Exhibit 4.1










Exhibit 4.1




Debenture No. 001





$2,946,646.00



SOUTHEASTERN BANK FINANCIAL CORPORATION




8% SUBORDINATED DEBENTURE

DUE May 14, 2014




SEE THE ATTACHED PAGES FOR THE DEBENTURE AGREEMENT. THE PROVISIONS ON PAGES 2 THROUGH 7 FOLLOWING AND ATTACHED TO THIS
CERTIFICATE ARE INCORPORATED HEREIN AS IF SET FORTH ON THE FACE OF THIS CERTIFICATE.



Southeastern Bank Financial Corporation, a Georgia corporation, (the “Company”) promises to pay, subject to the terms
of the Debenture Agreement, to R. W. Pollard Enterprises, LLLP or registered assigns (such holder, or any registered
assignee, is hereinafter the “Holder”), the principal sum of Two million Nine Hundred Forty-six Thousand Six Hundred
Forty-six Dollars and NO/100 ($2,946,646.00) on May 14, 2014.



The Company also promises to pay, subject to the terms of the Debenture Agreement, to the Holder interest on the
principal amount of this Debenture at a simple interest rate per annum equal to 8%, computed on the basis of a 365-day
year and on the actual number of days elapsed. Interest shall be paid quarterly in arrears commencing June 30, 2009 and
on the last day of each calendar quarter thereafter to the Holder of record on the third business day immediately
preceding the end of said quarter until payment of such principal sum has been duly made and provided for. If June 30,
2009 or the last day of any calendar quarter is not a business day, interest shall be paid on the next business day.



Southeastern Bank Financial Corporation



Original Issue Date: May 14, 2009



By: /s/ R. Daniel Blanton                                


R. Daniel Blanton


President



[CORPORATE SEAL]



Attest: /s/ Ronald L. Thigpen                         


Ronald L. Thigpen


Assistant Secretary


 


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THIS DEBENTURE IS NOT SECURED, IS NOT A DEPOSIT OR SAVINGS ACCOUNT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.



THE SECURITIES REPRESENTED BY THIS DEBENTURE (THE “SECURITIES”) HAVE BEEN ISSUED AND SOLD IN RELIANCE ON EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 (THE “1933 ACT”) AND STATE SECURITIES LAWS. THESE
SECURITIES MAY NOT BE TRANSFERRED OR RESOLD OTHER THAN (1) PURSUANT TO AN EFFECTIVE REGISTRATION OR AN EXEMPTION
THEREFROM UNDER THE 1933 ACT AND STATE SECURITIES LAWS OR (2) UPON RECEIPT BY THE ISSUER OF EVIDENCE SATISFACTORY TO
IT OF COMPLIANCE WITH THE 1933 ACT, AND THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE ISSUER
SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE WITH THE ABOVE LAWS.



Southeastern Bank Financial Corporation, a Georgia corporation (the “Company”), for value received, hereby
promises to pay on May 14, 2014 (the “Maturity Date”) to R. W. Pollard Enterprises, LLLP (such holder, or any
registered assignee, is hereinafter the “Holder”), the principal sum of Two Million Nine Hundred Forty-six
Thousand Six Hundred Forty-six and NO/100 United States Dollars ($2,946,646.00) with interest on such principal
sum, in accordance with the terms of this Debenture from the Original Issue Date until payment of such principal
sum has been made or duly provided for.



1. Issue. This is a single Subordinated Debenture that is in registered form, in an aggregate principal
amount of $2,946,646.00. The date on which this Debenture was issued is the “Original Issue Date.”



2. Interest.



(a) Interest Rate. The Company promises to pay interest on the principal amount of this Debenture at a
simple interest rate per annum equal to 8%, computed on the basis of a 365-day year and on the actual number of days
elapsed.



(b) Interest Payment Schedule. Interest shall be paid quarterly in arrears commencing June 30, 2009, and
on the last day of each calendar quarter thereafter to the Holder of record on the third business day immediately
preceding the end of said quarter until the Maturity Date. If June 30, 2009 or the last day of each calendar quarter
thereafter is not a business day, interest shall be paid on the next business day.



