8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 14, 2015

Independence Bancshares, Inc.
(Exact name of registrant as specified in its charter)

South Carolina	333-121485	20-1734180
(State or other	(Commission	(I.R.S. Employer
jurisdiction of	File Number)	Identification No.)
incorporation)

500 East Washington Street, Greenville, South Carolina, 29601
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (864) 672-1776

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement
Item 3.02 Unregistered Sales of Equity Securities
Item 3.03 Material Modification of the Rights of Security Holders

Offering

On May 14, 2015, Independence Bancshares, Inc. (the “Company” or “we”), the bank holding company for Independence National Bank, a South Carolina national bank (the “Bank”), raised $8,425,000 in Tier I capital through the sale of 8,425 shares of our convertible Series A preferred stock, purchase price of $1,000 per share, which is convertible into our common stock at the rate of $0.80 per share (the “Series A Shares”). The Series A Shares were sold pursuant to subscription agreements with certain institutional investors and members of Company management, all of whom are accredited investors. The net proceeds of the offering will be used primarily for general corporate purposes, including but not limited to supporting the Company’s expansion of its payments business. In connection with the offering, we paid commissions in the aggregate amount of 5% of the offering.

The Series A Shares have a liquidation preference of $1,000 per share and non-cumulative dividends are payable at a rate of 6% per annum when and if declared. The Series A Shares rank senior to our common stock with respect to dividends, distributions and amounts payable upon liquidation, dissolution and winding up of the Company. We have the option to redeem any or all the outstanding Series A Shares at $1,000 per share at any time, subject to advance notice. The holders of the Series A Shares have the option to elect conversion prior to any such redemption.

Each Series A Share is convertible, at the holder’s option, into 1,250 shares of our common stock, and the Series A Shares are automatically converted upon the satisfaction of certain conditions. The Series A Shares vote together with the common stock as a single class on an as-converted basis, but vote as a separate class on matters that could adversely affect the Series A Shares. The investors in the offering have been granted registration rights for the shares of common stock underlying the Series A Shares.

The Series A Shares were sold in reliance upon exemptions from registration under Securities Act of 1933, including Section 4(a)(2). Information with regards to the offering is qualified in its entirety by reference to the exhibits to this Form 8-K, incorporated herein by reference.

License Agreementand Asset Purchase Agreement

On May 14, 2015, we entered into a license agreement with MPIB Holdings, LLC (“MPIB”), pursuant to which we received a non-exclusive, non-transferable, non-sublicensable, worldwide license to use certain intellectual property of MPIB related to mobile payments and digital transactions.

The license agreement will continue until terminated or the intellectual property of MPIB is purchased by the Company (the “Purchase”). On April 27, 2015, we submitted a proposed asset purchase agreement between us and MPIB Holdings, LLC to the Federal Reserve Bank of Richmond (the “Asset Purchase Agreement”). We intend to enter into the Asset Purchase Agreement upon receipt of nonobjection from the Federal Reserve Bank of Richmond to consummate the transaction contemplated therein.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On May 14, 2015, and in connection with the offering, our board of directors appointed Adam G. Hurwich and Russell Echlov to the board. Adam G. Hurwich has served as Director of First Security Group, Inc. and FSGBank, National Association since June 2013. Mr. Hurwich also serves as a member of the Financial Accounting Standards Advisory Council an advisory committee to the Financial Accounting Standards Board. He is an experienced institutional investor with knowledge of banking and financial services. Mr. Hurwich received his A.B. from Harvard College in 1987 and his M.B.A. from Yale University in 1989. Mr. Hurwich is a portfolio manager at Ulysses Management LLC, the investment manager for Ulysses Partners, L.P. and Ulysses Offshore Fund, Ltd, which together invested $2.45 million in the offering described above.

Mr. Echlov is an assistant portfolio manager with RMB Capital Management, LLC. He is an experienced institutional investor with knowledge of banking and financial services and is a graduate of Dartmouth College. RMB Capital Management LLC, is the investment adviser to certain private funds whose strategy focus on the banking and financial services sectors. These private funds have collectively invested $2.45 million in the offering.

No committee assignments have been made yet for Messrs. Hurwich and Echlov, who will be entitled to receive directors’ fees for their service as board members, if and when such fees are subsequently approved by the Company’s board of directors. The Company does not currently pay outside directors fees for their board meeting or committee meeting attendance.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

On May 14, 2015, we filed with the Secretary of State of the State of South Carolina Articles of Amendment to our Articles of Incorporation, which include the Certificate of Designations for the Series A Shares.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

3.1	Articles of Amendment to the Articles of Incorporation
4.1	Certificate of Designations for the Series A Shares
10.1	Form of Subscription Agreement
10.2	Form of Registration Rights Agreement
10.3	License Agreement between Independence Bancshares, Inc. and MPIB Holdings, LLC, dated May 14, 2015
10.4	Form of Asset Purchase Agreement between Independence Bancshares, Inc. and MPIB Holdings, LLC, submitted to the Federal Reserve Bank of Richmond

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

INDEPENDENCE BANCSHARES, INC.
By:	/s/ Martha L. Long
Name:	Martha L. Long
Title:	Chief Financial Officer

Dated: May 14, 2015

EX-3.1

State of South Carolina
Department of the Secretary of State

ARTICLES OF AMENDMENT
TOARTICLES OF INCORPORATIONOFINDEPENDENCE BANCSHARES, INC.

In accordance with Sections 33-6-102 and 33-10-106 of the South Carolina Business Corporation Act of 1988 (the “Code”), Independence Bancshares, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the Code, DOES HEREBY CERTIFY:

1. The name of the Corporation is: Independence Bancshares, Inc.

2. Date of Incorporation: October 12, 2004.

3. Agent’s Name and Address: Benjamin A. Barnhill, Poinsett Plaza, 9^th Floor, Greenville, SC 29601.

4. On April 13, 2015, the Corporation adopted the following Amendment of its Articles of Incorporation:

Article Three of the Corporation’s Articles of Incorporation (the “Articles of Incorporation”) shall be amended to designate, create, authorize and provide for the issuance of series of preferred stock, having $0.01 par value per share and a liquidation preference of $1,000.00 per share, which shall be designated as Preferred Stock, Series A, having the preferences, limitations and relative rights, within the limits permitted by applicable law, as set forth in Exhibit A attached hereto and made a part hereof.

5. Such amendment was duly authorized by the Board of Directors and shareholder action was not required, pursuant to the authority granted in the Corporation’s Articles of Incorporation and Section 33-6-102 of the Code.

IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, does hereby affirm, under penalties of perjury, that this certificate is the act and deed of the Corporation and that the facts herein stated are true, and accordingly has hereunto set her hand this as of April 17, 2015.

INDEPENDENCE BANCSHARES, INC.
By:	/s/ Martha Long
Name: Martha Long
Title: Chief Financial Officer

Exhibit A

Certificate of Designations

EX-4.1

CERTIFICATE OF DESIGNATIONS
OF
PREFERRED STOCK, SERIES A
OF
INDEPENDENCE BANCSHARES, INC.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 5. Liquidation Rights.

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

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

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

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

Section 6. Redemption.

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

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

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

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

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

Section 7. Voting Rights.

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

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

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

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

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

Section 8. Conversion.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

EX-10.1

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

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

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SUBSCRIPTIONAGREEMENT

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.

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(b)Subscriber Status.

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

(c)General Solicitation.

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

(d)Reliance on Exemptions.

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

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(e)Review of Information and Consultation with Advisors.

The Subscriber, either alone or through its representatives:

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

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

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

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

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

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

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(f)No Reliance.

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

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

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

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(h)Brokers and Finders.

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

(i)No Conflicts.

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

(j)Investment Risk.

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

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(k)Residency.

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

(l)Organization; Authorization.

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

(m)Review of Risk Factors.

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

3.REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

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

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(a)Organization and Qualification; Capitalization.

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

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

(b)Authorization; Enforcement; Validity.

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

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(c)Issuance of Securities.

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

(d)No Conflicts.

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

(e)No Violation.

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

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

(f)Consents.

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

(g)No Registration.

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

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

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

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(i)No Integrated Offering.

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

(j)Financial Statements.

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

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

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

(l)Regulatory Permits and Reports.

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

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(m)Absence of Litigation and Other Proceedings.

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

(n)Internal Accounting and Disclosure Controls.

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

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

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

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

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

4.COVENANTS.

(a)Notice Filings.

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

(b)Required Disclosures.

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

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(c)Commercially Reasonable Efforts.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

7.CONDITIONS TO SUBSCRIBER’S OBLIGATIONS TO PURCHASE.

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

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

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

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

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

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

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

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

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

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

8.TRANSFER AGENT INSTRUCTIONS.

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

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

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

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

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

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

9.TERMINATION.

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

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

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

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

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

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

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10.MISCELLANEOUS.

(a)Binding Effect; Assignability; Benefit.

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

(b)Governing Law; Jurisdiction; Jury Trial.

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

(c)Counterparts.

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

(d)Headings.

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

(e)Severability.

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

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(f)Entire Agreement; Amendments.

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

(g)Notices.

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

If to the Company:
	500 E. Washington Street
	Greenville, SC 29601
	Attn: Corporate Secretary
	Fax: 864.672.1777
	mlong@independencenb.com
with copies (for informational purposes only) to:
	Nelson Mullins Riley & Scarborough LLP
	Poinsett Plaza, 9th Floor
	104 S. Main Street
	Greenville, SC 29601
	Attn: Neil E. Grayson
	Fax: 864.232.2925 neil.grayson@nelsonmullins.com

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

(h)Successors and Assigns.

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

(i)No Third Party Beneficiaries.

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

(j)Survival.

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

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(k)Further Assurances.

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

(l)No Strict Construction.

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

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

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

11.ADDITIONAL DISCLOSURES.

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

(a)Director and Executive Officer Compensation.

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

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

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● Ensure that compensation policies, including any incentive compensation, appropriately balance risk and reward and are compatible with the effective controls and risk management that the Company has established and do not encourage inappropriate risks that could lead to a material financial loss for the Company;

● Monitor the results of such policies to assure that compensation payable to the Company’s senior leadership team provides overall competitive pay levels, creates proper incentives to enhance shareholder value, rewards performance and is justified by the returns available to shareholders particularly when compared to the returns received by the shareholders of the Company’s principal competitors; and

● The Company’s 2013 Equity Incentive Plan provides that the number of shares available for issuance under the Plan (together with the Company’s 2005 Stock Incentive Plan) shall at all times equal 20% of our total outstanding shares of common stock on an as-diluted basis. These shares are available for issuance to directors and officers. The Company intends to seek shareholder approval to amend the 2013 Equity Incentive Plan such that the number of shares shall at all times equal 20% of our total outstanding shares of common stock on an as-diluted and as-converted (for classes of securities convertible into our common stock) basis.

(b)Intellectual Property.

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

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

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(c)Use of Proceeds.

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

(d)Shareholder Approval.

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

(e) Observation Rights.

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

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

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

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

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

[Signatures appear on the following pages.]

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

NAME OF SUBSCRIBER:

By:

Name:

Title:

SUBSCRIPTION AMOUNT:

Number of Purchased Shares:

Purchase Price Per Share:   $

Aggregate Purchase Price: $

Accepted:

INDEPENDENCE BANCSHARES, INC.

By:

Name:

Title:

By:

Name:

Title:

Number of Purchased Shares:

Purchase Price Per Share:   $

Aggregate Purchase Price: $

Date:

Signature Page to Subscription Agreement

Information of Subscriber

Name: 

Address: 

Contact Name: 

Telephone: 

Facsimile: 

E-mail: 

Tax ID No. (for entities): 

Social Security Number

(for natural persons): 

Information about Subscriber Representative:

Name:

Title:

Address:

Telephone:

Facsimile:

E-mail:

[Remainder of page intentionally left blank.]

Subscriber Information Page

EXHIBITS

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

EXHIBIT ACERTIFICATE 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 BACCREDITED 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 categoryapplicable 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:

A-1

EX-10.2

EXHIBIT CFORM OF REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into January __, 2015, by and among Independence Bancshares, Inc. d/b/a nD bancgroup, a South Carolina corporation (the “Company”), and the purchasers signatory hereto (each a “Purchaser” and collectively, the “Purchasers”).

This Agreement is made pursuant to the Subscription Agreements, dated as of January __, 2015, between the Company and each Purchaser (the “Subscription Agreement”).

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each of the Purchasers agree as follows:

1.Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Subscription Agreement shall have the meanings given such terms in the Subscription Agreement. As used in this Agreement, the following terms shall have the following meanings:

“Advice” shall have the meaning set forth in Section 6(d).

“Affiliate” means, with respect to any person, any other person which directly or indirectly controls, is controlled by, or is under common control with, such person.

“Agreement” shall have the meaning set forth in the Preamble.

“Business Day” means a day, other than a Saturday or Sunday, on which banks in the State of South Carolina are open for the general transaction of business.

“Closing” has the meaning set forth in the Subscription Agreement.

“Closing Date” has the meaning set forth in the Subscription Agreement.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $0.01 per share, and any securities into which such shares of common stock may hereinafter be reclassified.

“Company” shall have the meaning set forth in the Preamble.

“Effective Date” means the date that the Registration Statement filed pursuant to Section 2(a) is first declared effective by the Commission.

“Effectiveness Deadline” means, with respect to the Initial Registration Statement or the New Registration Statement, the earlier of (i) the 90th calendar day following the Closing Date (or the 120th calendar day following the Closing Date in the event that such registration statement is subject to review by the Commission) and (ii) the 5th Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review; provided, that if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business.

“Effectiveness Period” shall have the meaning set forth in Section 2(b).

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

“Filing Deadline” means, with respect to the Initial Registration Statement required to be filed pursuant to Section 2(a), the 45th calendar day following the Closing Date, provided, that if the Filing Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Filing Deadline shall be extended to the next business day on which the Commission is open for business.

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

“Indemnified Party” shall have the meaning set forth in Section 5(c).

“Indemnifying Party” shall have the meaning set forth in Section 5(c).

“Initial Registration Statement” means the initial Registration Statement filed pursuant to Section 2(a) of this Agreement.

“Losses” shall have the meaning set forth in Section 5(a).

“New Registration Statement” shall have the meaning set forth in Section 2(a).

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Preferred Shares” means the Series A preferred shares of the Company, par value $0.01 per share.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“Purchaser” or “Purchasers” shall have the meaning set forth in the Preamble.

“Registrable Securities” means all of the Preferred Shares and Underlying Shares and any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the Preferred Shares and the Underlying Shares, provided, that the Holder has completed and delivered to the Company a Selling Shareholder Questionnaire; and provided, further, that Preferred Shares and the Underlying Shares shall cease to be Registrable Securities upon the earliest to occur of the following: (A) a sale pursuant to a Registration Statement or Rule 144 under the Securities Act (in which case, only such security sold shall cease to be a Registrable Security); (B) becoming eligible for sale 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) and without volume or manner of sale restrictions by Holders who are not Affiliates of the Company; (C) if such Preferred Shares and the Underlying Shares have ceased to be outstanding; or (D) if such Preferred Shares and the Underlying Shares have been sold in a private transaction in which the Holder’s rights under this Agreement have not been assigned to the transferee.

“Registration Statements” means any one or more registration statements of the Company filed under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitation the Initial Registration Statement, the New Registration Statement and any Remainder Registration Statements), amendments and supplements to such Registration Statements, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such Registration Statements.

“Remainder Registration Statement” shall have the meaning set forth in Section 2(a).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“SEC Guidance” means (i) any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff and (ii) the Securities Act.

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

“Selling Shareholder Questionnaire” means a questionnaire in the form attached as Annex B hereto, or such other form of questionnaire as may reasonably be adopted by the Company from time to time.

“Subscription Agreement” shall have the meaning set forth in the Recitals.

“Underlying Shares” means all shares underlying the Preferred Shares, including the shares of Common Stock.

2.Registration.

(a)On or prior to the Filing Deadline, the Company shall file a Registration Statement with the Commission covering the resale of all of the Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of the Registrable Securities, by such other means of distribution of Registrable Securities as the Company may reasonably determine (the “Initial Registration Statement”). The Initial Registration Statement shall be on Form S-1 or such other Commission form which the Company is eligible to use with respect to the resale from time to time, whether underwritten or otherwise, of the Registrable Securities by the Holders (except if the Company is then eligible to register for resale the Registrable Securities on Form S-3, then such registration shall be on Form S-3) subject to the provisions of Section 2(e) and shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the “Plan of Distribution” section substantially in the form attached hereto as Annex A. Notwithstanding the registration obligations set forth in this Section 2, in the event the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to (i) inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission and/or (ii) withdraw the Initial Registration Statement and file a new registration statement (a “New Registration Statement”), in either case covering the maximum number of Registrable Securities permitted to be registered by the Commission, on Form S-1 or such other form available to the Company to register for resale the Registrable Securities as a secondary offering; provided, that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its commercially reasonable efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09. Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities or other shares of Common Stock permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the Commission for the registration of all or a greater number of Registrable Securities), the number of Registrable Securities or other shares of Common Stock to be registered on such Registration Statement will be reduced on a pro rata basis. In the event the Company amends the Initial Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the Commission one or more registration statements on Form S-1 or such other form available to the Company to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended, or the New Registration Statement (the “Remainder Registration Statements”). No Holder shall be named as an “underwriter” in any Registration Statement without such Holder’s prior consent.

(b)The Company shall use its commercially reasonable efforts to cause each Registration Statement to be declared effective by the Commission as soon as practicable (and in no event later than the Effectiveness Deadline) and keep each Registration Statement continuously effective under the Securities Act until the earlier of (i) such time as all of the Registrable Securities covered by such Registration Statement have been publicly sold by the Holders or (ii) the date that all Registrable Securities covered by such Registration Statement may be sold by non-affiliates of the Company without volume or manner of sale restrictions under Rule 144, without the requirement for the Company to be in compliance with the current public information requirements under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s transfer agent and the affected Holders (the “Effectiveness Period”). Upon receipt of notice from the Commission that the Company may request acceleration of the effectiveness of a Registration Statement, the Company shall request such effectiveness. The Company shall notify the Holders via facsimile or electronic mail of a “.pdf” format data file of the effectiveness of a Registration Statement. The Company shall file a final Prospectus with the Commission, as required by Rule 424(b).

