EXHIBIT 4.2




                               GUARANTEE AGREEMENT

                     Southeastern Bank Financial Corporation

                          Dated as of December 5, 2005


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                                  Table of Contents

                                                                                Page
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                                      ARTICLE I
                           DEFINITIONS AND INTERPRETATION

SECTION 1.1.     Definitions and Interpretation. . . . . . . . . . . . . . . .     1

                                     ARTICLE II
                 POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 2.1.     Powers and Duties of the Guarantee Trustee. . . . . . . . . .     4

SECTION 2.2.     Certain Rights of the Guarantee Trustee . . . . . . . . . . .     5

SECTION 2.3.     Not Responsible for Recitals or Issuance of Guarantee . . . .     7

SECTION 2.4.     Events of Default; Waiver . . . . . . . . . . . . . . . . . .     7

SECTION 2.5.     Events of Default; Notice . . . . . . . . . . . . . . . . . .     8

                                    ARTICLE III
                              THE GUARANTEE TRUSTEE

SECTION 3.1.     The Guarantee Trustee; Eligibility. . . . . . . . . . . . . .     8

SECTION 3.2.     Appointment, Removal and Resignation of the Guarantee Trustee     9

                                    ARTICLE IV
                                    GUARANTEE

SECTION 4.1.     Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . .     9

SECTION 4.2.     Waiver of Notice and Demand . . . . . . . . . . . . . . . . .    10

SECTION 4.3.     Obligations Not Affected. . . . . . . . . . . . . . . . . . .    10

SECTION 4.4.     Rights of Holders . . . . . . . . . . . . . . . . . . . . . .    11

SECTION 4.5.     Guarantee of Payment. . . . . . . . . . . . . . . . . . . . .    11

SECTION 4.6.     Subrogation . . . . . . . . . . . . . . . . . . . . . . . . .    11

SECTION 4.7.     Independent Obligations . . . . . . . . . . . . . . . . . . .    12

SECTION 4.8.     Enforcement . . . . . . . . . . . . . . . . . . . . . . . . .    12


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<PAGE>
                                  TABLE OF CONTENTS
                                     (continued)

                                                                                Page

                                      ARTICLE V
                      LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 5.1.     Limitation of Transactions . . . . . . . . . . . . . . . . .     12

SECTION 5.2.     Ranking                                                          13

                                     ARTICLE VI
                                    TERMINATION

SECTION 6.1.     Termination . . . . . . . . . . . . . . . . . . . . . . . . .    13

                                    ARTICLE VII
                                  INDEMNIFICATION

SECTION 7.1.     Exculpation . . . . . . . . . . . . . . . . . . . . . . . . .    14

SECTION 7.2.     Indemnification . . . . . . . . . . . . . . . . . . . . . . .    14

SECTION 7.3.     Compensation; Reimbursement of Expenses . . . . . . . . . . .    15

                                    ARTICLE VIII
                                    MISCELLANEOUS

SECTION 8.1.     Successors and Assigns . . . . . . . . . . . . . . . . . . .     16

SECTION 8.2.     Amendments . . . . . . . . . . . . . . . . . . . . . . . . .     16

SECTION 8.3.     Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .    16

SECTION 8.4.     Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . .    17

SECTION 8.5.     Governing Law . . . . . . . . . . . . . . . . . . . . . . . .    17

SECTION 8.6.     Counterparts . . . . . . . . . . . . . . . . . . . . . . . .     17
</TABLE>


                                      -ii-
<PAGE>
                               GUARANTEE AGREEMENT
                               -------------------

          This  GUARANTEE  AGREEMENT  (the "Guarantee"), dated as of December 5,
2005,  is  executed  and  delivered  by Southeastern Bank Financial Corporation,
incorporated  in  Georgia (the "Guarantor"), and U.S. Bank National Association,
as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein)  from  time  to  time  of  the Capital Securities (as defined herein) of
Southeastern  Bank  Financial  Statutory  Trust I, a Connecticut statutory trust
(the  "Issuer").

          WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"),  dated  as of December 5, 2005, among the trustees named therein
of  the  Issuer,  Southeastern  Bank  Financial Corporation, as sponsor, and the
Holders from time to time of undivided beneficial interests in the assets of the
Issuer, the Issuer is issuing on the date hereof securities, having an aggregate
liquidation  amount  of  up  to  $10,000,000,  designated the TP Securities (the
"Capital  Securities");  and

          WHEREAS,  as  incentive  for  the  Holders  to  purchase  the  Capital
Securities,  the  Guarantor desires irrevocably and unconditionally to agree, to
the  extent  set  forth  in  this  Guarantee,  to  pay to the Holders of Capital
Securities  the Guarantee Payments (as defined herein) and to make certain other
payments  on  the  terms  and  conditions  set  forth  herein.

          NOW, THEREFORE, in consideration of the purchase by each Holder of the
Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the  Holders.

                                    ARTICLE I
                         DEFINITIONS AND INTERPRETATION

SECTION 1.1.  Definitions and Interpretation.
              ------------------------------

          In this Guarantee, unless the context otherwise requires:

          (a)  capitalized  terms  used in this Guarantee but not defined in the
     preamble  above  have  the  respective  meanings  assigned  to them in this
     Section  1.1;

          (b)  a  term  defined  anywhere in this Guarantee has the same meaning
     throughout;

          (c)  all references to "the Guarantee" or "this Guarantee" are to this
     Guarantee as modified, supplemented or amended from time to time;

          (d)  all  references in this Guarantee to Articles and Sections are to
     Articles and Sections of this Guarantee, unless otherwise specified;

          (e)  terms  defined  in the Declaration as of the date of execution of
     this  Guarantee  have the same meanings when used in this Guarantee, unless
     otherwise  defined  in  this  Guarantee  or  unless  the  context otherwise
     requires;  and


<PAGE>
          (f)  a  reference  to the singular includes the plural and vice versa.

          "Beneficiaries"  means  any  Person to whom the Issuer is or hereafter
becomes  indebted  or  liable.