3. Redemption. Subject to any required approval by the Georgia Department of Banking and Finance or the
Federal Reserve Bank of Atlanta, the Company may redeem this Debenture, in whole or in part, at any time after the
three-year anniversary of the Original Issue Date by paying to the Holder the principal sum plus any accrued and unpaid
interest. The Company shall provide to the Holder written notice, in accordance with Section 10, of the
Company’s intention to redeem this Debenture at least ten (10) prior to the date on which the Company intends to redeem
this Debenture.



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4. Subordination, Etc.



(a) Agreement to Subordinate. The Holder agrees that the payment of the principal of and interest accrued
on this Debenture is subordinate and junior in right of payment to the claims of creditors, except for the holders of
debentures or other indebtedness equal or junior in priority and right of payment to this Debenture. In the event of
liquidation of the Company, all creditors of the Company, except holders of debentures or other indebtedness equal or
junior in priority and right of payment to this Debenture, shall be entitled to be paid in full with such interest as
may be provided by law before any payment shall be made on account of principal or interest on this Debenture. After
payment in full of all sums owing to such creditors of the Company, the Holder of this Debenture shall be entitled to
be paid from the remaining assets of the Company the unpaid principal amount of the Debenture plus accrued and unpaid
interest thereon before any payment or other distribution, whether in cash, property or otherwise, shall be made on
account of any capital stock of the Company. The Company reserves the right to issue from time to time other capital
notes, debentures, and other instruments evidencing indebtedness that shall be equal in priority and right of payment
to this Debenture. This Debenture shall in no case be subject to any assessment, and the Holder of this Debenture
shall not be liable for any debts, contracts, or engagements of the Company, nor for assessments to restore impairments
in the capital of the Company.



(b) Ineligible as Collateral. The Holder understands and agrees that this Debenture is ineligible to
serve as collateral for a loan made by the Company or any of its affiliates.



(c) No Right of Offset. The Holder, if a depository institution, waives any applicable right of offset by
it as a lender.



5. Successors to the Company.



(a) Conditions Applicable to Successors. The Company shall not merge with or into, enter into a share
exchange with, or sell all or substantially all of its assets to, any person unless:



(i) the person is a bank, corporation, partnership, trust, or limited liability company,



(ii) such person executes and delivers to the Holder a copy of an instrument pursuant to which such person assumes
the due and punctual payment of the principal of and interest on the Debenture and the performance and observance of
all the obligations of the Company under the Debenture, and



(iii) immediately after giving effect to the transaction, no Event of Default (as defined in Section 6
hereof) and no event, which after notice or lapse of time or both would become an Event of Default, shall have
occurred.



(b) Successor As Company. Upon compliance with this Section 5, the Successor shall succeed to and
be substituted for the Company under this Debenture with the same effect as if the Successor had been named as the
Company herein, and the Company shall be released from the obligation to pay the principal of and interest accrued on
the Debenture.



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(c) Company as Survivor. Nothing in this Debenture shall prevent any merger in which the Company is the
surviving corporation, any acquisition by the Company by purchase or otherwise of all or any part of the assets of any
other person, and no such merger or acquisition shall require compliance with this Section 5.



6. Events of Default and Remedies.



(a) Events of Default. As used herein, an “Event of Default” hereunder occurs if:



(i) the Company defaults in the payment of interest when the interest becomes due and payable and the default
continues for a period of thirty (30) days;



(ii) the Company fails to comply with any of its other agreements or covenants contained in this Debenture and the
failure is not cured within thirty (30) days after the Company receives written demand from the Holder to remedy the
failure;



(iii) the Company fails to make any payment due on any indebtedness of the Company that causes the acceleration of
such indebtedness, or the Company fails to perform or observe any other provision contained in any other indebtedness
of the Company or in any agreement securing or relating to any indebtedness of the Company, if the failure results in
the acceleration of such indebtedness;



(iv) the Company shall make an assignment for the benefit of creditors or shall admit in writing its inability to
pay its debts as they become due or shall become insolvent and shall suspend payments of its obligations;



(v) there shall be entered a decree or order by a court having jurisdiction in the premises constituting an order
for relief in respect of the Company under Title 11 of the United States Code, as now constituted or hereafter amended,
or any other applicable federal or state bankruptcy law or other similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator, or similar official of the Company or of any substantial part of its
properties, or ordering the winding-up or liquidation of the affairs of the Company and any such decree or order shall
continue in effect for a period of forty-five (45) consecutive days; or



(vi) the Company shall file a petition, answer, or consent seeking relief under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other applicable federal or state bankruptcy law or other similar
law, or the Company shall consent to the institution of proceedings thereunder or to the filing of any such petition or
to the appointment of or taking of possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, or
other similar official of the Company or of any substantial part of properties, or the Company shall fail generally to
pay its debts as such debts become due, or the Company shall take any corporate action in furtherance of any such
action.



