Document:

Exhibit 4.1

  

  

     

    

    

      FS BANCORP, INC.

    As Issuer,

    and

    U.S. BANK NATIONAL ASSOCIATION

    As Trustee

    INDENTURE

    Dated as of February 10, 2021

    3.75% Fixed-to-Floating Rate Subordinated Notes due 2031

     

    

     

    

     

    

     

    

     

    

    
      
        

    

    

    

    

    

    

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

    

    TABLE OF CONTENTS

     

      

     
      	 	Page
	 	 
	
              ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE

            	
              1 

              

            
	 	 	 	 
	
               

            	
              Section 1.01 

              

            	Definitions	
              1

              

            
	
               

            	
              Section 1.02 

              

            	Compliance Certificates and Opinions	
              13 

              

            
	
               

            	
              Section 1.03 

              

            	Form of Documents Delivered to Trustee	
               14

            
	
               

            	
              Section 1.04 

              

            	Acts of Holders	
               14

            
	
               

            	
              Section 1.05 

              

            	Required Notices or Demands	
               16

            
	
               

            	
              Section 1.06 

              

            	
              Language of Notices 

              

            	
              17 

              

            
	
               

            	
              Section 1.07 

              

            	
              Incorporation by Reference of Trust Indenture Act; Conflicts 

              

            	
              17 

              

            
	
               

            	
              Section 1.08 

              

            	Effect of Headings and Table of Contents	
              18

            
	
               

            	
              Section 1.09 

              

            	Successors and Assigns	
              18

            
	
               

            	
              Section 1.10 

              

            	Severability	
              18

            
	
               

            	
              Section 1.11 

              

            	Benefits of Indenture	
              18

            
	
               

            	
              Section 1.12 

              

            	Governing Law	
              18 

              

            
	
               

            	
              Section 1.13 

              

            	Legal Holidays	
              18 

              

            
	
               

            	
              Section 1.14 

              

            	Counterparts; Electronic Transmission	
              19 

              

            
	
               

            	
              Section 1.15 

              

            	Immunity of Certain Persons	
              19 

              

            
	
               

            	
              Section 1.16 

              

            	Waiver of Jury Trial	
              19 

              

            
	
               

            	
              Section 1.17 

              

            	Force Majeure	
              19 

              

            
	
               

            	
              Section 1.18

            	USA Patriot Act	
              20 

              

            
	
               

            	
              Section 1.19 

              

            	No Sinking Fund	
              20 

              

            
	
               

            	
              Section 1.20 

              

            	Rules of Construction	
              20 

              

            
	
               

            	
               

            	
               

            	
               

            
	ARTICLE II THE SUBORDINATED NOTES	
              20 

              

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
              Section 2.01 

              

            	
              Forms Generally 

              

            	
              20 

              

            
	 	Section 2.02	Definitive Subordinated Notes	21 

            
	 	Section 2.03 

            	Global Subordinated Notes	21 

            
	 	Section 2.04 

            	Restricted Subordinated Notes	21 

            
	 	Section 2.05 

            	Execution and Authentication	22 

            
	 	Section 2.06 

            	Registrar and Paying Agent	23 

            
	 	Section 2.07 

            	Registration of Transfer and Exchange	23 

            
	 	Section 2.08 

            	Exchange Offer	27 

            
	 	Section 2.09 

            	Mutilated, Destroyed, Lost and Stolen Subordinated Notes	28 

            
	 	Section 2.10 

            	Payment of Interest; Rights to Interest Preserved	28 

            
	 	Section 2.11 

            	Persons Deemed Owners	30 

            
	 	Section 2.12 

            	Cancellation	30 

            
	 	Section 2.13 

            	Computation of Interest	30 

            
	 	Section 2.14 

            	CUSIP Numbers	33 

            
	 	 	 	 
	ARTICLE III SATISFACTION AND DISCHARGE OF INDENTURE	33 

            
	
               

            	
               

            	
               

            	
               

            
	 	Section 3.01	Satisfaction and Discharge	33 

            
	 	Section 3.02 

            	Defeasance and Covenant Defeasance	34 

            
	 	Section 3.03 

            	Application of Trust Money	37 

            

      

      

      
        
          

      

      

      

      	 	Section 3.04 

            	Reinstatement	37 

            
	 	Section 3.05 

            	Effect on Subordination Provisions	37 

            
	
               

            	
               

            	
               

            	
               

            
	
              ARTICLE IV REMEDIES

            	
              38 

              

            
	 	 	 	 
	 	Section 4.01	Events of Default; Acceleration	38 

            
	 	Section 4.02 

            	Failure to Make Payments	39 

            
	 	Section 4.03 

            	Trustee May File Proofs of Claim	40 

            
	 	Section 4.04 

            	Trustee May Enforce Claims Without Possession of Subordinated Notes	41 

            
	 	Section 4.05 

            	Application of Money Collected	41 

            
	 	Section 4.06 

            	Limitation on Suits	42 

            
	 	Section 4.07 

            	Unconditional Right of Holders to Payments	42 

            
	 	Section 4.08 

            	Restoration of Rights and Remedies	42 

            
	 	Section 4.09 

            	Rights and Remedies Cumulative	43 

            
	 	Section 4.10 

            	Delay or Omission Not Waiver	43 

            
	 	Section 4.11 

            	Control by Holders	43 

            
	 	Section 4.12 

            	Waiver of Past Defaults	43 

            
	 	Section 4.13 

            	Undertaking for Costs	44 

            
	 	 	 	 
	ARTICLE V THE TRUSTEE	44 

            
	 	 	 	 
	 	Section 5.01	Duties of Trustee	44 

            
	 	Section 5.02 

            	Certain Rights of Trustee	45 

            
	 	Section 5.03 

            	Notice of Defaults	47 

            
	 	Section 5.04 

            	Not Responsible for Recitals or Issuance of Subordinated Notes	47 

            
	 	Section 5.05 

            	May Hold Subordinated Notes	47 

            
	 	Section 5.06 

            	Money Held in Trust	48 

            
	 	Section 5.07 

            	Compensation and Reimbursement	48 

            
	 	Section 5.08 

            	Corporate Trustee Required; Eligibility	49 

            
	 	Section 5.09 

            	Resignation and Removal; Appointment of Successor	49 

            
	 	Section 5.10 

            	Acceptance of Appointment by Successor	51 

            
	 	Section 5.11 

            	Merger, Conversion, Consolidation or Succession to Business	52 

            
	 	Section 5.12 

            	Appointment of Authenticating Agent	52 

            
	 	Section 5.13 

            	Preferred Collection of Claims against Company	54 

            
	 	 	 	 
	ARTICLE VI HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY	54 

            
	
               

            	
               

            	
               

            	
               

            
	

            	Section 6.01	Holder Lists	54 

            
	 	Section 6.02 

            	Preservation of Information; Communications to Holders	54 

            
	 	Section 6.03	Reports by Trustee	54 

            
	 	Section 6.04 

            	Reports by Company	55 

            
	 	 	 	 
	ARTICLE VII SUCCESSORS   

            	56 

            
	 	 	 	 
	 	Section 7.01	Merger, Consolidation or Sale of All or Substantially All Assets	56 

            
	 	Section 7.02 

            	Successor Person Substituted for Company	56 

            
	 	 	 	 
	ARTICLE VIII SUPPLEMENTAL INDENTURES	57 

            
	 	 	 	 
	 	Section 8.01	Supplemental Indentures without Consent of Holders	57 

            
	 	Section 8.02 

            	Supplemental Indentures with Consent of Holders	58 

            

      

      

      
        
          

      

      

      

      	 	Section 8.03 

            	Execution of Supplemental Indentures	59 

            
	 	Section 8.04 

            	Effect of Supplemental Indentures	59 

            
	 	Section 8.05 

            	Reference in Subordinated Notes to Supplemental Indentures	59 

            
	 	Section 8.06 

            	Effect on Senior Indebtedness	59 

            
	 	Section 8.07 

            	Conformity with Trust Indenture Act	59 

            
	 	 	 	 
	ARTICLE IX COVENANTS	60 

            
	 	 	 	 
	 	Section 9.01	Payment of Principal and Interest	60 

            
	 	Section 9.02 

            	Maintenance of Office	60 

            
	 	Section 9.03 

            	Money for Subordinated Notes Payments to Be Held in Trust	61 

            
	 	Section 9.04 

            	Corporate Existence	62 

            
	 	Section 9.05 

            	Maintenance of Properties	62 

            
	 	Section 9.06	Well-Capitalized	62 

            
	 	Section 9.07 

            	Waiver of Certain Covenants	62 

            
	 	Section 9.08 

            	Company Statement as to Compliance	62 

            
	 	Section 9.09 

            	Tier 2 Capital	63 

            
	 	 	 	 
	ARTICLE X REDEMPTION OF SECURITIES	63 

            
	 	 	 	 
	 	Section 10.01 

            	Applicability of Article	63 

            
	 	Section 10.02 

            	Election to Redeem; Notice to Trustee	63 

            
	 	Section 10.03 

            	Selection by Trustee of Subordinated Notes to be Redeemed	64 

            
	 	Section 10.04 

            	Notice of Redemption	64 

            
	 	Section 10.05 

            	Deposit of Redemption Price	65 

            
	 	Section 10.06 

            	Subordinated Notes Payable on Redemption Date	65 

            
	 	Section 10.07 

            	Subordinated Notes Redeemed in Part	66 

            
	 	 	 	 
	ARTICLE XI SUBORDINATION OF SECURITIES 	66 

            
	 	 	 	 
	 	Section 11.01	Agreement to Subordinate	66 

            
	 	Section 11.02 

            	Distribution of Assets	67 

            
	 	Section 11.03 

            	Default With Respect to Senior Indebtedness 

            	69 

            
	 	Section 11.04 

            	No Impairment	69 

            
	 	Section 11.05 

            	Effectuation of Subordination Provisions	70 

            
	 	Section 11.06 

            	Notice to Trustee	70 

            
	 	Section 11.07 

            	Trustee Knowledge of Senior Indebtedness	71 

            
	 	Section 11.08 

            	Senior Indebtedness to Trustee	71 

            
	 	Section 11.09 

            	Subordination Not Applicable to Trustee Compensation	71 

            
	
               

            	
               

            	
               

            	
               

            

    

    

    

    

    

      

    

    
      
        

    

    

    

    CROSS-REFERENCE TABLE

    

    

    	
            
              Trust Indenture Act Section

            

          	
            
              Indenture Section

            

          
	
            
              §310 (a)(1)

            

          	 	
            
              5.08

            

          
	
            
              (a)(2)

            

          	 	
            
              5.08

            

          
	
            
              (a)(3)

            

          	 	
            
              Not applicable

            

          
	
            
              (a)(4)

            

          	 	
            
              Not applicable

            

          
	
            
              (a)(5)

            

          	 	
            
              5.08

            

          
	
            
              (b)

            

          	 	
            
              5.08, 5.09

            

          
	
            
              §311 (a)

            

          	 	
            
              5.05

            

          
	
            
              (b)

            

          	 	
            
              5.05

            

          
	
            
              §312 (a)

            

          	 	
            
              6.01

            

          
	
            
              (b)

            

          	 	
            
              6.02

            

          
	
            
              (c)

            

          	 	
            
              6.02

            

          
	
            
              §313 (a)

            

          	 	
            
              6.03

            

          
	
            
              (b)(1)

            

          	 	
            6.03

          
	
            
              (b)(2)

            

          	 	
            6.03

          
	
