Exhibit 10-4

                            FIRST SOUTH BANCORP, INC.


                        JUNIOR SUBORDINATED DEBT SECURITY
                                    DUE 2034


         THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES LAWS OR ANY OTHER
APPLICABLE   SECURITIES  LAWS.   NEITHER  THIS  SECURITY  NOR  ANY  INTEREST  OR
PARTICIPATION  HEREIN MAY BE REOFFERED,  SOLD, ASSIGNED,  TRANSFERRED,  PLEDGED,
ENCUMBERED  OR  OTHERWISE  DISPOSED  OF IN THE ABSENCE OF SUCH  REGISTRATION  OR
UNLESS SUCH  TRANSACTION  IS EXEMPT  FROM,  OR NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF  THE  SECURITIES  ACT.  THE  HOLDER  OF  THIS  SECURITY  BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY
(A) TO THE COMPANY,  (B) PURSUANT TO RULE 144A UNDER THE  SECURITIES  ACT ("RULE
144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED  IN RULE 144A THAT  PURCHASES  FOR ITS OWN  ACCOUNT OR FOR THE
ACCOUNT  OF A  QUALIFIED  INSTITUTIONAL  BUYER TO WHOM  NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,  (C)  PURSUANT TO AN  EXEMPTION
FROM THE  REGISTRATION  REQUIREMENTS  OF THE  SECURITIES  ACT TO AN  "ACCREDITED
INVESTOR"  WITHIN THE MEANING OF  SUBPARAGRAPH  (a) (1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE  EXEMPTION
FROM  THE  REGISTRATION  REQUIREMENTS  OF THE  SECURITIES  ACT,  SUBJECT  TO THE
COMPANY'S  RIGHT PRIOR TO ANY SUCH OFFER,  SALE OR TRANSFER  PURSUANT TO CLAUSES
(C) OR (D) TO REQUIRE  THE  DELIVERY  OF AN OPINION  OF  COUNSEL,  CERTIFICATION
AND/OR OTHER INFORMATION  SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A
COPY OF WHICH MAY BE OBTAINED  FROM THE COMPANY.  THE HOLDER OF THIS SECURITY BY
ITS   ACCEPTANCE   HEREOF   AGREES  THAT  IT  WILL  COMPLY  WITH  THE  FOREGOING
RESTRICTIONS.

         THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS
AND  WARRANTS  THAT IT WILL NOT ENGAGE IN HEDGING  TRANSACTIONS  INVOLVING  THIS
SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT.

         THE HOLDER OF THIS  SECURITY  BY ITS  ACCEPTANCE  HEREOF  ALSO  AGREES,
REPRESENTS  AND  WARRANTS  THAT  IT  IS  NOT  AN  EMPLOYEE  BENEFIT,  INDIVIDUAL
RETIREMENT  ACCOUNT  OR  OTHER  PLAN OR  ARRANGEMENT  SUBJECT  TO TITLE I OF THE
EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT OF 1974,  AS AMENDED  ("ERISA"),  OR


<PAGE>

SECTION 4975 OF THE  INTERNAL  REVENUE  CODE OF 1986,  AS AMENDED (THE  "CODE"),
(EACH A "PLAN"),  OR AN ENTITY WHOSE UNDERLYING  ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF ANY PLAN'S  INVESTMENT  IN THE ENTITY  AND NO PERSON  INVESTING  "PLAN
ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS  SECURITY OR ANY INTEREST  THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIOE  RELIEF  AVAILABLE
UNDER  U.S.   DEPARTMENT  OF  LABOR  PROHIBITED   TRANSACTION   CLASS  EXEMPTION
96-23,95-60,91-38,90-1  OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE
AND  HOLDING OF THIS  SECURITY  IS NOT  PROHIBITED  BY  SECTION  406 OF ERISA OR
SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER
OR  HOLDER  OF THIS  SECURITY  OR ANY  INTEREST  THEREIN  WILL BE DEEMED TO HAVE
REPRESENTED  BY ITS  PURCHASE  AND HOLDING  THEREOF THAT EITHER (i) IT IS NOT AN
EMPLOYEE  BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS  APPLICABLE,  A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE  BENEFIT  PLAN OR PLAN,  OR ANY OTHER  PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE  BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED  TRANSACTION UNDER SECTION
406 OF  ERISA OR  SECTION  4975 OF THE CODE  FOR  WHICH  THERE IS NO  APPLICABLE
STATUTORY OR ADMINISTRATIVE EXEMPTION.