(b) General Remedies of Holders. Upon the occurrence of an Event of Default described in Section
6(a)(i) — (vi) hereof, the Holder of this Debenture may at any time thereafter (unless all defaults theretofore
have been remedied), at its option, by action or suit in equity, enjoin any acts or things that may be unlawful or in
violation of the rights of the Holder of this Debenture.



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(c) Remedies of Holders upon Insolvency or Bankruptcy. Upon the occurrence of an Event of Default
described in Section 6(a)(iv) — (vi) hereof, the Holder of this Debenture may at any time thereafter (unless
all defaults theretofore have been remedied), at its option, do any one or more of the following



(i) by written notice delivered to the Company, declare the principal of and interest accrued on this Debenture to
be immediately due and payable, whereupon all such amounts shall immediately become absolute and due and payable,
without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, anything in this
Debenture to the contrary notwithstanding;



(ii) by mandamus or other suit, action, or proceeding at law or in equity, enforce the payment of the principal of
or interest on this Debenture, or for the specific performance of any covenant or agreement contained herein;



(d) Default Rate of Interest. Following the occurrence of any Event of Default, the interest rate
otherwise applicable to the outstanding principal amount of the Debenture shall increase by two percent (2%).



(e) Attorneys’ Fees. In the event this Debenture is collected by law or through an attorney at law, the
Holder shall be entitled to actual expenses incurred by the Holder in seeking to collect the Debenture, including
reasonable attorneys’ fees.



(f) Effect of Delay. A delay or omission by the Holder of this Debenture in exercising any right or
remedy arising upon an Event of Default shall not impair such right or remedy or constitute a waiver of or an
acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.



7. Office for Registration. The Company shall maintain an office where the Debenture shall be surrendered or
presented for registration of transfers or exchanges. This office shall be at 3530 Wheeler Road, Augusta, Georgia
30909, until further notice from the Company to the Holder. The Company shall keep a register of the Debenture and of
its transfer and exchange, including the names and addresses of holders of the Debenture. Upon three (3) business
days’ written request, the Company shall permit the Holder or its duly authorized representative to inspect such
register. The Holder shall give the Company notice of any change in the Holder’s address to the office indicated in
this Section 7 or any different office as to which the Company notifies the Holder. Upon written notice to the
Holder, the Company may change the address of the office to be maintained by the Company pursuant to this Section
7 or appoint one or more co-registrars, stock registrars, or paying agents to assist the Company in performing the
Company’s functions under this Debenture.



8. Exchange, Transfer, Replacement or Cancellation.



(a) Exchange. This Debenture may be exchanged for an equal principal amount of Debentures upon written
request to the Company accompanied by surrender of this Debenture to the Company at the office described in Section
7 hereof or to an agent designated for that purpose. Any Debenture issued in exchange for this Debenture shall be
entitled to all the rights of this Debenture.



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(b) Restrictions on Transfer. This Debenture may not be transferred or resold without compliance with the
conditions specified in this Section 10(b), which conditions are intended to insure compliance with the
provisions of the Securities Act of 1933, as amended (the “1933 Act”). Prior to any proposed transfer or sale of this
Debenture, the Holder hereof shall give written notice to the Company of the proposed disposition. This Debenture may
not be transferred or resold other than (1) pursuant to an effective registration or an exemption therefrom under the
1933 Act and state securities laws or (2) upon receipt by the Company of evidence satisfactory to it of compliance with
the 1933 Act and the applicable securities laws of any state or other jurisdiction. The Company shall be entitled to
require an opinion of counsel reasonably satisfactory to the Company with respect to compliance with the 1933 Act and
the applicable securities law of any state or other jurisdiction. The Holder shall cause any proposed transferee of
such securities held by the Holder to agree to take and hold such securities subject to the provisions and upon the
conditions specified in this Section 8. The Company or any registrar appointed by the Company to serve as
transfer agent may require the Holder to furnish appropriate endorsements and/or transfer documents, including
information regarding any proposed transferee’s name, address, and social security or taxpayer identification number,
and to pay any issue or transfer taxes or fees as may be required by law. The registered Holder of this Debenture may
be treated as its owner for all purposes.