          "Corporate  Trust Office" means the office of the Guarantee Trustee at
which  the  corporate  trust  business  of  the  Guarantee Trustee shall, at any
particular  time,  be  principally  administered.

          "Covered Person" means any Holder of Capital Securities.

          "Debentures"  means the junior subordinated debentures of Southeastern
Bank  Financial  Corporation, designated the Junior Subordinated Debt Securities
due  2035,  held by the Institutional Trustee (as defined in the Declaration) of
the  Issuer.

          "Event of Default" has the meaning set forth in Section 2.4.

          "Guarantee  Payments"  means  the following payments or distributions,
without  duplication,  with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in  the Declaration) which are required to be paid on such Capital Securities to
the extent the Issuer has funds available in the Property Account (as defined in
the Declaration) therefor at such time, (ii) the Redemption Price (as defined in
the  Indenture)  to  the  extent  the Issuer has funds available in the Property
Account therefor at such time, with respect to any Capital Securities called for
redemption  by the Issuer, (iii) the Special Redemption Price (as defined in the
Indenture)  to the extent the Issuer has funds available in the Property Account
therefor  at such time, with respect to Capital Securities called for redemption
upon  the  occurrence of a Special Event (as defined in the Indenture), and (iv)
upon  a  voluntary  or  involuntary  liquidation,  dissolution,  winding-up  or
termination  of  the  Issuer  (other than in connection with the distribution of
Debentures  to  the  Holders  of  the Capital Securities in exchange therefor as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Capital Securities to the
date  of  payment,  to the extent the Issuer has funds available in the Property
Account  therefor  at  such  time,  and  (b)  the amount of assets of the Issuer
remaining  available  for  distribution  to Holders in liquidation of the Issuer
after  satisfaction  of  liabilities  to  creditors of the Issuer as required by
applicable  law  (in  either  case,  the  "Liquidation  Distribution").

          "Guarantee  Trustee"  means  U.S.  Bank  National Association, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee and thereafter means each such Successor
Guarantee  Trustee.

          "Holder"  means  any holder, as registered on the books and records of
the  Issuer,  of any Capital Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor  or  any  Affiliate  of  the  Guarantor.

          "Indemnified  Person"  means  the  Guarantee Trustee (including in its
individual  capacity),  any Affiliate of the Guarantee Trustee, or any officers,
directors,  shareholders,


                                      -2-
<PAGE>
members, partners, employees, representatives, nominees, custodians or agents of
the  Guarantee  Trustee.

          "Indenture" means the Indenture, dated as of December 5, 2005, between
the Guarantor and U.S. Bank National Association, not in its individual capacity
but  solely as trustee, and any indenture supplemental thereto pursuant to which
the  Debentures  are  to  be  issued to the Institutional Trustee of the Issuer.

          "Liquidation Distribution" has the meaning set forth in the definition
of  "Guarantee  Payments"  herein.

          "Majority  in  liquidation  amount  of  the  Capital Securities" means
Holder(s)  of  outstanding  Capital  Securities, voting together as a class, but
separately  from  the  holders  of  Common  Securities,  of more than 50% of the
aggregate  liquidation amount (including the stated amount that would be paid on
redemption,  liquidation or otherwise, plus accrued and unpaid Distributions to,
but excluding, the date upon which the voting percentages are determined) of all
Capital  Securities  then  outstanding.

          "Obligations"  means  any  costs,  expenses  or  liabilities  (but not
including liabilities related to taxes) of the Issuer, other than obligations of
the  Issuer  to  pay  to  holders  of  any Trust Securities the amounts due such
holders  pursuant  to  the  terms  of  the  Trust  Securities.

          "Officer's  Certificate"  means,  with  respect  to  any  Person,  a
certificate  signed  by  one  Authorized  Officer  of such Person. Any Officer's
Certificate  delivered  with  respect to compliance with a condition or covenant
provided  for  in  this  Guarantee  shall  include:

          (a)  a  statement  that each officer signing the Officer's Certificate
     has  read  the  covenant or condition and the definitions relating thereto;

          (b)  a  brief  statement of the nature and scope of the examination or
     investigation  undertaken  by  each  officer  in  rendering  the  Officer's
     Certificate;

          (c)  a  statement  that each such officer has made such examination or
     investigation  as,  in  such officer's opinion, is necessary to enable such
     officer  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, in the opinion of each such officer,
     such  condition  or  covenant  has  been  complied  with.

          "Person"  means a legal person, including any individual, corporation,
estate,  partnership,  joint  venture, association, joint stock company, limited
liability  company,  trust,  unincorporated  association,  or  government or any
agency or political subdivision thereof, or any other entity of whatever nature.

          "Responsible  Officer"  means,  with respect to the Guarantee Trustee,
any  officer  within  the  Corporate  Trust Office of the Guarantee Trustee with
direct  responsibility  for  the  administration of any matters relating to this
Guarantee,  including  any  vice  president,  any


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<PAGE>
assistant vice president, any secretary, any assistant secretary, the treasurer,
any  assistant  treasurer,  any  trust officer or other officer of the Corporate
Trust  Office  of the Guarantee 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.

          "Successor  Guarantee  Trustee"  means  a  successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 3.1.

          "Trust  Securities"  means  the  Common  Securities  and  the  Capital
Securities.

                                   ARTICLE II
               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 2.1.  Powers and Duties of the Guarantee Trustee.
              -------------------------------------------

          (a)  This  Guarantee  shall  be  held by the Guarantee Trustee for the
     benefit of the Holders of the Capital Securities, and the Guarantee Trustee
     shall  not transfer this Guarantee to any Person except a Holder of Capital
     Securities  exercising his or her rights pursuant to Section 4.4(b) or to a
     Successor  Guarantee  Trustee  on  acceptance  by  such Successor Guarantee
     Trustee  of  its  appointment  to  act  as Successor Guarantee Trustee. The
     right, title and interest of the Guarantee Trustee shall automatically vest
     in any Successor Guarantee Trustee, and such vesting and cessation of title
     shall be effective whether or not conveyancing documents have been executed
     and  delivered  pursuant  to  the  appointment  of such Successor Guarantee
     Trustee.

