Exhibit
4.3

    
 

    WARRANT
TO PURCHASE PREFERRED STOCK

     

    THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE
SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH
THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.

     

    WARRANT

    to
purchase

     

    767.00767

     

    Shares
of Preferred Stock

     

    of
First Reliance Bancshares, Inc.

     

    Issue
Date: March 6, 2009

     

    1.           Definitions.  Unless
the context otherwise requires, when used herein the following terms shall have
the meanings indicated.

     

    “Board of Directors” means the
board of directors of the Company, including any duly authorized committee
thereof.

     

    “business day” means any day
except Saturday, Sunday and any day on which banking institutions in the State
of New York generally are authorized or required by law or other governmental
actions to close.

     

    “Charter” means, with respect
to any Person, its certificate or articles of incorporation, articles of
association, or similar organizational document.

     

    “Company” means the Person
whose name, corporate or other organizational form and jurisdiction of
organization is set forth in Item 1 of Schedule A hereto.

     

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.

    


    
      
        
           


        

        
          1

          
            

          

        

        
           


        

      

    

     

    “Exercise Price” means the
amount set forth in Item 2 of Schedule A hereto.

     

    “Expiration Time” has the
meaning set forth in Section 3.

     

    “Issue Date” means the date
set forth in Item 3 of Schedule A hereto.

     

    “Liquidation Amount” means the
amount set forth in Item 4 of Schedule A hereto.

     

    “Original Warrantholder” means
the United States Department of the Treasury. Any actions specified to be taken
by the Original Warrantholder hereunder may only be taken by such Person and not
by any other Warrantholder.

     

    “Person” has the meaning given
to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act.

     

    “Preferred Stock” means the
series of perpetual preferred stock set forth in Item 5 of Schedule A
hereto.

     

    “Purchase Agreement” means the
Securities Purchase Agreement – Standard Terms incorporated into the Letter
Agreement, dated as of the date set forth in Item 6 of Schedule A hereto, as
amended from time to time, between the Company and the United States Department
of the Treasury (the “Letter
Agreement”), including all annexes and schedules thereto.

     

    “Regulatory Approvals” with
respect to the Warrantholder, means, to the extent applicable and required to
permit the Warrantholder to exercise this Warrant for shares of Preferred Stock
and to own such Preferred Stock without the Warrantholder being in violation of
applicable law, rule or regulation, the receipt of any necessary approvals and
authorizations of, filings and registrations with, notifications to, or
expiration or termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder.

     

    “SEC” means the U.S.
Securities and Exchange Commission.

     

    “Securities Act” means the
Securities Act of 1933, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.

     

    “Shares” has the meaning set
forth in Section 2.

     

    “Warrantholder” has the
meaning set forth in Section 2.

     

    “Warrant” means this Warrant,
issued pursuant to the Purchase Agreement.

     

    2.           Number of Shares; Exercise
Price.  This certifies that, for value received, the United
States Department of the Treasury or its permitted assigns (the “Warrantholder”) is entitled,
upon the terms and subject to the conditions hereinafter set forth, to acquire
from the Company, in whole or in part, after the receipt of all applicable
Regulatory Approvals, if any, up to an aggregate of the number of fully paid and
nonassessable shares of Preferred Stock set forth in Item 7 of Schedule A hereto
(the “Shares”), at a
purchase price per share of Preferred Stock equal to the Exercise
Price.

    


    
      
        
           


        

        
          2

          
            

          

        

        
           


        

      

    

     

    3.           Exercise of Warrant;
Term.  Subject to Section 2, to the extent permitted by
applicable laws and regulations, the right to purchase the Shares represented by
this Warrant is exercisable, in whole or in part by the Warrantholder, at any
time or from time to time after the execution and delivery of this Warrant by
the Company on the date hereof, but in no event later than 5:00 p.m., New York
City time on the tenth anniversary of the Issue Date (the “Expiration Time”), by (A) the
surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office
of the Company located at the address set forth in Item 8 of Schedule A hereto
(or such other office or agency of the Company in the United States as it may
designate by notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased, by having the Company withhold,
from the shares of Preferred Stock that would otherwise be delivered to the
Warrantholder upon such exercise, shares of Preferred Stock issuable upon
exercise of the Warrant with an aggregate Liquidation Amount equal in value to
the aggregate Exercise Price as to which this Warrant is so
exercised.