(c)Each Holder agrees to furnish to the Company a completed Selling Shareholder Questionnaire not more than 10 Business Days following the date of this Agreement. At least five Business Days prior to the first anticipated filing date of a Registration Statement for any registration under this Agreement, the Company will notify each Holder of the information the Company requires from that Holder other than the information contained in the Selling Shareholder Questionnaire, if any, which shall be completed and delivered to the Company promptly upon request and, in any event, within two Business Days prior to the applicable anticipated filing date. Each Holder further agrees that it shall not be entitled to be named as a selling securityholder in the Registration Statement or use the Prospectus for offers and resales of Registrable Securities at any time, unless such Holder has returned to the Company a completed and signed Selling Shareholder Questionnaire and a response to any requests for further information as described in the previous sentence. If a Holder of Registrable Securities returns a Selling Shareholder Questionnaire or a request for further information, in either case, after its respective deadline, the Company shall use its commercially reasonable efforts at the expense of the Holder who failed to return the Selling Shareholder Questionnaire or to respond for further information to take such actions as are required to name such Holder as a selling security holder in the Registration Statement or any pre-effective or post-effective amendment thereto and to include (to the extent not theretofore included) in the Registration Statement the Registrable Securities identified in such late Selling Shareholder Questionnaire or request for further information. Each Holder acknowledges and agrees that the information in the Selling Shareholder Questionnaire or request for further information as described in this Section 2(c) will be used by the Company in the preparation of the Registration Statement and hereby consents to the inclusion of such information in the Registration Statement.

(d)Notwithstanding anything to the contrary herein, at any time after the Registration Statement has been declared effective by the Commission, the Company may delay the disclosure of material non-public information concerning the Company if the disclosure of such information at the time is not, in the good faith judgment of the Company, in the best interests of the Company (a “Grace Period”); provided, the Company shall promptly (i) notify the Holders in writing of the existence of material non-public information giving rise to a Grace Period (provided that the Company shall not disclose the content of such material non-public information to the Holders) or the need to file a post-effective amendment, as applicable, and the date on which such Grace Period will begin, (ii) use commercially reasonable efforts to terminate a Grace Period and (iii) notify the Holders in writing of the date on which the Grace Period ends; provided, further, that no single Grace Period shall exceed forty-five (45) consecutive days, and during any three hundred sixty-five (365) day period, the aggregate of all Grace Periods shall not exceed an aggregate of ninety (90) days (each Grace Period complying with this provision being an “Allowable Grace Period”). For purposes of determining the length of a Grace Period, the Grace Period shall be deemed to begin on and include the date the Holders receive the notice referred to in clause (i) above and shall end on and include the later of the date the Holders receive the notice referred to in clause (iii) above and the date referred to in such notice; provided that no Grace Period shall be longer than an Allowable Grace Period. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended Common Stock to a transferee of a Holder in accordance with the terms of the Subscription Agreement in connection with any sale of Registrable Securities with respect to which a Holder has entered into a contract for sale prior to the Holder’s receipt of the notice of a Grace Period and for which the Holder has not yet settled.

(e)In the event that Form S-3 becomes available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) use commercially reasonable efforts to register the resale of the Registrable Securities on Form S-3 and (ii) use commercially reasonable efforts to undertake to register the Registrable Securities on Form S-3 after such form becomes available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the Commission.

3.Registration Procedures

In connection with the Company’s registration obligations hereunder:

(a)prior to the filing of a Registration Statement and any related Prospectus or any amendment or supplement thereto (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any similar or successor reports), the Company shall furnish to the Holder copies of such Registration Statement, Prospectus or amendment or supplement thereto, as proposed to be filed, which documents will be subject to the reasonable review of such Holder (it being acknowledged and agreed that if a Holder does not object to or comment on the aforementioned documents within three Business Days, then the Holder shall be deemed to have consented to and approved the use of such documents). The Company shall not file any Registration Statement or amendment or supplement thereto in a form to which a Holder reasonably objects in good faith, provided that, the Company is notified of such objection in writing within the three Business Day period described above.

(b)(i) the Company shall prepare and file with the Commission such amendments (including post-effective amendments), and supplements, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period (except during an Allowable Grace Period); (ii) the Company shall cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424 (except during an Allowable Grace Period); (iii) the Company shall respond to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and provide the Holders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that pertains to the Holders as “Selling Shareholders” but not any comments that would result in the disclosure to the Holders of material and non-public information concerning the Company; and (iv) the Company shall comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement until such time as all of such Registrable Securities shall have been disposed of (subject to the terms of this Agreement) in accordance with the intended methods of disposition by the Holders thereof as set forth in such Registration Statement as so amended or in such Prospectus as so supplemented; provided, that each Purchaser shall be responsible for the delivery of the Prospectus to the Persons to whom such Purchaser sells any of the Registrable Securities (including in accordance with Rule 172 under the Securities Act), and each Purchaser agrees to dispose of Registrable Securities in compliance with the plan of distribution described in the Registration Statement and otherwise in compliance with applicable federal and state securities laws. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the Commission on the same day on which the Exchange Act report which created the requirement for the Company to amend or supplement such Registration Statement was filed.

(c)the Company shall promptly notify the Holders (which notice shall, pursuant to clauses (iii) through (v) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on any Registration Statement (in which case the Company shall provide to each of the Holders true and complete copies of all comments that pertain to the Holders as a “Selling Shareholder” or to the “Plan of Distribution” and all written responses thereto, but not information that the Company believes would constitute material and non-public information); and (C) with respect to each Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information that pertains to the Holders as “Selling Shareholder” or the “Plan of Distribution”; (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading.

(d)the Company shall use commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as soon as practicable.

(e)the Company shall, if requested by a Holder, furnish to such Holder, without charge, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) after the filing of such documents with the Commission; provided, that the Company shall have no obligation to provide any document pursuant to this clause that is available on the Commission’s EDGAR system. The Company further agrees to promptly deliver to each Holder, without charge, as many copies of each Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request. The Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of Registrable Securities covered by such Prospectus and any amendment or supplement thereto.

(f)the Company shall, prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

(g)the Company shall cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free, to the extent permitted by the Subscription Agreement and under law, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may reasonably request. Certificates for Registrable Securities free from all restrictive legends may be transmitted by the transfer agent to a Holder by crediting the account of such Holder’s prime broker with DTC as directed by such Holder.

(h)the Company shall, as promptly and reasonably practicable following the occurrence of any event contemplated by Section 3(c)(iii)-(v), prepare and file a supplement or amendment, including a post-effective amendment, to the affected Registration Statements or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading.

(i)the Company may require each selling Holder to furnish to the Company a certified statement as to (i) the number of shares of Common Stock beneficially owned by such Holder and any Affiliate thereof, (ii) any Financial Industry Regulatory Authority (“FINRA”) affiliations, (iii) any natural persons who have the power to vote or dispose of the Common Stock and (iv) any other information as may be requested by the Commission, FINRA or any state securities commission.

(j)the Company shall cooperate with any registered broker through which a Holder proposes to resell its Registrable Securities in effecting a filing with FINRA pursuant to FINRA Rule 5110 as requested by any such Holder and the Company shall pay the filing fee required for the first such filing within two Business Days of the request therefor.

(k)if requested by a Holder, the Company shall (i) incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information as the Company reasonably agrees should be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as reasonably practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment.

(l)the Company shall otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and the Exchange Act, including Rule 172, notify the Holders if the Company no longer satisfies the conditions of Rule 172 and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and make available to its security holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earning statement shall satisfy the provisions of Section 11(a) of the Securities Act, including Rule 158 promulgated thereunder (for the purpose of this Section 3, “Availability Date” means the 45th day following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter), in each case subject to extensions permissible under applicable law.

4.Registration Expenses. All fees and expenses incident to the Company’s performance of or compliance with its obligations under this Agreement (excluding underwriting discounts, selling commissions and legal fees and expenses of any Holder) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the Commission and any national securities exchange or other-the-counter service or other trading market on which the Common Stock is then listed or quoted, (B) with respect to compliance with applicable state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the Holders) and (C) if not previously paid by the Company in connection with an issuer filing, with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the Holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses of the Company, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any underwriting, broker or similar fees or commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.

5.Indemnification.

(a)Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify, defend and hold harmless each Holder, the officers, directors, agents, general partners, managing members, managers, Affiliates, employees and investment advisors of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, general partners, managing members, managers, agents, employees and investment advisors of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and investigation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, that arise out of or are based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, or (ii) any violation or alleged violation by the Company of the Securities Act, Exchange Act or any state securities law or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (A) such untrue statements, alleged untrue statements, omissions or alleged omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and approved (or deemed reviewed and approved) by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that each Holder has approved Annex A hereto for this purpose), or (B) in the case of an occurrence of an event of the type specified in Section 3(c)(iii)-(v), related to the use by a Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated and defined in Section 6(d) below, but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party (as defined in Section 5(c)) and shall survive the transfer of the Registrable Securities by the Holders.

(b)Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein or (ii) to the extent, but only to the extent, that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and approved (or deemed reviewed and approved) by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an event of the type specified in Section 3(c)(iii)-(v), to the extent, but only to the extent, related to the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

(c)Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that such failure shall have materially and adversely prejudiced the Indemnifying Party (as finally determined by a court of competent jurisdiction, which determination is not subject to appeal or further review).

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest exists if the same counsel were to represent such Indemnified Party and the Indemnifying Party; provided, that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

Subject to the terms of this Agreement, all fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 5(c)) shall be paid to the Indemnified Party, as incurred, within 20 Business Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to indemnification hereunder). The failure to deliver written notice to the Indemnifying Party within a reasonable time of the commencement of any such action shall not relieve such Indemnifying Party of any liability to the Indemnified Party under this Section 5, except to the extent that the Indemnifying Party is materially and adversely prejudiced in its ability to defend such action.

(d)Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 5(d) was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this Section 5 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in diminution or limitation of the indemnification provisions under the Subscription Agreement.

6.Miscellaneous.

(a)Remedies. In the event of a breach by the Company or by a Holder of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to seek to exercise all rights granted by law and under this Agreement, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

(b)No Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Neither the Company nor any of its security holders may include securities of the Company in a Registration Statement hereunder and the Company shall not prior to the Effective Date enter into any agreement providing any such right to any of its security holders. The Company shall not, from the date hereof until the date that is 60 days after the Effective Date of the Initial Registration Statement, prepare and file with the Commission a registration statement relating to an offering for its own account under the Securities Act of any of its equity securities, other than (i) a registration statement on Form S-8, (ii) in connection with an acquisition on Form S-4, (iii) one shelf registration statement and one resale registration statement on Form S-1 or (iv) a registration statement to register for resale securities issued by the Company pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. For the avoidance of doubt, the Company shall not be prohibited from preparing and filing with the Commission a registration statement relating to an offering of Common Stock by existing shareholders of the Company under the Securities Act pursuant to the terms of registration rights held by such shareholder or from filing amendments to registration statements filed prior to the date of this Agreement (or, for the avoidance of doubt, filing any prospectus supplements related thereto pursuant to Rule 424).

(c)Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to the Registration Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in the Registration Statement

(d)Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(iii)-(v), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

(e)No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date hereof, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.

(f)Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, or waived unless the same shall be in writing and signed by the Company and Holders holding at least two-thirds of the then outstanding Registrable Securities, provided that any party may give a waiver as to itself. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of all of the Registrable Securities to which such waiver or consent relates; provided, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. Notwithstanding the foregoing, if any such amendment, modification or waiver would adversely affect in any material respect any Holder or group of Holders who have comparable rights under this Agreement disproportionately to the other Holders having such comparable rights, such amendment, modification, or waiver shall also require the written consent of the Holder(s) so adversely affected.

(g)Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Subscription Agreement; provided that the Company may deliver to each Holder the documents required to be delivered to such Holder under Section 3(a) of this Agreement by e-mail to the e-mail addresses provided by such Holder to the Company solely for such specific purpose.

(h)Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. The Company may not assign its rights (except by merger or in connection with another entity acquiring all or substantially all of the Company’s assets) or obligations hereunder without the prior written consent of all the Holders of the then outstanding Registrable Securities. Each Holder may assign its respective rights hereunder in the manner and to the Persons as permitted under the Subscription Agreement.

(i)Execution and Counterparts. This Agreement may be executed in two or more counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature were the original thereof.

(j)Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Subscription Agreement.

(k)Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

(l)Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their good faith reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(m)Headings. The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

(n)Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser hereunder. The decision of each Purchaser to purchase the Common Shares pursuant to the Transaction Documents has been made independently of any other Purchaser. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Common Shares or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to protect and enforce its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. The Company acknowledges that each of the Purchasers has been provided with the same Registration Rights Agreement for the purpose of closing a transaction with multiple Purchasers and not because it was required or requested to do so by any Purchaser.

(o)Effectiveness; Termination. This Agreement shall become automatically effective, without further action of the parties, upon the Closing. Notwithstanding anything to the contrary herein, this Agreement shall automatically terminate and be of no further force and effect immediately upon the termination of the Subscription Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

INDEPENDENCE BANCSHARES, INC.

By: 

Name: Gordon A. Baird

Title: Chief Executive Officer

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGES OF HOLDERS TO FOLLOW]

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

[NAME OF INVESTING ENTITY]

AUTHORIZED SIGNATORY

By: 

Name:

Title:

ADDRESS FOR NOTICE

c/o 

Street 

City/State/Zip 

Attention: 

Tel: 

Fax: 

Email: 

Annex A

PLAN OF DISTRIBUTION

We are registering the Securities issued to the selling shareholder to permit the resale of these Securities by the holders of the Securities from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the Securities. We will bear all fees and expenses incident to our obligation to register the Securities.

The selling shareholders may sell all or a portion of the Securities beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the Securities are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The Securities may be sold on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over-the-counter market and in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions. The selling shareholders may use any one or more of the following methods when selling Securities:

● ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

● block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

● purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

● an exchange distribution in accordance with the rules of the applicable exchange;

● privately negotiated transactions;

● settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;

● broker-dealers may agree with the selling shareholders to sell a specified number of such securities at a stipulated price per share;

● through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise;

● a combination of any such methods of sale; and

● any other method permitted pursuant to applicable law.

The selling shareholders also may resell all or a portion of the Securities in open market transactions in reliance upon Rule 144 under the Securities Act, as permitted by that rule, or Section 4(a)(1) under the Securities Act, if available, rather than under this prospectus, provided that they meet the criteria and conform to the requirements of those provisions.

Broker-dealers engaged by the selling shareholders may arrange for other broker-dealers to participate in sales. If the selling shareholders effect such transactions by selling Securities to or through underwriters, broker-dealers, or agents, such underwriters, broker-dealers, or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders, or commissions from purchasers of the Securities for whom they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction will not be in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction, a markup or markdown in compliance with FINRA Rule 2121.

In connection with sales of the Securities or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the Securities in the course of hedging in positions they assume. The selling shareholders may also sell Securities short and, if such short sale shall take place after the date that this Registration Statement is declared effective by the Commission, the selling shareholders may deliver Securities covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge Securities to broker-dealers that in turn may sell such shares, to the extent permitted by applicable law. The selling shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). Notwithstanding the foregoing, the selling shareholders have been advised that they may not use shares registered on this registration statement to cover short sales of our Securities made prior to the date the registration statement, of which this prospectus forms a part, has been declared effective by the SEC.

The selling shareholders may, from time to time, pledge or grant a security interest in some or all of the Securities owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the Securities from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling shareholders to include the pledgee, transferee, or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer and donate the Securities in other circumstances in which case the transferees, donees, pledgees, or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The selling shareholders and any broker-dealer or agents participating in the distribution of the Securities may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act in connection with such sales. In such event, any commissions paid, or any discounts or concessions allowed, to any such broker-dealer or agent and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Selling Shareholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the applicable prospectus delivery requirements of the Securities Act and may be subject to certain statutory liabilities of, including but not limited to, Sections 11, 12, and 17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Each selling shareholder has informed the Company that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the Securities. Upon the Company being notified in writing by a selling shareholder that any material arrangement has been entered into with a broker-dealer for the sale of Securities through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling shareholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the Securities were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In no event shall any broker-dealer receive fees, commissions and markups, which, in the aggregate, would exceed eight percent (8%).

Under the securities laws of some states, the Securities may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the Securities may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

There can be no assurance that any selling shareholder will sell any or all of the Securities registered pursuant to the shelf registration statement, of which this prospectus forms a part.

Each selling shareholder and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the Securities by the selling shareholder and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the Securities to engage in market-making activities with respect to the Securities. All of the foregoing may affect the marketability of the Securities and the ability of any person or entity to engage in market-making activities with respect to the Securities.

We will pay all expenses of the registration of the Securities pursuant to the registration rights agreement, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, that each selling shareholder will pay all underwriting discounts and selling commissions, if any, and any related legal fees and expenses incurred by it. We will indemnify the selling shareholders against certain liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreement, or the selling shareholders will be entitled to contribution. We may be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling shareholders specifically for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution.

#        #        #

Annex B

INDEPENDENCE BANCSHARES, INC.

SELLING SHAREHOLDER NOTICE AND QUESTIONNAIRE

The undersigned holder of securities of Independence Bancshares, Inc. d/b/a nD bancgroup, a South Carolina corporation (the “Company”), issued pursuant to a Subscription Agreement by and among the Company and the Purchasers named therein, dated January __, 2015, understands that the Company intends to file with the Securities and Exchange Commission a registration statement on Form S-1 (the “Resale Registration Statement”) for the registration and the resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities in accordance with the terms of a certain Registration Rights Agreement by and among the Company and the Purchasers named therein, dated as of January __, 2015 (the “Agreement”). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Agreement.