         IN  CONNECTION  WITH ANY  TRANSFER,  THE HOLDER OF THIS  SECURITY  WILL
DELIVER TO THE COMPANY AND TRUSTEE SUCH  CERTIFICATES  AND OTHER  INFORMATION AS
MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER  COMPLIES WITH THE
FOREGOING RESTRICTIONS.

         THIS  SECURITY  WILL BE ISSUED  AND MAY BE  TRANSFERRED  ONLY IN BLOCKS
HAVING A PRINCIPAL  AMOUNT OF NOT LESS THAN  $100,000 AND MULTIPLES OF $1,000 IN
EXCESS  THEREOF.  ANY  ATTEMPTED  TRANSFER OF THIS  SECURITY IN A BLOCK HAVING A
PRINCIPAL  AMOUNT  OF LESS  THAN  $100,000  SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE
THE HOLDER OF THIS SECURITY FOR ANY PURPOSE,  INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS SECURITY,  AND SUCH PURPORTED  TRANSFEREE SHALL
BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.

         THIS  OBLIGATION  IS NOT A DEPOSIT  AND IS NOT  INSURED  BY THE  UNITED
STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT
INSURANCE  CORPORATION  (THE "FDIC").  THIS  OBLIGATION IS  SUBORDINATED  TO THE
CLAIMS OF  DEPOSITORS  AND THE CLAIMS OF GENERAL  AND SECURED  CREDITORS  OF THE
COMPANY,  IS INELIGIBLE  AS  COLLATERAL  FOR A LOAN BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES AND IS NOT SECURED.





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<PAGE>


                   Junior Subordinated Debt Security due 2034

                                       of

                            First South Bancorp, Inc.

         First South Bancorp, Inc., a bank holding company incorporated in South
Carolina  (the  "Company"),  for value  received  promises to pay to Wells Fargo
Bank,  National  Association,  not in its  individual  capacity  but  solely  as
Institutional  Trustee for FSBS Capital Trust I, a Delaware statutory trust (the
"Holder"),  or registered assigns, the principal sum of Five Million One Hundred
Fifty  Five  Thousand  Dollars  on April 7,  2034  and to pay  interest  on said
principal  sum from January 30, 2004, or from the most recent  interest  payment
date (each such date,  an "Interest  Payment  Date") to which  interest has been
paid or duly provided for,  quarterly  (subject to deferral as set forth herein)
in arrears on January 7, April 7, July 7 and  October 7 of each year  commencing
April 7, 2004,  at a variable  per annum rate equal to LIBOR (as  defined in the
Indenture)  plus 2.80%  ("Initial  Rate") from January 30, 2004 to April 7, 2009
(the "Initial Rate Period"), and thereafter at LIBOR, as determined on the LIBOR
Determination Date immediately  preceding each Interest Payment Date, plus 2.85%
("Subsequent Rate") (provided, that LIBOR during the Initial Rate Period may not
fall below 1.12%; and, provided further, that the Interest Rate for any Interest
Payment Period may not exceed the highest rate permitted by New York law, as the
same may be modified by United  States law of general  applicability)  until the
principal hereof shall have become due and payable, and on any overdue principal
and  (without  duplication  and to the extent that  payment of such  interest is
enforceable  under applicable law) on any overdue  installment of interest at an
annual rate equal to the Interest Rate in effect for each such Extension  Period
compounded  quarterly.  The amount of interest  payable on any Interest  Payment
Date shall be computed on the basis of a 360-day  year and the actual  number of
days elapsed in the relevant  interest period.  Notwithstanding  anything to the
contrary  contained  herein,  if any Interest  Payment  Date,  other than on the
Maturity Date, any Redemption Date or the Special  Redemption  Date,  falls on a
day that is not a Business Day,  then any interest  payable will be paid on, and
such Interest  Payment Date will be moved to, the next succeeding  Business Day,
and additional interest will accrue for each day that such payment is delayed as
a result  thereof.  If the Maturity  Date,  any  Redemption  Date or the Special
Redemption  date falls on a day that is not a Business Day, then the  principal,
premium,  if any, and/or interest  payable on such date will be paid on the next
succeeding  Business Day, and no  additional  interest will accrue in respect of
such payment made on such next succeeding Business Day. The interest installment
so payable,  and punctually  paid or duly provided for, on any Interest  Payment
Date will,  as  provided in the  Indenture,  be paid to the Person in whose name
this Debt Security (or one or more  Predecessor  Securities,  as defined in said
Indenture) is registered at the close of business on the regular record date for
such  interest  installment,  except that  interest  and any  Deferred  Interest
payable on the  Maturity  Date shall be paid to the Person to whom  principal is
paid. Any such interest  installment  not  punctually  paid or duly provided for
shall  forthwith  cease to be payable to the registered  holders on such regular
record date and may be paid to the Person in whose name this Debt  Security  (or
one or more  Predecessor Debt Securities) is registered at the close of business
on a special  record  date to be fixed by the  Trustee  for the  payment of such
defaulted  interest,  notice whereof shall be given to the registered holders of
the Debt Securities not less than 10 days prior to such special record date, all
as more fully provided in the  Indenture.  The principal of and interest on this
Debt Security shall be payable at the office or agency of the



