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Exhibit 10.4    
    

INDEPENDENCE BANCSHARES, INC.  

 
  STOCK WARRANT AGREEMENT    
    

                        , 2005  

	Warrant Holder:	 	 	 	No. of Shares:	 	 
	 	 	
	 	 	 	

        Independence
Bancshares, Inc. (the "Company"), a South Carolina corporation and the holding company for Independence National Bank (proposed) (the "Bank"), hereby grants to the
person identified above as the Warrant Holder warrants (the "Warrants") to purchase the number of shares set forth above, representing one share of common stock for every two shares of common stock
purchased
by the Warrant Holder in the Company's initial public offering (provided that the maximum number of shares which may be covered by this Warrant is 25,000 shares), in consideration of the financial
risk associated with Warrant Holder's investment in the Company during its organizational stage and the time, expertise, and continuing involvement of the Warrant Holder in the management of the Bank.
Such Warrants are granted on the following terms and conditions: 

        1.    Exercise of
Warrants.    One-third of the shares (the "Shares") subject to the Warrants granted in this Agreement shall vest on each of the
first three anniversaries of the date of the opening of the Bank, subject to the Warrant Holder's continued service with the Company or the Bank as of such date as an executive officer or director.
Exercise of the Warrants is subject to the following: 

	(a)
	Exercise Price. The exercise price (the "Exercise Price") shall be $10.00 per Share, subject to adjustment
pursuant to Section 2 below.

	(b)
	Expiration of Warrant Term. The Warrants will expire at 5:00 p.m. Eastern Standard Time on the tenth anniversary of the opening
date of the bank (subject to earlier termination in certain circumstances pursuant to Section 5 below), and may not be exercised thereafter (the "Expiration Date").

	(c)
	Payment. The purchase price for Shares as to which the Warrants are being exercised shall be paid in cash, by
wire transfer, by certified or bank cashier's check, or by personal check drawn on funds on deposit with the Bank.

	(d)
	Method of Exercise. The Warrants shall be exercisable by a written notice delivered to the Chief Executive
Officer or Secretary of the Company which shall:

	(i)
	State
the owner's election to exercise the Warrants, the number of Shares with respect to which it is being exercised, the person in whose name the stock certificate for
such Shares is to be registered, and such person's address and tax identification number (or, if more than one, the names, addresses and tax identification numbers of such persons);

	(ii)
	Be
signed by the person or persons entitled to exercise the Warrants and, if the Warrants are being exercised by any person or persons other than the original holder
thereof, be accompanied by proof satisfactory to counsel for the Bank of the right of such person or persons to exercise the Warrants; and

	(iii)
	Be
accompanied by the originally executed copy of this Stock Warrant Agreement.

	(e)
	Partial Exercise. In the event of a partial exercise of the Warrants, the Company shall either issue a new
agreement for the balance of the Shares subject to this Stock Warrant Agreement after such partial exercise, or it shall conspicuously note hereon the date and number of Shares purchased pursuant to
such exercise and the number of Shares remaining covered by this Stock Warrant Agreement. 

 

	(f)
	Restrictions on Exercise. The Warrants may not be exercised (i) if the issuance of the Shares upon such
exercise would constitute a violation of any applicable federal or state securities or banking laws or other law or regulation or (ii) unless the Bank or the holder hereof, as applicable,
obtains any approval or other clearance which the Bank determines to be necessary or advisable from the Federal Reserve Board, the Federal Deposit Insurance Corporation or any other state or federal
banking regulatory agency with regulatory authority over the operation of Company or the Bank (collectively the "Regulatory Agencies"). The Company may require representations and warranties from the
Warrant Holder as required to comply with applicable laws or regulations, including the Securities Act of 1933 and state securities laws. 

        2.    Anti-Dilution;
Merger.    If, prior to the exercise of Warrants hereunder, the Company (i) declares, makes or issues, or fixes a record date for the
determination of holders of common stock entitled to receive, a dividend or other distribution payable on the Shares in shares of its capital stock, (ii) subdivides the outstanding Shares,
(iii) combines the outstanding Shares, (iv) issues any shares of its capital stock by reclassification of the Shares, capital reorganization or otherwise (including any such
reclassification or reorganization in connection with a consolidation or merger or and sale of all or substantially all of the Company's assets to any person), then the Exercise Price, and the number
and kind of shares receivable upon exercise, in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the holder of any Warrant exercised after such time shall be entitled to receive the
aggregate number and kind of shares which, if such Warrant had been exercised immediately prior to such time, he would have owned upon such exercise and been entitled to receive by virtue of such
dividend, distribution, subdivision, combination, reclassification, reorganization, consideration, merger or sale. 

