance with Section 106.

 

Neither the Trustee nor any Conversion Agent
shall be under any duty or responsibility with respect to any such certificate
or the information and calculations contained therein, except to exhibit the
same to any Holder of Convertible Securities of such series desiring inspection
thereof at its office during normal business hours.

 

SECTION 1206.        Notice of Certain
Corporate Action.

 

In case:

 

(1)                                  the
Company shall declare a dividend (or any other distribution) on its Common
Shares payable (i) otherwise than exclusively in cash or (ii) exclusively
in cash in an amount that would require any adjustment pursuant to Section 1204;
or

 

(2)                                  the
Company shall authorize the granting to the holders of its Common Shares
generally of rights, options or warrants to subscribe for or purchase any
shares of capital stock of any class or of any other rights; or

 

56

 

(3)                                  of
any reclassification of the Common Shares of the Company, or of any
consolidation, merger or share exchange to which the Company is a party and for
which approval of any shareholders of the Company is required, or of the
conveyance, sale, transfer or lease of all or substantially all of the assets
of the Company; or

 

(4)                                  of
the voluntary or involuntary dissolution, liquidation or winding up of the
Company; or

 

(5)                                  of
the termination of the ADS Deposit Agreement; or

 

(6)                                  the
Company or any Subsidiary shall commence a tender offer for all or a portion of
the outstanding Common Shares (or shall amend any such tender offer);

 

then the
Company shall cause to be filed, or the Company shall cause the Trustee to
cause to be filed, at the office of the Conversion Agent pursuant to Section 1002,
and the Company shall cause to be provided, or the Company shall cause the
Trustee to cause to be provided, to all Holders of Convertible Securities in
accordance with Section 106, at least 20 days (or 10 days in any
case specified in clause (1) or (2) above) prior to the
applicable record, expiration or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights, options or warrants, or, if a record is
not to be taken, the date as of which the holders of Common Shares of record to
be entitled to such dividend, distribution, rights, options or warrants are to
be determined, (y) the date on which the right to make tenders under such
tender offer expires or (z) the date on which such reclassification,
consolidation, merger, conveyance, transfer, sale, lease, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Shares of record shall be entitled
to exchange their Common Shares for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, sale, lease, dissolution, liquidation or winding up.  Neither the failure to give such notice nor any
defect therein shall affect the legality or validity of the proceedings
described in clauses (1) through (6) of this Section.  If at the time the Trustee shall not be a
Conversion Agent, a copy of such notice shall also forthwith be filed by the
Company with the Trustee.

 

SECTION 1207.        Company to Reserve Common
Shares; Depositary to Register ADSs; Listing on NYSE.

 

(1)                                  The
Company shall at all times reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Shares, for the purpose of
effecting the conversion of Convertible Securities, the full number of Common
Shares then issuable upon the conversion of all Outstanding Convertible
Securities.

 

(2)                                  The
Company shall cause the ADS Depositary at all times to register and maintain
registered under the Securities Act, for the purpose of effecting the
conversion of Convertible Securities, the full number of ADSs then issuable
upon the conversion of all Outstanding Convertible Securities.

 

[(3)                              The
Company has arranged for listing on the New York Stock Exchange of all ADSs
deliverable upon conversion of Convertible Securities, and agrees to maintain
registered with the National Registry of Securities and Intermediaries and
listed with the Mexican Stock Exchange the underlying Common Shares, and shall
take all action (including obtaining or giving approvals and consents and
paying listing fees) necessary to ensure that each ADS delivered on conversion
of a Convertible Security shall, upon such delivery and at all times thereafter
when outstanding, be so listed.]

 

SECTION 1208.        Taxes and Fees on
Conversions.

 

Except as provided in the next sentence, the
Company shall pay any and all taxes and duties and any and all fees of the ADS
Depositary that may be payable in respect of the issue or delivery to the ADS
Depositary of Common Shares and the issue and delivery of the ADSs on
conversion of Convertible Securities pursuant hereto.  The Company shall not, however, be required
to pay any tax or duty which may be payable in respect of (i) income of
the Holder (including franchise, capital gains and doing business taxes imposed
on a net income basis) or (ii) any transfer involved in the issue and
delivery of ADSs in a name other than that of the Holder of the Convertible
Security or Convertible Securities to be converted, and no such issue or
delivery shall be made unless and until the 

 

57

 

Person
requesting such issue has paid to the Company the amount of any such tax or
duty, or has established to the satisfaction of the Company that such tax or
duty has been paid.