          (b)  If an Event of Default actually known to a Responsible Officer of
     the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
     shall  enforce this Guarantee for the benefit of the Holders of the Capital
     Securities.

          (c)  The  Guarantee  Trustee,  before  the  occurrence of any Event of
     Default  and  after the curing or waiving of all Events of Default that may
     have  occurred,  shall  undertake  to  perform  only  such  duties  as  are
     specifically set forth in this Guarantee, and no implied covenants shall be
     read into this Guarantee against the Guarantee Trustee. In case an Event of
     Default has occurred (that has not been cured or waived pursuant to Section
     2.4(b))  and  is  actually  known to a Responsible Officer of the Guarantee
     Trustee, the Guarantee Trustee shall exercise such of the rights and powers
     vested  in  it by this Guarantee, and use the same degree of care and skill
     in  its  exercise  thereof, as a prudent person would exercise or use under
     the  circumstances  in  the  conduct  of  his  or  her  own  affairs.

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

               (i) prior to the occurrence of any Event of Default and after the
          curing  or  waiving  of  all Events of Default that may have occurred:


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<PAGE>
                    (A)  the  duties  and  obligations  of the Guarantee Trustee
               shall  be  determined  solely  by  the express provisions of this
               Guarantee,  and  the Guarantee Trustee shall not be liable except
               for  the  performance  of  such  duties  and  obligations  as are
               specifically  set  forth  in  this  Guarantee,  and  no  implied
               covenants  or  obligations  shall  be  read  into  this Guarantee
               against  the  Guarantee  Trustee;  and

                    (B) in the absence of bad faith on the part of the Guarantee
               Trustee,  the  Guarantee 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  Guarantee Trustee and conforming to the requirements of this
               Guarantee;  but  in the case of any such certificates or opinions
               furnished  to  the Guarantee Trustee, the Guarantee Trustee shall
               be  under  a duty to examine the same to determine whether or not
               on their face they conform to the requirements of this Guarantee;

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

               (iii)  the  Guarantee 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 written direction of the Holders of not less than
          a Majority in liquidation amount of the Capital Securities relating to
          the time, method and place of conducting any proceeding for any remedy
          available  to  the Guarantee Trustee, or exercising any trust or power
          conferred  upon  the  Guarantee  Trustee  under  this  Guarantee;  and

               (iv)  no  provision of this Guarantee shall require the Guarantee
          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, if the Guarantee Trustee
          shall have reasonable grounds for believing that the repayment of such
          funds  is  not  reasonably  assured  to  it  under  the  terms of this
          Guarantee,  or  security and indemnity, reasonably satisfactory to the
          Guarantee  Trustee,  against  such risk or liability is not reasonably
          assured  to  it.

SECTION 2.2.  Certain Rights of the Guarantee Trustee.
              ----------------------------------------

          (a)  Subject to the provisions of Section 2.1:

               (i)  The  Guarantee  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,  direction,  consent,  order, bond, debenture, note,
          other  evidence of indebtedness or other paper or document believed by
          it  to  be  genuine  and to have been signed, sent or presented by the
          proper  party  or  parties.


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<PAGE>
               (ii)  Any  direction or act of the Guarantor contemplated by this
          Guarantee shall be sufficiently evidenced by an Officer's Certificate.

               (iii)  Whenever,  in  the  administration  of this Guarantee, the
          Guarantee  Trustee  shall deem it desirable that a matter be proved or
          established before taking, suffering or omitting any action hereunder,
          the  Guarantee  Trustee  (unless other evidence is herein specifically
          prescribed)  may, in the absence of bad faith on its part, request and
          conclusively  rely  upon  an  Officer's  Certificate  of the Guarantor
          which,  upon  receipt  of such request, shall be promptly delivered by
          the  Guarantor.

               (iv)  The  Guarantee  Trustee  shall  have  no duty to see to any
          recording,  filing  or registration of any instrument or other writing
          (or  any  rerecording,  refiling  or  reregistration  thereof).

               (v)  The  Guarantee  Trustee  may  consult  with  counsel  of its
          selection,  and  the advice or opinion of such counsel with respect to
          legal  matters 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. Such counsel
          may  be  counsel  to  the  Guarantor  or any of its Affiliates and may
          include  any  of  its  employees. The Guarantee Trustee shall have the
          right  at  any time to seek instructions concerning the administration
          of  this  Guarantee  from  any  court  of  competent  jurisdiction.

               (vi)  The  Guarantee  Trustee  shall  be  under  no obligation to
          exercise any of the rights or powers vested in it by this Guarantee at
          the  request or direction of any Holder, unless such Holder shall have
          provided  to  the  Guarantee  Trustee  such  security  and  indemnity,
          reasonably  satisfactory  to the Guarantee Trustee, against the costs,
          expenses  (including  attorneys' fees and expenses and the expenses of
          the  Guarantee  Trustee's  agents,  nominees  or  custodians)  and
          liabilities  that  might  be  incurred  by  it  in complying with such
          request  or  direction,  including  such reasonable advances as may be
          requested  by  the  Guarantee Trustee; provided, however, that nothing
                                                 --------  -------
          contained  in  this  Section  2.2(a)(vi) shall be taken to relieve the
          Guarantee  Trustee, upon the occurrence of an Event of Default, of its
          obligation  to  exercise  the  rights  and powers vested in it by this
          Guarantee.

               (vii)  The  Guarantee  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,
          direction,  consent,  order,  bond, debenture, note, other evidence of
          indebtedness or other paper or document, but the Guarantee Trustee, in
          its  discretion,  may  make such further inquiry or investigation into
          such  facts  or  matters  as  it  may  see  fit.

               (viii)  The  Guarantee  Trustee  may execute any of the trusts or
          powers hereunder or perform any duties hereunder either directly or by
          or  through  agents,  nominees,  custodians  or  attorneys,  and  the
          Guarantee  Trustee  shall  not  be


                                      -6-
<PAGE>
          responsible  for any misconduct or negligence on the part of any agent
          or  attorney  appointed  with  due  care  by  it  hereunder.

