CERTIFICATE OF DESIGNATIONS

OF
PREFERRED STOCK, SERIES A

OF
INDEPENDENCE BANCSHARES,
INC. 

Independence Bancshares, Inc.,
a corporation organized and existing under the laws of the State of South
Carolina (the “Corporation”), in accordance with the provisions of Sections
33-6-102 and 33-10-106 of the South Carolina Business Corporation Act of 1988,
as amended, does hereby certify as follows: 

The board of directors of the
Corporation (the “Board of Directors”), in accordance with the articles of
incorporation and bylaws of the Corporation and applicable law, adopted the
following resolution on April 13, 2015, creating a series of 10,000 shares of
Preferred Stock of the Corporation designated as “Preferred Stock, Series A”.


RESOLVED, that pursuant to the
provisions of the articles of incorporation and the bylaws of the Corporation
and applicable law, a series of Preferred Stock, $.01 par value per share, of
the Corporation be and hereby is created, and that the designation and number of
shares of such series, and the voting and other powers, preferences and
relative, participating, optional or other rights, and the qualifications,
limitations and restrictions thereof, of the shares of such series, are as
follows: 

Section 1. Designation. The
designation of the series of Preferred Stock created hereby shall be Preferred
Stock, Series A, with $.01 par value and a liquidation preference of $1,000.00
per share (hereinafter referred to as the “Designated Preferred Stock”). Each
share of Designated Preferred Stock shall be identical in all respects to every
other share of Designated Preferred Stock. The Designated Preferred Stock will
rank equally with any Parity Stock (as defined below) with respect to the
distribution of assets in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, if any, and will
rank senior to the Common Stock (as defined below) with respect to the
distribution of assets in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation. 

Section 2. Number of Shares.
The number of shares of Designated Preferred Stock shall be 10,000. 

Section 3. Definitions. As
used herein with respect to the Designated Preferred Stock: 

“Applicable Dividend Rate”
shall mean 6% per annum.

“Articles of Incorporation”
shall mean the Corporation’s articles of incorporation, as they may be amended,
restated, supplemented or modified from time to time. 

“Bylaws” shall mean the bylaws
of the Corporation, as they may be amended, restated, supplemented or modified
from time to time. 

“Certificate of Designations”
shall mean the Certificate of Designations of the Designated Preferred Stock of
the Corporation, as it may be amended, restated, supplemented or modified from
time to time. 

“Common Stock” shall mean the
common stock, $0.01 par value per share, of the Corporation. 







“Designated Preferred Stock”
shall have the meaning set forth in Section 1 of this Certificate of
Designations. 

“Dividend Payment Commencement
Date” shall mean September 30, 2016. 

“Dividend Payment Date” shall
mean June 15 and December 15 of each year. 

“Junior Stock” shall mean the
Common Stock and any other class or series of capital stock of the Corporation
the terms of which expressly provide that it ranks junior to the Designated
Preferred Stock with respect to the distribution of assets in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation. 

“Parity Stock” shall mean any
class or series of capital stock of the Corporation (other than the Designated
Preferred Stock) the terms of which do not expressly provide that it ranks
senior or junior to the Designated Preferred Stock with respect to the
distribution of assets in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation. 

“Record Date” shall mean the
1st day of the calendar month in which the applicable Dividend Payment Date
falls on or such other record date, not more than thirty calendar days nor less
than ten calendar days preceding the applicable Dividend Payment Date, as is
fixed by the Board of Directors.

“ROA Calculation” shall mean
the percentage calculated by dividing (i) the Corporation’s reported GAAP net income for any two
consecutive quarters, as adjusted for any extraordinary non-recurring charges or
gains relating to securities gains and gains on the sale of assets or their
equivalent (provided, that if any single upfront payments are received during
that quarter, the amount of the upfront payment shall be amortized over the life
of the contract to which such payment relates), and (ii) the Corporation’s
reported average consolidated assets, the average of which will be calculated by
averaging the beginning of the period asset balance and the end of period asset
balance.

“ROA Test” shall be satisfied
when the ROA Calculation exceeds 2.00% (on an annualized basis calculated by
multiplying the quarterly amount by four) as reported under GAAP for any
calendar reporting period.

“SCBCA” shall mean the South
Carolina Business Corporation Act of 1988, as amended. 

