Corporacion Durango S/A/De C/V · 6-K · For 3/31/04

Filed On 4/30/04 8:28pm ET   ·   SEC File 1-13148   ·   Accession Number 925262-4-4

Report of a Foreign Private Issuer   ·   Form 6-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K         Durango Plan Support Agreement                        19±    83K 

Document Table of Contents

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                          Proposed Final Version

PLAN SUPPORT AGREEMENT                    

Agreement (together with the Exhibits and Schedules hereto,           
this "Agreement"), dated as of Abril 30, 2004, by and among                     
Corporacion Durango, S.A. de C.V. ("Corporacion Durango," or the                
"Company"), the Note Guarantors set forth on the signature pages                
hereto (the "Note Guarantors"), Banco Nacional de Mexico,                       
Sociedad Anonima, Integrante del Grupo Financiero Banamex, Bank                 
of America, N.A., JPMorgan Chase Bank, and California Commerce                  
Bank (collectively, the "Bank Lenders"), and the holders of the                 
Company's (i) 13 1/8% Senior Notes due 2006; (ii) 13 1/2% Senior                
Notes due 2008; and/or (iii) 13 3/4% Senior Notes due 2009                      
(collectively, the "Existing Notes") whose names appear on the                  
signature pages hereto (collectively, the "Initial Signatory                    
Noteholders"), and other holders of Existing Notes who from time                
to time become bound by this Agreement (collectively, together                  
with the Initial Signatory Noteholders, the "Noteholders", and,                 
together with the Bank Lenders, the "Supporting Creditors").                    
Corporacion Durango's obligations to each of the Bank Lenders are               
referred to herein collectively as the "Existing Bank Debt"                     
Corporacion Durango, the Note Guarantors, the Bank Lenders, and                 
the Noteholders are referred to herein collectively as the                      
"Parties"                                                                       

WHEREAS, the Parties have agreed to the Term Sheet attached           
hereto as Exhibit A (the "Term Sheet") which provides for a                     
restructuring of the Company's capital structure (the                           
"Restructuring"); and                                                           

WHEREAS, the Term Sheet provides that the Restructuring may           
be implemented through a cash tender offer, an exchange of the                  
Existing Notes for the New Notes and a restructuring of the                     
Existing Bank Debt (collectively, the "Exchange Offer") made                    
pursuant to Section 3(a)(9) of the Securities Act of 1933, as                   
amended (the "Securities Act"), Section 4(2) of the Securities                  
Act, or any other applicable exemption therefrom; and                           

WHEREAS, the Term Sheet provides that if the Exchange Offer           
is not consummated but certain other conditions are met, the                    
Parties will implement the Restructuring through the prosecution                
and confirmation of a plan of reorganization under chapter 11 of                
title 11 of the United States Code (the "Bankruptcy Code")                      
containing terms substantially identical to those set forth in                  
the Term Sheet (the "Plan") provided that the Company obtains the               
votes necessary under the Bankruptcy Code to confirm the Plan.                  

NOW, THEREFORE, in consideration of the premises and mutual           
covenants and agreements set forth herein, and for other good and               
valuable consideration, the receipt and sufficiency of which are                
hereby acknowledged, each of the Parties hereby agrees as                       
follows:                                                                        

1.   Initial Signatories.   It shall be a condition to the                      
effectiveness of this Agreement that each of the Initial                        
Signatory Noteholders, each Bank Lender, the Company and the Note               
Guarantors shall have entered into this Agreement.                              

2.   Definitions. Capitalized terms used but not defined herein                 
shall have the meanings ascribed to such terms in the Term Sheet.               

3.   Pursue Restructuring. The Company and each of the Note                     
Guarantors shall use commercially reasonable efforts to                         
effectuate the Restructuring, including commencing and completing               
the Exchange Offer within the times set forth on Schedule 1. If                 
the Exchange Offer is not accepted by the holders of 97% in                     
aggregate principal amount of the Unsecured Debt, but is accepted               
by a sufficient number and amount of Senior Unsecured Creditors                 
to constitute an impaired accepting class or classes pursuant to                
applicable provisions of the Bankruptcy Code, the Company will                  
file a voluntary petition for reorganization under chapter 11 of                
the Bankruptcy Code (the "Chapter 11 Case") to implement the                    
Restructuring, use commercially reasonable efforts to obtain                    
approval of a disclosure statement and other solicitation                       
materials in respect of the Plan (collectively, the "Disclosure                 
Statement"), support the Plan, obtain confirmation of the Plan                  
and consummate the Plan promptly after confirmation.  The Chapter               
11 Case, if filed, will be filed before a United States                         
Bankruptcy Court of appropriate venue under section 1408 of title               
28 of the United States Code that is acceptable to counsel for                  
Corporacion Durango, counsel for the Bank Lenders, and counsel                  
for the Initial Signatory Noteholders (the "Bankruptcy Court").                 

