EXHIBIT 4.1




                     SOUTHEASTERN BANK FINANCIAL CORPORATION
                                   as Company



                                    INDENTURE
                           Dated as of March 31, 2006


                        LASALLE BANK NATIONAL ASSOCIATION
                                   As Trustee


                       JUNIOR SUBORDINATED DEBT SECURITIES

                                Due June 15, 2036


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                                      TABLE OF CONTENTS

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                                         ARTICLE I
                                        DEFINITIONS

SECTION 1.01.       Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

                                         ARTICLE II
                                       DEBT SECURITIES

SECTION 2.01.       Authentication and Dating. . . . . . . . . . . . . . . . . . . . . . .  9

SECTION 2.02.       Form of Trustee's Certificate of Authentication. . . . . . . . . . . .  9

SECTION 2.03.       Form and Denomination of Debt Securities . . . . . . . . . . . . . . . 10

SECTION 2.04.       Execution of Debt Securities . . . . . . . . . . . . . . . . . . . . . 10

SECTION 2.05.       Exchange and Registration of Transfer of Debt Securities . . . . . . . 10

SECTION 2.06.       Mutilated, Destroyed, Lost or Stolen Debt Securities . . . . . . . . . 13

SECTION 2.07.       Temporary Debt Securities. . . . . . . . . . . . . . . . . . . . . . . 14

SECTION 2.08.       Payment of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 15

SECTION 2.09.       Cancellation of Debt Securities Paid, etc. . . . . . . . . . . . . . . 16

SECTION 2.10.       Computation of Interest. . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 2.11.       Extension of Interest Payment Period . . . . . . . . . . . . . . . . . 18

SECTION 2.12.       CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

SECTION 2.13.       Income Tax Certification . . . . . . . . . . . . . . . . . . . . . . . 19

SECTION 2.14.       Global Debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . 19

                                         ARTICLE III
                             PARTICULAR COVENANTS OF THE COMPANY

SECTION 3.01.       Payment of Principal, Premium and Interest; Agreed Treatment of the
                    Debt Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

SECTION 3.02.       Offices for Notices and Payments, etc. . . . . . . . . . . . . . . . . 22

SECTION 3.03.       Appointments to Fill Vacancies in Trustee's Office . . . . . . . . . . 23

SECTION 3.04.       Provision as to Paying Agent . . . . . . . . . . . . . . . . . . . . . 23

SECTION 3.05.       Certificate to Trustee . . . . . . . . . . . . . . . . . . . . . . . . 24

SECTION 3.06.       Additional Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 24

SECTION 3.07.       Compliance with Consolidation Provisions . . . . . . . . . . . . . . . 25

SECTION 3.08.       Limitation on Dividends. . . . . . . . . . . . . . . . . . . . . . . . 25

SECTION 3.09.       Covenants as to the Trust. . . . . . . . . . . . . . . . . . . . . . . 25


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                                      TABLE OF CONTENTS
                                         (CONTINUED)

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                                         ARTICLE IV
                      LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

SECTION 4.01.       Securityholders' Lists . . . . . . . . . . . . . . . . . . . . . . . . 26

SECTION 4.02.       Preservation and Disclosure of Lists . . . . . . . . . . . . . . . . . 26

SECTION 4.03.       Financial and Other Information. . . . . . . . . . . . . . . . . . . . 27

                                          ARTICLE V
                REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF
                                           DEFAULT

SECTION 5.01.       Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . 28

SECTION 5.02.       Payment of Debt Securities on Default; Suit Therefor . . . . . . . . . 30

SECTION 5.03.       Application of Moneys Collected by Trustee . . . . . . . . . . . . . . 31

SECTION 5.04.       Proceedings by Securityholders . . . . . . . . . . . . . . . . . . . . 32

SECTION 5.05.       Proceedings by Trustee . . . . . . . . . . . . . . . . . . . . . . . . 32

SECTION 5.06.       Remedies Cumulative and Continuing . . . . . . . . . . . . . . . . . . 33

SECTION 5.07.       Direction of Proceedings and Waiver of Defaults by Majority of
                    Securityholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

SECTION 5.08.       Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 34

SECTION 5.09.       Undertaking to Pay Costs . . . . . . . . . . . . . . . . . . . . . . . 34

                                         ARTICLE VI
                                   CONCERNING THE TRUSTEE

SECTION 6.01.       Duties and Responsibilities of Trustee . . . . . . . . . . . . . . . . 35

SECTION 6.02.       Reliance on Documents, Opinions, etc . . . . . . . . . . . . . . . . . 36

SECTION 6.03.       No Responsibility for Recitals, etc. . . . . . . . . . . . . . . . . . 37

SECTION 6.04.       Trustee, Authenticating Agent, Paying Agents, Transfer Agents or
                    Registrar May Own Debt Securities. . . . . . . . . . . . . . . . . . . 37

SECTION 6.05.       Moneys to be Held in Trust . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 6.06.       Compensation and Expenses of Trustee . . . . . . . . . . . . . . . . . 38

SECTION 6.07.       Officers' Certificate as Evidence. . . . . . . . . . . . . . . . . . . 39

SECTION 6.08.       Eligibility of Trustee . . . . . . . . . . . . . . . . . . . . . . . . 39

SECTION 6.09.       Resignation or Removal of Trustee, Calculation Agent, Paying
                    Agent or Debt Security Registrar . . . . . . . . . . . . . . . . . . . 39

SECTION 6.10.       Acceptance by Successor. . . . . . . . . . . . . . . . . . . . . . . . 41

SECTION 6.11.       Succession by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . 42

SECTION 6.12.       Authenticating Agents. . . . . . . . . . . . . . . . . . . . . . . . . 42


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                                      TABLE OF CONTENTS
                                         (CONTINUED)

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                                         ARTICLE VII
                               CONCERNING THE SECURITYHOLDERS

SECTION 7.01.       Action by Securityholders. . . . . . . . . . . . . . . . . . . . . . . 43

SECTION 7.02.       Proof of Execution by Securityholders. . . . . . . . . . . . . . . . . 44

SECTION 7.03.       Who Are Deemed Absolute Owners . . . . . . . . . . . . . . . . . . . . 44

SECTION 7.04.       Debt Securities Owned by Company Deemed Not Outstanding. . . . . . . . 44

SECTION 7.05.       Revocation of Consents; Future Securityholders Bound . . . . . . . . . 45

                                        ARTICLE VIII
                                  SECURITYHOLDERS' MEETINGS

SECTION 8.01.       Purposes of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 45

SECTION 8.02.       Call of Meetings by Trustee. . . . . . . . . . . . . . . . . . . . . . 46

SECTION 8.03.       Call of Meetings by Company or Securityholders . . . . . . . . . . . . 46

SECTION 8.04.       Qualifications for Voting. . . . . . . . . . . . . . . . . . . . . . . 46

SECTION 8.05.       Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

SECTION 8.06.       Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

SECTION 8.07.       Quorum; Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

SECTION 8.08.       Written Consent Without a Meeting. . . . . . . . . . . . . . . . . . . 48

                                         ARTICLE IX
                                   SUPPLEMENTAL INDENTURES

SECTION 9.01.       Supplemental Indentures without Consent of Securityholders . . . . . . 49

SECTION 9.02.       Supplemental Indentures with Consent of Securityholders. . . . . . . . 50

SECTION 9.03.       Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . 51

SECTION 9.04.       Notation on Debt Securities. . . . . . . . . . . . . . . . . . . . . . 51

SECTION 9.05.       Evidence of Compliance of Supplemental Indenture to be
                    furnished to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 51

                                          ARTICLE X
                                  REDEMPTION OF SECURITIES

SECTION 10.01.      Optional Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . 52

SECTION 10.02.      Special Event Redemption . . . . . . . . . . . . . . . . . . . . . . . 52

SECTION 10.03.      Notice of Redemption; Selection of Debt Securities . . . . . . . . . . 52

SECTION 10.04.      Payment of Debt Securities Called for Redemption . . . . . . . . . . . 53


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                                      TABLE OF CONTENTS
                                         (CONTINUED)

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                                         ARTICLE XI
                      CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

SECTION 11.01.      Company May Consolidate, etc., on Certain Terms. . . . . . . . . . . . 53

SECTION 11.02.      Successor Entity to be Substituted . . . . . . . . . . . . . . . . . . 54

SECTION 11.03.      Opinion of Counsel to be Given to Trustee. . . . . . . . . . . . . . . 55

                                         ARTICLE XII
                           SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 12.01.      Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . 55

SECTION 12.02.      Deposited Moneys to be Held in Trust by Trustee. . . . . . . . . . . . 56

SECTION 12.03.      Paying Agent to Repay Moneys Held. . . . . . . . . . . . . . . . . . . 56

SECTION 12.04.      Return of Unclaimed Moneys . . . . . . . . . . . . . . . . . . . . . . 56

                                        ARTICLE XIII
               IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

SECTION 13.01.      Indenture and Debt Securities Solely Corporate Obligations . . . . . . 56

                                         ARTICLE XIV
                                  MISCELLANEOUS PROVISIONS

SECTION 14.01.      Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

SECTION 14.02.      Official Acts by Successor Entity. . . . . . . . . . . . . . . . . . . 57

SECTION 14.03.      Surrender of Company Powers. . . . . . . . . . . . . . . . . . . . . . 57

SECTION 14.04.      Addresses for Notices, etc . . . . . . . . . . . . . . . . . . . . . . 57

SECTION 14.05.      Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

SECTION 14.06.      Evidence of Compliance with Conditions Precedent . . . . . . . . . . . 58

SECTION 14.07.      Non-Business Days. . . . . . . . . . . . . . . . . . . . . . . . . . . 58

SECTION 14.08.      Table of Contents, Headings, etc . . . . . . . . . . . . . . . . . . . 58

SECTION 14.09.      Execution in Counterparts. . . . . . . . . . . . . . . . . . . . . . . 59

SECTION 14.10.      Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

SECTION 14.11.      Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

SECTION 14.12.      Acknowledgment of Rights . . . . . . . . . . . . . . . . . . . . . . . 59

                                         ARTICLE XV
                              SUBORDINATION OF DEBT SECURITIES

SECTION 15.01.      Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . 60

SECTION 15.02.      Default on Senior Indebtedness . . . . . . . . . . . . . . . . . . . . 60

SECTION 15.03.      Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . . . . . . 60

SECTION 15.04.      Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62


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                                      TABLE OF CONTENTS
                                         (CONTINUED)

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SECTION 15.05.      Trustee to Effectuate Subordination. . . . . . . . . . . . . . . . . . 63

SECTION 15.06.      Notice by the Company. . . . . . . . . . . . . . . . . . . . . . . . . 63

SECTION 15.07.      Rights of the Trustee, Holders of Senior Indebtedness. . . . . . . . . 63

SECTION 15.08.      Subordination May Not Be Impaired. . . . . . . . . . . . . . . . . . . 64


EXHIBITS

EXHIBIT A           FORM OF DEBT SECURITY
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          THIS  INDENTURE, dated as of March 31, 2006, between Southeastern Bank
Financial  Corporation,  a  bank  holding  company  incorporated  in  Georgia
(hereinafter  sometimes  called  the  "Company"),  and  LaSalle  Bank  National
Association  as  trustee  (hereinafter  sometimes  called  the  "Trustee").

                              W I T N E S S E T H:

          WHEREAS,  for  its  lawful  corporate  purposes,  the Company has duly
authorized  the issuance of its Junior Subordinated Debt Securities due June 15,
2036  (the  "Debt  Securities") under this Indenture and to provide, among other
things,  for  the  execution  and  authentication,  delivery  and administration
thereof,  the  Company  has  duly  authorized  the  execution of this Indenture.

          NOW,  THEREFORE, in consideration of the premises, and the purchase of
the  Debt  Securities  by  the holders thereof, the Company covenants and agrees
with  the  Trustee  for  the  equal  and proportionate benefit of the respective
holders  from  time  to  time  of  the  Debt  Securities  as  follows:

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.01.  Definitions.
                    -----------

          The  terms  defined  in  this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this  Indenture  and  of  any  indenture  supplemental  hereto  shall  have  the
respective  meanings  specified  in this Section 1.01. All accounting terms used
herein  and not expressly defined shall have the meanings assigned to such terms
in  accordance  with  generally  accepted  accounting  principles  and  the term
"generally  accepted  accounting principles" means such accounting principles as
are  generally accepted in the United States at the time of any computation. The
words "herein," "hereof' and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision.

          "Additional  Interest"  shall  have  the  meaning set forth in Section
3.06.

          "Additional  Provisions"  shall  have the meaning set forth in Section
15.01.

          "Authenticating  Agent" means any agent or agents of the Trustee which
at the time shall be appointed and acting pursuant to Section 6.12.

          "Bankruptcy  Law" means Title 11, U.S. Code, or any similar federal or
state  law  for  the  relief  of  debtors.

          "Board  of  Directors"  means  the board of directors or the executive
committee or any other duly authorized designated officers of the Company.


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          "Board  Resolution"  means  a  copy  of  a resolution certified by the
Secretary  or an Assistant Secretary of the Company to have been duly adopted by
the  Board  of  Directors and to be in full force and effect on the date of such
certification  and  delivered  to  the  Trustee.

          "Business  Day"  means  any  day  other than a Saturday, Sunday or any
other  day  on which banking institutions in Wilmington, Delaware, New York City
or  the city of the Principal Office of the Trustee or the Company are permitted
or  required  by  any  applicable  law  or  executive  order  to  close.

          "Calculation  Agent"  means  the Person identified as "Trustee" in the
first paragraph hereof with respect to the Debt Securities and the Institutional
Trustee  with  respect  to  the  Trust  Securities.

          "Capital  Securities"  means  undivided  beneficial  interests  in the
assets  of the Trust which are designated as "TP Securities" and rank pari passu
with  Common Securities issued by the Trust; provided, however, that if an Event
of  Default  (as defined in the Declaration) has occurred and is continuing, the
rights  of  holders  of  such  Common  Securities  to  payment  in  respect  of
distributions  and  payments  upon  liquidation,  redemption  and  otherwise are
subordinated  to  the  rights  of  holders  of  such  Capital  Securities.

          "Capital  Securities Guarantee" means the guarantee agreement that the
Company  will enter into with LaSalle Bank National Association or other Persons
that  operates  directly  or  indirectly  for  the benefit of holders of Capital
Securities  of  the  Trust.

          "Capital  Treatment  Event"  means,  if  the  Company is organized and
existing  under  the  laws  of  the  United  States  or any state thereof or the
District  of Columbia, the receipt by the Company and the Trust of an Opinion of
Counsel  experienced  in such matters to the effect that, as a result of (a) any
amendment  to, or change in, the laws, rules or regulations of the United States
or  any  political  subdivision  thereof or therein, or any rules, guidelines or
policies  of  any  applicable  regulatory  authority  for the Company or (b) any
official  or  administrative pronouncement or action or decision interpreting or
applying such laws, rules or regulations, which amendment or change is effective
or  which pronouncement, action or decision is announced on or after the date of
original  issuance  of  the Debt Securities, there is more than an insubstantial
risk  that,  within  90  days  of  the  receipt  of  such opinion, the aggregate
Liquidation  Amount of the Capital Securities will not be eligible to be treated
by the Company as "Tier 1 Capital" (or the then equivalent thereof) for purposes
of  the  capital  adequacy  guidelines  of the Federal Reserve (or any successor
regulatory  authority  with  jurisdiction  over  bank  or  financial  holding
companies),  as  then in effect and applicable to the Company (or if the Company
is  not a bank holding company, such guidelines applied to the Company as if the
Company  were subject to such guidelines); provided, however, that the inability
of  the  Company to treat all or any portion of the aggregate Liquidation Amount
of the Capital Securities as Tier 1 Capital shall not constitute the basis for a
Capital  Treatment  Event,  if  such  inability  results from the Company having
cumulative  preferred stock, minority interests in consolidated subsidiaries, or
any  other  class  of  security or interest which the Federal Reserve or OTS, as
applicable,  may  now  or hereafter accord Tier 1 Capital treatment in excess of
the  amount  which  may now or hereafter qualify for treatment as Tier 1 Capital
under  applicable  capital  adequacy guidelines; provided further, however, that
the  distribution  of  the Debt Securities in connection with the liquidation of


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the  Trust  by  the  Company  shall  not  in  and of itself constitute a Capital
Treatment Event unless such liquidation shall have occurred in connection with a
Tax  Event  or  an  Investment  Company  Event.

          "Certificate"  means  a certificate signed by any one of the principal
executive  officer,  the principal financial officer or the principal accounting
officer  of  the  Company.

          "Common Securities" means undivided beneficial interests in the assets
of  the  Trust  which  are designated as "Common Securities" and rank pari passu
with Capital Securities issued by the Trust; provided, however, that if an Event
of  Default  (as defined in the Declaration) has occurred and is continuing, the
rights  of  holders  of  such  Common  Securities  to  payment  in  respect  of
distributions  and  payments  upon  liquidation,  redemption  and  otherwise are
subordinated  to  the  rights  of  holders  of  such  Capital  Securities.

          "Company"  means  Southeastern  Bank  Financial  Corporation,  a  bank
holding  company  incorporated  in  Georgia,  and,  subject to the provisions of
Article  XI,  shall  include  its  successors  and  assigns.

          "Debt  Security"  or  "Debt  Securities" has the meaning stated in the
first  recital  of  this  Indenture.

          "Debt  Security  Register"  has the meaning specified in Section 2.05.

          "Declaration"  means  the Amended and Restated Declaration of Trust of
the  Trust  dated  as of March 31, 2006, as amended or supplemented from time to
time.

          "Default"  means any event, act or condition that with notice or lapse
of  time,  or  both,  would  constitute  an  Event  of  Default.

          "Defaulted Interest" has the meaning set forth in Section 2.08.

          "Deferred Interest" has the meaning set forth in Section 2.11.

          "Depositary"  means  an  organization  registered as a clearing agency
under  the  Exchange  Act that is designated as Depositary by the Company or any
successor  thereto.  DTC  will  be  the  initial  Depositary.

          "Depositary Participant" means a broker, dealer, bank, other financial
institution  or  other  Person for whom from time to time the Depositary effects
book-entry  transfers  and  pledges of securities deposited with the Depositary.

          "DTC" means The Depository Trust Company, a New York corporation.

          "Event  of  Default"  means any event specified in Section 5.01, which
has  continued  for  the  period  of  time,  if any, and after the giving of the
notice,  if  any,  therein  designated.

          "Extension Period" has the meaning set forth in Section 2.11.


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          "Federal  Reserve" means the Board of Governors of the Federal Reserve
System.

          "Global  Debenture" means a security that evidences all or part of the
Debt Securities, the ownership and transfers of which shall be made through book
entries  by  a  Depositary.

          "Indenture"  means  this  instrument  as  originally  executed  or, if
amended  or  supplemented  as herein provided, as so amended or supplemented, or
both.

          "Initial  Purchaser"  means  the  initial  purchaser  of  the  Capital
Securities.

          "Institutional  Trustee" has the meaning set forth in the Declaration.

          "Interest  Payment  Date"  means  March  15, June 15, September 15 and
December  15  of each year, commencing on June 15, 2006, during the term of this
Indenture.

          "Interest  Payment  Period"  means  the  period  from and including an
Interest  Payment Date, or in the case of the first Interest Payment Period, the
original  date  of  issuance of the Debt Securities, to, but excluding, the next
succeeding  Interest  Payment  Date or, in the case of the last Interest Payment
Period,  the  Redemption  Date, Special Redemption Date or Maturity Date, as the
case  may  be.

          "Interest  Rate"  means,  with  respect  to any Interest Period, a per
annum rate of interest, equal to LIBOR, as determined on the LIBOR Determination
Date  for  such  Interest  Payment Date, plus 1.40%; provided, however, 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.

          "Investment  Company  Event"  means the receipt by the Company and the
Trust  of  an Opinion of Counsel experienced in such matters to the effect that,
as a result of a change in law or regulation or written change in interpretation
or application of law or regulation by any legislative body, court, governmental
agency  or  regulatory  authority, there is more than an insubstantial risk that
the  Trust is or, within 90 days of the date of such opinion will be, considered
an  "investment  company" that is required to be registered under the Investment
Company  Act  of  1940,  as  amended, which change or prospective change becomes
effective or would become effective, as the case may be, on or after the date of
the  original  issuance  of  the  Debt  Securities.

          "LIBOR"  means  the  London  Interbank  Offered  Rate  for U.S. Dollar
deposits  in  Europe as determined by the Calculation Agent according to Section
2.10(b).

          "LIBOR  Banking  Day" has the meaning set forth in Section 2.10(b)(1).

          "LIBOR  Business Day" has the meaning set forth in Section 2.10(b)(1).

          "LIBOR  Determination  Date"  has  the  meaning  set  forth in Section
2.10(b).

          "Liquidation  Amount" means the liquidation amount of $1,000 per Trust
Security.


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          "Maturity Date" means June 15, 2036.

          "Notice" has the meaning set forth in Section 2.11.

          "Officers'  Certificate" means a certificate signed by the Chairman of
the  Board,  the  Vice Chairman, the President or any Vice President, and by the
Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Comptroller,
an  Assistant  Comptroller,  the  Secretary  or  an  Assistant  Secretary of the
Company,  and  delivered to the Trustee. Each such certificate shall include the
statements  provided  for  in Section 14.06 if and to the extent required by the
provisions  of  such  Section.

          "Opinion  of  Counsel"  means  an  opinion  in writing signed by legal
counsel,  who  may  be an employee of or counsel to the Company, or may be other
counsel  reasonably satisfactory to the Trustee. Each such opinion shall include
the  statements  provided  for in Section 14.06 if and to the extent required by
the  provisions  of  such  Section.

          "OTS" means the Office of Thrift Supervision and any successor federal
agency  that  is  primarily responsible for regulating the activities of savings
and  loan  holding  companies.

          "Outstanding"  means,  when  used  with  reference to Debt Securities,
subject  to  the provisions of Section 7.04, as of any particular time, all Debt
Securities  authenticated  and  delivered  by  the Trustee or the Authenticating
Agent  under  this  Indenture,  except

          (a)     Debt  Securities  theretofore  canceled  by the Trustee or the
Authenticating  Agent  or  delivered  to  the  Trustee  for  cancellation;

          (b)     Debt  Securities,  or  portions  thereof,  for  the payment or
redemption  of which moneys in the necessary amount shall have been deposited in
trust  with  the  Trustee  or  with any Paying Agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company
shall  act as its own Paying Agent); provided, that, if such Debt Securities, or
                                     --------
portions  thereof,  are to be redeemed prior to maturity thereof, notice of such
redemption  shall have been given as provided in Articles X and XIV or provision
satisfactory  to  the  Trustee  shall have been made for giving such notice; and

          (c)     Debt Securities paid pursuant to Section 2.06 or in lieu of or
in  substitution  for  which other Debt Securities shall have been authenticated
and delivered pursuant to the terms of Section 2.06 unless proof satisfactory to
the  Company and the Trustee is presented that any such Debt Securities are held
by  bona  fide  holders  in  due  course.

          "Paying Agent" has the meaning set forth in Section 3.04(e).

          "Person" means any individual, corporation, limited liability company,
partnership,  joint  venture,  association,  joint-stock  company,  trust,
unincorporated organization or government or any agency or political subdivision
thereof.

          "Predecessor  Security"  of  any  particular Debt Security means every
previous  Debt  Security  evidencing  all  or a portion of the same debt as that
evidenced  by  such  particular  Debt  Security;  and,  for the purposes of this
definition,  any  Debt  Security  authenticated  and  delivered


                                      -5-
<PAGE>
under Section 2.06 in lieu of a lost, destroyed or stolen Debt Security shall be
deemed to evidence the same debt as the lost, destroyed or stolen Debt Security.

          "Principal  Office of the Trustee" means the office of the Trustee, at
which  at  any particular time its corporate trust business shall be principally
administered,  which  at all times shall be located within the United States and
at  the  time of the execution of this Indenture shall be 135 S. LaSalle Street,
Suite  1511,  Chicago,  Illinois  60603,  Attn:  CDO  Trust  Services  Group  -
Southeastern  Bank  Financial  Trust  II.

          "Redemption Date" has the meaning set forth in Section 10.01.

          "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.

          "Responsible  Officer" means, with respect to the Trustee, any officer
within  the CDO Trust Services Group in the Principal Office of the Trustee with
direct  responsibility  for  the  administration of the Indenture, including any
vice-president,  any  assistant  vice-president,  any  secretary,  any assistant
secretary,  the  treasurer,  any assistant treasurer, any trust officer or other
officer  of the Principal Office of the Trustee customarily performing functions
similar  to  those  performed  by  any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom  such  matter  is  referred  because  of  that  officer's  knowledge of and
familiarity  with  the  particular  subject.