               (ix)  Any  action  taken  by  the Guarantee Trustee or its agents
          hereunder  shall  bind  the Holders of the Capital Securities, and the
          signature  of  the  Guarantee  Trustee  or  its  agents alone shall be
          sufficient  and  effective  to perform any such action. No third party
          shall  be  required  to  inquire  as to the authority of the Guarantee
          Trustee  to  so  act or as to its compliance with any of the terms and
          provisions  of  this  Guarantee,  both  of which shall be conclusively
          evidenced  by  the  Guarantee  Trustee's  or  its  agent's taking such
          action.

               (x)  Whenever  in  the  administration  of  this  Guarantee  the
          Guarantee Trustee shall deem it desirable to receive instructions with
          respect  to  enforcing  any remedy or right or taking any other action
          hereunder, the Guarantee Trustee (A) may request instructions from the
          Holders of a Majority in liquidation amount of the Capital Securities,
          (B)  may  refrain  from  enforcing such remedy or right or taking such
          other  action  until  such  instructions are received and (C) shall be
          protected in conclusively relying on or acting in accordance with such
          instructions.

               (xi)  The  Guarantee  Trustee  shall not be liable for any action
          taken,  suffered,  or  omitted  to  be  taken  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  Guarantee.

          (b)     No  provision  of this Guarantee shall be deemed to impose any
duty  or  obligation  on  the  Guarantee  Trustee  to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction  in  which  it  shall  be illegal or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law to perform
any  such  act or acts or to exercise any such right, power, duty or obligation.
No  permissive  power  or  authority available to the Guarantee Trustee shall be
construed  to  be  a  duty.

SECTION 2.3.  Not Responsible for Recitals or Issuance of Guarantee.
              ------------------------------------------------------

          The  recitals  contained  in  this  Guarantee  shall  be  taken as the
statements  of  the  Guarantor,  and  the  Guarantee Trustee does not assume any
responsibility  for  their  correctness.  The  Guarantee  Trustee  makes  no
representation  as  to  the  validity  or  sufficiency  of  this  Guarantee.

SECTION 2.4.  Events of Default; Waiver.
              --------------------------

          (a)  An  Event  of  Default  under  this Guarantee will occur upon the
     failure of the Guarantor to perform any of its payment or other obligations
     hereunder.

          (b)  The  Holders  of  a Majority in liquidation amount of the Capital
     Securities  may,  voting or consenting as a class, on behalf of the Holders
     of  all  of the Capital Securities, waive any past Event of Default and its
     consequences.  Upon  such  waiver,  any


                                      -7-
<PAGE>
     such  Event  of  Default  shall cease to exist, and shall be deemed to have
     been  cured,  for every purpose of this Guarantee, but no such waiver shall
     extend to any subsequent or other default or Event of Default or impair any
     right  consequent  thereon.

SECTION 2.5.  Events of Default; Notice.
              --------------------------

          (a)  The  Guarantee Trustee shall, within 90 days after the occurrence
     of  an  Event of Default, transmit by mail, first class postage prepaid, to
     the  Holders  of  the  Capital Securities, notices of all Events of Default
     actually  known  to  a Responsible Officer of the Guarantee Trustee, unless
     such  defaults  have been cured before the giving of such notice; provided,
                                                                       ---------
     however,  that the Guarantee Trustee shall be protected in withholding such
     -------
     notice  if and so long as a Responsible Officer of the Guarantee Trustee in
     good  faith  determines  that  the  withholding  of  such  notice is in the
     interests  of  the  Holders  of  the  Capital  Securities.

          (b)  The  Guarantee Trustee shall not be charged with knowledge of any
     Event  of  Default unless the Guarantee Trustee shall have received written
     notice thereof from the Guarantor or a Holder of the Capital Securities, or
     a  Responsible  Officer  of  the  Guarantee  Trustee  charged  with  the
     administration  of  this  Guarantee  shall  have  actual knowledge thereof.

                                   ARTICLE III
                              THE GUARANTEE TRUSTEE

SECTION 3.1.  The Guarantee Trustee; Eligibility.
              -----------------------------------

          (a)  There  shall  at  all  times  be a Guarantee Trustee which shall:

               (i)  not  be  an  Affiliate  of  the  Guarantor;  and

               (ii) be a corporation or national association organized and doing
          business  under  the laws of the United States of America or any state
          or  territory  thereof  or  of  the  District  of  Columbia, or Person
          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,  territorial  or  District  of  Columbia  authority.  If  such
          corporation  or national association publishes reports of condition at
          least  annually,  pursuant  to  law  or  to  the  requirements  of the
          supervising  or  examining  authority referred to above, then, for the
          purposes  of this Section 3.1(a)(ii), the combined capital and surplus
          of  such corporation or national association shall be deemed to be its
          combined capital and surplus as set forth in its most recent report of
          condition  so  published.

          (b) If at any time the Guarantee Trustee shall cease to be eligible to
     so act under Section 3.1(a), the Guarantee Trustee shall immediately resign
     in  the  manner  and  with  the  effect  set  forth  in  Section  3.2(c).


                                      -8-
<PAGE>
          (c)  If  the  Guarantee  Trustee has or shall acquire any "conflicting
     interest'  within the meaning of Section 310(b) of the Trust Indenture Act,
     the Guarantee Trustee shall either eliminate such interest or resign to the
     extent  and  in  the  manner  provided  by, and subject to, this Guarantee.

SECTION 3.2.  Appointment, Removal and Resignation of the Guarantee Trustee.
              --------------------------------------------------------------

          (a)  Subject to Section 3.2(b), the Guarantee Trustee may be appointed
     or  removed  without  cause  at  any time by the Guarantor except during an
     Event  of  Default.

          (b)  The  Guarantee  Trustee  shall  not be removed in accordance with
     Section  3.2(a)  until a Successor Guarantee Trustee has been appointed and
     has  accepted  such  appointment  by  written  instrument  executed by such
     Successor  Guarantee  Trustee  and  delivered  to  the  Guarantor.