            
              (c)

            

          	 	
            6.03

          
	
            
              (d)

            

          	 	
            6.03

          
	
            
              §314 (a)

            

          	 	
            
              6.04

            

          
	
            
              (a)(4)

            

          	 	
            
              9.08

            

          
	
            
              (b)

            

          	 	
            
              Not applicable

            

          
	
            
              (c)(1)

            

          	 	
            
              1.02

            

          
	
            
              (c)(2)

            

          	 	
            
              1.02

            

          
	
            
              (c)(3)

            

          	 	
            
              Not applicable

            

          
	
            
              (d)

            

          	 	
            
              Not applicable

            

          
	
            
              (e)

            

          	 	
            
              1.02

            

          
	
            
              (f)

            

          	 	
            
              Not applicable

            

          
	
            
              §315 (a)

            

          	 	
            
              5.01, 5.02

            

          
	
            
              (b)

            

          	 	
            
              5.03

            

          
	
            
              (c)

            

          	 	
            
              5.01

            

          
	
            
              (d)

            

          	 	
            
              5.01, 5.02

            

          
	
            
              (e)

            

          	 	
            
              4.13

            

          
	
            
              §316 (a)

            

          	 	
            
              4.11, 4.12

            

          
	
            
              (b)

            

          	 	
            
              4.07

            

          
	
            
              (c)

            

          	 	
            
              1.04

            

          
	
            
              §317 (a)(1)

            

          	 	
            
              4.02

            

          
	
            
              (a)(2)

            

          	 	
            
              4.03

            

          
	
            
              (b)

            

          	 	
            
              9.03

            

          
	
            
              §318 (a)

            

          	 	
            
              1.07

            

          
	
            
              (b)

            

          	 	
            
              1.07

            

          
	
            
              (c)

            

          	 	
            
              1.07

            

          

    

    

    Note: This Cross-Reference table will not, for any purpose, be deemed part of this Indenture.

    

    

    

    

    

    

    

    

    

    

    
      
        

    

    This INDENTURE dated as of February 10, 2021 is between FS Bancorp, Inc., a Washington
      corporation (the “Company”), and U.S. Bank National Association, a national banking association duly organized and existing under the laws of the United States of America, as trustee (the “Trustee”).

    RECITALS

    WHEREAS, the Company has duly authorized the execution and delivery of this Indenture to
      provide for an issue of $50.0 million in aggregate principal amount of 3.75% Fixed-to-Floating Rate Subordinated Notes due 2031, subject to the terms and conditions set forth in this Indenture.

    NOW, THEREFORE, in order to declare the terms and conditions upon which the Subordinated Notes
      are authenticated, issued and delivered, and in consideration of the premises, and of the purchase and acceptance of the Subordinated Notes by the Holders thereof, the Company and the Trustee agree as follows for the benefit of each other and for the
      benefit of the respective Holders from time to time of the Subordinated Notes.

    ARTICLE I

      DEFINITIONS AND INCORPORATION BY REFERENCE

    
      	
              Section 1.01

            	
              Definitions.

            

    

    Except as otherwise expressly provided in this Indenture or unless the context otherwise
      requires, the terms defined in this Section for all purposes of this Indenture, any Company Order, any Board Resolution, and any indenture supplemental hereto will have the respective meanings specified in this Section.

    “Act,” when used with respect to any Holders, is defined in Section 1.04.

    “Additional Interest” has the meaning set forth in the Registration Rights Agreement.

    “Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this
      definition, “control,” when used with respect to any specified 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 meanings correlative to the foregoing.

    “Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Subordinated Note, the rules and procedures of the Depositary that apply to such transfer or exchange.

    “Authenticating Agent” means any Person authorized by the Trustee in accordance with Section 5.12 to act on behalf of the Trustee to authenticate Subordinated Notes.

     “Authorized Officer” means each of the Chairman of the Board, the Chief Executive Officer, the President, any Senior Executive Vice President and the Chief Financial Officer of the Company.

    1

    

    
      
        

    

    “Bankruptcy Laws” mean Title 11, United States Code (11 U.S.C. §§101 et seq.) or any similar federal or state law for the relief of debtors.

    “Benchmark” means, initially, Three-Month Term SOFR; provided that if the Calculation Agent determines on or prior to the Reference Time that a Benchmark Transition Event and its related Benchmark Replacement Date have
      occurred with respect to Three-Month Term SOFR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement.

    “Benchmark Replacement” means the Interpolated Benchmark with respect to the then-current Benchmark, plus the Benchmark Replacement Adjustment for such Benchmark; provided that if (a) the Calculation Agent cannot determine the
      Interpolated Benchmark as of the Benchmark Replacement Date or (b) the then-current Benchmark is Three-Month Term SOFR and a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Three-Month Term SOFR (in
      which event no Interpolated Benchmark with respect to Three-Month Term SOFR shall be determined), then “Benchmark Replacement” means the first alternative set forth in the order below that can be determined by the Calculation Agent as of the
      Benchmark Replacement Date:

    (1) The sum of (i) Compounded SOFR and (ii) the Benchmark Replacement Adjustment;

    (2) The sum of: (i) the alternate rate that has been selected or recommended by the Relevant Governmental Body as the
        replacement for the then-current Benchmark for the applicable Corresponding Tenor and (ii) the Benchmark Replacement Adjustment;

    (3) the sum of: (i) the ISDA Fallback Rate, and (ii) the Benchmark Replacement Adjustment;

    (4) the sum of: (a) the alternate rate that has been selected by the Calculation Agent as the replacement for the then-current Benchmark for the
        applicable Corresponding Tenor, giving due consideration to any industry-accepted rate as a replacement for the then-current Benchmark for U.S. dollar-denominated floating rate securities at such time, and (b) the Benchmark Replacement Adjustment.

    If the Benchmark Replacement, as determined pursuant to clause (1), (2), (3) or (4) above
      would be less than zero, the Benchmark Replacement will be deemed to be zero.

    “Benchmark Replacement Adjustment” means the first alternative set forth in the order below that can be determined by the Calculation Agent as of the Benchmark Replacement Date:

    (1) the spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero), that
        has been selected or recommended by the Relevant Governmental Body for the applicable Unadjusted Benchmark Replacement;

    (2) if the applicable Unadjusted Benchmark Replacement is equivalent to the ISDA Fallback Rate, then the ISDA Fallback
        Adjustment; and

    2

      

    
      
        

    

    (3) the spread adjustment (which may be a positive or negative value or zero) that has been selected by the Calculation Agent giving due
        consideration to any industry-accepted spread adjustment or method for calculating or determining such spread adjustment, for the replacement of the then-current Benchmark with the applicable Unadjusted Benchmark Replacement for U.S.
        dollar-denominated floating rate securities at such time.

    “Benchmark Replacement Adjustment Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “interest period,” timing and
      frequency of determining rates with respect to each interest period and making payments of interest, rounding of amounts or tenors, and other administrative matters) that the Calculation Agent decides may be appropriate to reflect the adoption of
      such Benchmark Replacement in a manner substantially consistent with market practice (or, if the Calculation Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Calculation Agent determines
      that no market practice for use of the Benchmark Replacement exists, in such other manner as the Calculation Agent determines is reasonably necessary).

    “Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark:

    (1) in the case of clause (1) of the definition of “Benchmark Transition Event,” the relevant Reference Time in respect
        of any determination;

    (2) in the case of clause (2) or (3) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or
        publication of information referenced therein and (b) the date on which the administrator of the Benchmark permanently or indefinitely ceases to provide the Benchmark; or

    (3) in the case of clause (4) of the definition of “Benchmark Transition Event,” the date of the public statement or
        publication of information referenced therein.

    
      For the avoidance of doubt, for purposes of the definitions of Benchmark Replacement Date and Benchmark Transition
        Event, references to the Benchmark also include any reference rate underlying the Benchmark (for example, if the Benchmark becomes Compounded SOFR, references to the Benchmark would include SOFR).

    

    

    

    
      For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as,
        but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination.

    

    
      

      

    

    “Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:

    (1) if the Benchmark is Three-Month Term SOFR, (a) the Relevant Governmental Body has not selected or recommended a forward-looking term rate for a
        tenor of three months based on SOFR, (b) the development of a forward-looking term rate for a tenor of three months based on SOFR that has been recommended or selected by the Relevant 

     3

      

    
      
        

    

    Governmental Body is not complete or (c) the Company determines that the use of a forward-looking rate for a tenor of
        three months based on SOFR is not administratively feasible;

    (2) a public statement or publication of information by or on behalf of the administrator of the Benchmark announcing that such administrator has
        ceased or will cease to provide the Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark;

    (3) a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark, the central bank for the
        currency of the Benchmark, an insolvency official with jurisdiction over the administrator for the Benchmark, a resolution authority with jurisdiction over the administrator for the Benchmark or a court or an entity with similar insolvency or
        resolution authority over the administrator for the Benchmark, which states that the administrator of the Benchmark has ceased or will cease to provide the Benchmark permanently or indefinitely, provided that, at the time of such statement or
        publication, there is no successor administrator that will continue to provide the Benchmark; or

    (4) a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark
        announcing that the Benchmark is no longer representative.

    “Board of Directors” means, as to any Person, the board of directors, or similar governing body, of such Person or any duly authorized committee thereof.

    “Board Resolution” means one or more resolutions, certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such
      certification, delivered to the Trustee.

    “Business Day” means any day other than a Saturday, Sunday or other day on which banking institutions in the State of Washington are authorized or obligated by law, regulation or executive order to close.

    “Calculation Agent” means such bank or other entity (which may be the Company or an affiliate of the Company) as may be appointed by the Company to act as Calculation Agent for the Subordinated Notes during the Floating Rate
      Period. Unless another entity has been appointed by the Company to act as Calculation Agent, the initial Calculation Agent shall be the Company.

    “Commission” means the U.S. Securities and Exchange Commission, as from time to time constituted, or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned
      to it under the Trust Indenture Act, then the body performing such duties at such time.

    “Company” is defined in the preamble to this Indenture.

    “Company Request” and “Company Order” mean, respectively, a written request or order, as the case may be, signed on
      behalf of the Company by an Authorized Officer and delivered to the Trustee.

    4

    

    
      
        

    

    “Compounded SOFR” means the compounded average of SOFRs for the applicable Corresponding Tenor, with the rate, or methodology for this rate, and conventions for this rate being established by the Calculation Agent in
      accordance with:

    (1) the rate, or methodology for this rate, and conventions for this rate selected or recommended by the Relevant Governmental Body for determining
        Compounded SOFR; provided that:

    (2) if, and to the extent that, the Calculation Agent determines that Compounded SOFR cannot be determined in accordance with clause (1) above, then
        the rate, or methodology for this rate, and conventions for this rate that have been selected by the Calculation Agent giving due consideration to any industry-accepted market practice for U.S. dollar-denominated floating rate securities at such
        time.

    For the avoidance of doubt, the calculation of Compounded SOFR shall exclude the Benchmark
      Replacement Adjustment (if applicable) and the spread of 337 basis points per annum.

    “Corporate Trust Office” means the address of the Trustee specified in Section 1.05 or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the designated address of
      any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

    “Corresponding Tenor” with respect to a Benchmark Replacement means a tenor (including overnight) having approximately the same length (disregarding Business Day adjustment) as the applicable tenor for the then-current
      Benchmark.

    “Covenant Defeasance” is defined in Section 3.02(3).

    “Defaulted Interest” is defined in Section 2.10.

