Execution Version

 

 

 

 

[exhibit10-11x1x1.jpg]

INDEPENDENCE BANCSHARES, INC.

(d/b/a nD bancgroup)

 

Subscription Booklet

 

 

 

 

 

 

 

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Execution Version

INSTRUCTIONS

This Subscription Booklet relates to the offering of shares of common stock of
Independence Bancshares, Inc., d/b/a nD bancgroup (the “Company”).

This Subscription Booklet contains the materials necessary for you to subscribe
for shares of the Company’s common stock, and if your subscription is accepted
by the Company, become a shareholder of the Company:

       1.        Subscription Agreement – Preferred Shares 2. Accredited
Investor Questionnaire 3. Signature Page (two copies) 4. Registration Rights
Agreement

Each prospective investor should read (A) all publicly available records and
filings concerning the Company and its subsidiary bank, Independence National
Bank (the “Bank”), including the Company’s Annual Report on Form 10-K for the
year ended December 31, 2013 (the “2013 10-K”), as filed with the Securities and
Exchange Commission (the “SEC”) on March 31, 2014, the Company’s Quarterly
Report on Form 10-Q for the quarter ended September 30, 2014 (the “3Q 10-Q”), as
filed with the SEC on November 14, 2014; the Company’s Current Report on Form
8-K relating to the termination of the Bank’s Consent Order with its primary
regulator, the Officer of the Comptroller of the Currency (the “Consent Order
8-K”), as filed with the SEC on June 5, 2014; and the Company’s Current Report
on Form 8-K relating to the Company’s updated risk factors (the “Risk Factors
8-K”), as filed with the SEC on July 18, 2014; (B) the Company’s overview of its
digital banking, payments and transaction services business, as filed with the
SEC on the Company’s Current Report on Form 8-K on July 14, 2014 (the “Company
Overview”), as supplemented from time to time; (C) the Subscription Agreement,
including the Registration Rights Agreement attached as Exhibit C hereto, and
all other risk factors and disclosures provided therein; (D) the Company’s
“Investor Presentation” provided to such prospective investor (the “Investor
Presentation”); and (E) all other documents, records, filings, reports,
agreements and other materials requested by the prospective investor and
provided by the Company regarding its and the Bank’s business, operations,
regulatory status and financial condition sufficient to enable the prospective
investor to evaluate its investment (collectively, the “Private Placement
Documents”). After reviewing the Private Placement Documents, each prospective
investor should then complete the appropriate portions of the Subscription
Agreement and the Accredited Investor Questionnaire and execute the signature
pages contained herein.

The Company does not intend to register this offering of its shares of common
stock under the Securities Act of 1933 (the “1933 Act”) but rather intends to
offer and sell such shares pursuant to an exemption from registration
thereunder, which limits the types of investors that may be permitted to
purchase the shares. The Accredited Investor Questionnaire is designed to
determine whether a prospective subscriber of shares (each, a “Subscriber”) is a
permissible investor, and the Company may reject any Subscriber which it, in its
sole discretion, determines not to be a permissible investor.

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Execution Version

THE COMPANY, IN ITS SOLE DISCRETION, MAY ACCEPT OR REJECT ANY SUBSCRIPTION IN
WHOLE OR IN PART.

THIS OFFERING OF SHARES HAS NOT BEEN REGISTERED UNDER THE 1933 ACT OR UNDER THE
SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH APPLICABLE FEDERAL, STATE AND FOREIGN
SECURITIES LAWS.

Please send two executed copies of this Subscription Agreement, the Accredited
Investor Questionnaire and the Registration Rights Agreement, together with one
properly executed Form W-9 to:

Independence Bancshares, Inc.
Attn: Martha L. Long, CFO
500 East Washington Street
Greenville, SC 29601

Each Subscriber whose Subscription Agreement is accepted by the Company shall
deliver the Purchase Price (as defined herein) to the Company by means of wire
transfer to the following operating account on or prior to the Closing Date (as
defined herein):

Bank of New
York ABA: 021000018
A/C: Pershing LLC.
A/C: 890-051238-5
FFC: QF7100075 - Independence Bancshares, Inc.

FAILURE TO COMPLY WITH THE INSTRUCTIONS CONTAINED HEREIN WILL CONSTITUTE AN
INVALID SUBSCRIPTION THAT MAY RESULT IN THE REJECTION OF YOUR SUBSCRIPTION
REQUEST. Questions regarding completion of subscription documents should be
directed to Martha L. Long, Chief Financial Officer of the Company, by telephone
at 864-672-1776.

The registrar and transfer agent for the Company’s common stock is
Computershare, Limited. Currently, the Company’s common stock is quoted on the
OTC Bulletin Board under the symbol “IEBS”. The Company has applied for listing
of its common stock on the NASDAQ Global Market under the symbol “IEBS”, but
there can be no assurances that such listing will occur.

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Execution Version

 

SUBSCRIPTION AGREEMENT

 by and between

INDEPENDENCE BANCSHARES, INC.

(d/b/a nD bancgroup)

and

THE SUBSCRIBER REFERRED TO HEREIN

 

 

 

 

 

 

 

 

 

 

 

 

 

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TABLE OF CONTENTS

1.        PURCHASE AND SALE OF SECURITIES 1   (a)        Purchase of Securities
1 (b) Form of Payment; Issuance of Purchased Shares 2   2. REPRESENTATIONS AND
WARRANTIES OF THE SUBSCRIBER 2   (a) No Public Sale or Distribution; No Other
Agreements with Respect to the Securities 2   (b) Subscriber Status 3 (c)
General Solicitation 3 (d) Reliance on Exemptions 3 (e) Review of Information
and Consultation with Advisors 3 (f) No Reliance 5 (g) No Public Market; No
Governmental Review; Securities Not Insured 6 (h) Brokers and Finders 6 (i) No
Conflicts 7 (j) Investment Risk 7 (k) Residency 7 (l) Organization;
Authorization 8 (m) Review of Risk Factors 8   (3) REPRESENTATIONS AND
WARRANTIES OF THE COMPANY 8   (a) Organization and Qualification; Capitalization
9 (b) Authorization; Enforcement; Validity 10 (c) Issuance of Securities 10 (d)
No Conflicts 11 (e) No Violation 11 (f) Consents 12 (g) No Registration 12   (h)
Acknowledgment Regarding the Subscriber’s Purchase of the Securities 12 (i) No
Integrated Offering 13 (j) Financial Statements 13 (k) Compliance with Law,
Certain Banking Regulations and Other Matters 13 (l) Regulatory Permits and
Reports 13 (m) Absence of Litigation and Other Proceedings 14 (n) Internal
Accounting and Disclosure Controls 14 (o) Approval by Directors 15 (p) Brokers
and Finders 15 (q) Adequate Capitalization; Bank Asset Size; Bank Asset Quality
15 (r) Purchase of MPIB Assets 15   4. COVENANTS 15   (a) Notice Filings 15

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(b) Required Disclosures 15 (c) Commercially Reasonable Efforts 15 (d) U.S. Real
Property Interest Matters 16   5.        CLOSING COSTS AND EXPENSES; PLACEMENT
AGENTS’ FEES 17   6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL 17   7.
CONDITIONS TO SUBSCRIBER’S OBLIGATION TO PURCHASE 18   8. TRANSFER AGENT
INSTRUCTIONS 19   9. TERMINATION 20   10. MISCELLANEOUS 22   (a)        Binding
Effect; Assignability; Benefit 22 (b) Governing Law; Jurisdiction; Jury Trial 22
(c) Counterparts 22 (d) Headings 22 (e) Severability 22 (f) Entire Agreement;
Amendments 22 (g) Notices 23 (h) Successors and Assigns 24 (i) No Third Party
Beneficiaries 24 (j) Survival 24 (k) Further Assurances 25 (l) No Strict
Construction 25 (m) Recapitalizations, Exchanges, Etc., Affecting the Securities
25   11.   ADDITIONAL DISCLOSURES 25   (a) Director and Executive Officer
Compensation 25 (b) Intellectual Property 26 (c) Use of Proceeds 27 (d)
Shareholder Approval 27 (e) Observation Rights 27 (f) Rights to Participate in
Follow-On Offerings 27 (g) Election of Two Additional Members to the Company’s
Board of Directors 27   EXHIBIT A CERTIFICATE OF DESIGNATIONS   EXHIBIT B
ACCREDITED INVESTOR QUESTIONNAIRE

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SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT (the “Agreement”), by and between Independence
Bancshares, Inc. d/b/a nD bancgroup (the “Company”), a South Carolina
corporation and bank holding company for Independence National Bank (the
“Bank”), a national bank, and the subscriber identified on the signature page
hereto (the “Subscriber”), shall be effective as of the date it is accepted by
the Company and executed by the parties hereto (the “Effective Date”).

A. The Offering. The Board of Directors of the Company has authorized the
Company to conduct a private placement of up to 10,000 shares of its Series A
preferred stock, par value $0.01 per share (“Preferred Stock”), at a purchase
price of not less than $1,000 per share (the “Private Placement”). The Private
Placement is being made to a limited number of other “accredited investors” as
such term is defined in Regulation D (defined below) (the “Other Subscribers”
and, together with the Subscriber, collectively, the “Subscribers”). The shares
of Preferred Stock, being sold to the Subscriber pursuant to this Agreement and
to certain Other Subscribers pursuant to subscription agreements, including all
exhibits thereto, identical to this Agreement (the “Other Subscription
Agreements”), are convertible into shares of the Company’s common stock, par
value $0.01 per share (“Common Stock”), as set forth in the Company’s
Certificate of Designations, substantially in the form attached as Exhibit A
hereto (“Certificate of Designations”). The Company will engage authorized
agents from time to time (collectively with any subagents of the foregoing, the
“Placement Agents”) to act as placement agents for the Private Placement.

B. Registration Rights. Contemporaneously with the execution and delivery of
this Agreement, the Company will enter into a Registration Rights Agreement for
the benefit of the Subscribers that have requested this right, substantially in
the form attached as Exhibit C hereto (the “Registration Rights Agreement”),
pursuant to which the Company will file a registration statement as soon as
reasonably practicable covering the resale of the Securities (defined below).

NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained in this Agreement, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Subscriber hereby agree as follows:

1. PURCHASE AND SALE OF SECURITIES.

(a) Purchase of Securities.

On the terms set forth in this Agreement and subject to the satisfaction (or
waiver) of the conditions set forth in Sections 6 and 7 below, at the Closing
(as defined below) the Company shall issue and sell to the Subscriber, and the
Subscriber shall purchase from the Company the number of shares of Preferred
Stock as accepted by the Company and set forth on the Company’s acceptance
hereto (the “Purchased Shares”, and together with the shares of common stock of
the Company into which the Purchased Shares convert, the “Securities”).

(i) Closing. The date and time of the closing of the transactions contemplated
by this Agreement (the “Closing”) shall, subject to the satisfaction (or waiver)
of the conditions set forth in Sections 6 and 7 below, be 10:00 a.m., Eastern
Time, on the date as declared by written notice from the Company to the
Subscriber (the “Closing Date”), provided the Company shall give such notice at
least five business days prior to the Closing Date.

