Exhibit 4.01

DEBENTURE

     THE SECURITIES REPRESENTED HEREBY HAVE
     NOT BEEN REGISTERED UNDER THE UNITED
     STATES SECURITIES ACT OF 1933, AS AMENDED
     (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD
     IN THE UNITED STATES (AS DEFINED IN
     REGULATION S UNDER THE ACT) OR TO, OR FOR
     THE ACCOUNT OR BENEFIT OF U.S. PERSONS (AS
     DEFINED IN REGULATION S UNDER THE ACT)
     EXCEPT PURSUANT TO REGISTRATION UNDER
     THE ACT OR AN EXEMPTION FROM THE
     REGISTRATION REQUIREMENTS OF THE ACT AND
     APPLICABLE STATE SECURITIES LAWS.

No.                                    US $_______


         NATIONAL AFFILIATED CORPORATION
                        
12% SERIES A SUBORDINATED CONVERTIBLE REDEEMABLE 
         DEBENTURE  DUE AUGUST 31, 1998
                        
     THIS DEBENTURE is one of a duly authorized issue of Debentures
of National Affiliated Corporation, a corporation duly organized and existing
under the laws of Louisiana (the "Company") designated as its 12% Series A
Subordinated Convertible Redeemable Debentures Due August 31, 1998, in
an aggregate principal face amount not exceeding Two Million Four Hundred
Thousand Dollars (U.S. $2,400,000) which Debentures are being purchased
at 83.33% of the face amount of such Debentures.

     FOR VALUE RECEIVED, the Company promises to pay to
_____________ _______________, the registered holder hereof and its
successors and assigns (the "Holder"), the principal face sum of
_________________________________ (US $_______) on August 31, 1998
(the "Maturity Date"), and to pay interest on the principal sum outstanding,
at the rate of 12% per annum due and payable quarterly commencing
_______________, 1997 pursuant to paragraph 4(b) herein and pursuant to
the terms and conditions of the Subscription Agreement between the
Company and ____________________________ of even date herewith (the
"Subscription Agreement").  Accrual of interest shall commence on the date
hereof and shall continue until payment in full of the outstanding principal sum
has been made or duly provided for.  The interest so payable will be paid to
the person in whose name this Debenture (or one or more predecessor
Debentures) is registered on the records of the Company regarding
registration and transfers of the Debentures (the "Debenture Register");
provided, however, that the Company's obligation to a transferee of this
Debenture arises only if such transfer, sale or other disposition is made in
accordance with the terms and conditions of the Subscription Agreement. 
The principal of, and interest (with the exception of the prepaid interest set
forth in Section 4(b) herein) on, this Debenture are payable 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, at the address last appearing
on the Debenture Register of the Company as designated in writing delivered
to the Company (with a copy to the Transfer Agent) by the Holder hereof
from time to time.  The Company will pay the outstanding principal due upon
this Debenture before or on the Maturity Date, less any amounts required by
law to be deducted or withheld, to the Holder of this Debenture no later than 
the tenth (10th) day prior to the Maturity Date by check or on the Maturity
Date by wire transfer and addressed to such Holder at the last address
appearing on the Debenture Register.  The forwarding of such check or wire
transfer shall constitute a payment of outstanding principal hereunder and shall
satisfy and discharge the liability for principal on this Debenture to the 
extent of the sum represented by such check or wire transfer plus any amounts so
deducted.  Interest shall be payable in Common Stock (as defined below)
pursuant to paragraph 4(b) herein.

     This Debenture is subject to the following additional provisions:

     
  1. The Debentures are issuable in denominations of Ten Thousand
Dollars (US$10,000) and integral multiples thereof.  The Debentures are
exchangeable for an equal aggregate principal amount of Debentures of
different authorized denominations, as requested by the Holders surrendering
the same but not less than U.S. $10,000.  No service charge will be made for
such registration or transfer or exchange, except that transferee shall pay any
tax or other governmental charges payable in connection therewith.

      2. The Company shall be entitled to withhold from all payments
of principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax or
other applicable laws at the time of such payments.