In order to sell or otherwise dispose of any Registrable Securities pursuant to the Resale Registration Statement, a holder of Registrable Securities generally will be required to be named as a selling shareholder in the related prospectus or a supplement thereto (as so supplemented, the “Prospectus”), deliver the Prospectus to purchasers of Registrable Securities (including pursuant to Rule 172 under the Securities Act), and be bound by the provisions of the Agreement (including certain indemnification provisions, as described below). Holders must complete and deliver this Notice and Questionnaire in order to be named as selling shareholders in the Prospectus. Holders of Registrable Securities who do not complete, execute, and return this Notice and Questionnaire within 10 Business Days following the date of the Agreement (1) will not be named as selling shareholders in the Resale Registration Statement or the Prospectus and (2) may not use the Prospectus for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling shareholder in the Resale Registration Statement and the Prospectus. Holders of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not named as a selling shareholder in the Resale Registration Statement and the Prospectus.

NOTICE

The undersigned holder (the “Selling Shareholder”) of Registrable Securities hereby gives notice to the Company of its intention to sell or otherwise dispose of Registrable Securities owned by it and listed below in Item (3), unless otherwise specified in Item (3), pursuant to the Resale Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire, understands and agrees that it will be bound by the terms and conditions of this Notice and Questionnaire and the Agreement.

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate and complete:

QUESTIONNAIRE

1.	Name.
	(a)	Full Legal Name of Selling Shareholder:
	(b)	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held:
	(c)	Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the questionnaire):
2.	Address for Notices to Selling Shareholder:

Telephone:      

Fax:

Contact Person:      

E-mail address of Contact Person:      

3.	Beneficial Ownership of Registrable Securities Issuable Pursuant to the Subscription Agreement:
	(a)	Type and Number of Registrable Securities beneficially owned and issued pursuant to the Agreement:
	(b)	Number of Securities to be registered pursuant to this Notice for resale:

4.       Broker-Dealer Status:

(a)	Are you a broker-dealer?
	Yes ☐	No ☐
(b)	If “yes” to Section 4(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?
	Yes ☐	No ☐
Note: If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
(c)	Are you an affiliate of a broker-dealer?
	Yes ☐	No ☐
Note: If yes, provide a narrative explanation below:
(d)	If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?
	Yes ☐	No ☐

Note: If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

5.	Beneficial Ownership of Other Securities of the Company Owned by the Selling Shareholder.
	Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in Item 3.
	Type and amount of other securities beneficially owned:

6.	Relationships with the Company:
	Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
	State any exceptions here:

7.	Plan of Distribution:
	The undersigned has reviewed the form of Plan of Distribution attached as Annex A to the Registration Rights Agreement, and hereby confirms that, except as set forth below, the information contained therein regarding the undersigned and its plan of distribution is correct and complete.
	State any exceptions here:

***********

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items (1) through (7) above and the inclusion of such information in the Resale Registration Statement and the Prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of any such Registration Statement and the Prospectus. The undersigned will immediately notify the Company of any inaccuracies in the information disclosed in this Questionnaire.

By signing below, the undersigned acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations thereunder, particularly Regulation M in connection with any offering of Registrable Securities pursuant to the Resale Registration Statement. The undersigned also acknowledges that it understands that the answers to this Questionnaire are furnished for use in connection with Registration Statements filed pursuant to the Registration Rights Agreement and any amendments or supplements thereto filed with the Commission pursuant to the Securities Act.

I confirm that, to the best of my knowledge and belief, the foregoing statements (including without limitation the answers to this Questionnaire) are correct.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Questionnaire to be executed and delivered either in person or by its duly authorized agent.

Dated: 

Beneficial Owner: 

By: 

Name: 

Title: 

EX-10.3

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (this “Agreement”), dated as of May 14, 2015 (the “Effective Date”), by and between MPIB Holdings, LLC, a Delaware limited liability company (“MPIB”), and Independence Bancshares Inc., a South Carolina corporation (“IB”, and each of MPIB and IB, a “Party” and collectively the “Parties”).

RECITALS:

WHEREAS, MPIB is the owner of the Licensed Materials (as defined below); and

WHEREAS, MPIB desires to grant to IB, and IB desires to be granted, a license to Use the Licensed Materials in the conduct of the Business (as defined below) during the Application Term (as defined below).

NOW, THEREFORE, for and in consideration of the terms, conditions, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1
DEFINITIONS

Section 1.01 Definitions. (a) The following terms, as used herein, have the following meanings:

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, that Person. For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have correlative meanings.

“Applicable Law” means, with respect to any Person, any transnational, domestic or foreign federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, permit, approval, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person.

“Application Term” means the period commencing on the Effective Date and ending on the earlier to occur of the Non-Objection Date and the termination of this Agreement.

“Business” means the business conducted by IB and its Affiliates of developing mobile payments and digital banking technologies and processes including technology architectures, regulatory and compliance infrastructures, market research, pricing strategies, customer lists, vendor due diligence and relationships, and documentation, processes and procedures and intellectual property to support patent applications for unique processes and other applicable intellectual property and other consulting and financial services-related businesses.

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“Claim” means any civil, criminal, administrative, regulatory or investigative action or proceeding commenced or threatened by a third party, including, without limitation, governmental authorities and regulatory agencies, however described or denominated.

“Code” means the Internal Revenue Code of 1986, as amended.

“Damages” means any and all damages, losses, liabilities, fines, penalties and expenses (including reasonable expenses of investigation and reasonable outside attorneys’ fees and expenses in connection with any action, suit or proceeding).

“Derivative Work” means any modification, derivation, revision, condensation, transformation, expansion or adaptation of the Licensed Materials.

“Documentation” means the user documentation accompanying the Licensed Materials.

“GAAP” means generally accepted accounting principles in the United States.

“Governmental Authority” means any transnational, domestic or foreign federal, state or local governmental authority, instrumentality, court, legislative body, government organization, commission, tribunal or any regulatory or administrative agency, or any political or other subdivision, department or branch of any of the foregoing.

“Improvements” means any inventions, technology, discoveries, technical information, processes, formula, data and know-how, and all Intellectual Property Rights therein, related to the Licensed Materials created, developed or reduced to practice during the Application Term.

“Intellectual Property Rights” all patent, copyright, trade secret and other similar proprietary rights.

“Knowledge” means, with respect to a Person other than an individual, the actual knowledge of any senior executive officer of such Person.

“Licensed Materials” means the items set forth in Exhibit A and all Intellectual Property Rights of MPIB therein.

“Material Adverse Effect” means a material adverse effect on the financial condition, business, assets or results of operations of the Business, taken as a whole, excluding any effect resulting from (A) changes in GAAP or changes in the regulatory accounting requirements applicable to any industry in which the Business is conducted, (B) changes in the general economic or political conditions in the United States of America, (C) changes (including changes of Applicable Law) or conditions generally affecting any industry in which the Business is conducted, (D) acts of war, sabotage or terrorism or natural disasters involving the United States of America, (E) the announcement or consummation of the transactions contemplated by this Agreement, (F) any action taken (or omitted to be taken) by a Party at the request of the other Party or (G) any action taken by a Party that is required or expressly permitted by this Agreement.

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“Non-Objection Date” means the date on which IB receives written notification by the Federal Reserve that it does not object to the Purchase.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority.

“Purchase” means the purchase of certain of the assets of MPIB by IB related to its business of developing mobile payments and digital banking technologies and processes including technology architectures, regulatory and compliance infrastructures, market research, pricing strategies, customer lists, vendor due diligence and relationships, and documentation, processes and procedures and intellectual property to support patent applications for unique processes and other applicable intellectual property and other consulting and financial services-related businesses.

“Purchase Date” means the Closing Date of the Purchase as defined in the definitive asset purchase agreement between the Parties.

“Representatives” means, with respect to any Person, such Person’s shareholders, members, partners, trustees, beneficiaries, officers, directors, employees, agents and representatives (including lenders, attorneys, accountants and advisors).

“Use” means to use, execute, reproduce, display, perform, maintain, modify, enhance, and prepare Derivative Works and Improvements.

Section 1.02 Other Interpretive Provisions. In this Agreement, unless otherwise specified: (a) words that include a number of constituent parts, things or elements shall be construed as referring separately to each constituent part, thing or element thereof, as well as to all such constituent parts, things or elements as a whole except as otherwise provided herein; (b) singular words include the plural and plural words include the singular; (c) words importing any gender include the other genders; (d) references to any Person include its successors and assigns; (e) the word “successors”, when it refers to an individual, includes the heirs, devisees, legatees, executors, administrators and personal representatives of such individual; (f) references to any statute or other law include all rules, regulations and orders adopted or made thereunder and all statutes or other laws amending, consolidating or replacing the statute or law referred to; (g) references to any agreement or other document include all subsequent amendments or other modifications thereof entered into in accordance with the provisions thereof; (h) the words “approve”, “consent” or “agree”, and any derivations thereof or words of similar import, mean the prior written approval, consent or agreement of the Person holding the right to approve, consent or agree; (i) the words “include” and “including”, and words of similar import, shall be deemed to be followed by the words “without limitation”; (j) unless otherwise specified, the words “hereto”, “herein”, “hereof” and “hereunder”, and words of similar import, refer to this Agreement in its entirety; (k) the Exhibits hereto are part of this Agreement and are incorporated herein by reference; (l) the words “Article”, “Section” and “Exhibit” refer to the articles, sections and exhibits, respectively, of and to this Agreement; and (m) the headings of Articles, Sections and Exhibits are inserted as a matter of convenience and shall not affect the construction of this Agreement.

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ARTICLE 2
LICENSE GRANT

Section 2.01 Grant of License. Subject to the terms and conditions of this Agreement, MPIB hereby grants to IB a non-exclusive, non-transferable, non-sublicensable (except as set forth in Section 2.03), worldwide license to Use the Licensed Materials and Documentation during the Application Term, solely in connection with the conduct of the Business (the “License”).

Section 2.02 No Delivery or Support Obligations. (a) The Parties hereby acknowledge and agree that, as of the Effective Date, IB has received and is in possession of the Licensed Materials in a form sufficient for IB’s exercise of the License.

(b) Notwithstanding anything in this Agreement to the contrary, neither MPIB nor any Affiliate of MPIB shall have any obligation hereunder to (i) deliver to IB, any Affiliate of IB or any other Person any Licensed Materials or physical embodiment thereof or any update, correction, improvement or modification thereto, (ii) deliver, provide or perform any support, maintenance or other assistance in connection with the Licensed Materials or (iii) update, correct, improve upon or otherwise modify any Licensed Materials.

Section 2.03 Sublicensing. (a) Subject to Section 2.03(b), the License shall include the right of IB to grant sublicenses (each, a “Permitted Sublicense”), solely in the ordinary course of business, to (i) its Affiliates; provided that any such sublicense shall terminate immediately upon the date such Affiliate ceases to be an Affiliate of IB, and (ii) Persons performing support services for IB in connection with the Business (e.g., in connection with marketing or promotional efforts with respect to the Business) (the Persons described in clauses (i) and (ii), “Permitted Sublicensees”).

(b) Each Permitted Sublicense shall be in writing, shall be materially consistent with the license terms and conditions of this Agreement, shall not be further sublicensable by the applicable Permitted Sublicensee and shall not be broader in scope than the License.

Section 2.04 Disclaimer; Limitation of Liability. (a) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE LICENSE IS MADE ON AN “AS IS” BASIS WITH NO REPRESENTATIONS OR WARRANTIES, AND MPIB, ON BEHALF OF ITSELF AND ITS AFFILIATES, HEREBY EXCLUDES AND DISCLAIMS ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE LICENSED MATERIALS, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF TITLE, QUIET ENJOYMENT, QUIET POSSESSION, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT AND ANY WARRANTIES IMPLIED FROM ANY COURSE OF DEALING OR USAGE OF TRADE.

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(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE UNDER ANY LEGAL OR EQUITABLE THEORY, REGARDLESS OF THE FORM OR CAUSE OF ACTION, FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OF ANY KIND IN CONNECTION WITH THIS AGREEMENT (INCLUDING DAMAGES FOR LOSS OF ANTICIPATED PROFITS, BUSINESS, GOODWILL, REPUTATION AND DATA AND ECONOMIC LOSS) EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

ARTICLE 3
OWNERSHIP OF LICENSED MATERIALS

Section 3.01 Ownership of Licensed Materials. (a) Subject to the terms hereof, the Parties hereby acknowledge and agree that, as between the Parties, MPIB has and shall retain exclusive title and ownership rights in and to all Licensed Materials.

(b) For as long as MPIB owns the Licensed Materials, IB shall not challenge, and shall neither allow any of its Representatives, Affiliates or Permitted Sublicensees to challenge nor assist any third party in challenging (including in each case in connection with any interference or opposition proceeding), the ownership, validity or enforceability of any Licensed Materials.

Section 3.02 Further Assurances. In connection with any matter contemplated by this Article 3, IB shall, and shall cause its Representatives, Affiliates and Permitted Sublicensees to, at MPIB’s sole expense, execute all documents and take all additional steps reasonably requested by MPIB to effect the intent hereof.

Section 3.03 Effect of Purchase. The Parties acknowledge and agree that the provisions of this Article 3 shall cease to apply from and after the Purchase Date in the event the Purchase occurs (i.e., at which point, as between the Parties, IB will be the owner of the Licensed Materials).

ARTICLE 4
LICENSE FEE

Section 4.01 License Fee. On the Purchase Date, for and in consideration of use of the Licensed Material during the Application Term, IB will pay MPIB a one-time license fee in the amount set forth on Exhibit B.

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ARTICLE 5
REPRESENTATIONS AND WARRANTIES

Section 5.01 MPIB’s Representations and Warranties. MPIB hereby represents and warrants to IB that:

(a)MPIB is duly organized, validly existing and in good standing under its jurisdiction of organization and has the right to enter into this Agreement;

(b)the performance of this Agreement shall not violate any agreement between MPIB and any other Person, and there are no contractual obligations preventing the fulfillment of any of MPIB’s obligations hereunder or materially impairing or diminishing the value of any of IB’s rights hereunder;

(c)the execution, delivery and performance by MPIB of this Agreement and the consummation of the transactions contemplated hereby are within the powers of MPIB, have been duly authorized by all necessary action on the part of MPIB and constitute a valid and binding agreement of MPIB;

(d)to the knowledge of MPIB, the execution, delivery and performance by MPIB of this Agreement and the consummation by MPIB of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority; and

(e)there is no action, suit, Claim, investigation or proceeding pending against or, to the Knowledge of MPIB, threatened against, MPIB or its business before any arbitrator or any Governmental Authority that is reasonably likely to adversely affect the business of MPIB in a material respect or that challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement.

Section 5.02 IB’s Representations and Warranties. IB hereby represents and warrants to MPIB that:

(a)IB is duly organized, validly existing and in good standing under its jurisdiction of organization and has the right to enter into this Agreement;

(b)the performance of this Agreement shall not violate any agreement between IB and any other Person, and there are no contractual obligations preventing the fulfillment of any of IB’s obligations hereunder or materially impairing or diminishing the value of any of MPIB’s rights hereunder;

(c)the execution, delivery and performance by IB of this Agreement and the consummation of the transactions contemplated hereby are within the powers of IB, have been duly authorized by all necessary action on the part of IB and constitute a valid and binding agreement of IB; and

(d)there is no action, suit, Claim, investigation or proceeding pending against or, to the knowledge of IB, threatened against, IB or its business before any arbitrator or any Governmental Authority that is reasonably likely to adversely affect the business of IB in a material respect or that challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement.

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Section 5.03 No Other Representations or Warranties. (a) Except for the representations and warranties expressly set forth in this Agreement, each Party hereby acknowledges and agrees that no representation or warranty of any kind whatsoever, express or implied, at law or in equity, is made or shall be deemed to have been made by or on behalf of the other Party or any of its Affiliates, and each Party hereby disclaims any such representation or warranty, whether by or on behalf of such Party, and notwithstanding the delivery or disclosure to the other Party or any of its Representatives or Affiliates of any documentation or other information with respect to any the foregoing.

(b) Each Party hereby acknowledges and agrees that the other Party makes no representation or warranty with respect to any projections, forecasts or other estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows (or any component thereof) or future financial condition (or any component thereof), business, operations or affairs.

Section 5.04 Survival of Representations and Warranties. The representations and warranties contained herein and in any certificate or other writing delivered pursuant hereto shall not survive the Purchase.

ARTICLE 6
ADDITIONAL COVENANTS

Section 6.01 Notification of Certain Events.

Each Party shall promptly notify the other Party of:

(a)any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with any transaction contemplated by this Agreement;

(b)any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; and

(c)any actions, suits, Claims, investigations or proceedings commenced that, if pending on the date of this Agreement, would have been required to have been disclosed.

Section 6.02 Reasonable Best Efforts; Further Assurances. Subject to the terms and conditions of this Agreement, the Parties shall use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under Applicable Law to consummate the transactions contemplated by this Agreement. The Parties shall execute and deliver such other documents, certificates, agreements and other writings and take such other actions as may be reasonably necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement.

Section 6.03 Certain Filings. The Parties shall cooperate with each other (i) in determining whether any action by or in respect of, or filing with, any Governmental Authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material contracts, in connection with the consummation of the transactions contemplated by this Agreement and (ii) in taking such actions or making any such filings, furnishing information required in connection therewith and seeking timely to obtain any such actions, consents, approvals and waivers.

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ARTICLE 7
TERM AND TERMINATION

Section 7.01 Commencement and Termination. This term of this Agreement shall commence on the Effective Date and may be terminated at any time prior to the Purchase Date:

(a)by mutual written agreement of MPIB and IB;

(b)by either MPIB or IB if the Purchase has not been consummated on or before the date that is 18 months following the Effective Date;

(c)by either MPIB or IB if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any Governmental Authority having competent jurisdiction; or

(d)by MPIB upon written notice to IB upon the occurrence of any material breach of this Agreement by IB prior to the Purchase Date and IB’s failure to cure such event within 10 days following MPIB’s delivery of written notice to IB of such event (it being understood that, if such event is incapable of being cured, or if IB does not promptly undertake efforts to cure such event following receipt of such notice, in each case in the reasonable judgment of MPIB, then MPIB shall have the right to terminate this Agreement immediately upon written notice to IB); or

(e)by IB upon written notice to MPIB upon the occurrence of any material breach of this Agreement by MPIB prior to the Purchase Date and MPIB’s failure to cure such event within 10 days following IB’s delivery of written notice to MPIB of such event (it being understood that, if such event is incapable of being cured, or if MPIB does not promptly undertake efforts to cure such event following receipt of such notice, in each case in the reasonable judgment of IB, then IB shall have the right to terminate this Agreement immediately upon written notice to MPIB).