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(ii) Purchase Price. The purchase price for the Purchased Shares is indicated on
the signature page hereto, and the aggregate purchase price for the Purchased
Shares to be purchased by the Subscriber on the Closing Date (the “Purchase
Price”) shall be the amount indicated below the Subscriber’s name on the
Company’s acceptance of this Agreement.

(b) Form of Payment; Issuance of Purchased Shares. On the Closing Date, the
Subscriber shall have delivered the Purchase Price to the Company by means of
wire transfer to the following operating account:

Bank of New York
ABA: 021000018
A/C: Pershing LLC.
A/C: 890-051238-5
FFC: QF7100075 - Independence Bancshares, Inc.

As soon as practicable following delivery of the Purchase Price to the Company
(but in no event prior to the Closing), the Company shall issue, or shall cause
its transfer agent, Computershare, Limited, to issue, the Purchased Shares to
the Subscriber in book entry format by electronic delivery at the applicable
balance account at The Depository Trust Company (allocated in the amounts as the
Subscriber shall reasonably request).

2. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER.

The Subscriber hereby represents and warrants as of the date it executed this
Agreement, as of the Effective Date, and as of the Closing Date (except for the
representations and warranties that are as of a specific date, which shall be
made as of such date) to the Company that:

(a) No Public Sale or Distribution; No Other Agreements with Respect to the
Securities.

The Subscriber was contacted by the Company or one of the Placement Agents with
respect to a potential investment in the Securities. The Subscriber understands
that the Securities have not been registered pursuant to the Securities Act of
1933 (the “1933”) Act or any applicable state securities law and are therefore
considered “restricted securities” under the 1933 Act and that the Subscriber is
acquiring the Securities in the ordinary course of its business directly from
the Company (and not from the Placement Agents), as principal for its own
account and not with a view towards, or for resale in connection with, the
public sale or distribution thereof in violation of the 1933 Act or any
applicable state securities laws. The Subscriber does not presently have any
agreement or understanding, directly or indirectly, with any Person (as defined
below) to: (i) distribute any of the Securities; (ii) hold or to dispose of the
Securities; (iii) vote the Securities (for the avoidance of doubt, nothing in
this Agreement shall prohibit any discussions or deliberations among the
directors of the Company, regardless of the affiliation of a director with, or
the nomination of a director by, the Subscriber or any other proposed subscriber
in the Company); or (iv) acquire any Securities from any other Person other than
from the Company pursuant to this Agreement. In connection herewith, the
Subscriber represents that it is aware of and understands the 1933 Act resale
limitations imposed upon the Securities. Notwithstanding the foregoing, subject
to applicable banking regulations or agreements, by making the representations
herein, the Subscriber does not agree to hold any of the Securities for any
minimum or other specific term and reserves the right to sell or dispose of the
Securities at any time in accordance with or pursuant to an effective
registration statement or an exemption under the 1933 Act, and in accordance
with applicable state securities laws. For purposes of this Agreement, “Person”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.

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(b) Subscriber Status.

The Subscriber is an “accredited investor” as that term is defined in Rule
501(a) of Regulation D and has provided the information in the Accredited
Investor Questionnaire attached as Exhibit B hereto, and all such information is
correct and complete. The Subscriber is not a registered broker-dealer under
Section 15 of the Securities Exchange Act of 1934 (the “1934 Act”) or an
unregistered broker-dealer engaged in the business of being a broker-dealer. To
the extent that the Subscriber is utilizing or has utilized a representative to
assist it in the evaluation of an investment in the Securities, the Subscriber
has provided the requested information about such representative as set forth on
the Subscriber’s signature page hereto, and all such information is correct and
complete.

(c) General Solicitation.

The Subscriber is not purchasing the Securities as a result of any
advertisement, article, notice or other communication regarding the Securities,
including the Purchased Shares, published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar or any
other general advertisement.

(d) Reliance on Exemptions.

The Subscriber understands that the Securities are being offered and sold to it
in reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and regulations and that the Company is
relying in part upon the truth and accuracy of, and the Subscriber’s compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of the Subscriber set forth herein in order to determine the
availability of such exemptions and the eligibility of the Subscriber to acquire
the Securities.

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(e) Review of Information and Consultation with Advisors.

The Subscriber, either alone or through its representatives:

(i) has consulted with its own legal, regulatory, tax, business, investment,
financial and accounting advisers in connection herewith to the extent it has
deemed necessary;

(ii) has had a reasonable opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, the officers and representatives of
the Company and the Bank concerning the Company’s and the Bank’s financial
condition and results of operations, financial projections, and regulatory
status, the business plan for the Company and the Bank, all employment
agreements and benefit plans and other contractual arrangements among the
Company, the Bank, and their management teams, the Company’s and the Bank’s
other material contracts and agreements, the terms and conditions of the Private
Placement and any additional relevant information that the Company possesses,
including, but not limited to, asset quality, credit performance, technology
status, compliance functions, risk management, status of customer negotiations,
or litigation, tax, or accounting issues, and any such questions have been
answered to its satisfaction;

(iii) has had the opportunity to review and evaluate, in connection with its
investment decision with respect to the Securities: (A) all publicly available
records and filings concerning the Company and the Bank, including the Company’s
Annual Report on Form 10-K for the year ended December 31, 2013 (the “2013
10-K”), as filed with the United States Securities and Exchange Commission (the
“SEC”) on March 31, 2014, the Company’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2014 (the “3Q 10-Q”); the Company’s Current Report
on Form 8-K relating to the termination of the Bank’s Consent Order with its
primary regulator, the Officer of the Comptroller of the Currency (the “Consent
Order 8-K”), as filed with the SEC on June 5, 2014; and the Company’s Current
Report on Form 8-K relating to the Company’s updated risk factors (the “Risk
Factors 8-K”), as filed with the SEC on July 18, 2014; (B) the Company’s
overview of its digital banking, payments and transaction services business, as
filed with the SEC on the Company’s Current Report on Form 8-K on July 14, 2014
(the “Company Overview”), as supplemented from time to time; (C) this Agreement,
including the form of Registration Rights Agreement attached as Exhibit C
hereto; (D) the Company’s “Investor Presentation” provided to the Subscriber
(the “Investor Presentation”); (E) the Certificate of Designations describing
the terms and condition of the Securities; and (F) all other documents, records,
filings, reports, agreements and other materials requested by the Subscriber and
provided by the Company regarding its and the Bank’s business, operations,
regulatory status and financial condition sufficient to enable the Subscriber to
evaluate its investment (collectively, the “Private Placement Documents”);

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(iv) understands that this Agreement, including the Registration Rights
Agreement attached hereto, and the Investor Presentation are confidential and
agrees that this Agreement, including the Registration Rights Agreement attached
hereto, the Investor Presentation, and any other non-public information provided
to Subscriber by or on behalf of the Company in connection with the Private
Placement (collectively, the “Confidential Information”) shall be kept in
confidence by Subscriber, except that this obligation shall not apply to any
such Confidential Information that (i) is part of the public knowledge or
literature and readily accessible as of the date hereof, including the 2013
10-K, the 3Q 10-Q, the Consent Order 8-K, the Risk Factors 8-K, the Company
Overview, and other filings made by the Company with the SEC, including the 8-K
to be filed by the Company in accordance with Section 4(b) hereof, (ii) becomes
part of the public knowledge or literature and readily accessible by publication
(except as a result of a breach of this provision), (iii) is received from a
third party (except a third party who discloses such Information in violation of
any confidentiality agreement) or (iv) that Subscriber is required to disclose
under applicable laws or reasonably deems necessary to disclose in any legal or
administrative proceeding to enforce its rights or remedies in connection with
the Private Placement. This obligation does not prohibit Subscriber’s discussion
of such Confidential Information with Subscriber’s counsel, accountant, or other
financial adviser (in each case, who agrees to keep the Confidential Information
confidential) solely for the purpose of assisting Subscriber’s analysis and
assessment of such Confidential Information and an investment in the Company.
Subscriber understands (and has advised Subscriber’s representatives who have
been apprised of this matter) Subscriber’s responsibility under the federal and
state securities laws with respect to purchasing or selling securities of the
Company about which Subscriber (or Subscriber’s Representatives) has material,
non-public information and agrees that Subscriber will neither use, nor cause
any third party to use, any information in contravention of such securities laws
or any rules or regulations promulgated thereunder;

(v) understands that the Placement Agents have acted as agent for the Company in
connection with the sale of the Securities (including the Purchased Shares), and
the Subscriber consents to the Placement Agents’ actions in this regard and
hereby waives any and all claims, actions, liabilities, damages or demands the
Subscriber may have against the Placement Agents in connection with any alleged
conflict of interest arising from the Placement Agents’ engagement as an agent
of the Company in connection with the sale by the Company of the Securities to
the Subscriber; and

(vi) has made its own investment decisions based upon its own judgment, due
diligence and advice from any advisers as it has deemed necessary and not upon
any view expressed by the Company, the Bank, the Placement Agents, or any of
their respective directors, officers, employees, Affiliates (as defined below),
shareholders, agents, representatives or advisors (including, without
limitation, attorneys, accountants, consultants, financing sources and financial
advisors) (collectively, including the Company, the Bank, and the Placement
Agents, the “Company Persons”). Neither such inquiries nor any other due
diligence investigations conducted by the Subscriber or its advisors or
representatives, if any, shall modify, amend or affect the Subscriber’s right to
rely on the Company’s representations and warranties contained herein. For
purposes of this Agreement, “Affiliate” means, with respect to any person, any
person directly or indirectly controlling, controlled by or under common control
with, such other person. For purposes of this definition, “control” (including,
with correlative meanings, the terms “controlled by” and “under common control
with”) when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management or policies of
such person, whether through the ownership of voting securities by contract or
otherwise.

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(f) No Reliance.

The Subscriber acknowledges that the information in the Private Placement
Documents is as of the date thereof and may not contain all of the terms and
conditions of the Private Placement and understands and acknowledges that it is
the Subscriber’s responsibility to conduct its own independent investigation and
evaluation of the Company and the Bank, including without limitation, (i) the
business prospects and future operations of the Company and the Bank, and (ii)
the management teams that will continue to operate and manage the Company and
the Bank following the Closing. The Subscriber is not relying upon, and has not
relied upon, any advice, statement, representation or warranty made by any
Company Person, including, without limitation, the Placement Agents, except for
the statements, representations and warranties of the Company expressly made in
(1) Section 3 of this Agreement, and (2) the Registration Rights Agreement and,
to the extent applicable, any other Private Placement Documents that constitute
agreements to which the Company is a party. The Subscriber acknowledges that the
Placement Agents have been indemnified by the Company and make no representation
or warranty of any of the information contained in any of the Private Placement
Documents. Furthermore, the Subscriber acknowledges and agrees that: (A) the
Placement Agents have not performed any due diligence review on behalf of the
Subscriber; (B) the Subscriber has made, and has relied upon, its own
independent examination in purchasing the Securities, including, without
limitation, of the Company, the Bank, and the management teams of the Company
and the Bank that will continue to operate and manage the Company and the Bank
after the Closing; (C) nothing in this Agreement or any other materials
(including any Private Placement Documents) presented by or on behalf of the
Company to the Subscriber in connection with the purchase of the Securities
constitutes legal, tax or investment advice and the Subscriber has consulted
such legal, tax and investment advisors as it, in its sole discretion, has
deemed necessary or appropriate in connection with its purchase of the
Securities; and (D) the Subscriber has received or had access to all of the
information the Subscriber deemed necessary in order to make its investment
decision in the Securities. The Subscriber acknowledges that the Company, the
Placement Agents, and others will rely on the acknowledgments, understandings,
agreements, representations and warranties of the Subscriber contained in this
Agreement, and the Subscriber hereby agrees to promptly notify the Company and
the Placement Agents if any of such acknowledgments, understandings, agreements,
representations, and warranties set forth herein change or are no longer
accurate.