    “Definitive Subordinated Notes” means, individually and collectively, each Restricted Definitive Subordinated Note and each Unrestricted Definitive Subordinated Note, substantially in the form of Exhibit A-l hereto, issued under this Indenture.

    “Depositary” means, with respect to any Subordinated Note issuable or issued in whole or in part in global form, the Person designated as depositary by the Company in accordance with this Indenture, and any and all successors
      thereto appointed as Depositary under this Indenture.

    “Dollars” or “$” means a dollar or other equivalent unit of legal tender for payment of public or private debts in
      the United States.

    “Event of Default” is defined in Section 4.01.

    “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute thereto.

    “Exchange Notes” means the Subordinated Notes issued in the Exchange Offer in accordance with Section 2.08.

    5

    

    
      
        

    

    “Exchange Offer” has the meaning set forth in the Registration Rights Agreement.

    “Federal Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

    “Federal Reserve Board” means the Board of Governors of the Federal Reserve System or any successor regulatory authority with jurisdiction over bank holding companies.

    “Fixed Interest Payment Date” means February 15 and August 15of each year, beginning August 15, 2021.

    “Floating Interest Payment Date” means February 15, May 15, August 15 and November 15 of each year, beginning February 15,
      2026.

    "Floating Rate Period" is defined in Section 2.13.

    “GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, the
      statements and pronouncements of the Financial Accounting Standards Board and such other statements by such other entities (including the Commission) as have been accepted by a significant segment of the accounting profession, which are applicable at
      the date of this Indenture.

    “Global Subordinated Notes” means, individually and collectively, each Restricted Global Subordinated Note and each Unrestricted Global Subordinated Note, substantially in the form of Exhibit A-2 hereto, issued under this Indenture.

    “Government Obligations” means securities which are direct obligations of the United States of America in each case where the payment or payments thereunder are supported by the full faith and credit of the United States of
      America.

    “Holder” means the Person in whose name the Subordinated Note is registered in the Subordinated Note Register.

    “Indenture” means this Indenture, as amended and supplemented from time to time in accordance with its terms.

    “Initial Notes” means the $50.0 million in aggregate principal amount of the Company’s 3.75% Fixed-to-Floating Rate Subordinated Notes due 2031 issued under this Indenture on the date hereof.

    “Interest Payment Date” means either a Fixed Interest Payment Date or a Floating Interest Payment Date, as applicable.

    “Interest Period” means each three-month period beginning on February 15, 2026.

    “Interpolated Benchmark” with respect to the Benchmark means the rate determined for the Corresponding Tenor by interpolating on a linear basis between: (1) the Benchmark for the 

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     longest period (for which the Benchmark is available) that is shorter than the Corresponding Tenor, and (2) the
      Benchmark for the shortest period (for which the Benchmark is available) that is longer than the Corresponding Tenor.

    “Investment Company Event” means the receipt by the Company of a legal opinion from counsel experienced in such matters to the effect that there is more than an insubstantial risk that the Company is or, within 90 days of the
      date of such legal opinion will be, considered an “investment company” that is required to be registered under the Investment Company Act of 1940, as amended.

    "ISDA"
      means the International Swaps and Derivatives Association, Inc. or any successor thereto.

    “ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional
      booklet for interest rate derivatives published from time to time.

    “ISDA Fallback Adjustment” means the spread adjustment (which may be a positive or negative value or zero) that would apply for derivatives transactions referencing the ISDA Definitions to be determined upon the occurrence of
      an index cessation event with respect to the Benchmark for the applicable tenor.

    “ISDA Fallback Rate” means the rate that would apply for derivatives transactions referencing the ISDA Definitions to be effective upon the occurrence of an index cessation date with respect to the Benchmark for the applicable
      tenor excluding the applicable ISDA Fallback Adjustment.

    “Legal Defeasance” is defined in Section 3.02(2).

    “Letter of Transmittal” means the letter of transmittal to be prepared by the Company and sent to all Holders for use by such Holders in connection with an Exchange Offer.

    “Maturity” means the date on which the principal of a Subordinated Note or an installment of principal becomes due and payable as provided in or under this Indenture or such Subordinated Note, whether at the Stated Maturity or
      by an acceleration of the maturity of such Subordinated Note in accordance with the terms of such Subordinated Note, upon redemption at the option of the Company, upon repurchase or repayment or otherwise, and includes a Redemption Date for such
      Subordinated Note and a date fixed for the repurchase or repayment of such Subordinated Note at the option of the Holder.

    “Officer” means, with respect to any Person, the chairman of the board, vice chairman of the board, the chief executive officer, the president, the chief operating officer, the chief financial officer, the treasurer, any
      assistant treasurer, the controller, the secretary or any vice president of such Person.

    “Officers’ Certificate” means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial 

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    officer or the principal accounting officer of the Company, that complies with the requirements of Section 1.02
      and is delivered to the Trustee.

    “Opinion of Counsel” means a written opinion from legal counsel reasonably acceptable to the Trustee, which opinion meets the requirements of Section 1.02.

    “Outstanding,” when used with respect to any Subordinated Notes, means, as of the date of determination, all such Subordinated Notes theretofore authenticated and delivered under this Indenture, except (1) any such
      Subordinated Note theretofore cancelled by the Trustee or the Registrar or delivered to the Trustee or the Registrar for cancellation; (2) any such Subordinated Note for whose payment at the Maturity thereof money in the necessary amount has been
      theretofore deposited in accordance with this Indenture (other than in accordance with Section 3.02) with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company will act
      as its own Paying Agent) for the Holders of such Subordinated Notes, provided that, if such Subordinated Notes are to be redeemed, notice of such redemption has been duly given in accordance with this Indenture or provision therefor satisfactory to
      the Trustee has been made; (3) any such Subordinated Note with respect to which the Company has effected Legal Defeasance or Covenant Defeasance in accordance with Section 3.02, except to the extent provided in Section 3.02; and (4) any such
      Subordinated Note that has been paid in accordance with Section 2.09 or in exchange for or in lieu of which other Subordinated Notes have been authenticated and delivered under this Indenture, unless there will have been presented to the Trustee
      proof satisfactory to the Trustee that such Subordinated Note is held by a bona fide purchaser in whose hands such Subordinated Note is a valid obligation of the Company; provided, however, in all cases, that in determining whether the Holders of the requisite principal amount of
      Outstanding Subordinated Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder. Subordinated Notes owned by the Company or any Affiliate of the Company will be disregarded and deemed not to be
      Outstanding. Subordinated Notes so owned that will have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Subordinated Notes and
      that the pledgee is not the Company or an Affiliate of the Company.

    “Participating Broker-Dealer” has the meaning set forth in the Registration Rights Agreement.

    “Paying Agent” is defined in Section 2.06.

    “Person” mean any individual, corporation, partnership, association, limited liability company, other company, statutory trust, business trust, joint venture, joint-stock company, trust, unincorporated organization or
      government or any agency or political subdivision thereof.

    “Place of Payment,” with respect to any Subordinated Note, means the place or places where the principal of, or interest on, such Subordinated Note are payable as provided in or under this Indenture or such Subordinated Note.

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    “Private Placement Legend” means the legend set forth in Section 2.04 of this Indenture to be placed on all Subordinated Notes issued under this Indenture, except where otherwise permitted by the provisions of this Indenture.

    “Purchase Agreement” means the Subordinated Note Purchase Agreement concerning the Subordinated Notes, dated February 10, 2021, by and among the Company and the purchasers identified therein.

    “Redemption Date” with respect to any Subordinated Note or portion thereof to be redeemed, means the date fixed for such redemption by or under this Indenture or such Subordinated Note.

    “Redemption Price” with respect to any Subordinated Note or portion thereof to be redeemed, means the price at which it is to be redeemed as determined by or under this Indenture or such Subordinated Note.

    “Reference Time” with respect to any determination of the Benchmark means (1) if the Benchmark is Three-Month Term SOFR, the time determined by the Calculation Agent after giving effect to the Three-Month Term SOFR
      Conventions, and (2) if the Benchmark is not Three-Month Term SOFR, the time determined by the Calculation Agent after giving effect to the Benchmark Replacement Conforming Changes.

    “Registrar” is defined in Section 2.06.

    “Registration Rights Agreement” means the Registration Rights Agreement in the form attached as Exhibit B to the Purchase Agreement
      with respect to the Subordinated Notes, dated as of the date of this Indenture, by and among the Company and the purchasers of the Initial Notes identified therein.

    “Regular Record Date,” with respect to any Interest Payment Date, means the close of business on the fifteenth calendar day prior to such Interest Payment Date, without regard to whether the Regular Record Date is a Business
      Day.

    “Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York
      or any successor thereto.

    “Responsible Officer” means, when used with respect to the Trustee, any officer assigned to the Corporate Trust Office who has direct responsibility for the administration of this Indenture and, with respect to a particular
      corporate trust matter, any other officer of the Trustee to whom such matter is referred because of such Person’s knowledge of and familiarity with the particular subject.

    “Restricted Definitive Subordinated Note” means a Definitive Subordinated Note bearing, or that is required to bear, the Private Placement Legend.

    “Restricted Global Subordinated Note” means a Global Subordinated Note bearing, or that is required to bear, the Private Placement Legend,

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    “Restricted Subordinated Note” means a Restricted Global Subordinated Note or a Restricted Definitive Subordinated Note.

    “Rule 144” means Rule 144 promulgated under the Securities Act.

    “Rule 144A” means Rule 144A promulgated under the Securities Act.

    “Securities Act” means the Securities Act of 1933, as amended, or any successor statute thereto.

    “Senior Indebtedness” means the principal of, and premium, if any, and interest, including interest accruing after the commencement of any bankruptcy proceeding relating to the Company, on, or substantially similar payments
      the Company makes in respect of the following categories of debt, whether that debt was outstanding on the date of execution of this Indenture or thereafter incurred, created or assumed: (1) all indebtedness and obligations of, or guaranteed or
      assumed by, the Company for money borrowed, whether or not evidenced by bonds, debentures, securities, notes or other similar instruments, and including, but not limited to all obligations to the Company's general and secured creditors and
      obligations incurred in connection with the acquisition of property, assets or businesses;; (2) indebtedness of the Company for money borrowed or represented by purchase money obligations, as defined below; (3) the Company’s obligations as lessee
      under leases of property whether made as part of a sale and leaseback transaction to which it is a party or otherwise; (4) reimbursement and other obligations relating to letters of credit, bankers’ acceptances and similar obligations and direct
      credit substitutes; (5) all obligations of the Company in respect of interest rate swap, cap or other agreements, interest rate future or option contracts, currency swap agreements, currency future or option contacts, commodity contracts and other
      similar arrangements or derivative products; (6) all of the Company’s obligations issued or assumed as the deferred purchase price of property or services, but excluding trade accounts payable and accrued liabilities arising in the ordinary course of
      business; (7) any other obligation of the Company to its general creditors; (8) all obligations of the type referred to in clauses (1) through (7) of other persons for the payment of which the Company is liable contingently or otherwise to pay or
      advance money as obligor, guarantor, endorser or otherwise; (9) all obligations of the types referred to in clauses (1) through (8) of other persons secured by a lien on any property or asset of the Company; and (10) all amendments, deferrals,
      renewals, extensions, modifications and refundings of any of the indebtedness or obligations described above.