        3.    Valid Issuance of Common Stock.    The Company possesses the
full authority and legal right to issue this Warrant and the Shares issuable pursuant to this Warrant. The issuance of this Warrant vests in the holder the entire legal and beneficial interests in
this Warrant, free and clear of any liens, claims, and encumbrances and subject to no legal or equitable restrictions of any kind except as described herein. The Shares that are issuable upon exercise
of this Warrant, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and
non-assessable, and will be free of restrictions on transfer other than restrictions under applicable state and federal securities. 

        4.    Restrictions on Transferability.    This
Agreement and the Warrants may not be assigned, transferred, pledged, or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment, or
similar process. Any attempted assignment, transfer, pledge, hypothecation, or other disposition of these Warrants contrary to the provisions hereof shall be without legal effect. 

        5.    Mandatory Exercise; Termination.    

	(a)
	Warrant
Holder shall exercise all of Warrant Holder's then exercisable Warrants within 90 days of the date that Warrant Holder ceases to serve the Company as an executive
officer, or director, or the then exercisable Warrants shall terminate; provided that such 90 day period shall be extended to one year if the cessation of service was a result of the Warrant
Holder's death or disability. In the event the Warrant Holder fails to exercise any of the Warrants referred to in this subparagraph within the specified day period, such Warrants shall be forfeited.

	(b)
	The
Company may be required to increase its capital to meet capital requirements imposed by statute, rule, regulation, or guideline. In order to achieve such capital increase, the
Regulatory Agencies may direct the Company to require, or the Company on its on volition may decide to require, the Warrant Holders to either (i) exercise all or part of their Warrants or
(ii) allow 

2

 

the
Warrants to be terminated. In such an event, the Warrant Holder must exercise or forfeit the Warrants as set forth below. 

	(c)
	When
the Company is required or determines to increase its capital as described in subsection (b) above, the Company shall send a notice (the "Notice") to the Warrant Holder
(i) specifying the number of Shares relating to the Warrants for which the Warrants must be exercised (the "Number") (if less than all shares relating to warrants held by all holders of
warrants of the Company under agreements substantially similar to this one are required by the Company to be exercised or cancelled, the Number for the Warrant Holder shall reflect a proportionate
allocation based on the number of Shares subject to this Agreement as compared to the total number of shares subject to warrants held by all such warrant holders as a group); (ii) specifying
the date prior to which the Warrants must be totally or partially exercised, as the case may be (the "Deadline"); and (iii) stating that the failure of the Warrant holder to exercise the
Warrants shall result in their automatic termination.

	(d)
	If
the Warrant Holder does not exercise the Warrants pursuant to the terms of the Notice, this Agreement shall be automatically terminated on the Deadline, without further act or
action by the Warrant Holder or the Company, and the Warrant Holder shall deliver this Agreement to the Company for cancellation. If the Number is less than the total number of Shares that are then
subject to exercise under this Agreement, the Company shall issue a new Stock Warrant Agreement in compliance with Section 1(e) hereof. 

        6.    Covenants of the Company.    During the term of the Warrants,
the Company shall: 

	(a)
	at
all times authorize, reserve and keep available, solely for issuance upon exercise of this Warrant, sufficient shares of common stock from time to time issuable upon exercise of
this Warrant;

	(b)
	on
receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft, or destruction, on
delivery of any indemnity agreement or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, at its expense
execute and deliver, in lieu of this Warrant, a new Warrant of like tenor; and

	(c)
	on
surrender for exchange of this Warrant or any Warrant substituted therefor pursuant hereto, properly endorsed, to the Company, at its expense, issue and deliver to or on the order
of the holder thereof a new Warrant or Warrants of like tenor, in the name of such holder, calling in the aggregate on the face or faces thereof for the issuances of the number of shares of common
stock issuable pursuant to the terms of the Warrant or Warrants so surrendered. 

        7.    No Dilution or Impairment.    The Company shall not amend its
Articles of Incorporation or participate in any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities or any other voluntary action for the purpose of
avoiding or seeking to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in carrying out all such
action as may be reasonably necessary in order to protect the exercise rights of the holder against improper dilution or other impairment. 

        8.    Amendment.    Neither this Agreement nor the rights granted
hereunder may be amended, changed or waived except in writing signed by each party hereto. 