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<PAGE>

Trustee (or other Paying Agent  appointed  by the Company)  maintained  for that
purpose in any coin or currency of the United States of America that at the time
of payment is legal  tender for payment of public and private  debts;  provided,
however,  that  payment of interest  may be made at the option of the Company by
check  mailed to the  registered  holder at such  address as shall appear in the
Debt  Security  Register  or  by  wire  transfer  to  an  account  appropriately
designated by the holder hereof.  Notwithstanding the foregoing,  so long as the
holder of this Debt Security is the  Institutional  Trustee,  the payment of the
principal  of and  interest on this Debt  Security  will be made in  immediately
available  funds at such place and to such account as may be  designated  by the
Institutional Trustee.

         Upon  submission of Notice (as defined in the Indenture) and so long as
no Event of Default has occurred and is  continuing,  the Company shall have the
right,  from time to time and  without  causing  an Event of  Default,  to defer
payments  of  interest  on  the  Debt   Securities  by  extending  the  interest
distribution  period  on the Debt  Securities  at any time and from time to time
during  the  term of the Debt  Securities,  for up to 20  consecutive  quarterly
periods  (each  such  extended  interest   distribution  period,  an  "Extension
Period"),  during which  Extension  Period no interest  shall be due and payable
(except  any  Additional  Interest  that  may be due and  payable).  During  any
Extension Period,  interest will continue to accrue on the Debt Securities,  and
interest on such accrued  interest (such accrued  interest and interest  thereon
referred to herein as "Deferred  Interest")  will accrue at an annual rate equal
to the  Interest  Rate  applicable  during  such  Extension  Period,  compounded
quarterly  from the date such Deferred  Interest would have been payable were it
not for the  Extension  Period,  to the extent  permitted  by law. No  Extension
Period may end on a date other than an Interest  Payment Date. At the end of any
such Extension  Period the Company shall pay all Deferred  Interest then accrued
and unpaid on the Debt Securities;  provided,  however, that no Extension Period
may extend beyond the Maturity Date and provided,  further,  however, during any
such Extension  Period,  the Company may not (i) declare or pay any dividends or
distributions on, or redeem,  purchase,  acquire,  or make a liquidation payment
with respect to, any of the Company's  capital stock or (ii) make any payment on
or repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to the Debt  Securities  (other
than (a)  repurchases,  redemptions or other  acquisitions  of shares of capital
stock of the Company (A) in connection  with any  employment  contract,  benefit
plan  or  other  similar  arrangement  with or for  the  benefit  of one or more
employees, officers, directors or consultants, (B) in connection with a dividend
reinvestment  or stockholder  stock purchase plan or (C) in connection  with the
issuance  of capital  stock of the Company (or  securities  convertible  into or
exercisable  for  such  capital  stock),  as  consideration  in  an  acquisition
transaction  entered into prior to the  applicable  Extension  Period,  (b) as a
result of any exchange, reclassification, combination or conversion of any class
or series of the  Company's  capital stock (or any capital stock of a subsidiary
of the Company) for any class or series of the Company's capital stock or of any
class or series  of the  Company's  indebtedness  for any class or series of the
Company's  capital stock, (c) the purchase of fractional  interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such  capital  stock or the  security  being  converted  or  exchanged,  (d) any
declaration of a dividend in connection with any  stockholder's  rights plan, or
the issuance of rights,  stock or other property under any stockholder's  rights
plan, or the  redemption or repurchase of rights  pursuant  thereto,  or (e) any
dividend  in the form of stock,  warrants,  options  or other  rights  where the
dividend stock or the stock issuable upon exercise of such warrants,  options or
other  rights is the same stock as that on which the  dividend  is being paid or
ranks pari passu with or junior to such stock).  Prior to the termination of any