      3. This Debenture has been issued subject to investment
representations of the original purchaser hereof and may be transferred or
exchanged in the U.S. only in compliance with the Securities Act of 1933, as
amended (the "Act") and applicable state securities laws.  Prior to due
presentment for transfer of this Debenture, the Company and any agent of the
Company may treat the person in whose name this Debenture is duly
registered on the Company's Debenture Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes,
whether or not this Debenture be overdue, and neither the Company nor any
such agent shall be affected or bound by notice to the contrary.  Any holder
of this Debenture, electing to exercise the right of conversion set forth in
Section 4(a) hereof, in addition to the requirements set forth in Section 4(a),
and any prospective transferee of this Debenture, is also required to give the
Company (i) written confirmation that it is not a U.S. Person and the
Debenture is not being converted on behalf of a U.S. Person ("Notice of
Conversion") or (ii) an opinion of U.S. counsel to the effect that the
Debenture and shares of common stock issuable upon conversion or transfer
thereof have been registered under the 1933 Act or are exempt from such
registration.  In the event a Notice of Conversion or opinion of counsel is not
provided the Holder hereof will not be entitled to exercise the right to convert
or transfer the Debentures.

       4. (a) The Holder of this Debenture is entitled, at its option,
at any time commencing 45 days after closing of the Offering hereof to
convert all or any amount over $10,000 of the principal face amount of this
Debenture then outstanding into shares of common stock, $0.001 par value
per share, of the Company (the "Common Stock"), at a conversion price for
each share of Common Stock equal to the lower of (a) 75% of the average of
the closing bid prices of the Common Stock for the five (5) business days
immediately preceding the date of receipt by the Company of notice of
conversion or (b) 80% of the closing bid price of the Common Stock for the
business day immediately preceding the closing date ("Conversion Shares")
as reported by the National Association of Securities Dealers ("NASDAQ")
(the "Conversion Price").  If the number of resultant Conversion Shares
would as a matter of law or pursuant to regulatory authority require the
Company to seek shareholder approval of such issuance, the Company shall,
as soon as practicable, take the necessary steps to seek such approval.  If such
approval is not received within 45 days then Company shall be required to
redeem the Debenture pursuant to paragraph 4(c) herein.  Such conversion
shall be effectuated by surrendering the Debentures to be converted (with a
copy, by facsimile or courier, to the Company) to the Company with the form
of conversion notice attached hereto as Exhibit I, executed by the Holder of
this Debenture evidencing such Holder's intention to convert this Debenture
or a specified portion (as above provided) hereof, and accompanied by proper
assignment hereof in blank.  Accrued but unpaid interest shall be subject to
conversion.  No fractional shares or scrip representing fractions of shares will
be issued on conversion, but the number of shares issuable shall be rounded
to the nearest whole share.  The transferee or issuee shall execute such
investment representations or other documents as are respectively required by
counsel in order to ascertain the available registration exemption.  The date
on which notice of conversion is given shall be deemed to be the date on
which the Holder has delivered this Debenture, with the assignment and
conversion notice duly executed, to the Company or, if earlier, the date set
forth in such notice of conversion if the Debenture is received by the
Company within five (5) business days thereafter.  The transferee or issuee
shall execute such investment representations or other documents as are
reasonably required by counsel in order to ascertain the available registration
exemption.

      (b)Interest at the rate of 12% per annum shall be payable
in advance, quarterly commencing                        , 1997.  However, at
Closing, the Company shall prepay the first 3 months interest by issuing in
Common Stock of the Company as follows: Based on the average closing bid
prices of the Common Stock for the last 5 consecutive trading days prior to
Closing ("Market Price") the Company shall issue to the Holder shares of
Common Stock in an amount equal to the total monthly interest accrued and
due divided by 80% of the Market Price (the "Interest Shares"). Common
Stock issued pursuant hereto shall be issued pursuant to Regulation S or other
applicable exemption to federal and state securities laws in accordance with
the terms of the Subscription Agreement.  Thereafter, commencing 91 days
after Closing the Company shall pay interest on a quarterly basis in advance
in cash (or Common Stock, based on the above formula, at the Company's
option).