4.   Cooperation and Support.  Each of the Parties covenants and                
agrees to negotiate in good faith to arrive at mutually agreeable               
definitive documents to implement the Restructuring within the                  
time frame set forth on Schedule 1.  The Supporting Creditors                   
shall have the opportunity to review drafts of each Exchange                    
Offer document, and the Plan and Disclosure Statement, as the                   
case may be, prior to its release to the public. Each of such                   
documents shall be subject to each Supporting Creditor's                        
approval, which will not be unreasonably withheld or delayed so                 
long as it is (i) consistent in all material respects with, and                 
at least as favorable to the Supporting Creditor in all material                
respects as, the Term Sheet and (ii) consistent in all material                 
respects with the information previously provided to the                        
Supporting Creditors. So long as this Agreement remains in effect               
with respect to a particular Supporting Creditor, and except as                 
may otherwise be provided below, such Supporting Creditor shall:                

(a)  so long as such Supporting Creditor shall have approved the                
Exchange Offer documents or the Plan and Disclosure Statement, as               
the case may be, submit its Existing Bank Debt or Existing Notes,               
as the case may be, for purchase, restructure or exchange, and                  
otherwise participate in the Exchange Offer;                                    

(b)  so long as such Supporting Creditor shall have approved the                
Exchange Offer documents or the Plan and Disclosure Statement, as               
the case may be, to the extent its claim (as such term is defined               
under section 101 of the Bankruptcy Code, "Claim") is impaired,                 
in connection with any solicitation of votes by the Company with                
respect to the Plan, timely vote all of its Holdings (as such                   
term is defined hereinafter) to accept the Plan by delivering its               
duly executed and completed ballot accepting the Plan, and not                  
change, revoke or withdraw (or cause to be changed, revoked or                  
withdrawn) such vote(s), except as permitted by the terms of this               
Agreement;                                                                      

(c)  support the Plan and not (i) object to the Disclosure                      
Statement or Plan or support any such objection by any third                    
party, or otherwise commence any proceeding or take any action to               
oppose or alter the Disclosure Statement or Plan or (ii) propose,               
file, support or vote for any restructuring, workout, or plan of                
reorganization for the Company other than the Plan;                             

(d)  vote against any restructuring, workout or plan of                         
reorganization relating to the Company other than the Plan; and                 

(e)  not (nor will it encourage any other person to), directly or               
indirectly, delay, interfere, impede, or take any other action                  
that could reasonably be expected to delay, interfere or impede,                
or that is inconsistent in any respect with, acceptance,                        
confirmation or implementation of the Plan;                                     

provided, however, that each Supporting Creditor may raise and be               
heard on any issue arising in the Chapter 11 Case so long as it                 
is not attempting to oppose or alter the Plan or the Disclosure                 
Statement approved by it.  A Supporting Creditor may, but shall                 
not be required to, use commercially reasonable efforts to obtain               
the joinder of other creditors to this Agreement or an agreement                
substantially similar to this Agreement.                                        

5.   Holdings and Transfers.                                                    

(a)  Each Supporting Creditor severally represents and warrants                 
to the Company that it is the beneficial owner, owner of record                 
with the power to bind the beneficial holder and/or the                         
investment advisor or manager on behalf of the beneficial owner,                
of Existing Bank Debt or Existing Notes, as the case may be, of                 
the issues and in the principal amounts (i) in the case of a Bank               
Lender, set forth on such Supporting Creditor's signature page                  
and (ii) in the case of a Noteholder, disclosed to U.S. counsel                 
to the Ad Hoc Bondholders Committee, Bingham McCutchen LLP                      
("Bingham"), in the manner described in the following sentence                  
(collectively, the "Holdings") and has the power to vote and                    
dispose of the Holdings in accordance with this Agreement on                    
behalf of such beneficial owners, and that the amount of the                    
Holdings constitutes the principal amount of all of such                        
Supporting Creditor's unsecured Claims against the Company at the               
time this Agreement becomes effective.  Notwithstanding anything                
in this section to the contrary, each Noteholder shall only be                  
required to disclose its Holdings to Bingham. Bingham shall, on                 
the date of  the execution and delivery of this Agreement by the                
Initial Signatory Noteholders, certify in writing to the Company                
(with a copy to counsel for the Bank Lenders) the aggregate                     
Holdings of the Initial Signatory Noteholders as certified to                   
Bingham by such Initial Signatory Noteholders.                                  

(b)  Each Supporting Creditor severally agrees that it will not                 
sell, pledge, assign, hypothecate, or otherwise transfer any                    
Holdings, and any such attempted sale, pledge, assignment,                      
hypothecation, or other transfer shall be void and without                      
effect, unless the transferee executes and there is delivered to                
the Company and to the other notice parties listed in Section 19                
hereof, a written undertaking (in the form of the Transferee                    
Signature Page attached hereto as Schedule 2) agreeing to become                
a party to this Agreement other than Section 11 (Appointment to a               
Creditors' Committee; Absolute Discretion to Exercise Fiduciary                 
Responsibilities) with respect to the Holdings being transferred                
(but not any Claims against the Company previously owned or                     
thereafter acquired), and such transferee (hereinafter a                        
"Transferee") shall thereupon be deemed to be a Supporting                      
Creditor with respect to the amount of such transferred Holdings                
for purposes of this Agreement, other than Section 11 hereof, and               
the transferor shall no longer be a Supporting Creditor with                    
respect to such transferred Holdings. The Company hereby agrees                 
that any Transferee executing such an undertaking shall be                      
entitled to the benefits of this Agreement.                                     