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        IN
WITNESS WHEREOF, the Company has executed and the holder has accepted this Stock Warrant Agreement as of the date and year first above written. 

	 	 	INDEPENDENCE BANCSHARES, INC.
	

 	
 	

By:	
 	

    

	 	 	Lawrence R. Miller, Chief Executive Officer
	(CORPORATE SEAL)	 	 	 	 
	 	 	Attest:	 	    

	 	 	Kimberly D. Barrs, Secretary
	

 	
 	
WARRANT HOLDER:
	

 	
 	

By:	
 	

    

	 	 	Signature
	

    	
 	

 Print Name

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Exhibit 10.4

STOCK WARRANT AGREEMENTQuickLinks
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Exhibit 10.5    
    

 
 

ESCROW AGREEMENT    
    

        THIS ESCROW AGREEMENT (this "Agreement") is entered into and effective as of
the             day of
            , 2004, by and between Independence Bancshares, Inc., a South Carolina corporation (the "Company"), and The Bankers Bank (the "Escrow Agent"). 

W I T N E S S E T H:  

        WHEREAS, the Company proposes to offer and sell (the "Offering") up to 2,500,000 shares of Common Stock, $0.01 par
value per share (the "Shares"), to investors at $10.00 per Share pursuant to a registered public offering; and 

        WHEREAS, the Company desires to establish an escrow for funds forwarded by subscribers for Shares, and the Escrow Agent is willing to
serve as Escrow Agent upon the terms and conditions herein set forth. 

        NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows: 

        1.    Deposit with Escrow Agent.    

        (a)   The
Escrow Agent agrees that it will from time to time accept, in its capacity as escrow agent, subscription funds for the Shares (the "Escrowed Funds") in the form of
checks received by the Company from subscribers. All checks shall be made payable to the Escrow Agent. If any check does not clear normal banking channels in due course, the Escrow Agent will promptly
notify the Company. Any check which does not clear normal banking channels and is returned by the drawer's bank to Escrow Agent will be promptly turned over to the Company along with all other
subscription documents relating to such check. Any check received that is made payable to a party other than the Escrow Agent shall be returned to the Company for return to the proper party. The
Company in its sole and absolute discretion may reject any subscription for shares for any reason and upon such rejection it shall notify and instruct the Escrow Agent in writing to return the
Escrowed Funds by check made payable to the subscriber. If the Company rejects or cancels any subscription for any reason the Company will retain any interest earned on the Escrowed Funds to help
defray organizational costs. 

        (b)   Subscription
agreements for the Shares shall be reviewed for accuracy by the Company and, immediately thereafter, the Company shall deliver to the Escrow Agent the
following information: (i) the name and address of the subscriber; (ii) the number of Shares subscribed for by such subscriber; (iii) the subscription price paid by such
subscriber; (iv) the subscriber's tax identification number certified by such subscriber; and (v) a copy of the subscription agreement. 

        2.    Investment of Escrowed Funds.    Upon collection of each check
by the Escrow Agent, the Escrow Agent shall invest the funds in deposit accounts or certificates of deposit which are fully insured by the Federal Deposit Insurance Corporation or another agency of
the United States government, short-term securities issued or fully guaranteed by the United States government, federal funds, or such other investments as the Escrow Agent and the Company
shall agree. The Company shall provide the Escrow Agent with instructions from time to time concerning in which of the specific investment instruments described above the Escrowed Funds shall be
invested, and the Escrow Agent shall adhere to such instructions. Unless and until otherwise instructed by the Company, the Escrow Agent shall by means of a "Sweep" or other automatic investment
program invest the Escrowed Funds in blocks of $1,000 in federal funds. Interest and other earnings shall start accruing on such funds as soon as such funds would be deemed to be available for access
under applicable banking laws and pursuant to the Escrow Agent's own banking policies. 

1

 

        3.    Distribution of Escrowed Funds.    The Escrow Agent shall
distribute the Escrowed Funds in the amounts, at the times, and upon the conditions hereinafter set forth in this Agreement. 