Section 7.02 Effect of Termination. (a) Upon the termination of this Agreement pursuant to Section 7.01, the License, any Permitted Sublicenses and all rights of IB and its Representatives, Affiliates and Permitted Sublicensees with respect to the Licensed Materials and Improvements shall terminate immediately without any further action by MPIB, and IB shall, and shall cause each of its Representatives, Affiliates and Permitted Sublicensees to: (i) cease using the Licensed Materials; (b) return to MPIB or destroy, at MPIB’s election, all Confidential Information of MPIB; and (c) cooperate generally with MPIB to ensure that all rights of MPIB in the Licensed Materials and Improvements are preserved and retained by MPIB. Upon MPIB’s written request, IB shall provide written certification to MPIB, signed by a duly authorized officer of IB, of IB’s compliance with IB’s obligations under this 02.

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(b) Any termination of this Agreement pursuant to Section 7.01 shall be without liability of either Party (or any Representative thereof) to the other Party; provided that if such termination results from the willful (i) failure of either Party to fulfill a condition to the performance of the obligations of the other Party, (ii) failure to perform a covenant of this Agreement or (iii) breach by either Party of any representation or warranty or agreement contained herein, such Party shall be fully liable for any and all Damages incurred or suffered by the other Party as a result of such failure or breach.

ARTICLE 8
MISCELLANEOUS

Section 8.01 Notices. All notices, requests and other communications to any Party shall be in writing (including facsimile transmission and email transmission, so long as a receipt of such e-mail is requested and received) and shall be given,

if to IB, to:

Independence Bancshares, Inc.

500 East Washington Street

Greenville, SC 29601

Facsimile: (864) 672-1777

E-mail: mlong@indepbanc.com

Attention: Martha Long, CFO

with a copy to:

Nelson Mullins Riley & Scarborough LLP

104 S. Main Street, Suite 900

Greenville, SC 29601

Facsimile: (864) 250-2373

Attention: Ben Barnhill

Email: ben.barnhill@nelsonmullins.com

if to MPIB, to:

MPIB Holdings, LLC

c/o Kathleen M. DeCruze

Martin, DeCruze & Company, LLP

2777 Summer Street, Suite 401

Stamford, CT 06905

Facsimile: (203) 977-8314

E-mail: gordonabaird@gmail.com

Attention: Gordon A. Baird

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with a copy to:

Martin LLP

262 Harbor Drive, 3^rd Floor

Stamford, CT 06902

Facsimile: (203) 973-5250

Email: cmartin@martinllp.net

Attention: Christopher Martin

or such other address, facsimile number or email address as such Party may hereafter specify for the purpose by notice to the other Parties. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt.

Section 8.02 Amendments and Waivers. (a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each Party or, in the case of a waiver, by the Party against whom the waiver is to be effective.

(b) No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.

Section 8.03 Expenses. Except as otherwise provided on Exhibit B, all costs and expenses incurred in connection with this Agreement shall be paid by the Party incurring such cost or expense.

Section 8.04 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided that no Party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other Party.

Section 8.05 No Partnership or Joint Venture. Nothing in this Agreement shall be construed as making or rendering MPIB and IB partners, joint venturers or members of a joint enterprise or as making or rendering either of the Parties liable for the debts or obligations of the other Party.

Section 8.06 Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of New York without regard to the conflicts of law rules of such state.

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Section 8.08. Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York. Each of the Parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court. Without limitation of the foregoing, each Party hereby agrees that service of process on such Party as provided in Section 9.01 shall be deemed effective service of process on such Party.

Section 8.09 Counterparts; Effectiveness; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each Party shall have received a counterpart hereof signed by the other Party. Until and unless each Party has received a counterpart hereof signed by the other Party, this Agreement shall have no effect and no Party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any Person other than the Parties and their respective successors and assigns.

Section 8.10 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, both oral and written, between the Parties with respect to the subject matter hereof.

Section 8.11 Severability. If any term, provision, covenant or restriction of this Agreement is determined by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

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Section 8.12 Specific Performance. The Parties hereby acknowledge and agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in the courts set forth in Section 6.07, in addition to any other remedy to which they are entitled at law or in equity.

Section 8.13 Drafting Party. The provisions of this Agreement have been prepared, examined, negotiated and revised by each Party and its lawyers, and no implication shall be drawn and no provision shall be construed against any Party by virtue of the purported identity of the drafter of this Agreement or any portion of this Agreement.

[signature page follows]

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IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the day and year first above written.

MPIB HOLDINGS, LLC
By:	/s/ Gordon A. Baird
	Name: Gordon A. Baird
	Title: Authorized Member
INDEPENDENCE BANCSHARES, INC.
By:	/s/ Martha L. Long
	Name: Martha L. Long
	Title: Chief Financial Officer

[signature page to License Agreement]

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EXHIBIT A

LICENSED MATERIALS

● All computer software, hardware, systems, intellectual property rights, intellectual property agreements and assigned contracts as disclosed in the MPIB file server at: https://bhco.egnyte.com/fl/1RZyWr4gww.

● All (i) books and records relating to the assets, properties and rights of Seller relating to the Business; (ii) market research studies, surveys, reports, analyses and similar information relating to the Business; (iii) all active and inactive files and data relating to the Business; and (iv) sales data, brochures, catalogues, literature, forms, mailing lists, art work, photographs and advertising material, in whatever form or media relating to the Business.
 

● All claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind in favor of Seller or pertaining to, or arising out of, the Business.
 

● All goodwill and other intangible properties associated with any of the assets described in the foregoing including, without limitation, the Intellectual Property Rights.
 

● MPIB Global (unregistered service mark of MPIB)
 

● www.mpibglobal.com (Internet domain name owned by MPIB)

EXHIBIT BLICENSE FEE

$150,454, which amount shall be paid to:

● Davis Polk & Wardwell LLP $85,222
 

● Martin LLP $53,522
 

● Martin, Decruze & Company $11,710

EX-10.4

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”), dated as of May __, 2015, is entered into by and between INDEPENDENCE BANCSHARES, INC., a South Carolina corporation (“Buyer”) and registered bank holding company for Independence National Bank (the “Bank”) and MPIB HOLDINGS, LLC, a Delaware limited liability company (“Seller”).

RECITALS

WHEREAS, Seller is engaged in the business of developing mobile payments and digital banking technologies and processes including technology architectures, regulatory and compliance infrastructures, market research, pricing strategies, customer lists, vendor due diligence and relationships, and documentation, processes and procedures and intellectual property to support patent applications for unique processes and other applicable intellectual property and other consulting and financial services-related businesses (the “Business”); and

WHEREAS, Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller, certain assets and certain Liabilities of the Business, subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I
Definitions

Section 1.01 Definitions. Unless otherwise specified in this Agreement, capitalized terms used herein shall have the meanings set forth in Schedule 1 to this Agreement.

ARTICLE II
Purchase and Sale 

Section 2.01Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title and interest in, to and under the tangible and intangible assets, properties and rights described in this Section 2.01 (collectively, the “Purchased Assets”):

(a)all computer software, hardware and systems of Seller in connection with the Business as set forth on Schedule 2.01(a) of the Disclosure Schedules;

(b)all Intellectual Property Rights as set forth on Schedule 2.01(b) or Schedule 4.16(a) of the Disclosure Schedules;

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(c)all Intellectual Property Agreements to which Seller is party in connection with the conduct of the Business as set forth on Schedule 2.01(c) of the Disclosure Schedules (“Assigned Intellectual Property Agreements”);

(d)all Contracts or other arrangements to which Seller is party in connection with the conduct of the Business, as set forth on Schedule 2.01(d) of the Disclosure Schedules (“Assigned Contracts”);

(e)all (i) books and records relating to the assets, properties and rights of Seller relating to the Business or the Purchased Assets; (ii) market research studies, surveys, reports, analyses and similar information relating to the Business; (iii) all active and inactive files and data relating to the Business; and (iv) sales data, brochures, catalogues, literature, forms, mailing lists, art work, photographs and advertising material, in whatever form or media relating to the Business (collectively, “Books and Records”);

(f)all claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind in favor of Seller or pertaining to, or arising out of, the Purchased Assets (“Claims”); and

(g)all goodwill and other intangible properties associated with any of the assets described in the foregoing clauses including, without limitation, the Intellectual Property Rights.

Section 2.02Excluded Assets. Notwithstanding anything to the contrary in this Agreement, Buyer shall not purchase and Seller shall not sell, transfer or assign to Buyer any assets except the Purchased Assets. Without limiting the generality of the foregoing, it is expressly agreed that Buyer shall not purchase and Seller shall not sell, transfer or assign to Buyer the following (collectively, the “Excluded Assets”):

(a)all the assets, properties and rights specifically set forth on Schedule 2.02(a) of the Disclosure Schedules;

(b)all accounts or notes receivable of Seller or any of its Affiliates, including all accounts or notes receivable relating to the Business and any account, account receivable, note or note receivable payable to Seller by any Member or any other member of Seller or Affiliate of Seller;

(c)all cash and cash equivalents and securities of Seller or any of its Affiliates;

(d)all bank accounts of Seller or any of its Affiliates;

(e)all Contracts that are not Assigned Contracts;

(f)Sellers’ organizational documents, minute books, membership interest books, Tax Returns, books of account and records of Seller pertaining to the Business which Seller is prohibited from disclosing or transferring to Buyer under applicable Law and is required by applicable Law to retain;

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(g)all refunds, rebates, abatements, credits, net operating losses or other tax assets (including duty and tax refunds and prepayments), of Seller or any of its Affiliates;

(h)all claims, rights, benefits and interests arising under or resulting from any Excluded Assets or Excluded Liabilities;

(i)any future business of Seller or any of its Affiliates;

(j)the rights which accrue or will accrue to Seller under this Agreement;

(k)all prepaid expenses and deposits of Seller, but only to the extent of the benefit to be conferred by such prepaid expenses and deposits to the Business after the Closing Date;

(l)all rights and benefits under all employee benefit plans of Seller;

(m)contracts of insurance maintained by or on behalf of Seller or any of its Affiliates (including any return of charges or premiums under retrospective rating plans) and all insurance proceeds or claims made by Seller or any of its Affiliates thereunder; and

(n)all rights of Seller and the Members under this Agreement or any agreement, instrument or other document entered into in connection herewith or any rights in connection with the transactions contemplated hereby and thereby.

Section 2.03Assumed Liabilities. At the Closing, Buyer shall assume (with an effective date of January 1, 2013 (the “Assumption Date”)), and from the Assumption Date and thereafter Buyer shall pay, perform, fulfill, discharge and otherwise satisfy in accordance with their respective terms, and Seller shall sell, convey, assign, transfer and deliver to Buyer, only the obligations and Liabilities of Seller set forth in Section 2.03(a) and 2.03(b) (the “Assumed Liabilities”), as follows:

(a)all Liabilities and obligations that arise out of events occurring after the Assumption Date relating to the Intellectual Property Rights, the Assigned Intellectual Property Agreements, the Assigned Contracts and the Claims, except (i) in each case, to the extent such Liabilities and obligations, but for a breach or default by Seller or any of its Affiliates would have been paid, performed or otherwise discharged on or prior to the Assumption Date or to the extent the same arise out of any such breach or default, (ii) in each case, to the extent such Liabilities and obligations would be required to be reflected on a balance sheet as of Assumption Date with respect to the Purchased Assets prepared in accordance with GAAP and were not disclosed on Schedule 4.20 of the Disclosure Schedules (excluding any Liabilities paid directly by, or to the actual Knowledge of, Buyer), and (iii) to the extent that such agreements were not assigned to Buyer hereunder in compliance with any required consents of other parties or consents or approvals of Governmental Authorities; and

(b)any Liabilities and obligations expressly listed on Schedule 2.03(b) of the Disclosure Schedules, to the extent clearly and unambiguously described therein.

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Notwithstanding anything in this Agreement to the contrary, Buyer shall not assume any Liabilities or obligations of Seller or the Purchased Assets, including the Intellectual Property Rights, except for those Liabilities and obligations which are listed in Schedule 2.03 of the Disclosure Schedules. Seller understands that, other than the Assumed Liabilities of Seller specifically listed in Schedule 2.03 of the Disclosure Schedules, Buyer shall not assume, nor shall Buyer or any of its Affiliates, directors, employees, shareholders or agents, be deemed to have assumed or guaranteed, or be responsible for in any way, any Liabilities or obligations, whether such Liabilities or obligations are contingent or otherwise, or direct or indirect, of Seller or any of its Affiliates.

Section 2.04Retained Liabilities. The Liabilities and obligations which shall be retained by Seller or any of its Affiliates (the “Retained Liabilities”) shall consist of all Liabilities of Seller or any of its Affiliates other than the Assumed Liabilities, including, without limitation, the following: (a) all Liabilities of Seller or any of its Affiliates relating to Indebtedness; (b) all Liabilities of Seller or any of its Affiliates resulting from, constituting or relating to a breach of any of the representations, warranties, covenants or agreements of Seller or any of its Affiliates under this Agreement in accordance with the indemnification provisions of this Agreement; (c) all Liabilities of Seller or any of its Affiliates for federal, state, local or foreign taxes, including taxes incurred in respect of or measured by the income of Seller or any of its Affiliates earned on or realized prior to the Assumption Date, including any gain and income from the sale of the Purchased Assets and other transactions contemplated herein; (d) all Liabilities of Seller or any of its Affiliates arising in connection with its operations related to the Business except as otherwise specifically provided in Section 2.03; (e) all Liabilities of Seller or any of its Affiliates arising in connection with its operations unrelated to the Business; (f) any liability of Seller or any of its Affiliates based on its tortious or illegal conduct; (g) any liability or obligation incurred by Seller or any of its Affiliates in connection with the negotiation, execution or performance of this Agreement and the transactions contemplated hereby, including, without limitation, all legal, accounting, brokers’, finders’ and other professional fees and expenses except as otherwise specifically provided in Section 8.01; (h) any Liabilities or obligations of Seller to the Members and any of its other members, employees, directors, officers or any other of its Affiliates; and (i) all Liabilities incurred by Seller or any of its Affiliates after the Assumption Date.

Section 2.05Purchase Price. As consideration for the sale, transfer, and conveyance of the Purchased Assets to Buyer, Buyer agrees to deliver to Seller the following consideration (the “Purchase Price”):

(a)On the Closing Date, Buyer shall remit to Seller an amount equal to Two Hundred and Fifty Thousand Dollars ($250,000.00) by wire transfer of immediately available funds to the account designated in Section 8.02(C) below, or such other account designated in writing by Seller to Buyer (“Designated Account”);

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(b)Within seven business days following the Deferred Purchase Price Trigger Event (defined below), Buyer shall remit to Seller an amount equal to One Million Five Hundred Thousand Dollars ($1,500,000.00) by wire transfer of immediately available funds to the Designated Account.The “Deferred Purchase Price Trigger Event” shall mean the date Buyer’s (i) Cumulative Consolidated Core Net Income (as defined below) exceeds Two Million Dollars ($2,000,000.00), or (ii) Cumulative aggregate consolidated Gross Revenues of net interest income and non-interest revenues exceeds Eight Million Dollars ($8,000,000.00) for any consecutive five quarterly periods and Buyer’s average market capitalization for the 30 day period immediately prior to the Deferred Purchase Price Trigger Event exceeds Fifty Million Dollars ($50,000,000.00). “Cumulative Consolidated Core Net Income” means the sum of the Buyer’s and its subsidiaries’ net income before other comprehensive income determined in accordance with GAAP consistently applied as reported in Buyer’s 10-Q and 10-K filings with the Securities and Exchange Commission. For the avoidance of doubt, Cumulative Consolidated Core Net Income shall exclude (i) net losses, if any, before other comprehensive income of the Buyer, (ii) unrealized gains or loss on investment securities available for sale (iii) gains or loss from goodwill, and (iv) gains or loss from extraordinary nonrecurring items as reported on the Company’s financials. “Cumulative consolidated gross revenues of net interest income and non-interest revenues” means the gross revenues of the Buyer from both net interest income and non-interest income, calculated on a consolidated basis with all subsidiaries, cumulated each quarter for the period beginning in the period of the Closing, and measured at the end of each calendar quarter thereafter determined in accordance with GAAP consistently applied as reported in Buyer’s 10-Q and 10-K filings with the Securities and Exchange Commission; and

(c)On the Closing Date, Buyer shall issue to Seller One Million Five Hundred Thousand (1,500,000) shares of common stock of Buyer (the “Restricted Stock”), as evidenced by the Restricted Stock Agreement in the form of Exhibit C (the “Restricted Stock Agreement”) which shall include the following restrictions: (i) the Restricted Stock shall not vest with Seller or any of its Affiliates (or any transferee thereof) unless and until there is a Deferred Purchase Price Trigger Event; and (ii) the Restricted Stock shall not vest with Seller or any of its Affiliates (or any transferee thereof) and shall be returned by Seller to Buyer if the Deferred Purchase Price Trigger Event does not occur on or before the tenth (10^th) anniversary of the Closing Date (except as described below in Section 2.5(d)).

(d)If, prior to the earlier of either the tenth (10^th) anniversary of the Closing Date or a Deferred Purchase Price Trigger Event, the Buyer accepts an offer to sell 100% of its outstanding shares of stock, the following procedure will apply:

(i) The Buyer will obtain an appraisal or fairness opinion as to the consideration paid for the shares of the Buyer from a nationally recognized investment bank (the “Valuation”), which shall include a separate valuation of the Bank which is limited to the Bank’s rendering of traditional banking services (the “Bank Valuation”). The parties agree that the value of the Buyer in excess of the Bank (as limited to its rendering of traditional banking services) shall be attributed to the Buyer’s transaction processing business (the “Transaction Processing Business”).