          (c)  The Guarantee Trustee appointed to office shall hold office until
     a  Successor  Guarantee  Trustee  shall  have  been  appointed or until its
     removal  or  resignation.  The  Guarantee  Trustee  may  resign from office
     (without  need  for  prior  or  subsequent  accounting) by an instrument in
     writing  executed  by the Guarantee Trustee and delivered to the Guarantor,
     which resignation shall not take effect until a Successor Guarantee Trustee
     has  been  appointed  and has accepted such appointment by an instrument in
     writing  executed  by such Successor Guarantee Trustee and delivered to the
     Guarantor  and  the  resigning  Guarantee  Trustee.

          (d)  If  no  Successor Guarantee Trustee shall have been appointed and
     accepted  appointment  as provided in this Section 3.2 within 60 days after
     delivery  of an instrument of removal or resignation, the Guarantee Trustee
     resigning or being removed may petition any court of competent jurisdiction
     for appointment of a Successor Guarantee Trustee. Such court may thereupon,
     after  prescribing  such  notice,  if any, as it may deem proper, appoint a
     Successor  Guarantee  Trustee.

          (e)  No Guarantee Trustee shall be liable for the acts or omissions to
     act  of  any  Successor  Guarantee  Trustee.

          (f)  Upon  termination  of this Guarantee or removal or resignation of
     the Guarantee Trustee pursuant to this Section 3.2, the Guarantor shall pay
     to  the  Guarantee Trustee all amounts owing to the Guarantee Trustee under
     Sections  7.2  and  7.3 accrued to the date of such termination, removal or
     resignation.

                                   ARTICLE IV
                                    GUARANTEE

SECTION 4.1.  Guarantee.
              ----------

          (a)  The  Guarantor  irrevocably  and unconditionally agrees to pay in
     full  to the Holders the Guarantee Payments (without duplication of amounts
     theretofore paid by the Issuer), as and when due, regardless of any defense
     (except  as  defense  of  payment  by  the  Issuer),  right  of  set-off or
     counterclaim  that  the  Issuer  may  have  or  assert.  The


                                      -9-
<PAGE>
     Guarantor's  obligation  to  make  a  Guarantee Payment may be satisfied by
     direct  payment  of the required amounts by the Guarantor to the Holders or
     by  causing  the  Issuer  to  pay  such  amounts  to  the  Holders.

          (b) The Guarantor hereby also agrees to assume any and all Obligations
     of  the  Issuer  and  in  the  event any such Obligation is not so assumed,
     subject  to  the  terms  and  conditions  hereof,  the  Guarantor  hereby
     irrevocably  and  unconditionally  guarantees  to each Beneficiary the full
     payment, when and as due, of any and all Obligations to such Beneficiaries.
     This  Guarantee  is  intended to be for the Beneficiaries who have received
     notice hereof.

SECTION 4.2.  Waiver of Notice and Demand.
              ----------------------------

          The Guarantor hereby waives notice of acceptance of this Guarantee and
of  any  liability  to  which  it  applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Issuer or any other
Person  before  proceeding against the Guarantor, protest, notice of nonpayment,
notice  of  dishonor,  notice  of  redemption and all other notices and demands.

SECTION 4.3.  Obligations Not Affected.
              -------------------------

          The  obligations,  covenants,  agreements  and duties of the Guarantor
under  this  Guarantee  shall in no way be affected or impaired by reason of the
happening  from  time  to  time  of  any  of  the  following:

          (a)  the  release  or waiver, by operation of law or otherwise, of the
     performance  or  observance  by  the  Issuer  of  any  express  or  implied
     agreement,  covenant,  term or condition relating to the Capital Securities
     to  be  performed  or  observed  by  the  Issuer;

          (b)  the extension of time for the payment by the Issuer of all or any
     portion  of  the Distributions, Redemption Price, Special Redemption Price,
     Liquidation  Distribution  or any other sums payable under the terms of the
     Capital  Securities  or  the  extension  of time for the performance of any
     other  obligation under, arising out of, or in connection with, the Capital
     Securities  (other  than  an  extension  of  time  for  the  payment of the
     Distributions,  Redemption  Price,  Special  Redemption  Price, Liquidation
     Distribution  or  other sums payable that results from the extension of any
     interest  payment period on the Debentures or any extension of the maturity
     date  of  the  Debentures  permitted  by  the  Indenture);

          (c)  any  failure, omission, delay or lack of diligence on the part of
     the  Holders  to enforce, assert or exercise any right, privilege, power or
     remedy  conferred  on  the  Holders  pursuant  to  the terms of the Capital
     Securities,  or any action on the part of the Issuer granting indulgence or
     extension  of  any  kind;

          (d) the voluntary or involuntary liquidation, dissolution, sale of any
     collateral,  receivership,  insolvency,  bankruptcy,  assignment  for  the
     benefit  of  creditors,  reorganization,  arrangement,  composition  or
     readjustment of debt of, or other similar proceedings affecting, the Issuer
     or  any  of  the  assets  of  the  Issuer;


                                      -10-
<PAGE>
          (e)  any  invalidity  of,  or  defect  or  deficiency  in, the Capital
     Securities;

          (f)  the  settlement or compromise of any obligation guaranteed hereby
     or  hereby  incurred;  or

          (g)  any other circumstance whatsoever that might otherwise constitute
     a  legal  or  equitable  discharge  or defense of a guarantor, it being the
     intent  of this Section 4.3 that the obligations of the Guarantor hereunder
     shall  be  absolute  and  unconditional  under  any  and all circumstances.

          There  shall  be  no  obligation  of the Holders to give notice to, or
obtain  consent  of,  the  Guarantor with respect to the happening of any of the
foregoing.