        (a)   If
at any time on or prior to the expiration date of the offering as described in the prospectus relating to the offering, (the "Closing Date"), (i) the Escrow
Agent has certified to the Company in writing that the Escrow Agent has received $15,000,000 in Escrowed Funds, less the amount certified by the Company to have been received by it as subscriptions
from organizers (which do not have to be placed in escrow), and (ii) the Escrow Agent has received a certificate from the President or the Chairman of the Board of the Company that all other
conditions to the release of funds as described in the Company's Registration Statement filed with the Securities and Exchange Commission pertaining to the public offering have been met, then the
Escrow Agent shall deliver the Escrowed Funds to the Company to the extent such Escrowed Funds are collected funds. If any portion of the Escrowed Funds are not collected funds, then the Escrow Agent
shall notify the Company of such fact and shall distribute such funds to the Company only after such funds become collected funds. For purposes of this Agreement, "collected funds" shall mean all
funds received by the Escrow Agent, which have cleared normal banking channels. 

        (b)   If
the Escrowed Funds do not, on or prior to the Closing Date, become deliverable to the Company based on failure to meet the conditions described in
Paragraph 3(a), or if the Company terminates the offering at any time prior to the Closing Date and delivers written notice to the Escrow Agent of such termination (the "Termination Notice"),
the Escrow Agent shall return the Escrowed Funds which are collected funds as directed in writing by the Company to the respective subscribers in amounts equal to the subscription amount theretofore
paid by each of them. All uncleared checks representing Escrowed Funds which are not collected funds as of the Initial Closing Date shall be collected by the Escrow Agent, and together with all
related subscription documents thereof shall be delivered to the Company by the Escrow Agent, unless the Escrow Agent is otherwise specifically directed in writing by the Company. 

        4.    Distribution of Interest.    Any interest earned on the Escrowed
Funds shall be retained by the Company. 

        5.    Fee of Escrow Agent.    The escrow account will accrue a service
charge of $20.00 per month. In addition, a $20.00 per check fee will be charged if the escrow account has to be refunded due to a failure to complete the subscription. All of these fees are payable
upon the release of the Escrowed Funds, and the Escrow Agent is hereby authorized to deduct such fees from the Escrowed Funds prior to any release thereof pursuant to Section 3 hereof. 

        6.    Liability of Escrow Agent.    

        (a)   In
performing any of its duties under the Agreement, or upon the claimed failure to perform its duties hereunder, the Escrow Agent shall not be liable to anyone for any
damages, losses or expenses which it may incur as a result of the Escrow Agent so acting, or failing to act; provided, however, the Escrow Agent shall be liable for damages arising out of its willful
default or misconduct or its gross negligence under this Agreement. Accordingly, the Escrow Agent shall not incur any such liability with respect to (i) any action taken or omitted to be taken
in good faith upon advice of its counsel or counsel for the Company which is given with respect to any questions relating to the duties and responsibilities of the Escrow Agent hereunder; or
(ii) any action taken or omitted to be taken in reliance upon any document, including any written notice or instructions provided for this Escrow Agreement, not only as to its due execution and
to the validity and effectiveness of its provisions but also as to the truth and accuracy of any information contained therein, if the Escrow Agent shall in good faith believe such document to be
genuine, to have been signed or presented by a proper person or persons, and to conform with the provisions of this Agreement. 

2

 

        (b)   The
Company agrees to indemnify and hold harmless the Escrow Agent against any and all losses, claims, damages, liabilities and expenses, including, without limitation,
reasonable costs of investigation and counsel fees and disbursements which may be imposed by the Escrow Agent or incurred by it in connection with its acceptance of this appointment as Escrow Agent
hereunder or the performance of its duties hereunder, including, without limitation, any litigation arising from this Escrow Agreement or involving the subject matter thereof; except, that if the
Escrow Agent shall be found guilty of willful misconduct or gross negligence under this Agreement, then, in that event, the Escrow Agent shall bear all such losses, claims, damages and expenses. 

        (c)   If
a dispute ensues between any of the parties hereto which, in the opinion of the Escrow Agent, is sufficient to justify its doing so, the Escrow Agent shall retain
legal counsel of its choice as it reasonably may deem necessary to advise it concerning its obligations hereunder and to represent it in any litigation to which it may be a part by reason of this
Agreement. The Escrow Agent shall be entitled to tender into the registry or custody of any court of competent jurisdiction all money or property in its hands under the terms of this Agreement, and to
file such legal proceedings as it deems appropriate, and shall thereupon be discharged from all further duties under this Agreement. Any such legal action may be brought in any such court as the
Escrow Agent shall determine to have jurisdiction thereof. In connection with such dispute, the Company shall indemnify the Escrow Agent against its court costs and reasonable attorney's fees
incurred. 