(c)  This Agreement shall in no way be construed to preclude a                  
Supporting Creditor from acquiring additional Existing Bank Debt,               
Existing Notes or other Claims against the Company, provided that               
such Supporting Creditor (other than a Transferee) shall vote,                  
and take such other actions in respect of, such additional                      
Existing Bank Debt, Existing Notes or other Claims as is provided               
for herein.                                                                     

6.   Additional Conditions Precedent.  The following shall be                   
additional conditions to the effectiveness of this Agreement:                   

(a)  The Company shall have filed a Form 6-K with the Securities                
and Exchange Commission attaching a copy of the Term Sheet and                  
this Agreement.                                                                 

(b)  Each of the Note Guarantors shall have entered into one or                 
more agreements whereby it jointly and severally agrees to pay                  
the fees and expenses of the professional advisors to the Bank                  
Lenders and the Ad Hoc Bondholders Committee, whether incurred                  
before or after the filing of the Chapter 11 Case. Such                         
agreements shall be on terms substantially identical to the terms               
of the existing fee agreements between the Company and such                     
professionals.                                                                  

7.   Termination. This Agreement shall terminate as to a                        
Supporting Creditor and any acceptances or votes in favor of the                
Restructuring by such Creditor shall be null and void (i) prior                 
to the filing of the Chapter 11 Case, if any of the events set                  
forth in the following paragraph (a "Termination Event") occurs                 
and is not cured (which, in the case of a Milestone (as defined                 
below), shall mean that the Company fulfills the condition(s)                   
contemplated by a Milestone notwithstanding the date of such                    
Milestone) prior to the time such Supporting Creditor sends a                   
written notice (a "Notice of Termination") to the Company                       
terminating its participation in this Agreement, or (ii) after                  
the filing of the Chapter 11 Case, automatically, without notice,               
hearing, or order of the applicable bankruptcy court if any                     
Termination Event occurs, unless waived by each Supporting                      
Creditor within three (3) business days thereafter (or, in the                  
case of the Termination Event described in Section 7(g) hereof,                 
fifteen (15) business days thereafter). The Supporting Creditor                 
shall send a copy of its Notice of Termination in accordance with               
Section 19 hereof, but its termination shall be effective                       
notwithstanding any failure to send such notice. Promptly after                 
the filing of the Chapter 11 Case, the Company will apply to the                
Bankruptcy Court for an order (in a form approved by the                        
Supporting Creditors) under Section 365 of the Bankruptcy Code                  
and/or Federal Rule of Bankruptcy Procedure 3018 (the "Post-                    
Petition Termination Order") providing that, if any Termination                 
Event occurs, each Supporting Creditor, in its sole and absolute                
discretion and without limiting any of its other rights, may send               
a Notice of Termination (without the requirement or need for a                  
hearing or court order) terminating this Agreement and changing                 
or withdrawing any votes previously cast by it in favor of the                  
Plan.  The Supporting Creditors will support such application.                  
If the Bankruptcy Court enters the Post-Petition Termination                    
Order, this Agreement shall no longer terminate automatically                   
upon the occurrence of a Termination Event, but rather a                        
Supporting Creditor shall be required to send a Notice of                       
Termination as contemplated by clause (i) of this paragraph.                    

The following shall constitute Termination Events:                              

(a)  A condition set forth on Schedule 1 hereto (each, a                        
"Milestone") shall not have been satisfied on or before the date                
set forth for such condition on such schedule; or                               

(b)  the Exchange Offer, the Plan or the Disclosure Statement                   
shall be amended, modified or supplemented from the form approved               
pursuant to Section 4 hereof (i) in any respect such that the                   
Exchange Offer or the Plan and Disclosure Statement is materially               
inconsistent with the Term Sheet without having first obtained                  
the consent of such Supporting Creditor, or (ii) in any other                   
respect without the consent of Bingham and Mayer, Brown, Rowe &                 
Maw LLP; or                                                                     

(c)  Supporting Creditors holding 66 2/3% or more of the                        
aggregate principal amount of all Claims subject to Plan Support                
Agreements on the date hereof shall have delivered Notices of                   
Termination; or                                                                 

(d)  The Company or any of the Note Guarantors shall institute an               
insolvency proceeding under U.S., Mexican (including a concurso                 
mercantil proceeding), or other bankruptcy, insolvency, or                      
similar law (other than the initial filing of the Company's                     
Chapter 11 Case), or allow the Chapter 11 Case to be dismissed or               
become ancillary to another insolvency proceeding pursuant to                   
Section 304 of the Bankruptcy Code; or the Chapter 11 Case shall                
be converted to one under chapter 7 of the Bankruptcy Code; or a                
declaration of concurso shall have been entered in an involuntary               
concurso mercantil proceeding commenced against the Company or                  
any Note Guarantor; or                                                          

(e)  The Company or the members of the Note Guarantor Group shall               
have failed to pay any fees and disbursements of Bingham, Canales               
y Socios, Asesoria Juridica, Capstone Corporate Recovery, LLC,                  
Mayer, Brown, Rowe & Maw LLP, or Martinez Algaba Estrella de Haro               
y Galvan Duque, as advisors to the Supporting Creditors, within                 
seven (7) days of having been given written notice by such party                
(including, without limitation, notice by electronic mail) that                 
an invoice is past due.  If any portion of such fees and expenses               
is disputed by the Company in good faith, the Company need not                  
pay the disputed portion if (i) the Company timely pays that                    
portion of fees and expenses not subject to dispute, and (ii) the               
relevant parties promptly proceed in good faith to resolve such                 
dispute within fifteen (15) days; or                                            