Section 4. Dividends. Holders
of Designated Preferred Stock shall be entitled to receive, on each share of
Designated Preferred Stock if, as and when declared by the Board of Directors or
any duly authorized committee of the Board of Directors, but only out of assets
legally available therefor, cash dividends in arrears at a rate per annum equal
to the Applicable Dividend Rate. Such dividends shall be payable Holders of
Designated Preferred Stock on each Dividend Payment Date (except that if any
such date is a Saturday, Sunday or legal holiday, then such dividend shall be
payable on the next day that is not a Saturday, Sunday or legal holiday),
commencing with the first such Dividend Payment Date to occur after the Dividend
Payment Commencement Date to holders of record as they appear upon the stock
transfer books of the Corporation on the Record Date. Dividends shall be
non-cumulative. After the Dividend Payment Commencement Date, the Corporation
shall not declare, pay or set aside any dividends on shares of any Junior Stock
unless (in addition to the obtaining of any consents required elsewhere in the
Certificate of Designations) the holders of the Designated Preferred Stock then
outstanding first receive, or simultaneously receive, a cash dividend in arrears
on each outstanding share of Designated Preferred Stock in an amount no less
than the Applicable Dividend Rate.







Section 5. Liquidation Rights.


(a) Liquidation. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of
Designated Preferred Stock shall be entitled to receive for each share of
Designated Preferred Stock, (i) any declared but unpaid dividends, and (ii) out
of the assets of the Corporation or proceeds thereof (whether capital or
surplus) available for distribution to shareholders of the Corporation, subject
to the rights of the holders of any class or series of securities ranking senior
to the Designated Preferred Stock, the rights of the holders of any Parity Stock
and the rights of the Corporation’s creditors, before any distribution of such
assets or proceeds is made to or set aside for the holders of any Junior Stock
as to such distribution, payment in full of an amount equal to $1,000.00 per
share of Designated Preferred Stock (the “Liquidation Preference”). The holders
of Designated Preferred Stock shall not be entitled to any further payments in
the event of any such voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation other than what is expressly
provided for in this Section 5. 

(b) Partial Payment. If in any distribution described in Section 5(a) above
the assets of the Corporation or proceeds thereof are not sufficient to pay in
full the Liquidation Preference to all holders of Designated Preferred Stock and
the corresponding amounts payable with respect to any Parity Stock as to such
distribution to all holders of such Parity Stock, the holders of Designated
Preferred Stock and the holders of such Parity Stock shall share ratably in any
such distribution in proportion to the full respective distributions to which
they are entitled. 

(c) Residual Distributions. If the Liquidation Preference has been paid in
full to all holders of Designated Preferred Stock and the corresponding amounts
payable with respect of any Parity Stock as to such distribution have been paid
in full to the holders of such Parity Stock, the holders of other capital stock
of the Corporation shall be entitled to receive all remaining assets of the
Corporation according to their respective rights and preferences. 

(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of
this Section 5, the sale, conveyance, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property and assets of the Corporation shall not be deemed a voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Corporation, nor shall the merger, consolidation or any other business
combination transaction of the Corporation into or with any other corporation or
person or the merger, consolidation or any other business combination
transaction of any other corporation or person into or with the Corporation be
deemed to be a voluntary or involuntary dissolution, liquidation or winding up
of the affairs of the Corporation. 

Section 6. Redemption.


(a) Optional Redemption by the Corporation. The Corporation, at the option of
its board of directors, may redeem the shares of Designated Preferred Stock at a
redemption price equal to the Liquidation Preference per share of Designated
Preferred Stock (the “Redemption Price”) at any time, provided such redemption
is conducted per this Section 6 (b) and the holder has the option to elect
conversion prior to such redemption. The Corporation may require the holder of
shares of Designated Preferred Stock to effect the conversion of its shares of
Designated Preferred Stock as provided for in Section 8 hereof. Any written
request by the Corporation in respect of the foregoing shall be deemed to have
the same force and effect as the notice of redemption described in Section
6(b).