 

SECTION 1209.        Covenant as to Common
Shares.

 

The Company agrees that all Common Shares
represented by ADSs which may be issued and delivered to the ADS Depositary
upon conversion of Convertible Securities shall be duly authorized and validly
issued and maintains, at all times, that any principal amount of, or premium or
interest on any Convertible Security remaining unpaid in treasury of the
Company, and upon such issue and delivery, shall be fully paid and
nonassessable and, except as provided in Section 1208, the Company shall
pay all taxes, liens and charges with respect to the issue and delivery
thereof.

 

SECTION 1210.        Cancellation of Converted
Convertible Securities.

 

All Convertible Securities delivered for
conversion shall be delivered to the Trustee to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in Section 309.

 

SECTION 1211.        Provision in Case of
Consolidation, Merger or Sale of Assets.

 

In case of any consolidation or merger of the
Company with or into any other Person, any merger of another Person with or
into the Company (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding Common
Shares of the Company) or any conveyance, sale, transfer or lease of all or
substantially all of the assets of the Company, the Person formed by such
consolidation or resulting from such merger or which acquires such assets, as the
case may be, shall execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Convertible Security then Outstanding shall
have the right thereafter, during the period such Convertible Security shall be
convertible as specified in Section 1201, to convert such Convertible
Security only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance, sale, transfer or lease
by a holder of the number of Common Shares of the Company into which such
Convertible Security might have been converted immediately prior to such
consolidation, merger, conveyance, sale, transfer or lease, assuming such
holder of Common Shares of the Company (i) is not a Person with which the
Company consolidated or merged with or into or which merged into or with the
Company or to which such conveyance, sale, transfer or lease was made, as the
case may be (“Constituent Person”), or an Affiliate of a Constituent Person and
(ii) failed to exercise his rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease (provided that if the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance, sale,
transfer, or lease is not the same for each share of Common Shares of the
Company held immediately prior to such consolidation, merger, conveyance, sale,
transfer or lease by others than a Constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised (“Non-electing
Share”), then for the purpose of this Section the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer or lease by the holders of each Non-electing Share
shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-electing Shares). 
Such supplemental indenture shall provide for adjustments which, for
events subsequent to the effective date of such supplemental indenture, shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Article.  The above provisions of
this Section shall similarly apply to successive consolidations, mergers,
conveyances, sales, transfers or leases. 
Notice of the execution of such a supplemental indenture shall be given
by the Company, or the Company shall cause the Trustee to give such notice in
the name of and at the expense of the Company, to the Holder of each
Convertible Security as provided in Section 106 promptly upon such
execution.

 

Neither the Trustee, any Paying Agent nor any
Conversion Agent shall be under any responsibility to determine the correctness
of any provisions contained in any such supplemental indenture relating either
to the kind or amount of shares of stock or other securities or property or
cash receivable by Holders of Convertible Securities upon the conversion of
their Convertible Securities after any such consolidation, merger, conveyance,
transfer, sale or lease or to any such adjustment, but may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected in
relying upon, an Opinion of Counsel with respect thereto, which the Company
shall cause to be furnished to the Trustee upon request.

 

58

 

SECTION 1212.        Responsibility of Trustee
for Conversion Provisions.

 

The Trustee, subject to the provisions of Article Five,
and any Conversion Agent shall not at any time be under any duty or
responsibility to any Holder of Convertible Securities to determine whether any
facts exist which may require any adjustment of the Conversion Rate, or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same, or whether a supplemental
indenture need be entered into.  Neither
the Trustee, subject to the provisions of Article Six, nor any Conversion
Agent shall be accountable with respect to the validity or value (or the kind
or amount) of any Common Shares, or of any other securities or property or
cash, which may at any time be issued or delivered upon the conversion of any
Convertible Security; and it or they do not make any representation with
respect thereto.  Neither the Trustee,
subject to the provisions of Article Six, nor any Conversion Agent shall
be responsible for any failure of the Company to make or calculate any cash
payment or to issue, transfer or deliver any Common Shares or share
certificates or other securities or property or cash upon the surrender of any
Convertible Security for the purpose of conversion; and neither the Trustee,
subject to the provisions of Article Six, nor any Conversion Agent shall
be responsible for any failure of the Company to comply with any of the
covenants of the Company contained in this Article.

 

SECTION 1213.        Termination of Deposit
Agreement.