      (c)At any time within 45 days of issuance of the
Debenture the Company shall have the option to redeem the Debenture in full
by paying to the Holder the face amount of the Debenture.  In addition, at any
time on of after 90 days the Company shall have the option to pay to the
Holder 120% of the principal face amount of the Debenture, in full, to the
extent conversion has not occurred pursuant to paragraph 4(a) herein, or
prepay upon maturity if the Debenture is not converted, the Company shall
give the Holder 5 days written notice and the Holder shall have the option to
convert the Debenture or any part thereof into shares of Common Stock at a
conversion price equal to 75% of the average of the closing bid price of the
Common Stock for the 5 consecutive trading days prior to the date of such
conversion or accept the cash repayment.  Any shares issued pursuant to the
options shall be issued pursuant to Regulation S or a Registration Statement. 

      5. No provision of this Debenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of, and interest on, this Debenture at the time, place, and rate, and
in the coin currency, herein prescribed.

      6. The Company hereby expressly waives demand and
presentment for payment, notice of nonpayment, protest, notice of protest,
notice of dishonor, notice of acceleration or intent to accelerate, bringing of
suit and diligence in taking any action to collect amounts called for hereunder
and shall be directly and primarily liable for the payment of all sums owing and
to be owing hereon, regardless of and without any notice, diligence, act or
omission as or with respect to the collection of any amount called for
hereunder.

      7.  The Company agrees to pay all costs and expenses, including
reasonable attorneys' fees, which may be incurred by the Holder in collecting
any amount due under this Debenture.

      8.If one or more of the following described "Events of Default"
shall occur (and shall not be caused by misrepresentation or omission by
Holder in Holders Subscription Agreement) and continue for 30 days unless
a different period is otherwise stated below:

     (a)  The Company shall default in the payment of principal
          or interest on this Debenture; or

     (b)  Any of the representations or warranties made by the
          Company herein, in the Subscription Agreement, or in
          any certificate or financial or other written statements
          heretofore or hereafter furnished by or on behalf of the
          Company in connection with the execution and
          delivery of this Debenture or the Subscription
          Agreement shall be false or misleading in any material
          respect at the time made; or

     (c)  The Company shall fail to perform or observe, in any
          material respect, any other covenant, term, provision,
          condition, agreement or obligation of the Company
          under this Debenture [and such failure shall continue
          uncured for a period of thirty (30) days after notice
          from the Holder of such failure]; or

     (d)  The Company shall (1) become insolvent; (2) admit in
          writing its liability to pay its debts generally as they
          mature; (3) make an assignment for the benefit of
          creditors or commence proceedings for its dissolution;
          or (4) apply for or consent to the appointment of a
          trustee, liquidator or receiver for its or for a
          substantial part of its property or business; or

     (e)       A trustee, liquidator or receiver shall be appointed for
               the Company or for a substantial part of its property
               or business without its consent and shall not be
               discharged within thirty (60) days after such
               appointment; or

     (f)  Any governmental agency or any court of competent
          jurisdiction at the instance of any governmental agency
          shall assume custody or control of the whole or any
          substantial portion of the properties or assets of the
          Company and shall not be dismissed within thirty (30)
          days thereafter; or 

     (g)  Any money judgment, writ or warrant of attachment,
          or similar process, in excess of One Million
          ($1,000,000) Dollars in the aggregate shall be entered
          or filed against the Company or any of its properties or
          other assets and shall remain unpaid, unvacated,
          unbonded or unstayed for a period of fifteen (15) days
          or in any event later than five (5) days prior to the date
          of any proposed sale thereunder; or

     (h)  Bankruptcy, reorganization, insolvency or liquidation
          proceedings or other proceedings for relief under any
          bankruptcy law or any law for the relief of debtors
          shall be instituted by or against the Company and, if
          instituted against the Company, shall not be dismissed
          within thirty (60) days after such instruction of the
          Company shall by any action or answer approve of,
          consent to, or acquiesce in any such proceedings or
          admit the material allegations of, or default in
          answering a petition filed in any such proceeding; or

     (i)  The Company shall have its Common Stock delisted
          from the over-the-counter market.

     (j)  The Company shall fail to issue the Common Stock
          within seven (7) business days pursuant to paragraph
          4 herein and as permitted by then current SEC
          guidelines for this type of offering without a restrictive
          legend.