     

    If the
Warrantholder does not exercise this Warrant in its entirety, the Warrantholder
will be entitled to receive from the Company within a reasonable time, and in
any event not exceeding three business days, a new warrant in substantially
identical form for the purchase of that number of Shares equal to the difference
between the number of Shares subject to this Warrant and the number of Shares as
to which this Warrant is so exercised.  Notwithstanding anything in
this Warrant to the contrary, the Warrantholder hereby acknowledges and agrees
that its exercise of this Warrant for Shares is subject to the condition that
the Warrantholder will have first received any applicable Regulatory
Approvals.

     

    4.           Issuance of Shares;
Authorization.  Certificates for Shares issued upon exercise of
this Warrant will be issued in such name or names as the Warrantholder may
designate and will be delivered to such named Person or Persons within a
reasonable time, not to exceed three business days after the date on which this
Warrant has been duly exercised in accordance with the terms of this
Warrant.  The Company hereby represents and warrants that any Shares
issued upon the exercise of this Warrant in accordance with the provisions of
Section 3 will be duly and validly authorized and issued, fully paid and
nonassessable and free from all taxes, liens and charges (other than liens or
charges created by the Warrantholder, income and franchise taxes incurred in
connection with the exercise of the Warrant or taxes in respect of any transfer
occurring contemporaneously therewith).  The Company agrees that the
Shares so issued will be deemed to have been issued to the Warrantholder as of
the close of business on the date on which this Warrant and payment of the
Exercise Price are delivered to the Company in accordance with the terms of this
Warrant, notwithstanding that the stock transfer books of the Company may then
be closed or certificates representing such Shares may not be actually delivered
on such date. The Company will at all times reserve and keep available, out of
its authorized but unissued preferred stock, solely for the purpose of providing
for the exercise of this Warrant, the aggregate number of shares of Preferred
Stock then issuable upon exercise of this Warrant at any time.  The
Company will use reasonable best efforts to ensure that the Shares may be issued
without violation of any applicable law or regulation or of any requirement of
any securities exchange on which the Shares are listed or traded.

    


    
      
        
           


        

        
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    5.           No Rights as Stockholders;
Transfer Books.  This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the
Company prior to the date of exercise hereof.  The Company will at no
time close its transfer books against transfer of this Warrant in any manner
which interferes with the timely exercise of this Warrant.

     

    6.           Charges, Taxes and
Expenses.  Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to
the Warrantholder for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company.

     

    7.           Transfer/Assignment.

     

    (A)  Subject
to compliance with clause (B) of this Section 7, this Warrant and all rights
hereunder are transferable, in whole or in part, upon the books of the Company
by the registered holder hereof in person or by duly authorized attorney, and a
new warrant shall be made and delivered by the Company, of the same tenor and
date as this Warrant but registered in the name of one or more transferees, upon
surrender of this Warrant, duly endorsed, to the office or agency of the Company
described in Section 3.  All expenses (other than stock transfer
taxes) and other charges payable in connection with the preparation, execution
and delivery of the new warrants pursuant to this Section 7 shall be paid by the
Company.

     

    (B)  The
transfer of the Warrant and the Shares issued upon exercise of the Warrant are
subject to the restrictions set forth in Section 4.4 of the Purchase
Agreement.  If and for so long as required by the Purchase Agreement,
this Warrant shall contain the legends as set forth in Section 4.2(a) of the
Purchase Agreement.

     

    8.           Exchange and Registry of
Warrant.  This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of
like tenor and representing the right to purchase the same aggregate number of
Shares.  The Company shall maintain a registry showing the name and
address of the Warrantholder as the registered holder of this
Warrant.  This Warrant may be surrendered for exchange or exercise in
accordance with its terms, at the office of the Company, and the Company shall
be entitled to rely in all respects, prior to written notice to the contrary,
upon such registry.

     

    9.           Loss, Theft, Destruction or
Mutilation of Warrant.  Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and in the case of any such loss, theft or destruction, upon
receipt of a bond, indemnity or security reasonably satisfactory to the Company,
or, in the case of any such mutilation, upon surrender and cancellation of this
Warrant, the Company shall make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of Shares as provided for in such
lost, stolen, destroyed or mutilated Warrant.

     

    10.           Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a business day, then such action may be taken or such right may be exercised
on the next succeeding day that is a business day.