 

If the ADS Deposit Agreement is terminated
for any reason (and no successor deposit agreement is established), Holders of
the Convertible Securities shall thereafter receive upon conversion the number
of Common Shares that was represented by the number of ADSs deliverable upon
conversion of the Convertible Securities at the date of such termination
(subject to adjustment from time to time as set forth in this Article).

 

ARTICLE THIRTEEN

 

DEFEASANCE AND COVENANT DEFEASANCE

 

SECTION 1301.        Company’s Option to Effect
Defeasance or Covenant Defeasance.

 

If applicable to a particular series of Securities,
the Company may elect, at its option at any time, to have Section 1302 or
1303 applied to any such series of Securities or any Securities of such series,
as the case may be, designated pursuant to Section 301 as being defeasible
pursuant to such Section 1302 or 1303, in accordance with any applicable
requirements provided pursuant to Section 301 and upon compliance with the
conditions set forth below in this Article. 
Any such election shall be evidenced by a Board Resolution or in another
manner specified as contemplated by Section 301 for such Securities.

 

SECTION 1302.        Defeasance and Discharge.

 

Upon the Company’s exercise of its option (if any)
to have this Section applied to any applicable series of Securities or any
Securities of such series, as the case may be, the Company shall be deemed to
have been discharged from its Obligations with respect to such Securities as
provided in this Section on and after the date the conditions set forth in
Section 1304 are satisfied (hereinafter called “Defeasance”).  For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by such Securities and to have satisfied all its other Obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the direction and the expense of the Company,
shall execute proper instruments acknowledging the same), subject to the following
which shall survive until otherwise terminated or discharged hereunder:  (1) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1304
and as more fully set forth in such Section, payments in respect of the
principal of and any premium and interest on such Securities when payments are
due, (2) the Company’s Obligations with respect to such Securities under Sections 304,
305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company’s  Obligations in connection therewith and (4) this
Article.  Subject to compliance with this
Article, the Company may exercise its option (if any) to have this Section applied
to any applicable Securities notwithstanding the prior exercise of its option
(if any) to have Section 1303 applied to such Securities.

 

59

 

SECTION 1303.        Covenant Defeasance.

 

Upon the
Company’s exercise of its option (if any) to have this Section applied to
any applicable series of Securities or any Securities of such series, as the
case may be, (1) the Company shall be released from its obligations under
Sections 102, 301(19), 704, 801(3), 802, 901(2), 901(7), 1005, or 1008 [or
1207(3)], and (2) the occurrence of any event specified in Section 501(3) (with
respect to any of Sections 102, 301(19), 704, 801(3), 802, 901(2), 901(7),
1005, or 1008 [or 1207(3)]) and Section 501(4) shall be deemed not to
be or result in an Event of Default, in each case with respect to such
Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
“Covenant Defeasance”).  For this
purpose, such Covenant Defeasance means that, with respect to such Securities,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such specified Section (to
the extent so specified in the case of Section 501(3)), whether directly
or indirectly by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision
herein or in any other document, but the remainder of this Indenture and such
Securities shall be unaffected thereby.

 

SECTION 1304.        Conditions to Defeasance
or Covenant Defeasance.

 

The following shall be the conditions to the
application of Section 1302 or 1303 to any applicable series of Securities
or any Securities of such series, as the case may be:

 

(1)                                  The
Company shall irrevocably have deposited or caused to be deposited with the
Trustee (or another trustee which satisfies the requirements contemplated by Section 609
and agrees to comply with the provisions of this Article applicable to it)
as trust funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefits of
the Holders of such Securities, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or any such other qualifying trustee) to pay
and discharge, the principal of and any premium, if any, and interest
(including Additional Amounts) on such Securities on the respective Stated
Maturities, in accordance with the terms of this Indenture and such
Securities.  As used herein, “U.S.
Government Obligation” means (x) any security which is (i) a direct
obligation of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (ii) an
obligation of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary
receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the
account of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any U.S. Government Obligation which
is so specified and held, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by such
depositary receipt.

 

(2)                                  In
the event of an election to have Section 1302 apply to any applicable
series of Securities or any Securities of such series, as the case may be, the
Company shall have delivered to the Trustee an Opinion of Counsel from counsel
in the United States reasonably acceptable to the Trustee (subject to customary
exceptions and exclusions) and independent of the Company to the effect that (A) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date of this instrument, there has been
a change in the applicable Federal income tax law, in either case (A) or (B) to
the effect that, and based thereon such opinion shall confirm that, the Holders
of such Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit, Defeasance and discharge to be effected
with respect to such Securities and will be subject to Federal income tax on
the same amount, in the same manner and at the same times as would be the case
if such deposit, Defeasance and discharge were not to occur.