(f)  The Company or one or more Note Guarantors shall have                      
expressed in writing or by public press release or SEC filing its               
intention not to pursue the Restructuring; or                                   

(g)  The business, properties, assets or financial condition                    
of the Company and the Note Guarantors (taken as a whole) shall                 
have been materially and adversely affected since the date of                   
this Agreement by reason of any act of God, war, civil                          
disturbance, terrorism, earthquake, flood, fire, other casualty                 
event, expropriation or nationalization; or                                     

(h)  The claims alleged against the Company (including any                      
Note Guarantor) by The Official Committee of Unsecured Creditors                
of Durango-Georgia Paper Company, Durango-Georgia Converting                    
Corp., and Durango-Georgia Converting LLC in the Name of and                    
Behalf of the Bankruptcy Estates of Durango-Georgia Paper                       
Company, Durango-Georgia Converting Corp, and Durango-Georgia                   
Converting, LLC in its Complaint filed on April 2 2004, in                      
Adversary Proceeding No. 04-2070 (arising in or related to                      
Bankruptcy Case No. 02-21669) before the United States Bankruptcy               
Court for the Southern District of Georgia, Brunswick Division,                 
are settled, resolved, dismissed or treated in any manner,                      
including, without limitation, under a plan of reorganization,                  
which in any case contemplates the payment or delivery of money,                
property, securities, or the incurrence of any other obligation                 
of either the Company or any Note Guarantor, without the prior                  
written consent of each Supporting Creditor; or                                 

(i)  The Company or one or more of the Note Guarantors shall take               
any action which is materially inconsistent with the                            
implementation of the Restructuring.                                            

8.   Representations and Warranties.  Each Supporting Creditor                  
(severally), the Company and each Note Guarantor hereby                         
represents and warrants to the other that:                                      

(a)  It has the requisite corporate power and authority to enter                
into this Agreement and to carry out the transactions                           
contemplated by, and perform its respective obligations under,                  
this Agreement;                                                                 

(b)  The execution and delivery of this Agreement and the                       
performance of its obligations hereunder have been duly                         
authorized by all necessary corporate or other organizational                   
action on its part;                                                             

(c)  The execution, delivery, and performance by it of this                     
Agreement does not and shall not (i) violate any provision of                   
law, rule, or regulation applicable to it or any of its                         
affiliates, or its certificate of incorporation or bylaws or                    
other organizational documents or those of any of its affiliates,               
or (ii) conflict with, result in a breach of, or constitute (with               
due notice or lapse of time or both) a default under any material               
contractual obligation to which it or any of its affiliates is a                
party;                                                                          

(d)  The execution, delivery, and performance by it of this                     
Agreement does not and shall not require any registration or                    
filing with, the consent or approval of, notice to, or any other                
action with any federal, state, or other governmental authority                 
or regulatory body;                                                             

(e)  This Agreement is the legally valid and binding obligation                 
of it, enforceable against it in accordance with its terms,                     
except as enforcement may be limited by bankruptcy, insolvency,                 
reorganization, moratorium, or other similar laws relating to or                
limiting creditors' rights generally, or by equitable principles                
relating to enforceability;                                                     

(f)  Each Supporting Creditor severally represents and warrants                 
that (i) it is an "accredited investor" within the meaning of                   
Rule 501 of the Securities and Exchange Commission under the                    
Securities Act, with sufficient knowledge and experience to                     
evaluate properly the terms and conditions of the Term Sheet and                
this Agreement, and has been afforded the opportunity to discuss                
the Term Sheet and other information concerning the Company with                
the Company's representatives, and to consult with its legal and                
financial advisors with respect to its investment decision to                   
execute this Agreement, and (ii) it has made its own analysis and               
decision to enter into this Agreement and otherwise investigated                
this matter to its full satisfaction and will not seek rescission               
or revocation of this Agreement; and                                            

(g)  The Company and each of the Note Guarantors represents and                 
warrants that (i) it has been advised by professionals of                       
international standing and experience in transactions of this                   
nature, and has been afforded the opportunity to discuss and                    
evaluate the terms and conditions of the Term Sheet and this                    
Agreement, and to consult with its legal and financial advisors                 
with respect to its decision to execute this Agreement, and (ii)                
it has made its own analysis and decision to enter into this                    
Agreement and otherwise investigated this matter to its full                    
satisfaction and will not seek rescission or revocation of this                 
Agreement.                                                                      

9.   Specific Performance.   It is understood and agreed by each                
of the Parties that money damages would not be a sufficient                     
remedy for any breach of this Agreement by any Party, and each                  
non-breaching Party shall be entitled to seek specific                          
performance and injunctive or other equitable relief as a remedy                
for such breach.                                                                