(ii) Upon the closing of the sale of 100% of the outstanding shares of the Buyer, the Deferred Purchase Price Trigger Event shall be deemed to have occurred and the payments made and vesting of Restricted Stock described in this Section 2.05 shall be made to the extent that the net proceeds of such sale, in excess the value of the Bank, are sufficient to fund the consideration to Seller stated in this Section 2.5. In the event of the sale of 100% of the outstanding shares of the Buyer for stock consideration, the Buyer will make best efforts to negotiate a cash portion of payment to the Seller equal to the cash consideration described in Section 2.05(b) above.

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(iii) In the event that the Buyer accepts an offer to sell 100% of the outstanding shares of the Buyer, but such purchaser is unwilling to pay additional consideration for the Transaction Processing Business in an amount at least equal to the deferred purchase price described in Section 2.05(b) and (c) above, the Buyer will make best efforts to sell the Transaction Processing Business separately from the Bank, and if such separate sale occurs, the Deferred Purchase Price Trigger Event shall be deemed to have occurred and the payments made and vesting of Restricted Stock described in this Section 2.05 shall be made to the extent that the net proceeds of such sale are sufficient to fund the consideration to Seller described in Section 2.05, which payment shall in no event exceed the Purchase Price.

Section 2.06Allocation of Purchase Price. Buyer and Seller agree that the Purchase Price shall be allocated among the Purchased Assets in a reasonable manner and prepared in accordance with Section 1060 of the Code and the treasury regulations promulgated thereunder. Any subsequent adjustments to the Purchase Price shall be made in a manner consistent with Section 1060 of the Code and the regulations thereunder. Neither Seller nor the Members on the one hand, nor Buyer on the other hand, shall file any return or take a position with any taxing authority that is inconsistent with the allocation referred to herein. Additionally, Buyer, on the one hand, and Seller and the Members, on the other hand, shall cooperate with the other in any filings required under Section 1060 of the Code.

ARTICLE III
Closing

Section 3.01Closing. Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated by this Agreement (the “Closing”) shall take via electronic exchange of documents at 10:00 a.m., EST on the date hereof or at such other time, date or place as Seller and Buyer may mutually agree upon in writing (the day on which the Closing takes place being the “Closing Date”). The Closing shall be deemed effective as of 12:01 a.m. EDT as of the Closing Date.

Section 3.02Closing Actions.

(a)At the Closing, Seller shall deliver to Buyer the following:

(i)a general assignment and bill of sale in the form of Exhibit A (the “Bill of Sale”) and duly executed by Seller;

(ii)an assignment and assumption agreement in the form of Exhibit B hereto (the “Assignment and Assumption Agreement”) and duly executed by Seller;

(iii)the Inventions Assignment agreement in the form of Exhibit D hereto (the “Inventions Assignment Agreement”) and duly executed by the Member;

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(iv)the Restricted Stock Agreement duly executed by Seller; and

(v)Such other conveyancing documents as Buyer shall reasonably determine to be appropriate to transfer title and/or ownership to the Purchased Assets to Buyer hereunder including, without limitation, resolutions of the members and managers of Seller authorizing the actions contemplated in this Agreement and the Transaction Documents.

(b)At the Closing, Buyer shall deliver to Seller the following:

(i)the Purchase Price in accordance with Section 2.05(a) and (c);

(ii)the Assignment and Assumption Agreement duly executed by Buyer;

(iii)the Inventions Assignment Agreement duly executed by Buyer;

(iv)the Restricted Stock Agreement duly executed by Buyer; and

(v)counterparts of the conveyancing documents described in Section 3.02(a)(v) above.

ARTICLE IV
Representations and warranties of seller and the members

Seller, represent and warrant to the Purchaser that the statements contained in this Section 4 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Section 4).

Section 4.01Organization and Qualification of Seller. Seller is a limited liability company duly organized, validly existing and in good standing under the Laws of the state of Delaware and has all necessary corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on the Business as currently conducted. Seller is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the ownership of the Purchased Assets or the operation of the Business as currently conducted makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing would not have a Material Adverse Effect.

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Section 4.02Authority of Seller. Seller has full power and authority to enter into this Agreement and the other Transaction Documents to which Seller is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement and any other Transaction Document to which Seller is a party, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of Seller and no other corporate action is necessary for the execution, delivery and performance by Seller of the Transaction Documents and the consummation by Seller of the transactions contemplated by the Transaction Documents. This Agreement has been duly executed and delivered by Seller and the Members, and (assuming due authorization, execution and delivery by Buyer) this Agreement constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). When each other Transaction Document to which Seller and the Members is or will be a party has been duly executed and delivered by Seller (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a legal and binding obligation of Seller enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

Section 4.03No Conflicts; Consents. Except as expressly set forth on Schedule 4.03 of the Disclosure Schedules, the execution, delivery and performance of the Transaction Documents to which any of Seller is a party, and the consummation by Seller of the transactions contemplated by the Transaction Documents, will not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in the creation of any lien upon any of the Purchased Assets under, (iv) give any third party the right to modify, terminate or accelerate any Assumed Liability or other liability or obligation of Seller under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or other action by or declaration or notice to any governmental entity pursuant to the Seller’s Certificate of Formation or Seller Operating Agreement, or any agreement, instrument or other document, or any legal requirement which Seller, or any of Seller’s assets are subject. Without limiting the generality of the foregoing, except as set forth on Schedule 4.03 of the Disclosure Schedules, neither Seller, any of their respective Affiliates has entered into any agreement, or is bound by any obligation of any kind whatsoever, directly or indirectly to transfer or dispose of (whether by sale of stock or assets, assignment, merger, consolidation or otherwise) the Business or the Purchased Assets (or any substantial portion thereof) to any person or entity other than the Purchaser, and neither Seller have entered into any agreement or any obligation of any kind whatsoever to issue any capital stock of Seller to any person or entity.

Section 4.04Tax Returns. Set forth as Schedule 4.04 of the Disclosure Schedules are correct and complete copies of all tax returns of Seller for the years ended December 31, 2011 through December 31, 2014 (the “Tax Returns”). The Tax Returns present fairly the financial condition of Seller as of the dates and for the periods, are correct and complete, and are consistent with the books and records of Seller (which books and records are correct and complete), subject to normal year-end adjustments (which will not be material individually or in the aggregate).

Section 4.05Absence of Certain Changes, Events and Conditions. Except as set forth on Schedule 4.05 of the Disclosure Schedules, from December 31, 2014 until the date of this Agreement, Seller has operated the Business in the ordinary course of business in all material respects and there has not been any material adverse change in the financial condition, operations or business of Seller taken as a whole from that shown on the Tax Returns, or any material transaction or commitment effected or entered into by Seller outside the ordinary course of the Business.

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Section 4.06Material Contracts.

(a)Schedule 4.06(a) of the Disclosure Schedules lists each Contract (x) by which any of the Purchased Assets are bound or affected or (y) to which Seller is a party or by which it is bound in connection with the Business or the Purchased Assets, excluding however any of the foregoing which were both (i) entered into in the ordinary course of the business and (ii) may be terminated without penalty, premium or liability by Seller on not more than thirty-one (31) days prior written notice(collectively, the “Material Contracts”).

(b)Seller is not in breach of, or default under, any Material Contract, except for such breaches or defaults that would not have a Material Adverse Effect.

Section 4.07Title to Purchased Assets. Except as set forth on Schedule 4.07 of the Disclosure Schedules, Seller has good and marketable title to, or a valid leasehold interest in, the Purchased Assets, free and clear of any Encumbrances. The Purchased Assets include all tangible and intangible property and assets (except for the Excluded Assets) necessary for the continued conduct of the Business after Closing in the same manner as conducted prior to Closing. The transfer of the Purchased Assets hereunder conveys to the Buyer good, valid and indefeasible title to the Purchased Assets, free and clear of any Encumbrances.

Section 4.08Real Property. Seller neither owns nor leases any real property.

Section 4.09Legal Proceedings; Governmental Orders.

(a)There are no Actions pending or, to Seller’s Knowledge after due inquiry, threatened against or by Seller relating to or affecting the Business or the Purchased Assets which, if determined adversely to Seller would result in a Material Adverse Effect.

(b)There are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting the Business or the Purchased Assets which would result in a Material Adverse Effect.

Section 4.10Compliance With Laws; Permits.

(a)Except as set forth in Schedule 4.10(a) of the Disclosure Schedules, Seller is in compliance with all Laws applicable to the conduct of the Business as currently conducted and the ownership and use of the Purchased Assets except where the failure to be in compliance would not have a Material Adverse Effect. Further, no event has occurred that is reasonably likely to give rise to any action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand that would, if it gave rise thereto, have a Material Adverse Effect.

(b)All Permits required for Seller to conduct the Business as currently conducted or for the ownership and use of the Purchased Assets have been obtained by Seller and are valid and in full force and effect, except where the failure to obtain such Permits would not have a Material Adverse Effect.

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(c)None of the representations and warranties in this Section 4.10 shall be deemed to relate to employee benefits matters (which are governed by Section 4.11), employment matters (which are governed by Section 4.12) or tax matters (which are governed by Section 4.12).

Section 4.11No Employees or Benefit Plans. Seller has not employed any Persons or established or maintained any employee benefit plans at any time from its inception through and including the Closing Date.

Section 4.12Tax Matters.

(a)Except as set forth in Schedule 4.12 of the Disclosure Schedules, Seller has filed all Tax Returns that it was required to file with respect to the Business. All such Tax Returns were correct and complete. All Taxes owed by Seller with respect to the Business, the Purchased Assets or otherwise (whether or not shown on any Tax Return), have been paid and all current Taxes with respect to the Business, the Purchased Assets, income, expense or credits of Seller have been paid or provided for or will be paid or provided for prior to the Closing. Seller is not currently the beneficiary of any extension of time within which to file any Tax Return. No claim with respect to the Business or the Purchased Assets has ever been made by an authority in a jurisdiction where Seller does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There is no lien on any of the Purchased Assets that arose in connection with any failure (or alleged failure) to pay any Tax.

(b)Seller has withheld and paid all material Taxes with respect to the Business, the Purchased Assets or otherwise required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, member, stockholder or other third party.

(c)There is no pending dispute or claim concerning any tax liability of Seller with respect to the Business or the Purchased Assets. No Tax audits are pending or being conducted with respect to Seller.

(d)The representations and warranties set forth in this Section 4.12 are Seller’s sole and exclusive representations and warranties regarding Tax matters.

Section 4.13Brokers. Neither the Seller nor any of its Affiliates has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

Section 4.14No Undisclosed Liabilities. As of the Closing Date, Seller has no Liabilities or obligations (whether absolute or contingent, liquidated or unliquidated, known or unknown, or due or to become due), and there is no basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand, except for Liabilities and obligations (i) expressly listed on Schedule 4.14 of the Disclosure Schedules, to the extent clearly and unambiguously described therein, (ii) reflected on the Tax Returns, and (iii) arising after the Closing Date in the ordinary course of business (none of which results from, arises out of, relates to or was caused by any breach of contract, breach of warranty, tort, infringement or violation of law).

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Section 4.15Material Misstatements or Omissions. No representation or warranty by Seller or the Members in this Agreement, and no document, written statement, certificate or schedule furnished or to be furnished to Buyer by (or on behalf of) Seller or the Members pursuant thereto, when construed together with all other such representations, warranties, documents, written statements, certificates or schedules contains, or will, when furnished, contain, any untrue statement of a material fact, or omits, or will then omit to state, a material fact necessary to make any statement of facts contained herein or therein not materially misleading. There have been no events or transactions, or information which has come to the attention of Seller or the Members which, as related directly to the Business or the Purchased Assets, could reasonably be expected to have a Material Adverse Effect on the business, operations, affairs or condition of the Business or the Purchased Assets other than for general economic or industry conditions or trends.

Section 4.16Intellectual Property.

(a)Schedule 4.16(a) of the Disclosure Schedules lists each patent, registered trademark, registered service mark, trade dress, logo, trade name, copyright, mask work and registration or application for any of the foregoing owned by or licensed to Seller for use in connection with the Business. Except as specifically set forth on Schedule 4.16(a) of the Disclosure Schedules, Seller has good and marketable title to each item of Intellectual Property purported to be owned by it, free and clear of any liens, existing or pending. Seller owns or has the right to use pursuant to licenses, sublicenses, agreements or permission all patents, trademarks, service marks, trade dress, trade secrets, logos, trade names, copyrights and mask works necessary for the operation of the Business as presently conducted. Each item of Intellectual Property owned or used by Seller immediately prior to the Closing Date will be owned or available for use by the Buyer on identical terms and conditions immediately subsequent to the Closing Date. Seller has taken all necessary and, to the belief of Seller, desirable action to maintain and protect each item of Intellectual Property that it owns or uses. The Members have assigned to the Business all of their intellectual property rights relating to the Business.

(b)Schedule 4.16(b) of the Disclosure Schedules identifies each unregistered trademark, service mark, trade name, corporate name or Internet domain name, computer software item (other than commercially available off-the-shelf software purchased or licensed for less than a total cost of $1,000 in the aggregate) and each material unregistered copyright used by the Company in connection with its business. With respect to each item of Intellectual Property required to be identified in Schedule 4.16(b):

(i) Seller owns and possesses all right, title, and interest in and to the item, free and clear of any Lien, license, or other restriction or limitation regarding use or disclosure;

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(ii) the item is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge;

(iii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to the Knowledge of any Member, is threatened that challenges the legality, validity, enforceability, use, or ownership of the item, and, to the Knowledge of any Member there are no grounds for the same;

(iv) other than as set forth on Schedule 4.16(b) of the Disclosure Schedules, Seller has never agreed to indemnify any Person for or against any interference, infringement, misappropriation, or other conflict with respect to the item; and

(v) no loss or expiration of the item is threatened, pending, or reasonably foreseeable, except for patents expiring at the end of their statutory terms (and not as a result of any act or omission by Seller, including without limitation, a failure by Seller to pay any required maintenance fees).

(c)Schedule 4.16(c) of the Disclosure Schedules lists identifies each item of Intellectual Property that any third party owns and that Seller uses pursuant to a license, sublicense, agreement, or permission. Seller has delivered to Buyer correct and complete copies of all such licenses, sublicenses, agreements, and permissions (each as amended to date).

(d)Seller has not interfered with, infringed upon, misappropriated or, to the Knowledge of Seller, otherwise come into conflict with any Intellectual Property rights of third parties, and neither Seller nor the Members, directors and officers (and employees with responsibility for Intellectual Property matters) of Seller have ever received any charge, complaint, claim, demand or notice alleging any such interference, infringement, misappropriation, violation or adverse claims of ownership (including any claim that Seller must license or refrain from using any Intellectual Property rights of any third party). No third party has interfered with, infringed upon, misappropriated or, to the Knowledge of Seller, otherwise come into conflict with any Intellectual Property Rights of Seller.

(e)Each of the employees, agents, contractors or consultants who have contributed to or participated in the discovery, creation or development of Intellectual Property on behalf of Seller: (i) has assigned or is under a valid obligation to assign all right, title, and interest thereto to Seller; (ii) is a party to a valid “work for hire” agreement under which Seller is deemed to be the author and original owner of the copyright to the Intellectual Property; or (iii) has by operation of law vested in Seller all right, title, and interest in the Intellectual Property by virtue of his or her employment with Seller.

(f)Seller has complied with and is presently in compliance with all federal, state, local, governmental (including, but not limited to, the Federal Trade Commission and State Attorneys General), administrative or regulatory laws, regulations, guidelines and rules applicable to any Intellectual Property of Seller and shall take all steps necessary to ensure such compliance until the Closing Date.

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(g)Seller further agrees, without any additional consideration, to execute any instruments and to do all other things reasonably requested by Buyer (both during and after the term of this Agreement) in order to (i) file applications in relation to the protection of intellectual property, including but not limited to patent, trademark, and copyright applications and (ii) vest more fully in or record ownership by Buyer or its designee all ownership rights in those items hereby transferred by Seller to Buyer, or to evidence such ownership by Buyer.

(h)Seller shall provide any trade secrets to Buyer in such form and format as requested by Buyer and shall continue to disclose any such trade secrets to Buyer upon reasonable request, wherein this provision shall extend after the expiration of this Agreement.

Section 4.17Transactions with Affiliates. Except as specifically set forth in Schedule 4.17 of the Disclosure Schedules, Seller has not been involved in any business arrangement or relationship with any of its members or Affiliates, including the Members, within the past 36 months, and none of its members or Affiliates, including the Members, own any assets, tangible or intangible (including the Purchased Assets), or provides any service which is used in the Business.

Section 4.18Investment.

(a)Seller is acquiring the Restricted Stock to be received by it pursuant to this Agreement for investment for its own account and not with a view to participating directly or indirectly in any resale, distribution or underwriting thereof in violation of the Securities Act, or applicable state securities laws, and Seller will not offer or sell the Restricted Stock received pursuant to this Agreement in violation of the Securities Act or applicable state securities laws. Seller understands that the Restricted Stock received pursuant to this Agreement will be registered following the lapse of restrictions stated in the Restricted Stock Agreement, pursuant to the terms of this Agreement and the Restricted Stock Agreement. However, the Restricted Stock has not been registered under the Securities Act or under applicable state securities laws as of the date of this Agreement and may not be sold, transferred, assigned, pledged or otherwise transferred or disposed of unless there is an effective registration statement under the Securities Act covering such securities and the securities have been qualified or registered under applicable state securities laws or an exemption from the registration requirements of the Securities Act and such laws is available. Seller also understands that until such time as the Restricted Stock is registered under the Securities Act or under applicable state securities laws or an exemption from the registration requirements of the Securities Act and such laws is available, certificates representing such Restricted Stock shall bear an appropriate legend regarding the restrictions on transfer and Buyer shall order any transfer agent it may appoint to stop the transfer thereof absent compliance with such restrictions.