          "Securityholder,"  "Holder,"  "holder  of  Debt  Securities"  or other
similar  terms,  means  any  Person  in whose name at the time a particular Debt
Security  is  registered  on  the  Debt  Security  Register.

          "Senior  Indebtedness"  means,  with  respect  to the Company, (i) the
principal,  premium,  if any, and interest in respect of (A) indebtedness of the
Company  for  money  borrowed  and  (B)  indebtedness  evidenced  by securities,
debentures,  notes,  bonds  or  other similar instruments issued by the Company;
(ii)  all capital lease obligations of the Company; (iii) all obligations of the
Company  issued  or  assumed  as  the  deferred  purchase price of property, all
conditional  sale  obligations of the Company and all obligations of the Company
under  any  title  retention  agreement  (but  excluding  trade accounts payable
arising in the ordinary course of business); (iv) all obligations of the Company
for  the  reimbursement  of  any  letter of credit, any banker's acceptance, any
security purchase facility, any repurchase agreement or similar arrangement, any
interest  rate swap, any other hedging arrangement, any obligation under options
or  any  similar  credit  or  other transaction; (v) all obligations of the type
referred  to  in clauses (i) through (iv) above of other Persons for the payment
of  which  the  Company  is  responsible  or  liable  as  obligor,  guarantor or
otherwise;  and  (vi)  all  obligations  of  the type referred to in clauses (i)
through  (v) above of other Persons secured by any lien on any property or asset
of  the  Company  (whether  or  not  such obligation is assumed by the Company),
whether  incurred  on  or  prior  to  the  date  of this Indenture or thereafter
incurred,  unless,  with  the  prior  approval  of  the  Federal  Reserve if not
otherwise  generally  approved,  it  is  provided  in the instrument creating or
evidencing  the  same  or  pursuant  to which the same is outstanding, that such
obligations  are  not superior or are pari passu in right of payment to the Debt
Securities;


                                      -6-
<PAGE>
provided,  however,  that  Senior  Indebtedness  shall  not include (A) any debt
securities issued to any trust other than the Trust (or a trustee of such trust)
that is a financing vehicle of the Company (a "financing entity"), in connection
with  the  issuance  by  such  financing entity of equity or other securities in
transactions substantially similar in structure to the transactions contemplated
hereunder  and  in the Declaration, (B) any guarantees of the Company in respect
of  the equity or other securities of any financing entity referred to in clause
(A)  above or (C) any other instruments classified as subordinated or pari passu
to  the  Debt  Securities  by  the  Federal  Reserve.

          "Special  Event" means any of a Tax Event, an Investment Company Event
or  a  Capital  Treatment  Event.

          "Special  Redemption Date" has the meaning set forth in Section 10.02.

          "Special  Redemption  Price"  means, with respect to the redemption of
any Debt Security following a Special Event, an amount in cash equal to 103.525%
of the principal amount of Debt Securities to be redeemed prior to June 15, 2007
and  thereafter  equal  to  the  percentage  of the principal amount of the Debt
Securities that is specified below for the Special Redemption Date plus, in each
case,  unpaid  interest  accrued  thereon  to  the  Special  Redemption  Date:

<TABLE>
<CAPTION>
            Special Redemption During the
          12-Month Period Beginning June 15     Percentage of Principal Amount
          ---------------------------------     ------------------------------
<S>                                             <C>
                      2007                                103.140%
                      2008                                102.355%
                      2009                                101.570%
                      2010                                100.785%
                2011 and thereafter                       100.000%
</TABLE>

          "Subsidiary"  means,  with respect to any Person, (i) any corporation,
at  least a majority of the outstanding voting stock of which is owned, directly
or  indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person  and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of the outstanding partnership or
similar  interests of which shall at the time be owned by such Person, or by one
or  more  of  its  Subsidiaries,  or  by  such  Person  and  one  or more of its
Subsidiaries,  and  (iii) any limited partnership of which such Person or any of
its  Subsidiaries  is  a  general  partner. For the purposes of this definition,
"voting  stock"  means shares, interests, participations or other equivalents in
the  equity  interest (however designated) in such Person having ordinary voting
power  for  the  election  of a majority of the directors (or the equivalent) of
such  Person,  other than shares, interests, participations or other equivalents
having  such  power  only  by  reason  of  the  occurrence  of  a  contingency.

          "Tax  Event"  means  the  receipt  by  the Company and the Trust of an
Opinion  of  Counsel experienced in such matters to the effect that, as a result
of  any  amendment  to or change (including any announced prospective change) in
the  laws  or  any  regulations  thereunder  of  the


                                      -7-
<PAGE>
United  States  or  any  political  subdivision  or  taxing authority thereof or
therein,  or as a result of any official administrative pronouncement (including
any  private  letter  ruling, technical advice memorandum, regulatory procedure,
notice  or  announcement  (an  "Administrative  Action"))  or  judicial decision
interpreting  or  applying  such laws or regulations, regardless of whether such
Administrative  Action or judicial decision is issued to or in connection with a
proceeding  involving  the  Company  or  the Trust and whether or not subject to
review  or appeal, which amendment, clarification, change, Administrative Action
or  decision  is enacted, promulgated or announced, in each case on or after the
date  of  original  issuance  of  the  Debt  Securities,  there  is more than an
insubstantial risk that: (i) the Trust is, or will be within 90 days of the date
of  such  opinion,  subject  to United States federal income tax with respect to
income  received  or  accrued  on  the  Debt  Securities; (ii) if the Company is
organized  and existing under the laws of the United States or any state thereof
or  the  District  of  Columbia,  interest  payable  by  the Company on the Debt
Securities  is  not, or within 90 days of the date of such opinion, will not be,
deductible by the Company, in whole or in part, for United States federal income
tax  purposes;  or  (iii) the Trust is, or will be within 90 days of the date of
such  opinion,  subject to or otherwise required to pay, or required to withhold
from distributions to holders of Trust Securities, more than a de minimis amount
of  other  taxes  (including  withholding  taxes),  duties, assessments or other
governmental  charges.

          "Trust"  means  Southeastern  Bank  Financial  Trust  II, the Delaware
statutory  trust,  or any other similar trust created for the purpose of issuing
Capital Securities in connection with the issuance of Debt Securities under this
Indenture,  of  which  the  Company  is  the  sponsor.

          "Trust  Indenture  Act"  means  the  Trust  Indenture  Act of 1939, as
amended  from  time-to-time,  or  any  successor  legislation.

          "Trust  Securities"  means Common Securities and Capital Securities of
Southeastern  Bank  Financial  Trust  II.

          "Trustee"  means  the  Person  identified  as  "Trustee"  in the first
paragraph  hereof,  and,  subject  to the provisions of Article VI hereof, shall
also  include  its  successors  and  assigns  as  Trustee  hereunder.

          "United States" means the United States of America and the District of
Columbia.

          "U.S.  Person"  has  the  meaning given to United States Person as set
forth  in  Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

                                   ARTICLE II

                                 DEBT SECURITIES

     SECTION 2.01.  Authentication  and  Dating.
                    ---------------------------

          Upon  the  execution  and  delivery of this Indenture, or from time to
time  thereafter, Debt Securities in an aggregate principal amount not in excess
of  $10,310,000  may be executed and delivered by the Company to the Trustee for
authentication,  and the Trustee shall thereupon authenticate and make available
for  delivery  said  Debt  Securities  to  or  upon  the  written  order  of


                                      -8-
<PAGE>
the  Company,  signed  by its Chairman of the Board of Directors, Vice Chairman,
President  or Chief Financial Officer or one of its Vice Presidents, without any
further action by the Company hereunder. In authenticating such Debt Securities,
and  accepting  the additional responsibilities under this Indenture in relation
to  such Debt Securities, the Trustee shall be entitled to receive, and (subject
to  Section  6.01)  shall be fully protected in relying upon a copy of any Board
Resolution  or  Board  Resolutions  relating  thereto  and,  if  applicable,  an
appropriate record of any action taken pursuant to such resolution, in each case
certified  by  the  Secretary  or  an Assistant Secretary or other officers with
appropriate  delegated  authority  of  the  Company  as  the  case  may  be.

          The  Trustee  shall  have  the  right  to  decline to authenticate and
deliver  any Debt Securities under this Section if the Trustee, being advised by
counsel,  determines  that  such  action  may  not  lawfully  be  taken  or if a
Responsible  Officer  of  the  Trustee  in  good faith shall determine that such
action  would  expose  the  Trustee  to  personal  liability  to  existing
Securityholders.  The  Trustee  shall  also be entitled to receive an opinion of
counsel  to  the  effect  that  (1)  all  conditions precedent to the execution,
delivery  and  authentication of the Securities have been complied with; (2) the
Securities  are  not required to be registered under the Securities Act; and (3)
the  Indenture  is  not  required to be qualified under the Trust Indenture Act.

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

     SECTION 2.02.  Form  of  Trustee's  Certificate  of  Authentication.
                    ----------------------------------------------------

          The  Trustee's  certificate  of  authentication on all Debt Securities
shall  be  in  substantially  the  following  form:

          This  represents  Debt  Securities referred to in the within-mentioned
Indenture.

          LaSalle  Bank National Association, not in its individual capacity but
solely  as  Trustee

                          By
                            ------------------------------
                                 Authorized Signatory

     SECTION 2.03.  Form  and  Denomination  of  Debt  Securities.
                    ---------------------------------------------

          The  Debt  Securities  shall be substantially in the form of Exhibit A
hereto.  The  Debt  Securities shall be in registered, certificated form without
coupons  and  in minimum denominations of $100,000 and any multiple of $1,000 in
excess  thereof.  The  Debt Securities shall be numbered, lettered, or otherwise
distinguished  in  such  manner or in accordance with such plans as the officers
executing  the  same may determine with the approval of the Trustee as evidenced
by  the  execution  and  authentication  thereof.


                                      -9-
<PAGE>
     SECTION 2.04.  Execution  of  Debt  Securities.
                    -------------------------------

          The  Debt  Securities shall be signed in the name and on behalf of the
Company by the manual or facsimile signature of any of its Chairman of the Board
of  Directors, Vice Chairman, President or Chief Financial Officer or one of its
Executive  Vice Presidents, Senior Vice Presidents or Vice Presidents, under its
corporate  seal  (if legally required), which may be affixed thereto or printed,
engraved  or  otherwise reproduced thereon, by facsimile or otherwise, and which
need  not  be  attested.  Only  such  Debt  Securities  as  shall bear thereon a
certificate  of  authentication substantially in the form herein before recited,
executed  by  the Trustee or the Authenticating Agent by the manual signature of
an authorized officer, shall be entitled to the benefits of this Indenture or be
valid  or  obligatory  for  any  purpose. Such certificate by the Trustee or the
Authenticating  Agent  upon  any  Debt Security executed by the Company shall be
conclusive  evidence  that  the  Debt  Security  so  authenticated has been duly
authenticated  and  delivered  hereunder  and that the holder is entitled to the
benefits  of  this  Indenture.

          In  case  any  officer of the Company who shall have signed any of the
Debt  Securities  shall  cease  to be such officer before the Debt Securities so
signed  shall  have  been  authenticated  and  delivered  by  the Trustee or the
Authenticating  Agent,  or  disposed  of  by  the  Company, such Debt Securities
nevertheless  may  be  authenticated  and delivered or disposed of as though the
Person  who signed such Debt Securities had not ceased to be such officer of the
Company;  and  any  Debt Security may be signed on behalf of the Company by such
Persons  as, at the actual date of the execution of such Debt Security, shall be
the  proper  officers  of  the Company, although at the date of the execution of
this  Indenture  any  such  person  was  not  such  an  officer.

          Every Debt Security shall be dated the date of its authentication.

     SECTION 2.05.  Exchange and Registration of Transfer of Debt Securities.
                    --------------------------------------------------------

          The Company shall cause to be kept, at the office or agency maintained
for  the  purpose  of  registration  of transfer and for exchange as provided in
Section  3.02, a register (the "Debt Security Register") for the Debt Securities
issued  hereunder  in  which,  subject  to such reasonable regulations as it may
prescribe,  the  Company  shall provide for the registration and transfer of all
Debt  Securities  as  provided  in  this  Article  II. Such register shall be in
written  form  or in any other form capable of being converted into written form
within  a  reasonable  time.

          Debt  Securities  to  be exchanged may be surrendered at the Principal
Office of the Trustee or at any office or agency to be maintained by the Company
for such purpose as provided in Section 3.02, and the Company shall execute, the
Company  or  the  Trustee  shall  register and the Trustee or the Authenticating
Agent  shall  authenticate  and make available for delivery in exchange therefor
the  Debt  Security  or  Debt  Securities  which  the  Securityholder making the
exchange  shall be entitled to receive. Upon due presentment for registration of
transfer  of  any Debt Security at the Principal Office of the Trustee or at any
office  or  agency  of  the  Company  maintained for such purpose as provided in
Section  3.02,  the  Company  shall  execute,  the  Company or the Trustee shall
register and the Trustee or the Authenticating Agent shall authenticate and make
available  for  delivery in the name of the transferee or transferees a new Debt
Security  for a like aggregate principal amount. Registration or registration of
transfer


                                      -10-
<PAGE>
of  any  Debt  Security  by the Trustee or by any agent of the Company appointed
pursuant to Section 3.02, and delivery of such Debt Security, shall be deemed to
complete  the  registration  or  registration of transfer of such Debt Security.

          All  Debt  Securities  presented  for  registration of transfer or for
exchange  or  payment shall (if so required by the Company or the Trustee or the
Authenticating  Agent)  be  duly  endorsed  by,  or be accompanied by, a written
instrument  or  instruments  of transfer in form satisfactory to the Company and
either  the  Trustee or the Authenticating Agent duly executed by, the holder or
such  holder's  attorney  duly  authorized  in  writing.

          Neither  the  Trustee  nor  the  Debt  Security  Registrar  shall  be
responsible  for  ascertaining  whether any transfer hereunder complies with the
registration  provisions of or any exemptions from the Securities Act (under and
as  defined  in  the  Declaration),  applicable  state  securities  laws  or the
applicable  laws  of  any  other jurisdiction, ERISA, the United States Internal
Revenue  Code  of  1986, as amended, or the Investment Company Act (under and as
defined  in  the  Declaration).

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

          The  Company  or  the  Trustee  shall  not  be required to exchange or
register  a  transfer  of  any Debt Security for a period of 15 days immediately
preceding  the  date  of  selection  of  Debt  Securities  for  redemption.

          Notwithstanding  the foregoing, Debt Securities may not be transferred
except  in  compliance  with  the  restricted securities legend set forth below,
unless  otherwise  determined  by the Company in accordance with applicable law,
which  legend  shall  be  placed  on  each  Debt  Security:

          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) TO A "NON U.S. PERSON" IN
AN "OFFSHORE TRANSACTION" PURSUANT TO REGULATION S UNDER THE SECURITIES ACT, (D)
PURSUANT  TO  AN  EXEMPTION  FROM  THE


                                      -11-
<PAGE>
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 (E) 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
(D)  OR  (E)  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
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 EXEMPTIVE 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.


                                      -12-
<PAGE>
          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.  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.

     SECTION 2.06.  Mutilated,  Destroyed,  Lost  or  Stolen  Debt  Securities.
                    ----------------------------------------------------------

          In case any Debt Security shall become mutilated or be destroyed, lost
or  stolen,  the Company shall execute, and upon its written request the Trustee
shall  authenticate  and  deliver,  a  new  Debt  Security  bearing a number not
contemporaneously  outstanding,  in  exchange and substitution for the mutilated
Debt  Security,  or  in  lieu  of  and  in substitution for the Debt Security so
destroyed,  lost  or  stolen. In every case the applicant for a substituted Debt
Security shall furnish to the Company and the Trustee such security or indemnity
as  may be required by them to save each of them harmless, and, in every case of
destruction,  loss or theft, the applicant shall also furnish to the Company and
the  Trustee evidence to their satisfaction of the destruction, loss or theft of
such  Debt  Security  and  of  the  ownership  thereof.

          The  Trustee  may  authenticate any such substituted Debt Security and
deliver the same upon the written request or authorization of any officer of the
Company.  Upon  the  issuance  of any substituted Debt Security, the Company may
require  the  payment of a sum sufficient to cover any tax or other governmental
charge  that may be imposed in relation thereto and any other expenses connected
therewith.  In case any Debt Security which has matured or is about to mature or
has  been  called for redemption in full shall become mutilated or be destroyed,
lost  or stolen, the Company may, instead of issuing a substitute Debt Security,
pay  or  authorize  the payment of the same (without surrender thereof except in
the  case  of a mutilated Debt Security) if the applicant for such payment shall
furnish  to  the  Company  and  the Trustee such security or indemnity as may be
required  by  them  to  save  each of them harmless and, in case of destruction,


                                      -13-
<PAGE>
loss  or  theft,  evidence satisfactory to the Company and to the Trustee of the
destruction,  loss  or  theft  of  such  Security  and of the ownership thereof.

          Every  substituted  Debt Security issued pursuant to the provisions of
this  Section  2.06  by  virtue  of  the  fact  that  any  such Debt Security is
destroyed,  lost or stolen shall constitute an additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Debt Security shall
be  found  at  any  time,  and  shall  be  entitled  to all the benefits of this
Indenture  equally  and  proportionately  with any and all other Debt Securities
duly  issued  hereunder.  All  Debt  Securities shall be held and owned upon the
express condition that, to the extent permitted by applicable law, the foregoing
provisions  are  exclusive  with  respect  to  the  replacement  or  payment  of
mutilated,  destroyed, lost or stolen Debt Securities and shall preclude any and
all  other  rights  or  remedies  notwithstanding any law or statute existing or
hereafter  enacted to the contrary with respect to the replacement or payment of
negotiable  instruments  or  other  securities  without  their  surrender.

     SECTION 2.07.  Temporary  Debt  Securities.
                    ---------------------------

          Pending the preparation of definitive Debt Securities, the Company may
execute  and  the  Trustee  shall  authenticate  and make available for delivery
temporary  Debt  Securities  that  are typed, printed or lithographed. Temporary
Debt  Securities  shall  be  issuable  in  any  authorized  denomination,  and
substantially  in  the  form  of  the  definitive  Debt Securities but with such
omissions,  insertions  and  variations as may be appropriate for temporary Debt
Securities,  all  as may be determined by the Company. Every such temporary Debt
Security  shall  be  executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect,  as  the  definitive  Debt  Securities.  Without unreasonable delay, the
Company  will  execute  and  deliver  to the Trustee or the Authenticating Agent
definitive  Debt  Securities  and thereupon any or all temporary Debt Securities
may  be surrendered in exchange therefor, at the Principal Office of the Trustee
or  at  any  office  or  agency  maintained  by  the Company for such purpose as
provided  in  Section  3.02,  and  the Trustee or the Authenticating Agent shall
authenticate and make available for delivery in exchange for such temporary Debt
Securities a like aggregate principal amount of such definitive Debt Securities.
Such  exchange  shall  be made by the Company at its own expense and without any
charge  therefor  except  that  in  case  of  any  such  exchange  involving  a
registration  of transfer the Company may require payment of a sum sufficient to
cover  any tax, fee or other governmental charge that may be imposed in relation
thereto. Until so exchanged, the temporary Debt Securities shall in all respects
be  entitled  to  the  same  benefits  under  this  Indenture as definitive Debt
Securities  authenticated  and  delivered  hereunder.

     SECTION 2.08.  Payment  of  Interest.
                    ---------------------

          Each  Debt Security will bear interest at the then applicable Interest
Rate  from and including each Interest Payment Date or, in the case of the first
Interest Payment Period, the original date of issuance of such Debt Security to,
but  excluding, the next succeeding Interest Payment Date or, in the case of the
last  Interest  Payment  Period, the Redemption Date, Special Redemption Date or
Maturity Date, as applicable, on the principal thereof, on any overdue principal
and (to the extent that payment of such interest is enforceable under applicable
law)  on Deferred Interest and on any overdue installment of interest (including
Defaulted  Interest),


                                      -14-
<PAGE>
payable (subject to the provisions of Article XII) on each Interest Payment Date
commencing  on  June  15,  2006.  Interest and any Deferred Interest on any Debt
Security  that  is  payable,  and is punctually paid or duly provided for by the
Company,  on any Interest Payment Date shall be paid to the Person in whose name
said  Debt Security (or one or more Predecessor Securities) 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.  In the event that any
Debt  Security  or  portion  thereof is called for redemption and the redemption
date is subsequent to a regular record date with respect to any Interest Payment
Date and either on or prior to such Interest Payment Date, interest on such Debt
Security will be paid upon presentation and surrender of such Debt Security.

          Any  interest on any Debt Security, other than Deferred Interest, that
is  payable,  but is not punctually paid or duly provided for by the Company, on
any  Interest  Payment Date (herein called "Defaulted Interest") shall forthwith
cease to be payable to the registered holder on the relevant regular record date
by  virtue of having been such holder, and such Defaulted Interest shall be paid
by  the  Company  to  the  Persons in whose names such Debt Securities (or their
respective  Predecessor Securities) are registered at the close of business on a
special  record  date for the payment of such Defaulted Interest, which shall be
fixed  in  the following manner: the Company shall notify the Trustee in writing
of  the  amount  of  Defaulted  Interest  proposed  to be paid on each such Debt
Security  and the date of the proposed payment, and at the same time the Company
shall  deposit with the Trustee an amount of money equal to the aggregate amount
proposed  to  be  paid  in  respect  of  such  Defaulted  Interest or shall make
arrangements  reasonably  satisfactory  to the Trustee for such deposit prior to
the  date of the proposed payment, such money when deposited to be held in trust
for  the  benefit  of the Persons entitled to such Defaulted Interest as in this
clause  provided.  Thereupon the Trustee shall fix a special record date for the
payment of such Defaulted Interest which shall not be more than fifteen nor less
than  ten  days  prior to the date of the proposed payment and not less than ten
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee  shall  promptly  notify the Company of such special record date and, in
the  name  and at the expense of the Company, shall cause notice of the proposed
payment  of  such  Defaulted Interest and the special record date therefor to be
mailed,  first  class  postage  prepaid,  to  each  Securityholder at his or her
address  as  it  appears  in  the Debt Security Register, not less than ten days
prior  to  such  special  record  date.  Notice  of the proposed payment of such
Defaulted  Interest  and  the special record date therefor having been mailed as
aforesaid,  such  Defaulted Interest shall be paid to the Persons in whose names
such Debt Securities (or their respective Predecessor Securities) are registered
on  such  special  record  date and thereafter the Company shall have no further
payment  obligation  in  respect  of  the  Defaulted  Interest.

          Any  interest  scheduled to become payable on an Interest Payment Date
occurring  during  an Extension Period shall not be Defaulted Interest and shall
be  payable  on  such  other  date as may be specified in the terms of such Debt
Securities.

          The  term  "regular  record date" as used in this Indenture shall mean
the  fifteenth  day prior to the applicable Interest Payment Date whether or not
such  date  is  a  Business  Day.

          Subject  to  the  foregoing  provisions  of  this  Section,  each Debt
Security  delivered  under this Indenture upon registration of transfer of or in
exchange  for  or  in  lieu  of  any  other


                                      -15-
<PAGE>
Debt  Security  shall  carry  the  rights to interest accrued and unpaid, and to
accrue,  that  were  carried  by  such  other  Debt  Security.

     SECTION 2.09.  Cancellation  of  Debt  Securities  Paid,  etc.
                    ----------------------------------------------

          All  Debt  Securities  surrendered  for  the  purpose  of  payment,
redemption,  exchange  or registration of transfer, shall, if surrendered to the
Company or any Paying Agent, be surrendered to the Trustee and promptly canceled
by  it, or, if surrendered to the Trustee, shall be promptly canceled by it, and
no Debt Securities shall be issued in lieu thereof except as expressly permitted
by  any  of  the  provisions of this Indenture. The Trustee shall dispose of all
canceled  Debt Securities in accordance with its customary practices, unless the
Company  otherwise  directs  the  Trustee  in writing, in which case the Trustee
shall dispose of such Debt Securities as directed by the Company. If the Company
shall  acquire  any  of the Debt Securities, however, such acquisition shall not
operate  as a redemption or satisfaction of the indebtedness represented by such
Debt  Securities  unless  and  until the same are surrendered to the Trustee for
cancellation.

     SECTION 2.10.  Computation  of  Interest.
                    -------------------------

          (a)     The amount of interest payable for any Interest Payment Period
will  be  computed  on the basis of a 360-day year and the actual number of days
elapsed  in  the  relevant  interest  period;  provided,  however, that upon the
                                               --------   -------
occurrence  of  a Special Event Redemption pursuant to Section 10.02 the amounts
payable  pursuant  to  this  Indenture  shall  be calculated as set forth in the
definition  of  Special  Redemption  Price.