 

60

 

(3)                                  In
the event of an election to have either Section 1302 or 1303 apply to any
applicable series of Securities or any Securities of such series, as the case
may be, the Company shall have delivered to the Trustee (A) an Opinion of
Counsel from counsel in Mexico reasonably acceptable to the Trustee (subject to
customary exceptions and exclusions) and independent of the Company to the
effect that, based upon Mexican law then in effect, Holders will not recognize
income, gain or loss for Mexican tax purposes, including withholding tax except
for withholding tax then payable on interest payments due, as a result of
Defeasance or Covenant Defeasance, as the case maybe, and will be subject to
Mexican taxes on the same amounts and in the same manner and at the same time
as would have been the case if such Defeasance or Covenant Defeasance, as the
case may be, had not occurred; or (B) a ruling directed to the Trustee
received from the tax authorities in Mexico to the same effect as the Opinion
of Counsel described in clause (A) above.

 

(4)                                  The
Company shall have delivered to the Trustee an Officers’ Certificate to the
effect that neither such Securities nor any other Securities of the same
series, if then listed on any securities exchange, will be delisted as a result
of such deposit.

 

(5)                                  No
event which is, or after notice or lapse of time or both would become, an Event
of Default with respect to such Securities or any other Securities shall have
occurred and be continuing on the date of the deposit pursuant to Section 1304(1) (except
any Default or Event of Default resulting from the failure to comply with a
covenant as a result of the borrowing of the funds required to effect such
deposit).

 

(6)                                  Such
Defeasance or Covenant Defeasance shall not cause the Trustee to have a
conflicting interest within the meaning of the Trust Indenture Act (assuming
all Securities are in default within the meaning of such Act).

 

(7)                                  Such
Defeasance or Covenant Defeasance shall not result in a breach or violation of,
or constitute a default under, any other agreement or instrument to which the
Company is a party or by which it is bound.

 

(8)                                  The
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent with respect to
such Defeasance or Covenant Defeasance have been complied with.

 

SECTION 1305.        Repayment to Company.

 

The Trustee and the Paying Agent shall promptly turn
over to the Company upon written request any excess money or securities held by
them upon payment of all the Obligations under this Indenture.

 

Subject to any applicable abandoned property law,
the Trustee and the Paying Agent shall pay to the Company upon written request
any money held by them for the payment of principal of or interest on the
Securities that remains unclaimed for two years, and, thereafter, Holders
entitled to the money must look to the Company for payment as general
creditors.

 

SECTION 1306.        Deposited Money and U.S.
Government Obligations to Be Held in Trust; Miscellaneous Provisions.

 

Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (solely for purposes of
this Section and Section 1307, the Trustee and any such other trustee
are referred to collectively as the “Trustee”) pursuant to Section 1304 in
respect of any Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Securities, of all sums due and to become due thereon in
respect of principal and any premium and interest, but money so held in trust
need not be segregated from other funds except to the extent required by law.

 

The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 1304 or the principal
and interest 

 

61

 

received in respect thereof
other than any such tax, fee or other charge which by law is for the account of
the Holders of Outstanding Securities.

 

Anything in this Article to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it
as provided in Section 1304 with respect to any Securities which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect the Defeasance or Covenant Defeasance, as the case may be, with respect
to such Securities.

 

SECTION 1307.        Reinstatement.

 

If the Trustee or the Paying Agent is unable to
apply any money in accordance with this Article with respect to any Securities
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
obligations under this Indenture and such Securities from which the Company has
been discharged or released pursuant to Section 1302 or 1303 shall be
revived and reinstated as though no deposit had occurred pursuant to this Article with
respect to such Securities, until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust pursuant to Section 1305 with
respect to such Securities in accordance with this Article; provided, however, that
if the Company makes any payment of principal of or any premium or interest on
any such Security following such reinstatement of its obligations, the Company
shall be subrogated to the rights (if any) of the Holders of such Securities to
receive such payment from the money so held in trust.

 

This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed an original, but all
such counterparts shall together constitute but one and the same instrument.

 

62

 

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year first above written.

 

 

	
   

  	
   

  	
  Desarrolladora Homex, S.A.B. de C.V.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Bank of New York
  Mellon, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

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