    Senior Indebtedness excludes  any indebtedness, obligation or liability that: (a) expressly
      states that it is junior to the Subordinated Notes, (b)  is subordinated to indebtedness, obligations or liabilities of the Company to substantially the same extent as or to a greater extent than the Subordinated Notes are subordinated, (c) is
      identified as junior to, or equal in right of payment with, the Subordinated Notes in any Board Resolution establishing such indebtedness or in any indenture providing for such indebtedness, (d) indebtedness that expressly provides that it shall not
      be senior in right of payment to the Subordinated Notes or expressly provides that it is on the same basis or junior to the Subordinated Notes, or (e) any indebtedness between the Company and any of its Subsidiaries.

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    Notwithstanding the foregoing, and for the avoidance of doubt, if the Federal Reserve (or
      other competent regulatory agency or authority) promulgates any rule or issues any interpretation that defines general creditor(s), the main purpose of which is to establish criteria for determining whether the subordinated debt of a financial or
      bank holding company is to be included in its capital, then the term "general creditors" as used in this definition will have the meaning as described in that rule or interpretation. As used above, the term “purchase money obligations” means
      indebtedness, obligations evidenced by a note, debenture, bond or other instrument, whether or not secured by a lien or other security interest, issued to evidence the obligation to pay or a guarantee of the payment of, and any deferred obligation
      for the payment of, the purchase price of property but excluding indebtedness or obligations for which recourse is limited to the property purchased, issued or assumed as all or a part of the consideration for the acquisition of property or services,
      whether by purchase, merger, consolidation or otherwise, but does not include any trade accounts payable as set forth in clause (6) above.

    “Significant Subsidiary” means any Subsidiary of the Company that is a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X promulgated by the Commission (as such rule is in effect on the date of this Indenture).

    “SOFR” means the secured overnight financing rate published by the Federal Reserve Bank of New York, as the administrator of the Benchmark (or a successor administrator), on the Federal Reserve Bank of New York’s Website.

    “Special Record Date” for the payment of any Defaulted Interest on any Subordinated Note means a date fixed in accordance with Section 2.10.

    “Stated Maturity” means February 15, 2031.

    “Subordinated Note” or “Subordinated Notes” means the Initial Notes and the Exchange Notes and, more particularly,
      any Subordinated Note authenticated and delivered under this Indenture, including those Subordinated Notes issued or authenticated upon transfer, replacement or exchange.

    “Subordinated Note Register” is defined in Section 2.06.

    “Subordination Provisions” means the provisions contained in Article XI or any provisions with respect to subordination contained in the Subordinated Notes.

    “Subsidiary” means a corporation, a partnership, business or statutory trust or a limited liability company, a majority of the outstanding voting equity securities or a majority of the voting membership or partnership
      interests, as the case may be, of which is owned or controlled, directly or indirectly, by the Company or by one or more other Subsidiaries of the Company. For the purposes of this definition, “voting equity securities” means securities having voting
      power for the election of directors, managers, managing partners or trustees, as the case may be, whether at all times or only so long as no senior class of stock has voting power by reason of any contingency.

    “Tax Event” means the receipt by the Company of an opinion of independent tax counsel to the effect that as a result of (a) an amendment to or change (including any announced prospective amendment or change) in any law or
      treaty, or any regulation thereunder, of the United States or 

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    any of its political subdivisions or taxing authorities; (b) a judicial decision, administrative action,
      official administrative pronouncement, ruling, regulatory procedure, regulation, notice or announcement, including any notice or announcement of intent to adopt or promulgate any ruling, regulatory procedure or regulation (any of the foregoing, an
      “Administrative or Judicial Action”); or (c) an amendment to or change in any official position with respect to, or any interpretation of, an Administrative or Judicial Action or a law or regulation of the United States that differs from the
      previously generally accepted position or interpretation, in each case, which change or amendment or challenge becomes effective or which pronouncement, decision or challenge is announced on or after the original issue date of the Subordinated Notes,
      there is more than an insubstantial risk that interest payable by the Company on the Subordinated Notes is not, or, within 90 days of the date of such opinion, will not be, deductible by the Company, in whole or in part, for United States federal
      income tax purposes.

    “Term SOFR” means the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

    “Term SOFR Administrator” means any entity designated by the Relevant Governmental Body as the administrator of Term SOFR (or a successor administrator).

    “Three-Month Term SOFR” means the rate for Term SOFR for a tenor of three months that is published by the Term SOFR Administrator at the Reference Time for any interest period, as determined by the Calculation Agent after
      giving effect to the Three-Month Term SOFR Conventions. All percentages used in or resulting from any calculation of Three-Month Term SOFR shall be rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point, with 0.000005%
      rounded up to 0.00001%.

    “Three-Month Term SOFR Conventions” means any determination, decision or election with respect to any technical, administrative or operational matter (including with respect to the manner and timing of the publication of
      Three-Month Term SOFR, or changes to the definition of “interest period,” timing and frequency of determining Three-Month Term SOFR with respect to each interest period and making payments of interest, rounding of amounts or tenors, and other
      administrative matters) that the Calculation Agent decides may be appropriate to reflect the use of Three-Month Term SOFR as the Benchmark in a manner substantially consistent with market practice (or, if the Calculation Agent decides that adoption
      of any portion of such market practice is not administratively feasible or if the Calculation Agent determines that no market practice for the use of Three-Month Term SOFR exists, in such other manner as the Calculation Agent determines is reasonably
      necessary).

    “Tier 2 Capital” means Tier 2 capital for purposes of capital adequacy regulations of the Federal Reserve Board, as
      then in effect and applicable to the Company.

    “Tier 2 Capital Event” means the Company's good faith determination that, as a result of (1) any amendment to, or
      change in, the laws, rules or regulations of the United States (including, for the avoidance of doubt, any agency or instrumentality of the United States, including the Federal Reserve and other federal bank regulatory agencies) or any political
      subdivision of or in the United States that is enacted or becomes effective after the issue date of the Subordinated Notes, (2) any proposed change in those laws, rules or regulations that is announced or becomes 

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    effective after the issue date of the Subordinated Notes, or (3) any official administrative decision or
      judicial decision or administrative action or other official pronouncement interpreting or applying those laws, rules, regulations, policies or guidelines with respect thereto that is announced after the issue date of the Subordinated Notes, there is
      more than an insubstantial risk that the Company will not be entitled to treat the Subordinated Notes then Outstanding as Tier 2 Capital for so long as any Subordinated Notes are Outstanding.

    “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

    “Trustee” means U.S. Bank National Association, as trustee, until a successor replaces it in accordance with the provisions of this Indenture and thereafter means the successor serving hereunder.

    “United States” means the United States of America (including the states thereof and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction.

    “Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.

    “Unrestricted Definitive Subordinated Note” means a Definitive Subordinated Note that does not bear, and is not required to bear, the Private Placement Legend.

    “Unrestricted Global Subordinated Note” means a Global Subordinated Note that does not bear, and is not required to bear, the Private Placement Legend.

    
      	
              Section 1.02

            	
              Compliance Certificates and Opinions.

            

    

    Except as otherwise expressly provided in or under this Indenture, upon any application or
      request by the Company to the Trustee to take any action under any provision of this Indenture, the Company will furnish to the Trustee an Officers’ Certificate stating that, in the opinion of the signers, all conditions precedent (including
      covenants compliance with which constitutes a condition precedent), if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion of such counsel, all such
      conditions precedent (including covenants compliance with which constitutes a condition precedent), if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents or any of
      them is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

    Each certificate or opinion with respect to which compliance with a condition provided for in
      this Indenture (other than an Officers’ Certificate provided under Section 9.08) must comply with the provisions of Section 314(e) of the Trust Indenture Act and must include:

    (1) a statement that the person making such certificate or opinion has read such covenant or condition;

    (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

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    (3) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to
        whether or not such condition has been satisfied; and

    (4) a statement as to whether or not, in the opinion of such person, such condition has been satisfied.

    
      	
              Section 1.03

            	
              Form of Documents Delivered to Trustee.

            

    

    In any case where several matters are required to be certified by, or covered by an opinion
      of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion
      with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

    Any certificate or opinion of an officer of the Company may be based, insofar as it relates to
      legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which
      his certificate or opinion is based is erroneous.

    Any such certificate or opinion of counsel may be based, insofar as it relates to factual
      matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company unless such counsel knows, or in the
      exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

    Where any Person is required to make, give or execute two or more applications, requests,
      consents, certificates, statements, opinions or other instruments under this Indenture or any Subordinated Note, they may, but need not, be consolidated and form one instrument.

    
      	
              Section 1.04

            	
              Acts of Holders.

            

    

    (1) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by or under this Indenture to be made, given or taken
        by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action will become
        effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments and any such record (and the action embodied therein and
        evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a
        Subordinated Note, will be sufficient for any purpose of this Indenture and (subject to Section 5.01) conclusive in favor of the Trustee and the Company and any agent of the Trustee or the Company, if made in the manner provided in this Section.

     

      

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    (2) The fact and date of the execution by any Person of any such instrument or writing may be proved in any reasonable manner that the Trustee deems
        sufficient and in accordance with such reasonable rules as the Trustee may determine, and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section.

    (3) The ownership, principal amount and serial numbers of Subordinated Notes held by any Person, and the date of the commencement and the date of the
        termination of holding the same, will be proved by the Subordinated Note Register.

    (4) The Company may, in the circumstances permitted by the Trust Indenture Act, set a record date for purposes of determining the identity of Holders
        entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Company prior to the first
        solicitation of a Holder made by any Person in respect of any such action, any such record date will be the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee
        prior to such solicitation. If a record date is fixed, the Holders on such record date, and only such Persons, will be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether
        or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action will be valid or effective if made, given or taken more than 90 days after such record date.

    (5) Any effective request, demand, authorization, direction, notice, consent, waiver or other Act by the Holder of any Subordinated Note will bind every
        future Holder of the same Subordinated Note and the Holder of every Subordinated Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or suffered to be done by the Trustee, any
        Registrar, any Paying Agent or the Company in reliance thereon, whether or not notation of such Act is made upon such Subordinated Note.

    (6) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any
        part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so in accordance with such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or
        its agents with regard to different parts of such principal amount in accordance with this paragraph will have the same effect as if given or taken by separate Holders of each such different part.

    (7) Without limiting the generality of this Section 1.04, a Holder, including a Depositary that is a Holder of a Global Subordinated Note, may make, give
        or take, by a proxy or proxies, duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other Act provided in or under this Indenture or the Subordinated Notes to be made, given or taken by Holders, and
        a Depositary that is a Holder of a Global Subordinated Note may provide its proxy or proxies to the beneficial owners of interests in any such Global Subordinated Note through such Depositary’s Applicable Procedures. The Company may fix a record
        date for the purpose of determining the Persons who are beneficial owners of interests in any Global Subordinated Note entitled under the Applicable Procedures of such Depositary to make, give or take, by a proxy or proxies duly appointed in
        writing, any request, demand, authorization, 

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    direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If
        such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, will be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other
        action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action will be valid or effective if made, given or taken more than 90 days after such
        record date.

    Promptly upon any record date being set in accordance with this Section 1.04, the Company, at
      its own expense, will cause notice of the record date, the proposed action by Holders and the expiration date to be given to the Trustee in writing and the Holders in the manner set forth in Section 1.05.

    
      	
              Section 1.05

            	
              Required Notices or Demands.

            

    

    Any notice or communication by the Company or the Trustee to the other is duly given if in
      writing and delivered in Person or delivered by registered or certified mail (return receipt requested), facsimile or overnight air courier guaranteeing next day delivery, to the other’s address:

    If to the Company;

    FS Bancorp, Inc.