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<PAGE>

Extension  Period,  the Company may further extend such period,  provided,  that
such period together with all such previous and further  consecutive  extensions
thereof shall not exceed 20 consecutive  quarterly periods, or extend beyond the
Maturity Date. Upon the termination of any Extension Period and upon the payment
of all  Deferred  Interest,  the Company may  commence a new  Extension  Period,
subject to the foregoing requirements. No interest or Deferred Interest shall be
due and payable  during an  Extension  Period,  except at the end  thereof,  but
Deferred  Interest  shall accrue upon each  installment  of interest  that would
otherwise  have been due and payable  during such  Extension  Period  until such
installment is paid. The Company must give the Trustee notice of its election to
begin such  Extension  Period at least one  Business Day prior to the earlier of
(i) the next succeeding date on which interest on the Debt Securities would have
been payable except for the election to begin such Extension  Period or (ii) the
date such  interest  is  payable,  but in any event not later  than the  related
regular record date.

         The  indebtedness  evidenced  by this Debt  Security  is, to the extent
provided  in the  Indenture,  subordinate  and junior in right of payment to the
prior  payment in full of all Senior  Indebtedness,  and this Debt  Security  is
issued  subject to the provisions of the Indenture  with respect  thereto.  Each
holder of this Debt Security,  by accepting the same, (a) agrees to and shall be
bound by such  provisions,  (b)  authorizes  and  directs  the  Trustee  on such
holder's  behalf  to take such  action as may be  necessary  or  appropriate  to
acknowledge  or effectuate  the  subordination  so provided and (c) appoints the
Trustee  such  holder's  attorney-in-fact  for any and all such  purposes.  Each
holder hereof, by such holder's  acceptance hereof,  hereby waives all notice of
the  acceptance  of the  subordination  provisions  contained  herein and in the
Indenture  by each holder of Senior  Indebtedness,  whether now  outstanding  or
hereafter  incurred,   and  waives  reliance  by  each  such  holder  upon  said
provisions.

         The  Company  waives  demand,   presentment  for  payment,   notice  of
nonpayment, notice of protest, and all other notices.

         This Debt  Security  shall not be  entitled  to any  benefit  under the
Indenture  hereinafter  referred to and shall not be valid or become  obligatory
for any purpose until the certificate of  authentication  hereon shall have been
signed by or on behalf of the Trustee.

         The  provisions of this Debt Security are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.





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<PAGE>

         IN WITNESS WHEREOF, the Company has duly executed this certificate.

                                          First South Bancorp, Inc.