        (d)   The
Escrow Agent may resign at any time upon giving thirty (30) days written notice to the Company. If a successor escrow agent is not appointed by Company within
thirty (30) days after notice of resignation, the Escrow Agent may petition any court of competent jurisdiction to name a successor escrow agent and the Escrow Agent herein shall be fully
relieved of all liability under this Agreement to any and all parties upon the transfer of the Escrowed Funds and all related documentation thereto, including appropriate information to assist the
successor escrow agent with the reporting of earnings of the Escrowed Funds to the appropriate state and federal agencies in accordance with the applicable state and federal income tax laws, to the
successor escrow agent designated by the Company appointed by the court. 

        7.    Appointment of Successor.    The Company may, upon the delivery
of thirty (30) days written notice appointing a successor escrow agent to the Escrow Agent, terminate the services of the Escrow Agent hereunder. In the event of such termination, the Escrow
Agent shall immediately deliver to the successor escrow agent selected by the Company, all documentation and Escrowed Funds including interest earnings thereon in its possession, less any fees and
expenses due to the Escrow Agent or required to be paid by the Escrow Agent to a third party pursuant to this Agreement. 

        8.    Notice.    All notices, requests, demands and other
communications or deliveries required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given three days after having been deposited for mailing if sent by
registered mail, or certified mail return receipt requested, or delivery by courier, to the respective addresses set forth below: 

	If to the subscribers for Shares:	 	To their respective addresses as specified in their Subscription Agreements.
	

The Company:	
 	

Independence Bancshares, Inc.

420 North Pleasantburg Drive

Greenville, South Carolina 29607

Attention: Lawrence R. Miller

Chief Executive Officer
	 	 	 

3

 

	

With a copy to:	
 	

Nelson Mullins Riley & Scarborough, LLP

104 South Main Street, Suite 900

Greenville, South Carolina 29601

Attn: Neil E. Grayson, Esq.
	

The Escrow Agent:	
 	

The Bankers Bank

2410 Paces Ferry Road

600 Paces Summit

Atlanta, GA 30339-4098

Attention: Jo W. Avery

First Vice President

        9.    Representations of the Company.    The Company hereby
acknowledges that the status of the Escrow Agent with respect to the offering of the Shares is that of agent only for the limited purposes herein set forth, and hereby agrees it will not represent or
imply that the Escrow Agent, by serving as the Escrow Agent hereunder or otherwise, has investigated the desirability or advisability in an investment in the Shares, or has approved, endorsed or
passed upon the merits of the Shares, nor shall the Company use the name of the Escrow Agent in any manner whatsoever in connection with the offer or sale of the Shares, other than by acknowledgment
that it has agreed to serve as Escrow Agent for the limited purposes herein set forth. 

        10.    General.    

        (a)   This
Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Georgia. 

        (b)   The
section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. 

        (c)   This
Agreement sets forth the entire agreement and understanding of the parties with regard to this escrow transaction and supersedes all prior agreements, arrangements
and understandings relating to the subject matter hereof. 

        (d)   This
Agreement may be amended, modified, superseded or canceled, and any of the terms or conditions hereof may be waived, only by a written instrument executed by each
party hereto or, in the case of a waiver, by the party waiving compliance. The failure of any part at any time or times to require performance of any provision hereof shall in no manner affect the
right at a later time to enforce the same. No waiver in any one or more instances by any part of any condition, or of the breach of any term contained in this Agreement, whether by conduct or
otherwise, shall be deemed to be, or construed as, a further or continuing waiver of any such condition or breach, or a waiver of any other condition or of the breach of any other terms of this
Agreement. 

        (e)   This
Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and
the same instrument. 

        (f)    This
Agreement shall inure to the benefit of the parties hereto and their respective administrators, successors and assigns. The Escrow Agent shall be bound only by the
terms of this Escrow Agreement and shall not be bound by or incur any liability with respect to any other agreement or understanding between the parties except as herein expressly provided. The Escrow
Agent shall not have any duties hereunder except those specifically set forth herein. 

        (g)   No
interest in any part to this Agreement shall be assignable in the absence of a written agreement by and between all the parties to this Agreement, executed with the
same formalities as this original Agreement. 

4

 

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

	COMPANY:	 	ESCROW AGENT:
	

 	
 	

 	
 	

THE BANKERS BANK
	

By:	
 	

    
 Lawrence R. Miller

Chief Executive Officer	
 	

By:	
 	

    
 Jo W. Avery

First Vice President

5

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Exhibit 10.5

ESCROW AGREEMENT

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