On December 10, 2020, First Keystone Corporation entered into Subordinated Note Purchase Agreements with certain institutional accredited investors and qualified institutional buyers pursuant to which the Company sold and issued $25.0 million in aggregate principal amount of its 4.375% fixed to floating rate subordinated notes due 2030. The Notes were issued by the Company to the Purchasers at a price equal to 100% of their face amount. The Company intends to use the net proceeds it received from the sale of the Notes to support organic growth and for general corporate purposes. The Purchase Agreements contain certain customary representations, warranties and covenants made by the Company, on the one hand, and the Purchasers, severally and not jointly, on the other hand. The Notes have a stated maturity of December 31, 2030, are redeemable and payable by the Company at its option, in whole or in part, on or after December 31, 2025, and at any time upon the occurrences of certain events. Prior to December 10, 2025, the Company may redeem the Notes, in whole or in part, only under certain limited circumstances set forth in the Note. On or after December 10, 2025, the Company may redeem the Notes, in whole or in part, at its option, on any interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the Notes being redeemed, together with any accrued and unpaid interest on the Notes being redeemed to but excluding the date of redemption. The Notes are not subject to redemption at the option of the holder. The Notes will bear interest at a fixed rate of 4.375% per year, from and including December 10, 2020 to, but excluding, December 31, 2025 or earlier redemption date. From and including December 31, 2025 to, but excluding the maturity date or earlier redemption date, the interest rate will reset quarterly at a variable rate equal to the then current 90-day average Secured Overnight Financing Rate (“SOFR”) plus 411 basis points. As provided in the Notes, the interest rate on the Notes during the applicable floating rate period may be determined based on a rate other than 90-day average SOFR. Principal and interest on the Notes are subject to acceleration only in limited circumstances. The Notes are unsecured, subordinated obligations of the Company, are not obligations of, and are not guaranteed by, any subsidiary of the Company, and rank junior in right of payment to the Company’s current and future senior indebtedness. The Notes are intended to qualify as Tier 2 capital of the Company for regulatory capital purposes.