(b) Notice
by the Corporation of Redemption. Notice of redemption of the shares of
Designated Preferred Stock shall be mailed by first class mail, postage prepaid,
addressed to each holder of record of such shares at its last address appearing
on the books of the Corporation. Such mailing shall be at least 30 days and not
more than 60 days before the date fixed for redemption. Any such notice mailed
as provided in this Section 6(b) shall be conclusively presumed to have been
duly given, whether or not the holders receive such notice. Each notice shall
state (i) the redemption date; and (ii) the number of shares of Designated
Preferred Stock held by the holder that the Corporation shall redeem on the
redemption date specified in the notice; and (iii) the place where the
Designated Preferred Stock is to be redeemed. A Holder will have 10 business
days following the date notice is deemed given to elect optional conversion per
Section 8 herein.

(c) Effectiveness of Redemption. Subject to Section 8(f), if notice of
redemption has been duly given by the Corporation and if on or before the
redemption date specified in the notice all funds necessary for such redemption
have been set aside by the Corporation, separate and apart from its other funds,
in trust for the benefit of the holders of such shares, so as to be and continue
to be available therefor, then, notwithstanding that the certificate for the
shares so called for redemption has not been surrendered for cancellation, on
and after the redemption date such shares shall cease to be outstanding, and all
rights with respect to such shares shall forthwith on such redemption date cease
and terminate, except only the right of the holders thereof to receive the
amount payable on such redemption.

(d) Status of Redeemed Shares.
Shares of Designated Preferred Stock that are redeemed, repurchased or otherwise
acquired by the Corporation shall revert to authorized but unissued shares of
Preferred Stock (provided that any such cancelled shares of Designated Preferred
Stock may be reissued only as shares of any series of preferred stock other than
Designated Preferred Stock). 

(e) Partial Redemption. In
case of the redemption of less than all of the then-outstanding shares of
Designated Preferred Stock, the Corporation shall have the discretion to
designate the shares to be redeemed pro rata, by lot or by a substantially
equivalent method selected by the Board of Directors. The right of the
Corporation to redeem all or a portion of the Designated Preferred Stock is
subject to the Corporation having received prior approval from the Federal
Reserve Board (or other applicable federal agency) if such approval is required
under applicable capital guidelines or policies of the Federal Reserve Board (or
other applicable federal agency).

Section 7. Voting
Rights.

(a) General. The holders of
Designated Preferred Stock shall have such voting rights as set forth below or
as otherwise required by law.







(b) Voting with the Common
Stock as a Single Class. Except as provided by law or by Section 7(c) below and
so long as any shares of Designated Preferred Stock are outstanding, (i) holders
of Designated Preferred Stock shall vote together with the holders of Common
Stock as a single class, and (ii) on any matter that is presented to the
shareholders of the Corporation for their action or consideration at any meeting
of shareholders of the Corporation (or by written consent of shareholders in
lieu of meeting), each holder of outstanding shares of Designated Preferred
Stock shall be entitled to cast the number of votes equal to the number of whole
shares of Common Stock into which the shares of Designated Preferred Stock held
by such holder are convertible as of the record date for determining
shareholders entitled to vote on such matter.

(c) Class Voting Rights as to
Particular Matters. So long as any shares of Designated Preferred Stock are
outstanding, in addition to any other vote or consent of shareholders required
by law or by the Articles of Incorporation, without the vote or consent of the
holders of at least a 66 2/3% of the shares of Designated Preferred Stock at the
time outstanding, voting as a separate class, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, the Corporation shall not amend, alter or repeal any provision of the
Certificate of Designations, the Articles of Incorporation or the Bylaws in any
respect (including any amendment, alteration or repeal by means of a merger,
consolidation or otherwise) so as to significantly and adversely affect the
rights, preferences, privileges or voting powers of the Designated Preferred
Stock; provided, however, that the authorization of Designated Preferred Stock,
Parity Stock or Junior Stock shall not be deemed to adversely affect the rights,
preferences, privileges or voting powers of the Holders of outstanding
Designated Preferred Stock and shall not require affirmative vote or consent of
the Holders of outstanding Designated Preferred Stock. On each matter voted on
by the holders of Designated Preferred Stock voting as a separate class as
provided in this Section 7(c), each share of Designated Preferred Stock is
entitled to one vote. 