(g) No Public Market; No Governmental Review; Securities Not Insured.

The Subscriber understands that there is no established market for the
Securities and that no public and/or liquid trading market for the Securities
may develop. The Subscriber understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities or the fairness or suitability
of the investment in the Securities nor have such authorities passed upon or
endorsed the merits of the offering of the Securities. The Subscriber
understands that the Securities are not savings accounts, deposits or other
obligations of a depository institution and are not insured by the FDIC,
including the FDIC’s Deposit Insurance Fund, or any other governmental agency.

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(h) Brokers and Finders.

No broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the transactions contemplated by this
Agreement based on arrangements made by and on behalf of the Subscriber.

(i) No Conflicts.

The execution, delivery and performance by the Subscriber of this Agreement, the
Registration Rights Agreement, and any other executed agreements between the
Subscriber and the Company (if any) relating to the purchase of the Securities
(collectively, the “Transaction Documents”) to which it is a party and the
consummation by the Subscriber of the transactions contemplated hereby and
thereby will not (i) result in a violation of the organizational documents of
the Subscriber, if an entity, or (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Subscriber
is a party, or (iii) assuming the receipt of all required approvals from
Government Entities or the Bank Regulatory Authorities (the “Required
Approvals”), result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities and banking laws and
regulations, assuming the correctness of the representations and warranties made
by the Company herein and the Other Subscribers’ representations and warranties
set forth in the Other Subscription Agreements) applicable to the Subscriber,
except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in the
aggregate, reasonably be expected to materially adversely affect the ability of
the Subscriber to perform its obligations hereunder and thereunder.

(j) Investment Risk.

The Subscriber understands that (i) its investment in the Securities involves a
high degree of risk, (ii) no representation is being made as to the business or
prospects of the Company or the Bank after the Closing or the future value of
the Securities, and (iii) no representation is being made as to any projections
or estimates delivered to or made available to the Subscriber (or any of its
Affiliates or representatives) of the Company’s or the Bank’s future assets,
liabilities, shareholders’ equity, regulatory capital ratios, net interest
income, net income or any component of any of the foregoing or any ratios
derived therefrom, except the representations of the Company expressly set forth
(A) in Section 3 of this Agreement, and (B) any other applicable Transaction
Documents. The Subscriber, either alone or together with its representatives, if
any, has the knowledge, sophistication and experience in financial and business
matters to fully understand and be capable of evaluating the merits and risks of
an investment in the Securities, has conducted its own due diligence as it has
deemed necessary for an investment in the Securities, and has the ability to
bear the economic risks of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.

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(k) Residency.

The Subscriber has, if an entity, its principal place of business or, if an
individual, its primary residence, in the jurisdiction indicated below the
Subscriber’s name on the signature page hereto.

(l) Organization; Authorization.

The Subscriber, if an entity, is duly organized, validly existing and in good
standing (to the extent such concept is applicable) under the laws of the
jurisdiction in which it is organized and has the requisite organizational power
and authority to enter into and perform its obligations under the Transaction
Documents and to consummate the transactions contemplated by such Transaction
Documents. Assuming the correctness of the representations and warranties made
by the Company in Section 3 of this Agreement and the Other Subscribers’
representations and warranties set forth in the Other Subscription Agreements,
the execution and delivery of the Transaction Documents to which the Subscriber
is a party by the Subscriber and performance by the Subscriber of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate or, if the Subscriber is not a corporation, such
partnership, limited liability company or other applicable like action, on the
part of the Subscriber, and no further consent or authorization in connection
therewith is required by the Subscriber, its Board of Directors or its
shareholders, or if the Subscriber is not a corporation, such partnership,
limited liability company or other applicable like action, on the part of the
Subscriber. The Transaction Documents to which the Subscriber is a party have
been (or upon delivery will have been) duly executed by the Subscriber, and when
delivered by the Subscriber in accordance with the terms of this Agreement and
thereof, will constitute the legal, valid and binding obligations of the
Subscriber, enforceable against it in accordance with its respective terms,
subject to (i) the application of bankruptcy, receivership, conservatorship,
reorganization, insolvency and similar laws affecting creditors’ rights
generally and (ii) equitable principles being applied at the discretion of a
court before which any proceeding may be brought (clauses (i) and (ii)
collectively, the “Bankruptcy and Equity Exception”), and except that rights to
indemnification and contribution thereunder may be limited by virtue of public
policy under federal or state securities laws.

(m) Review of Risk Factors.

The Subscriber recognizes that an investment in the Securities involves risks.
The Subscriber has read and understands the risk factors outlining certain, but
not all, risks related to the Company, the Bank, and an investment in the
Company, included (and referenced) in the Risk Factors 8-K, it being understood
and agreed that in the event of any inconsistencies between this Agreement and
the risk factors, the terms of this Agreement shall govern.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company hereby represents and warrants as of the Effective Date and as of
the Closing Date (except for the representations and warranties that are as of a
specific date which shall be made as of that date and subject to the exceptions
noted in Section 11 hereto) to the Subscriber that:

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(a) Organization and Qualification; Capitalization.

(i) The Company has been duly organized, is validly existing as a South Carolina
corporation, is duly registered as a bank holding company under the Bank Holding
Company Act of 1956 (the “BHC Act”), and is supervised and regulated by the
Board of Governors of the Federal Reserve System (the “Federal Reserve”). The
Bank has been duly organized and is validly existing as a national bank in good
standing under laws of United States of America and is supervised and regulated
by the Office of the Comptroller of the Currency (the “OCC”) and is an insured
depository institution pursuant to the provisions of the Federal Deposit
Insurance Act, and its accounts are insured up to applicable limits by the FDIC
(collectively with the OCC and the Federal Reserve, the “Bank Regulatory
Authorities”), and all premiums and assessments required to be paid in
connection therewith have been paid when due. The Company has the requisite
corporate power and authority to carry on its business as now being conducted
and, if necessary, will have obtained any requisite regulatory approval required
in order to conduct its business in the same manner as now being conducted
following the closing of the Private Placement, and, if necessary, has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts its business in a manner or to an extent that
would require such qualification, other than such failures to be so qualified or
in good standing as, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. The Company has furnished or made
available to the Subscriber, prior to the date hereof, true, correct and
complete copies of the Company’s Articles of Incorporation (the “Articles of
Incorporation”), the Company’s Bylaws (the “Bylaws”), and the Bank’s Articles of
Association and Bylaws (the “Bank’s Organizational Documents”), each as amended
through the Effective Date. For purposes of this Agreement, a “Material Adverse
Effect” means any circumstance, event, change, development or effect that,
individually or in the aggregate, would reasonably be expected to (A) have a
material and adverse effect on the business, results of operations, prospects or
condition (financial or otherwise) of the Company and the Bank (as hereinafter
defined), taken as a whole, or (B) materially impair or delay the ability of the
Company to perform its obligations under this Agreement and the Registration
Rights Agreement and to consummate the issuance and sale of the Securities,
including the Purchased Shares, in the Private Placement; provided, however,
that a Material Adverse Effect shall not be deemed to include the effects of (1)
changes after the Effective Date in general business, economic or market
conditions (including changes generally in prevailing interest rates, credit
availability and liquidity, currency exchange rates and price levels or trading
volumes in the United States or foreign securities or credit markets), or any
outbreak or escalation of hostilities, declared or undeclared acts of war or
terrorism, in each case generally affecting the industries in which the Company
and the Bank operate, (2) changes or proposed changes after the Effective Date
in generally accepted accounting principles as applied in the United States
(“GAAP”) or regulatory accounting requirements, or authoritative interpretations
thereof, or (3) changes or proposed changes after the Effective Date in
securities, banking, and other laws of general applicability or related policies
or interpretations of any federal or state agency charged with supervision or
regulation of depository institutions or holding companies of depository
institutions, or engaged in the insurance of depository institution deposits, or
any court, administrative agency or commission or other Governmental Entities
(in the case of each of these clauses (1), (2), and (3), other than changes or
occurrences to the extent that such changes or occurrences have or would
reasonably be expected to have a disproportionate adverse effect on the Company
and the Bank, taken as a whole, relative to comparable U.S. banking or financial
services organizations).

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(ii) Immediately prior to the Closing, the authorized capital stock of the
Company consisted of 300,000,000 shares of Common Stock and 10,000,000 shares of
preferred stock, and there were 20,502,760 shares of Common Stock issued and
outstanding and no shares of preferred stock issued and outstanding. As of the
Effective Date, as well as immediately prior to the Closing, all outstanding
shares of Common Stock have been duly authorized and validly issued and are
fully paid and non-assessable, have been issued in compliance in all material
respects with all applicable federal and state securities laws and none of the
outstanding shares of Common Stock has been issued in violation of preemptive
rights or any similar rights of any Person, with no personal liability attaching
to the ownership thereof. Except as described in the Company’s SEC Reports (as
defined below), this Agreement (together with all Other Subscription
Agreements), the Registration Rights Agreements, and any other transaction
documents entered into in connection with this Private Placement, there are no
options, warrants, or other rights, agreements, arrangements, or commitments to
which the Company is a party or by which the Company is bound relating to the
issued or unissued shares of Common Stock or Preferred Stock of the Company.

(b) Authorization; Enforcement; Validity.

The Company has the requisite corporate power and authority to enter into and
perform its obligations under the Transaction Documents and the Other
Subscription Agreements and to issue the Securities in accordance with the terms
of this Agreement. The execution and delivery by the Company of the Transaction
Documents and of the Other Subscription Agreements, and the consummation by the
Company of the transactions contemplated by such Transaction Documents and such
Other Subscription Agreements, including, without limitation, the issuance and
sale of the Securities (including the Purchased Shares pursuant to this
Agreement) have been duly authorized by the Company’s Board of Directors and no
further consent or authorization in connection therewith is required by the
Company, its Board of Directors or its shareholders that has not been obtained.
The Transaction Documents and Other Subscription Agreements have been (or upon
delivery will have been) duly executed and delivered by the Company and
constitute (or will constitute upon their execution and delivery) the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to the Bankruptcy and Equity
Exception, and except that rights to indemnification and contribution thereunder
may be limited by virtue of public policy under federal or state securities and
banking laws. The Board of Directors has resolved that the transactions
contemplated hereby and by the Transaction Documents and the Other Subscription
Agreements are in the best interests of the shareholders of the Company (the
“Shareholders”).

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(c) Issuance of Securities.