                                          By:___________________________________
                                          Name:_________________________________
                                          Title:________________________________



Dated:__________________, 2004

                          CERTIFICATE OF AUTHENTICATION

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

                                       Wells Fargo Bank, National Association,
                                       not in its individual capacity
                                       but solely as the Trustee


                                       By:______________________________________
                                            Authorized Officer


Dated:__________________, 2004





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<PAGE>


                              [REVERSE OF SECURITY]

         This  Debt  Security  is  one  of a  duly  authorized  series  of  Debt
Securities of the Company,  all issued or to be issued  pursuant to an Indenture
(the  "Indenture"),  dated as of January 30, 2004,  duly  executed and delivered
between the Company and Wells Fargo Bank, National Association,  as Trustee (the
"Trustee"), to which Indenture and all indentures supplemental thereto reference
is  hereby  made  for a  description  of  the  rights,  limitations  of  rights,
obligations,  duties and immunities  thereunder of the Trustee,  the Company and
the holders of the Debt Securities (referred to herein as the "Debt Securities")
of which this Debt  Security  is a part.  The  summary of the terms of this Debt
Security  contained  herein does not purport to be complete  and is qualified by
reference to the Indenture.

         Upon the  occurrence  and  continuation  of a Tax Event,  an Investment
Company Event or a Capital Treatment Event (each a "Special  Event"),  this Debt
Security  may become  due and  payable,  in whole but not in part,  at any time,
within 90 days  following the occurrence of such Tax Event,  Investment  Company
Event or Capital  Treatment Event (the "Special  Redemption  Date"), as the case
may be, at the Special  Redemption  Price. The Company shall also have the right
to redeem this Debt Security at the option of the Company,  in whole or in part,
on any  January  7,  April 7, July 7 or  October 7 on or after  April 7, 2009 (a
"Redemption Date"), at the Redemption Price.

         Any  redemption  pursuant  to the  preceding  paragraph  will be  made,
subject to the  receipt by the  Company of prior  approval  from any  regulatory
authority with  jurisdiction  over the Company if such approval is then required
under  applicable   capital  guidelines  or  policies  of  the  such  regulatory
authority,  upon not less than 30 days' nor more  than 60 days'  notice.  If the
Debt Securities are only partially redeemed by the Company,  the Debt Securities
will be  redeemed  pro rata or by lot or by any  other  method  utilized  by the
Trustee.

         "Redemption  Price"  means  100% of the  principal  amount  of the Debt
Securities  being  redeemed  plus  accrued  and  unpaid  interest  on such  Debt
Securities  to the  Redemption  Date or, in the case of a redemption  due to the
occurrence of a Special Event,  to the Special  Redemption  Date if such Special
Redemption Date is on or after April 7, 2009.

         "Special  Redemption Price" means (1) if the Special Redemption Date is
before April 7, 2009, One Hundred Five Percent (105%) of the principal amount to
be redeemed  plus any accrued  and unpaid  interest  thereon to the date of such
redemption and (2) if the Special  Redemption Date is on or after April 7, 2009,
the Redemption Price for such Special Redemption Date.

         In the event of  redemption  of this Debt  Security in part only, a new
Debt  Security or Debt  Securities  for the  unredeemed  portion  hereof will be
issued in the name of the holder hereof upon the cancellation hereof.

         In case an Event of Default,  as defined in the  Indenture,  shall have
occurred and be continuing,  the principal of all of the Debt  Securities may be
declared due and payable, and upon such declaration of acceleration shall become
due and payable,  in the manner,  with the effect and subject to the  conditions
provided in the Indenture.