10.  Material Non-Public Information.  If at any time after                     
satisfaction of the condition set forth in Section 6(a), the                    
Company or any Note Guarantor proposes to provide any Supporting                
Creditor with material information concerning the Company which                 
is not available to the public, the Company or such Note                        
Guarantor shall first inform such Supporting Creditor of such                   
fact and give it the option to decline to receive such                          
information.                                                                    

11.  Appointment to a Creditors' Committee; Absolute Discretion                 
to Exercise Fiduciary Responsibilities.  If the Chapter 11 Case                 
is filed, the Company shall request that the Bankruptcy Court                   
and/or office of the U.S. Trustee (i) not appoint any official                  
committees in the Chapter 11 Case (including any committee                      
provided for under section 1102 of the Bankruptcy Code, a                       
"Creditors' Committee"); or, in the alternative, (ii) delay the                 
appointment of any such committees pending consideration of                     
approval of the Disclosure Statement.  If a Creditors' Committee                
is nevertheless appointed in the Chapter 11 Case, each Supporting               
Creditor will endeavor to obtain appointment to the Creditors'                  
Committee by taking actions, including without limitation, timely               
completing and submitting its assent to any solicitation to                     
participate on a committee that may be provided by the Office of                
the United States Trustee for the district in which the                         
Bankruptcy Court sits, and attending by any allowed means,                      
including telephone or through counsel, any committee formation                 
meeting that may be scheduled in the Chapter 11 Case and, at such               
meeting, expressing its interest in participating on the                        
Creditors' Committee.                                                           

Anything else in this Agreement to the contrary notwithstanding,                
if a Supporting Creditor is appointed to and serves on a                        
Creditors' Committee, the terms of this Agreement shall not be                  
construed to limit such party's exercise, in its sole discretion,               
of its fiduciary duties to any person arising from its service on               
such committee, and any exercise of such fiduciary duties shall                 
not be deemed to constitute a breach of the terms of this                       
Agreement.                                                                      

12.  Indemnification of Supporting Creditors. The Company and                   
each of the Note Guarantors shall, jointly and severally,                       
indemnify each of the Indemnified Parties and hold them harmless                
from and against any and all claims, liabilities, actions, suits,               
damages, fines, and judgments (including the current payment of                 
legal fees and expenses) directly or indirectly resulting from,                 
arising out of, or in any way connected with (a) such Supporting                
Creditor's entering into this Agreement or (b) any action taken                 
by such Supporting Creditor in good faith which is in furtherance               
of the Restructuring or required by this Agreement, including any               
action permitted by the final sentence of Section 4 hereof.  An                 
Indemnified Party shall promptly notify the Company and each of                 
the Note Guarantors in writing of any claim made against it which               
falls within the scope of this indemnity, and the Company and                   
each of the Note Guarantors shall assume the defense of such                    
claim, including, without limitation, the employment of counsel                 
satisfactory to the Company and the Note Guarantors, at its                     
expense.  Each Indemnified Party shall have the right to employ                 
separate counsel in any such claim, action or proceeding and to                 
consult with the Company in the defense thereof, and the fees and               
expenses of such counsel shall be paid by the Company unless the                
Company shall have assumed the defense of such claim, action or                 
proceeding. The Company or any of the Note Guarantors shall not                 
effect any settlement of any such claim unless such settlement                  
contains a full and unconditional release of the Indemnified                    
Party. As used in this Section "Indemnified Party" shall mean any               
one or more of the Supporting Creditors or their officers,                      
directors, employees, agents, representatives, advisors,                        
attorneys, successors or assigns.                                               

13.  Successors and Assigns. Except as otherwise provided in this               
Agreement, this Agreement is intended to bind and inure to the                  
benefit of each of the Parties and each of their respective                     
successors, assigns, heirs, executors, administrators, and                      
representatives.                                                                

14.  No Third-Party Beneficiaries. Unless expressly stated                      
herein, this Agreement shall be solely for the benefit of the                   
Parties and no other person or entity shall be a third-party                    
beneficiary of this Agreement.                                                  

15.  Prior Agreements. This Agreement supersedes all prior                      
negotiations and agreements among the Parties with respect to the               
matters set forth herein.                                                       

16.  Governing Law. This Agreement shall be governed by, and                    
construed in accordance with, the laws of the State of New York,                
regardless of the laws that might otherwise govern under                        
applicable principles of conflicts of law of the State of New                   
York.                                                                           

17.  Venue. By execution and delivery of this Agreement, each of                
the Parties irrevocably and unconditionally agrees that any legal               
action, suit, or proceeding with respect to any matter under or                 
arising out of or in connection with this Agreement, or for                     
recognition or enforcement of any judgment rendered in any such                 
action, suit, or proceeding, shall be brought (a) in the                        
Bankruptcy Court if the Chapter 11 Case has been commenced, or                  
(b) in a court of competent jurisdiction located in the City of                 
New York if the Chapter 11 Case has not been commenced. Each                    
Party irrevocably waives any objection it may have to the venue                 
of any action, suit, or proceeding brought in such court or to                  
the convenience of the forum.                                                   

18.  Personal Jurisdiction. By execution and delivery of this                   
Agreement, each of the Parties irrevocably and unconditionally                  
submits to the personal jurisdiction of (a) the Bankruptcy Court                
if the Chapter 11 Case has been commenced, or (b) a court of                    
competent jurisdiction located in the City of New York if the                   
Chapter 11 Case has not been commenced, for purposes of any                     
action, suit or proceeding arising out of or relating to this                   
Agreement.                                                                      