The Securities, including the Purchased Shares to be issued and sold to the
Subscriber by the Company pursuant to this Agreement, have been duly authorized
and, when issued and delivered to the Subscribers against full payment therefor
in accordance with the terms of this Agreement and the Other Subscription
Agreements, will be validly issued, fully paid and non-assessable, will have
been issued in compliance with all applicable state and federal securities laws
and free of any preemptive or similar rights, and such issuance will not result
in the violation or triggering of any price-based anti-dilution adjustments
under any agreement to which the Company or the Bank is a party, and will not
subject the holders thereof to personal liability. The delivery of the
Securities, including the Purchased Shares, being issued and sold pursuant to
the terms of this Agreement and the Other Subscription Agreements will pass
valid title to such Securities free and clear of any and all liens, charges,
claims, encumbrances, security interests, rights of first refusal, preemptive
rights or other restrictions of any kind (“Liens”) or defect in title to the
purchaser thereof, which is purchasing such Securities in good faith and without
notice of any Lien or defect in title.

(d) No Conflicts.

The execution, delivery and performance by the Company of the Transaction
Documents and Other Subscription Agreements, and the consummation by the Company
of the transactions contemplated hereby or thereby (including, without
limitation, the issuance of the Securities do not and will not (i) conflict with
or violate any provisions of the Company’s Articles of Incorporation, Bylaws or
otherwise result in a violation of the Bank’s Organizational Documents, (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or give to others any rights
of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any contract of the Company that was filed, or should
have been filed, as an exhibit to the SEC Reports (as defined below) pursuant to
Item 601 of Regulation S-K (“Material Contract”), or (iii) subject to the
Required Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, or decree or other restriction of any court or
governmental authority to which the Company is subject (including federal and
state securities laws and regulations and the rules and regulations thereunder,
assuming, without investigation, the correctness of the representations and
warranties made by the Subscribers herein, of any self-regulatory organization
to which the Company or its shares are subject), or by which any property or
asset of the Company is bound or affected, except in the case of clauses (ii)
and (iii) such as would not have or reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.

(e) No Violation.

(i) Neither the Company nor the Bank (as applicable) is currently in breach of
or in default under (A) the Articles of Incorporation, the Bylaws, or the Bank’s
Organizational Documents, or (B) except as described in Section 11 hereto, any
law, rule, regulation, order, judgment or decree of any court, tribunal,
administrative agency, commission, applicable industry self-regulatory
organization or other governmental authority or instrumentality, whether
federal, state, local or foreign (each, a “Governmental Entity” and
collectively, “Governmental Entities”) applicable to the Company or the Bank or
any of their respective properties or assets, except for breaches or defaults
that would not have, individually or in the aggregate, a Material Adverse
Effect.

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(ii) Other than unpaid invoices pertaining to the Company’s agreements with a
software provider and a software developer, neither the Company nor the Bank is
currently in breach of or in default under any Material Contract, except for
breaches or defaults that would not have, individually or in the aggregate, a
Material Adverse Effect.

(f) Consents.

Except for any report or notice required under any applicable state securities
laws, neither the Company nor the Bank is required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any Governmental Entity or any other Person in order for the
Company to execute, deliver or perform any of its obligations under, or to
consummate the transactions contemplated by, the Transaction Documents and Other
Subscription Agreements, in each case, in accordance with the terms of this
Agreement or thereof. The Company is unaware of any facts or circumstances that
might prevent the Company or the Bank from obtaining or effecting any of the
registrations, applications or filings pursuant to the preceding sentence
required to be obtained or effected, or otherwise from satisfying a condition
for the consummation of the transactions contemplated by this Agreement or the
other Transaction Documents.

(g) No Registration.

Assuming the accuracy of the representations and warranties made by the
Subscriber in this Agreement and by the Other Subscribers in the Other
Subscription Agreements, the issuance and sale to the Subscribers of the
Securities, including the Purchased Shares, in the manner contemplated by this
Agreement and the Other Subscription Agreements are exempt from the registration
requirements of the 1933 Act and applicable state securities laws (or are in
compliance therewith).

(h) Acknowledgment Regarding the Subscriber’s Purchase of the Securities.

The Company acknowledges and agrees that the Subscriber is acting solely in the
capacity of an arm’s-length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby and thereby and that, except in the
case of a Subscriber that is currently an officer or a director of the Company,
the Subscriber is not (i) currently an officer or director of the Company or the
Bank, (ii) to the knowledge of the Company, an “affiliate” of the Company or the
Bank (as defined in Rule 144 of the 1933 Act) or (iii) to the knowledge of the
Company, a “beneficial owner” of more than 9.9% of the Common Stock. For
purposes of this Agreement, a “beneficial owner” shall have the definition set
forth in Rule 13d-3 of the 1934 Act. The Company further acknowledges that the
Subscriber is not acting as a financial advisor or fiduciary of the Company or
the Bank (or in any similar capacity) with respect to the Private Placement
Documents and the transactions contemplated hereby and thereby, and any advice
given by the Subscriber or any of its representatives or agents in connection
with the Private Placement Documents and the transactions contemplated hereby
and thereby is merely incidental to Subscriber’s purchase of the Securities. The
Company further represents to the Subscriber that the Company’s decision to
enter into the Transaction Documents has been based solely on an independent
evaluation by the Company and its representatives.

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(i) No Integrated Offering.

Neither the Company nor any of its Affiliates, nor any Person acting on its or
their behalf, has, directly or indirectly made any offers or sales of any
Company security or solicited any offers to buy any security, under
circumstances that would require registration of the issuance of any of the
Securities, including the Purchased Shares, under the 1933 Act, whether through
integration with prior offerings or otherwise.

(j) Financial Statements.

From and after December 31, 2011, all financial statements of the Company
present fairly in all material respects the consolidated financial position of
the Company as of and at the date thereof and the results of its operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal year-end audit adjustments which would not be material,
either individually or in the aggregate (the “Financial Statements”). The
Financial Statements complied as to form in all material respects with
applicable accounting requirements and have been prepared in conformity with
GAAP applied on a consistent basis throughout the periods involved (except (A)
as may be otherwise indicated in such financial statements or the notes thereto
and (B) in the case of unaudited interim financial statements, to the extent
they may exclude footnotes, may be subject to customary year-end adjustments or
may be condensed or summary statements). The books and records of the Company
and the Bank have been, and are being, maintained in all material respects in
accordance with GAAP and all other applicable legal and accounting requirements.

(k) Compliance with Law, Certain Banking Regulations and Other Matters.

The Company and the Bank are in compliance with, and neither of them is, to the
knowledge of the Company, under investigation with respect to (other than in
connection with routine examinations or investigations) or, to the knowledge of
the Company, has been threatened to be charged with or given notice of any
violation of, any applicable domestic (federal, state or local) or foreign law,
statute, ordinance, license, rule, regulation, policy or guideline, order,
demand, writ, injunction, decree or judgment of any Governmental Entity, other
than such noncompliance, defaults or violations that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

(l) Regulatory Permits and Reports.

Each of the Company and the Bank possesses all material certificates,
authorizations and permits issued by the Bank Regulatory Authorities and other
Governmental Entities, as applicable, necessary to conduct its business as
presently conducted. The Company and the Bank have not received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit. Each of the Company and the Bank has filed all reports,
registrations, documents, filings, statements and submissions, together with any
required amendments thereto, that it is required to file with any federal or
state banking authority, and such reports, registrations and statements complied
as to form in all material respects with all the rules and regulations
promulgated by such federal or state banking authorities, and have paid all fees
and assessments due and payable in connection therewith. The Company has filed
all reports, schedules, forms, registration statements and other documents,
together with any required amendments thereto, that it is required to file with
the SEC under the 1934 Act and SEC regulations (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”), and each such SEC
Report complied in all material respects with the requirements of the 1934 Act
and SEC regulations, and none of the SEC Reports, as of their respective filing
dates, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. There are no outstanding comments from the SEC with respect to
any SEC Report.

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(m) Absence of Litigation and Other Proceedings.

Except in the ordinary course of the Company’s and the Bank’s respective
businesses, there is no action, suit, proceeding, inquiry or investigation
before or by any court, tribunal, commission, self-regulatory organization or
other Governmental Entity pending or, to the knowledge of the Company,
threatened against or affecting the Company or the Bank, the proposed issuance
of the Securities in the Private Placement or any of the Company’s or the Bank’s
officers or directors. Neither the Company nor the Bank is subject to any
injunction, order, judgment or decree and, to the knowledge of the Company, no
such proceedings with respect to the foregoing are pending or threatened. No
order or decree preventing the use of the Private Placement Documents, or any
order asserting that the transactions contemplated by this Agreement or the
Other Subscription Agreements are subject to the registration requirements of
the 1933 Act or SEC regulations has been issued and no proceeding for that
purpose has commenced or is pending or, to the knowledge of the Company, is
contemplated.

(n) Internal Accounting and Disclosure Controls.

The Company and the Bank maintain a system of internal accounting controls
adequate to provide all necessary information and controls that (i) transactions
are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset and liability
accountability, (iii) access to assets or incurrence of liabilities is permitted
only in accordance with management’s general or specific authorization, and (iv)
the recorded accountability for assets and liabilities is compared with the
existing assets and liabilities at reasonable intervals and appropriate action
is taken with respect to any difference. The Company has not received any notice
or correspondence from any accountant relating to any material weakness in any
part of the system of internal accounting controls of the Company or the Bank.

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(o) Approval by Directors. A majority of the members of the Board of Directors
of the Company voted in favor of entering into this Agreement and the Other
Subscription Agreements, and the consummation of the transactions contemplated
by this Agreement and the Other Subscription Agreements, including the issuance
of the Securities.

(p) Brokers and Finders. Other than the Placement Agents, no Person will have,
as a result of the transactions contemplated by this Agreement, any valid right,
interest or claim against or upon the Company or the Subscriber for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Company.

(q) Adequate Capitalization; Bank Asset Size; Bank Asset Quality. As of December
31, 2014, the Bank (i) was deemed “well capitalized” under the capital adequacy
requirements of the OCC, (ii) held deposits of at least $75,000,000 and (iii)
had Non-Performing Assets of less than 2.5% of total assets. For purposes of
this provision, “Non-performing Assets” shall include all nonaccrual loans,
loans past due 90 days or more, other restructured loans, and other real estate
owned.

(r) Purchase of MPIB Assets. As of the Closing Date, the Company shall have
purchase all of the assets of MPIB Holdings LLC (“MPIB”) necessary to pursue its
business of mobile payments and digital banking, free and clear of all liens,
security interests, restrictions, claims and encumbrances as set forth in the
asset purchase agreement (the “Asset Purchase Agreement”) pertaining thereto.

4. COVENANTS.

(a) Notice Filings.

The Company agrees to timely file any notices and other filings that may be
required under applicable federal and state securities and banking laws and
regulations in connection with the transactions contemplated by the Transaction
Documents and the Other Subscription Agreements.

(b) Required Disclosures.

The Company shall, by 5:00 p.m., New York City time, on the day of Closing,
issue a Current Report on Form 8-K, including a form of subscription agreement
as an exhibit thereto, disclosing the material terms of the transactions
contemplated hereby and by the Other Subscription Agreements.