    


    
      
        
           


        

        
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    11.           Rule 144
Information.  The Company covenants that it will use its
reasonable best efforts to timely file all reports and other documents required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations promulgated by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Warrantholder,
make publicly available such information as necessary to permit sales pursuant
to Rule 144 under the Securities Act), and it will use reasonable best efforts
to take such further action as any Warrantholder may reasonably request, in each
case to the extent required from time to time to enable such holder to, if
permitted by the terms of this Warrant and the Purchase Agreement, sell this
Warrant without registration under the Securities Act within the limitation of
the exemptions provided by (A) Rule 144 under the Securities Act, as such rule
may be amended from time to time, or (B) any successor rule or regulation
hereafter adopted by the SEC.  Upon the written request of any
Warrantholder, the Company will deliver to such Warrantholder a written
statement that it has complied with such requirements.

     

    12.           Adjustments and Other
Rights.  For so long as the Original Warrantholder holds this
Warrant or any portion thereof, if any event occurs that, in the good faith
judgment of the Board of Directors of the Company, would require adjustment of
the Exercise Price or number of Shares into which this Warrant is exercisable in
order to fairly and adequately protect the purchase rights of the Warrants in
accordance with the essential intent and principles of the Purchase Agreement
and this Warrant, then the Board of Directors shall make such adjustments in the
application of such provisions, in accordance with such essential intent and
principles, as shall be reasonably necessary, in the good faith opinion of the
Board of Directors, to protect such purchase rights as aforesaid.

     

    Whenever
the Exercise Price or the number of Shares into which this Warrant is
exercisable shall be adjusted as provided in this Section 12, the Company shall
forthwith file at the principal office of the Company a statement showing in
reasonable detail the facts requiring such adjustment and the Exercise Price
that shall be in effect and the number of Shares into which this Warrant shall
be exercisable after such adjustment, and the Company shall also cause a copy of
such statement to be sent by mail, first class postage prepaid, to each
Warrantholder at the address appearing in the Company’s records.

     

    13.           No
Impairment.  The Company will not, by amendment of its Charter
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in taking
of all such action as may be necessary or appropriate in order to protect the
rights of the Warrantholder.

     

    14.           Governing
Law.  This Warrant will be governed by and construed in
accordance with the federal law of the United States if and to the extent such
law is applicable, and otherwise in accordance with the laws of the State of New
York applicable to contracts made and to be performed entirely within such
State.  Each of the Company and the Warrantholder agrees (a) to submit
to the exclusive jurisdiction and venue of the United States District Court for
the District of Columbia for any civil action, suit or proceeding arising out of
or relating to this Warrant or the transactions contemplated hereby, and (b)
that notice may be served upon the Company at the address in Section 17 below
and upon the Warrantholder at the address for the Warrantholder set forth in the
registry maintained by the Company pursuant to Section 8 hereof.  To
the extent permitted by applicable law, each of the Company and the
Warrantholder hereby unconditionally waives trial by jury in any civil legal
action or proceeding relating to the Warrant or the transactions contemplated
hereby or thereby.

    


    
      
        
           


        

        
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    15.           Binding
Effect.  This Warrant shall be binding upon any successors or
assigns of the Company.

     

    16.           Amendments.  This
Warrant may be amended and the observance of any term of this Warrant may be
waived only with the written consent of the Company and the
Warrantholder.

     

    17.           Notices.  Any
notice, request, instruction or other document to be given hereunder by any
party to the other will be in writing and will be deemed to have been duly given
(a) on the date of delivery if delivered personally, or by facsimile, upon
confirmation of receipt, or (b) on the second business day following the date of
dispatch if delivered by a recognized next day courier service.  All
notices hereunder shall be delivered as set forth in Item 9 of Schedule A
hereto, or pursuant to such other instructions as may be designated in writing
by the party to receive such notice.

     

    18.           Entire
Agreement.  This Warrant, the forms attached hereto and
Schedule A hereto (the terms of which are incorporated by reference herein), and
the Letter Agreement (including all documents incorporated therein), contain the
entire agreement between the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous arrangements or undertakings with
respect thereto.

     

    [Remainder
of page intentionally left blank]

    


    
      
        
           


        

        
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    [Form of Notice of
Exercise]

     

    Date:_______________

     

    TO:           First Reliance Bancshares,
Inc.

     

    RE:           Election
to Purchase Preferred Stock

     

    The
undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to subscribe for and purchase such number of shares of Preferred
Stock covered by the Warrant such that after giving effect to an exercise
pursuant to Section 3(B) of the Warrant, the undersigned will receive the
net number of shares of Preferred Stock set forth below.  The
undersigned, in accordance with Section 3 of the Warrant, hereby agrees to
pay the aggregate Exercise Price for such shares of Preferred Stock in the
manner set forth in Section 3(B) of the Warrant.