(b)Seller is an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act. Seller (i) acknowledges that Buyer has made available to Seller a copy of the Buyer SEC Filings, (ii) understands that it has not been furnished with any exhibits to the Buyer SEC Filings and that it may, upon its written request, receive from Buyer a copy of any such exhibit and (iii) acknowledges that it has been provided an opportunity to ask questions and receive answers from Buyer concerning the terms and conditions of the offering of the Restricted Stock and to obtain any additional information which Buyer possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of any information furnished with such offering.

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Section 4.19Capitalization. The authorized capital ownership interest of Seller consists only of capitalization amounts contributed by the Members identified in Schedule 4.19 of the Disclosure Schedules. Except as set forth in Schedule 4.19 of the Disclosure Schedule, Seller has not authorized any other measures of capital ownership of Seller. Except as set forth in Schedule 4.19 of the Disclosure Schedule, there are no agreements, arrangements or understandings to which Seller or the Members are a party (written or oral) to issue any other measures of capital ownership of Seller, there are no options or other rights to require such units or other measures of capital ownership and there are no preemptive rights or agreements, arrangements or understandings to issue preemptive rights with respect to the issuance or sale of any units or other measures of capital ownership of Seller created by statute, the Certificate of Formation of Seller or the Seller Operating Agreement, or any agreement or other arrangement to which Seller or any of the Members are a party or to which they are bound and there are no agreements, arrangements or understandings to which Seller or the Members are a party (written or oral) pursuant to which Seller has the right to elect to satisfy any Liability by issuing any units or other measures of capital ownership of Seller. Other than the Seller Operating Agreement, Seller is not a party or subject to any agreement or understanding, and, to Seller’s and the Members’ knowledge after due inquiry, there is no agreement, arrangement or understanding between or among any Persons which affects, restricts or relates to voting, giving of written consents, distributions, allocation of profits and losses, or transferability of units or other measures of capital ownership of Seller, including any voting trust agreement or proxy.

Section 4.20No Liabilities on Closing Date. Except as set forth in Schedule 4.20 of the Disclosure Schedules, Seller shall have no Liabilities or Indebtedness on the Closing Date including, without limitation, Liabilities or Indebtedness associated with the following: (a) all Liabilities of Seller relating to Indebtedness for borrowed money; (b) all Liabilities of Seller for federal, state, local or foreign Taxes, including Taxes incurred in respect of or measured by the income of Seller earned on or realized prior to the Closing Date, including any gain and income from the sale of the Purchased Assets and other transactions contemplated herein; (c) all Liabilities for all environmental, ecological, health or safety claims to the extent arising out of the operation of the Business or the Purchased Assets by Seller on or before the Closing Date; (d) all Liabilities of Seller arising in connection with its operations unrelated to the Business except as otherwise specifically provided in Schedule 4.20 of the Disclosure Schedule; (e) any liability of Seller based on its tortious or illegal conduct; and (f) any liability or obligation incurred by Seller in connection with the negotiation, execution or performance of this Agreement and the transactions contemplated hereby, including, without limitation, all legal, accounting, brokers’, finders’ and other professional fees and expenses.

Section 4.21No Additional Activities. Since the Assumption Date, the Members have not engaged in any activities related to the Business, except as an agent, executive, consultant, employee and/or director of the Company including, without limitation, any activities in their individual capacity or as an agent, member, manager, employee, officer and/or director of Seller. Since the Assumption Date, Seller has not engaged in any activities related to the Business.

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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller that the statements contained in this Article V are true and correct as of the date hereof.

Section 5.01Organization. Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of South Carolina.

Section 5.02Authority of Buyer. Buyer has all necessary power and authority to enter into this Agreement and the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). When each other Transaction Document to which Buyer is or will be a party has been duly executed and delivered by Buyer (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a legal and binding obligation of Buyer enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

Section 5.03No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) result in a violation or breach of any provision of the partnership agreement of Buyer; (b) result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer; or (c) require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or result in the acceleration of any agreement to which Buyer is a party, except in the cases of clauses (b) and (c), where the violation, breach, conflict, default, acceleration or failure to give notice would not have a Material Adverse Effect on Buyer’s ability to consummate the transactions contemplated hereby. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Buyer in connection with the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, except for such consents, approvals, Permits, Governmental Orders, declarations, filings or notices which would not have a Material Adverse Effect on Buyer’s ability to consummate the transactions contemplated hereby and thereby.

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Section 5.04Brokers. 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 or any other Transaction Document based upon arrangements made by or on behalf of Buyer.

Section 5.05Independent Investigation. Buyer has conducted its own independent investigation, review and analysis of the Business, the Purchased Assets and the Assumed Liabilities, and acknowledges that it has been provided adequate access to the personnel, properties, assets, books and records, and other documents and data of Seller for such purpose. Buyer has relied solely upon its own investigation and the express representations and warranties of Seller set forth in Article IV of this Agreement (including related portions of the Disclosure Schedules); and (b) neither Seller nor any other Person has made any representation or warranty as to Seller, the Business, the Purchased Assets or this Agreement, except as expressly set forth in Article IV of this Agreement (including the related portions of the Disclosure Schedules).

ARTICLE VI
COVENANTS

Section 6.01Books and Records. In order to facilitate the resolution of any claims made against or incurred by Seller prior to the Closing, or for any other reasonable purpose, for a period of six (6) years after the Closing, Buyer shall (and shall cause its Affiliates to) (a) retain the Books and Records (including personnel files) relating to periods prior to the Closing in a manner reasonably consistent with the prior practices of Seller; and (b) upon reasonable notice, afford Seller’s Representatives reasonable access (including the right to make, at Seller’s expense, photocopies), during normal business hours, to such Books and Records.

Section 6.02Bulk Sales Laws. The parties hereby waive compliance with the provisions of any bulk sales, bulk transfer or similar Laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Purchased Assets to Buyer.

Section 6.03Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other similar Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other Transaction Documents shall be borne and paid by Buyer when due. Buyer shall, at its own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Seller shall cooperate with respect thereto as necessary).

Section 6.04Further Assurances. Following the Closing, each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents.

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Section 6.05Limitations on Sellers’ Representations and Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES MADE BY SELLER CONTAINED IN ARTICLE IV HEREOF, (I) SELLER MAKES NO OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY AS TO (A) THE VALUE, DESIGN, UTILITY, QUALITY, MANUFACTURE, FITNESS OR CONDITION OF THE PURCHASED ASSETS, (B) THE ABSENCE OF DEFECTS (LATENT OR APPARENT), (C) FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTY OF MERCHANTABILITY OR TITLE OR WARRANTY (LEGAL OR CONVENTIONAL) OF QUALITY OR (D) THE TRANSACTIONS CONTEMPLATED HEREBY AND (II) SELLER SHALL NOT BE LIABLE OR BOUND IN ANY MANNER BY ANY EXPRESS OR IMPLIED WARRANTY, GUARANTEE, STATEMENT, PROMISE, REPRESENTATION OR INFORMATION MADE OR FURNISHED BY ANY BROKER, AGENT, EMPLOYEE OR OTHER PERSON REPRESENTING OR PURPORTING TO REPRESENT SELLER OR ARISING OUT OF ANY USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE.

Section 6.06Buyer Financial Statements and Information. Buyer shall maintain its financial statements in accordance with GAAP.

Section 6.07Seller Inspection. Seller shall be entitled to inspect, and may select an accounting firm (or other Representatives) to inspect, during normal business hours and on reasonable notice to Buyer, such books and records in order to verify the accuracy of the cumulative consolidated net income reported by Buyer. Seller shall be solely responsible for its fees and costs related to such inspection (including the fees and costs of such accounting firm or other Representatives), unless a discrepancy with respect to the amount of cumulative consolidated net income exceeding 5% is revealed by such audit, in which case Buyer shall be responsible for all of Seller’s fees and costs related to such audit. If Seller (or its accounting firm or other Representatives, as applicable) determines that any such books and records are inaccurate, Buyer shall correct the inaccuracy. If Buyer does not correct the inaccuracy, Seller will share sufficient information with Buyer to allow the parties to resolve in good faith the alleged inaccuracy. In the event that Buyer ceases to be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, then Buyer shall retain an independent accounting firm reasonably satisfactory to Seller to maintain all books and records with respect to the cumulative consolidated net income. If the majority of the business, assets and/or stock of Buyer is acquired prior to the date of the final payment pursuant to Section 2.05, whether pursuant to merger or otherwise, then Buyer shall take all necessary and appropriate action to cause the acquirer(s) in such transaction to comply with the provisions of Section 2.05.

Section 6.08Consents of Third Parties. Seller shall obtain the consent in writing of all persons necessary to permit Seller to assign and transfer all of the Purchased Assets to Buyer, free and clear of all liens, security interests, restrictions, claims and encumbrances (other than the Assumed Liabilities) and to perform its obligations under, and to conclude the transactions contemplated by, this Agreement in order that the performance hereof will not result in the termination of, or any violation, breach or default under any material contracts, loans, notes, agreements, obligations, leases, permits or licenses to which Seller is a party or by which any of Seller’s property is bound.

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Section 6.09Survival of Covenants. Except as otherwise provided herein, each of the covenants set forth in Article VI shall survive the Closing.

ARTICLE VII
DISCLAIMER;SURVIVAL;INDEMNIFICATION;SET-OFF

Section 7.01Survival. All of the Fundamental Representations will survive the Closing, regardless of any investigation made by Buyer. All of the additional representations and warranties of the parties contained in this Agreement, in any document to be delivered pursuant to this Agreement, in any document delivered in connection with the Closing, or in any other document delivered or to be delivered in connection with the transactions contemplated hereunder will survive for eighteen (18) months following the Closing and will thereafter expire, regardless of any investigation made by any of the parties hereto.

Section 7.02Indemnification By Seller. Seller agrees to indemnify and hold each of Buyer and its Affiliates, stockholders, officers, directors, employees, agents and successors and assigns (collectively, the “Buyer Indemnitees”) harmless against and in respect of (i) all obligations and Liabilities of Seller or the Members, whether accrued, absolute, fixed, contingent or otherwise, not expressly assumed by Buyer pursuant to this Agreement, (ii) any loss, liability or damage incurred or sustained by any Buyer Indemnitee as a result of any breach by Seller or the Members of this Agreement, including, without limitation, any breach of any of the representations, warranties and covenants contained herein or in certificates or other documents delivered hereunder or pursuant hereto or otherwise in connection with the transactions contemplated hereby, (iii) any loss, liability, penalties, interest or other damage incurred in connection with this Agreement under any bulk sales law, and (iv) all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ and accountants’ fees) incurred by any Buyer Indemnitee in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this Section 7.02.

Section 7.03Indemnification By Buyer. Buyer agrees to indemnify and hold each of the Seller and their respective Affiliates, stockholders, officers, directors, employees, agents and successors and assigns (collectively, the “Seller Indemnitees”) harmless against and in respect of (i) all obligations and Liabilities arising under the Assumed Liabilities from and after the Closing Date, (ii) any loss, liability or damage incurred or sustained by any Seller Indemnitee as a result of any breach by Buyer of this Agreement, including, without limitation, any breach of any of the representations, warranties and covenants contained herein or in certificates or the documents delivered hereunder or pursuant hereto or otherwise in connection with the transactions contemplated hereby, and (iii) all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ and accountants’ fees) incurred in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this Section 7.03.

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Section 7.04Certain Limitations. The party making a claim under this Article VII is referred to as the “Indemnified Party”, and the party against whom such claims are asserted under this Article VII is referred to as the “Indemnifying Party”. The indemnification provided for in Section 7.02 and Section 7.03 shall be subject to the following limitations:

(a)In the absence of fraud or intentional misrepresentation, shall not be liable to the Indemnified Party for indemnification under Section 7.02 or Section 7.03¹ as the case may be, until the aggregate amount of all Losses in respect of indemnification under Section 7.02(a) or Section 7.03(a) exceeds $500,000 (the “Deductible”), in which event the Indemnifying Party shall only be required to pay or be liable for Losses in excess of the Deductible. With respect to any claim as to which the Indemnified Party may be entitled to indemnification under Section 7.02(a) or Section 7.03(a), as the case may be, the Indemnifying Party shall not be liable for any individual or series of related Losses which do not exceed $50,000 (which Losses shall not be counted toward the Deductible).

(b)In the absence of fraud or intentional misrepresentation, the aggregate amount of all Losses for which an Indemnifying Party shall be liable pursuant to Section 7.02 or Section 7.03, as the case may be, shall not exceed fifteen percent (15%) of the maximum Purchase Price payable under this Agreement received or to be received by the Seller (when, as and if earned), except for Losses related to the Fundamental Representations which shall not exceed the maximum Purchase Price payable under this Agreement received or to be received by the Seller (when, as and if earned).

(c)Payments by an Indemnifying Party pursuant to Section 7.02(a) or Section 7.03(a) in respect of any Loss shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment received or reasonably expected to be received by the Indemnified Party in respect of any such claim. The Indemnified Party shall use its commercially reasonable efforts to recover under insurance policies or indemnity, contribution or other similar agreements for any such Losses prior to seeking indemnification under this Agreement.

(d)Payments by an Indemnifying Party pursuant to Section 7.02 or 7.03 in respect of any Loss shall be reduced by an amount equal to any Tax benefit realized or reasonably expected to be realized as a result of such Loss by the Indemnified Party.

(e)In no event shall any Indemnifying Party be liable to any Indemnified Party for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple.

(f)Each Indemnified Party shall take, and cause its Affiliates to take commercially reasonable steps to mitigate any Loss subject to Sections 7.02(a) or 7.03(a), as the case may be, upon becoming aware of any event which would reasonably be expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Loss.

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(g)Seller shall not be liable under Section 7.02(a) for any Losses based upon or arising out of any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement if Buyer had knowledge of such inaccuracy or breach prior to the Closing.

Section 7.05Indemnification Procedures.

(a)Third Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any action, suit, claim or other legal proceeding made or brought by any Person (a “Third Party Claim”) against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of any Third Party Claim at the Indemnifying Party’s expense and by the Indemnifying Party’s own counsel, and the Indemnified Party shall cooperate in good faith in such defense. In the event that the Indemnifying Party assumes the defense of any Third Party Claim, subject to Section 7.05(b), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right, at its own cost and expense, to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Party’s right to control the defense thereof. Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.

(b)Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed), except as provided in this Section 7.05(b). If an offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all Liabilities and obligations in connection with such Third Party Claim, the Indemnifying Party may settle the Third Party Claim upon the terms set forth in such offer to settle such Third Party Claim. If the Indemnified Party has assumed the defense pursuant to Section 7.05(a), it shall not agree to any settlement without the written consent of the Indemnifying Party.

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(c)Direct Claims. Any claim by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a “Direct Claim”) shall be asserted by the Indemnified Party giving the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have 10 days after its receipt of such notice to respond in writing to such Direct Claim. During such 10-day period, the Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party’s investigation by giving such information and assistance (including access to the Indemnified Party’s premises and personnel and the right to examine and copy any relevant accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within such 10-day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement. In the event of any claim for indemnity under Section 7.03, Buyer agrees to give Seller and its Representatives reasonable access to its books and records and employees relating to the Purchased Assets and the Business (and the operations thereof) in connection with the matters for which indemnification is sought to the extent Seller reasonably deems such access necessary in connection with its rights and obligations under this Article VII and at no cost to Seller.

Section 7.06Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

Section 7.07Right to Assert Defenses and Rights. Buyer hereby agrees that Seller shall have the right to assert on its behalf, and Seller shall have the benefit of, any defense or right included in the Purchased Assets in connection with Seller’s defense of any matter with respect to which a Buyer Indemnitee is seeking indemnification under this Article VII.

Section 7.08Exclusive Remedies. Subject to Section 8.09, the parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud on the part of a party hereto in connection with the transactions contemplated by this Agreement) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article VII. In furtherance of the foregoing, each party hereby waives, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement it may have against the other parties hereto and their Affiliates and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this Article VII. Nothing in this Section 7.08 shall limit any Person’s right to seek and obtain any equitable relief to which any Person shall be entitled pursuant to Section 8.09 or to seek any remedy on account of any fraud by any party hereto.

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Section 7.09Right to Set-Off. Notwithstanding anything in this Agreement to the contrary, upon notice to Seller specifying in reasonable detail the basis for such set-off, Buyer may set off any amount to which it may be entitled under this Section 7 against any amounts payable to Seller including, without limitation, amounts payable under Section 2 of this Agreement. The exercise of such right of set-off by Buyer in good faith, whether or not ultimately determined to be justified, will not constitute a breach of any duty or agreement between Buyer and Seller. Neither the exercise of nor the failure to exercise such right of set-off will constitute an election of remedies or limit Buyer in any manner in the enforcement of any other remedies that may be available to it.

ARTICLE VIII
MISCELLANEOUS

Section 8.01Expenses. Except as otherwise expressly provided by this Agreement, each of the parties hereto will bear all legal, accounting, investment banking and other expenses incurred by it or on its behalf in connection with the transactions contemplated by this Agreement, whether or not such transactions are consummated; provided that at Closing, Buyer shall reimburse Seller for all reasonable costs and expenses including, without limitation, fees and disbursements of counsel, financial advisors, tax advisors and accountants, incurred in connection with this Agreement and legal, tax and valuation assessments conducted in anticipation of this agreement including but not limited to the fees and expenses of Martin LLP, which fees shall not exceed $100,000. Buyer shall also reimburse Seller for any costs associated with preparing, filing and administering the regulatory notice as required in Section 2.06(c), which costs shall not exceed $30,000.