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(c) Commercially Reasonable Efforts.

Subject to the terms and conditions of this Agreement, each of the parties
hereto agrees to use its commercially reasonable efforts in good faith to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or desirable, or advisable under applicable laws, so as to
permit consummation of the transactions contemplated hereby as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other parties hereto to
that end, including in relation to the satisfaction of the conditions to Closing
set forth in Sections 6 and 7 below and cooperating in seeking to obtain any
consent, approval or waiver required from, and submitting any required notices
or other documentation to, the Federal Reserve or the OCC; provided, however,
that any such information will be provided subject to such confidentiality
requests as the party providing such information may reasonably seek. In the
event the Subscriber is required by the Federal Reserve to make any “passivity”
or similar non-control or anti-association commitments in connection with the
purchase of Securities hereunder, the Subscriber agrees to make any such
commitments on a timely basis; provided, however, that such commitments shall
not include any restrictions (other than customary restrictions typically
contained in the Federal Reserve’s form of passivity and anti-association
commitments for similar transactions) that are materially and unreasonably
burdensome to the Subscriber or the Company; provided, further, that if the
Subscriber is required to provide confidential and proprietary information of
itself or its Affiliates to the Federal Reserve, such information may be so
provided directly to the Federal Reserve with the Investor giving prompt notice
of any such request and disclosure.

(d) U.S. Real Property Interest Matters.

(i) As and when requested by the Subscriber, the Company agrees to provide
reasonable assistance in connection with determinations by the Subscriber of
whether the Preferred Stock the Subscriber holds or has held constitutes a
United States real property interest under Section 897 of the Internal Revenue
Code of 1986 and the regulations and published interpretations thereunder (the
“Code”). The Company shall timely and duly comply with the notice requirement to
the Internal Revenue Service described in Treasury Regulation Section
1.897-2(h)(2).

(ii) The Company shall, prior to making a distribution to the Subscriber, based
on the information that is reasonably available to the Company at the time,
calculate the percentage of the dividend distribution that is expected to be out
of the Company’s earnings and profits, including current or accumulated earnings
and profits, (and therefore constitutes a dividend for U.S. federal income tax
purposes pursuant to Section 301(c)(1) of the Code). If any amount of the
distribution is reasonably expected to be in excess of the Company’s earnings
and profits, including current or accumulated earnings and profits, the Company
will notify the Subscriber, and if requested by the Subscriber, at the
Subscriber’s expense, consult with a nationally recognized accounting firm to
determine whether the stock in the Company is a “United States real property
interest” (a “USRPI”) for purposes of Section 897 of the Code, and, if based on
such consultation, the Company’s stock is reasonably expected to be a USRPI, the
Company will notify the Subscriber of its conclusion at least 30 days prior to
making the distribution (and shall update such information, if applicable, on
the date such distribution is made and as soon as practicable after the
Company’s tax year end). If it is determined that the interest in the Company is
not a USRPI, the Company shall provide the Subscriber with a properly executed
statement from the Company that meets the requirements of Treasury Regulations
Sections 1.1445-2(c)(3) and 1.897-2(h)(1) or notify the Subscriber of its
inability to provide such a certificate and the basis for such inability. If
such a certificate cannot be provided, the Company shall cooperate with the
Subscriber in good faith to determine the percentage of the dividend
distribution that is in excess of the Subscriber adjusted basis in the stock of
the Company.

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(iii) Upon receiving written notice thereof, in the case of a direct or indirect
disposition of the stock of the Company by the Subscriber (or its
beneficiaries), the Company shall provide the Subscriber with a properly
executed statement from the Company that meets the requirements of Treasury
Regulations Sections 1.1445-2(c)(3) and 1.897-2(h)(1), or notify the Subscriber
of its inability to provide such a certificate and the basis for such inability.
The Subscriber shall pay for the reasonable expenses of the Company in
connection with the preparation of such certificate solely if the Subscriber
requests such certificate in connection with a disposition of the stock of the
Company by the Subscriber (or its beneficiaries).

(iv) The Company will not distribute a USRPI to the Subscriber without such
Subscriber’s consent.

5. CLOSING COSTS AND EXPENSES; PLACEMENT AGENTS’ FEES.

Except as otherwise expressly provided herein, each of the parties hereto will
bear and pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated by the Private Placement
Documents, including fees and expenses of its own financial or other
consultants, investment bankers, accountants and counsel. In connection with,
and from the proceeds of, the Private Placement, the Company will pay costs,
fees, and expenses of the Placement Agents (provided that commissions to
Placement Agents shall not exceed 5.5% of the gross offering proceeds) as well
as the Company’s costs, fees, and expenses associated with the Private Placement
and the satisfaction of closing condition related thereto, including, but not
limited to, legal and accounting fees and out-of-pocket expenses.

6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

The obligation of the Company hereunder to issue and sell the Securities to the
Subscriber at the Closing is subject to the sole satisfaction of the Company, at
or before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion by providing the Subscriber with
prior written notice thereof:

(a) The Subscriber shall have duly executed each of the Transaction Documents
required to be executed at (or prior to) Closing and delivered the same to the
Company.

(b) The Subscriber shall have duly executed a fully completed Accredited
Investor Questionnaire in the form attached as Exhibit B.

(c) All of the Subscribers shall have delivered their respective Purchase Price
to the Company, and all of the other conditions to the Company’s obligation to
close set forth in the Other Subscription Agreements shall have been satisfied
or (in the Company’s sole discretion) waived.

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(d) The representations and warranties of the Subscriber contained in Sections
2(k) and (l) of this Agreement shall be true and correct as of the Closing Date
as though made at and as of the Closing Date (except for such representations
and warranties that expressly speak as of a specific date, which shall be true
and correct as of such specified date) and (ii) contained in all other
subsections of Section 2 hereof shall, without giving effect to any materiality
qualifications therein, be true and correct at and as of the Closing Date as
though made at and as of the Closing Date (except for such representations and
warranties that expressly speak as of an earlier date, which representations and
warranties shall be true and correct as of such specified date) except for such
failures to be true and correct as, individually or in the aggregate, would not
be material; and the Subscriber shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by
the Transaction Documents to be performed, satisfied or complied with by the
Subscriber at or prior to the Closing Date, and the Company shall have received
a certificate executed by an authorized officer of the Subscriber (or by the
Subscriber himself or herself if the Subscriber is a natural person), dated as
of the Closing Date, certifying to the foregoing.

(e) The Subscriber and/or the Company (as applicable) shall have received all
required approvals, consents or non-objections of Governmental Entities, if any,
and the Subscriber shall have entered into any required passivity or similar
non-control or anti-association commitments, if any, prior to the Closing Date
for the transactions contemplated by this Agreement and the Other Subscription
Agreements.

(f) No provisions of any applicable law or regulation and no judgment,
injunction, order or decree of any Governmental Entity shall prohibit the
Closing or any of the transactions contemplated by the Private Placement
Documents to be executed at Closing, and no lawsuit or formal administrative
proceeding shall have been commenced by any Governmental Entity seeking to
effect any of the foregoing.

7. CONDITIONS TO SUBSCRIBER’S OBLIGATIONS TO PURCHASE.

The obligation of the Subscriber to purchase the Securities at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for the Subscriber’s
sole benefit and may be waived by the Subscriber at any time in its sole
discretion by providing the Company with prior written notice thereof:

(a) The Company shall have executed and delivered the Transaction Documents
contemplated to become effective as of the Closing Date.

(b) No Material Adverse Effect shall have occurred since the Effective Date.

(c) The Company, and to the extent applicable, each Subscriber, shall have
received all required approvals, consents or non-objections of Governmental
Entities prior to the Closing Date for the transactions contemplated by this
Agreement and the Other Subscription Agreements, and such approvals, consents
and non-objections shall be in full force and effect, in each case without the
imposition of a specific condition, limitation, restriction or requirement as
described in Section 4(a) and Section 4(d)(iii).

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(d) The Company shall have prepared an officer’s certificate confirming that (i)
the Company has met (in person or by conference call) with staff of the Federal
Reserve Bank of Richmond and/or the Federal Reserve and with staff of the OCC,
respectively, to present information about the Company’s business objectives,
plans and related financial information (“Business”), as well as information
about the Private Placement and the use of proceeds as described in Section
11(e) hereof; (ii) the Company has provided these regulatory agencies with an
amount of time that is reasonably sufficient in the circumstances to consider
and respond to such information; and (iii) none of these regulatory agencies has
objected, or through any response to such information, given the Company a
reason to believe that either agency will object, to the Business, Private
Placement or use of proceeds.

(e) The Company shall have obtained any third party consents and approvals, if
any, necessary for the completion of the transactions contemplated by this
Agreement and the Other Subscription Agreements, and such consents and approvals
shall be in full force and effect.

(f) No provisions of any applicable law or regulation and no judgment,
injunction, order or decree of any Governmental Entity shall prohibit the
Closing or any of the transactions contemplated by the Private Placement
Documents to be executed at Closing, and no lawsuit or formal administrative
proceeding shall have been commenced against the Company by any Governmental
Entity seeking to effect any of the foregoing.

(g) The Subscriber shall have duly executed a fully completed Accredited
Investor Questionnaire in the form attached as Exhibit B.

(h) The Company shall have executed and filed the Certificate of Designations
with the South Carolina Secretary of State and shall be in effect.

(i) The Asset Purchase Agreement shall have been executed by the Company and
MPIB.

8. TRANSFER AGENT INSTRUCTIONS.

(a) The Subscriber hereby represents, warrants and covenants that the
Subscriber:

(i) agrees, for all Securities held in book entry format, to the Company’s
transfer agent recording, so long as is required by this Section 8, of the
following legend on the share register for the Securities, in substantially the
following form:

THE ISSUANCE OF THE SHARES REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS (THE
“STATE ACTS”), OR ANY OTHER APPLICABLE SECURITIES LAWS. THE SHARES REPRESENTED
HEREBY MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT, THE STATE ACTS, AND ANY OTHER APPLICABLE SECURITIES LAW OR
UNLESS, IN THE OPINION OF COUNSEL ACCEPTABLE TO INDEPENDENCE BANCSHARES, INC.,
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE
SECURITIES ACT, THE STATE ACTS, AND ANY OTHER APPLICABLE SECURITIES LAW. 

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(ii) acknowledges that the book entries for the Securities shall not contain the
legend set forth in this Section 8: (A) while a registration statement covering
the resale of such security is effective under SEC regulations or the 1933 Act,
(B) following any sale of such securities pursuant to an exemption under SEC
regulations or the 1933 Act which permits the removal of the legend (i.e., Rule
144), or (C) when the Securities are eligible for sale under Rule 144, without
the requirement for the Company to be in compliance with the current public
information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable) as
to such securities and without volume or manner-of-sale restrictions; and

(iii) agrees that the removal of the legend from the book entries for the
Securities as set forth in this Section 8 is predicated upon the Company’s
reliance that the Subscriber will sell any Securities pursuant to either the
registration requirements set forth in the SEC regulations, including any
applicable prospectus delivery requirements, or an exemption therefrom.