     (k)  The Company shall fail within 3 business days from the
          date of closing to perfect a secured interest for the
          debenture in its asset by the filing of a UCC-1
          Statement and all other necessary documents.

Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which
waiver shall not be deemed to be a waiver of any subsequent default) at the
option of the Holder and in the Holder's sole discretion, the Holder may
consider this Debenture immediately due and payable, without presentment,
demand, protest or (further) notice of any kind (other than notice of
acceleration), all of which are hereby expressly waived, anything herein or in
any note or other instruments contained to the contrary notwithstanding, and
the Holder may immediately, and without expiration of any period of grace,
enforce any and all of the Holder's rights and remedies provided herein or any
other rights or remedies afforded by law.

       9.(a)This Debenture represents a secured obligation of the
Company guaranteed by The Southern Group, Inc. pursuant to paragraph 9(b)
herein.  However, no recourse shall be had for the payment of the principal of,
or the interest on, this Debenture, or for any claim based hereon, or otherwise
in respect hereof, against any incorporator, officer or director, as such, past,
present or future, of the Company whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.

      (b)The Southern Group, Inc. shall contemporaneously
with the issuance of this Debenture enter into a guarantee in the form attached
hereto.  All Holders of the Debentures shall have equal priority regardless of
the time of their purchase.  The Southern Group, Inc. shall take all steps
necessary to execute appropriate guarantee documents and shall provide the
Holder with an opinion of counsel or other evidence that such guarantee is
enforceable in accordance with its terms.

      10.The Holder of this Debenture, by acceptance hereof, agrees
that this Debenture is being acquired for investment and that such Holder will
not offer, sell or otherwise dispose of this Debenture or the Shares of
Common Stock issuable upon exercise thereof except under circumstances
which will not result in a violation of the Act or any applicable state Blue Sky
law or similar laws relating to the sale of securities.

      11.In case any provision of this Debenture is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Debenture will not in any
way be affected or impaired thereby.

      12.This Debenture and the agreements referred to in this
Debenture constitute the full and entire understanding and agreement between
the Company and the Holder with respect to the subject hereof.  Neither this
Debenture nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the Company and the
Holder.

      13.This Debenture shall be governed by and construed in
accordance with the laws of New York.  Holder hereby waives trial by jury
and consents to exclusive jurisdiction and venue in the State of New York.

      14.Any controversy or claim relating to this Agreement
("Arbitrable Dispute") shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (the
"AAA") as such rules may be modified herein or as otherwise agreed by the
parties in controversy.  The forum for arbitration shall be New York, New
York.  Broker agrees to submit to the jurisdiction of the New York Courts for
purposes of confirming any award.
     
      15.As set forth herein, the Company shall use all reasonable
efforts to issue and deliver, within seven (7) business days after the Holder 
has fulfilled all conditions and submitted all necessary documents duly executed
and in proper form required for conversion (the "Deadline"), to the Holder or
any part receiving a Debenture by transfer from the Holder (together, a
"Holder"), at the address of the Holder on the books of the Company, a
certificate or certificates for the number of Shares of Common Stock to which
the Holder shall be entitled.  It is understood by both parties that such
certificates must  comply with the then enacted SEC regulations governing
this transaction.  The Company understands that a delay in the issuance of the
Shares of Common Stock beyond the Deadline could result in economic loss
to the Holder.  As compensation to the Holder for such loss, the Company
agrees to pay as liquidated damages to the Holder for late issuance of Shares
(not resulting from causes out of Company's control)  upon conversion in
accordance with the following schedule (where "No. Business Days Late" is
defined as the number of business days beyond ten (10) business days from the
date of receipt by the Company and the transfer agent of a Notice of
Conversion of all necessary documentation duly executed and in proper form
required for conversion, including the original Debenture to be converted, all
in accordance with the Debenture, Subscription Agreement and the
requirements of the transfer agent):
<TABLE>
           <C>                                  <C>
                                       Liquidated Damages per
        No. Business Days Late            $100,000 of Debenture

           1                                      $500
           2                                    $1,000
           3                                    $1,500
           4                                    $2,000
           5                                    $2,500
           6                                    $3,000
           7                                    $3,500
           8                                    $4,000
           9                                    $4,500
           10                                   $5,000
           10                                   $5,000 + $1,000 each
                                                Business Day Late beyond 10 days
</TABLE>
     The Company shall pay the Holder any liquidated damages incurred
under this Section by check upon the earlier to occur of (i) issuance of the
Shares to the Holder or (ii) each monthly anniversary of the receipt of the
Company of such Holder's Notice of Conversion.