                                       7
<PAGE>

         The  Indenture  contains  provisions  permitting  the  Company  and the
Trustee,  with the  consent  of the  holders  of not  less  than a  majority  in
aggregate  principal  amount  of the Debt  Securities  at the  time  outstanding
affected  thereby,  as  specified  in the  Indenture,  to  execute  supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or  eliminating  any of the  provisions of the Indenture or of any  supplemental
indenture  or of  modifying  in any manner the rights of the holders of the Debt
Securities;  provided, however, that no such supplemental indenture shall, among
other  things,  without the consent of the  holders of each Debt  Security  then
outstanding  and  affected  thereby  (i) extend the fixed  maturity  of the Debt
Securities,  or reduce the principal  amount thereof or any  redemption  premium
thereon,  or reduce the rate or extend the time of payment of interest  thereon,
or make  payments  due on the Debt  Securities  payable in any coin or  currency
other than that provided in the Debt  Securities,  or impair or affect the right
of any holder of Debt Securities to institute suit for the payment  thereof,  or
(ii) reduce the aforesaid  percentage of Debt  Securities,  the holders of which
are required to consent to any such supplemental  indenture.  The Indenture also
contains provisions  permitting the holders of a majority in aggregate principal
amount of the Debt Securities at the time  outstanding,  on behalf of all of the
holders of the Debt Securities,  to waive any past default in the performance of
any of the covenants contained in the Indenture,  or established pursuant to the
Indenture, and its consequences,  except a default in payments due on any of the
Debt  Securities.  Any such consent or waiver by the  registered  holder of this
Debt Security  (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such holder and upon all future holders and owners of this Debt
Security and of any Debt Security issued in exchange  herefor or in place hereof
(whether by registration  of transfer or otherwise),  irrespective of whether or
not any notation of such consent or waiver is made upon this Debt Security.

         No  reference  herein to the  Indenture  and no  provision of this Debt
Security  or of the  Indenture  shall  alter or  impair  the  obligation  of the
Company,  which is absolute and  unconditional,  to pay all payments due on this
Debt  Security  at the time and place  and at the rate and in the  money  herein
prescribed.

         As provided in the Indenture and subject to certain  limitations herein
and therein set forth,  this Debt  Security is  transferable  by the  registered
holder hereof on the Debt Security  Register of the Company,  upon  surrender of
this Debt Security for  registration  of transfer at the office or agency of the
Trustee  in  Wilmington,   Delaware  accompanied  by  a  written  instrument  or
instruments of transfer in form  satisfactory to the Company or the Trustee duly
executed  by the  registered  holder  hereof  or  such  holder's  attorney  duly
authorized  in  writing,  and  thereupon  one or more  new  Debt  Securities  of
authorized  denominations  and for the same aggregate  principal  amount will be
issued to the designated  transferee or  transferees.  No service charge will be
made for any such registration of transfer,  but the Company may require payment
of a sum  sufficient to cover any tax or other  governmental  charge  payable in
relation thereto.

         Prior to due  presentment  for  registration  of  transfer of this Debt
Security,  the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any  transfer  agent  and the Debt  Security  registrar  may deem and  treat the
registered  holder hereof as the absolute owner hereof (whether or not this Debt
Security shall be overdue and notwithstanding any notice of ownership or writing
hereon) for the purpose of receiving  payment of or on account of the  principal
hereof and  interest  due hereon and for all other  purposes,  and  neither  the


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<PAGE>

Company nor the Trustee nor any  Authenticating  Agent nor any Paying  Agent nor
any  transfer  agent nor any Debt  Security  registrar  shall be affected by any
notice to the contrary.

         No  recourse  shall be had for the payment of the  principal  of or the
interest on this Debt Security,  or for any claim based hereon,  or otherwise in
respect  hereof,  or  based  on or in  respect  of the  Indenture,  against  any
incorporator,  stockholder,  officer or director,  past,  present or future,  as
such, of the Company or of any predecessor or successor corporation,  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  issuance  hereof,  expressly
waived and released.

         The Debt Securities are issuable only in registered  certificated  form
without coupons. As provided in the Indenture and subject to certain limitations
herein and  therein  set forth,  Debt  Securities  are  exchangeable  for a like
aggregate  principal  amount  of  Debt  Securities  of  a  different  authorized
denomination, as requested by the holder surrendering the same.

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

         THE LAW OF THE STATE OF NEW YORK  SHALL  GOVERN THE  INDENTURE  AND THE
DEBT SECURITIES, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.




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