    6920 220th Street SW

    Mountlake Terrace, WA 98043

      Attention: Matthew D. Mullet

    Facsimile: (425)-771-0040

    If to the Trustee:

    U.S. Bank National Association

    333 Commerce Street, Suite 800

    Nashville, TN 37201

    Attention: Wally Jones

    Facsimile No.: (615) 251-0737

    

    

    The Company or the Trustee by notice to the other may designate additional or different
      addresses for subsequent notices or communications.

    All notices and communications will be deemed to have been duly given: at the time delivered
      by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if delivered by mail; on the first Business Day after being sent, if sent by facsimile and the sender receives confirmation of successful
      transmission; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

    Any notice required or permitted to be given to a Holder under the provisions of this
      Indenture will be deemed to be properly delivered by being deposited postage prepaid in a post office letter box in the United States addressed to such Holder at the address of such Holder as 

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    shown on the Subordinated Note Register. Any report in accordance with Section 313 of the Trust Indenture Act
      will be transmitted in compliance with subsection (c) therein. If the Company delivers a notice or communication to Holders, the Company will deliver a copy to the Trustee at the same time.

    In any case where notice to Holders of Subordinated Notes is delivered by mail, neither the
      failure to deliver such notice, nor any defect in any notice so delivered, to any particular Holder of a Subordinated Note will affect the sufficiency of such notice with respect to other Holders of Subordinated Notes. Any notice that is delivered in
      the manner herein provided will be conclusively presumed to have been duly given or provided. In the case by reason of the suspension of regular mail service or by reason of any other cause it will be impracticable to give such notice by mail, then
      such notification as will be made with the approval of the Trustee will constitute a sufficient notification for every purpose hereunder.

    Where this Indenture provides for notice in any manner, such notice may be waived in writing
      by the Person entitled to receive such notice, either before or after the event, and such waiver will be the equivalent of such notice. Waivers of notice by Holders of Subordinated Notes will be filed with the Trustee, but such filing will not be a
      condition precedent to the validity of any action taken in reliance upon such waiver.

    Notwithstanding any other provision herein, where this Indenture provides for notice to any
      Holder of a Global Subordinated Note, or of an interest therein, such notice will be sufficiently given if given to the Depositary for such Global Subordinated Note (or its designee) according to the Applicable Procedures of such Depositary
      prescribed for giving such notice.

    
      	
              Section 1.06

            	
              Language of Notices.

            

    

    Any request, demand, authorization, direction, notice, consent or waiver or other Act required
      or permitted under this Indenture will be in the English language, except that, if the Company so elects, any published notice may be in an official language of the country of publication.

    
      	
              Section 1.07

            	
              Incorporation by Reference of Trust Indenture Act; Conflicts.

            

    

    Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is
      incorporated by reference in and made a part of this Indenture. The Trust Indenture Act term “obligor” used in this Indenture means the Company and any successor
      obligor upon the Subordinated Notes.

    All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by
      Trust Indenture Act reference to another statute or defined by Commission rule under the Trust Indenture Act have the meanings so assigned to them as of the date of this Indenture. If and to the extent that any provision of this Indenture limits,
      qualifies or conflicts with another provision included in this Indenture that is required to be included in this Indenture by any of Sections 310 to 317, inclusive, of the Trust Indenture Act, such required provision will control. If any provision of
      this Indenture limits, qualifies or conflicts with the duties imposed by Section 318(c) of the Trust Indenture Act, the duties imposed by Section 318(c) of the Trust Indenture Act will control. If any provision of this Indenture modifies or excludes
      any provision of the Trust Indenture Act 

     17

    

    
      
        

    

    that may be so modified or excluded, the provisions of the Trust Indenture Act will be deemed to apply to this
      Indenture as so modified or will be excluded, as the case may be.

    
      	
              Section 1.08

            	
              Effect of Headings and Table of Contents.

            

    

    The Article and Section headings in this Indenture and the Table of Contents are for
      convenience only and will not affect the construction of this Indenture.

    
      	
              Section 1.09

            	
              Successors and Assigns.

            

    

    All the covenants, stipulations, promises and agreements in this Indenture by or on behalf of
      the Company or the Trustee will bind its respective successors and permitted assigns, whether so expressed or not.

    
      	
              Section 1.10

            	
              Severability.

            

    

    In case any provision in this Indenture or any Subordinated Note will be invalid, illegal or
      unenforceable, the validity, legality and enforceability of the remaining provisions will not, to the fullest extent permitted by law, in any way be affected or impaired thereby.

    
      	
              Section 1.11

            	
              Benefits of Indenture.

            

    

    Nothing in this Indenture or any Subordinated Note, express or implied, will give to any
      Person, other than the parties hereto, any Registrar, any Paying Agent and their respective successors hereunder and the Holders of Subordinated Notes, and the holders of Senior Indebtedness, any benefit or any legal or equitable right, remedy or
      claim under this Indenture.

    
      	
              Section 1.12

            	
              Governing Law.

            

    

    This Indenture and the Subordinated Notes will be deemed to be a contract made under the laws
      of the State of New York and will be governed by, and construed in accordance with, the laws of the State of New York without giving effect to any laws or principles of conflict of laws that would apply the laws of a different jurisdiction.

    
      	
              Section 1.13

            	
              Legal Holidays.

            

    

    Unless otherwise specified in or under this Indenture or any Subordinated Notes, in any case
      where any Interest Payment Date, Stated Maturity or Maturity of, or any other day on which a payment is due with respect to, any Subordinated Note will be a day that is not a Business Day at any Place of Payment, then (notwithstanding any other
      provision of this Indenture or any Subordinated Note other than a provision in any Subordinated Note or in the Board Resolution, Officers’ Certificate or supplemental indenture establishing the terms of any Subordinated Note that specifically states
      that such provision will apply in lieu hereof) payment need not be made at such Place of Payment on such date, but such payment may be made on the next succeeding day that is a Business Day at such Place of Payment with the same force and effect as
      if made on the Interest Payment Date, at the Stated Maturity or Maturity or on any such other payment date, as the case may be, and no interest will accrue on the amount payable on such date or at such time for the period from and after such Interest
      Payment Date, Stated Maturity, Maturity or other 

     18

    

    
      
        

    

    payment date, as the case may be, to the next succeeding Business Day. Notwithstanding the foregoing, in the
      event that any Floating Interest Payment Date during the Floating Rate Period falls on a day that is not a Business Day, the interest payment due on that date shall be postponed to the next day that is a Business Day and no interest will accrue on
      the amount payable on such date or at such time for the period from and after such Floating Interest Payment Date, except that if the postponement would cause the day to fall in the next calendar month during the Floating Rate Interest Period, the
      Floating Interest Payment Date shall instead be brought forward to the immediately preceding Business Day.

    
      	
              Section 1.14

            	
              Counterparts; Electronic Transmission.

            

    

    This Indenture may be executed in several counterparts, each of which will be an original and
      all of which will constitute but one and the same instrument. Any facsimile or electronically transmitted copies hereof or signature hereon will, for all purposes, be deemed originals.

    
      	
              Section 1.15

            	
              Immunity of Certain Persons.

            

    

    No recourse under or upon any obligation, covenant or agreement contained in this Indenture,
      or in any Subordinated Note, or because of any indebtedness evidenced thereby, will be had against any past, present or future shareholder, employee, officer or director, as such, of the Company or Trustee or of any predecessor or successor, either
      directly or through the Company or Trustee or any predecessor or successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability
      being expressly waived and released by the acceptance of the Subordinated Notes by the Holders and as part of the consideration for the issue of the Subordinated Notes.

    
      	
              Section 1.16

            	
              Waiver of Jury Trial.

            

    

    EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
      AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SUBORDINATED NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

    
      	
              Section 1.17

            	
              Force Majeure.

            

    

    In no event will the Trustee be responsible or liable for any failure or delay in the
      performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances,
      nuclear or natural catastrophes or acts of God, epidemics and pandemics, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee will use reasonable
      efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

     

    

     19

    

    
      
        

    

    
      	
              Section 1.18

            	
              USA Patriot Act.

            

    

    The Trustee hereby notifies the Company that in accordance with the requirements of the USA
      Patriot Act, it is required to obtain, verify and record information that identifies the Company, which information includes the name and address of the Company and other information that will allow the Trustee to identify the Company in accordance
      with the USA Patriot Act.

    
      	
              Section 1.19

            	
              No Sinking Fund.

            

    

    The Subordinated Notes are not entitled to the benefit of any sinking fund.

    
      	
              Section 1.20

            	
              Rules of Construction.

            

    

    Unless the context otherwise requires:

    

    

    (1) a term has the meaning assigned to it;

    (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

    (3) “or” is not exclusive;

    (4) words in the singular include the plural, and in the plural include the singular;

    (5) “including” means including without limitation;

    (6) “will” will be interpreted to express a command;

    (7) provisions apply to successive events and transactions;

    (8) references to sections of, or rules under, the Securities Act will be deemed to include substitute, replacement or successor sections or rules adopted by the Commission from
        time to time;

    (9) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture; and

    (10) the words “herein,” “hereof and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other
        subdivision.

    ARTICLE II

      THE SUBORDINATED NOTES

    
      	
              Section 2.01

            	
              Forms Generally.

            

    

    The Subordinated Notes and the Trustee’s certificate of authentication will be substantially
      in the form of Exhibit A-1 and Exhibit A-2, as applicable, which is a part of this Indenture. The Subordinated Notes may have notations, legends or endorsements required
      by law, stock exchange 

    

     20

    

    
      
        

    

    rule or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).
      The Company will provide any such notations, legends or endorsements to the Trustee in writing. Each Subordinated Note will be dated the date of its authentication. The terms and provisions contained in the Subordinated Notes will constitute, and are
      hereby expressly made a part of this Indenture and the Company and the Trustee, by their execution and delivery of this Indenture, agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Subordinated
      Note irreconcilably conflicts with the express provisions of this Indenture, the provisions of this Indenture will govern and be controlling.

    
      	
              Section 2.02

            	
              Definitive Subordinated Notes.

            

    

    The Initial Notes will be issued initially in the form of one or more Definitive Subordinated
      Notes,  unless, before the issuance of such Initial Notes, the Company has determined that the Initial Notes may be represented by Global Subordinated Notes and has so notified the Trustee, in which event, the Initial Notes will be issued in the form
      of one or more Global Subordinated Notes. The Exchange Notes will also be issued initially in the form of one or more Definitive Subordinated Notes, unless, before the issuance of such Exchange Notes, the Company has determined that the Subordinated
      Notes may be represented by Global Subordinated Notes and has so notified the Trustee, in which event the Exchange Notes will be issued in the form of one or more Global Subordinated Notes. Except as provided in Section 2.07, Holders of Definitive
      Subordinated Notes will not be entitled to transfer Definitive Subordinated Notes in exchange for beneficial interests in Global Subordinated Notes, and owners of beneficial interests in Global Subordinated Notes will not be entitled to receive
      physical delivery of Definitive Subordinated Notes.

    
      	
              Section 2.03

            	
              Global Subordinated Notes.

            

    

    Each Global Subordinated Note issued under this Indenture will be deposited with the Trustee
      at its Corporate Trust Office, as custodian for the Depositary, and registered in the name of the Depositary or the nominee thereof, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount
      of any Global Subordinated Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary as hereinafter provided. Any adjustment of the aggregate principal amount of a Global Subordinated
      Note to reflect the amount of any increase or decrease in the amount of outstanding Subordinated Notes represented thereby will be made by the Trustee in accordance with written instructions given by the Holder thereof as required by Section 2.07
      hereof and will be made on the records of the Trustee and the Depositary.