19.  Notices. All notices (including, without limitation, any                   
Notice of Termination) and other communications hereunder shall                 
be in writing and shall be deemed to have been duly given if                    
personally delivered by courier service, messenger, or facsimile                
to the following addresses, or such other addresses as may be                   
furnished hereafter by notice in writing:                                       

(a)  if to Corporacion Durango or any of the Note Guarantors:         

Corporacion Durango,                                        
S.A. de C.V. Potasio                                        
No. 150                                                     
Cd. Industrial Durango                                      
C.P. 34220, Durango,                                        
Mexico Attention:                                           
Mayela Rincon                                               
Facsimile:     011-52-                                      
18-14-1423                                                  

With a copy to counsel for Corporacion Durango:             

White & Case LLP                                            

Wachovia Financial Center,                                  
Suite 4900                                                  
200 South Biscayne                                          
Boulevard                                                   
Miami, Florida 33131-2352                                   
Attention:     Emilio                                       
Alvarez-Farre                                               
Facsimile:     (305) 358-                                   
5744                                                        

if to a Noteholder, to counsel for the Noteholders:         

Bingham McCutchen LLP                                       

One State Street                                            
Hartford Connecticut 06103-                                 
3178                                                        
Attention:     Michael J.                                   
Reilly;   William E.                                        
Kelly; and     William F.                                   
Govier                                                      
Facsimile:     (860) 240-                                   
2800                                                        

if to a Bank Lender, to counsel for the Bank Lenders:       

Mayer, Brown, Rowe & Maw LLP                                

1675 Broadway                                               
New York, NY  10019-5820                                    
Attention:     David K. Duffee                              
Facsimile:     (212) 849-5630                               

20.  Headings. The section headings of this Agreement are for                   
convenience of reference only and shall not, for any purpose, be                
deemed a part of this Agreement.                                                

21.  Amendments. The Parties acknowledge and agree that the exact               
scheduling of the Milestones as set forth on Schedule 1 is a                    
material inducement for the Supporting Creditors to enter into                  
this Agreement, and that no grace periods are intended.                         
Accordingly, no waiver, extension or modification of any such                   
Milestone may be effectuated except in accordance with this                     
Section.  This Agreement may not be modified, amended, or                       
supplemented, and no provision hereof waived, as to any                         
Supporting Creditor except in a writing signed by the Company and               
such Supporting Creditor.                                                       

22.  Counterparts. This Agreement may be executed in one or more                
counterparts, each of which shall be deemed an original and all                 
of which shall constitute one and the same Agreement. Delivery of               
an executed signature page of this Agreement by facsimile shall                 
be effective as delivery of a manually executed signature page of               
this Agreement.                                                                 

23.  No Waiver of Participation and Reservation of Rights. Except               
as expressly provided in this Agreement and in any amendment                    
among the Parties, nothing herein is intended to, or does, in any               
manner waive, limit, impair, or restrict the ability of any                     
Supporting Creditor to protect and preserve its rights, remedies                
and interests, including, without limitation, its Claims against                
Corporacion Durango or any of the Note Guarantors or its full                   
participation in any bankruptcy case filed by Corporacion                       
Durango, or any of its affiliates and subsidiaries, including,                  
without limitation, the Chapter 11 Case. The Parties fully                      
reserve any and all of their rights in the event the transactions               
contemplated by this Agreement or in the Plan are not consummated               
or this Agreement is terminated.                                                

24.  Interpretation. This Agreement is the product of                           
negotiations among the Supporting Creditors and the Company, and                
in the enforcement or interpretation hereof, is to be interpreted               
in a neutral manner, and any presumption with regard to                         
interpretation for or against any Party by reason of that Party                 
having drafted or caused to be drafted this Agreement, or any                   
portion hereof, shall not be effective in regard to the                         
interpretation hereof.                                                          

25.  Acknowledgement. This Agreement is not and shall not be                    
deemed to be a solicitation of votes for the acceptance of the                  
Plan.  Each Supporting Creditor's vote will not be solicited                    
until such Supporting Creditor has been provided a Disclosure                   
Statement.                                                                      

IN WITNESS WHEREOF, the parties hereto have caused this               
Agreement to be executed and delivered by their respective                      
officers thereunto duly authorized, as of the date first written                
above.                                                                          

           THE COMPANY

                    Corporacion Durango,
            S.A. de C.V.

                             By:  /s/ Mayela R. de Velasco
                              ------------------------------
                          Name: Mayela R. de Velasco
                              Title: Chief Financial Officer

                   THE NOTE GUARANTORS

                         Empaques de Carton Titan,
            S.A. de C.V.

                             By:  /s/ Mayela R. de Velasco
                              ------------------------------
                          Name: Mayela R. de Velasco
                              Title: Chief Financial Officer

                    Compania Papelera de
                        Atenquique, S.A. de C.V.

                             By:  /s/ Mayela R. de Velasco
                              ------------------------------
                          Name: Mayela R. de Velasco
                              Title: Chief Financial Officer

                       Ponderosa Industrial de
                    Mexico, S.A. de C.V.