(b) If required by the Company’s transfer agent, the Subscriber may cause its
counsel to issue a legal opinion to the Company’s transfer agent to effect the
removal of the legend set forth in this Section 8. The Company agrees that at
such time as such legend is no longer required under this Section 8 it will, as
soon as possible, but in any event within three business days, following the
delivery by the Subscriber to the Company, or its transfer agent, of a
certificate or other instrument representing securities issued with a
restrictive legend, together with any required legal opinion, deliver or cause
to be delivered to the Subscriber a certificate representing such securities
that is free from such first restrictive legend.

9. TERMINATION.

This Agreement may be terminated and the sale and purchase of the Securities
abandoned at any time prior to the Closing by either the Company or the
Subscriber upon written notice to the other, if the Closing has not been
consummated on or prior to 5:00 p.m., New York City time, on March 31, 2015;
provided however that the Company may extend such date for an additional 90 day
period solely to secure any necessary regulatory approvals (the “Termination
Date”); provided, however, that the right to terminate this Agreement under this
Section 9 shall not be available to any Person whose failure to comply with its
obligations under this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such time; provided, further, that
the right to terminate by the Subscriber under this Section 9 shall only permit
the Subscriber to terminate its obligations under this Agreement and not the
obligations of any Other Subscribers. Nothing in this Section 9 shall be deemed
to release any party from any liability for any breach by such party of the
terms and provisions of this Agreement or the other Private Placement Documents
or to impair the right of any party to compel specific performance by any other
party of its obligations under this Agreement or the other Private Placement
Documents. In the event of a termination pursuant to this Section 9, the Company
shall promptly notify all non-terminating Subscribers. 

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Upon a termination in accordance with this Section 9, the Company will return
the Subscriber’s subscription funds within five business days of such
termination, and the Company and the Subscriber shall not have any further
obligation or liability (including arising from such termination) to the other,
and no Subscriber will have any liability to any Other Subscribers under the
Private Placement Documents as a result therefrom. Notwithstanding the
foregoing, this Agreement may be terminated prior to the Closing:

(a) by the Company or the Subscriber, upon written notice to the other parties,
in the event that any Governmental Entity shall have issued any order, decree or
injunction or taken any other action restraining, enjoining or prohibiting any
of the transactions contemplated by this Agreement, and such order, decree,
injunction or other action shall have become final and nonappealable,

(b) by the Subscriber or the Company, if the Subscriber or its Affiliates
receives written notice from or is otherwise advised by the Federal Reserve that
the Federal Reserve will not issue a determination (formal or informal) that the
Subscriber will not be deemed in control of the Company for purposes of the BHC
Act or the Change in Bank Control Act of 1978, or that it will not make such
determination without the imposition of a burdensome condition, or otherwise
indicates that it will deem the Subscriber or any of its Affiliates to control
the Company for purposes of the BHC Act,

(c) by the Company with respect to the Subscriber if there has been a breach of
any representation, warranty, covenant or agreement made by such Subscriber in
this Agreement, or any such representation and warranty shall have become untrue
after the date of this Agreement, such that Section 6 would not be satisfied and
such breach or condition is not curable or, if curable, is not cured within the
earlier of (i) 30 days after written notice thereof is given by the Company to
the Subscriber and (ii) the Termination Date; provided that the Company is not
then in breach of any representation, warranty, covenant, agreement or other
obligation contained in this Agreement and, provided, further, that such
termination by the Company shall only be as to the breaching Subscriber and that
notice of such termination shall be provided to the Other Subscribers, or

(d) by the Subscriber if there has been a breach of any representation,
warranty, covenant or agreement made by the Company in this Agreement, or any
such representation and warranty shall have become untrue after the date of this
Agreement, such that Section 7 would not be satisfied and such breach or
condition is not curable or, if curable, is not cured within the earlier of (i)
30 days after written notice thereof is given by the Subscriber to the Company
and (ii) the Termination Date; provided, that the terminating Subscriber is not
then in material breach of any representation, warranty, covenant, agreement or
other obligation contained in this Agreement, and provided, further, that such
termination by the Subscriber shall only be as to the Subscriber. 

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10. MISCELLANEOUS.

(a) Binding Effect; Assignability; Benefit.

This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, successors, legal representatives and
permitted assigns. Any Subscriber that ceases to beneficially own the Securities
shall cease to be bound by the terms hereof (other than Sections 10(a), 10(b),
10(e), 10(f), 10(g), 10(j), and 10(m)).

(b) Governing Law; Jurisdiction; Jury Trial.

All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of South Carolina, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of South Carolina or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of South Carolina. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.

(c) Counterparts.

This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other
party; provided that a facsimile signature shall be considered due execution and
shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile signature.

(d) Headings.

The headings of this Agreement are for convenience of reference and shall not
form part of, or affect the interpretation of, this Agreement.

(e) Severability.

If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.

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(f) Entire Agreement; Amendments.

The Transaction Documents, together with the appendices, schedules and exhibits
hereto and thereto, supersede all other prior oral or written agreements between
the Subscriber, the Company, their Affiliates and Persons acting on their behalf
with respect to the matters discussed herein, and this Agreement, the other
Transaction Documents and the instruments referenced herein and therein contain
the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein,
neither the Company nor the Subscriber makes any representation, warranty,
covenant or undertaking with respect to such matters. No amendment to this
Agreement may limit the right of the Subscriber to waive any provision which it
has the right to waive, and no provision of this Agreement, including the
additional disclosures provided in Section 11 hereto, may be amended other than
by an instrument in writing signed by the Company and the Subscriber. No
provision of this Agreement, including the additional disclosures provided in
Section 11 hereto, may be waived other than by an instrument in writing signed
by the party against whom enforcement is sought; provided, however, that no
modification, amendment or waiver may cause the Subscriber (together with its
Affiliates) to be deemed to “control” the Company or the Bank for purposes of
the BHC Act, by reason of the purchase of the Securities or the consummation of
the other transactions contemplated by this Agreement or the other Private
Placement Documents. No amendment to the proviso in Section 10(i) that is
adverse to the Placement Agents may be effected without the express written
consent of the Placement Agents.

(g) Notices.

Any notices, consents, waivers or other communications required or permitted to
be given under the terms of this Agreement must be in writing, which, unless
otherwise provided for in this Agreement, includes an e-mail, and will be deemed
to have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or one business day after deposit with an overnight courier service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

                             If to the Company:           500 E. Washington
Street   Greenville, SC 29601 Attn: Corporate Secretary   Fax: 864.672.1777
mlong@independencenb.com   with copies (for informational purposes only) to:  
Nelson Mullins Riley & Scarborough LLP Poinsett Plaza, 9th Floor 104 S. Main
Street Greenville, SC 29601 Attn: Neil E. Grayson

Fax: 864.232.2925
neil.grayson@nelsonmullins.com

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If to the Subscriber, to its address and facsimile number set forth under the
Subscriber’s name on the signature page hereto, with copies to the Subscriber’s
representative as set forth under the Subscriber’s name on the signature page
hereto, or to such other address or facsimile number or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated by
the sender’s facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission, or (C) provided by
an overnight courier service, shall be rebuttable evidence of personal service,
receipt by facsimile or e-mail or receipt from an overnight courier service in
accordance with clause (A), (B) or (C) above, respectively.

(h) Successors and Assigns.

This Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns. The Company shall not assign this
Agreement or any rights or obligations hereunder. The Subscriber may assign some
or all of its rights hereunder to its Affiliates or Persons that share a common
discretionary investment adviser with the Subscriber without the consent of the
Company if in compliance with this Agreement and applicable law, in which event
such assignee shall be deemed to be a Subscriber hereunder with respect to such
assigned rights and shall be bound by the terms and conditions of this Agreement
that apply to a “Subscriber.”

(i) No Third Party Beneficiaries.

Except as expressly set forth herein, this Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision of this Agreement be enforced
by, any other Person; provided, however, that the Placement Agents and their
legal advisors, solely in their capacities as placement agents (and counsel
thereto) in connection with the transactions contemplated hereby, are third
party beneficiaries solely for purposes of the representations and warranties
contained in Section 2 and Section 3 of this Agreement.

(j) Survival.

Each of the representations and warranties set forth in this Agreement shall
survive the Closing under this Agreement but only for a period of 30 months
following the Closing Date (or until final resolution of any claim or action
arising from the breach of any such representation and warranty, if notice of
such breach was provided prior to the end of such period) and thereafter shall
expire and have no further force and effect; provided that the representations
and warranties in Sections 3(a), 3(b), 3(c) and 3(e) shall survive indefinitely.
Except as otherwise provided herein, all covenants and agreements contained
herein shall survive for the duration of any statutes of limitations applicable
thereto or until, by their respective terms, they are no longer operative. 

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(k) Further Assurances.

Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated by the
Private Placement Documents.

(l) No Strict Construction.

The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent, and no rules of strict construction
will be applied against any party.

(m) Recapitalizations, Exchanges, Etc., Affecting the Securities.

The provisions of this Agreement shall apply, to the full extent set forth
herein with respect to the Securities, and to any and all shares of the Company
or any successor or assign of the Company (whether by merger, consolidation,
sale of assets or otherwise) which may be issued in respect of, in exchange for,
or in substitution of the Securities, by reason of any stock dividend, stock
split, stock issuance, reverse stock split, combination, recapitalization,
reclassification, merger, consolidation or otherwise. Upon the occurrence of any
of such events, amounts hereunder shall be appropriately adjusted.

11. ADDITIONAL DISCLOSURES.

The purpose of this section is to memorialize and confirm certain disclosures
that the Company has made or hereby intends to make in connection with
Subscriber’s decision to invest in the Securities. In addition to the
information contained in the Private Placement Documents, as well as any other
information that the Company has provided to Subscriber in connection with
Subscriber’s due diligence of the Company, the Company hereby discloses the
following information to the Subscriber. Following the Closing, the Company will
disclose this information in accordance with Section 4(b) hereof.

(a) Director and Executive Officer Compensation.

The Company seeks to follow industry best practices when establishing its
compensation programs. The Company’s guiding philosophy is as follows with a
focus on ensuring compensation practices are aligned with sound risk management:

● Use its best efforts to develop compensation policies that create a direct
relationship between pay levels, corporate performance and long-term return to
shareholders;

25

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● Ensure that compensation policies, including any incentive compensation,
appropriately balance risk and reward and are compatible with the effective
controls and risk management that the Company has established and do not
encourage inappropriate risks that could lead to a material financial loss for
the Company;   ● Monitor the results of such policies to assure that
compensation payable to the Company’s senior leadership team provides overall
competitive pay levels, creates proper incentives to enhance shareholder value,
rewards performance and is justified by the returns available to shareholders
particularly when compared to the returns received by the shareholders of the
Company’s principal competitors; and   ● The Company’s 2013 Equity Incentive
Plan provides that the number of shares available for issuance under the Plan
(together with the Company’s 2005 Stock Incentive Plan) shall at all times equal
20% of our total outstanding shares of common stock on an as-diluted basis.
These shares are available for issuance to directors and officers. The Company
intends to seek shareholder approval to amend the 2013 Equity Incentive Plan
such that the number of shares shall at all times equal 20% of our total
outstanding shares of common stock on an as-diluted and as-converted (for
classes of securities convertible into our common stock) basis.