          (b)     LIBOR, for any Interest Payment Period, shall be determined by
the  Calculation  Agent  in  accordance  with  the  following  provisions:

               (1)     On  the second LIBOR Business Day (provided, that on such
          day  commercial  banks  are  open  for business (including dealings in
          foreign  currency  deposits)  in  London  (a "LIBOR Banking Day"), and
          otherwise  the  next preceding LIBOR Business Day that is also a LIBOR
          Banking  Day) prior to March 15, June 15, September 15 and December 15
          (or,  with  respect to the first Interest Payment Period, on March 29,
          2006)  (each  such day, a "LIBOR Determination Date" for the following
          Interest  Payment Period), the Calculation Agent shall obtain the rate
          for  three-month  U.S.  Dollar  deposits  in  Europe, which appears on
          Telerate  Page  3750  (as  defined  in  the  International  Swaps  and
          Derivatives Association, Inc. 2000 Interest Rate and Currency Exchange
          Definitions) or such other page as may replace such Telerate Page 3750
          on  the  Moneyline  Telerate,  Inc.  service (or such other service or
          services  as  may  be nominated by the British Banker's Association as
          the  information vendor for the purpose of displaying London Interbank
          offered  rates  for  U.S.  dollar  deposits), as of 11:00 a.m. (London
          time) on such LIBOR Determination Date, and the rate so obtained shall
          be  LIBOR for such Interest Payment Period. "LIBOR Business Day" means
          any  day  that  is  not  a  Saturday,  Sunday  or  other  day on which
          commercial  banking  institutions  in The City of New York or Chicago,
          Illinois  are  authorized or obligated by law or executive order to be
          closed.  If  such  rate  is  superseded  on  Telerate  Page  3750 by a
          corrected


                                      -16-
<PAGE>
          rate  before  12:00 noon (London time) on the same LIBOR Determination
          Date,  the  corrected  rate  as  so substituted will be LIBOR for that
          Interest  Payment  Period.

               (2)     If,  on  any LIBOR Determination Date, such rate does not
          appear  on  Telerate  Page 3750 or such other page as may replace such
          Telerate  Page  3750  on the Moneyline Telerate, Inc. service (or such
          other  service or services as may be nominated by the British Banker's
          Association  as  the  information vendor for the purpose of displaying
          London  Interbank  offered  rates  for  U.S.  dollar  deposits),  the
          Calculation  Agent  shall determine the arithmetic mean of the offered
          quotations  of the Reference Banks (as defined below) to leading banks
          in the London Interbank market for three-month U.S. Dollar deposits in
          Europe (in an amount determined by the Calculation Agent) by reference
          to  requests  for  quotations  as  of approximately 11:00 a.m. (London
          time) on the LIBOR Determination Date made by the Calculation Agent to
          the Reference Banks. If, on any LIBOR Determination Date, at least two
          of  the Reference Banks provide such quotations, LIBOR shall equal the
          arithmetic  mean  of  such  quotations. If, on any LIBOR Determination
          Date,  only  one  or  none  of  the  Reference  Banks  provide  such a
          quotation,  LIBOR  shall  be  deemed  to be the arithmetic mean of the
          offered  quotations that at least two leading banks in the City of New
          York  (as  selected  by  the  Calculation  Agent)  are  quoting on the
          relevant LIBOR Determination Date for three-month U.S. Dollar deposits
          in  Europe  at  approximately  11:00  a.m. (London time) (in an amount
          determined  by  the  Calculation  Agent).  As  used herein, "Reference
          Banks"  means four major banks in the London Interbank market selected
          by  the  Calculation  Agent.

               (3)     If  the  Calculation  Agent  is required but is unable to
          determine  a  rate  in  accordance with at least one of the procedures
          provided above, LIBOR for the applicable Interest Payment Period shall
          be  LIBOR  in  effect  for  the immediately preceding Interest Payment
          Period.

          (c)     All  percentages  resulting  from any calculations on the Debt
Securities  will be rounded, if necessary, to the nearest one hundred-thousandth
of  a  percentage  point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)),
and  all  dollar  amounts  used  in  or  resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward).

          (d)     As  soon  as  practicable  following  each LIBOR Determination
Date, but in no event later than the 30th day following such LIBOR Determination
Date,  the  Calculation  Agent  shall  notify,  in  writing,  the  Company,  the
Institutional  Trustee  and  the Paying Agent of the applicable Interest Rate in
effect  for  the  related  Interest Payment Period. The Calculation Agent shall,
upon the request of the holder of any Debt Securities, provide the Interest Rate
then in effect. All calculations made by the Calculation Agent in the absence of
manifest  error  shall be conclusive for all purposes and binding on the Company
and  the  Holders  of  the  Debt  Securities.  Any error in a calculation of the
Interest  Rate  by  the  Calculation  Agent  may be corrected at any time by the
delivery  of  notice  of  such  corrected  Interest Rate as provided above.  The
Paying  Agent  shall  be  entitled  to  rely  on  information  received from the
Calculation  Agent  or  the


                                      -17-
<PAGE>
Company  as  to the Interest Rate. The Company shall, from time to time, provide
any  necessary  information  to  the Paying Agent relating to any original issue
discount and interest on the Debt Securities that is included in any payment and
reportable  for  taxable  income  calculation  purposes.  Failure  to notify the
Company,  the  Institutional  Trustee  or  the  Paying  Agent  of the applicable
Interest  Rate shall not affect the obligation of the Company to make payment on
Debentures  at  such  Interest  Rate.

     SECTION 2.11.  Extension  of  Interest  Payment  Period.
                    ----------------------------------------

          As  long  as  it  is  acting in good faith, and so long as no Event of
Default  pursuant to paragraphs (c), (e) or (f) of Section 5.01 of the Indenture
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 twenty 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). No Extension Period may end on a date other than an
Interest  Payment  Date.  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  interest  or Deferred Interest shall be due and payable
during  an  Extension  Period, except at the end thereof. 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, that during any
                                      -------- -------  -------
such  Extension  Period,  the  Company  shall be subject to the restrictions set
forth  in  Section  3.08  of  this  Indenture.  Prior  to the termination of any
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 twenty 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 any Extension Period or extend an Extension Period ("Notice") not later
than  the  related  regular  record date for the relevant Interest Payment Date.
The  Notice  shall  describe  why  the Company has elected to begin an Extension
Period.  The  Notice  shall  acknowledge  and affirm the Company's understanding
that  it is prohibited from issuing dividends and other distributions during the
Extension  Period.  Upon  receipt of the Notice, an Initial Purchaser shall have
the right, at its sole discretion, to disclose the name of the Company, the fact
that  the Company has elected to begin an Extension Period and other information
that  such  Initial  Purchaser,  at  its  sole discretion, deems relevant to the
Company's  election to begin an Extension Period.  The Trustee shall give notice
of  the  Company's  election  to  begin  a  new  Extension  Period  to  the
Securityholders.


                                      -18-
<PAGE>
     SECTION 2.12.  CUSIP  Numbers.
                    --------------

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

     SECTION 2.13.  Income  Tax  Certification.
                    --------------------------

          As  a  condition to the payment of any principal of or interest on the
Debt  Securities  without  the  imposition of withholding tax, the Trustee shall
require  the  previous delivery of properly completed and signed applicable U.S.
federal  income  tax certifications (generally, an Internal Revenue Service Form
W-9  (or  applicable  successor  form) in the case of a person that is a "United
States person" within the meaning of Section 7701 (a)(30) of the Code (under and
as  defined  in  the  Declaration)  or  an Internal Revenue Service Form W-8 (or
applicable  successor form) in the case of a person that is not a "United States
person"  within  the  meaning  of Section 7701(a)(30) of the Code, and any other
certification  acceptable  to  it  to  enable the Trustee or any Paying Agent to
determine  their  respective duties and liabilities with respect to any taxes or
other charges that they may be required to pay, deduct or withhold in respect of
such  Debt  Securities.

     SECTION 2.14.  Global  Debentures.
                    ------------------

          (a)     Upon  the  election  of  the  holder  of  Outstanding  Debt
Securities,  which election need not be in writing, the Debt Securities owned by
such  holder  shall  be  issued  in  the  form  of one or more Global Debentures
registered  in the name of the Depositary or its nominee.  Each Global Debenture
issued  under  this  Indenture shall be registered in the name of the Depositary
designated  by  the  Company  for such Global Debenture or a nominee thereof and
delivered  to  such  Depositary  or a nominee thereof or custodian therefor, and
each  such  Global  Debenture  shall  constitute  a single Debt Security for all
purposes  of  this  Indenture.

          (b)     Notwithstanding  any  other  provision  in  this Indenture, no
Global  Debenture  may  be  exchanged  in  whole  or in part for Debt Securities
registered,  and  no  transfer  of a Global Debenture in whole or in part may be
registered,  in the name of any Person other than the Depositary for such Global
Debenture  or  a  nominee thereof unless (i) such Depositary advises the Trustee
and  the Company in writing that such Depositary is no longer willing or able to
properly  discharge  its  responsibilities  as  Depositary  with respect to such
Global  Debenture, and no qualified successor is appointed by the Company within
ninety  (90) days of receipt by the Company of such notice, (ii) such Depositary
ceases  to  be  a  clearing  agency  registered  under  the  Exchange Act and no
successor  is  appointed  by the Company within ninety (90) days after obtaining
knowledge  of such event, (iii) the Company executes and delivers to the Trustee
a  Company  Order  stating  that  the Company elects to terminate the book-entry
system  through  the  Depositary or (iv) an Event of Default shall have occurred
and  be  continuing.  Upon  the


                                      -19-
<PAGE>
occurrence  of any event specified in clause (i), (ii), (iii) or (iv) above, the
Trustee  shall  notify  the Depositary and instruct the Depositary to notify all
owners  of  beneficial  interests  in such Global Debenture of the occurrence of
such  event  and  of  the  availability  of  Debt  Securities  to such owners of
beneficial  interests  requesting  the  same.  Upon  the  issuance  of such Debt
Securities  and  the  registration  in  the  Debt Security Register of such Debt
Securities  in the names of such owners of the beneficial interests therein, the
Trustee  shall  recognize  such  owners  of  beneficial  interests  as  Holders.

          (c)     If  any  Global  Debenture  is  to be exchanged for other Debt
Securities  or  canceled in part, or if another Debt Security is to be exchanged
in  whole  or  in  part  for a beneficial interest in any Global Debenture, then
either  (i)  such  Global  Debenture  shall  be  so  surrendered for exchange or
cancellation as provided in this Article II or (ii) the principal amount thereof
                                 ----------
shall be reduced or increased by an amount equal to the portion thereof to be so
exchanged  or  canceled,  or  equal  to  the principal amount of such other Debt
Security  to  be so exchanged for a beneficial interest therein, as the case may
be,  by  means  of  an  appropriate  adjustment  made on the records of the Debt
Security  registrar,  whereupon  the  Trustee, in accordance with the Applicable
Depository  Procedures,  shall  instruct  the  Depositary  or  its  authorized
representative to make a corresponding adjustment to its records.  Upon any such
surrender  or adjustment of a Global Debenture by the Depositary, accompanied by
registration  instructions,  the  Company  shall  execute  and the Trustee shall
authenticate  and  deliver  any  Debt  Securities  issuable in exchange for such
Global Debenture (or any portion thereof) in accordance with the instructions of
the  Depositary.  The  Trustee  shall not be liable for any delay in delivery of
such  instructions and may conclusively rely on, and shall be fully protected in
relying  on,  such  instructions.

          (d)     Every  Debt  Security  authenticated  and  delivered  upon
registration  of  transfer  of,  or  in  exchange  for  or  in lieu of, a Global
Debenture  or  any  portion  thereof shall be authenticated and delivered in the
form  of,  and  shall  be,  a  Global  Debenture,  unless  such Debt Security is
registered  in  the  name  of a Person other than the Depositary for such Global
Debenture  or  a  nominee  thereof.

          (e)     Debt  Securities  distributed to holders of Book-Entry Capital
Securities (as defined in the Trust Agreement) upon the dissolution of the Trust
shall  be distributed in the form of one or more Global Debentures registered in
the  name of a Depositary or its nominee, and deposited with the Debt Securities
registrar, as custodian for such Depositary, or with such Depositary, for credit
by  the  Depositary  to  the respective accounts of the beneficial owners of the
Debt Securities represented thereby (or such other accounts as they may direct).
Debt  Securities  distributed  to  holders  of  Capital  Securities  other  than
Book-Entry  Capital  Securities  upon  the dissolution of the Trust shall not be
issued  in  the  form  of  a  Global  Debenture  or  any  other form intended to
facilitate  book-entry  trading in beneficial interests in such Debt Securities.

          (f)     The  Depositary  or  its nominee, as the registered owner of a
Global  Debenture, shall be the Holder of such Global Debenture for all purposes
under this Indenture and the Debt Securities, and owners of beneficial interests
in  a  Global  Debenture  shall  hold  such interests pursuant to the Applicable
Depository  Procedures.  Accordingly,  any such owner's beneficial interest in a
Global Debenture shall be shown only on, and the transfer of such interest shall
be effected only through, records maintained by the Depositary or its nominee or
its


                                      -20-
<PAGE>
Depositary Participants.  The Debt Securities registrar and the Trustee shall be
entitled to deal with the Depositary for all purposes of this Indenture relating
to  a  Global Debenture (including the payment of principal and interest thereon
and  the  giving of instructions or directions by owners of beneficial interests
therein  and  the giving of notices) as the sole Holder of the Debt Security and
shall  have  no  obligations  to  the  owners  of  beneficial interests therein.
Neither  the  Trustee nor the Debt Securities registrar shall have any liability
in  respect  of  any  transfers  affected  by  the  Depositary.

          (g)     The  rights  of  owners  of  beneficial  interests in a Global
Debenture shall be exercised only through the Depositary and shall be limited to
those  established  by law and agreements between such owners and the Depositary
and/or  its  Depositary  Participants.

          (h)     No  holder  of any beneficial interest in any Global Debenture
held  on  its  behalf by a Depositary shall have any rights under this Indenture
with respect to such Global Debenture, and such Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the owner of
such  Global  Debenture  for  all purposes whatsoever.  None of the Company, the
Trustee nor any agent of the Company or the Trustee will have any responsibility
or  liability  for  any  aspect  of  the records relating to or payments made on
account  of beneficial ownership interests of a Global Debenture or maintaining,
supervising  or  reviewing  any  records  relating  to such beneficial ownership
interests.  Notwithstanding  the  foregoing,  nothing  herein  shall prevent the
Company,  the  Trustee  or  any  agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by a
Depositary  or  impair,  as  between a Depositary and such holders of beneficial
interests,  the  operation  of customary practices governing the exercise of the
rights of the Depositary (or its nominee) as holder of any Debt Security.

                                   ARTICLE III

                       PARTICULAR COVENANTS OF THE COMPANY

     SECTION 3.01.  Payment of Principal, Premium and Interest; Agreed Treatment
                    ------------------------------------------------------------
of  the  Debt  Securities.
-------------------------

          (a)     The  Company  covenants  and  agrees  that  it  will  duly and
punctually  pay  or  cause to be paid all payments due on the Debt Securities at
the  place, at the respective times and in the manner provided in this Indenture
and  the  Debt  Securities.  At  the  option of the Company, each installment of
interest  on  the  Debt  Securities  may  be paid (i) by mailing checks for such
interest payable to the order of the holders of Debt Securities entitled thereto
as  they  appear  on  the Debt Security Register or (ii) by wire transfer to any
account  with  a  banking institution located in the United States designated by
such  holders  to  the  Paying  Agent  no  later  than  the related record date.
Notwithstanding anything to the contrary contained in this Indenture or any Debt
Security,  if  the  Trust  or the Trustee of the Trust is the holder of any Debt
Security,  then  all  payments in respect of such Debt Security shall be made by
the  Company  in  immediately  available  funds  when  due.

          (b)     The  Company  and  each  of  the  Holders  will treat the Debt
Securities  as  indebtedness, and the amounts, other than payments of principal,
payable  in  respect  of  the


                                      -21-
<PAGE>
principal  amount  of  such  Debt  Securities  as interest, for all U.S. federal
income  tax  purposes.  All  payments  in respect of the Securities will be made
free  and clear of U.S. withholding tax to any beneficial owner thereof that has
provided  (i)  an Internal Revenue Service Form W-9 or W-8BEN (or any substitute
or  successor  form)  establishing  its U.S. or non-U.S. status for U.S. federal
income  tax  purposes,  or  and  establishing  a  complete  exemption  from U.S.
withholding  tax,  or  (ii)  any  other  applicable form establishing a complete
exemption  from  U.S.  withholding  tax.

          (c)     As  of the date of this Indenture, the Company represents that
it  has  no intention to exercise its right under Section 2.11 to defer payments
of  interest  on  the  Debt  Securities  by  commencing  an  Extension  Period.

          (d)     As  of the date of this Indenture, the Company represents that
the  likelihood  that  it would exercise its right under this Indenture to defer
payments of interest on the Debt Securities by commencing an Extension Period at
any  time  during which the Debt Securities are outstanding is remote because of
the  restrictions  that  would be imposed on the Company's ability to declare or
pay  dividends or distributions on, or to redeem, purchase or make a liquidation
payment  with  respect  to,  any  of its outstanding equity and on the Company's
ability to make any payments of principal of or premium, if any, or interest on,
or  repurchase or redeem, any of its debt securities that rank pari passu in all
respects  with  or  junior  in  interest  to  the  Debt  Securities.


     SECTION 3.02.  Offices  for  Notices  and  Payments,  etc.
                    ------------------------------------------

          So  long as any of the Debt Securities remain outstanding, the Company
will maintain an office or agency where the Debt Securities may be presented for
payment,  an  office  or  agency  where the Debt Securities may be presented for
registration  of  transfer and for exchange as provided in this Indenture and an
office  or agency where notices and demands to or upon the Company in respect of
the  Debt  Securities  or  of  this Indenture may be served.  The Company hereby
appoints  the  Trustee  at LaSalle Bank National Association, CDO Trust Services
Group, Attn: Greg Myers, 135 South LaSalle Street, Suite 1511, Chicago, Illinois
60603  - Southeastern Bank Financial Trust II as such office or agency.  In case
the  Company  shall  fail to maintain any such office or shall fail to give such
notice  of  the location or of any change in the location thereof, presentations
and demands may be made and notices may be served at the Principal Office of the
Trustee.

          In addition to any such office or agency, the Company may from time to
time  designate  one or more other offices or agencies where the Debt Securities
may  be  presented  for  registration of transfer and for exchange in the manner
provided  in  this Indenture, and the Company may from time to time rescind such
designation,  as the Company may deem desirable or expedient; provided, however,
                                                              --------  -------
that  no  such designation or rescission shall in any manner relieve the Company
of  its  obligation to maintain any such office or agency for the purposes above
mentioned.  The  Company  will  give to the Trustee prompt written notice of any
such  designation  or  rescission  thereof.


                                      -22-
<PAGE>
     SECTION 3.03.  Appointments  to  Fill  Vacancies  in  Trustee's  Office.
                    --------------------------------------------------------

          The  Company,  whenever  necessary  to  avoid or fill a vacancy in the
office  of  Trustee,  will  appoint,  in  the manner provided in Section 6.09, a
Trustee, so that there shall at all times be a Trustee hereunder.

     SECTION 3.04.  Provision  as  to  Paying  Agent.
                    --------------------------------

          (a)     If  the  Company  shall  appoint a Paying Agent other than the
Trustee,  it  will cause such Paying Agent to execute and deliver to the Trustee
an  instrument  in which such agent shall agree with the Trustee, subject to the
provision  of  this  Section  3.04:

               (1)     that  it  will hold all sums held by it as such agent for
          the  payment  of all payments due on the Debt Securities (whether such
          sums  have  been  paid to it by the Company or by any other obligor on
          the  Debt  Securities)  in trust for the benefit of the holders of the
          Debt  Securities;

               (2)     that  it  will  give the Trustee prompt written notice of
          any  failure  by  the  Company  (or  by  any other obligor on the Debt
          Securities)  to  make any payment on the Debt Securities when the same
          shall  be  due  and  payable;  and

               (3)     that  it  will, at any time during the continuance of any
          Event  of  Default, upon the written request of the Trustee, forthwith
          pay  to  the  Trustee  all sums so held in trust by such Paying Agent.

          (b)     If  the Company shall act as its own Paying Agent, it will, on
or  before  each due date of the payments due on the Debt Securities, set aside,
segregate  and  hold  in  trust  for  the  benefit  of  the  holders of the Debt
Securities a sum sufficient to pay such payments so becoming due and will notify
the  Trustee in writing of any failure to take such action and of any failure by
the  Company  (or  by  any  other obligor under the Debt Securities) to make any
payment  on  the  Debt  Securities  when  the same shall become due and payable.

          Whenever the Company shall have one or more Paying Agents for the Debt
Securities,  it  will,  on or prior to each due date of the payments on the Debt
Securities,  deposit with a Paying Agent a sum sufficient to pay all payments so
becoming  due,  such  sum  to  be  held  in trust for the benefit of the Persons
entitled thereto and (unless such Paying Agent is the Trustee) the Company shall
promptly  notify  the  Trustee  in  writing  of  its  action  or failure to act.

          (c)     Anything in this Section 3.04 to the contrary notwithstanding,
the  Company  may,  at any time, for the purpose of obtaining a satisfaction and
discharge  with respect to the Debt Securities, or for any other reason, pay, or
direct  any  Paying  Agent  to  pay to the Trustee all sums held in trust by the
Company  or  any such Paying Agent, such sums to be held by the Trustee upon the
same  terms  and  conditions  herein  contained.

          (d)     Anything in this Section 3.04 to the contrary notwithstanding,
the  agreement to hold sums in trust as provided in this Section 3.04 is subject
to  Sections  12.03  and  12.04.


                                      -23-
<PAGE>
          (e)     The  Company  hereby  initially appoints the Trustee to act as
Paying  Agent  (the  "Paying  Agent").

     SECTION 3.05.  Certificate  to  Trustee.
                    ------------------------

          The  Company  will  deliver to the Trustee on or before 120 days after
the  end  of  each  fiscal  year,  so  long  as  Debt Securities are outstanding
hereunder,  a  Certificate  stating that in the course of the performance by the
signers  of  their  duties  as  officers of the Company they would normally have
knowledge  of  any default by the Company in the performance of any covenants of
the  Company contained herein, stating whether or not they have knowledge of any
such  default and, if so, specifying each such default of which the signers have
knowledge  and  the  nature  thereof.

     SECTION 3.06.  Additional  Interest.
                    --------------------

          If  and  for so long as the Trust is the holder of all Debt Securities
and  is subject to or otherwise required to pay, or is required to withhold from
distributions  to  holders  of Trust Securities, any additional taxes (including
withholding  taxes),  duties,  assessments  or  other  governmental charges as a
result  of  a  Tax  Event,  the  Company  will  pay such additional amounts (the
"Additional  Interest")  on the Debt Securities as shall be required so that the
net  amounts  received  and retained by the Trust for distribution to holders of
Trust  Securities  after paying all taxes (including withholding taxes), duties,
assessments or other governmental charges will be equal to the amounts the Trust
would have received and retained for distribution to holders of Trust Securities
after  paying all taxes (including withholding taxes on distributions to holders
of  Trust  Securities),  duties, assessments or other governmental charges if no
such  additional  taxes,  duties,  assessments or other governmental charges had
been  imposed.  Whenever  in  this  Indenture  or the Debt Securities there is a
reference  in  any context to the payment of principal of or premium, if any, or
interest on the Debt Securities, such mention shall be deemed to include mention
of  payments  of  the  Additional Interest provided for in this paragraph to the
extent that, in such context, Additional Interest is, was or would be payable in
respect thereof pursuant to the provisions of this paragraph and express mention
of  the  payment of Additional Interest (if applicable) in any provisions hereof
shall  not  be  construed  as  excluding Additional Interest in those provisions
hereof  where  such  express  mention  is  not  made;  provided,  however, that,
                                                       --------   -------
notwithstanding anything to the contrary contained in this Indenture or any Debt
Security,  the  deferral  of  the payment of interest during an Extension Period
pursuant  to Section 2.11 shall not defer the payment of any Additional Interest
that  may  be  due  and  payable.

     SECTION 3.07.  Compliance  with  Consolidation  Provisions.
                    -------------------------------------------

          The  Company  will  not,  while  any  of  the  Debt  Securities remain
outstanding,  consolidate  with,  or  merge into any other Person, or merge into
itself,  or  sell, convey, transfer or otherwise dispose of all or substantially
all  of  its property or capital stock to any other Person unless the provisions
of  Article  XI  hereof  are  complied  with.