(c) Replacement Debentures. If the Holder claims that this Debenture has been lost, destroyed, or
wrongfully taken, the Company shall issue a replacement Debenture upon (i) receipt of any indemnity bond or other
assurance requested by the Company to protect it from any loss that it may suffer by reason of such replacement or
subsequent presentment of the original Debenture and (ii) payment of any expenses reasonably incurred by the Company in
replacing this Debenture.



9. Amendments and Waivers.



(a) Amendment of Debenture. Except as otherwise provided in Section 6(b) hereof, and subject to
any necessary approval by the Georgia Department of Banking and Finance or the Federal Reserve Bank of Atlanta (or
successor agencies), the Debenture may, with the consent of the Company and the Holder, be amended or any provision,
past default, or non-compliance thereof waived; provided, however, that, without the consent of the
Holder, no such amendment or waiver may:




	 	(i)	 	reduce the rate of or change the time for payment of interest on the Debenture;







	 	(ii)	 	reduce the amount of principal or extend the maturity of the Debenture;







	 	(iii)	 	make any change in this Section 9(a) or Section 6 hereof; or







	 	(iv)	 	make any change in Section 4 hereof that adversely affects the rights of the Holder.






(b) Effectiveness of Amendments. After an amendment or waiver becomes effective, the Company shall mail
to the Holder a copy of such amendment or waiver. The Company may require the Holder to surrender this Debenture so
that an appropriate notation concerning the amendment or waiver may be placed thereon or a new Debenture, reflecting
the amendment or waiver, exchanged therefor. Even if such a notation is not made or such a new Debenture is not
issued, such amendment or waiver and any consent given thereto by a Holder of this Debenture shall be binding according
to its terms on any subsequent Holder of this Debenture.



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(c) Amendments Without Consent of Holders. Notwithstanding Section 10(a) hereof, the Company may
amend or supplement this Debenture without the consent of the Holder to cure any ambiguity, defect, or inconsistency or
to provide for an uncertificated Debenture in addition to or in place of a certificated Debenture, or to make any
change that does not materially adversely affect the rights of the Holder.



10. Notices. Any notice or communication hereunder shall be in writing and delivered by first-class mail,
return receipt requested, to the Holder at its address shown in the register kept by the Company or any co-registrar
appointed by the Company and to the Company at the address of its office to be maintained pursuant to Section 8
hereof. Failure to mail, or any defect in, a notice or communication to any other holder of the Debenture shall not
affect its sufficiency with respect to the Holder. If a notice or communication is mailed to the Holder in the manner
provided above within the time prescribed, it shall be deemed duly given and effective on the fifth (5th) business day
after it was deposited in the mail, whether or not the Holder actually receives it.



11. No Recourse Against Others. No director, officer, employee, or shareholder of the Company shall have any
liability for any obligations of the Company under the Debenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder of this Debenture by accepting the Debenture waives and releases
all such liability and such waiver and release are part of the consideration for the issuance of the Debenture.



12. Governing Law. This Debenture shall be governed by and construed in accordance with the laws of the State
of Georgia.



[CORPORATE SEAL]



Southeastern Bank Financial Corporation



ATTEST:



By: /s/ R. Daniel Blanton                                           


R. Daniel Blanton


President



/s/ Ronald L. Thigpen                                                    

Ronald L. Thigpen

Assistant Secretary








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ASSIGNMENT FORM




If you, the Holder, would like to assign this Debenture, complete the form below:


I/we assign and transfer this Debenture to








                                                                                                                                                               
    




(Insert assignee’s social security

or tax ID number)






                                                                                                                                                               
    






                                                                                                                                                               
    






                                                                                                                                                               
    




(Print or type assignee’s name, address and zip code)




and irrevocably appoint                                                                                     
agent to transfer this Debenture on the books of the Company. The agent may substitute another to act for him or her.



Holder’s signature:                                                                    


Second signature,



	if required:	 	                                                                                
(Sign exactly as your name appears on the face of this Debenture)







Date:                                              



Signature guaranteed by state or national bank or New York Stock Exchange member
firm:
                                                                                                                  



 


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