(b) Intellectual Property.

In March 2013, the Company filed a provisional patent application with the U.S.
Patent and Trademark Office covering several different potentially patentable
concepts, including concepts associated with mobile wallet messages among
different software platforms, temporary electronic currency messages, digital
identities, improved credit score data collected from a mobile device and/or
individual activities, improved interfaces for carrying out mobile financial
transactions, closed loop mobile enablement bridging, software-related building
blocks for performing financial transactions, social networking, encryption
protocols and insurance risk analysis. On March 15 and 17, 2014, the Company
filed three patent applications covering these concepts. The Company has not
been granted any form of intellectual property protection from the U.S. Patent
and Trademark Office or other government entity that grants intellectual
property protections and is continuing to explore its alternatives regarding the
type of protection to pursue regarding its proprietary technology and software.

On December 31, 2012, the Company completed a recapitalization which included a
business plan to expand a mobile payments and transaction processing business.
On July 2011, Gordon A. Baird, the Company’s current Chief Executive Officer,
formed MPIB to develop the business plan and intellectual property for a
transaction processing and mobile payment bank. In December 2011, Alvin G.
Hageman, a non employee director of the Company, became a member of MPIB.
Concurrent with the Closing, the Company will enter into an agreement to
purchase any and all of the assets of MPIB. The purchase price for such assets
will consist of $250,000 upfront, and the remainder being paid out over time
based on performance of the business (the “Deferred Purchase Price”). The
Deferred Purchase Price will be payable within seven business days following the
date the Company’s (i) cumulative aggregate consolidated core positive net
income exceeds $2,000,000.00, for the period commencing as of the Closing Date
or (ii) cumulative aggregate consolidated gross revenues of net interest income
and non-interest revenues exceeds $8,000,000.00 for any consecutive five
quarterly periods and the Company’s average market capitalization for the 30 day
period immediately prior to the Deferred Purchase Price Trigger Event exceeds
$50,000,000.00. The Deferred Purchase Price will consist of $1,500,000 payment
in cash and 1,500,000 shares of common stock (with registration rights). 

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(c) Use of Proceeds.

The Company expects to use the net proceeds from the Private Placement for
general corporate purposes, including but not limited to supporting the
Company’s and Bank’s regulatory capital position and continuing business and
customer development including the development of its transaction services and
mobile banking business. The Company’s board will establish customary policies
and procedures relating to expenditures, budgets and oversight.

(d) Shareholder Approval.

The Company requires shareholder approval to make certain changes to its 2013
Equity Incentive Plan and take certain actions required to execute its business
plan. On November 20, 2014, the Company received shareholder approval of a 10:1
reverse stock split to facilitate listing on the NASDAQ Global Market. The
Company may elect to seek shareholder approval for an adjusted stock split ratio
of up to 20:1 to further facilitate the NASDAQ listing process. Following the
Closing, the Company will seek shareholder approval for the necessary
shareholder actions.

(e) Observation Rights.

The Company may from time to time offer certain board observation rights to
individuals who may or may not be holders of the Designated Preferred Stock,
which observation rights may include the right to observe meetings of the Board
of Directors of the Company.

(f) Rights to Participate in Follow-On Offerings.

The Company may from time to time offer certain parties, including investors,
the right to participate in future offerings of the Company which could
facilitate future capital raises for the Company. Such rights may be in the form
of rights of first offer, refusal or limited pre-emptive rights.

(g) Election of Two Additional Members to the Company’s Board of Directors.

The Board of Directors of the Company intends to elect two new individuals as
directors of the Company effective as of the Closing Date, subject only to
regulatory nonobjection.

[Signatures appear on the following pages.]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

NAME OF SUBSCRIBER:

By:  

Name:  

Title:  

SUBSCRIPTION AMOUNT:

Number of Purchased Shares:  

Purchase Price Per Share:   $

Aggregate Purchase Price: $  

Accepted:   INDEPENDENCE BANCSHARES, INC.

By:  

Name:  

Title:  

By:  

Name:  

Title:  

Number of Purchased Shares:  

Purchase Price Per Share:   $

Aggregate Purchase Price: $  

Date:  

Signature Page to Subscription Agreement

--------------------------------------------------------------------------------

Information of Subscriber

Name:   

Address:   

Contact Name:   

Telephone:   

Facsimile:   

E-mail:   

Tax ID No. (for entities):   

Social Security Number (for natural persons):   

Information about Subscriber Representative:

Name:  

Title:  

Address:  

Telephone:  

Facsimile:  

E-mail:  

[Remainder of page intentionally left blank.]

Subscriber Information Page

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EXHIBITS

EXHIBIT A       CERTIFICATE OF DESIGNATIONS   EXHIBIT B   ACCREDITED INVESTOR
QUESTIONNAIRE   EXHIBIT C FORM OF REGISTRATION RIGHTS AGREEMENT

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EXHIBIT A
CERTIFICATE OF DESIGNATIONS

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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 January __, 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.

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“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.

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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.

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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. Upon receiving notice by the
Corporation of Redemption, a Holder will have 5 business days to elect optional
conversion per Section 8 herein.

(c) Effectiveness of Redemption. 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).

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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: (i) issue
or authorize for issuance any shares of Designated Preferred Stock or any
rights, warrants, options, commitments or securities to acquire any Designated
Preferred Stock (including any securities directly or indirectly convertible or
exchangeable into any of the foregoing), (ii) increase or decrease the
authorized number of shares of Designated Preferred Stock, or (iii) 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 adversely
affect the rights, preferences, privileges or voting powers of the Designated
Preferred Stock, including but not limited to by creating any other series of
preferred stock or other new class or series of capital stock or other
securities having general voting rights or having the right to vote on any share
exchange, reclassification, merger, consolidation or other business combination
transaction involving the Corporation other than any such rights as are
currently held by holders of any Parity Stock outstanding as of the date hereof;
provided, however, that the authorization of Parity Stock or Junior Stock shall
not be deemed to adversely affect the rights, preferences, privileges or voting
powers of the Holders of outstanding Series A Preferred Stock and shall not
require affirmative vote or consent of the Holders of outstanding Series A
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 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,
the Corporation shall not effect such conversion to Common Stock 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.

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EXHIBIT B
ACCREDITED INVESTOR QUESTIONNAIRE

 

 

 

 

 

 

 

 

 

 

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Note to Subscriber:

For Corporations, Partnerships, Trusts, Foundations, Joint Subscribers (other
than married couples) and Other Entities, please provide the information
requested by Exhibit A-1.

For Individuals (including married couples), please provide the information
requested by Exhibit A-2.

All Subscribers, please complete the Form W-9 found in Exhibit A-3.

Capitalized terms not defined herein have the meaning ascribed to them in the
Agreement.

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Accredited Investor Questionnaire for
Corporations, Partnerships, Trusts, Foundations,
Joint Subscribers (other than married couples) and Other Entities

If the undersigned is a corporation, partnership, trust, pension plan,
foundation, joint Subscriber (other than a married couple) or other entity, an
authorized officer, partner, or trustee must complete, date and sign this
Certificate.

CERTIFICATE

The undersigned certifies that the representations and responses below are true
and accurate:

(a) The undersigned has been duly formed and is validly existing and has full
power and authority to invest in the Company. The person signing on behalf of
the undersigned has the authority to execute and deliver the Investment
Agreement on behalf of the undersigned and to take other actions with respect
thereto.

(b) Indicate the form of entity of the undersigned:

                 __       Limited Partnership       __ General Partnership      
__ Corporation       __ Revocable Trust (identify each grantor and indicate
under what circumstances the trust is revocable by the grantor):        
(Continue on a separate piece of paper, if necessary.)        __ Other Type of
Trust (indicate type of trust and, for trusts other than pension trusts, name
the grantors and beneficiaries):     (Continue on a separate piece of paper, if
necessary.)        __ Other form of organization (indicate form of
organization):  

(c) Indicate the approximate date the undersigned entity was formed: ___________

--------------------------------------------------------------------------------

(d) In order for the Company to offer and sell the Securities in conformance
with state and federal securities laws and regulations, the following
information must be obtained regarding your investor status. Please initial each
category applicable to you as a Subscriber of the Securities of the Company.

            __ (1)       A bank as defined in Section 3(a)(2) of the 1933 Act,
or any savings and loan association or other institution pursuant to Section
3(a)(5)(A) of the 1933 Act whether acting in its individual or fiduciary
capacity;               __ (2) A broker or dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934;   __ (3) An insurance company as
defined in Section 2(13) of the 1933 Act;   __ (4) An investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of that act;   __ (5) A Small Business
Investment Company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958;   __ (6) A
plan established and maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of $5,000,000;
  __ (7) An employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such act, which is either a bank,
savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made solely by
persons that are accredited investors;   __ (8) A business development company
as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;   __
(9) An organization described in Section 501(c)(3) of the Internal Revenue Code,
a corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the Securities, with total assets
in excess of $5,000,000;   __  (10) A trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the Securities,
whose purchase is directed by a sophisticated person who has such knowledge and
experience in financial and business matters that such person is capable of
evaluating the merits and risks of investing in the Company;

--------------------------------------------------------------------------------

            __  (11)        An entity in which all of the equity owners qualify
under any of the above subparagraphs. If the undersigned belongs to this
investor category only, list the equity owners of the undersigned, and the
investor category which each such equity owner satisfies:         (Continue on a
separate piece of paper, if necessary.)

Dated:                        , 2015

Name of Subscriber: By:  

Name:  

Title:  

An Authorized Officer, Partner or Trustee

--------------------------------------------------------------------------------

Accredited Investor Questionnaire
for
Individuals (including married couples)

If the undersigned is an Individual (or married couple), the undersigned must
complete, date and sign this Certificate.

CERTIFICATE

I certify that the representations and responses below are true and accurate:

(a) In order for the Company to offer and sell the Securities in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category applicable
to you as a Subscriber of the Securities of the Company.

       __         (1) A natural person whose individual net worth, or joint net
worth with that person’s spouse, at the time of his or her purchase exceeds
$1,000,000 (excluding in such calculation the value of your primary residence
and the related amount of indebtedness secured by your primary residence up to
its fair market value and including in such calculation, if applicable, the
related amount of indebtedness secured by your primary residence that exceeds
its fair market value);     __  (2) A natural person who had an individual
income in excess of $200,000 in each of the two most recent years, or joint
income with that person’s spouse in excess of $300,000, in each of those years,
and has a reasonable expectation of reaching the same income level in the
current year;     __  (3) An executive officer or director of the Company.

(b) Set forth in the space provided below the state(s), if any, in the U.S. in
which you maintained your residence during the past two years and the dates
during which you resided in each state:

                                  

       Dated:                        , 2015

        

Name(s) of Subscriber:

 

Signature:

  Signature:   (If joint ownership, both individuals must execute this
Certificate.)

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FEDERAL INCOME TAX BACKUP WITHHOLDING

In order to prevent the application of federal income tax backup withholding,
each subscriber must provide us with a correct Taxpayer Identification Number
(“TIN”). An individual’s social security number is his or her TIN. The TIN
should be provided in the space provided in the Substitute Form W-9 below.