(d) Changes after Provision
for Redemption. No vote or consent of the holders of Designated Preferred Stock
shall be required pursuant to Sections 7(a) through 7(c) above if, at or prior
to the time when any such vote or consent would otherwise be required pursuant
to such Section, all outstanding shares of the Designated Preferred Stock shall
have been redeemed, or shall have been called for redemption upon proper notice
and sufficient funds shall have been deposited in trust for such redemption, in
each case pursuant to Section 6 above.

(e) Procedures for Voting and
Consents. The rules and procedures for calling and conducting any meeting of the
holders of Designated Preferred Stock (including, without limitation, the fixing
of a Record Date in connection therewith), the solicitation and use of proxies
at such a meeting, the obtaining of written consents and any other aspect or
matter with regard to such a meeting or such consents shall be governed by any
rules of the Board of Directors or any duly authorized committee of the Board of
Directors, in its discretion, may adopt from time to time, which rules and
procedures shall conform to the requirements of the Articles of Incorporation,
the Bylaws, and applicable law and the rules of any national securities exchange
or other trading facility on which Designated Preferred Stock is listed or
traded at the time.

Section 8. Conversion.


(a) General. Subject to Section 8(g), each share of Designated Preferred
Stock shall be convertible, at the option of the holder thereof , into 1,250
fully paid and non-assessable shares of Common Stock (“Conversion Rate”). If the
Corporation effects a stock split, this Conversion Rate will be adjusted
proportionally to such split and will be reflected in the Corporation’s books
and records and applicable stock registers.







(b) Rights
upon Conversion. Immediately upon conversion, the rights of a holder with
respect to such holder’s shares of Designated Preferred Stock so converted shall
cease and the person entitled to receive the shares of Common Stock upon the
conversion of such shares of Designated Preferred Stock shall be treated for all
purposes as having become the record and beneficial owner of such shares of
Common Stock. 

(c) Notice
and Effectiveness of Conversion. A holder of any shares of Designated Preferred
Stock may exercise the conversion rights in whole or in part as to any such
shares of Designated Preferred Stock by delivering to the Corporation during
regular business hours, at the principal office of the Corporation with notice
to the attention of Corporate Secretary, the certificate or certificates for the
shares to be converted, duly endorsed for transfer to the Corporation (if
required by it), accompanied by written notice stating that such holder elects
to convert such shares. Conversion shall be deemed to have been effected on the
date when such delivery is made, and such date is referred to herein as the
“Conversion Date.” As promptly as practicable thereafter, the Corporation shall
issue and deliver to such holder, a certificate or certificates for the number
of shares of Common Stock to which such holder is entitled. The holder shall be
deemed to have become a shareholder of record on the applicable Conversion Date
unless the transfer books of the Corporation are closed on such date, in which
event he shall be deemed to have become a Common Stock shareholder of record on
the next succeeding date on which the transfer books are open. Upon conversion
of only a portion of the number of shares of Designated Preferred Stock
represented by a certificate surrendered for conversion, the Corporation shall
issue and deliver upon the written order of the holder of the certificate so
surrendered for conversion, at the expense of the Corporation, a new certificate
covering the number of shares of Designated Preferred Stock representing the
unconverted shares of the certificate so surrendered. 

(d) Reservation of Shares. The Corporation shall at all times reserve and
keep available, out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of Designated Preferred Stock as provided
for herein, the full number of shares of Common Stock deliverable upon the
conversion of all Designated Preferred Stock from time to time outstanding.


(e) Automatic Conversion. The Designated Preferred will automatically convert
to Common Stock (i) in full if the Corporation’s Common Stock becomes listed on
the NASDAQ (or equivalent nationally recognized exchange) and the market
capitalization of the Common Stock (including all shares of Common Stock on an
as-converted basis), measured by the volume weighted average price for the 30
calendar days preceding the date of conversion, exceeds each of (A) the
liquidation value of the Designated Preferred Stock and (B) 20% of the prior
period reported GAAP balance sheet total assets; (ii) in full if the Corporation
has satisfied the ROA Test; or (iii) in full or in part (proportionally based on
the outstanding shares of Designated Preferred Stock) upon the cash investment
by the Corporation (“Invested Amount”) in any of the Corporation’s subsidiary
federally insured depository institution(s), in which case the number of
converted shares will be equal to the Invested Amount divided by the Conversion
Rate. Notice of conversion of the shares of Designated Preferred Stock shall (x)
be mailed by first class mail, postage prepaid, addressed to each holder of
record of such shares at its last address appearing on the books of the
Corporation, with instruction on how to receive the converted shares in
certificate or book entry form, (x) shall be recorded in the stock register of
the Corporation and (z) notice provided to the Corporation’s applicable stock
transfer agent.