     SECTION 3.08.  Limitation  on  Dividends.
                    -------------------------

          If  Debt  Securities are initially issued to the Trust or a trustee of
such  Trust  in  connection  with  the issuance of Trust Securities by the Trust
(regardless  of  whether  Debt


                                      -24-
<PAGE>
Securities  continue to be held by such Trust) and (i) there shall have occurred
and be continuing an Event of Default, (ii) the Company shall be in default with
respect to its payment of any obligations under the Capital Securities Guarantee
or  (iii)  the Company shall have given notice of its election to defer payments
of interest on the Debt Securities by extending the interest distribution period
as  provided  herein  and  such  period,  or  any  extension thereof, shall have
commenced  and  be  continuing,  then the Company may not (A) 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 (B)
make  any  payment  of principal of or interest or premium, if any, 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 or (C) make any
payment under any guarantees of the Company that rank pari passu in all respects
with  or  junior in interest to the Capital Securities Guarantee (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company  (I)  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,  (II)  in connection with a dividend reinvestment or
stockholder  stock  purchase  plan  or  (III) 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  occurrence  of  (i), (ii) or (iii) above, (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).

     SECTION 3.09.  Covenants  as  to  the  Trust.
                    -----------------------------

          For  so  long as such Trust Securities remain outstanding, the Company
shall  maintain 100% ownership of the Common Securities; provided, however, that
                                                         --------  -------
any  permitted  successor  of  the  Company  under this Indenture that is a U.S.
Person  may  succeed  to  the Company's ownership of such Common Securities. The
Company,  as  owner  of the Common Securities, shall use commercially reasonable
efforts to cause the Trust (a) to remain a statutory trust, except in connection
with  a  distribution  of  Debt Securities to the holders of Trust Securities in
liquidation  of  the  Trust,  the  redemption  of all of the Trust Securities or
certain  mergers,  consolidations  or  amalgamations,  each  as permitted by the
Declaration,  (b)  to otherwise continue to be classified as a grantor trust for
United  States federal income tax purposes and (c) to cause each holder of Trust
Securities  to be treated as owning an undivided beneficial interest in the Debt
Securities.


                                      -25-
<PAGE>
                                   ARTICLE IV

                LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

     SECTION 4.01.  Securityholders'  Lists.
                    -----------------------

          The  Company  covenants and agrees that it will furnish or cause to be
furnished  to  the  Trustee:

          (a)     on  each  regular  record date for an Interest Payment Date, a
list,  in  such  form  as  the  Trustee may reasonably require, of the names and
addresses  of the Securityholders of the Debt Securities as of such record date;
and

          (b)     at  such  other  times  as the Trustee may request in writing,
within  30  days after the receipt by the Company of any such request, a list of
similar  form  and  content as of a date not more than 15 days prior to the time
such  list  is furnished, except that no such lists need be furnished under this
Section  4.01  so  long as the Trustee is in possession thereof by reason of its
acting  as  Debt  Security  registrar.

     SECTION 4.02.  Preservation  and  Disclosure  of  Lists.
                    ----------------------------------------

          (a)     The  Trustee  shall  preserve,  in  as  current  a  form as is
reasonably  practicable,  all  information  as to the names and addresses of the
holders of Debt Securities (1) contained in the most recent list furnished to it
as  provided  in  Section  4.01  or  (2)  received by it in the capacity of Debt
Securities  registrar (if so acting) hereunder. The Trustee may destroy any list
furnished  to  it  as  provided  in  Section  4.01 upon receipt of a new list so
furnished.

          (b)     In  case three or more holders of Debt Securities (hereinafter
referred  to as "applicants") apply in writing to the Trustee and furnish to the
Trustee  reasonable proof that each such applicant has owned a Debt Security for
a period of at least six months preceding the date of such application, and such
application  states that the applicants desire to communicate with other holders
of  Debt  Securities  with respect to their rights under this Indenture or under
such  Debt Securities and is accompanied by a copy of the form of proxy or other
communication  which such applicants propose to transmit, then the Trustee shall
within five Business Days after the receipt of such application, at the election
of  the  Company,  either:

               (1)     afford  such  applicants  access  to  the  information
          preserved at the time by the Trustee in accordance with the provisions
          of  subsection  (a)  of  this  Section  4.02,  or

               (2)     inform  such  applicants  as to the approximate number of
          holders  of  Debt  Securities  whose names and addresses appear in the
          information  preserved  at  the time by the Trustee in accordance with
          the  provisions  of subsection (a) of this Section 4.02, and as to the
          approximate  cost of mailing to such Securityholders the form of proxy
          or  other  communication,  if  any,  specified  in  such  application.


                                      -26-
<PAGE>
          If  the  Company  shall  elect not to afford such applicants access to
such  information,  the  Trustee  shall,  upon  the  written  request  of  such
applicants,  mail  to  each  Securityholder  of  Debt  Securities whose name and
address  appear  in  the  information  preserved  at  the time by the Trustee in
accordance  with the provisions of subsection (a) of this Section 4.02 a copy of
the form of proxy or other communication which is specified in such request with
reasonable promptness after a tender to the Trustee of the material to be mailed
and  of  payment,  or  provision  for the payment, of the reasonable expenses of
mailing,  unless  within  five days after such tender, the Trustee shall mail to
such  applicants,  and  file  with  the  Securities  and Exchange Commission, if
permitted or required by applicable law, together with a copy of the material to
be  mailed,  a  written statement of the Company to the effect that such mailing
would  be  contrary to the best interests of the holders of all Debt Securities,
as  the  case  may  be, or would be in violation of applicable law. Such written
statement  shall  specify  the  basis  of  such  opinion. If said Commission, as
permitted  or  required  by applicable law, after opportunity for a hearing upon
the objections specified in the written statement so filed, shall enter an order
refusing  to  sustain  any of such objections or if, after the entry of an order
sustaining  one  or  more  of such objections, said Commission shall find, after
notice  and  opportunity  for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such  material  to all such Securityholders with reasonable promptness after the
entry  of such order and the renewal of such tender; otherwise the Trustee shall
be  relieved  of  any  obligation  or  duty  to such applicants respecting their
application.

          (c)     Each  and  every  holder  of Debt Securities, by receiving and
holding  the  same,  agrees  with  the  Company and the Trustee that neither the
Company nor the Trustee nor any Paying Agent shall be held accountable by reason
of  the  disclosure of any such information as to the names and addresses of the
holders  of  Debt Securities in accordance with the provisions of subsection (b)
of  this  Section 4.02, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any  material  pursuant  to  a  request  made  under  said  subsection  (b).

     SECTION 4.03.  Financial  and  Other  Information.
                    ----------------------------------

          The  Company  shall  deliver to each Securityholder (1) each Report on
Form  10-K  and  Form 10-Q prepared by the Company and filed with the Securities
and  Exchange Commission in accordance with the Exchange Act within 7 days after
the  filing thereof, (2) if the Company is not then (y) subject to Section 13 or
15(d)  of  the  Exchange  Act  or  (z)  exempt  from  reporting pursuant to Rule
12g3-2(b) thereunder, the Company shall be required to provide within 45 days of
the  end  of  each  calendar  quarterly period and 90 days after the end of each
calendar  year, the information required to be provided by Rule 144A(d)(4) under
the  Securities  Act  and (3) within 30 days after the end of the fiscal year of
the  Company, Form 1099 or such other annual U.S. federal income tax information
statement  required  by  the Code containing such information with regard to the
Debt  Securities  held  by such holder as is required by the Code and the income
tax  regulations  of  the  U.S.  Treasury  thereunder.

          If  and  so  long as a Holder of the Debt Securities is an entity that
holds  a  pool  of  debt  securities or trust preferred securities, or a trustee
thereof,  the  Company  will  cause  copies of its reports on Form FR Y-9C to be
delivered  to  the  Holder  promptly  following  their  filing  with the Federal
Reserve.


                                      -27-
<PAGE>
                                    ARTICLE V

      REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT

     SECTION 5.01.  Events  of  Default.
                    -------------------

          The following events shall be "Events of Default" with respect to Debt
Securities:

          (a)     the  Company  defaults in the payment of any interest upon any
Debt  Security  when  it becomes due and payable (unless the Company has elected
and  may  defer  interest payments pursuant to Section 2.11), and continuance of
such  default  for a period of 30 days; for the avoidance of doubt, an extension
of  any  interest  distribution period by the Company in accordance with Section
2.11 of this Indenture shall not constitute a default under this clause 5.01(a);
or

          (b)     the  Company defaults in the payment of all or any part of the
principal  of  (or premium, if any, on) any Debt Securities as and when the same
shall become due and payable either at maturity, upon redemption, by declaration
of  acceleration  pursuant  to  Section  5.01 of this Indenture or otherwise; or

          (c)     the  Company  defaults in the payment of any interest upon any
Debt  Security  when  it becomes due and payable following the nonpayment of any
such  interest  as  a  result  of  Extension  Period  for 20 or more consecutive
quarterly  periods;  or

          (d)     the  Company  defaults in the performance of, or breaches, any
of  its  covenants  or  agreements  in Sections 3.06, 3.07, 3.08 or 3.09 of this
Indenture  (other than a covenant or agreement a default in whose performance or
whose  breach  is  elsewhere  in  this  Section  specifically  dealt  with), and
continuance  of  such  default or breach for a period of 90 days after there has
been given, by registered or certified mail, to the Company by the Trustee or to
the  Company  and  the  Trustee by the holders of not less than 25% in aggregate
principal amount of the outstanding Debt Securities, a written notice specifying
such  default  or  breach  and requiring it to be remedied and stating that such
notice  is  a  "Notice  of  Default"  hereunder;  or

          (e)     a  court  having  jurisdiction  in  the premises shall enter a
decree  or  order  for  relief  in respect of the Company in an involuntary case
under  any  applicable  bankruptcy,  insolvency  or  other  similar  law  now or
hereafter  in  effect,  or appoints a receiver, liquidator, assignee, custodian,
trustee,  sequestrator  (or  similar  official)  of  the  Company  or  for  any
substantial part of its property, or orders the winding-up or liquidation of its
affairs  and  such  decree  or  order  shall remain unstayed and in effect for a
period  of  90  consecutive  days;  or

          (f)     the  Company  shall  commence  a  voluntary  case  under  any
applicable  bankruptcy,  insolvency  or  other  similar  law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under  any such law, or shall consent to the appointment of or taking possession
by  a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar  official) of the Company or of any substantial part of its property, or
shall  make  any  general assignment for the benefit of creditors, or shall fail
generally  to  pay  its  debts  as  they  become  due;  or


                                      -28-
<PAGE>
          (g)     the  Trust shall have voluntarily or involuntarily liquidated,
dissolved, wound-up its business or otherwise terminated its existence except in
connection  with  (1)  the distribution of the Debt Securities to holders of the
Trust  Securities  in  liquidation  of  their  interests  in  the Trust, (2) the
redemption  of  all  of the outstanding Trust Securities or (3) certain mergers,
consolidations or amalgamations, each as permitted by the Declaration.

          If an Event of Default specified under clause (c) of this Section 5.01
occurs  and is continuing with respect to the Debt Securities, then, and in each
and  every  such  case,  unless  the principal of the Debt Securities shall have
already  become  due  and payable, either the Trustee or the holders of not less
than  25%  in aggregate principal amount of the Debt Securities then outstanding
hereunder,  by  notice in writing to the Company (and to the Trustee if given by
Securityholders),  may  declare  the entire principal of the Debt Securities and
any  premium  and  interest  accrued, but unpaid, thereon, if any, to be due and
payable  immediately,  and  upon  any  such  declaration  the  same shall become
immediately  due and payable.  If an Event of Default specified under clause (e)
or  (f)  of  this  Section  5.01  occurs, then, in each and every such case, the
entire  principal  amount  of  the  Debt Securities and any premium and interest
accrued, but unpaid, thereon shall ipso facto become immediately due and payable
without  further  action.  Notwithstanding  anything  to  the  contrary  in this
Section  5.01,  if at any time during the period in which this Indenture remains
in  force and effect, the Company ceases or elects to cease to be subject to the
supervision  and  regulations  of  the  Federal  Reserve,  OTS,  OCC  or similar
regulatory  authority  overseeing  bank,  thrift,  savings and loan or financial
holding  companies  or  similar  institutions  requiring  specifications for the
treatment  of capital similar in nature to the capital adequacy guidelines under
the  Federal  Reserve  rules  and  regulations,  then the first sentence of this
paragraph shall be deemed to include clauses (a), (b) and (d) under this Section
5.01  as an Event of Default resulting in an acceleration of payment of the Debt
Securities to the same extent as provided herein for clause (c).

          With  respect  to  clause (d) of this Section 5.01, the Company agrees
that  in  the  event  of  a breach by the Company of its covenants or agreements
mentioned  therein,  any  remedy  at  law or in damages may prove inadequate and
therefore  the  Company  agrees that the Trustee shall be entitled to injunctive
relief  against  the  Company in the event of any breach or threatened breach by
the  Company,  in  addition to any other relief (including damages) available to
the  Trustee  under  this  Indenture  or  under  law.

          The  foregoing  provisions, however, are subject to the condition that
if,  at  any  time after the principal of the Debt Securities shall have been so
declared  due  and payable, and before any judgment or decree for the payment of
the  moneys due shall have been obtained or entered as hereinafter provided, (i)
the  Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all  matured  installments  of  interest  upon  all  the Debt Securities and all
payments  on  the  Debt Securities which shall have become due otherwise than by
acceleration (with interest upon all such payments and Deferred Interest, to the
extent  permitted  by  law)  and  such  amount  as  shall be sufficient to cover
reasonable  compensation  to  the  Trustee  and  each predecessor Trustee, their
respective  agents,  attorneys  and  counsel,  and  all other amounts due to the
Trustee  pursuant  to Section 6.06, if any, and (ii) all Events of Default under
this  Indenture,  other  than the non-payment of the payments on Debt Securities
which  shall  have  become  due  by


                                      -29-
<PAGE>
acceleration,  shall  have  been cured, waived or otherwise remedied as provided
herein,  and  in each and every such case the holders of a majority in aggregate
principal  amount  of the Debt Securities then outstanding, by written notice to
the  Company  and  to  the Trustee, may waive all defaults and rescind and annul
such  declaration  and  its  consequences,  but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall impair
any right consequent thereon; provided, however, that if the Debt Securities are
held  by  the  Trust  or  a  trustee of the Trust, such waiver or rescission and
annulment  shall  not  be effective until the holders of a majority in aggregate
liquidation amount of the outstanding Capital Securities of the Trust shall have
consented  to  such  waiver  or  rescission  and  annulment.

          In  case  the  Trustee shall have proceeded to enforce any right under
this  Indenture  and  such proceedings shall have been discontinued or abandoned
because  of  such  rescission or annulment or for any other reason or shall have
been  determined  adversely  to  the  Trustee,  then  and in every such case the
Company,  the  Trustee  and the holders of the Debt Securities shall be restored
respectively  to  their  several positions and rights hereunder, and all rights,
remedies  and  powers  of  the  Company, the Trustee and the holders of the Debt
Securities shall continue as though no such proceeding had been taken.

     SECTION 5.02.  Payment of Debt Securities on Default; Suit Therefor.
                    ----------------------------------------------------

          The  Company covenants that upon the occurrence of an Event of Default
pursuant  to clause 5.01(a), 5.01(b) or 5.01(c), and upon demand of the Trustee,
the  Company will pay to the Trustee, for the benefit of the holders of the Debt
Securities,  the whole amount that then shall have become due and payable on all
Debt Securities including Deferred Interest accrued on the Debt Securities; and,
in  addition  thereto,  such  further amount as shall be sufficient to cover the
costs  and  expenses  of  collection, including a reasonable compensation to the
Trustee,  its  agents,  attorneys  and counsel, and any other amounts due to the
Trustee under Section 6.06. In case the Company shall fail forthwith to pay such
amounts  upon  such  demand,  the  Trustee, in its own name and as trustee of an
express  trust,  shall  be  entitled  and  empowered to institute any actions or
proceedings  at  law  or  in  equity  for  the collection of the sums so due and
unpaid,  and  may  prosecute  any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
any  other obligor on such Debt Securities and collect in the manner provided by
law  out  of  the  property  of  the  Company  or any other obligor on such Debt
Securities wherever situated the moneys adjudged or decreed to be payable.

          In  case  there shall be pending proceedings for the bankruptcy or for
the  reorganization  of  the Company or any other obligor on the Debt Securities
under Bankruptcy Law, or in case a receiver or trustee shall have been appointed
for  the  property  of  the Company or such other obligor, or in the case of any
other similar judicial proceedings relative to the Company or other obligor upon
the  Debt  Securities,  or  to  the creditors or property of the Company or such
other  obligor,  the  Trustee, irrespective of whether the principal of the Debt
Securities  shall then be due and payable as therein expressed or by declaration
of  acceleration or otherwise and irrespective of whether the Trustee shall have
made  any  demand  pursuant  to  the  provisions  of this Section 5.02, shall be
entitled  and  empowered,  by  intervention in such proceedings or otherwise, to
file  and prove a claim or claims for the whole amount of principal and interest
owing  and unpaid in respect of the Debt Securities and, in case of any judicial
proceedings,  to  file such proofs of claim and other papers or documents as may
be  necessary  or


                                      -30-
<PAGE>
advisable  in  order  to have the claims of the Trustee (including any claim for
reasonable  compensation  to the Trustee and each predecessor Trustee, and their
respective  agents,  attorneys  and  counsel, and for reimbursement of all other
amounts  due  to  the  Trustee  under  Section  6.06) and of the Securityholders
allowed  in  such  judicial  proceedings  relative  to  the Company or any other
obligor  on  the Debt Securities, or to the creditors or property of the Company
or  such  other obligor, unless prohibited by applicable law and regulations, to
vote  on  behalf  of  the  holders  of  the Debt Securities in any election of a
trustee  or  a  standby  trustee  in arrangement, reorganization, liquidation or
other  bankruptcy  or  insolvency  proceedings  or  Person  performing  similar
functions  in  comparable  proceedings, and to collect and receive any moneys or
other  property payable or deliverable on any such claims, and to distribute the
same after the deduction of its charges and expenses; and any receiver, assignee
or  trustee  in bankruptcy or reorganization is hereby authorized by each of the
Securityholders to make such payments to the Trustee, and, in the event that the
Trustee  shall  consent  to  the  making  of  such  payments  directly  to  the
Securityholders,  to  pay  to the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each predecessor Trustee and their
respective  agents,  attorneys  and  counsel,  and  all other amounts due to the
Trustee  under  Section  6.06.

          Nothing  herein  contained shall be construed to authorize the Trustee
to  authorize  or  consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting the
Debt  Securities or the rights of any holder thereof or to authorize the Trustee
to  vote  in  respect of the claim of any Securityholder in any such proceeding.

          All  rights of action and of asserting claims under this Indenture, or
under  any  of  the  Debt Securities, may be enforced by the Trustee without the
possession of any of the Debt Securities, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or proceeding instituted
by  the Trustee shall be brought in its own name as trustee of an express trust,
and  any recovery of judgment shall be for the ratable benefit of the holders of
the  Debt  Securities.

          In  any  proceedings  brought by the Trustee (and also any proceedings
involving  the  interpretation  of  any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Debt Securities, and it shall not be necessary to make any holders of the
Debt  Securities  parties  to  any  such  proceedings.

     SECTION 5.03.  Application  of  Moneys  Collected  by  Trustee.
                    -----------------------------------------------

          Any  moneys collected by the Trustee shall be applied in the following
order,  at  the  date or dates specified pursuant hereto for the distribution of
such  moneys,  upon  presentation  of  the several Debt Securities in respect of
which  moneys  have  been  collected,  and stamping thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:

          First:  To  the  payment  of  costs  and  expenses  incurred  by,  and
reasonable  fees  of, the Trustee, its agents, attorneys and counsel, and of all
other  amounts  due  to  the  Trustee  under  Section  6.06;


                                      -31-
<PAGE>
          Second:  To  the  payment of all Senior Indebtedness of the Company if
and  to  the  extent  required  by  Article  XV;

          Third:  To  the  payment  of the amounts then due and unpaid upon Debt
Securities,  in  respect  of  which  or  for the benefit of which money has been
collected, ratably, without preference or priority of any kind, according to the
amounts  due  on  such  Debt  Securities;  and

          Fourth: The balance, if any, to the Company.

     SECTION 5.04.  Proceedings  by  Securityholders.
                    --------------------------------

          No  holder  of any Debt Security shall have any right to institute any
suit,  action  or  proceeding  for  any  remedy  hereunder,  unless  such holder
previously shall have given to the Trustee written notice of an Event of Default
with  respect to the Debt Securities and unless the holders of not less than 25%
in aggregate principal amount of the Debt Securities then outstanding shall have
given the Trustee a written request to institute such action, suit or proceeding
and  shall  have  offered  to  the  Trustee  such reasonable indemnity as it may
require  against the costs, expenses and liabilities to be incurred thereby, and
the  Trustee  for 60 days after its receipt of such notice, request and offer of
indemnity  shall  have  failed to institute any such action, suit or proceeding;
provided,  that  no  holder of Debt Securities shall have any right to prejudice
--------
the rights of any other holder of Debt Securities, obtain priority or preference
over  any  other such holder or enforce any right under this Indenture except in
the  manner herein provided and for the equal, ratable and common benefit of all
holders  of  Debt  Securities.

          Notwithstanding  any  other provisions in this Indenture, however, the
right of any holder of any Debt Security to receive payment of the principal of,
premium,  if  any,  and interest on such Debt Security when due, or to institute
suit  for the enforcement of any such payment, shall not be impaired or affected
without  the  consent  of such holder. For the protection and enforcement of the
provisions  of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.

     SECTION 5.05.  Proceedings  by  Trustee.
                    ------------------------

          In  case  of  an  Event  of  Default  hereunder the Trustee may in its
discretion  proceed  to  protect  and  enforce  the  rights vested in it by this
Indenture  by  such  appropriate  judicial proceedings as the Trustee shall deem
most  effectual  to  protect  and  enforce any of such rights, either by suit in
equity  or by action at law or by proceeding in bankruptcy or otherwise, whether
for  the  specific  enforcement  of  any covenant or agreement contained in this
Indenture  or  in aid of the exercise of any power granted in this Indenture, or
to  enforce  any  other  legal  or equitable right vested in the Trustee by this
Indenture  or  by  law.

     SECTION 5.06.  Remedies  Cumulative  and  Continuing.
                    -------------------------------------

          Except  as otherwise provided in Section 2.06, all powers and remedies
given  by  this Article V to the Trustee or to the Securityholders shall, to the
extent  permitted  by  law,  be deemed cumulative and not exclusive of any other
powers  and  remedies  available  to  the  Trustee  or  the  holders of the Debt
Securities,  by judicial proceedings or otherwise, to enforce the performance or
observance  of  the  covenants  and  agreements  contained  in this Indenture or


                                      -32-
<PAGE>
otherwise  established  with  respect  to  the  Debt Securities, and no delay or
omission  of  the  Trustee  or  of  any  holder of any of the Debt Securities to
exercise  any  right  or  power accruing upon any Event of Default occurring and
continuing  as  aforesaid  shall  impair  any  such  right or power, or shall be
construed  to  be  a waiver of any such default or an acquiescence therein; and,
subject  to the provisions of Section 5.04, every power and remedy given by this
Article  V  or  by law to the Trustee or to the Securityholders may be exercised
from  time to time, and as often as shall be deemed expedient, by the Trustee or
by  the  Securityholders.