                             By:  /s/ Mayela R. de Velasco
                              ------------------------------
                          Name: Mayela R. de Velasco
                              Title: Chief Financial Officer

                         Industrias Centauro, S.A.
       de C.V.

                             By:  /s/ Mayela R. de Velasco
                              ------------------------------
                          Name: Mayela R. de Velasco
                              Title: Chief Financial Officer

                     Envases y Empaques de
                    Mexico, S.A. de C.V.

                             By:  /s/ Mayela R. de Velasco
                              ------------------------------
                          Name: Mayela R. de Velasco
                              Title: Chief Financial Officer

                       Cartonpak, S.A. de C.V.

                             By:  /s/ Mayela R. de Velasco
                              ------------------------------
                          Name: Mayela R. de Velasco
                              Title: Chief Financial Officer

              Administracion
                       Corporativa de Durango,
            S.A. de C.V.

                             By:  /s/ Mayela R. de Velasco
                              ------------------------------
                          Name: Mayela R. de Velasco
                              Title: Chief Financial Officer

               THE NOTEHOLDERS

                  John Hancock Funds

                        By: /s/ Howard C. Greene
                             -----------------------------
                      Name: Howard C. Greene
                            Title: Senior Vice President

                 John Hancock Life
                 Insurance Company

                         By: /s/ Marlene J. DeLeon
                             -----------------------------
                       Name: Marlene J. DeLeon
                        Title: Managing Director

                Federated Global
                     Investment Management
     Corp.

                             By: /s/ Roberto Sanchez -Dahl
                             -----------------------------
                           Name: Roberto Sanchez -Dahl
                        Title: Portfolio Manager

                Marathon Special
                       Opportunity Master Fund
    LTD.

                      By: /s/ Michael Layden
                             -----------------------------
                    Name: Michael Layden
      Title:

                    Marathon Master Fund
    LTD.

                      By: /s/ Michael Layden
                             -----------------------------
                    Name: Michael Layden
      Title:

                     Gramercy Advisors LLC

                            By: /s/ Robert Koenigsberger
                             -----------------------------
                          Name: Robert Koenigsberger
                          Title: Co-Managing Partner

                  Provident Life and
                  Accident Insurance
       Company

                        By: Provident Investment
                        Management, LLC, its
         agent

                         By: /s/ Ben S. Miller
                              --------------------------
                       Name: Ben S. Miller
                         Title: Vice-President

                   Unum Life Insurance
                  Company of America

                        By: Provident Investment
                        Management, LLC, its
         agent

                         By: /s/ Ben S. Miller
                              --------------------------
                       Name: Ben S. Miller
                         Title: Vice-President

Address for Notices                      Banco Nacional de Mexico,              
                           S.A. Integrante del Grupo
Prol. Paseo de la Reforma # 490          Financiero Banamex                     
Torre B, Planta Baja                                                            
Col. Santa Fe                            By: /s/ Jose Luis Michel               
Mexico, D.F.                             -----------------------------          
C.P. 01210                               Name: Jose Luis Michel                 
Atn: Jose Luis Michel / Roberto Glenn    Title:                                 

Existing Bank Debt                                                              

Credit Agreement        $5,100,000.00                                           
Credit Agreement        $75,335,634.36                                          
Total                   $80,435,634.36                                          

Address for Notices                      Bank of America, N.A.                  

Orlando J. Loera                         By: /s/ Javier Orozco                  
Paseo de la Reforma 265 Piso 22          -----------------------------          
Mexico City, CP 06500 D.F. Mexico        Name:  Javier Orozco                   
Phone: 5255 5230 6499                    Title:                                 
Fax: 5255 5230 6383                                                             
orlando.loera@bankofamerica.com                                                 

Javier Orozco                                                                   
Paseo de la Reforma 265 Piso 22                                                 
Mexico City, CP 06500 D.F. Mexico                                               
Phone: 5255 5230 6487                                                           
Fax: 5255 5230 6383                                                             
javier.orozco@bankofamerica.com                                                 

Julia del Rio                                                                   
1850 GATEWAY BLVD                                                               
CONCORD CA 94520-3282                                                           
Phone: 925 675 8019                                                             
Fax: 925 675 8051                                                               
Email:                                                                          
julia.del_rio@bankofamerica.com                                                 

Existing Bank Debt                                                              

Durango Georgia     $17,000,000                                                 
Credit Agreement    $2,000,000                                                  
Total               $19,000,000                                                 

Address for Notices:                     JP Morgan Chase Bank                   

277 Park Avenue, 2nd Floor               By: /s/ Manochere Alamgir              
New York,  NY 10172                      -----------------------------          
Attn: Indirah Toovey                     Name: Manochere Alamgir                
                       Title: Vice-president

Existing Bank Debt                                                              

Letter of Credit         $4,985,268                                             
Credit Agreement         $8,000,000                                             
Total                    $12,958,268                                            

Address for Notices                      California Commerce Bank               

2029 Century Park east 42nd. Floor       By: /s/                                
Los Angeles, California, 90067           -----------------------------          
                         Name: Jorge A. Figueroa
                              Title: Senior Vice-president

Existing Bank Debt                                                              

Credit Agreement         $12,500,000                                            
Credit Agreement         $11,680,000                                            
Total                    $24,180,000                                            

Schedule 1 to the Plan Support Agreement                
Milestones                

Date                             Event                

April 30, 2004                   The credit agreement,                          
                indentures and other documents
                 evidencing or governing the New
              Notes shall be substantially
                 complete and agreed upon by the
                Company, the Initial Signatory
           Noteholders, and the Bank
Lenders.      