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Section 8.02Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be (a) delivered by a recognized overnight courier service, (b) sent by registered or certified mail (postage prepaid, return receipt requested) or (c) sent by telecopy or other written form of electronic communication (with a copy thereof delivered in accordance with clause (a), (b) or (c) of this Section 8.02) to the parties at the following respective addresses:

(A)	Seller:
	MPIB Holdings, LLC c/o Kathleen M. DeCruze
	Martin, DeCruze & Company, LLP 2777 Summer Street, Suite 401 Stamford, CT 06905
	Facsimile: (203) 977-8314 E-mail: gordonabaird@gmail.com Attention: Gordon A. Baird
	With a copy to:
	Martin LLP 262 Harbor Drive, 3rd Floor Stamford, CT 06902
	Facsimile: 203-973-5250 Email: cmartin@martinllp.net Attention: Christopher Martin
(B)	Buyer:
	Independence Bancshares, Inc. 500 East Washington Street Greenville SC 29601 Facsimile: (864) 672-1777 E-mail: mlong@indepbanc.com Attention: Martha Long, CFO

or to such other Persons or at such other addresses as shall be furnished by like notice to the other party, and such notice or other communication shall be deemed to have been given or made as of the date so delivered or received.

(C)	Designated Account
	MPIB Holdings LLC Citibank ABA Number: 221172610 Account Number: 1255427174 Memo: Independence MPIB Payment

Section 8.03Headings. The headings in this Agreement are for convenience of reference only and shall not define, limit or otherwise affect the interpretation of this Agreement or any of the terms and provisions hereof.

Section 8.04Severability. Any provision hereof which is held by any court of competent jurisdiction in any jurisdiction to be illegal, void or unenforceable shall, as to such jurisdiction, be ineffective to the extent of such illegality or unenforceability without invalidating the remaining provisions hereof, and any such illegality or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the fullest extent permitted by applicable Law, the parties hereby waive any provision of Law which may render any provision hereof prohibited or unenforceable in any respect.

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Section 8.05Entire Agreement. This Agreement together with the schedules and exhibits hereto (which schedules and exhibits are deemed a part of this Agreement) and any further agreements entered into by Buyer and Seller at the Closing (including the other Transaction Documents), (a) contain the entire agreement and understanding of the parties with respect to the subject matter hereof and (b) supersede all prior negotiations, discussions, correspondence, communications, understandings, drafts and agreements between the parties relating to the subject matter hereof, including without limitation any non-disclosure or confidentiality agreement between the parties, all of which are merged into this Agreement.

Section 8.06Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and assigns; provided, however, that no party shall assign or delegate any of the rights or obligations under this Agreement (whether by merger, operation of law or otherwise) without the prior written consent of the other party hereto, and any such purported assignment or delegation without such consent shall be void and of no effect. Nothing in this Agreement, express or implied, shall confer upon any Person other than a party to this Agreement or a party’s permitted successors and assigns, any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement except, with respect to Article VII, to the extent that certain third-parties are expressly covered as Buyer Indemnitees or Seller Indemnitees.

Section 8.07Amendment and Modification; Waiver.

(a)This Agreement may be amended, modified, supplemented or restated only by a written instrument executed by the parties hereto. The terms of this Agreement may be waived only by a written instrument executed by the party waiving compliance.

(b)The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent or other breach, whether or not similar, and no such waiver shall operate or be construed as a continuing waiver unless so provided.

(c)No delay on the part of any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, and no single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

Section 8.08Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a)This Agreement including its formation, performance, termination or enforcement, and the parties’ relationship in connection therewith, together with any related claims whether sounding in contract, tort or otherwise, shall be governed by and construed and enforced in accordance with the Laws of the State of New York, without regard to any conflicts of law rules that might apply the Laws of any other jurisdiction.

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(b)ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY SHALL BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c)EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.08(c).

Section 8.09Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

Section 8.10Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same agreement, and all signatures need not appear on any one counterpart. Executed copies of the signature pages of this Agreement sent by facsimile or transmitted electronically in Portable Document Format or any similar format, shall be treated as originals, fully binding and with full legal force and effect, and the parties waive any rights they may have to object to such treatment.

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Section 8.11Non-recourse. This Agreement may only be enforced against, and any claim, action, suit or other legal proceeding based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement, may only be brought against the entities that are expressly named as parties hereto and then only with respect to the specific obligations set forth herein with respect to such party. No past, present or future director, officer, employee, incorporator, manager, member, partner, stockholder, Affiliate, agent, attorney or other Representative of any party hereto or of any Affiliate of any party hereto, or any of their successors or permitted assigns, shall have any liability for any obligations or Liabilities of any party hereto under this Agreement or for any claim, action, suit or other legal proceeding based on, in respect of or by reason of the transactions contemplated hereby.

Section 8.12Rules of Construction. For all purposes of this Agreement, except as otherwise expressly provided for herein or unless the context of this Agreement otherwise requires:

(a)Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.”

(b)The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section, schedule and exhibit references shall refer to this Agreement unless otherwise specified.

(c)The meanings given to terms defined herein shall be equally applicable to both singular and plural forms of such terms.

(d)Words of any gender are deemed to include each other gender.

(e)A reference to any party to this Agreement or any other agreement or document shall include such party’s successors and permitted assigns.

(f)A reference to any agreement shall be to such agreement (together with the schedules and exhibits attached hereto) as it may have been amended, modified, supplemented, waived or restated from time to time in accordance with its terms.

(g)A reference to any legislation or to any provision of any legislation shall include any modification or re-enactment thereof, any legislative provision substituted therefor and all regulations and rules issued thereunder or pursuant thereto.

(h)All references to “$”, “funds” and “dollars” refer to United States currency unless otherwise expressly provided.

Section 8.13Press Releases and Announcements. No party will issue any press release or announcement relating to the subject matter of this Agreement prior to the Closing Date without the prior written approval of the other parties; provided that any party may make any public disclosure it believes in good faith is required by law or regulation (in which case the disclosing party will advise the other parties prior to making such disclosure).

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Section 8.14Attorney’s Fees. Should a suit or arbitration be brought to enforce or interpret any provision of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees to be fixed in amount by the Court or the arbitrator(s) if applicable (including without limitation costs, expenses and fees on any appeal). The prevailing party will be entitled to recover its costs of suit or arbitration, as applicable, regardless of whether such suit or arbitration proceeds to a final judgment or award.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

SELLER:

MPIB HOLDINGS, LLC

By: 

Name: 

Title: 

BUYER:

INDEPENDENCE BANCSHARES, INC.

By: 

Name: 

Title: 

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SCHEDULE 1
DEFINITIONS

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

“Agreement” has the meaning set forth in the preamble.

“Assigned Contracts” has the meaning set forth in Section 2.01(d).

“Assignment and Assumption Agreement” has the meaning set forth in Section 3.02(a)(ii).

“Assumed Liabilities” has the meaning set forth in Section 2.03.

“Assumption Date” has the meaning set forth in Section 2.03.

“Bill of Sale” has the meaning set forth in Section 3.02(a)(i).

“Books and Records” has the meaning set forth in Section 2.01(e).

“Business” has the meaning set forth in the recitals.

“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Connecticut and South Carolina are authorized or required by Law to be closed for business.

“Buyer” has the meaning set forth in the preamble.

“Buyer Indemnitees” has the meaning set forth in Section 7.02.

“Claims” has the meaning set forth in Section 2.01(g).

“Closing” has the meaning set forth in Section 3.01.

“Closing Date” has the meaning set forth in Section 3.01.

“Code” means the Internal Revenue Code of 1986, as amended.

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“Contracts” means all contracts, leases, mortgages, licenses, instruments, notes, commitments, undertakings, indentures and other agreements, whether written or oral.

“Cumulative consolidated core net income” has the meaning set forth in Section 2.05(c).

“Cumulative consolidated gross revenues of net interest income and non-interest revenues” has the meaning set forth in Section 2.05(c).

“Deductible” has the meaning set forth in Section 7.04(a).

“Deferred Purchase Price Trigger Event” has the meaning set forth in Section 2.05(c).

“Direct Claim” has the meaning set forth in Section 7.05(c).

“Disclosure Schedules” means the Disclosure Schedules delivered by Seller concurrently with the execution and delivery of this Agreement.

“Encumbrance” means any lien, pledge, mortgage, deed of trust, security interest, charge, claim, easement, encroachment or other similar encumbrance.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

“Excluded Assets” has the meaning set forth in Section 2.02.

“Fundamental Representations” means the representations set out in Sections 4.01 (Organization and Qualification), 4.02 (Authority), 4.03 (No Conflicts; Consents), 4.07 (Title to and Sufficiency of Assets), 4.10 (Compliance with Laws; Permits), 4.12 (Tax Matters), 4.14 (No Undisclosed Liabilities), as well as Sections 5.01 (Organization), 5.02 (Authority), and 5.03 (No Conflicts; Consents).

“GAAP” means United States generally accepted accounting principles in effect from time to time.

“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

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“Indebtedness” means with respect to any Person, at any date, without duplication, (A) all obligations of such Person for borrowed money, including, without limitation, all principal, interest, premiums, fees, expenses, overdrafts and penalties with respect thereto, (B) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (C) all obligations of such Person to pay the deferred purchase price of the property or services, (D) all obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (E) all capitalized lease obligations as defined in accordance with GAAP, (F) all other obligations of a Person which would be required to be shown as indebtedness on a balance sheet of such Person prepared in accordance with GAAP, and (G) all indebtedness of any other Person of the type referred to in clauses (A) to (F) above directly or indirectly guaranteed by such Person or secured by any assets of such Person.

“Indemnified Party” has the meaning set forth in Section 7.04.

“Indemnifying Party” has the meaning set forth in Section 7.04.

“Intellectual Property”means and includes patents, patent applications and the right to file for patent applications (including but not limited to continuations, continuations-in-part, divisionals and reissues), trademarks, logos, service marks, trade names and service names (in each case whether or not registered) and applications for and the right to file applications for registration thereof, copyrights (whether or not registered) and applications for and the right to file applications for registration thereof, moral rights, mask works and mask work registrations and applications for the right to file applications for registration thereof, trade secrets, trade dress, publicity and privacy rights, and any other intellectual property rights arising under the laws of the United States of America, any State thereof, or any country or province.

“Intellectual Property Agreements”means and includes all licenses, sublicenses, consent to use agreements, settlements, coexistence agreements, covenants not to sue, permissions and other Contracts (including any right to receive or obligation to pay royalties or any other consideration), whether written or oral, relating to any Intellectual Property or the Business.

“Intellectual Property Registrations”means and includes all Intellectual Property Rights that are subject to any issuance, registration, application or other filing by, to or with any Governmental Authority or authorized private registrar in any jurisdiction, including registered trademarks, domain names and copyrights, issued and reissued patents and pending applications for any of the foregoing.

“Intellectual Property Rights”means and includes all Intellectual Property that is owned by Seller and used in connection with or necessary for the conduct of the Business.

“Inventions Assignment Agreement” has the meaning set forth in Section 3.02.

“Knowledge of Seller or Seller’s Knowledge” or any other similar knowledge qualification, means (a) actual knowledge or (b) knowledge that would be expected to be obtained after a reasonably comprehensive investigation concerning the matter at issue. Seller will be deemed to have Knowledge of a matter if the Members, any Affiliate of Seller, or any employee of Seller with responsibility for such matter has, or at any time had, Knowledge of such matter.

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“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

“Liability” means any liability, obligation or commitment of any kind or nature, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due; provided, however, that solely with respect to Assumed Liabilities, the term Liability shall not include liabilities, obligations and commitments to the extent arising from Assumed Liabilities.

“Lien” means any mortgage, pledge, lien, encumbrance, charge, or other security interest, other than (a) liens for Taxes not yet due and payable or Taxes that the taxpayer is contesting in good faith through appropriate proceedings and for which adequate reserves have been made, and (b) purchase money liens and liens securing rental payments under capital lease arrangements.

“Loss” means any loss, claim, demand, Governmental Order, damage (including incidental, consequential and punitive damages) , penalty, fine, cost (including any opportunity cost), settlement payment, Liability, Tax, Encumbrance, diminution of value, expense, fee, court costs or attorneys’ fees and expenses.

“Material Adverse Effect” means any condition, circumstance, change or effect that is or is reasonably likely to be materially adverse to the Purchased Assets, the Business or the results of operations, profits, prospects or condition (financial or otherwise) of Seller, with respect to the Business, considered as a whole.

“Material Contracts” has the meaning set forth in Section 4.06(a).

“Members” has the meaning set forth in the preamble.

“Permits” means all permits, licenses, franchises, approvals, authorizations and consents required to be obtained from Governmental Authorities.

“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

“Purchase Price” has the meaning set forth in Section 2.05.

“Purchased Assets” has the meaning set forth in Section 2.01.

“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

“Restricted Stock” and “Restricted StockAgreement” have the meaning set forth in Section 2.05(c).

“Retained Liabilities” has the meaning set forth in Section 2.04.

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“Securities Act” means the Securities Act of 1933.

“Seller” has the meaning set forth in the preamble.

“Seller Indemnitees” has the meaning set forth in Section 7.03.

“Taxes” means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other “, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

“Tax Returns” means has the meaning set forth in Section 4.04.

“Third Party Claim” has the meaning set forth in Section 7.05(a).

“Transaction Documents” means this Agreement, the Bill of Sale, the Assignment and Assumption Agreement, the Inventions Assignment Agreement, the Restricted Stock Agreement and the other agreements, instruments and documents required to be delivered at the Closing.

“Vesting Restrictions” has the meaning set forth in Section 2.05(d).

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DISCLOSURE SCHEDULES

References; Defined Terms. All references to “Sections” in the Schedules shall be deemed to refer to the provisions of the Agreement, unless the context clearly requires otherwise, and, additionally, such Section references correspond to the respective representations and warranties. Any capitalized terms used in any Schedule that are not defined therein, but which are defined in the Agreement, shall have the respective meanings given to those terms in the Agreement. Any capitalized term defined in any Schedule shall have the same meaning when used in any of the other Schedules, unless the context clearly requires otherwise.

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EXHIBIT A
BILL OF SALE

35

BILL OF SALE

WHEREAS, pursuant to the Asset Purchase Agreement dated as of May __, 2015, by and between INDEPENDENCE BANCSHARES, INC., a South Carolina corporation (“Buyer”) and MPIB HOLDINGS, LLC, a Delaware limited liability company (“Seller”), the Sellers have agreed to transfer certain assets used by the Sellers in conducting its business;

NOW THEREFORE, for good and valuable consideration paid by the Buyer to the Seller, the receipt and adequacy of which are hereby acknowledged, the Seller does hereby assign, grant, sell, transfer and deliver to the Buyer, its successors and assigns, in accordance with the Asset Purchase Agreement, the Seller’s right, title and interest and claim in and to all of the Purchased Assets as and to the extent set forth in the Asset Purchase Agreement and any Exhibits thereto. Unless otherwise defined herein, all capitalized terms used in this Bill of Sale shall have the meanings attributed to them in the Asset Purchase Agreement. The Seller acknowledges that the Buyer does not assume and shall have no liability for any debts, liabilities or obligations of Seller of any kind whatsoever except related to the Assumed Liabilities as specifically set forth in the Asset Purchase Agreement.

The Seller does hereby covenant with the Buyer and its successors and assigns that it is lawfully seized of the foregoing properties and assets, that they hold the foregoing properties and assets free and clear of all liens, claims, encumbrances, security interests, pledges, leases, equities, conditional sales contracts, charges, restrictions and chattel mortgages of any kind whatsoever, that they have good title to, and good and lawful authority to convey, the foregoing properties and assets, and that they will protect and defend the Buyer’s right, title and interest in and to such properties and assets.

This Bill of Sale and Assignment has been duly executed by the Seller to the Buyer as of the May __, 2015.

MPIB HOLDINGS, LLC
By:
	Member

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EXHIBIT BASSIGNMENT AND ASSUMPTION AGREEMENT

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ASSIGNMENT AND ASSUMPTION AGREEMENT

WHEREAS, pursuant to the Asset Purchase Agreement dated as of May __, 2015 (the “Asset Purchase Agreement”), by and between Independence Bancshares, Inc. (the “Purchaser”) and MPIB Holdings, LLC (the “Seller”), Seller has agreed to transfer certain assets and liabilities as set forth in the Asset Purchase Agreement; and

WHEREAS, pursuant to the Asset Purchase Agreement, the Seller has agreed to sell, assign, convey, transfer, and deliver to the Purchaser, and the Purchaser has agreed to purchase and assume from the Seller, the Purchased Assets and the Assumed Liabilities (as each is defined in the Asset Purchase Agreement and Exhibits thereto).

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Seller hereby fully and completely assigns, conveys, transfers, and delivers, and the Purchaser hereby fully and completely assumes, liability for the payment and performance of all Purchased Assets and Assumed Liabilities transferred pursuant to the Asset Purchase Agreement, as of 11:59 p.m. on the date hereof.

All terms and provisions of this Assignment and Assumption Agreement (this “Agreement”) shall be binding upon and shall inure to the benefit of the parties hereto and their respective permitted transferees, successors and assigns; provided, that this Agreement and all rights, privileges, duties and obligations of the parties hereto or hereunder may not be assigned or delegated by either party hereto without the prior written consent of the other party to this Agreement.

With the exception of the Assumed Liabilities (as defined in the Asset Purchase Agreement), this Agreement shall not create in any third parties any rights, remedies, or claims against the Purchaser which such parties did not have against the Sellers prior to the execution and delivery of this Agreement with respect to the Purchased Assets. The Seller shall retain all of its liabilities and obligations arising or alleged to arise from, in connection with, or resulting from the ownership of the Purchased Assets, and operation of the Business (as defined in the Asset Purchase Agreement) as provided in the Asset Purchase Agreement, and shall pay and perform all such liabilities and obligations in the ordinary course of business (as defined in the Asset Purchase Agreement) when due.

This Agreement is given pursuant to the provisions of the Asset Purchase Agreement and, except as herein otherwise provided, the assignment and assumption of the Purchased Assets and the Assumed Liabilities hereunder is made subject to the terms and provisions of the Asset Purchase Agreement.

This Agreement is made and entered into in the State of New York and the laws of that state shall govern the validity and interpretation hereof and the performance of the parties hereto of their respective obligations hereunder.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

SELLER:

MPIB HOLDINGS, LLC

By: 

Name: 

Title: 

BUYER:

INDEPENDENCE BANCSHARES, INC.