     SECTION 5.07.  Direction  of Proceedings and Waiver of Defaults by Majority
                    ------------------------------------------------------------
of  Securityholders.
-------------------

          The  holders  of  a majority in aggregate principal amount of the Debt
Securities  affected  (voting  as one class) at the time outstanding and, if the
Debt  Securities are held by the Trust or a trustee of the Trust, the holders of
a majority in aggregate liquidation amount of the outstanding Capital Securities
of  the  Trust  shall  have  the  right  to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any  trust  or  power  conferred  on  the  Trustee  with  respect  to  such Debt
Securities; provided, however, that if the Debt Securities are held by the Trust
            --------  -------
or  a trustee of the Trust, such time, method and place or such exercise, as the
case may be, may not be so directed until the holders of a majority in aggregate
liquidation amount of the outstanding Capital Securities of the Trust shall have
directed  such  time,  method  and  place  or such exercise, as the case may be;
provided,  further, that (subject to the provisions of Section 6.01) the Trustee
shall  have  the  right  to  decline to follow any such direction if the Trustee
being  advised  by  counsel shall determine that the action so directed would be
unjustly  prejudicial to the holders not taking part in such direction or if the
Trustee  being  advised  by  counsel determines that the action or proceeding so
directed  may  not  lawfully be taken or if a Responsible Officer of the Trustee
shall  determine  that  the  action or proceedings so directed would involve the
Trustee in personal liability. Prior to any declaration of acceleration, or ipso
facto  acceleration,  of  the  maturity of the Debt Securities, the holders of a
majority  in  aggregate  principal  amount  of  the  Debt Securities at the time
outstanding may on behalf of the holders of all of the Debt Securities waive (or
modify  any  previously  granted waiver of) any past default or Event of Default
and  its  consequences,  except  a  default  (a) in the payment of principal of,
premium,  if  any,  or interest on any of the Debt Securities, (b) in respect of
covenants  or  provisions hereof which cannot be modified or amended without the
consent  of  the holder of each Debt Security affected, or (c) in respect of the
covenants  contained  in  Section  3.09;  provided,  however,  that  if the Debt
                                          --------   -------
Securities  are  held  by  the  Trust  or a trustee of the Trust, such waiver or
modification  to  such  waiver  shall  not  be  effective until the holders of a
majority  in  Liquidation Amount of the Trust Securities of the Trust shall have
consented to such waiver or modification to such waiver; provided, further, that
                                                         --------  -------
if the consent of the holder of each outstanding Debt Security is required, such
waiver  or  modification to such waiver shall not be effective until each holder
of  the outstanding Capital Securities of the Trust shall have consented to such
waiver  or  modification to such waiver. Upon any such waiver or modification to
such  waiver, the Default or Event of Default covered thereby shall be deemed to
be cured for all purposes of this Indenture and the Company, the Trustee and the
holders  of  the Debt Securities shall be restored to their former positions and
rights  hereunder,  respectively;  but  no  such  waiver or modification to such
waiver  shall  extend  to any subsequent or other Default or Event of Default or
impair  any  right  consequent thereon. Whenever any Default or Event of Default
hereunder shall have been waived as permitted by this Section 5.07, said Default
or  Event  of


                                      -33-
<PAGE>
Default  shall  for  all  purposes  of the Debt Securities and this Indenture be
deemed  to  have  been  cured  and  to  be  not  continuing.

     SECTION 5.08.  Notice  of  Defaults.
                    --------------------

          The  Trustee  shall, within 90 days after a Responsible Officer of the
Trustee shall have actual knowledge or received written notice of the occurrence
of  a  Default with respect to the Debt Securities, mail to all Securityholders,
as  the  names  and  addresses  of  such  holders  appear upon the Debt Security
Register,  notice  of  all Defaults with respect to the Debt Securities actually
known  to  the  Trustee,  unless  such defaults shall have been cured before the
giving  of such notice (the term "defaults" for the purpose of this Section 5.08
being  hereby  defined  to be the events specified in subsections (a), (b), (c),
(d),  (e)  and  (f)  of  Section  5.01,  not including periods of grace, if any,
provided  for  therein);  provided,  that,  except in the case of default in the
                          --------
payment  of  the  principal  of, premium, if any, or interest on any of the Debt
Securities,  the Trustee shall be protected in withholding such notice if and so
long  as  a Responsible Officer of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Securityholders.

     SECTION 5.09.  Undertaking  to  Pay  Costs.
                    ---------------------------

          All  parties  to  this  Indenture  agree,  and each holder of any Debt
Security  by  such  holder's  acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any  action  taken or omitted by it as Trustee, the filing by any party litigant
in  such  suit  of  an  undertaking to pay the costs of such suit, and that such
court  may  in  its  discretion  assess  reasonable  costs, including reasonable
attorneys'  fees  and  expenses, against any party litigant in such suit, having
due  regard  to the merits and good faith of the claims or defenses made by such
party  litigant;  but the provisions of this Section 5.09 shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Securityholder, or
group  of  Securityholders,  holding in the aggregate more than 10% in principal
amount of the Debt Securities (or, if such Debt Securities are held by the Trust
or  a  trustee  of  the  Trust,  more  than  10%  in  liquidation  amount of the
outstanding  Capital  Securities),  to any suit instituted by any Securityholder
for  the  enforcement of the payment of the principal of (or premium, if any) or
interest  on  any  Debt  Security against the Company on or after the same shall
have  become  due  and  payable,  or  to  any suit instituted in accordance with
Section  14.12.

                                   ARTICLE VI

                             CONCERNING THE TRUSTEE

     SECTION 6.01.  Duties  and  Responsibilities  of  Trustee.
                    ------------------------------------------

          With  respect  to the holders of Debt Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default with respect to the Debt
Securities  and  after  the curing or waiving of all Events of Default which may
have  occurred,  with respect to the Debt Securities, undertakes to perform such
duties  and only such duties as are specifically set forth in this Indenture. In
case an Event of Default with respect to the Debt Securities has occurred (which


                                      -34-
<PAGE>
has not been cured or waived), the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in  their  exercise,  as  a  prudent  person  would  exercise  or  use under the
circumstances  in  the  conduct  of  such  person's  own  affairs.

          No  provision  of  this  Indenture  shall  be construed to relieve the
Trustee  from  liability for its own negligent action, its own negligent failure
to  act  or  its  own  willful  misconduct,  except  that:

          (a)     prior to the occurrence of an Event of Default with respect to
the  Debt  Securities  and  after the curing or waiving of all Events of Default
which  may  have  occurred

               (1)     the duties and obligations of the Trustee with respect to
          the  Debt  Securities  shall  be  determined  solely  by  the  express
          provisions  of  this  Indenture,  and  the Trustee shall not be liable
          except for the performance of such duties and obligations with respect
          to  the  Debt  Securities  as  are  specifically  set  forth  in  this
          Indenture,  and no implied covenants or obligations shall be read into
          this  Indenture  against  the  Trustee;  and

               (2)     in  the  absence of bad faith on the part of the Trustee,
          the  Trustee  may conclusively rely, as to the truth of the statements
          and  the  correctness  of  the  opinions  expressed  therein, upon any
          certificates  or  opinions  furnished to the Trustee and conforming to
          the  requirements  of  this  Indenture;  but,  in the case of any such
          certificates  or  opinions  which  by  any  provision  hereof  are
          specifically  required  to  be  furnished  to the Trustee, the Trustee
          shall  be under a duty to examine the same to determine whether or not
          they  conform  on  their  face  to the requirements of this Indenture;

          (b)     the Trustee shall not be liable for any error of judgment made
in  good  faith  by  a Responsible Officer or Officers of the Trustee, unless it
shall  be  proved  that  the Trustee was negligent in ascertaining the pertinent
facts;

          (c)     the  Trustee  shall  not  be liable with respect to any action
taken  or  omitted  to  be  taken  by  it  in good faith, in accordance with the
direction of the Securityholders pursuant to Section 5.07, relating to the time,
method  and  place  of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture;

          (d)     the Trustee shall not be charged with knowledge of any Default
or  Event  of  Default  with  respect to the Debt Securities unless either (1) a
Responsible  Officer  shall  have  actual  knowledge of such Default or Event of
Default  or  (2)  written  notice of such Default or Event of Default shall have
been  given  to  the  Trustee  by  the  Company or any other obligor on the Debt
Securities  or  by  any holder of the Debt Securities, except with respect to an
Event  of Default pursuant to Sections 5.01(a), 5.01(b) or 5.01(c) hereof (other
than an Event of Default resulting from the default in the payment of Additional
Interest  or  premium,  if any, if the Trustee does not have actual knowledge or
written notice that such payment is due and payable), of which the Trustee shall
be  deemed  to  have  knowledge;  and


                                      -35-
<PAGE>
          (e)     in  the  absence  of bad faith on the part of the Trustee, the
Trustee may seek and rely on reasonable instructions from the Company.

          None  of  the provisions contained in this Indenture shall require the
Trustee  to  expend  or risk its own funds or otherwise incur personal financial
liability  in  the performance of any of its duties or in the exercise of any of
its  rights  or  powers.

     SECTION 6.02.  Reliance  on  Documents,  Opinions,  etc.
                    ----------------------------------------

          Except as otherwise provided in Section 6.01:

          (a)     the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument,  opinion,  report,  notice,  request,  consent,  order,  bond, note,
debenture  or other paper or document believed by it in good faith to be genuine
and  to  have  been  signed  or  presented  by  the  proper  party  or  parties;

          (b)     any  request,  direction,  order  or  demand  of  the  Company
mentioned  herein  shall  be  sufficiently evidenced by an Officers' Certificate
(unless  other  evidence  in respect thereof be herein specifically prescribed);
and  any  Board  Resolution  may  be  evidenced to the Trustee by a copy thereof
certified  by  the  Secretary  or  an  Assistant  Secretary  of  the  Company;

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

          (d)     the  Trustee  shall  be under no obligation to exercise any of
the  rights  or  powers  vested in it by this Indenture at the request, order or
direction  of  any  of  the  Securityholders, pursuant to the provisions of this
Indenture,  unless  such  Securityholders  shall  have  offered  to  the Trustee
reasonable  security  or  indemnity  against the costs, expenses and liabilities
which  may  be  incurred  therein  or  thereby;

          (e)     the  Trustee  shall  not  be  liable  for  any action taken or
omitted  by  it  in good faith and reasonably believed by it to be authorized or
within  the  discretion or rights or powers conferred upon it by this Indenture;
nothing  contained herein shall, however, relieve the Trustee of the obligation,
upon  the  occurrence of an Event of Default with respect to the Debt Securities
(that  has  not  been  cured  or  waived)  to  exercise with respect to the Debt
Securities  such of the rights and powers vested in it by this Indenture, and to
use  the  same  degree  of care and skill in their exercise, as a prudent person
would  exercise  or  use under the circumstances in the conduct of such person's
own  affairs;

          (f)     the  Trustee shall not be bound to make any investigation into
the  facts  or  matters  stated  in  any  resolution,  certificate,  statement,
instrument,  opinion,  report,  notice, request, consent, order, approval, bond,
debenture,  coupon or other paper or document, unless requested in writing to do
so  by  the holders of not less than a majority in aggregate principal amount of
the outstanding Debt Securities affected thereby; provided, however, that if the
                                                  --------  -------
payment  within  a  reasonable  time  to  the  Trustee of the costs, expenses or
liabilities  likely to be incurred by it in the making of such investigation is,
in  the  opinion  of  the  Trustee,  not  reasonably


                                      -36-
<PAGE>
assured  to  the  Trustee  by  the  security afforded to it by the terms of this
Indenture,  the Trustee may require reasonable indemnity against such expense or
liability  as  a  condition  to  so  proceeding;  and

          (g)     the  Trustee may execute any of the trusts or powers hereunder
or  perform  any  duties  hereunder  either  directly  or  by  or through agents
(including  any Authenticating Agent) or attorneys, and the Trustee shall not be
responsible  for  any  misconduct or negligence on the part of any such agent or
attorney  appointed  by  it  with  due  care.

     SECTION 6.03.  No  Responsibility  for  Recitals,  etc.
                    ---------------------------------------

          The  recitals  contained  herein and in the Debt Securities (except in
the  certificate  of  authentication of the Trustee or the Authenticating Agent)
shall  be  taken  as  the  statements  of  the  Company  and the Trustee and the
Authenticating  Agent  assume no responsibility for the correctness of the same.
The  Trustee  and  the  Authenticating  Agent  make no representations as to the
validity or sufficiency of this Indenture or of the Debt Securities. The Trustee
and the Authenticating Agent shall not be accountable for the use or application
by  the  Company  of  any Debt Securities or the proceeds of any Debt Securities
authenticated  and  delivered  by  the  Trustee  or  the Authenticating Agent in
conformity  with  the  provisions  of  this  Indenture.

     SECTION 6.04.  Trustee,  Authenticating  Agent,  Paying  Agents,  Transfer
                    -----------------------------------------------------------
Agents  or  Registrar  May  Own  Debt  Securities.
--------------------------------------------------

          The  Trustee  or  any  Authenticating Agent or any Paying Agent or any
transfer  agent  or  any Debt Security registrar, in its individual or any other
capacity,  may  become  the  owner  or  pledgee of Debt Securities with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
transfer  agent  or  Debt  Security  registrar.

     SECTION 6.05.  Moneys  to  be  Held  in  Trust.
                    -------------------------------

          Subject to the provisions of Section 12.04, all moneys received by the
Trustee  or any Paying Agent shall, until used or applied as herein provided, be
held  in  trust  for  the  purpose for which they were received, but need not be
segregated  from  other funds except to the extent required by law.  The Trustee
and  any  Paying  Agent  shall  be  under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So  long  as  no  Event  of  Default  shall have occurred and be continuing, all
interest  allowed on any such moneys, if any, shall be paid from time to time to
the Company upon the written order of the Company, signed by the Chairman of the
Board  of  Directors,  the  President,  the  Chief  Operating  Officer,  a  Vice
President,  the  Treasurer  or  an  Assistant  Treasurer  of  the  Company.

     SECTION 6.06.  Compensation  and  Expenses  of  Trustee.
                    ----------------------------------------

          Other  than  as  provided  in  the Fee Agreement of even date herewith
between Cohen Bros. & Company, the Trustee, the Company and Delaware Trustee (as
defined  in  the  Declaration),  the  Company covenants and agrees to pay to the
Trustee  from  time  to  time,  and  the  Trustee  shall  be  entitled  to, such
compensation  as  shall  be  agreed  to  in  writing between the Company and the
Trustee  (which  shall  not  be limited by any provision of law in regard to the
compensation  of  a  trustee  of  an express trust), and the Company will pay or
reimburse  the


                                      -37-
<PAGE>
Trustee  upon  its  written  request  for  all  documented  reasonable expenses,
disbursements  and  advances  incurred or made by the Trustee in accordance with
any  of  the provisions of this Indenture (including the reasonable compensation
and  the reasonable expenses and disbursements of its counsel and of all Persons
not  regularly  in  its employ) except any such expense, disbursement or advance
that  arises  from  its negligence, willful misconduct or bad faith. The Company
also  covenants  to  indemnify  each of the Trustee (including in its individual
capacity)  and  any predecessor Trustee (and its officers, agents, directors and
employees)  for,  and  to  hold  it  harmless against, any and all loss, damage,
claim,  liability  or  expense  including  taxes  (other than taxes based on the
income of the Trustee), except to the extent such loss, damage, claim, liability
or  expense results from the negligence, willful misconduct or bad faith of such
indemnitee,  arising  out  of  or  in  connection  with  the  acceptance  or
administration  of  this  Trust,  including  the costs and expenses of defending
itself  against  any  claim or liability in the premises. The obligations of the
Company  under  this Section 6.06 to compensate and indemnify the Trustee and to
pay or reimburse the Trustee for documented expenses, disbursements and advances
shall constitute additional indebtedness hereunder. Such additional indebtedness
shall be secured by (and the Company hereby grants and pledges to the Trustee) a
lien  prior  to  that of the Debt Securities upon all property and funds held or
collected  by the Trustee as such, except funds held in trust for the benefit of
the  holders  of  particular  Debt  Securities.

          Without  prejudice  to any other rights available to the Trustee under
applicable  law,  when  the  Trustee  incurs  expenses  or  renders  services in
connection  with an Event of Default specified in subsections (e), (f) or (g) of
Section 5.01, the expenses (including the reasonable charges and expenses of its
counsel)  and  the  compensation  for  the  services  are intended to constitute
expenses  of  administration  under  any applicable federal or state bankruptcy,
insolvency  or  other  similar  law.

          The  provisions  of  this  Section  shall  survive  the resignation or
removal  of  the  Trustee  and  the  defeasance  or  other  termination  of this
Indenture.

          Notwithstanding anything in this Indenture or any Debt Security to the
contrary,  the  Trustee  shall have no obligation whatsoever to advance funds to
pay  any  principal  of or interest on or other amounts with respect to the Debt
Securities  or  otherwise  advance  funds  to  or  on  behalf  of  the  Company.

     SECTION 6.07.  Officers'  Certificate  as  Evidence.
                    ------------------------------------

          Except  as  otherwise  provided in Sections 6.01 and 6.02, whenever in
the administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting  any  action  hereunder,  such matter (unless other evidence in respect
thereof  be  herein  specifically prescribed) may, in the absence of negligence,
willful  misconduct  or  bad  faith  on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee,  and such certificate, in the absence of negligence, willful misconduct
or  bad  faith  on the part of the Trustee, shall be full warrant to the Trustee
for  any  action  taken  or omitted by it under the provisions of this Indenture
upon  the  faith  thereof.


                                      -38-
<PAGE>
     SECTION 6.08.  Eligibility  of  Trustee.
                    ------------------------

          The  Trustee  hereunder  shall at all times be a U.S. Person that is a
banking corporation or national banking association organized and doing business
under  the  laws  of the United States of America or any state thereof or of the
District  of Columbia and authorized under such laws to exercise corporate trust
powers,  having  a  combined  capital and surplus of at least fifty million U.S.
dollars  ($50,000,000)  and  subject  to  supervision or examination by federal,
state,  or  District  of  Columbia  authority.  If  such corporation or national
banking  association  publishes reports of condition at least annually, pursuant
to  law  or  to  the  requirements  of  the  aforesaid  supervising or examining
authority,  then  for the purposes of this Section 6.08 the combined capital and
surplus  of  such corporation or national banking association shall be deemed to
be  its  combined capital and surplus as set forth in its most recent records of
condition  so  published.

          The  Company  may  not,  nor  may  any  Person  directly or indirectly
controlling,  controlled  by, or under common control with the Company, serve as
Trustee,  notwithstanding  that such corporation or national banking association
shall  be  otherwise  eligible  and  qualified  under  this  Article.

          In  case  at  any  time  the  Trustee  shall  cease  to be eligible in
accordance  with  the  provisions of this Section 6.08, the Trustee shall resign
immediately  in  the  manner  and  with  the  effect  specified in Section 6.09.

          If  the Trustee has or shall acquire any "conflicting interest" within
the  meaning of Sec. 310(b) of the Trust Indenture Act, the Trustee shall either
eliminate  such interest or resign, to the extent and in the manner provided by,
and  subject  to  this  Indenture.

     SECTION 6.09.  Resignation or Removal of Trustee, Calculation Agent, Paying
                    ------------------------------------------------------------
Agent  or  Debt  Security  Registrar.
------------------------------------

          (a)     The  Trustee,  or any trustee or trustees hereafter appointed,
the  Calculation  Agent, the Paying Agent and any Debt Security Registrar may at
any  time resign by giving written notice of such resignation to the Company and
by  mailing notice thereof, at the Company's expense, to the holders of the Debt
Securities  at  their  addresses  as  they  shall  appear  on  the Debt Security
Register.  Upon receiving such notice of resignation, the Company shall promptly
appoint  a successor or successors by written instrument, in duplicate, executed
by  order  of  its  Board  of  Directors,  one copy of which instrument shall be
delivered  to the resigning party and one copy to the successor. If no successor
shall  have been so appointed and have accepted appointment within 30 days after
the  mailing  of such notice of resignation to the affected Securityholders, the
resigning  party  may  petition  any  court  of  competent  jurisdiction for the
appointment  of  a  successor,  or  any  Securityholder who has been a bona fide
holder  of  a  Debt  Security  or  Debt  Securities for at least six months may,
subject  to  the provisions of Section 5.09, on behalf of himself or herself and
all  others similarly situated, petition any such court for the appointment of a
successor.  Such  court may thereupon, after such notice, if any, as it may deem
proper  and  prescribe,  appoint  a  successor.


                                      -39-
<PAGE>
          (b)   In  case  at  any  time  any  of  the  following  shall occur:

               (1)     the  Trustee shall fail to comply  with the provisions of
          the  last  paragraph of Section 6.08 after written request therefor by
          the  Company  or by any Securityholder who has been a bona fide holder
          of  a  Debt  Security  or  Debt  Securities  for  at least six months,

               (2)     the Trustee shall cease to be eligible in accordance with
          the  provisions of Section 6.08 and shall fail to resign after written
          request  therefor  by  the  Company  or by any such Securityholder, or

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

     then,  in  any  such case, the Company may remove the Trustee and appoint a
successor  Trustee by written instrument, in duplicate, executed by order of the
Board  of  Directors,  one  copy  of  which instrument shall be delivered to the
Trustee  so  removed  and  one copy to the successor Trustee, or, subject to the
provisions of Section 5.09, if no successor Trustee shall have been so appointed
and  have  accepted  appointment within 30 days of the occurrence of any of (1),
(2)  or  (3) above, any Securityholder who has been a bona fide holder of a Debt
Security or Debt Securities for at least six months may, on behalf of himself or
herself  and  all  others  similarly  situated,  petition any court of competent
jurisdiction  for  the removal of the Trustee and the appointment of a successor
Trustee.  Such  court  may  thereupon, after such notice, if any, as it may deem
proper  and  prescribe,  remove  the  Trustee  and  appoint a successor Trustee.

          (c)     Upon  prior written notice to the Company and the Trustee, the
holders  of  a  majority in aggregate principal amount of the Debt Securities at
the time outstanding may at any time remove the Trustee and nominate a successor
Trustee,  which shall be deemed appointed as successor Trustee unless within ten
Business  Days  after such nomination the Company objects thereto, in which case
or in the case of a failure by such holders to nominate a successor Trustee, the
Trustee  so  removed  or  any  Securityholder, upon the terms and conditions and
otherwise  as  in subsection (a) of this Section 6.09 provided, may petition any
court  of  competent  jurisdiction  for  an  appointment  of  a  successor.

          (d)     Any  resignation  or  removal  of the Trustee, the Calculation
Agent,  the  Paying  Agent  and any Debt Security Registrar and appointment of a
successor  pursuant  to  any of the provisions of this Section 6.09 shall become
effective upon acceptance of appointment by the successor as provided in Section
6.10.

     SECTION 6.10.  Acceptance  by  Successor.
                    -------------------------

          Any  successor  Trustee,  Calculation  Agent,  Paying  Agent  or  Debt
Security  Registrar  appointed  as  provided  in  Section  6.09  shall  execute,
acknowledge  and  deliver  to  the  Company and to its predecessor an instrument
accepting  such  appointment hereunder, and thereupon the resignation or removal
of  the  retiring  party  shall become effective and such successor, without any
further  act,  deed  or  conveyance,  shall  become  vested with all the rights,


                                      -40-
<PAGE>
powers,  duties  and  obligations  with  respect  to  the Debt Securities of its
predecessor  hereunder,  with  like  effect  as if originally named herein; but,
nevertheless,  on  the  written  request of the Company or of the successor, the
party  ceasing to act shall, upon payment of the amounts then due it pursuant to
the  provisions  of Section 6.06, execute and deliver an instrument transferring
to  such  successor all the rights and powers of the party so ceasing to act and
shall duly assign, transfer and deliver to such successor all property and money
held  by  such  retiring  party  hereunder.  Upon reasonable request of any such
successor, the Company shall execute any and all instruments in writing for more
fully  and certainly vesting in and confirming to such successor all such rights
and powers. Any party ceasing to act shall, nevertheless, retain a lien upon all
property  or  funds held or collected to secure any amounts then due it pursuant
to  the  provisions  of  Section  6.06.

          If a successor Trustee is appointed, the Company, the retiring Trustee
and  the  successor  Trustee shall execute and deliver an indenture supplemental
hereto  which  shall  contain  such  provisions  as shall be deemed necessary or
desirable  to  confirm  that  all  the  rights, powers, trusts and duties of the
retiring Trustee with respect to the Debt Securities as to which the predecessor
Trustee  is not retiring shall continue to be vested in the predecessor Trustee,
and  shall  add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the Trust hereunder
by  more  than  one  Trustee, it being understood that nothing herein or in such
supplemental  indenture  shall  constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be Trustee of a trust or trusts hereunder
separate  and apart from any trust or trusts hereunder administered by any other
such  Trustee.

          No  successor  Trustee  shall  accept  appointment as provided in this
Section  6.10 unless at the time of such acceptance such successor Trustee shall
be  eligible  and  qualified  under  the  provisions  of  Section  6.08.

          In  no event shall a retiring Trustee, Calculation Agent, Paying Agent
or  Debt Security Registrar be liable for the acts or omissions of any successor
hereunder.

          Upon  acceptance  of  appointment  by a successor Trustee, Calculation
Agent, Paying Agent or Debt Security Registrar as provided in this Section 6.10,
the  Company  shall  mail  notice  of  the  succession  to  the  holders of Debt
Securities  at  their  addresses  as  they  shall  appear  on  the Debt Security
Register.  If  the  Company  fails  to mail such notice within ten Business Days
after  the acceptance of appointment by the successor, the successor shall cause
such  notice  to  be  mailed  at  the  expense  of  the  Company.