     The Company shall at all times reserve and have available all Common
Stock necessary to meet conversion of the Debentures by all Holders of the
entire amount of Debentures then outstanding.  If, at any time Holder submits
a Notice of Conversion and the Company does not have sufficient authorized
but unissued shares of Common Stock available to effect, in full, a conversion
of the Debentures (a "Conversion Default", the date of such default being
referred to herein as the "Conversion Default Date"), the Company shall issue
to the Holder all of the shares of Common Stock which are available, and the
Notice of Conversion as to any Debentures requested to be converted but not
converted (the "Unconverted Debentures"), upon Holder's sole option, may
be deemed null and void.  The Company shall provide notice of such
Conversion Default ("Notice of Conversion Default") to all existing Holders
of outstanding Debentures, by facsimile, within one (1) business day of such
default (with the original delivered by overnight or two day courier), and the
Holder shall give notice to the Company by facsimile within five business days
of receipt of the original Notice of Conversion Default (with the original
delivered by overnight or two day courier) of its election to either nullify or
confirm the Notice of Conversion.

     The Company agrees to pay to all Holders of outstanding
Debentures, as liquidated damages, payments for a Conversion Default
("Conversion Default Payments") in the amount of (N/365) x (.24) x the initial
issuance price of the outstanding and/or tendered but not converted
Debentures held by each Holder where N = the number of days from the
Conversion Default Date to the date (the "Authorization Date") that the
Company authorizes a sufficient number of shares of Common Stock to effect
conversion of all remaining Debentures.  The Company shall send notice
("Authorization Notice") to each Holder of outstanding Debentures that
additional shares of Common Stock have been authorized, the Authorization
Date and the amount of Holder's accrued Conversion Default Payments.  The
accrued Conversion Default shall be paid in cash or shall be convertible into
Common Stock at the Conversion Rate, at the Holder's option, payable as
follows:  (i) in the event Holder elects to take such payment in cash, cash
payments shall be made to such Holder of outstanding Debentures by the fifth
day of the following calendar month, or (ii) in the event Holder elects to take
such payment in stock, the Holder may convert such payment amount into
Common Stock at the conversion rate set forth in Section 4(a) at anytime
after the 5th day of the calendar month following the month in which the
Authorization Notice was received, until the maturity date.


     IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed by an officer thereunto duly authorized.


Dated:                                                  

                                    NATIONAL AFFILIATED CORPORATION


                                    By:                                         
                                    Title:    
                                                                        



                                    Guaranteed By:

                                    THE SOUTHERN GROUP, INC.


                                    By:                                         
                                    Title:    
                                                                        

                    EXHIBIT I
                        
              NOTICE OF CONVERSION
                        
(To be Executed by the Registered Holder in order to Convert the
                   Debenture)



     The undersigned hereby irrevocably elects to convert
$______________ of the above Debenture No. ___ into Shares of
Common Stock of National Affiliated Corporation (the "Company")
according to the conditions set forth in such Debenture, as of the date
written below.

     The undersigned represents that it is not a U.S. Person as defined in
Regulation S promulgated under the Securities Act of 1933, as amended,
and is not converting the Debenture on behalf of any U.S. Person and the
representations contained in the Subscription Agreement are true and
correct.  If Shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.

Date of Conversion*                                                         
                                 

Applicable Conversion Price                                                    
                                 

Signature                                                                    
                                 
     [Print Name of Holder and Title of Signer]

Address:                                                                    
                                 

                                                                            
                                  








                                                                          
Medallion Signature Guaranty



* This original Debenture and Notice of Conversion must be received by the 
Company by the fifth business date following the Date of Conversion.


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