     

    Number of
Shares of Preferred Stock1
____________________________

     

    The
undersigned agrees that it is exercising the attached Warrant in full and that,
upon receipt by the undersigned of the number of shares of Preferred Stock set
forth above, such Warrant shall be deemed to be cancelled and surrendered to the
Company.

     

    
      
        	
                Holder:

              	
                  

              
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              


      

    

    
       

      
        

      

      
        	
                1

              	
                Number
      of shares to be received by the undersigned upon exercise of the attached
      Warrant pursuant to Section 3(B)
thereof.

              


      

    

    


    
      
        
           


        

        
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    IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a
duly authorized officer.

     

    Dated:  March 6,
2009

     

    
      
        	
                COMPANY:

              
	 
      
	
                FIRST
      RELIANCE BANCSHARES, INC.

              
	 
      
	
                By:

              	
                

                  /s/
      F.R. Saunders, Jr.

                

              
	 
      	 
      
	
                Name:

              	
                F.R.
      Saunders, Jr.

              
	 
      	 
      
	
                Title:

              	
                President
      and Chief Executive Officer

              
	 
      	 
      
	
                Attest:

              
	 
      	 
      
	
                By:

              	
                

                  /s/
      Jeffrey A. Paolucci

                

              
	 
      	 
      
	
                Name:

              	
                Jeffrey
      A. Paolucci

              
	 
      	 
      
	
                Title:

              	
                Senior
      Vice President and Chief

              
	 
      	
                Financial
      Officer

              


      

    

     

    [Signature
Page to Warrant]

    


    
      
        
           


        

        
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    SCHEDULE
A

     

    Item 1

     

    Name:
First Reliance Bancshares,
Inc.

     

    Corporate
or other organizational form: C
Corporation

     

    Jurisdiction
of organization: South
Carolina

     

    Item 2

     

    Exercise
Price:2 $0.01 per share

     

    Item 3

     

    Issue
Date: March 6,
2009

     

    Item 4

     

    Liquidation
Amount: $1,000 per
share

     

    Item 5

     

    Series of
Perpetual Preferred Stock: Fixed Rate Cumulative Perpetual
Preferred Stock, Series B

     

    Item 6

     

    Date of
Letter Agreement between the Company and the United States Department of the
Treasury: March 6,
2009

     

    Item 7

     

    Number of
shares of Preferred Stock:3 767.00767

     

      
        

      

    

    
      	
              2

            	
              $0.01
      per share or such greater amount as the Charter may require as the par
      value of the Preferred Stock.

            


    

    


    
      	
              3

            	
              The
      initial number of shares of Preferred Stock for which this Warrant is
      exercisable shall include the number of shares required to effect the
      cashless exercise pursuant to Section 3(B) of this Warrant (e.g., such
      number of shares of Preferred Stock having an aggregate Liquidation Amount
      equal in value to the aggregate Exercise Price) such that, following
      exercise of this Warrant and payment of the Exercise Price in accordance
      with such Section 3(B), the net number of shares of Preferred Stock
      delivered to the Warrantholder (and rounded to the nearest whole share)
      would have an aggregate Liquidation Amount equal to 5% of the aggregate
      amount invested by the United States Department of the Treasury on the
      investment date.

            


    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    Item 8

     

    Company’s
address:           2170 W. Palmetto
Street

    Florence, SC 29501

    Item 9

     

    
      	
              Notice
      information:

            	 
      	
              With
      a copy to:

            
	
              Mr. Jeff A.
      Paolucci

            	 
      	
              Mr.
      B.T. Atkinson

            
	
              Senior
      VP and Chief Financial Officer

            	 
      	
              Bryan
      Cave LLP

            
	
              First
      Reliance Bancshares, Inc.

            	 
      	
              One
      Wachovia Center, Suite 3700

            
	
              2170
      W. Palmetto Street

            	 
      	
              301
      S. College St.

            
	
              Florence,
      SC 29501

            	 
      	
              Charlotte,
      NC 28202

            
	
              Tel:
      (843) 674-3250

            	 
      	
              Tel:
      (704) 749-8954

            
	
              Fax:
      (843) 674-3045

            	 
      	
              Fax:
      (704) 749-8990

            
	
              Email:
      jpaolucci@firstreliance.com

            	
                

            	
              Email:
      bt.atkinson@bryancave.com