     SECTION 6.11.  Succession  by  Merger,  etc.
                    ----------------------------

          Any  Person  into which the Trustee may be merged or converted or with
which  it  may  be  consolidated,  or  any  Person  resulting  from  any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding  to  all  or substantially all of the corporate trust business of the
Trustee,  shall  be the successor of the Trustee hereunder without the execution
or  filing  of  any  paper  or any further act on the part of any of the parties
hereto;  provided,  that  such  Person shall be otherwise eligible and qualified
         --------
under  this  Article.


                                      -41-
<PAGE>
          In case at the time such successor to the Trustee shall succeed to the
trusts  created  by  this  Indenture  any of the Debt Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate  of authentication of any predecessor Trustee, and deliver such Debt
Securities so authenticated; and in case at that time any of the Debt Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such  Debt  Securities either in the name of any predecessor hereunder or in the
name  of  the  successor  Trustee; and in all such cases such certificates shall
have  the  full  force  which  it  is anywhere in the Debt Securities or in this
Indenture  provided  that  the  certificate of the Trustee shall have; provided,
                                                                       --------
however,  that  the  right  to  adopt  the  certificate of authentication of any
-------
predecessor  Trustee  or  authenticate  Debt  Securities  in  the  name  of  any
predecessor  Trustee  shall apply only to its successor or successors by merger,
conversion  or  consolidation.

     SECTION 6.12.  Authenticating  Agents.
                    ----------------------

          There  may  be  one  or  more  Authenticating  Agents appointed by the
Trustee  upon  the  request  of  the Company with power to act on its behalf and
subject  to  its direction in the authentication and delivery of Debt Securities
issued upon exchange or registration of transfer thereof as fully to all intents
and  purposes  as  though  any  such  Authenticating  Agent  had  been expressly
authorized  to  authenticate  and  deliver  Debt  Securities; provided, that the
Trustee  shall have no liability to the Company for any acts or omissions of the
Authenticating  Agent  with  respect  to the authentication and delivery of Debt
Securities.  Any  such  Authenticating  Agent  shall  at  all  times be a Person
organized and doing business under the laws of the United States or of any state
or  territory  thereof or of the District of Columbia authorized under such laws
to  act  as  Authenticating  Agent,  having a combined capital and surplus of at
least  $50,000,000  and  being subject to supervision or examination by federal,
state,  territorial  or District of Columbia authority. If such Person publishes
reports  of  condition  at least annually pursuant to law or the requirements of
such  authority, then for the purposes of this Section 6.12 the combined capital
and  surplus  of  such  Person  shall  be  deemed to be its combined capital and
surplus  as set forth in its most recent report of condition so published. If at
any  time  an Authenticating Agent shall cease to be eligible in accordance with
the  provisions  of  this Section, it shall resign immediately in the manner and
with  the  effect  herein  specified  in  this  Section.

          Any  Person  into  which  any  Authenticating  Agent  may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, consolidation or conversion to which any Authenticating Agent shall be a
party,  or  any  Person  succeeding to all or substantially all of the corporate
trust  business  of  any  Authenticating  Agent,  shall be the successor of such
Authenticating  Agent  hereunder, if such successor Person is otherwise eligible
under  this  Section  6.12  without  the execution or filing of any paper or any
further  act  on  the  part  of the parties hereto or such Authenticating Agent.

          Any  Authenticating  Agent  may  at  any time resign by giving written
notice  of resignation to the Trustee and to the Company. The Trustee may at any
time  terminate  the agency of any Authenticating Agent with respect to the Debt
Securities  by giving written notice of termination to such Authenticating Agent
and  to  the Company. Upon receiving such a notice of resignation or upon such a
termination,  or  in case at any time any Authenticating Agent shall cease to be
eligible  under  this Section 6.12, the Trustee may, and upon the request of the
Company  shall, promptly appoint a successor Authenticating Agent eligible under
this  Section


                                      -42-
<PAGE>
6.12,  shall  give  written  notice of such appointment to the Company and shall
mail  notice  of such appointment to all holders of Debt Securities as the names
and  addresses  of  such  holders  appear  on  the  Debt  Security Register. Any
successor  Authenticating  Agent  upon  acceptance  of its appointment hereunder
shall  become  vested  with all rights, powers, duties and responsibilities with
respect to the Debt Securities of its predecessor hereunder, with like effect as
if  originally  named  as  Authenticating  Agent  herein.

          Other  than  as  provided  in  the Fee Agreement of even date herewith
between Cohen Bros. & Company, the Company, the Trustee and Delaware Trustee (as
defined  in  the  Declaration),  the Company agrees to pay to any Authenticating
Agent  from  time  to  time  reasonable  compensation  for  its  services.  Any
Authenticating  Agent  shall  have no responsibility or liability for any action
taken  by  it as such in accordance with the directions of the Trustee and shall
receive  such reasonable indemnity as it may require against the costs, expenses
and  liabilities  incurred in furtherance of its duties under this Section 6.12.

                                   ARTICLE VII

                         CONCERNING THE SECURITYHOLDERS

     SECTION 7.01.  Action  by  Securityholders.
                    ---------------------------

          Whenever  in  this  Indenture  it  is  provided  that the holders of a
specified  percentage  in  aggregate  principal amount of the Debt Securities or
aggregate  Liquidation  Amount  of  the  Capital  Securities may take any action
(including  the  making  of  any  demand  or  request, the giving of any notice,
consent  or waiver or the taking of any other action), the fact that at the time
of  taking  any such action the holders of such specified percentage have joined
therein  may  be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by such Securityholders or holders of Capital Securities,
as  the case may be, in person or by agent or proxy appointed in writing, or (b)
by  the record of such holders of Debt Securities voting in favor thereof at any
meeting  of  such  Securityholders  duly  called and held in accordance with the
provisions  of Article VIII or of such holders of Capital Securities duly called
and  held  in  accordance  with  the  provisions of the Declaration, or (c) by a
combination  of  such  instrument  or  instruments and any such record of such a
meeting  of  such  Securityholders or holders of Capital Securities, as the case
may  be,  or  (d)  by  any  other  method  the  Trustee  deems  satisfactory.

          If  the  Company  shall  solicit from the Securityholders any request,
demand,  authorization,  direction,  notice,  consent, waiver or other action or
revocation  of  the  same,  the  Company  may, at its option, as evidenced by an
Officers' Certificate, fix in advance a record date for such Debt Securities for
the  determination  of  Securityholders  entitled  to give such request, demand,
authorization,  direction, notice, consent, waiver or other action or revocation
of the same, but the Company shall have no obligation to do so. If such a record
date  is fixed, such request, demand, authorization, direction, notice, consent,
waiver  or  other  action or revocation of the same may be given before or after
the record date, but only the Securityholders of record at the close of business
on  the  record  date  shall be deemed to be Securityholders for the purposes of
determining  whether  Securityholders of the requisite proportion of outstanding
Debt  Securities have authorized or agreed or consented to such request, demand,
authorization,  direction, notice, consent, waiver or other action or revocation
of  the  same,  and  for  that  purpose  the  outstanding


                                      -43-
<PAGE>
Debt Securities shall be computed as of the record date; provided, however, that
                                                         --------  -------
no  such  authorization,  agreement  or  consent  by such Securityholders on the
record  date shall be deemed effective unless it shall become effective pursuant
to  the  provisions of this Indenture not later than six months after the record
date.

     SECTION 7.02.  Proof  of  Execution  by  Securityholders.
                    -----------------------------------------

          Subject  to  the  provisions of Sections 6.01, 6.02 and 8.05, proof of
the  execution  of  any  instrument by a Securityholder or such Securityholder's
agent  or  proxy  shall be sufficient if made in accordance with such reasonable
rules  and  regulations as may be prescribed by the Trustee or in such manner as
shall  be satisfactory to the Trustee. The ownership of Debt Securities shall be
proved  by  the  Debt Security Register or by a certificate of the Debt Security
Registrar.  The Trustee may require such additional proof of any matter referred
to  in  this  Section  as  it  shall  deem  necessary.

          The  record  of  any  Securityholders'  meeting shall be proved in the
manner  provided  in  Section  8.06.

     SECTION 7.03.  Who  Are  Deemed  Absolute  Owners.
                    ----------------------------------

          Prior  to  due  presentment  for  registration of transfer of any Debt
Security,  the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any  transfer agent and any Debt Security registrar may deem the Person in whose
name  such  Debt Security shall be registered upon the Debt Security Register to
be,  and  may  treat  such  Person  as, the absolute owner of such Debt Security
(whether  or  not  such  Debt  Security  shall  be  overdue)  for the purpose of
receiving  payment  of  or  on account of the principal of, premium, if any, and
interest  on  such  Debt  Security  and  for all other purposes; and neither the
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.  All such payments so made to any holder for the time
being  or upon such holder's order shall be valid, and, to the extent of the sum
or  sums  so  paid,  effectual to satisfy and discharge the liability for moneys
payable  upon  any  such  Debt  Security.

     SECTION 7.04.  Debt  Securities  Owned  by  Company Deemed Not Outstanding.
                    ------------------------------------------------------------

          In  determining  whether  the  holders  of  the  requisite  aggregate
principal  amount of Debt Securities have concurred in any direction, consent or
waiver  under  this Indenture, Debt Securities which are owned by the Company or
any other obligor on the Debt Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company (other than the Trust) or any other obligor on the Debt Securities shall
be  disregarded  and  deemed  not  to be outstanding for the purpose of any such
determination;  provided,  that  for  the  purposes  of  determining whether the
                --------
Trustee  shall be protected in relying on any such direction, consent or waiver,
only  Debt  Securities which a Responsible Officer of the Trustee actually knows
are  so  owned shall be so disregarded. Debt Securities so owned which have been
pledged  in  good  faith may be regarded as outstanding for the purposes of this
Section  7.04  if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right to vote such Debt Securities and that the pledgee is not the
Company  or  any  such  other  obligor  or


                                      -44-
<PAGE>
Person  directly  or  indirectly controlling or controlled by or under direct or
indirect  common control with the Company or any such other obligor. In the case
of a dispute as to such right, any decision by the Trustee taken upon the advice
of  counsel  shall  be  full  protection  to  the  Trustee.

     SECTION 7.05.  Revocation  of  Consents;  Future  Securityholders  Bound.
                    ---------------------------------------------------------

          At any time prior to (but not after) the evidencing to the Trustee, as
provided  in  Section  7.01,  of  the taking of any action by the holders of the
percentage  in  aggregate  principal  amount of the Debt Securities specified in
this  Indenture  in  connection  with such action, any holder (in cases where no
record  date  has  been  set  pursuant  to  Section 7.01) or any holder as of an
applicable  record  date  (in cases where a record date has been set pursuant to
Section  7.01)  of  a  Debt Security (or any Debt Security issued in whole or in
part  in  exchange or substitution therefor) the serial number of which is shown
by  the evidence to be included in the Debt Securities the holders of which have
consented  to  such action may, by filing written notice with the Trustee at the
Principal Office of the Trustee and upon proof of holding as provided in Section
7.02,  revoke  such  action  so far as concerns such Debt Security (or so far as
concerns  the  principal amount represented by any exchanged or substituted Debt
Security).  Except  as aforesaid any such action taken by the holder of any Debt
Security  shall  be  conclusive and binding upon such holder and upon all future
holders  and  owners  of  such Debt Security, and of any Debt Security issued in
exchange  or  substitution  therefor  or  on  registration  of transfer thereof,
irrespective  of whether or not any notation in regard thereto is made upon such
Debt  Security or any Debt Security issued in exchange or substitution therefor.

                                  ARTICLE VIII

                            SECURITYHOLDERS' MEETINGS

     SECTION 8.01.  Purposes  of  Meetings.
                    ----------------------

          A  meeting  of Securityholders may be called at any time and from time
to time pursuant to the provisions of this Article VIII for any of the following
purposes:

          (a)     to  give  any  notice  to the Company or to the Trustee, or to
give  any directions to the Trustee, or to consent to the waiving of any default
hereunder  and  its  consequences,  or to take any other action authorized to be
taken by Securityholders pursuant to any of the provisions of Article V;

          (b)     to  remove  the  Trustee  and  nominate  a  successor  trustee
pursuant  to  the  provisions  of  Article  VI;

          (c)     to  consent  to  the  execution  of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.02; or

          (d)     to  take  any  other  action  authorized  to be taken by or on
behalf  of  the holders of any specified aggregate principal amount of such Debt
Securities  under any other provision of this Indenture or under applicable law.


                                      -45-
<PAGE>
     SECTION 8.02.  Call  of  Meetings  by  Trustee.
                    -------------------------------

          The  Trustee may at any time call a meeting of Securityholders to take
any  action specified in Section 8.01, to be held at such time and at such place
in  Chicago, Illinois as the Trustee shall determine. Notice of every meeting of
the Securityholders, setting forth the time and the place of such meeting and in
general  terms  the action proposed to be taken at such meeting, shall be mailed
to  holders  of Debt Securities affected at their addresses as they shall appear
on  the  Debt  Securities Register. Such notice shall be mailed not less than 20
nor more than 180 days prior to the date fixed for the meeting.

     SECTION 8.03.  Call  of  Meetings  by  Company  or  Securityholders.
                    ----------------------------------------------------

          In case at any time the Company pursuant to a Board Resolution, or the
holders of at least 10% in aggregate principal amount of the Debt Securities, as
the  case  may  be, then outstanding, shall have requested the Trustee to call a
meeting  of  Securityholders,  by  written  request  setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have  mailed  the  notice  of  such meeting within 20 days after receipt of such
request, then the Company or such Securityholders may determine the time and the
place  in  for  such  meeting  and  may  call  such  meeting  to take any action
authorized  in  Section  8.01,  by mailing notice thereof as provided in Section
8.02.

     SECTION 8.04.  Qualifications  for  Voting.
                    ---------------------------

          To  be  entitled  to  vote  at any meeting of Securityholders a Person
shall  be  (a) a holder of one or more Debt Securities with respect to which the
meeting  is  being held or (b) a Person appointed by an instrument in writing as
proxy  by  a  holder  of  one or more such Debt Securities. The only Persons who
shall  be  entitled  to be present or to speak at any meeting of Securityholders
shall  be the Persons entitled to vote at such meeting and their counsel and any
representatives  of  the  Trustee and its counsel and any representatives of the
Company  and  its  counsel.

     SECTION 8.05.  Regulations.
                    -----------

          Notwithstanding  any  other  provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Securityholders, in regard to proof of the holding of Debt Securities and of the
appointment  of  proxies,  and  in  regard  to  the  appointment  and  duties of
inspectors of votes, the submission and examination of proxies, certificates and
other  evidence  of  the  right  to  vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate.

          The  Trustee  shall,  by an instrument in writing, appoint a temporary
chairman  of  the  meeting,  unless  the  meeting  shall have been called by the
Company  or  by  Securityholders  as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like  manner  appoint a temporary chairman. A permanent chairman and a permanent
secretary  of  the  meeting  shall  be  elected by majority vote at the meeting.

          Subject  to the provisions of Section 7.04, at any meeting each holder
of  Debt  Securities  with  respect to which such meeting is being held or proxy
therefor  shall  be  entitled  to


                                      -46-
<PAGE>
one vote for each $1,000 principal amount of Debt Securities held or represented
by  such holder; provided, however, that no vote shall be cast or counted at any
                 --------  -------
meeting  in respect of any Debt Security challenged as not outstanding and ruled
by  the  chairman  of  the  meeting  to  be not outstanding. The chairman of the
meeting shall have no right to vote other than by virtue of Debt Securities held
by  such  chairman  or instruments in writing as aforesaid duly designating such
chairman  as  the Person to vote on behalf of other Securityholders. Any meeting
of  Securityholders  duly  called  pursuant to the provisions of Section 8.02 or
8.03  may be adjourned from time to time by a majority of those present, whether
or  not  constituting  a  quorum,  and  the  meeting may be held as so adjourned
without  further  notice.

     SECTION 8.06.  Voting.
                    ------

          The  vote  upon  any resolution submitted to any meeting of holders of
Debt  Securities  with  respect  to which such meeting is being held shall be by
written  ballots  on which shall be subscribed the signatures of such holders or
of  their  representatives by proxy and the serial number or numbers of the Debt
Securities  held  or  represented by them. The permanent chairman of the meeting
shall  appoint  two  inspectors  of  votes who shall count all votes cast at the
meeting  for  or  against  any  resolution  and who shall make and file with the
secretary  of  the  meeting  their verified written reports in triplicate of all
votes  cast  at  the  meeting.  A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes  on any vote by ballot taken thereat and affidavits by one or more Persons
having  knowledge of the facts setting forth a copy of the notice of the meeting
and  showing that said notice was mailed as provided in Section 8.02. The record
shall  show  the  serial  numbers  of  the Debt Securities voting in favor of or
against  any  resolution.  The  record  shall  be  signed  and  verified  by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates  shall be delivered to the Company and the other to the Trustee to be
preserved  by the Trustee, the latter to have attached thereto the ballots voted
at  the meeting.  Any record so signed and verified shall be conclusive evidence
of  the  matters  therein  stated.

     SECTION 8.07.  Quorum;  Actions.
                    ----------------

          The  Persons  entitled  to  vote  a  majority in outstanding principal
amount  of  the  Debt  Securities  shall  constitute  a  quorum for a meeting of
Securityholders;  provided,  however,  that if any action is to be taken at such
                  --------   -------
meeting  with  respect  to  a  consent,  waiver,  request,  demand,  notice,
authorization,  direction  or  other action which may be given by the holders of
not less than a specified percentage in outstanding principal amount of the Debt
Securities,  the  Persons  holding  or representing such specified percentage in
outstanding principal amount of the Debt Securities will constitute a quorum. In
the  absence  of  a  quorum within 30 minutes of the time appointed for any such
meeting,  the  meeting  shall, if convened at the request of Securityholders, be
dissolved.  In  any  other case the meeting may be adjourned for a period of not
less  than  10 days as determined by the permanent chairman of the meeting prior
to  the  adjournment  of  such  meeting.  In the absence of a quorum at any such
adjourned  meeting, such adjourned meeting may be further adjourned for a period
of  not less than 10 days as determined by the permanent chairman of the meeting
prior to the adjournment of such adjourned meeting. Notice of the reconvening of
any  adjourned  meeting  shall be given as provided in Section 8.02, except that
such notice need be given only once not less than five days prior to the date on
which


                                      -47-
<PAGE>
the  meeting  is  scheduled  to  be  reconvened. Notice of the reconvening of an
adjourned  meeting  shall  state expressly the percentage, as provided above, of
the outstanding principal amount of the Debt Securities which shall constitute a
quorum.

          Except  as  limited  by  the proviso in the first paragraph of Section
9.02, any resolution presented to a meeting or adjourned meeting duly reconvened
at which a quorum is present as aforesaid may be adopted by the affirmative vote
of  the  holders  of not less than a majority in outstanding principal amount of
the  Debt  Securities; provided, however, that, except as limited by the proviso
                       --------  -------
in  the  first  paragraph  of  Section  9.02, any resolution with respect to any
consent,  waiver,  request,  demand,  notice,  authorization, direction or other
action that this Indenture expressly provides may be given by the holders of not
less  than  a  specified  percentage in outstanding principal amount of the Debt
Securities  may  be adopted at a meeting or an adjourned meeting duly reconvened
and  at  which  a quorum is present as aforesaid only by the affirmative vote of
the  holders of not less than such specified percentage in outstanding principal
amount  of  the  Debt  Securities.

          Any  resolution  passed or decision taken at any meeting of holders of
Debt  Securities  duly  held in accordance with this Section shall be binding on
all  the  Securityholders, whether or not present or represented at the meeting.

     SECTION 8.08.  Written  Consent  Without  a  Meeting.
                    -------------------------------------

         Whenever  under  this  Indenture,  Securityholders  are  required  or
permitted to take any action by vote, such action may be taken without a meeting
on  written  consent,  setting  forth  the  action  so  taken,  signed  by  the
Securityholders  of all outstanding Debt Securities entitled to vote thereon. No
consent shall be effective to take the action referred to therein unless, within
sixty  days  of  the  earliest dated consent delivered in the manner required by
this paragraph to the Trustee, written consents signed by a sufficient number of
Securityholders  to  take  action  are delivered to the Trustee at its Principal
Office.  Delivery  made to the Trustee at its Principal Office, shall be by hand
or by certificated or registered mail, return receipt requested. Written consent
thus  given  by  the  Securityholders  of  such  number of Debt Securities as is
required  hereunder,  shall  have  the  same  effect  as  a  valid  vote  of
Securityholders of such number of Debt Securities.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

     SECTION 9.01.  Supplemental  Indentures without Consent of Securityholders.
                    ------------------------------------------------------------

          The  Company,  when  authorized by a Board Resolution, and the Trustee
may  from  time  to  time  and at any time enter into an indenture or indentures
supplemental hereto, without the consent of the Securityholders, for one or more
of  the  following  purposes:

          (a)     to  evidence  the succession of another Person to the Company,
or  successive  successions,  and  the assumption by the successor Person of the
covenants,  agreements  and  obligations  of the Company, pursuant to Article XI
hereof;


                                      -48-
<PAGE>
          (b)     to add to the covenants of the Company such further covenants,
restrictions  or conditions for the protection of the holders of Debt Securities
as the Board of Directors shall consider to be for the protection of the holders
of  such  Debt  Securities,  and  to  make the occurrence, or the occurrence and
continuance,  of  a Default in any of such additional covenants, restrictions or
conditions a Default or an Event of Default permitting the enforcement of all or
any  of  the  several  remedies  provided in this Indenture as herein set forth;
provided,  however, that in respect of any such additional covenant, restriction
--------   -------
or  condition such supplemental indenture may provide for a particular period of
grace  after default (which period may be shorter or longer than that allowed in
the  case  of  other  defaults) or may provide for an immediate enforcement upon
such  default  or  may  limit  the  remedies  available to the Trustee upon such
default;

          (c)     to  cure  any  ambiguity  or  to  correct  or  supplement  any
provision  contained  herein  or  in  any  supplemental  indenture  which may be
defective  or  inconsistent  with any other provision contained herein or in any
supplemental  indenture,  or to make or amend such other provisions in regard to
matters  or  questions  arising  under  this  Indenture; provided, that any such
                                                         --------
action  shall  not  adversely  affect  the  interests of the holders of the Debt
Securities;

          (d)     to  add  to,  delete  from,  or  revise  the  terms  of  Debt
Securities,  including,  without limitation, any terms relating to the issuance,
exchange,  registration or transfer of Debt Securities, including to provide for
transfer  procedures  and restrictions substantially similar to those applicable
to the Capital Securities, as required by Section 2.05 (for purposes of assuring
that  no registration of Debt Securities is required under the Securities Act of
1933, as amended); provided, that any such action shall not adversely affect the
interests  of  the  holders  of  the  Debt Securities then outstanding (it being
understood,  for  purposes  of  this proviso, that transfer restrictions on Debt
Securities substantially similar to those applicable to Capital Securities shall
not  be  deemed  to  adversely  affect  the  holders  of  the  Debt Securities);

          (e)     to  evidence  and  provide  for  the acceptance of appointment
hereunder  by a successor Trustee with respect to the Debt Securities and to add
to  or  change  any of the provisions of this Indenture as shall be necessary to
provide  for  or  facilitate  the administration of the trusts hereunder by more
than  one  Trustee,  pursuant  to  the  requirements  of  Section  6.10;

          (f)     to  make  any change (other than as elsewhere provided in this
paragraph)  that  does  not adversely affect the rights of any Securityholder in
any  material  respect;  or

          (g)     to  provide  for  the  issuance  of and establish the form and
terms  and  conditions  of  the  Debt  Securities,  to establish the form of any
certifications  required to be furnished pursuant to the terms of this Indenture
or  the  Debt  Securities,  or  to  add  to  the  rights  of the holders of Debt
Securities.

          The  Trustee  is  hereby  authorized  to  join with the Company in the
execution  of  any  such supplemental indenture, to make any further appropriate
agreements  and  stipulations  which  may be therein contained and to accept the
conveyance,  transfer and assignment of any property thereunder, but the Trustee
shall  not  be  obligated  to,  but  may  in its discretion, enter into any such
supplemental  indenture  which  affects  the  Trustee's  own  rights,  duties or
immunities  under  this  Indenture  or  otherwise.


                                      -49-
<PAGE>
          Any  supplemental  indenture  authorized  by  the  provisions  of this
Section  9.01 may be executed by the Company and the Trustee without the consent
of  the  holders  of  any  of  the  Debt  Securities  at  the  time outstanding,
notwithstanding  any  of  the  provisions  of  Section  9.02.