SECTION 4.4.  Rights of Holders.
              ------------------

          (a)  The  Holders  of  a Majority in liquidation amount of the Capital
     Securities  have  the  right  to  direct  the  time,  method  and  place of
     conducting any proceeding for any remedy available to the Guarantee Trustee
     in  respect  of  this  Guarantee  or to direct the exercise of any trust or
     power  conferred upon the Guarantee Trustee under this Guarantee; provided,
                                                                       --------
     however, that (subject to Sections 2.1 and 2.2) the Guarantee Trustee shall
     -------
     have  the  right  to  decline to follow any such direction if the Guarantee
     Trustee  shall  determine  that  the  actions so directed would be unjustly
     prejudicial  to  the  Holders  not  taking part in such direction or if the
     Guarantee Trustee being advised by legal counsel determines that the action
     or  proceeding  so  directed  may not lawfully be taken or if the Guarantee
     Trustee  in  good  faith  by  its board of directors or trustees, executive
     committee  or a trust committee of directors or trustees and/or Responsible
     Officers  shall  determine  that the action or proceeding so directed would
     involve  the  Guarantee  Trustee  in  personal  liability.

          (b)  Any Holder of Capital Securities may institute a legal proceeding
     directly  against  the  Guarantor to enforce the Guarantee Trustee's rights
     under  this Guarantee, without first instituting a legal proceeding against
     the Issuer, the Guarantee Trustee or any other Person. The Guarantor waives
     any  right  or  remedy  to  require  that  any such action be brought first
     against  the  Issuer,  the  Guarantee Trustee or any other Person before so
     proceeding  directly  against  the  Guarantor.

SECTION 4.5.  Guarantee of Payment.
              ---------------------

          This  Guarantee  creates a guarantee of payment and not of collection.

SECTION 4.6.  Subrogation.
              ------------

          The  Guarantor  shall  be  subrogated  to  all  (if any) rights of the
Holders  of Capital Securities against the Issuer in respect of any amounts paid
to  such  Holders by the Guarantor under this Guarantee; provided, however, that
                                                         --------  -------
the  Guarantor shall not (except to the extent required by applicable provisions
of  law) be entitled to enforce or exercise any right that it may acquire by way
of  subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee, if, after giving effect to any such
payment,  any


                                      -11-
<PAGE>
amounts  are due and unpaid under this Guarantee. If any amount shall be paid to
the  Guarantor  in  violation of the preceding sentence, the Guarantor agrees to
hold  such  amount  in  trust for the Holders and to pay over such amount to the
Holders.

SECTION 4.7.  Independent Obligations.
              ------------------------

          The  Guarantor  acknowledges  that  its  obligations  hereunder  are
independent  of  the  obligations  of  the  Issuer  with  respect to the Capital
Securities  and  that  the  Guarantor shall be liable as principal and as debtor
hereunder  to  make  Guarantee  Payments pursuant to the terms of this Guarantee
notwithstanding  the  occurrence  of  any  event  referred to in subsections (a)
through  (g),  inclusive,  of  Section  4.3  hereof.

SECTION 4.8.  Enforcement.
              ------------

          A  Beneficiary  may enforce the Obligations of the Guarantor contained
in  Section  4.1(b) directly against the Guarantor, and the Guarantor waives any
right  or remedy to require that any action be brought against the Issuer or any
other  person  or  entity  before  proceeding  against  the  Guarantor.

          The  Guarantor  shall  be  subrogated  to  all  rights (if any) of any
Beneficiary  against  the  Issuer  in  respect  of  any  amounts  paid  to  the
Beneficiaries by the Guarantor under this Guarantee; provided, however, that the
                                                     --------  -------
Guarantor  shall  not (except to the extent required by applicable provisions of
law) be entitled to enforce or exercise any rights that it may acquire by way of
subrogation  or any indemnity, reimbursement or other agreement, in all cases as
a  result  of  payment  under  this  Guarantee,  if, after giving effect to such
payment,  any  amounts  are  due  and  unpaid  under  this  Guarantee.

                                    ARTICLE V
                    LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 5.1.  Limitation of Transactions.
              ---------------------------

          So  long  as  any  Capital Securities remain outstanding, if (a) there
shall  have  occurred and be continuing an Event of Default or (b) the Guarantor
shall  have selected an Extension Period as provided in the Declaration and such
period,  or  any extension thereof, shall have commenced and be continuing, then
the  Guarantor  may not (x) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the  Guarantor's  capital  stock  or  (y)  make  any  payment of principal of or
interest  or  premium,  if  any,  on  or  repay,  repurchase  or redeem any debt
securities  of the Guarantor that rank pari passu in all respects with or junior
in  interest  to  the  Debentures (other than (i) payments under this Guarantee,
(ii)  repurchases,  redemptions or other acquisitions of shares of capital stock
of the Guarantor (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 Guarantor (or securities convertible into or
exercisable  for  such  capital  stock),  as  consideration  in  an  acquisition
transaction  entered into prior to the occurrence of the Event of Default or the
applicable  Extension  Period,  (iii)  as  a  result  of  any  exchange,
reclassification,  combination  or


                                      -12-
<PAGE>
conversion  of  any  class  or  series  of the Guarantor's capital stock (or any
capital  stock  of a subsidiary of the Guarantor) for any class or series of the
Guarantor's  capital  stock  or  of  any  class  or  series  of  the Guarantor's
indebtedness  for any class or series of the Guarantor's capital stock, (iv) the
purchase  of  fractional  interests  in  shares of the Guarantor's capital stock
pursuant  to  the conversion or exchange provisions of such capital stock or the
security  being  converted  or  exchanged,  (v) 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  (vi) 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 5.2.  Ranking.
              --------

          This  Guarantee  will  constitute  an  unsecured  obligation  of  the
Guarantor  and  will  rank  subordinate  and  junior  in right of payment to all
present  and  future  Senior  Indebtedness  (as defined in the Indenture) of the
Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees
to  the  foregoing  provisions  of  this Guarantee and the other terms set forth
herein.