    
      	
              Section 2.04

            	
              Restricted Subordinated Notes.

            

    

    Each Restricted Definitive Subordinated Note and Restricted Global Subordinated Note will bear
      a legend in substantially the following form:

    “THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO, 

     21

    

    
      
        

    

    AND IN ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH
      TRANSFER; (B) TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT OR TO A PERSON THAT YOU REASONABLY BELIEVE TO BE AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE
      501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT; OR (C) UNDER ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (INCLUDING, IF AVAILABLE, THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES
      ACT).”

    The Private Placement Legend set forth above will be removed and a new Subordinated Note of
      like tenor and principal amount without such Private Placement Legend will be executed by the Company, and upon written request of the Company (together with an Officers’ Certificate and an Opinion of Counsel) given at least three Business Days prior
      to the proposed authentication date, the Trustee will authenticate and deliver such new Subordinated Note to the respective Holder, if legal counsel to the Holder or owner of beneficial interests requesting the removal of such Private Placement
      Legend deliver to the Trustee, any Registrar and Paying Agent (if a different Person than the Trustee) and the Company an opinion of counsel in compliance with this Indenture and additionally opining that the restrictive legend can be removed in
      connection with the transfer in accordance with the Securities Act.

    
      	
              Section 2.05

            	
              Execution and Authentication.

            

    

    Subordinated Notes will be executed on behalf of the Company by any Authorized Officer and may
      (but need not) have the Company’s corporate seal or a facsimile thereof reproduced thereon. The signature of an Authorized Officer on the Subordinated Notes may be manual or facsimile. Subordinated Notes bearing the manual or facsimile signatures of
      individuals who were at the time of execution Authorized Officers of the Company will, to the fullest extent permitted by law, bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the
      authentication and delivery of such Subordinated Notes or did not hold such offices at the date of such Subordinated Notes.

    The Trustee or an Authenticating Agent will authenticate and deliver the Initial Notes for
      original issue in an initial aggregate principal amount of up to $50.0 million upon one or more Company Orders and an Opinion of Counsel. In addition, the Trustee or
      an Authenticating Agent will upon receipt of a Company Order, Opinion of Counsel and Officers’ Certificate authenticate and deliver any Exchange Notes for an initial aggregate principal amount not to exceed $50.0 million specified in such Company Order for Exchange Notes issued hereunder. The aggregate principal amount of the Outstanding Subordinated Notes to be issued hereunder may be increased at any time
      hereafter and the series may be reopened for issuances of additional Subordinated Notes upon Company Order without the consent of any Holder. The Subordinated Notes issued on the date hereof and any such additional Subordinated Notes that may be
      issued hereafter shall be part of the same series of Subordinated Notes for all purposes under the Indenture. Unless the context otherwise requires, the initial Subordinated Notes and the Exchange Notes shall constitute one series for all purposes
      under the Indenture, including with respect to any amendment, waiver, acceleration or other Act of the Holders or upon redemption of the Subordinated Notes. The 

     22

    

    
      
        

    

    Subordinated Notes will be issued only in registered form without coupons and in minimum denominations of
      $100,000 and any integral multiple of $1,000 in excess thereof.

    The Trustee will not be required to authenticate any Subordinated Notes if the issue of such
      Subordinated Notes under this Indenture will affect the Trustee’s own rights, duties or immunities under the Subordinated Notes and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee or if the Trustee, being
      advised by counsel, determines that such action may not lawfully be taken.

    No Subordinated Note will be entitled to any benefit under this Indenture or be valid or
      obligatory for any purpose, unless there appears on such Subordinated Note a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee or by the Authenticating Agent by the manual signature of
      one of its authorized signatories. Such certificate upon any Subordinated Note will be conclusive evidence, and the only evidence, that such Subordinated Note has been duly authenticated and delivered hereunder.

    
      	
              Section 2.06

            	
              Registrar and Paying Agent.

            

    

    The Company will maintain an office or agency where Subordinated Notes may be presented for
      registration of transfer or for exchange (“Registrar”) and an office or agency where Subordinated Notes may be presented for payment (“Paying Agent”). The Registrar will keep a register of the Subordinated Notes (“Subordinated Note Register”) and of
      their transfer and exchange. The registered Holder of a Subordinated Note will be treated as the owner of the Subordinated Note for all purposes. The Company may appoint one or more co-registrars and one or more additional paying agents. The term
      “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without prior notice to any Holder; provided that no such removal or replacement will be
      effective until a successor Paying Agent or Registrar will have been appointed by the Company and will have accepted such appointment. The Company will notify the Trustee in writing of the name and address of any Registrar or Paying Agent not a party
      to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee will act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.

    The Company initially appoints the Trustee to act as the Paying Agent and Registrar for the
      Subordinated Notes and, in the event that any Subordinated Notes are issued in global form, to initially act as custodian with respect to the Global Subordinated Notes. In the event that the Trustee will not be or will cease to be Registrar with
      respect the Subordinated Notes, it will have the right to examine the Subordinated Note Register at all reasonable times. There will be only one Subordinated Note Register.

    
      	
              Section 2.07

            	
              Registration of Transfer and Exchange.

            

    

    (1) Except as otherwise provided in or under this Indenture, upon surrender for registration of transfer of any Subordinated Note, the Company will
        execute, and the Trustee will, upon receipt of a Company Order, authenticate and deliver, in the name of the designated transferee or transferees, one or more new Subordinated Notes denominated as authorized in or 

     23

      

    
      
        

    

    under this Indenture, of a like aggregate principal amount bearing a number not contemporaneously outstanding and
        containing identical terms and provisions.

    Except as otherwise provided in or under this Indenture, at the option of the Holder,
      Subordinated Notes may be exchanged for other Subordinated Notes containing identical terms and provisions, in any authorized denominations (minimum denominations of $100,000 and any integral multiple of $1,000 in excess thereof), and of a like
      aggregate principal amount, upon surrender of the Subordinated Notes to be exchanged at any office or agency for such purpose. Whenever any Subordinated Notes are so surrendered for exchange, the Company will execute, and the Trustee will
      authenticate and deliver, subject to the terms hereof, the Subordinated Notes that the Holder making the exchange is entitled to receive.

    All Subordinated Notes issued upon any registration of transfer or exchange of Subordinated
      Notes will be the valid obligations of the Company evidencing the same debt and entitling the Holders thereof to the same benefits under this Indenture as the Subordinated Notes surrendered upon such registration of transfer or exchange.

    Every Subordinated Note presented or surrendered for registration of transfer or for exchange
      or redemption will (if so required by the Company or the Registrar for such Subordinated Note) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar for such Subordinated Note
      duly executed by the Holder thereof or his attorney duly authorized in writing.

    No service charge will be made for any registration of transfer or exchange of Subordinated
      Notes, or any redemption or repayment of Subordinated Notes, or any conversion or exchange of Subordinated Notes for other types of securities or property, but the Company may require payment of a sum sufficient to pay all taxes, assessments or other
      governmental charges that may be imposed in connection with the transfer or exchange of the Subordinated Notes from the Holder requesting such transfer or exchange.

    Except as otherwise provided in or under this Indenture, the Company will not be required (i)
      to issue, register the transfer of or exchange any Subordinated Notes during a period beginning at the opening of business 15 days before the day of the selection for redemption of Subordinated Notes under Section 10.03 and ending at the close of
      business on the day of such selection, or (ii) to register the transfer of or exchange any Subordinated Note, or portion thereof, so selected for redemption, except in the case of any Subordinated Note to be redeemed in part, the portion thereof not
      to be redeemed.

    Any Registrar appointed in accordance with Section 2.06 hereof will provide to the Trustee
      such information as the Trustee may reasonably require in connection with the delivery by such Registrar of Subordinated Notes upon transfer or exchange of Subordinated Notes. No Registrar will be required to make registrations of transfer or
      exchange of Subordinated Notes during any periods designated in the Subordinated Notes or in this Indenture as periods during which such registration of transfers and exchanges need not be made.

    The Trustee will have no obligation or duty to monitor, determine or inquire as to compliance
      with any restrictions on transfer imposed under this Indenture or under applicable law 

     24

    

    
      
        

    

    with respect to any transfer of any interest in any Subordinated Note (including any transfers between or among
      Depositary participants or beneficial owners of interests in any Global Subordinated Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly
      required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

    Neither the Trustee nor any Paying Agent will have any responsibility for any actions taken or
      not taken by the Depositary.

    (2) When Definitive Subordinated Notes are presented by a Holder to the Registrar with a request to register the transfer of such Definitive Subordinated
        Notes or to exchange such Definitive Subordinated Notes for an equal principal amount of Definitive Subordinated Notes of other authorized denominations, the Registrar will register the transfer or make the exchange as requested if its reasonable
        requirements for such transaction are met; provided, however, that the
        Definitive Subordinated Notes surrendered for transfer or exchange will be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar, duly executed by the Holder thereof or
        such Holder’s attorney duly authorized in writing.

    (3) A Global Subordinated Note may not be transferred except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
        Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Subordinated Notes will be exchanged by the Company for Definitive
        Subordinated Notes if: (i) the Depositary has notified the Company that it is unwilling or unable to continue as Depositary for such Global Subordinated Note or such Depositary has ceased to be a “clearing agency” registered under the Exchange Act,
        and a successor depositary is not appointed by the Company within 90 days, (ii) the Company determines that the Subordinated Notes are no longer to be represented by Global Subordinated Notes and so notifies the Trustee in writing, or (iii) an
        Event of Default has occurred and is continuing with respect to the Subordinated Notes and the Depositary or its participant(s) has requested the issuance of Definitive Subordinated Notes.

    Any Global Subordinated Note exchanged in accordance with clause (i) or (ii) above will be so
      exchanged in whole and not in part, and any Global Subordinated Note exchanged in accordance with clause (iii) above may be exchanged in whole or from time to time in part as directed by the Depositary.

    Upon the occurrence of any of the preceding events in (i), (ii) or (iii) above, Definitive
      Subordinated Notes will be issued in fully registered form, without interest coupons, will have an aggregate Principal Amount equal to that of the Global Subordinated Note or portion thereof to be so exchanged, will be registered in such names and be
      in such authorized denominations as the Depositary will instruct the Trustee in writing and will bear such legends as provided herein. Global Subordinated Notes also may be exchanged or replaced, in whole or in part, as provided in Section 2.09
      hereof. Every Subordinated Note authenticated and delivered in exchange for, or in lieu of, a Global Subordinated Note or any portion thereof, in accordance with this Section 2.07 or Section 2.09 hereof, will be authenticated and delivered in the
      form of, and will be, a Global 

     25

    

    
      
        

    

    Subordinated Note, except as otherwise provided herein. A Global Subordinated Note may not be exchanged for
      another Subordinated Note other than as provided in this Section 2.07(3); however, beneficial interests in a Global Subordinated Note may be transferred and exchanged as provided in paragraph (4) hereof.

    Any Global Subordinated Note to be exchanged in whole will be surrendered by the Depositary to
      the Trustee. With regard to any Global Subordinated Note to be exchanged in part, either such Global Subordinated Note will be so surrendered for exchange or, if the Trustee is acting as custodian for the Depositary or its nominee with respect to
      such Global Subordinated Note, the principal amount thereof will be reduced, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or
      adjustment, the Trustee will authenticate and deliver the Subordinated Note issuable on such exchange to or upon the order of the Depositary or an authorized representative thereof.