     SECTION 9.02.  Supplemental  Indentures  with  Consent  of Securityholders.
                    ------------------------------------------------------------

          With  the  consent  (evidenced  as  provided  in  Section 7.01) of the
holders  of  not  less than a majority in aggregate principal amount of the Debt
Securities  at the time outstanding affected by such supplemental indenture, the
Company, when authorized by a Board Resolution, and the Trustee may from time to
time  and  at any time enter into an indenture or indentures supplemental hereto
(which  shall  conform  to  the  provisions  of the Trust Indenture Act, then in
effect, applicable to indentures qualified thereunder) for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this 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 without such consent of the holders of each
Debt Security then outstanding and affected thereby (i) change the Maturity Date
of  any  Debt  Security,  or  reduce the principal amount thereof or any premium
thereon, or reduce the rate (or manner of calculation of the rate) or extend the
time  of  payment  of interest thereon, or reduce (other than as a result of the
maturity  or earlier redemption of any such Debt Security in accordance with the
terms  of  this  Indenture  and  such  Debt  Security) or increase the aggregate
principal  amount  of  Debt  Securities  then  outstanding, or change any of the
redemption  provisions, or make the principal thereof or any interest or premium
thereon  payable  in  any  coin or currency other than United States Dollars, or
impair  or  affect the right of any Securityholder to institute suit for payment
thereof  or  impair the right of repayment, if any, at the option of the holder,
or  (ii) reduce the aforesaid percentage of Debt Securities the holders of which
are  required  to  consent  to  any  such  supplemental indenture; and provided,
                                                                       --------
further,  that if the Debt Securities are held by the Trust or a trustee of such
-------
trust, such supplemental indenture shall not be effective until the holders of a
majority  in Liquidation Amount of the outstanding Capital Securities shall have
consented to such supplemental indenture; provided, further, that if the consent
                                          --------  -------
of  the  Securityholder  of  each  outstanding  Debt  Security is required, such
supplemental  indenture  shall  not  be  effective  until  each  holder  of  the
outstanding  Capital  Securities  shall  have  consented  to  such  supplemental
indenture.

          Upon  the  request  of  the  Company accompanied by a Board Resolution
authorizing  the  execution  of  any  such  supplemental indenture, and upon the
filing  with  the  Trustee  of  evidence  of the consent of Securityholders (and
holders of Capital Securities, if required) as aforesaid, the Trustee shall join
with  the  Company  in  the execution of such supplemental indenture unless such
supplemental  indenture  affects  the Trustee's own rights, duties or immunities
under  this  Indenture  or  otherwise,  in  which  case  the  Trustee may in its
discretion,  but  shall  not  be  obligated  to,  enter  into  such supplemental
indenture.

          Promptly  after  the  execution  by the Company and the Trustee of any
supplemental  indenture  pursuant to the provisions of this Section, the Trustee
shall  transmit  by mail, first class postage prepaid, a notice, prepared by the
Company,  setting  forth  in  general  terms  the substance of such supplemental
indenture,  to  the Securityholders as their names and addresses appear upon the
Debt  Security  Register.  Any  failure  of  the  Trustee  to  mail such notice,


                                      -50-
<PAGE>
or  any  defect  therein,  shall  not,  however, in any way impair or affect the
validity  of  any  such  supplemental  indenture.

          It shall not be necessary for the consent of the Securityholders under
this  Section  9.02  to approve the particular form of any proposed supplemental
indenture,  but  it  shall  be  sufficient  if  such  consent  shall approve the
substance  thereof.

     SECTION 9.03.  Effect  of  Supplemental  Indentures.
                    ------------------------------------

          Upon  the  execution  of  any  supplemental  indenture pursuant to the
provisions  of  this  Article  IX,  this  Indenture shall be and be deemed to be
modified  and  amended  in  accordance  therewith  and  the  respective  rights,
limitations  of  rights, obligations, duties and immunities under this Indenture
of  the Trustee, the Company and the holders of Debt Securities shall thereafter
be  determined, exercised and enforced hereunder subject in all respects to such
modifications  and  amendments  and  all  the  terms  and conditions of any such
supplemental  indenture  shall  be  and  be  deemed  to be part of the terms and
conditions  of  this  Indenture  for  any  and  all  purposes.

     SECTION 9.04.  Notation  on  Debt  Securities.
                    ------------------------------

          Debt Securities authenticated and delivered after the execution of any
supplemental  indenture pursuant to the provisions of this Article IX may bear a
notation  as  to  any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debt Securities so modified as to
conform,  in  the  opinion  of  the  Board  of  Directors of the Company, to any
modification  of this Indenture contained in any such supplemental indenture may
be  prepared  and  executed  by the Company, authenticated by the Trustee or the
Authenticating  Agent  and  delivered  in  exchange for the Debt Securities then
outstanding.

     SECTION 9.05.  Evidence  of  Compliance  of  Supplemental  Indenture  to be
                    ------------------------------------------------------------
furnished  to  Trustee.
-----------------------

          The  Trustee,  subject  to  the  provisions of Sections 6.01 and 6.02,
shall,  in  addition  to  the  documents  required  by Section 14.06, receive an
Officers'  Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental  indenture  executed pursuant hereto complies with the requirements
of  this  Article  IX.  The  Trustee  shall  receive  an  Opinion  of Counsel as
conclusive  evidence  that  any supplemental indenture executed pursuant to this
Article  IX  is  authorized  or permitted by, and conforms to, the terms of this
Article  IX  and  that it is proper for the Trustee under the provisions of this
Article  IX  to  join  in  the  execution  thereof.

                                    ARTICLE X

                            REDEMPTION OF SECURITIES

     SECTION 10.01.  Optional  Redemption.
                     --------------------

          At  any  time the Company shall have the right, 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  such  regulatory


                                      -51-
<PAGE>
authority, to redeem the Debt Securities, in whole or (provided that all accrued
and  unpaid  interest  has  been  paid  on  all Debt Securities for all Interest
Periods  terminating on or prior to such date) from time to time in part, on any
March  15,  June  15, September 15 or December 15 on or after June 15, 2011 (the
"Redemption  Date"),  at  the  Redemption  Price.

     SECTION 10.02.  Special  Event  Redemption.
                     --------------------------

          If  a  Special  Event shall occur and be continuing, the Company shall
have the right, 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 such regulatory
authority,  to  redeem  the  Debt  Securities,  in whole or in part, at any time
within  90  days  following  the  occurrence of such Special Event (the "Special
Redemption  Date"),  at  the  Special  Redemption  Price.

     SECTION 10.03.  Notice  of  Redemption;  Selection  of  Debt  Securities.
                     --------------------------------------------------------

          In  case the Company shall desire to exercise the right to redeem all,
or, as the case may be, any part of the Debt Securities, it shall fix a date for
redemption  and  shall mail, or cause the Trustee to mail (at the expense of the
Company) a notice of such redemption at least 30 and not more than 60 days prior
to  the  date  fixed  for  redemption to the holders of Debt Securities so to be
redeemed as a whole or in part at their last addresses as the same appear on the
Debt Security Register. Such mailing shall be by first class mail. The notice if
mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the holder receives such notice. In any case, failure
to  give  such  notice  by mail or any defect in the notice to the holder of any
Debt  Security  designated for redemption as a whole or in part shall not affect
the  validity  of the proceedings for the redemption of any other Debt Security.

          Each such notice of redemption shall specify the CUSIP number, if any,
of  the  Debt  Securities  to  be  redeemed,  the date fixed for redemption, the
redemption  price  (or  manner  of  calculation  of  the  price)  at  which Debt
Securities are to be redeemed, the place or places of payment, that payment will
be  made  upon presentation and surrender of such Debt Securities, that interest
accrued  to  the  date  fixed  for  redemption will be paid as specified in said
notice,  and  that  on  and  after said date interest thereon or on the portions
thereof  to  be  redeemed  will  cease  to  accrue.  If  less  than all the Debt
Securities are to be redeemed the notice of redemption shall specify the numbers
of  the  Debt  Securities  to be redeemed. In case the Debt Securities are to be
redeemed  in  part only, the notice of redemption shall state the portion of the
principal  amount  thereof  to be redeemed and shall state that on and after the
date  fixed  for  redemption,  upon  surrender of such Debt Security, a new Debt
Security  or Debt Securities in principal amount equal to the unredeemed portion
thereof  will  be  issued.

          On  the  Business  Day  prior  to  the  Redemption Date or the Special
Redemption  Date specified in the notice of redemption given as provided in this
Section,  the  Company  will deposit with the Trustee or with one or more Paying
Agents  an  amount  of money sufficient to redeem on the redemption date all the
Debt  Securities  so  called for redemption at the appropriate redemption price,
together  with  unpaid  interest  accrued  to  such  date.


                                      -52-
<PAGE>
          The  Company  will  give  the Trustee notice not less than 45 nor more
than  60  days  prior to the Redemption Date as to the Redemption Price at which
the  Debt  Securities  are  to be redeemed and the aggregate principal amount of
Debt  Securities  to be redeemed and the Trustee shall select, in such manner as
in  its  sole discretion it shall deem appropriate and fair, the Debt Securities
or  portions  thereof  (in  integral  multiples  of  $1,000)  to  be  redeemed.

     SECTION 10.04.  Payment  of  Debt  Securities  Called  for  Redemption.
                     ------------------------------------------------------

          If  notice  of redemption has been given as provided in Section 10.03,
the  Debt  Securities  or portions of Debt Securities with respect to which such
notice has been given shall become due and payable on the Redemption Date or the
Special  Redemption  Date (as the case may be) and at the place or places stated
in  such  notice  at  the  applicable  redemption  price, together with interest
accrued  to the date fixed for redemption, and on and after said Redemption Date
or  the Special Redemption Date (unless the Company shall default in the payment
of  such  Debt Securities at the redemption price, together with unpaid interest
accrued  thereon  to  said  date) interest on the Debt Securities or portions of
Debt  Securities so called for redemption shall cease to accrue. On presentation
and  surrender  of  such Debt Securities at a place of payment specified in said
notice, such Debt Securities or the specified portions thereof shall be paid and
redeemed by the Company at the applicable redemption price, together with unpaid
interest  accrued  thereon to the Redemption Date or the Special Redemption Date
(as  the  case  may  be).

          Upon  presentation  of  any  Debt  Security redeemed in part only, the
Company  shall execute and the Trustee shall authenticate and make available for
delivery  to  the  holder  thereof,  at  the  expense of the Company, a new Debt
Security  or  Debt  Securities  of  authorized denominations in principal amount
equal  to  the  unredeemed  portion  of  the  Debt  Security  so  presented.

                                   ARTICLE XI

                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

     SECTION 11.01.  Company  May  Consolidate,  etc.,  on  Certain  Terms.
                     -----------------------------------------------------

          Nothing  contained  in  this Indenture or in the Debt Securities shall
prevent  any  consolidation  or  merger  of  the  Company with or into any other
corporation  or  corporations  (whether  or  not affiliated with the Company) or
successive  consolidations  or  mergers in which the Company or its successor or
successors  shall  be a party or parties, or shall prevent any sale, conveyance,
transfer  or  other  disposition  of all or substantially all of the property or
capital  stock  of  the  Company  or  its  successor  or successors to any other
corporation  (whether  or  not  affiliated with the Company, or its successor or
successors)  authorized to acquire and operate the same; provided, however, that
                                                         --------  -------
the  Company  hereby covenants and agrees that, (i) upon any such consolidation,
merger  (where  the Company is not the surviving corporation), sale, conveyance,
transfer  or  other  disposition,  the  successor  entity shall be a corporation
organized  and existing under the laws of the United States or any state thereof
or  the District of Columbia (unless such corporation has (1) agreed to make all
payments  due  in respect of the Debt Securities or, if outstanding, the Capital
Securities  and  Capital  Securities  Guarantee without withholding or deduction
for,  or  on  account  of,  any taxes, duties, assessments or other governmental
charges


                                      -53-
<PAGE>
under  the  laws or regulations of the jurisdiction of organization or residence
(for  tax  purposes)  of such corporation or any political subdivision or taxing
authority  thereof  or  therein unless required by applicable law, in which case
such  corporation  shall  have agreed to pay such additional amounts as shall be
required  so  that  the net amounts received and retained by the holders of such
Debt  Securities or Capital Securities, as the case may be, after payment of all
taxes  (including  withholding taxes), duties, assessments or other governmental
charges,  will be equal to the amounts that such holders would have received and
retained had no such taxes (including withholding taxes), duties, assessments or
other  governmental  charges  been  imposed, (2) irrevocably and unconditionally
consented  and  submitted to the jurisdiction of any United States federal court
or  New  York state court, in each case located in The City of New York, Borough
of  Manhattan,  in  respect of any action, suit or proceeding against it arising
out  of  or  in connection with this Indenture, the Debt Securities, the Capital
Securities  Guarantee  or  the  Declaration  and irrevocably and unconditionally
waived,  to  the fullest extent permitted by law, any objection to the laying of
venue  in  any  such  court or that any such action, suit or proceeding has been
brought  in  an inconvenient forum and (3) irrevocably appointed an agent in The
City  of  New  York  for  service  of  process in any action, suit or proceeding
referred  to  in clause (2) above) and such corporation expressly assumes all of
the  obligations  of  the Company under the Debt Securities, this Indenture, the
Capital Securities Guarantee and the Declaration and (ii) after giving effect to
any such consolidation, merger, sale, conveyance, transfer or other disposition,
no  Default  or  Event  of  Default  shall  have  occurred  and  be  continuing.

     SECTION 11.02.  Successor  Entity  to  be  Substituted.
                     --------------------------------------

          In  case of any such consolidation, merger, sale, conveyance, transfer
or  other  disposition  contemplated in Section 11.01 and upon the assumption by
the  successor  entity, by supplemental indenture, executed and delivered to the
Trustee  and  reasonably  satisfactory  in  form  to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the  Debt  Securities and the due and punctual performance and observance of all
of the covenants and conditions of this Indenture to be performed or observed by
the  Company,  such successor entity shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the Company, and
thereupon  the  predecessor entity shall be relieved of any further liability or
obligation  hereunder  or  upon  the  Debt  Securities.  Such  successor  entity
thereupon may cause to be signed, and may issue either in its own name or in the
name  of the Company, any or all of the Debt Securities issuable hereunder which
theretofore  shall  not  have  been  signed  by the Company and delivered to the
Trustee  or  the  Authenticating  Agent;  and,  upon the order of such successor
entity  instead  of  the  Company  and  subject to all the terms, conditions and
limitations  in  this  Indenture  prescribed,  the Trustee or the Authenticating
Agent  shall authenticate and deliver any Debt Securities which previously shall
have been signed and delivered by the officers of the Company, to the Trustee or
the  Authenticating Agent for authentication, and any Debt Securities which such
successor  entity  thereafter  shall  cause  to  be  signed and delivered to the
Trustee or the Authenticating Agent for that purpose. All the Debt Securities so
issued  shall  in  all  respects have the same legal rank and benefit under this
Indenture  as the Debt Securities theretofore or thereafter issued in accordance
with  the terms of this Indenture as though all of such Debt Securities had been
issued  at  the  date  of  the  execution  hereof.


                                      -54-
<PAGE>
     SECTION 11.03.  Opinion  of  Counsel  to  be  Given  to  Trustee.
                     ------------------------------------------------

          The  Trustee,  subject  to  the  provisions of Sections 6.01 and 6.02,
shall  receive,  in addition to the Opinion of Counsel required by Section 9.05,
an  Opinion  of  Counsel  as conclusive evidence that any consolidation, merger,
sale,  conveyance,  transfer or other disposition, and any assumption, permitted
or required by the terms of this Article XI complies with the provisions of this
Article  XI.

                                   ARTICLE XII

                     SATISFACTION AND DISCHARGE OF INDENTURE

     SECTION 12.01.  Discharge  of  Indenture.
                     ------------------------

          When (a) the Company shall deliver to the Trustee for cancellation all
Debt  Securities theretofore authenticated (other than any Debt Securities which
shall  have been destroyed, lost or stolen and which shall have been replaced or
paid  as  provided in Section 2.06) and not theretofore canceled, or (b) all the
Debt  Securities  not  theretofore  canceled  or  delivered  to  the Trustee for
cancellation  shall have become due and payable, or are by their terms to become
due  and  payable  within one year or are to be called for redemption within one
year  under arrangements satisfactory to the Trustee for the giving of notice of
redemption,  and  the  Company  shall deposit with the Trustee, in trust, funds,
which  shall  be  immediately  due and payable, sufficient to pay at maturity or
upon redemption all of the Debt Securities (other than any Debt Securities which
shall  have been destroyed, lost or stolen and which shall have been replaced or
paid  as  provided in Section 2.06) not theretofore canceled or delivered to the
Trustee  for cancellation, including principal and premium, if any, and interest
due  or  to  become due to such date of maturity or redemption date, as the case
may  be,  but  excluding,  however,  the amount of any moneys for the payment of
principal  of,  and  premium,  if  any,  or  interest on the Debt Securities (1)
theretofore  repaid  to the Company in accordance with the provisions of Section
12.04,  or  (2) paid to any state or to the District of Columbia pursuant to its
unclaimed  property  or similar laws, and if in the case of either clause (a) or
clause (b) the Company shall also pay or cause to be paid all other sums payable
hereunder  by  the  Company,  then  this  Indenture shall cease to be of further
effect except for the provisions of Sections 2.05, 2.06, 3.01, 3.02, 3.04, 6.06,
6.09  and  12.04  hereof,  which  shall survive until such Debt Securities shall
mature  or  are  redeemed, as the case may be, and are paid in full. Thereafter,
Sections  6.06,  6.09 and 12.04 shall survive, and the Trustee, on demand of the
Company  accompanied by an Officers' Certificate and an Opinion of Counsel, each
stating  that  all  conditions  precedent  herein  provided  for relating to the
satisfaction and discharge of this Indenture have been complied with, and at the
cost  and expense of the Company, shall execute proper instruments acknowledging
satisfaction  of  and  discharging  this Indenture, the Company, however, hereby
agreeing  to  reimburse  the  Trustee  for  any  costs  or  expenses  thereafter
reasonably  and  properly  incurred  by  the  Trustee  in  connection  with this
Indenture  or  the  Debt  Securities.

     SECTION 12.02.  Deposited  Moneys  to  be  Held  in  Trust  by  Trustee.
                     -------------------------------------------------------

          Subject  to the provisions of Section 12.04, all moneys deposited with
the  Trustee  pursuant to Section 12.01 shall be held in trust and applied by it
to  the  payment,  either  directly  or


                                      -55-
<PAGE>
through  any  Paying  Agent  (including  the Company if acting as its own Paying
Agent),  to  the  holders  of  the particular Debt Securities for the payment of
which  such  moneys have been deposited with the Trustee, of all sums due and to
become  due  thereon  for  principal,  and  premium,  if  any,  and  interest.

     SECTION 12.03.  Paying  Agent  to  Repay  Moneys  Held.
                     --------------------------------------

          Upon the satisfaction and discharge of this Indenture, all moneys then
held  by any Paying Agent of the Debt Securities (other than the Trustee) shall,
upon demand of the Company, be repaid to the Company or paid to the Trustee, and
thereupon  such  Paying  Agent shall be released from all further liability with
respect  to  such  moneys.

     SECTION 12.04.  Return  of  Unclaimed  Moneys.
                     -----------------------------

          Any  moneys  deposited with or paid to the Trustee or any Paying Agent
for  payment  of  the  principal  of,  and  premium, if any, or interest on Debt
Securities  and  not  applied  but  remaining  unclaimed  by the holders of Debt
Securities  for  two  years  after  the  date  upon  which the principal of, and
premium,  if any, or interest on such Debt Securities, as the case may be, shall
have  become  due  and payable, shall be repaid to the Company by the Trustee or
such  Paying  Agent  on  written  demand;  and  the  holder  of  any of the Debt
Securities  shall thereafter look only to the Company for any payment which such
holder  may  be  entitled  to  collect  and all liability of the Trustee or such
Paying  Agent  with  respect  to  such  moneys  shall  thereupon  cease.

                                  ARTICLE XIII

         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

     SECTION 13.01.  Indenture and Debt Securities Solely Corporate Obligations.
                     ----------------------------------------------------------

          No recourse for the payment of the principal of or premium, if any, or
interest  on  any  Debt Security, or for any claim based thereon or otherwise in
respect  thereof,  and  no  recourse  under  or upon any obligation, covenant or
agreement  of the Company in this Indenture or in any supplemental indenture, or
in  any  such  Debt  Security,  or  because  of the creation of any indebtedness
represented  thereby,  shall  be  had  against  any  incorporator,  stockholder,
officer,  director,  employee or agent, as such, past, present or future, of the
Company  or  of  any predecessor or successor corporation of the Company, either
directly  or  through  the  Company or any successor corporation 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; it being expressly
understood  that all such liability is hereby expressly waived and released as a
condition  of,  and  as a consideration for, the execution of this Indenture and
the  issue  of  the  Debt  Securities.


                                      -56-
<PAGE>
                                   ARTICLE XIV

                            MISCELLANEOUS PROVISIONS

     SECTION 14.01.  Successors.
                     ----------

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

     SECTION 14.02.  Official  Acts  by  Successor  Entity.
                     -------------------------------------

          Any act or proceeding by any provision of this Indenture authorized or
required  to  be  done  or  performed  by any board, committee or officer of the
Company  shall  and  may be done and performed with like force and effect by the
like  board,  committee,  officer  or other authorized Person of any entity that
shall  at  the  time  be  the  lawful  successor  of  the  Company.

     SECTION 14.03.  Surrender  of  Company  Powers.
                     ------------------------------

          The  Company  by  instrument  in  writing executed by authority of 2/3
(two-thirds)  of  its  Board  of  Directors  and  delivered  to  the Trustee may
surrender  any of the powers reserved to the Company and thereupon such power so
surrendered  shall  terminate  both  as  to  the Company and as to any permitted
successor.

     SECTION 14.04.  Addresses  for  Notices,  etc.
                     -----------------------------

          Any  notice  or  demand  which  by  any provision of this Indenture is
required  or  permitted  to  be  given  or  served  by  the  Trustee  or  by the
Securityholders on the Company may be given or served in writing, duly signed by
the  party  giving  such  notice,  and  shall  be  delivered by facsimile (which
telecopy shall be followed by notice delivered or mailed by first class mail) or
mailed  by  first  class  mail  to  the  Company  at:

                     Southeastern Bank Financial Corporation
                                3530 Wheeler Road
                             Augusta, Georgia 30909
                          Attention:  Ronald L. Thigpen

          Any  notice, direction, request or demand by any Securityholder or the
Company  to  or upon the Trustee shall be deemed to have been sufficiently given
or  made, for all purposes, if given or made in writing at the office of LaSalle
Bank  National  Association  at:

                      135 South LaSalle Street, Suite 1511
                             Chicago, Illinois 60603
      Attn: CDO Trust Services Group - Southeastern Bank Financial Trust II


                                      -57-
<PAGE>
     SECTION 14.05.  Governing  Law.
                     --------------

          This  Indenture and the Debt Securities shall each be governed by, and
construed  in accordance with, the laws of the State of New York, without regard
to  conflict  of  laws principles of said State other than Section 5-1401 of the
New  York  General  Obligations  Law.

     SECTION 14.06.  Evidence  of  Compliance  with  Conditions  Precedent.
                     -----------------------------------------------------

          Upon  any  application or demand by the Company to the Trustee to take
any  action  under  any  of  the provisions of this Indenture, the Company shall
furnish  to  the Trustee an Officers' Certificate stating that in the opinion of
the  signers  all  conditions  precedent, if any, provided for in this Indenture
relating  to  the  proposed  action  have  been  complied with and an Opinion of
Counsel  stating  that,  in  the  opinion  of  such counsel, all such conditions
precedent  have  been  complied  with (except that no such Opinion of Counsel is
required  to  be  furnished to the Trustee in connection with the authentication
and  issuance  of  Debt  Securities  issued  on  the  date  of  this Indenture).

          Each  certificate  or  opinion  provided  for  in  this  Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided  for  in  this  Indenture  (except  certificates  delivered pursuant to
Section  3.05)  shall  include  (a)  a  statement  that  the  person making such
certificate  or  opinion has read such covenant or condition and the definitions
relating  thereto;  (b)  a  brief  statement  as  to the nature and scope of the
examination  or investigation upon which the statements or opinions contained in
such  certificate  or opinion are based; (c) a statement that, in the opinion of
such  person,  he  or  she  has  made  such  examination  or investigation as is
necessary  to  enable him or her to express an informed opinion as to whether or
not such covenant or condition has been complied with; and (d) a statement as to
whether  or  not,  in the opinion of such person, such condition or covenant has
been  complied  with.