          The  right  of  the  Guarantor  to  participate in any distribution of
assets  of  any  of  its  subsidiaries upon any such subsidiary's liquidation or
reorganization  or otherwise is subject to the prior claims of creditors of that
subsidiary,  except  to  the  extent the Guarantor may itself be recognized as a
creditor of that subsidiary. Accordingly, the Guarantor's obligations under this
Guarantee  will  be  effectively  subordinated  to  all  existing  and  future
liabilities  of  the Guarantor's subsidiaries, and claimants should look only to
the  assets  of  the  Guarantor for payments thereunder. This Guarantee does not
limit  the  incurrence  or  issuance  of  other secured or unsecured debt of the
Guarantor,  including  Senior Indebtedness of the Guarantor, under any indenture
or  agreement  that  the  Guarantor  may  enter into in the future or otherwise.

                                   ARTICLE VI
                                   TERMINATION

SECTION 6.1.  Termination.
              ------------

          This  Guarantee  shall terminate as to the Capital Securities (i) upon
full  payment  of  the  Redemption Price or the Special Redemption Price, as the
case  may  be,  of  all  Capital  Securities  then  outstanding,  (ii)  upon the
distribution  of  all  of  the  Debentures  to the Holders of all of the Capital
Securities  or (iii) upon full payment of the amounts payable in accordance with
the  Declaration upon dissolution of the Issuer. This Guarantee will continue to
be  effective  or  will  be  reinstated,  as the case may be, if at any time any
Holder  of  Capital  Securities  must restore payment of any sums paid under the
Capital  Securities  or  under  this  Guarantee.


                                      -13-
<PAGE>
                                   ARTICLE VII
                                 INDEMNIFICATION

SECTION 7.1.  Exculpation.
              ------------

          (a)  No Indemnified Person shall be liable, responsible or accountable
     in  damages  or  otherwise  to  the Guarantor or any Covered Person for any
     loss,  damage  or  claim  incurred by reason of any act or omission of such
     Indemnified Person in good faith in accordance with this Guarantee and in a
     manner  that  such  Indemnified Person reasonably believed to be within the
     scope  of  the  authority  conferred  on  such  Indemnified  Person by this
     Guarantee  or by law, except that an Indemnified Person shall be liable for
     any  such  loss,  damage  or  claim  incurred by reason of such Indemnified
     Person's  negligence  or  willful  misconduct  with respect to such acts or
     omissions.

          (b)  An Indemnified Person shall be fully protected in relying in good
     faith  upon  the  records  of  the  Issuer  or  the Guarantor and upon such
     information, opinions, reports or statements presented to the Issuer or the
     Guarantor  by  any  Person  as to matters the Indemnified Person reasonably
     believes  are  within such other Person's professional or expert competence
     and  who,  if  selected  by such Indemnified Person, has been selected with
     reasonable  care  by  such  Indemnified  Person,  including  information,
     opinions,  reports  or statements as to the value and amount of the assets,
     liabilities, profits, losses, or any other facts pertinent to the existence
     and  amount  of  assets  from  which  Distributions  to  Holders of Capital
     Securities  might  properly  be  paid.

SECTION 7.2.  Indemnification.
              ----------------

          (a) The Guarantor agrees to indemnify each Indemnified Person for, and
     to  hold  each  Indemnified  Person  harmless  against,  any  and all loss,
     liability,  damage, claim or expense incurred without negligence or willful
     misconduct  on  the  part  of  the Indemnified Person, arising out of or in
     connection  with  the  acceptance  or administration of the trust or trusts
     hereunder,  including  but not limited to the costs and expenses (including
     reasonable  legal  fees  and  expenses) of the Indemnified Person defending
     itself against, or investigating, any claim or liability in connection with
     the  exercise  or  performance of any of the Indemnified Person's powers or
     duties  hereunder. The obligation to indemnify as set forth in this Section
     7.2  shall  survive the resignation or removal of the Guarantee Trustee and
     the  termination  of  this  Guarantee.

          (b) Promptly after receipt by an Indemnified Person under this Section
     7.2  of  notice  of the commencement of any action, such Indemnified Person
     will,  if  a  claim  in respect thereof is to be made against the Guarantor
     under this Section 7.2, notify the Guarantor in writing of the commencement
     thereof;  but  the  failure so to notify the Guarantor (i) will not relieve
     the  Guarantor  from  liability under paragraph (a) above unless and to the
     extent  that  the Guarantor did not otherwise learn of such action and such
     failure  results  in  the forfeiture by the Guarantor of substantial rights
     and  defenses  and  (ii) will not, in any event, relieve the Guarantor from
     any  obligations  to  any Indemnified Person other than the indemnification
     obligation provided in paragraph (a) above. The Guarantor shall be entitled
     to  appoint  counsel  of  the  Guarantor's  choice  at  the  Guarantor's


                                      -14-
<PAGE>
     expense  to  represent  the  Indemnified  Person  in  any  action for which
     indemnification is sought (in which case the Guarantor shall not thereafter
     be  responsible  for the fees and expenses of any separate counsel retained
     by  the Indemnified Person or Persons except as set forth below); provided,
                                                                       --------
     however, that such counsel shall be satisfactory to the Indemnified Person.
     -------
     Notwithstanding  the  Guarantor's  election to appoint counsel to represent
     the Indemnified Person in any action, the Indemnified Person shall have the
     right  to  employ  separate  counsel  (including  local  counsel),  and the
     Guarantor  shall  bear  the  reasonable  fees,  costs  and expenses of such
     separate  counsel  (and local counsel), if (i) the use of counsel chosen by
     the  Guarantor  to  represent  the  Indemnified  Person  would present such
     counsel  with  a  conflict  of  interest,  (ii)  the  actual  or  potential
     defendants  in, or targets of, any such action include both the Indemnified
     Person  and  the Guarantor and the Indemnified Person shall have reasonably
     concluded  that  there  may  be legal defenses available to it and/or other
     Indemnified  Persons  which  are  different  from  or  additional  to those
     available  to  the  Guarantor,  (iii) the Guarantor shall not have employed
     counsel satisfactory to the Indemnified Person to represent the Indemnified
     Person  within  a  reasonable  time after notice of the institution of such
     action  or  (iv)  the  Guarantor  shall authorize the Indemnified Person to
     employ separate counsel at the expense of the Guarantor. The Guarantor will
     not,  without  the prior written consent of the Indemnified Persons, settle
     or  compromise  or consent to the entry of any judgment with respect to any
     pending or threatened claim, action, suit or proceeding in respect of which
     indemnification or contribution may be sought hereunder (whether or not the
     Indemnified  Persons  are  actual  or  potential  parties  to such claim or
     action)  unless  such  settlement,  compromise  or  consent  includes  an
     unconditional release of each Indemnified Person from all liability arising
     out  of  such  claim,  action,  suit  or  proceeding.