    (4) The transfer and exchange of beneficial interests in the Global Subordinated Notes will be effected through the Depositary in accordance with the
        Applicable Procedures and this Section 2.07.

    (5) A Definitive Subordinated Note may not be exchanged for a beneficial interest in a Global Subordinated Note unless the Company determines that the
        Subordinated Notes may be represented by Global Subordinated Notes and so notifies the Trustee. After the Company has determined that the Subordinated Notes may be represented by Global Subordinated Notes and so notifies the Trustee in writing,
        then upon receipt by the Trustee of a Definitive Subordinated Note, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with written instructions from such Holder directing the Trustee
        to make, or to direct the Registrar to make, an adjustment on its books and records with respect to such Global Subordinated Note to reflect an increase in the aggregate principal amount of the Subordinated Notes represented by the Global
        Subordinated Note, such instructions to contain information regarding the Depositary account to be credited with such increase, the Trustee will cancel such Definitive Subordinated Note and cause, or direct the Registrar to cause, in accordance
        with the standing instructions and procedures existing between the Depositary and the Registrar, the aggregate principal amount of Subordinated Notes represented by the Global Subordinated Note to be increased by the aggregate principal amount of
        the Definitive Subordinated Note to be exchanged, and will credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Subordinated Note equal to the principal amount of the
        Definitive Subordinated Note so cancelled. If no Global Subordinated Notes are then outstanding, the Company will issue and the Trustee will authenticate, upon Company Order, a new Global Subordinated Note in the appropriate principal amount.

    (6) At such time as all beneficial interests in a particular Global Subordinated Note have been exchanged for Definitive Subordinated Notes or a particular
        Global Subordinated Note has been repurchased or canceled in whole and not in part, each such Global Subordinated Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.12 hereof. At any time prior to such
        cancellation, if any beneficial interest in a Global Subordinated Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Subordinated Note or for Definitive
        Subordinated Notes, the principal 

      

     26

      

    
      
        

    

    amount of Subordinated Notes represented by such Global Subordinated Note will be reduced accordingly by adjustments made
        on the records of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Subordinated Note, such
        other Global Subordinated Note will be increased accordingly by adjustments made on the records of the Trustee to reflect such increase.

    (7) No Restricted Subordinated Note will be transferred or exchanged except in compliance with the Private Placement Legend or as provided in accordance
        with Section 2.08. In addition to the provisions for transfer and exchange set forth in this Section 2.07, the Trustee, any Registrar and Paying Agent (if a different Person than the Trustee) and the Company may, prior to effecting any requested
        transfer or exchange of any Restricted Subordinated Notes, other than an exchange in accordance with Section 2.08, require that legal counsel to the Holder or owner of beneficial interests requesting such transfer or exchange deliver to the
        Trustee, any Registrar and Paying Agent (if a different Person than the Trustee) and the Company, an Opinion of Counsel in compliance with this Indenture and additionally opining that the transfer or exchange is in compliance with the requirements
        of the Private Placement Legend and that the Subordinated Note issued to the transferee or in exchange for the Restricted Subordinated Note may be issued free of the Private Placement Legend. Any untransferred or unexchanged balance of a Restricted
        Subordinated Note will be reissued to the Holder with the Private Placement Legend, unless the Private Placement Legend may be omitted in accordance with Section 2.04, as evidenced by the Opinion of Counsel.

    
      	
              Section 2.08

            	
              Exchange Offer.

            

    

    Upon the occurrence of an Exchange Offer in accordance with the Registration Rights Agreement,
      the Company will issue and, upon receipt of a Company Order in accordance with Section 2.05 hereof, the Trustee will authenticate (i) Unrestricted Definitive Subordinated Notes in an aggregate principal amount equal to the principal amount of the
      Restricted Definitive Subordinated Notes tendered in such Exchange Offer for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not Participating Broker-Dealers, (y) they are not participating in a
      distribution of the applicable Exchange Notes and (z) they are not Affiliates of the Company, and accepted for exchange in such Exchange Offer or, if permitted by the Company, (ii) one or more Unrestricted Global Subordinated Notes in an aggregate
      principal amount equal to the principal amount of the beneficial interests in the Restricted Global Subordinated Notes tendered in such Exchange Offer for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are
      not Participating Broker-Dealers, (y) they are not participating in a distribution of the applicable Exchange Notes and (z) they are not Affiliates of the Company, and accepted for exchange in such Exchange Offer. Concurrently with the issuance of
      such Unrestricted Global Subordinated Notes upon exchange of Restricted Global Subordinated Notes, the Trustee will cause the aggregate principal amount of the applicable Restricted Global Subordinated Notes to be reduced accordingly, and the Company
      will execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of Restricted Definitive Subordinated Notes so accepted Unrestricted Definitive Subordinated Notes in the applicable principal amount. Any
      Subordinated Notes that remain outstanding after the consummation of such Exchange Offer, and Exchange Notes issued in connection with such Exchange Offer, will be treated as a single class of securities under this Indenture.

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              Section 2.09

            	
              Mutilated, Destroyed, Lost and Stolen Subordinated Notes.

            

    

    If any mutilated Subordinated Note is surrendered to the Trustee, subject to the provisions of
      this Section 2.09, the Company will execute and the Trustee will authenticate and deliver in exchange therefor a new Subordinated Note containing identical terms and of like principal amount and bearing a number not contemporaneously outstanding.

    If there be delivered to the Company and to the Trustee (i) evidence to their satisfaction of
      the destruction, loss or theft of any Subordinated Note, and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that
      such Subordinated Note has been acquired by a bona fide purchaser, the Company will execute and, upon the Company’s written instruction the Trustee will authenticate and deliver, in exchange for or in lieu of any such destroyed, lost or stolen
      Subordinated Note, a new Subordinated Note containing identical terms and of like principal amount and bearing a number not contemporaneously outstanding.

    Notwithstanding the foregoing provisions of this Section 2.09, in case the outstanding
      principal balance of any mutilated, destroyed, lost or stolen Subordinated Note has become or is about to become due and payable, or is about to be redeemed by the Company pursuant to Article X hereof, the Company in its discretion may, instead of
      issuing a new Subordinated Note, pay or redeem such Subordinated Note, as the case may be.

    Upon the issuance of any new Subordinated Note under this Section, the Company may require the
      payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

    Every new Subordinated Note issued in accordance with this Section in lieu of any destroyed,
      lost or stolen Subordinated Note will constitute a separate obligation of the Company, whether or not the destroyed, lost or stolen Subordinated Note will be at any time enforceable by anyone, and will be entitled to all the benefits of this
      Indenture equally and proportionately with any and all other Subordinated Notes duly issued hereunder.

    The provisions of this Section, as amended or supplemented in accordance with this Indenture
      with respect to particular Subordinated Notes or generally, will (to the extent lawful) be exclusive and will preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or
      stolen Subordinated Notes.

    
      	
              Section 2.10

            	
              Payment of Interest; Rights to Interest Preserved.

            

    

    Any interest on any Subordinated Note that will be payable, and punctually paid or duly
      provided for, on any Interest Payment Date will be paid to the Person in whose name such Subordinated Note is registered as of the close of business on the Regular Record Date for such Interest Payment Date.

    Any interest on any Subordinated Note that will be payable, but will not be punctually paid or
      duly provided for, on any Interest Payment Date for such Subordinated Note (herein called “Defaulted Interest”) will cease to be payable to the Holder thereof on the relevant Regular Record 

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    Date by virtue of having been such Holder; and such Defaulted Interest may be paid by the Company, at its
      election in each case, as provided in clause (1) or (2) below:

    (1) The Company may elect to make payment of any Defaulted Interest to the Person in whose name such Subordinated Note will be registered at the close of business on a Special
        Record Date for the payment of such Defaulted Interest, which will be fixed in the following manner:

    The Company will notify the Trustee in writing of the amount of Defaulted Interest proposed to
      be paid on such Subordinated Note and the date of the proposed payment, and at the same time the Company will deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or will
      make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when so deposited to be held in trust for the benefit of the Person entitled to such Defaulted Interest as in this clause
      provided. Thereupon, the Company will fix or cause to be fixed a Special Record Date for the payment of such Defaulted Interest, which will be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than
      10 days after the receipt by the Trustee of the notice of the proposed payment. The Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company), will cause notice of the proposed payment of such
      Defaulted Interest and the Special Record Date therefor to be delivered to the Holder of such Subordinated Note at the Holder’s address as it appears in the Subordinated Note Register not less than 10 days prior to such Special Record Date. Notice of
      the proposed payment of such Defaulted Interest and the Special Record Date therefor having been delivered as aforesaid, such Defaulted Interest will be paid to the Person in whose name such Subordinated Note will be registered at the close of
      business on such Special Record Date and will no longer be payable under the following clause (2).

    (2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Subordinated
        Note may be listed, and upon such notice as may be required by such exchange, if, after written notice given by the Company to the Trustee of the proposed payment under this Clause, such payment will be deemed practicable by the Trustee.

    Unless otherwise provided in or under this Indenture or the Subordinated Notes, at the option
      of the Company, interest on Subordinated Notes that bear interest may be paid by mailing a check to the address of the Person entitled thereto as such address will appear in the Subordinated Note Register or by transfer to an account maintained by
      the payee with a bank located in the United States.

    Subject to the foregoing provisions of this Section and Section 2.07, each Subordinated Note
      delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Subordinated Note will carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Subordinated Note.

     

    

    29

    

    
      
        

    

    
      	
              Section 2.11

            	
              Persons Deemed Owners.

            

    

    Prior to due presentment of a Subordinated Note for registration of transfer, the Company, the
      Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Subordinated Note is registered in the Subordinated Note Register as the owner of such Subordinated Note for the purpose of receiving payment of principal of,
      and (subject to Section 2.07 and Section 2.10) interest on, such Subordinated Note and for all other purposes whatsoever, whether or not any payment with respect to such Subordinated Note will be overdue, and neither the Company, the Trustee or any
      agent of the Company or the Trustee will be affected by notice to the contrary.

    No holder of any beneficial interest in any Global Subordinated Note held on its behalf by a
      Depositary will have any rights under this Indenture with respect to such Global Subordinated Note, and such Depositary may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the owner of such Global Subordinated
      Note for all purposes whatsoever. None of the Company, the Trustee, any Paying Agent or the Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of
      a Global Subordinated Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

    Notwithstanding the foregoing, nothing herein will prevent the Company, the Trustee, any
      Paying Agent or the Registrar from giving effect to any written certification, proxy or other authorization furnished by the applicable Depositary, as a Holder, with respect to a Global Subordinated Note or impair, as between such Depositary and the
      owners of beneficial interests in such Global Subordinated Note, the operation of customary practices governing the exercise of the rights of such Depositary (or its nominee) as the Holder of such Global Subordinated Note.

    
      	
              Section 2.12

            	
              Cancellation.