     SECTION 14.07.  Non-Business  Days.
                     ------------------

          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.

     SECTION 14.08.  Table  of  Contents,  Headings,  etc.
                     ------------------------------------

          The  table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are  not  to be considered a part hereof, and shall in no way modify or restrict
any  of  the  terms  or  provisions  hereof.


                                      -58-
<PAGE>
     SECTION 14.09.  Execution  in  Counterparts.
                     ---------------------------

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

     SECTION 14.10.  Severability.
                     ------------

          In  case any one or more of the provisions contained in this Indenture
or in the Debt Securities shall for any reason be held to be invalid, illegal or
unenforceable  in  any  respect, such invalidity, illegality or unenforceability
shall  not  affect  any  other  provisions  of  this  Indenture  or of such Debt
Securities, but this Indenture and such Debt Securities shall be construed as if
such  invalid  or  illegal  or  unenforceable provision had never been contained
herein  or  therein.

     SECTION 14.11.  Assignment.
                     ----------

          Subject to Article XI, the Company will have the right at all times to
assign  any  of  its  rights  or  obligations  under this Indenture and the Debt
Securities  to  a  direct  or  indirect  wholly owned Subsidiary of the Company;
provided,  however,  that, in the event of any such assignment, the Company will
--------   -------
remain liable for all such obligations. Subject to the foregoing, this Indenture
is  binding  upon  and  inures  to  the  benefit of the parties hereto and their
respective  successors and assigns. This Indenture may not otherwise be assigned
by  the  parties  thereto.

     SECTION 14.12.  Acknowledgment  of  Rights.
                     --------------------------

          The  Company  acknowledges  that,  with respect to any Debt Securities
held  by  the  Trust  or  the  Institutional  Trustee  of  the  Trust,  if  the
Institutional  Trustee  of  the  Trust  fails  to  enforce its rights under this
Indenture as the holder of Debt Securities held as the assets of the Trust after
the holders of a majority in Liquidation Amount of the Capital Securities of the
Trust have so directed in writing such Institutional Trustee, a holder of record
of  such Capital Securities may to the fullest extent permitted by law institute
legal  proceedings  directly  against  the Company to enforce such Institutional
Trustee's  rights  under  this  Indenture  without  first  instituting any legal
proceedings  against  such  Institutional  Trustee  or  any  other  Person.
Notwithstanding  the  foregoing,  if  an  Event  of  Default has occurred and is
continuing  and  such event is attributable to the failure of the Company to pay
interest  (or  premium,  if any) or principal on the Debt Securities on the date
such interest (or premium, if any) or principal is otherwise due and payable (or
in  the  case  of  redemption, on the redemption date), the Company acknowledges
that  a  holder  of  record  of  Capital  Securities  of  the Trust may directly
institute  a  proceeding  against the Company for enforcement of payment to such
holder directly of the principal of (or premium, if any) or interest on the Debt
Securities  having  an  aggregate  principal  amount  equal  to  the  aggregate
Liquidation  Amount  of  the  Capital  Securities of such holder on or after the
respective  due  date  specified  in  the  Debt  Securities.


                                      -59-
<PAGE>
                                   ARTICLE XV

                        SUBORDINATION OF DEBT SECURITIES

     SECTION 15.01.  Agreement  to  Subordinate.
                     --------------------------

          The  Company  covenants and agrees, and each holder of Debt Securities
issued  hereunder  and  under  any  supplemental  indenture  (the  "Additional
Provisions")  by such Securityholder's acceptance thereof likewise covenants and
agrees,  that  all  Debt Securities shall be issued subject to the provisions of
this Article XV; and each holder of a Debt Security, whether upon original issue
or  upon  transfer or assignment thereof, accepts and agrees to be bound by such
provisions.

          The  payment by the Company of the payments due on all Debt Securities
issued hereunder and under any Additional Provisions shall, to the extent and in
the manner hereinafter set forth, be subordinated and junior in right of payment
to  the prior payment in full of all Senior Indebtedness of the Company, whether
outstanding  at  the  date  of  this  Indenture  or  thereafter  incurred.

          No  provision  of  this Article XV shall prevent the occurrence of any
Default  or  Event  of  Default  hereunder.

     SECTION 15.02.  Default  on  Senior  Indebtedness.
                     ---------------------------------

          In the event and during the continuation of any default by the Company
in  the  payment of principal, premium, interest or any other payment due on any
Senior  Indebtedness of the Company following any applicable grace period, or in
the  event  that the maturity of any Senior Indebtedness of the Company has been
accelerated  because  of a default, and such acceleration has not been rescinded
or  canceled  and  such  Senior Indebtedness has not been paid in full, then, in
either  case,  no  payment  shall  be  made  by  the Company with respect to the
payments  due  on  the  Debt  Securities.

          In the event that, notwithstanding the foregoing, any payment shall be
received  by  the  Trustee  when  such  payment  is  prohibited by the preceding
paragraph  of  this Section 15.02, such payment shall, subject to Section 15.06,
be held in trust for the benefit of, and shall be paid over or delivered to, the
holders  of  Senior  Indebtedness or their respective representatives, or to the
trustee  or  trustees  under  any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only  to  the  extent  that  the  holders  of  the Senior Indebtedness (or their
representative  or  representatives  or a trustee) notify the Trustee in writing
within  90  days of such payment of the amounts then due and owing on the Senior
Indebtedness  and only the amounts specified in such notice to the Trustee shall
be  paid  to  the  holders  of  Senior  Indebtedness.

     SECTION 15.03.  Liquidation;  Dissolution;  Bankruptcy.
                     --------------------------------------

          Upon  any  payment  by  the  Company  or distribution of assets of the
Company  of  any  kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the  Company,  whether  voluntary  or  involuntary  or


                                      -60-
<PAGE>
in  bankruptcy,  insolvency,  receivership or other proceedings, all amounts due
upon  all  Senior  Indebtedness  of  the Company shall first be paid in full, or
payment  thereof  provided for in money in accordance with its terms, before any
payment  is  made  by  the  Company  on  the  Debt Securities; and upon any such
dissolution  or  winding-up or liquidation or reorganization, any payment by the
Company,  or  distribution  of  assets  of the Company of any kind or character,
whether  in  cash,  property  or securities, to which the Securityholders or the
Trustee would be entitled to receive from the Company, except for the provisions
of this Article XV, shall be paid by the Company, or by any receiver, trustee in
bankruptcy,  liquidating  trustee,  agent or other Person making such payment or
distribution,  or  by the Securityholders or by the Trustee under this Indenture
if received by them or it, directly to the holders of Senior Indebtedness of the
Company  (pro  rata  to  such  holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative  or  representatives,  or  to  the  trustee or trustees under any
indenture  pursuant to which any instruments evidencing such Senior Indebtedness
may  have  been  issued, as their respective interests may appear, to the extent
necessary  to  pay  such Senior Indebtedness in full, in money or money's worth,
after  giving  effect  to  any  concurrent payment or distribution to or for the
holders  of such Senior Indebtedness, before any payment or distribution is made
to  the  Securityholders.

          In  the  event  that,  notwithstanding  the  foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property  or  securities,  prohibited by the foregoing, shall be received by the
Trustee  before  all  Senior  Indebtedness  of  the  Company is paid in full, or
provision  is  made for such payment in money in accordance with its terms, such
payment  or  distribution shall be held in trust for the benefit of and shall be
paid  over  or  delivered  to  the  holders of such Senior Indebtedness or their
representative  or  representatives,  or  to  the  trustee or trustees under any
indenture  pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the  Company,  for  application to the payment of all Senior Indebtedness of the
Company remaining unpaid to the extent necessary to pay such Senior Indebtedness
in  full  in  money  in  accordance  with  its terms, after giving effect to any
concurrent  payment or distribution to or for the benefit of the holders of such
Senior  Indebtedness.

          For  purposes  of  this  Article  XV,  the  words  "cash,  property or
securities"  shall  not  be  deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided  for  by a plan of reorganization or readjustment, the payment of which
is  subordinated at least to the extent provided in this Article XV with respect
to the Debt Securities to the payment of all Senior Indebtedness of the Company,
that may at the time be outstanding, provided, that (a) such Senior Indebtedness
                                     --------
is  assumed  by  the  new  corporation,  if  any,  resulting  from  any  such
reorganization or readjustment, and (b) the rights of the holders of such Senior
Indebtedness  are  not,  without  the  consent  of such holders, altered by such
reorganization  or  readjustment.  The consolidation of the Company with, or the
merger  of  the  Company  into,  another  corporation  or  the  liquidation  or
dissolution  of  the  Company  following  the  conveyance,  transfer  or  other
disposition  of its property as an entirety, or substantially as an entirety, to
another  corporation upon the terms and conditions provided for in Article XI of
this  Indenture  shall  not  be deemed a dissolution, winding-up, liquidation or
reorganization  for the purposes of this Section 15.03 if such other corporation
shall,  as  a part of such consolidation, merger, conveyance or transfer, comply
with  the  conditions  stated  in


                                      -61-
<PAGE>
Article  XI of this Indenture. Nothing in Section 15.02 or in this Section 15.03
shall  apply  to  claims  of,  or  payments to, the Trustee under or pursuant to
Section  6.06  of  this  Indenture.

     SECTION 15.04.  Subrogation.
                     -----------

          Subject  to  the  payment  in  full  of all Senior Indebtedness of the
Company, the Securityholders shall be subrogated to the rights of the holders of
such  Senior Indebtedness to receive payments or distributions of cash, property
or  securities  of  the Company applicable to such Senior Indebtedness until all
payments due on the Debt Securities shall be paid in full; and, for the purposes
of  such subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Securityholders or
the  Trustee would be entitled except for the provisions of this Article XV, and
no  payment  over  pursuant  to  the provisions of this Article XV to or for the
benefit  of  the  holders  of such Senior Indebtedness by Securityholders or the
Trustee,  shall,  as  between  the  Company, its creditors other than holders of
Senior  Indebtedness  of  the Company, and the holders of the Debt Securities be
deemed  to  be a payment or distribution by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article XV are
and  are intended solely for the purposes of defining the relative rights of the
holders  of the Debt Securities, on the one hand, and the holders of such Senior
Indebtedness,  on  the  other  hand.

          Nothing  contained  in this Article XV or elsewhere in this Indenture,
any  Additional  Provisions  or  in  the Debt Securities is intended to or shall
impair,  as  between the Company, its creditors other than the holders of Senior
Indebtedness  of  the  Company,  and  the  holders  of  the Debt Securities, the
obligation  of  the  Company, which is absolute and unconditional, to pay to the
holders  of  the Debt Securities all payments on the Debt Securities as and when
the  same  shall  become  due  and payable in accordance with their terms, or is
intended  to  or  shall  affect  the  relative rights of the holders of the Debt
Securities  and  creditors  of  the  Company,  other  than the holders of Senior
Indebtedness  of  the  Company, nor shall anything herein or therein prevent the
Trustee  or  the  holder  of  any  Debt  Security  from  exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to  the  rights,  if  any,  under  this Article XV of the holders of such Senior
Indebtedness  in respect of cash, property or securities of the Company received
upon  the  exercise  of  any  such  remedy.

          Upon  any payment or distribution of assets of the Company referred to
in this Article XV, the Trustee, subject to the provisions of Article VI of this
Indenture,  and  the Securityholders shall be entitled to conclusively rely upon
any  order  or  decree made by any court of competent jurisdiction in which such
dissolution,  winding-up, liquidation or reorganization proceedings are pending,
or  a  certificate  of the receiver, trustee in bankruptcy, liquidation trustee,
agent  or  other  Person  making  such payment or distribution, delivered to the
Trustee  or to the Securityholders, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and  other  indebtedness  of the Company, the amount thereof or payable thereon,
the  amount or amounts paid or distributed thereon and all other facts pertinent
thereto  or  to  this  Article  XV.


                                      -62-
<PAGE>
     SECTION 15.05.  Trustee  to  Effectuate  Subordination.
                     --------------------------------------

          Each  Securityholder  by  such  Securityholder's  acceptance  thereof
authorizes  and directs the Trustee on such Securityholder's behalf to take such
action  as  may  be  necessary  or  appropriate  to effectuate the subordination
provided  in  this  Article  XV  and  appoints the Trustee such Securityholder's
attorney-in-fact  for  any  and  all  such  purposes.

     SECTION 15.06.  Notice  by  the  Company.
                     ------------------------

          The  Company shall give prompt written notice to a Responsible Officer
of  the  Trustee at the Principal Office of the Trustee of any fact known to the
Company  that  would  prohibit  the making of any payment of moneys to or by the
Trustee  in  respect  of  the Debt Securities pursuant to the provisions of this
Article  XV.  Notwithstanding  the  provisions  of  this Article XV or any other
provision  of this Indenture or any Additional Provisions, the Trustee shall not
be  charged with knowledge of the existence of any facts that would prohibit the
making  of  any  payment  of  moneys to or by the Trustee in respect of the Debt
Securities  pursuant  to  the  provisions of this Article XV, unless and until a
Responsible  Officer of the Trustee at the Principal Office of the Trustee shall
have  received written notice thereof from the Company or a holder or holders of
Senior  Indebtedness or from any trustee therefor; and before the receipt of any
such  written  notice,  the  Trustee, subject to the provisions of Article VI of
this  Indenture,  shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
       --------  -------
provided  for in this Section 15.06 at least two Business Days prior to the date
upon  which  by  the  terms  hereof any money may become payable for any purpose
(including,  without limitation, the payment of the principal of (or premium, if
any)  or  interest on any Debt Security), then, anything herein contained to the
contrary  notwithstanding,  the  Trustee  shall have full power and authority to
receive  such  money  and  to apply the same to the purposes for which they were
received,  and  shall  not be affected by any notice to the contrary that may be
received  by  it  within  two  Business  Days  prior  to  such  date.

          The  Trustee,  subject  to  the  provisions  of  Article  VI  of  this
Indenture,  shall  be  entitled  to conclusively rely on the delivery to it of a
written  notice  by  a  Person representing himself or herself to be a holder of
Senior  Indebtedness of the Company (or a trustee or representative on behalf of
such  holder)  to  establish that such notice has been given by a holder of such
Senior  Indebtedness or a trustee or representative on behalf of any such holder
or  holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of such
Senior  Indebtedness  to  participate in any payment or distribution pursuant to
this  Article XV, the Trustee may request such Person to furnish evidence to the
reasonable  satisfaction  of  the  Trustee  as  to  the  amount  of  such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights  of  such  Person  under  this  Article  XV, and, if such evidence is not
furnished,  the  Trustee  may  defer any payment to such Person pending judicial
determination  as  to  the  right  of  such  Person  to  receive  such  payment.

     SECTION 15.07.  Rights  of  the  Trustee,  Holders  of Senior Indebtedness.
                     ----------------------------------------------------------

          The  Trustee  in  its individual capacity shall be entitled to all the
rights set forth in this Article XV in respect of any Senior Indebtedness at any
time  held  by  it,  to  the  same  extent  as


                                      -63-
<PAGE>
any  other  holder  of Senior Indebtedness, and nothing in this Indenture or any
Additional  Provisions  shall  deprive  the Trustee of any of its rights as such
holder.

          With respect to the holders of Senior Indebtedness of the Company, the
Trustee  undertakes  to  perform  or  to  observe only such of its covenants and
obligations  as  are  specifically  set forth in this Article XV, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall  be  read  into  this  Indenture  or any Additional Provisions against the
Trustee. The Trustee shall not owe or be deemed to owe any fiduciary duty to the
holders of such Senior Indebtedness and, subject to the provisions of Article VI
of  this Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness  if it shall pay over or deliver to Securityholders, the Company or
any other Person money or assets to which any holder of such Senior Indebtedness
shall  be  entitled  by  virtue  of  this  Article  XV  or  otherwise.

          Nothing  in  this Article XV shall apply to claims of, or payments to,
the  Trustee  under  or  pursuant  to  Section  6.06.

     SECTION 15.08.  Subordination  May  Not  Be  Impaired.
                     -------------------------------------

          No right of any present or future holder of any Senior Indebtedness of
the Company to enforce subordination as herein provided shall at any time in any
way  be  prejudiced  or impaired by any act or failure to act on the part of the
Company,  or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Company, with the terms, provisions and covenants of
this  Indenture,  regardless  of  any knowledge thereof that any such holder may
have  or  otherwise  be  charged  with.

          Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from time
to time, without the consent of or notice to the Trustee or the Securityholders,
without incurring responsibility to the Securityholders and without impairing or
releasing  the  subordination  provided  in  this  Article XV or the obligations
hereunder  of  the  holders of the Debt Securities to the holders of such Senior
Indebtedness,  do any one or more of the following: (a) change the manner, place
or  terms  of  payment or extend the time of payment of, or renew or alter, such
Senior  Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness  or any instrument evidencing the same or any agreement under which
such  Senior  Indebtedness  is  outstanding;  (b)  sell,  exchange,  release  or
otherwise  deal  with any property pledged, mortgaged or otherwise securing such
Senior  Indebtedness;  (c)  release  any  Person  liable  in  any manner for the
collection  of  such  Senior  Indebtedness;  and  (d)  exercise  or refrain from
exercising  any  rights  against  the  Company,  and  any  other  Person.

          LaSalle  Bank National Association, in its capacity as Trustee, hereby
accepts  the  trusts in this Indenture declared and provided, upon the terms and
conditions  herein  above  set  forth.


                                      -64-
<PAGE>
          IN  WITNESS  WHEREOF, the parties hereto have caused this Indenture to
be  duly  executed by their respective officers thereunto duly authorized, as of
the  day  and  year  first  above  written.

                                 Southeastern Bank Financial Corporation


                                 By:     /s/ Ronald Thigpen
                                    --------------------------------------------
                                 Name:   Ronald L. Thigpen
                                      ------------------------------------------
                                 Title:  Executive Vice President & COO
                                       -----------------------------------------


                                 LaSalle Bank National Association, as Trustee


                                 By:     /s/ Suzanne Smith
                                    --------------------------------------------
                                 Name:   Suzanne Smith
                                      ------------------------------------------
                                 Title:  Vice President
                                       -----------------------------------------


<PAGE>
                                    EXHIBIT A

                    FORM OF JUNIOR SUBORDINATED DEBT SECURITY
                                    DUE 2036

                           [FORM OF FACE OF SECURITY]
                            ------------------------

     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) TO A "NON U.S. PERSON" IN
AN "OFFSHORE TRANSACTION" PURSUANT TO REGULATION S UNDER THE SECURITIES ACT, (D)
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 (E) 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 (D) OR (E) 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,


                                      A-1
<PAGE>
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
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 EXEMPTIVE 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. 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.


                                      A-2
<PAGE>
                Form of Junior Subordinated Debt Security due 2036

                                       of

                     Southeastern Bank Financial Corporation

     Southeastern  Bank  Financial  Corporation,  a  bank  holding  company
incorporated  in  Georgia (the "Company"), for value received promises to pay to
LaSalle  Bank National Association, not in its individual capacity but solely as
Institutional  Trustee  for  Southeastern  Bank  Financial  Trust II, a Delaware
statutory  trust (the "Holder"), or registered assigns, the principal sum of Ten
Million  Three Hundred Ten Thousand Dollars on June 15, 2036 and to pay interest
on  said  principal  sum  from  March 31, 2006, 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 March 15, June 15, September 15 and December 15 of each
year  commencing  June 15, 2006, at a variable per annum rate equal to LIBOR (as
defined  in  the Indenture) plus 1.40% (the "Interest Rate") (provided, however,
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 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
               --------  -------


                                      A-3
<PAGE>
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  or  immediately  available funds 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, payment
of  the  principal  of  and  premium, if any, and interest on this Debt Security
shall  be made in immediately available funds when due at such place and to such
account  as  may  be  designated  by  the Institutional Trustee. All payments in
respect  of  this  Debt Security shall be payable 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.

          Upon submission of Notice (as defined in the Indenture) and so long as
it  is  acting  in  good  faith,  and so long as no Event of Default pursuant to
paragraphs  (c), (e) or (f) of Section 5.01 of the Indenture 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, Redemption Date (to the
extent  redeemed)  or  Special  Redemption 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  of principal of or premium, if any, or interest 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 or (iii) make any
payment under any guarantees of the Company that rank in all respects pari passu
with  or  junior  in respect to the Capital Securities Guarantee (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


                                      A-4
<PAGE>
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 Extension Period, the
Company  may  further  extend such Extension Period; provided, that no Extension
                                                     --------
Period  (including all previous and further consecutive extensions that are part
of  such  Extension  Period)  shall  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  any Extension Period or extend an Extension Period
("Notice")  not  later  than  the  related  regular record date for the relevant
Interest Payment Date.  The Notice shall describe why the Company has elected to
begin  an  Extension  Period.  The  Notice  shall  acknowledge  and  affirm  the
Company's  understanding  that it is prohibited from issuing dividends and other
distributions  during  the  Extension  Period.  Upon  receipt  of the Notice, an
Initial  Purchaser shall have the right, at its sole discretion, to disclose the
name of the Company, the fact that the Company has elected to begin an Extension
Period  and  other  information  that  such  Initial  Purchaser,  at  its  sole
discretion,  deems  relevant  to  the  Company's  election to begin an Extension
Period.  The  Trustee shall give notice of the Company's election to begin a new
Extension  Period  to  the  Securityholders.

          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  diligence, presentment, demand for payment, notice of
nonpayment,  notice  of  protest,  and  all  other  demands  and  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.


                                      A-5
<PAGE>
     IN WITNESS WHEREOF, the Company has duly executed this certificate.

                                  Southeastern Bank Financial Corporation


                                  By:
                                     -------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

     Dated:                  ,  2006
           ------------------

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

     This  represents  Debt  Securities  referred  to  in  the  within-mentioned
Indenture.

                                  LaSalle Bank National Association, not in its
                                  individual capacity but solely as Trustee


                                  By:
                                     -------------------------------------------
                                       Authorized Signatory

     Dated:                  ,  2006
           ------------------


                                      A-6
<PAGE>
                          [FORM OF 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 March 31, 2006, duly executed and delivered between
the  Company  and LaSalle 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 or 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 March 15, June 15, September
15  or  December  15  on  or  after  June 15, 2011 (a "Redemption Date"), at the
Redemption  Price.

     Any  redemption  pursuant to either of the two preceding paragraphs 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 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.

     "Special  Redemption  Price"  means,  with respect to the redemption of any
Debt  Security following a Special Event, an amount in cash equal to 103.525% of
the  principal  amount  of Debt Securities to be redeemed prior to June 15, 2007
and  thereafter  equal  to  the  percentage  of the principal amount of the Debt
Securities that is specified below for the Special Redemption Date plus, in each
case, unpaid interest accrued thereon to the Special Redemption Date:

<TABLE>
<CAPTION>
            Special Redemption During the
          12-Month Period Beginning June 15     Percentage of Principal Amount
          ---------------------------------     ------------------------------
<S>                                             <C>
                      2007                                 103.140%
                      2008                                 102.355%
                      2009                                 101.570%
                      2010                                 100.785%
               2011 and thereafter                         100.000%
</TABLE>


                                      A-7
<PAGE>
     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  certain  cases  where 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, and, in certain cases, shall ipso facto become, due
and  payable,  and  upon  such  declaration of acceleration shall become due and
payable,  in  each  case,  in  the  manner,  with  the effect and subject to the
conditions  provided  in  the  Indenture.

     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)  change  the  Maturity Date of any Debt
Security,  or  reduce  the  principal  amount thereof or any premium thereon, or
reduce  the  rate  (or  manner of calculation of the rate) or extend the time of
payment  of  interest thereon, or reduce (other than as a result of the maturity
or  earlier redemption of any such Debt Security in accordance with the terms of
the Indenture and such Debt Security) or increase the aggregate principal amount
of Debt Securities then outstanding, or change any of the redemption provisions,
or  make the principal thereof or any interest or premium thereon payable in any
coin or currency other than United States Dollars, 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) a default in payments due in respect
of  any of the Debt Securities, (b) in respect of covenants or provisions of the
Indenture  which cannot be modified or amended without the consent of the holder
of  each  Debt  Security  affected,  or  (c)  in respect of the covenants of the
Company  relating  to  its ownership of Common Securities of the Trust. 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.


                                      A-8
<PAGE>
     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
Chicago, Illinois 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 the principal of and premium, if
any,  and interest on this Debt Security and for all other purposes, and neither
the  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 (OTHER THAN
SECTION  5-1401  OF  THE  GENERAL  OBLIGATIONS  LAW).


                                      A-9