SECTION 7.3.  Compensation; Reimbursement of Expenses.
              ----------------------------------------

          Other  than  as  provided  in  the Fee Agreement of even date herewith
between  Cohen  Bros. & Company and the Guarantee Trustee, the Guarantor agrees:

          (a)  to  pay  to  the  Guarantee  Trustee  from  time  to  time  such
     compensation for all services rendered by it hereunder as the parties shall
     agree  to from time to time (which compensation shall not be limited by any
     provision  of  law in regard to the compensation of a trustee of an express
     trust);  and

          (b)  except  as  otherwise expressly provided herein, to reimburse the
     Guarantee  Trustee  upon request for all reasonable expenses, disbursements
     and  advances  incurred  or  made by it in accordance with any provision of
     this  Guarantee (including the reasonable compensation and the expenses and
     disbursements  of  its  agents  and  counsel),  except  any  such  expense,
     disbursement or advance as may be attributable to its negligence or willful
     misconduct.

          The  provisions  of  this Section 7.3 shall survive the resignation or
removal of the Guarantee Trustee and the termination of this Guarantee.


                                      -15-
<PAGE>
                                  ARTICLE VIII
                                  MISCELLANEOUS

SECTION 8.1.  Successors and Assigns.
              -----------------------

          All  guarantees  and agreements contained in this Guarantee shall bind
the  successors,  assigns,  receivers,  trustees  and  representatives  of  the
Guarantor  and  shall  inure  to  the  benefit  of  the  Holders  of the Capital
Securities  then  outstanding.  Except  in  connection  with  any  merger  or
consolidation of the Guarantor with or into another entity or any sale, transfer
or  lease  of the Guarantor's assets or capital stock to another entity, in each
case  to  the extent permitted under the Indenture, the Guarantor may not assign
its  rights  or  delegate its obligations under this Guarantee without the prior
approval of the Holders of not less than a Majority in liquidation amount of the
Capital  Securities.

SECTION 8.2.  Amendments.
              -----------

          Except  with  respect  to any changes that do not adversely affect the
rights  of  Holders  of the Capital Securities in any material respect (in which
case no consent of Holders will be required), this Guarantee may be amended only
with  the  prior  approval  of  the  Holders  of  not  less  than  a Majority in
liquidation  amount of the Capital Securities. The provisions of the Declaration
with  respect  to  amendments  thereof  shall  apply  equally  with  respect  to
amendments  of  the  Guarantee.

SECTION 8.3.  Notices.
              --------

          All  notices  provided for in this Guarantee shall be in writing, duly
signed  by  the  party giving such notice, and shall be delivered, telecopied or
mailed  by  first  class  mail,  as  follows:

          (a)  If  given  to  the  Guarantee Trustee, at the Guarantee Trustee's
     mailing  address  set  forth  below (or such other address as the Guarantee
     Trustee  may  give  notice  of  to  the Holders of the Capital Securities):

               U.S. Bank National Association
               225 Asylum Street, 23rd Floor
               Hartford, CT 06103
               Attention:  Corporate Trust Services
               Southeastern Bank Financial Statutory Trust I

With a copy to:
               U.S. Bank National Association
               One Federal Street, 3rd Floor
               Boston, MA  02110
               Attention:  Corporate Trust Services
               Southeastern Bank Financial Statutory Trust I
               Telecopy:  (617) 603-6683
               Telephone: (617) 603-6549


                                      -16-
<PAGE>
          (b)  If given to the Guarantor, at the Guarantor's mailing address set
     forth  below  (or such other address as the Guarantor may give notice of to
     the  Holders  of  the  Capital  Securities  and  to the Guarantee Trustee):

               Southeastern Bank Financial Corporation
               3530 Wheeler Road
               Augusta, Georgia  30909
               Attention: Ronald L. Thigpen
               Telecopy: (706) 481-9869
               Telephone: (706) 481-1014

          (c)  If  given to any Holder of the Capital Securities, at the address
     set  forth  on  the  books  and  records  of  the  Issuer.

          All  such  notices shall be deemed to have been given when received in
person,  telecopied  with  receipt  confirmed,  or  mailed  by first class mail,
postage  prepaid,  except that if a notice or other document is refused delivery
or  cannot  be  delivered  because  of  a changed address of which no notice was
given,  such  notice or other document shall be deemed to have been delivered on
the  date  of  such  refusal  or  inability  to  deliver.

SECTION 8.4.  Benefit.
              --------

          This Guarantee is solely for the benefit of the Holders of the Capital
Securities  and,  subject to Section 2.1(a), is not separately transferable from
the  Capital  Securities.

SECTION 8.5.  Governing Law.
              --------------

          THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE  LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).

SECTION 8.6.  Counterparts.
              -------------

          This  Guarantee may contain more than one counterpart of the signature
page  and this Guarantee may be executed by the affixing of the signature of the
Guarantor  and the Guarantee Trustee to any of such counterpart signature pages.
All  of  such  counterpart signature pages shall be read as though one, and they
shall  have  the same force and effect as though all of the signers had signed a
single  signature  page.


                                      -17-
<PAGE>
          THIS GUARANTEE is executed as of the day and year first above written.

                                        Southeastern Bank Financial Corporation,
                                        as Guarantor


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



                                        U.S. BANK NATIONAL ASSOCIATION, as
                                        Guarantee Trustee


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


                                      -18-