April 30, 2004.                  The Disclosure Statement and                   
              all other Exchange Offer and
            Tender Offer documentation
                 shall be substantially complete
                 and agreed upon by the Company,
       the Initial Signatory
           Noteholders, and the Bank
Lenders.      

May 14, 2004  (Non-binding       Corporacion Durango shall have                 
Target Date May 7).              commenced the Exchange Offer.                  

June 25, 2004  (Non-binding      Exchange Offer completed.                      
Target Date June 14)                                                            

July 1, 2004                     Provide to each Initial                        
               Signatory Noteholder and each
                 Bank Lender draft copies of all
                pleadings proposed to be filed
                 on the first day of the Chapter
    11 Case, including
            applications, motions, and
            proposed orders (including
           motion and proposed Post-
              Petition Termination Order).

July 2, 2004                     Chapter 11 filed, if necessary;                
         first day motions filed
           (including motion for the
               approval of the Post-Petition
                Termination Order); Disclosure
                 Statement filed for approval by
              Bankruptcy Court; Disclosure
             Statement posted on Company
               website; Press release issued
            by Company indicating that
               Disclosure Statement is filed
           with Bankruptcy Court and
               available on Company website.

July 9, 2004                     The Company shall have filed a                 
              motion for the approval of a
             Scheduling Order that would
                schedule court hearings on the
            adequacy of the Disclosure
                Statement and the confirmation
                 of the Plan on dates consistent
     with this Schedule.

August 6, 2004.   (Non-binding   The aforementioned Scheduling                  
Target Date July 16)             Order shall have been entered.                 

November 23, 2004.   (Non-       Plan confirmation.                             
binding Target Date November                                                    
15)                                                                             

Schedule 2 to the Plan Support Agreement                  
Transferee Signature Page               

By signing in the space provided below and returning a copy of                  
this Transferee Signature Page to the Company and to the other                  
notice parties listed in Section 19 of the Plan Support                         
Agreement, the undersigned, as Transferee, (a) represents and                   
warrants that it has received (i) the Plan Support Agreement                    
(attached as Exhibit A), (ii) the Term Sheet (attached hereto as                
Exhibit B), (iii) that certain side letter, dated ______________,               
2004, (the "Chapter 11 Venue Side Letter" attached hereto as                    
Exhibit C), and (iv) that certain side letter, dated                            
______________, 2004, (the "Financial Reporting Side Letter"                    
attached hereto as Exhibit D); (b) indicates its agreement to be                
bound by (i) the Plan Support Agreement (other than with respect                
to Section 11 thereof (Appointment to a Creditors' Committee;                   
Absolute Discretion to Exercise Fiduciary Responsibilities)),                   
(ii) the Term Sheet, (iii) the Chapter 11 Venue Side Letter, and                
(iv) the Financial Reporting Side Letter, with respect to the                   
Holdings being transferred (but not any Claims against the                      
Company previously owned by the Transferee or thereafter acquired               
by the Transferee).  Capitalized terms used in this Transferee                  
Signature Page and not defined herein shall have the meanings                   
ascribed to them in the Plan Support Agreement, including by                    
reference therein.                                                              

It is a precondition to any transfer of Holdings that an executed               
Transferee Signature Page be delivered to the Company.  Delivery                
of an executed Transferee Signature Page by facsimile to the                    
Company shall be effective for such delivery. Upon receipt by the               
Company of an executed Transferee Signature Page, the undersigned               
Transferee shall thereupon be deemed to be a Supporting Creditor                
with respect to the amount of such transferred Holdings for                     
purposes of the Plan Support Agreement (other than Section 11                   
thereof), and the undersigned transferor shall no longer be a                   
Supporting Creditor with respect to such transferred Holdings.                  

ACCEPTED AND AGREED                                                             

[NAME OF TRANSFEREE]                                                            

By:_____________________________                                                
Name:                                                                 
Title:                                                                

ACCEPTED AND AGREED                                                             

[NAME OF TRANSFEROR]                                                            

By:_____________________________                                                
Name:                                                                 
Title:                                                                

Exhibit A to the Transferee Signature Page                
Plan Support Agreement                

Exhibit B to the Transferee Signature Page                
Term Sheet                

Exhibit C to the Transferee Signature Page                
Chapter 11 Venue Side Letter                

Exhibit D to the Transferee Signature Page                
Financial Reporting Side Letter               

Exhibit A to the Plan Support Agreement               
Term Sheet                

Dates Referenced Herein   and   Documents Incorporated By Reference

This 6-K Filing		Date		Other Filings
For The Period Ended		3/31/04		6-K
		4/30/04
Filed On		5/1/04		6-K
Filed As Of		5/3/04		6-K
		5/14/04
		6/25/04
		7/1/04		NT 20-F
		7/2/04
		7/9/04
		8/6/04
		11/23/04
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