Under federal income tax law, any person who is required to furnish his or her
correct TIN to another person, and who fails to comply with such requirements,
may be subject to a $50 penalty imposed by the IRS.

Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If backup withholding results in an overpayment of taxes, a refund may
be obtained from the IRS. Certain taxpayers, including all corporations, are not
subject to these backup withholding and reporting requirements.

If the shareholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future, “Applied For” should be written
in the space provided for the TIN on the Substitute Form W-9.

SUBSTITUTE FORM W-9

Under penalties of perjury, I certify that: (i) The number shown on this form is
my correct Taxpayer Identification Number (or I am waiting for a Taxpayer
Identification Number to be issued to me), and (ii) I am not subject to backup
withholding because: (a) I am exempt from backup withholding; or (b) I have not
been notified by the Internal Revenue Service (“IRS”) that I am subject to
backup withholding as a result of a failure to report all interest or dividends;
or (c) the IRS has notified me that I am no longer subject to backup
withholding.

You must cross out item (ii) above if you have been notified by the IRS that you
are subject to backup withholding because of underreporting interest or
dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from
the IRS that you are no longer subject to backup withholding, do not cross out
item (ii).

Each subscriber should complete this section.

           Signature of Subscriber   Signature of Co-Subscriber (if applicable)
    Printed Name   Printed Name     Social Security or Employer   Social
Security or Employer     Identification No. Identification No.

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[exhibit10-13x16x1.jpg]

INDEPENDENCE BANCSHARES, INC.
(d/b/a nD bancgroup)
____________________________________________

SUPPLEMENT TO THE PREFERRED STOCK SUBSCRIPTION BOOKLET
DATED JANUARY 15, 2015

FOR PERSONS WHO HAVE PREVIOUSLY SUBMITTED
A SUBSCRIPTION AGREEMENT
_____________________________________________

The date of this Supplement is April 13, 2015.

This Supplement has been prepared solely for use in conjunction with the
preferred stock subscription booklet of Independence Bancshares, Inc., d/b/a nD
bancgroup, a South Carolina corporation (the “Company”), dated January 15, 2015
(the “Subscription Booklet”), pursuant to which we are offering up to 10,000
shares of Series A preferred stock, par value $0.01 per share (“Preferred
Stock”), at a purchase price of not less than $1,000 per share (the “Private
Placement”).

As previously disclosed, the Federal Reserve Board (“Federal Reserve”) requested
certain amendments to the Certificate of Designations for the Preferred Stock
and Subscription Agreement since the date of the Subscription Booklet. All
amendments to the Certificate of Designation and Subscription Agreement are set
forth below. This Supplement provides you with an update on the terms of the
Private Placement discussed above so that you may decide whether you would still
like to participate in the Private Placement. In addition, the Company notes
that, as permitted in Section 9 of the Subscription Agreement, on March 30,
2015, the Company extended the closing deadline for the offering for 90 days to
allow time to obtain necessary regulatory nonobjections.

After reviewing the information contained in this Supplement, any subscriber who
previously submitted a subscription agreement and desires to purchase shares in
the Private Placement in accordance with the terms of the Private Placement as
revised by this Supplement, may elect to do so by completing the Investment
Confirmation attached hereto as Exhibit A. If a person who has previously
submitted a subscription agreement does not complete and return the Investment
Confirmation, then such subscriber’s previously submitted subscription agreement
will not be accepted and we will return all funds received from such subscriber
without interest promptly. In addition, execution of the Investment Confirmation
shall satisfy each subscriber’s obligation under Section 6(d) of the
Subscription Booklet for an officer’s certificate attesting to the accuracy of
certain representation and warranties of the subscriber as of the Closing Date.

Any subscriber who desires to submit an Investment Confirmation should e-mail a
properly completed and signed Investment Confirmation, and also send the
original to:

Independence Bancshares, Inc.
Attn: Martha L. Long, CFO
500 East Washington Street
Greenville, SC 29601
mlong@indepbanc.com
(864) 672-1770

THIS SUPPLEMENT IS NOT A SUMMARY OF THE INFORMATION IN THE SUBSCRIPTION BOOKLET,
AND IT MAY NOT BE USED EXCEPT IN CONJUNCTION WITH SUCH BOOKLET. TO THE EXTENT
ANY INFORMATION SET FORTH IN THIS SUPPLEMENT IS INCONSISTENT WITH OR CONTRARY TO
THE INFORMATION SET FORTH IN THE SUBSCRIPTION BOOKLET, THE INFORMATION SET FORTH
HEREIN SHALL MODIFY AND SUPERSEDE THE INFORMATION CONTAINED IN THE SUBSCRIPTION
BOOKLET. THIS SUPPLEMENT DOES NOT CONTAIN A COMPLETE DESCRIPTION OF THE TERMS OF
THE PRIVATE PLACEMENT AND INFORMATION RELATING TO OUR COMPANY. PROSPECTIVE
INVESTORS SHOULD READ THE SUBSCRIPTION BOOKLET AND THIS SUPPLEMENT IN THEIR
ENTIRETY PRIOR TO DECIDING WHETHER TO PURCHASE SHARES OF OUR PREFERRED STOCK IN
THE PRIVATE PLACEMENT.

1

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CHANGES TO CERTIFICATE OF DESIGNATIONS

Section 6. Redemption.

(a) 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.

(b) 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.

Section 7. Voting Rights.

(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.

Section 8. Conversion.

(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.

2

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CHANGES TO SUBSCRIPTION AGREEMENT

Section 3(r) the Subscription Agreement is revised as follows:

(r) Purchase of MPIB Assets. On the Closing Date, that certain asset purchase
agreement between the Company and MPIB Holdings LLC (“MPIB”) relating to the
purchase of certain assets will be held in escrow and remain unexecuted until
the Company has received notice from the Federal Reserve that (i) any necessary
notices or applications from the Company or MPIB have been filed in form and
substance acceptable to the Federal Reserve and (ii) the agency does not object
to the consummation of the contemplated transaction based on its compliance with
applicable Federal law and regulation.

Section 3(s) the Subscription Agreement has been added as follows:

(s) On the Closing Date, the Company and the Bank possess all material licenses,
sublicenses, certificates, title, and permits necessary to conduct its business.

Section 7(i) of the Subscription Agreement is revised as follows:

(i) The Company shall have submitted to the Federal Reserve such notices or
applications requested by the Federal Reserve as described in Section 3(r)
above. In addition, MPIB shall have submitted to the Federal Reserve a Notice of
Change in Control on Form FR 2081a relating to the restricted common stock which
is proposed to constitute a portion of the purchase price under the Asset
Purchase Agreement. The Asset Purchase Agreement shall contain a closing
condition that the transaction contemplated thereby shall not be consummated
until the Federal Reserve shall have provided nonobjection to or approval of the
notices and applications described in this Section 7(i).

Section 11(b) the Subscription Agreement is revised as follows:

On December 31, 2012, the Company completed a recapitalization which included a
business plan to expand a mobile payments and transaction processing business.
On July 2011, Gordon A. Baird, the Company’s current Chief Executive Officer,
formed MPIB to develop the business plan and intellectual property for a
transaction processing and mobile payment bank. In December 2011, Alvin G.
Hageman, a non employee director of the Company, became a member of MPIB. The
Company will enter into an agreement to purchase any and all of the assets of
MPIB. The purchase price for such assets will consist of $250,000 upfront, and
the remainder being paid out over time based on performance of the business (the
“Deferred Purchase Price”). The Deferred Purchase Price will be payable within
seven business days following the date the Company’s (i) cumulative aggregate
consolidated core positive net income exceeds $2,000,000.00, for the period
commencing as of the Closing Date or (ii) cumulative aggregate consolidated
gross revenues of net interest income and non-interest revenues exceeds
$8,000,000.00 for any consecutive five quarterly periods and the Company’s
average market capitalization for the 30 day period immediately prior to the
Deferred Purchase Price Trigger Event exceeds $50,000,000.00. The Deferred
Purchase Price will consist of $1,500,000 payment in cash and 1,500,000 shares
of common stock (with registration rights).

3

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EXHIBIT A

INVESTMENT CONFIRMATION

Reference is made to that certain preferred stock subscription booklet (the
“Subscription Booklet”) dated January 15, 2015, of Independence Bancshares,
Inc., d/b/a nD bancgroup, a South Carolina corporation (the “Company”), the
supplement, dated April 13, 2015, to the Subscription Booklet for persons who
have previously submitted a subscription agreement (the “Supplement”), and the
Subscription Agreement previously submitted by the undersigned to the Company
(the “Subscription Agreement”).

Confirmation of Investment. The undersigned subscriber (the “Subscriber”) hereby
elects to purchase shares of Series A preferred stock (“Preferred Stock”) of the
Company pursuant to the Subscription Agreement, as modified by this Investment
Confirmation, at a purchase price per share of $1,000. The Subscriber
understands that the Subscriber may revoke all or a portion of the Subscriber’s
subscription at any time on or prior to April 17, 2015, and that in such event
the Company will promptly return all funds (or the applicable portion thereof,
if the Subscriber revokes only a portion of the Subscriber’s subscription)
received from such Subscriber without interest. The Subscriber understands that,
if the Subscriber does not to complete and return this Investment Confirmation,
then the Subscriber’s Subscription Agreement will not be accepted and the
Company will return all funds received from the Subscriber without interest
promptly.

Maximum Aggregate Purchase Price, Number and Percentage of Shares to Be
Purchased. Unless otherwise set forth below, each of the Subscriber’s maximum
aggregate purchase price, maximum percentage of pro forma Preferred Stock
outstanding to be purchased, and maximum number of shares to be purchased will
remain as set forth on the Subscriber’s signature page to the Subscription
Agreement. If the Subscriber desires to establish a maximum aggregate purchase
price and/or maximum number of shares to be purchased that is different from the
applicable maximum set forth on the Subscriber’s signature page to the
Subscription Agreement, then the Subscriber must set forth such amounts below.

Maximum No. of Shares to be Purchased:
                                                 Maximum Aggregate Purchase
Price:  

Bring down of Representations and Warranties. The Subscriber hereby confirms
that (A) its representations and warranties (i) contained in Sections 2(k) and
(l) of its Subscription Agreement are true and correct as of the date hereof
(except for such representations and warranties that expressly speak as of a
specific date, which shall be true and correct as of such specified date) and
(ii) contained in all other subsections of Section 2 thereof are, without giving
effect to any materiality qualifications therein, true and correct at and as of
the date herof (except for such representations and warranties that expressly
speak as of an earlier date, which representations and warranties shall be true
and correct as of such specified date) except for such failures to be true and
correct as, individually or in the aggregate, would not be material; and (B) it
has performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Subscriber at or prior to the date
hereof.

IN WITNESS WHEREOF, the undersigned has executed this Investment Confirmation.

COMPANY:    INDEPENDENCE BANCSHARES, INC.   Signature:    

Name:    

Title:    

Number of Purchased Shares:    

Date:  

SUBSCRIBER: (if individual)   Signature:   

Name:  

Date:  

  (if entity)   (print entity name) Signature:   

Name:  

Title/Office/Position:  

Date:  

A-1

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