Execution Version 

 

 

 

 




INDEPENDENCE BANCSHARES,
INC. 

(d/b/a nD bancgroup)


 

Subscription Booklet


 

 

 

 

 

 

 







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.








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.







Execution Version 

 

SUBSCRIPTION
AGREEMENT

 by and between


INDEPENDENCE BANCSHARES,
INC. 

(d/b/a nD bancgroup)


and 

THE SUBSCRIBER REFERRED
TO HEREIN 

 

 

 

 

 

 

 

 

 

 

 

 

 







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



1 







			(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	



2 







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. 







(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. 

2 







(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.



3 








(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”);

4 







(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. 

5 







(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. 


6 







(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. 

7 







(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: 

8 







(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).

9 







(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”).



10 








(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.

11 







(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. 

12 







(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. 


13 







(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.

14







(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.


15







(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.

16







(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. 

17







(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).

18







(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. 

19







(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. 

20







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. 

21







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.



22







(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 




23







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. 

24







(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







	●	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). 

26







(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.] 

27







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 







EXHIBITS


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









EXHIBIT A 
CERTIFICATE OF DESIGNATIONS 







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. 







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

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

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

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

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

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

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

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

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

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

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







Section 5. Liquidation Rights.


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

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

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

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







Section 6. Redemption.


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

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







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. 







EXHIBIT B 
ACCREDITED INVESTOR QUESTIONNAIRE 

 

 

 

 

 

 

 

 

 

 







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. 







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.)









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.











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 







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 







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 







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:	  





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