(f) Conversion and Redemption subject to Regulatory Requirements. To the
extent a holder of any shares of the Designated Preferred Stock is required by
federal banking laws to receive regulatory approval or nonobjection from the
Federal Reserve Board (or other applicable federal agency) to own shares of the
Corporation’s Common Stock issuable upon conversion of one or more shares of
Designated Preferred Stock or hold shares of Designated Preferred Stock
following a redemption of Designated Preferred Stock, the Corporation shall not
effect such conversion to Common Stock or redemption until the holder of such
shares of Designated Preferred Stock shall have received such approval or
nonobjection.

(g) Partial Conversion. In the event some but not all of the Designated
Preferred Stock represented by a certificate or certificates surrendered by the
holder of the Designated Preferred Stock are converted, the Corporation shall
execute and deliver to or on the order of the holder of the Designated Preferred
Stock, at the expense of the Corporation, a new certificate representing the
shares of the Designated Preferred Stock not converted. 

(h) Fractional Shares. No fractional shares of Common Stock shall be issued
upon conversion of the Designated Preferred Stock. In lieu of any fractional
shares to which the holder would otherwise be entitled, the Corporation shall
pay cash equal to such fraction multiplied by the fair market value of a share
of Common Stock as determined in good faith by the Board of Directors of the
Corporation. Whether or not fractional shares would be issuable upon such
conversion shall be determined on the basis of the total number of shares of
Designated Preferred Stock the holder is at the time converting into Common
Stock and the aggregate number of shares of Common Stock issuable upon such
conversion. 

Section 9. No Sinking Fund.
The shares of Designated Preferred Stock are not subject to the operation of a
sinking fund. 

Section 10. No Preemptive
Rights. No share of Designated Preferred Stock shall have any rights of
preemption whatsoever as to any securities of the Corporation, or any warrants,
rights or options issued or granted with respect thereto, regardless of how such
securities, or such warrants, rights or options, may be designated, issued or
granted.

Section 11. Transfer. Subject
to applicable securities laws, regulation and restrictions, the holders of
Designated Preferred Stock shall be able to sell, assign, transfer, or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the direct or indirect sale, assignment, transfer,
encumbrance or other disposition of, the Designated Preferred Stock. 

Section 12. Record Holders. To
the fullest extent permitted by applicable law, the Corporation may deem and treat the record holder
of any share of Designated Preferred Stock as the true and lawful owner thereof
for all purposes, and the Corporation shall not be affected by any notice to the
contrary. 

Section 13. Notices. Except as
otherwise expressly set forth herein, all notices or communications in respect
of the Designated Preferred Stock shall be sufficiently given if given in
writing and delivered in person or by first class mail, postage prepaid, or if
given in such other manner as may be permitted in the Certificate of
Designations, the Articles of Incorporation or Bylaws or by applicable
law.







Section 14. Replacement
Certificates. The Corporation shall replace any mutilated certificate at the
holder’s expense upon surrender of that certificate to the Corporation. The
Corporation shall replace certificates that become destroyed, stolen or lost at
the holder’s expense upon delivery to the Corporation of reasonably satisfactory
evidence that the certificate has been destroyed, stolen or lost, together with
any indemnity that may be reasonably required by the Corporation. 

Section 15. Directors of the
Bank. So long as any shares of Designated Preferred Stock are outstanding, the
Corporation shall take such action as is necessary to ensure that at all times
no less than two directors of the Corporation (the “Appointed Bank Directors”)
are serving as directors of Independence National Bank, the wholly-owned banking
subsidiary of the Corporation. Further, the Appointed Bank Directors shall both
serve on the credit committee and the investment committee of Independence
National Bank. 

Section 16. Other Rights. The
shares of Designated Preferred Stock shall not have any rights, preferences,
privileges or voting powers or relative, participating, optional or other
special rights, or qualifications, limitations or restrictions thereof, other
than as set forth herein or in the Articles of Incorporation or as provided by
applicable law.