By: 

Name: 

Title: 

39

EXHIBIT CRESTRICTED STOCK AGREEMENT

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RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) dated as of May __, 2015, is entered into by and among INDEPENDENCE BANCSHARES, INC., a South Carolina corporation (the “Company”) and MPIB HOLDINGS, LLC, a Delaware limited liability company (“MPIB”). Capitalized terms used, but not otherwise defined, in this Agreement shall have the respective meanings specified in the Purchase Agreement (defined below).

RECITALS

WHEREAS, the Company and MPIB entered into an Asset Purchase Agreement of even date herewith (the “Purchase Agreement”) whereby the Company agreed to purchase the certain assets of MPIB (the “Purchased Assets”);

WHEREAS, pursuant to the Purchase Agreement, the Company has agreed to issue One Million Five Hundred Thousand (1,500,000) shares of common stock of the Company, subject to the restrictions set forth in the Purchase Agreement and herein;

WHEREAS, MPIB is willing to receive the shares of the common stock of the Company in connection with the Purchase Agreement and MPIB agrees to abide by the obligations imposed under this Agreement.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, the parties agree as follows:

1.RESTRICTED STOCK.

(a) Subject to the restrictions set forth in this Agreement including, without limitation, Section 1(b) below, the Company hereby issues One Million Five Hundred Thousand (1,500,000) shares of common stock of the Company (the “Restricted Stock”) to MPIB.

(b) Notwithstanding anything in this Agreement, the Purchase Agreement and the Transaction Documents to the contrary, the Restricted Stock is subject to the following restrictions (the “Vesting Restrictions”): (i) the Restricted Stock shall not vest with MPIB or any of its Affiliates (or any transferee thereof) unless and until there is a Deferred Purchase Price Trigger Event; and (ii) the Restricted Stock shall not vest with MPIB or any of its Affiliates (or any transferee thereof) and shall be returned by MPIB to the Company if the Deferred Purchase Price Trigger Event does not occur on or before the tenth (10^th) anniversary of the Closing Date.

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(c) The certificates for the Restricted Stock shall be held in the custody of MPIB. Each existing or replacement certificate for shares now owned or hereafter acquired by MPIB shall bear the following legend upon its face:

THE SALE, PLEDGE, HYPOTHECATION, ASSIGNMENT, OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN RESTRICTED STOCK AGREEMENT BY AND BETWEEN THE SHAREHOLDER AND THE COMPANY AND BY THE COMPANY’S BYLAWS, COPIES OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.

Following the Registration Date (defined below) and satisfaction of the Vesting Restrictions, MPIB shall be entitled to have the restrictive legend set forth above removed from the share certificates.

(d) Following the satisfaction of the Vesting Restrictions, MPIB shall have all rights and privileges of a shareholder as to the shares of Restricted Stock, including the right to vote and receive distribution and liquidation proceeds and profit and loss allocations with respect to the shares of Restricted Stock.

2. Registration Rights.

(a) The Company shall, not later than 90 days following the satisfaction of the Vesting Restrictions (the “Filing Date”), prepare and file with the SEC a Registration Statement pursuant to Rule 415 (or any appropriate similar rule that may be adopted by the SEC) under the Securities Act of 1933 (the “Act”) covering the Restricted Stock (the “Shelf Registration”). The Shelf Registration shall be on Form S-1 or another appropriate form permitting registration of the Restricted Stock for resale by MPIB from time to time.

(b) The Company shall use its best efforts to cause the Shelf Registration to become effective under the Act as soon as practicable following the Filing Date. Subject to the requirements of the Act including, without limitation, requirements relating to updating through post-effective amendments or otherwise, the Company shall use its best efforts to keep the Shelf Registration continuously effective until the later of (i) the third anniversary of the Filing Date or (ii) such time as all of the Restricted Stock may be traded pursuant to Rule 144 under the Act by persons who are not at such time affiliates of the Company within the meaning set forth in Rule 144 under the Act. The Company shall use its best efforts to take such actions under the laws of various states as may be required to cause the resale of the Restricted Stock pursuant to the Shelf Registration to be lawful.

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(c) Following the effectiveness of a Registration Statement filed pursuant to this section, the Company may, at any time, suspend the effectiveness of such Registration Statement for up to 60 days, as appropriate (a “Suspension Period”), by giving notice to MPIB, if the Company shall have determined that the Company may be required to disclose any material corporate development which disclosure may have a material adverse effect on the Company. MPIB agrees that, upon receipt of any notice from the Company of a Suspension Period, MPIB shall forthwith discontinue disposition of shares covered by such Registration Statement or Prospectus until MPIB (i) is advised in writing by the Company that the use of the applicable Prospectus may be resumed, (ii) has received copies of a supplemental or amended Prospectus, if applicable, and (iii) has received copies of any additional or supplemental filings which are incorporated or deemed to be incorporated by reference in such Prospectus.

3. Approvals Required for Transfer.

(a) The Company shall not register the transfer of any certificate representing the Restricted Stock unless its Board of Directors concludes, in its sole discretion, that MPIB has complied with the Vesting Restrictions.

(b) Notwithstanding any other provision herein, the Company may, in its sole discretion, when it finds that a waiver would be in the best interests of the Company, waive in whole or in part any or all remaining restrictions with respect to the Restricted Stock.

4. Representations of MPIB.

(a) MPIB hereby represents, warrants, and covenants that it: (i) understands that the issuance of the Restricted Stock has not been registered under the Act, the shares are offered pursuant to an exemption thereunder, and the offering has not been approved or disapproved by the Securities and Exchange Commission or by any other federal or state agency; (ii) is acquiring the Restricted Stock for their own account for investment, not on behalf or for the benefit of any other person, and has no intention of distributing such shares to others in violation of the Act; (iii) understands that the shares are illiquid, subject to resale restrictions imposed by the securities laws of various states, and may not be sold without compliance with such laws and he may be required to hold the shares indefinitely; and (iv) resides in the State of Connecticut. MPIB also represents and warrants that MPIB is an accredited investor as that term is defined in Regulation D of the Act.

(b) MPIB acknowledges that two of its members are directors of the Company and as such are aware of the Company’s business affairs and financial condition and have acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Restricted Stock. In addition, MPIB has been granted access to, and had the opportunity to review, financial and other information relating to the Company and the terms and conditions of an investment in the Restricted Stock, as well as such other information as MPIB deems necessary or appropriate as a prudent and knowledgeable investor in evaluating the merits and risks of an investment in the Restricted Stock. MPIB has been granted access to, and had the opportunity to review, copies of all quarterly and annual filings by the Company with the Securities and Exchange Commission during 2012, 2013, and 2014. MPIB has had the opportunity to ask questions of, and receive satisfactory answers from, the Company concerning the terms and conditions of an investment in the Restricted Stock and the information concerning the Company that MPIB has reviewed.

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5. Miscellaneous.

(a)Each of the parties hereto will bear all legal, accounting, investment banking and other expenses incurred by it or on its behalf in connection with the transactions contemplated by this Agreement.

(b)All notices and other communications given or made pursuant hereto shall be in writing and shall be (i) delivered by messenger, (ii) delivered by a recognized overnight courier service, (iii) sent by registered or certified mail (postage prepaid, return receipt requested) or (iv) sent by telecopy or other written form of electronic communication (with a copy thereof delivered in accordance with clause (i), (ii) or (iii) of this Section 5(b)) to the parties at the following respective addresses:

MPIB:

MPIB Holdings, LLC
c/o Kathleen M. DeCruze
Martin, DeCruze & Company, LLP
2777 Summer Street, Suite 401
Stamford, CT 06905
Facsimile: (203) 977-8314
E-mail: gordonabaird@gmail.com
Attention: Gordon A. Baird

With a copy to:

Martin LLP
262 Harbor Drive, 3^rd Floor
Stamford, CT 06902

Facsimile: 203-973-5250
Email: cmartin@martinllp.net
Attention: Christopher Martin
The Company:

Independence Bancshares, Inc.
500 East Washington Street
Greenville SC 29601
Facsimile: (864) 672-1777
E-mail: mlong@indepbanc.com
Attention: Martha Long, CFO

or to such other Persons or at such other addresses as shall be furnished by like notice to the other party, and such notice or other communication shall be deemed to have been given or made as of the date so delivered or received.

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(c)The headings in this Agreement are for convenience of reference only and shall not define, limit or otherwise affect the interpretation of this Agreement or any of the terms and provisions hereof.

(d)Any provision hereof which is held by any court of competent jurisdiction in any jurisdiction to be illegal, void or unenforceable shall, as to such jurisdiction, be ineffective to the extent of such illegality or unenforceability without invalidating the remaining provisions hereof, and any such illegality or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the fullest extent permitted by applicable law, the parties hereby waive any provision of law which may render any provision hereof prohibited or unenforceable in any respect.

(e)This Agreement and any further agreements entered into by the Company and MPIB at the Closing (including the other Transaction Documents), (a) contains the entire agreement and understanding of the parties with respect to the subject matter hereof and (b) supersedes all prior negotiations, discussions, correspondence, communications, understandings, drafts and agreements between the parties relating to the subject matter hereof, including without limitation any non-disclosure or confidentiality agreement between the parties, all of which are merged into this Agreement.

(f)This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and assigns; provided, however, that no party shall assign or delegate any of the rights or obligations under this Agreement (whether by merger, operation of law or otherwise) without the prior written consent of the other party hereto, and any such purported assignment or delegation without such consent shall be void and of no effect. Nothing in this Agreement, express or implied, shall confer upon any person other than a party to this Agreement or a party’s permitted successors and assigns, any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement.

(g)This Agreement may be amended, modified, supplemented or restated only by a written instrument executed by the parties hereto. The terms of this Agreement may be waived only by a written instrument executed by the party waiving compliance.

(h)The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent or other breach, whether or not similar, and no such waiver shall operate or be construed as a continuing waiver unless so provided.

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(i)No delay on the part of any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, and no single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

(j)This Agreement including its formation, performance, termination or enforcement, and the parties’ relationship in connection therewith, together with any related claims whether sounding in contract, tort or otherwise, shall be governed by and construed and enforced in accordance with the laws of the State of New York, without regard to any conflicts of law rules that might apply the Laws of any other jurisdiction.

(k)ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY SHALL BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(l)EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5(l).

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(m)The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

(n)This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same agreement, and all signatures need not appear on any one counterpart. Executed copies of the signature pages of this Agreement sent by facsimile or transmitted electronically or any similar format, shall be treated as originals, fully binding and with full legal force and effect, and the parties waive any rights they may have to object to such treatment.

(o)This Agreement may only be enforced against, and any claim, action, suit or other legal proceeding based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement, may only be brought against the entities that are expressly named as parties hereto and then only with respect to the specific obligations set forth herein with respect to such party. No past, present or future director, officer, employee, incorporator, manager, member, partner, stockholder, affiliate, agent, attorney or other representative of any party hereto or of any affiliate of any party hereto, or any of their successors or permitted assigns, shall have any liability for any obligations or liabilities of any party hereto under this Agreement or for any claim, action, suit or other legal proceeding based on, in respect of or by reason of the transactions contemplated hereby.

(p)Should a suit or arbitration be brought to enforce or interpret any provision of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees to be fixed in amount by the Court or the arbitrator(s) if applicable (including without limitation costs, expenses and fees on any appeal). The prevailing party will be entitled to recover its costs of suit or arbitration, as applicable, regardless of whether such suit or arbitration proceeds to a final judgment or award.

(q)MPIB shall be responsible for all federal, state, and local income taxes payable with respect to this award of Restricted Stock. MPIB shall have the right to make such elections under the Internal Revenue Code as are available in connection with this award of Restricted Stock.

[Signatures appear on the following page.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

MPIB:

MPIB HOLDINGS, LLC

By: 

Name:

Title:

THE COMPANY:

INDEPENDENCE BANCSHARES, INC.

By: 

Name: 

Title: 

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EXHIBIT D
INVENTIONS ASSIGNMENT AGREEMENT

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MPIB HOLDINGS, LLC
CONFIDENTIALITY & INVENTIONS AGREEMENT

This Agreement is entered into by and between MPIB Holdings, LLC (the “Company”), and Alvin Hageman (the “Director”), effective as of ____________, being the first date on which the Director provided services for the Company (the “Effective Date”).

In consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is mutually covenanted and agreed by and between the parties as follows:

1.Confidential Information.

(a)Company Information. Director shall at all times during the term of Director’s service to the Company and thereafter, hold in the strictest confidence, and not use, except for the benefit of the Company, or disclose to any person, firm or corporation, without written authorization of the Chief Executive Officer of the Company, any Confidential Information of the Company. As used herein, “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, investors, business partners, customer lists and customers (including, but not limited to, those of the Company on whom Director has called or with whom Director became acquainted during the term of Director’s service to the Company), markets, technology, developments, inventions, processes, methods of operation, formulas, designs, drawings, engineering, marketing, finances or other business information disclosed to Director by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment. “Confidential Information” does not include any of the foregoing items that have become publicly known and made generally available through no wrongful act of Director or of others who were under confidentiality obligations as to the item or items involved or improvements or new versions thereof.

(b)Former Employer Information. Director shall not, during Director’s service to the Company, improperly use or disclose any proprietary information or trade secrets of any former or current employer or other person or entity and Director shall not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity.

(c)Third Party Information. Director shall hold in the strictest confidence all confidential or proprietary information that the Company has received from any third party and with respect to which it is the Company’s obligation to maintain confidence. Director shall only use such information for certain limited purposes in the strictest confidence and shall not disclose such information to any person, firm or corporation, or use such information except as necessary in carrying out Director’s work for the Company consistent with the Company’s agreement with such third party.

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2.Inventions. Director hereby represents, warrants and covenants as follows:

(a)Inventions Retained and Licensed. Director hereby represents that, other than disclosed on Schedule A, there are no inventions, original works of authorship, developments, improvements, and trade secrets which were made by Director prior to Director’s service to the Company (collectively referred to as “Prior Inventions”), which belong to Director (and not to any prior employer), which relate to the line of business of the Company, namely the business of developing mobile payments and digital banking technologies and processes including technology architectures, regulatory and compliance infrastructures, market research, pricing strategies, customer lists, vendor due diligence and relationships, and documentation, processes and procedures and intellectual property to support patent applications for unique processes and other applicable intellectual property and other consulting and financial services-related businesses (the “Line of Business”), and which are not assigned to the Company hereunder. If in the course of Director’s service to the Company, Director incorporates into a product, process or machine for the benefit of the Company a Prior Invention owned by Director or in which the Director has an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine.

(b)Assignment of Inventions. Director shall make, or will promptly make, full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all of Director’s right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which Director may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time Director is providing services to the Company which relate to the Line of Business (collectively referred to as “Inventions”). Director hereby acknowledges that all original works of authorship that are made by Director (solely or jointly with others) within the scope of and during the period of Director’s service to the Company which relate to the Project are (i) “works made for hire,” as that term is defined in the United States Copyright Act (to the extent protectable by copyright); and (ii) together with all related intellectual property rights of any sort anywhere in the world, the sole property of the Company. Director hereby understands and agrees that the decision whether or not to commercialize or market any Inventions developed by Director solely or jointly with others is within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to Director as a result of the Company’s efforts to commercialize or market any such Inventions.

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(c)Patent and Copyright Registrations. Director shall assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. Director agrees that it is Director’s obligation to execute or cause to be executed, when it is in Director’s power to do so, any such instrument or papers after the termination of this Agreement. If the Company is unable because of the Director’s mental or physical incapacity or for any other reason to secure Director’s signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as set forth above, then Director hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Director’s agent and attorney in fact, to act for and in Director’s behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by Director.

3.Returning Company Documents. Upon any termination of service to the Company, Director covenants that Director shall deliver to the Company (and will not keep in Director’s possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by Director pursuant to Director’s service to the Company or otherwise belonging to the Company, its successors or assigns.

4.Miscellaneous.

(a)Right to Advice of Counsel. Director acknowledges that Director has had the right to consult with counsel and is fully aware of Director’s rights and obligations under this Agreement.

(b)Successors. This Agreement may not be assigned by Director without the consent of the Company. This Agreement shall inure to the benefit of the Company’s successors and assigns.

(c)Severability. The invalidity or unenforceability of any provision of this Agreement, or any terms hereof, shall not affect the validity or enforceability of any other provision or term of this Agreement.

(d)Governing Law. This Agreement including its formation, performance, termination or enforcement, and the parties’ relationship in connection therewith, together with any related claims, shall be governed by and construed and enforced in accordance with the Laws of the State of New York, without regard to any conflicts of law rules that might apply the Laws of any other jurisdiction. ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT SHALL BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING.

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(e)Equitable Remedies. Director acknowledges that the restrictions contained in this Agreement are necessary for the protection of the business and goodwill of the Company and are considered by Director to be reasonable for such purpose. Director agrees that any breach of Sections 1-4 of this Agreement is likely to cause the Company substantial and irrevocable damage which is difficult to measure. Therefore, in the event of any such breach or threatened breach, Director agrees that the Company, in addition to such other remedies which may be available, shall have the right to specific performance of the provisions of this Agreement and shall have the right to obtain an injunction from a court restraining such a breach or threatened breach, and Director hereby waives the adequacy of a remedy at law as a defense to such relief.

(f)Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which together shall constitute one and the same instrument. Electronic signatures shall have the same effect as an original.

[SIGNATURES FOLLOW]

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IN WITNESS WHEREOF, the Director has executed this agreement as of the day and year written below, with effectiveness as of the Effective Date.

Director

Name: Alvin Hageman

Date:

Acknowledged and Agreed:

MPIB Holdings, LLC

Name: Gordon A. Baird

Title:

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Schedule A to Proprietary Information and Inventions Agreement

Prior Inventions

Except as set forth below, there are no ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulae, discoveries, patents, copyrights, or any claims, rights, or improvements to the foregoing that are excluded from the operation of this Agreement: None

1