            

    

    All Subordinated Notes surrendered for payment, redemption, registration of transfer or
      exchange will, if surrendered to any Person other than the Trustee, be delivered to the Trustee, and any such Subordinated Note, as well as Subordinated Notes surrendered directly to the Trustee for any such purpose, will be cancelled promptly by the
      Trustee. The Company may at any time deliver to the Trustee for cancellation any Subordinated Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Subordinated Notes so delivered
      will be cancelled promptly by the Trustee. No Subordinated Notes will be authenticated in lieu of or in exchange for any Subordinated Notes cancelled as provided in this Section, except as expressly permitted by or under this Indenture. All cancelled
      Subordinated Notes held by the Trustee will be disposed of in accordance with its procedure for the disposition of cancelled Subordinated Notes, and the Trustee upon the written request of the Company will deliver to the Company a certificate of such
      disposition, unless by a Company Order the Company shall direct that cancelled Subordinated Notes shall be returned to the Company.

    
      	
              Section 2.13

            	
              Computation of Interest.

            

    

    (1) From and including the original issue date of the Subordinated Notes to but excluding February 15, 2026 or the earlier
        redemption date contemplated by Article X of the 

     30

      

    
      
        

    

    Indenture, the rate at which the Subordinated Notes shall bear interest shall be 3.75% per annum,
        computed on the basis of a 360-day year consisting of twelve 30-day months and payable semiannually in arrears on each Fixed Interest Payment Date. From and including February 15, 2026, to but excluding the Stated Maturity (the "Floating Rate
        Period”), the rate at which the Subordinated Notes shall bear interest shall be a floating rate equal to the then current Benchmark,  reset quarterly, for the applicable Interest Period plus 337 basis points, computed on the basis of a 360-day year
        and the actual number of days elapsed and payable quarterly in arrears on each Floating Interest Payment Date. The Calculation Agent shall notify the Trustee (if the Trustee is not the Calculation Agent) in writing of the interest rate for each
        Interest Period promptly after the Reference Time (or such other date of determination for the applicable Benchmark). Notwithstanding the foregoing, if Three-Month Term SOFR (or other applicable Benchmark) is less than zero, then Three-Month Term
        SOFR (or other such Benchmark) shall be deemed to be zero.

    (2) The Company shall take such actions as are necessary to ensure that from the commencement of the Interest Period for so long as
        any of the Subordinated Notes remain outstanding there will at all times be a Calculation Agent appointed to calculate Three-Month Term SOFR in respect of each Interest Period. The calculation of Three-Month Term SOFR for each applicable Interest
        Period by the Calculation Agent will (in the absence of manifest error) be final and binding. The Calculation Agent’s determination of any interest rate and its calculation of interest payments for any period will be maintained on file at the
        Calculation Agent’s principal offices, will be made available to any Holder of the Subordinated Notes upon request and will be provided to the Trustee. The Calculation Agent (if the Trustee is not the Calculation Agent) shall have all the rights,
        protections and indemnities afforded to the Trustee under the Indenture and hereunder. The Calculation Agent may be removed by the Company at any time. If the Calculation Agent is unable or unwilling to act as Calculation Agent or is removed by the
        Company, the Company will promptly appoint a replacement Calculation Agent. The Calculation Agent may not resign its duties without a successor having been duly appointed; provided, that if a successor Calculation Agent has not been appointed by
        the Company and such successor accepted such position within 30 days after the giving of notice of resignation by the Calculation Agent, then the resigning Calculation Agent may petition, at the expense of the Company, any court of competent
        jurisdiction for the appointment of a successor Calculation Agent with respect to such series. The Trustee shall not be under any duty to succeed to, assume or otherwise perform, any duties of the Calculation Agent, or to appoint a successor or
        replacement in the event of the Calculation Agent’s resignation or removal or to replace the Calculation Agent in the event of a default, breach or failure of performance on the part of the Calculation Agent with respect to the Calculation Agent’s
        duties and obligations hereunder. For the avoidance of doubt, if at any time there is no Calculation Agent appointed by the Company, then the Company shall be the Calculation Agent.

    (3) Effect of Benchmark Transition Event

        (a) If the Calculation Agent determines that a Benchmark Transition Event and its related Benchmark Replacement Date
        have occurred on or prior to the Reference Time in respect of any determination of the Benchmark on any date, then the Benchmark Replacement will replace the then-current Benchmark for all purposes relating to the Subordinated Notes during the
        Interest Period in respect of such determination on such date and all determinations on all subsequent dates. In connection with the implementation of a Benchmark Replacement, the 

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    Calculation Agent will have the right to make Benchmark Replacement Adjustment Conforming Changes
        from time to time and such change shall become effective without consent from the relevant Holders or any other party.

        (b) Notwithstanding anything set forth in Section 2.13(1) above, if the Calculation Agent determines on or prior to
        the relevant Reference Time that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Three-Month Term SOFR, then the provisions set forth in this Section 2.13(3) will thereafter apply to all
        determinations of the interest rate on the Subordinated Notes during the Interest Period. After a Benchmark Transition Event and its related Benchmark Replacement Date have occurred, the interest rate on the Subordinated Notes for each Interest
        Period will be an annual rate equal to the Benchmark Replacement plus 337 basis points.

        (c) The Calculation Agent is expressly authorized to make certain determinations, decisions and elections under the
        terms of the Subordinated Notes, including with respect to the use of Three-Month Term SOFR as the Benchmark and under this Section 2.13(3). Any determination, decision or election that may be made by the Calculation Agent under the terms of the
        Subordinated Notes, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or selection (i) will be
        conclusive and binding on the Holders of the Subordinated Notes and the Trustee absent manifest error, (ii) if made by the Company as Calculation Agent, will be made in the Company’s sole discretion, (iii) if made by a Calculation Agent other than
        the Company, will be made after consultation with the Company, and the Calculation Agent will not make any such determination, decision or election to which the Company reasonably objects and (iv) notwithstanding anything to the contrary herein or
        in the Indenture, shall become effective without consent from the Holders of the Subordinated Notes, the Trustee or any other party. If the Calculation Agent fails to make any determination, decision or election that it is required to make under
        the terms of the Subordinated Notes, then the Company will make such determination, decision or election on the same basis as described above.

        (d) The Company (or its Calculation Agent, if the Trustee is not the Calculation Agent) shall notify the Trustee in
        writing (i) upon the occurrence of the Benchmark Transition Event or the Benchmark Replacement Date, and (ii) of any Benchmark Replacements, Benchmark Replacement Adjustment Conforming Changes and other items affecting the interest rate on the
        Subordinated Notes after a Benchmark Transition Event.

       (e) The Trustee (including in its capacity as Paying Agent) shall have no (i) responsibility or liability for the (A)
        Three-Month Term SOFR Conventions, (B) selection of an alternative reference rate to Three-Month Term SOFR (including, without limitation, whether the conditions for the designation of such rate have been satisfied or whether such rate is a
        Benchmark Replacement or an Unadjusted Benchmark Replacement), (C) determination or calculation of a Benchmark Replacement, or (D) determination of whether a Benchmark Transition Event or Benchmark Replacement Date has occurred, and in each such
        case under clauses (A) through (D) above shall be entitled to conclusively rely upon the selection, determination, and/or calculation thereof as provided by the Company or its Calculation Agent, as applicable, and (ii) liability for any failure or
        delay in performing its duties hereunder as a result of the unavailability of a Benchmark rate as described in the definition thereof, including, without limitation, as a result of 

     32

      

    
      
        

    

    the Company’s or Calculation Agent’s failure to select a Benchmark Replacement or the Calculation
        Agent’s failure to calculate a Benchmark. The Trustee shall be entitled to rely conclusively on all notices from the Company or its Calculation Agent regarding any Benchmark or Benchmark Replacement, including, without limitation, in regards to
        Three-Month Term SOFR Conventions, a Benchmark Transition Event, Benchmark Replacement Date, and Benchmark Replacement Adjustment Conforming Changes. The Trustee shall not be responsible or liable for the actions or omissions of the Calculation
        Agent, or any failure or delay in the performance of the Calculation Agent’s duties or obligations, nor shall it be under any obligation to monitor or oversee the performance of the Calculation Agent. The Trustee shall be entitled to conclusively
        rely on any determination made, and any instruction, notice, Officers’ Certificate or other instruction or information provided by the Calculation Agent without independent verification, investigation or inquiry of any kind. The Trustee shall not
        be obligated to enter into any amendment or supplement hereto that adversely impacts its rights, duties, obligations, immunities or liabilities (including, without limitation, in connection with the adoption of any Benchmark Replacement Adjustment
        Conforming Changes).

        (f) If the then-current Benchmark is Three-Month Term SOFR, the Calculation Agent will have the right to establish the
        Three-Month Term SOFR Conventions, and if any of the foregoing provisions concerning the calculation of the interest rate and the payment of interest during the Interest Period are inconsistent with any of the Three-Month Term SOFR Conventions
        determined by the Calculation Agent, then the relevant Three-Month Term SOFR Conventions will apply.

    
      	
              Section 2.14

            	
              CUSIP Numbers.

            

    

    The Company may issue the Subordinated Notes with one or more “CUSIP” numbers (if then
      generally in use). The Company will promptly notify the Trustee in writing of any change in the CUSIP numbers. The Trustee may use “CUSIP” numbers in notices (including but not limited to notices of redemption or exchange) as a convenience to
      Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Subordinated Notes or
      as contained in any notice (including any notice of redemption or exchange) and that reliance may be placed only on the other identification numbers printed on the Subordinated Notes, and any such notice will not be affected by any defect in or
      omission of such numbers.

    ARTICLE III

      SATISFACTION AND DISCHARGE OF INDENTURE

    
      	
              Section 3.01

            	
              Satisfaction and Discharge.

            

    

    This Indenture will cease to be of further effect, and the Trustee, on receipt of a Company
      Order, at the expense of the Company, will execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

    (1) either

        (a) all Subordinated Notes theretofore authenticated and delivered (other than (i) Subordinated Notes that have been destroyed, lost or stolen and
        which have been replaced or 

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    paid as provided in Section 2.09 and (ii) Subordinated Notes for whose payment money has theretofore been deposited in
        trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 9.03) have been delivered to the Trustee for cancellation; or

        (b) all Subordinated Notes that have not been delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and
        payable at their Stated Maturity within one year, or (iii) if redeemable at the option of the Company, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the
        Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for such purpose, an amount sufficient to pay and
        discharge the entire indebtedness on such Subordinated Notes not theretofore delivered to the Trustee for cancellation, including the principal of, and interest on, such Subordinated Notes, to the date of such deposit (in the case of Subordinated
        Notes which have become due and payable) or to the Maturity thereof, as the case may be;

    (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Outstanding Subordinated Notes; and

    (3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided
        for relating to the satisfaction and discharge of this Indenture have been satisfied.

    Notwithstanding the satisfaction and discharge of this Indenture with respect to the
      Subordinated Notes, the obligations of the Company to the Trustee under Section 5.07 and, if money will have been deposited with the Trustee in accordance with Section 3.01(1)(b), the obligations of the Company and the Trustee with respect to the
      Subordinated Notes under Section 3.03 and Section 9.03 will survive.

    
      	
              Section 3.02

            	
              Defeasance and Covenant Defeasance.

            

    

    (1) The Company may at its option and at any time, elect to have Section 3.02(2) or Section 3.02(3) be applied to such Outstanding Subordinated Notes upon
        compliance with the conditions set forth below in this Section 3.02. Legal Defeasance and Covenant Defeasance may be effected only with respect to all, and not less than all, of the Outstanding Subordinated Notes.

    (2) Upon the Company’s exercise of the above option applicable to this Section 3.02(2), the Company will be deemed to have been discharged from its
        obligations with respect to such Outstanding Subordinated Notes on the date the conditions set forth in clause (4) of this Section 3.02 are satisfied (“Legal Defeasance”). For this purpose, Legal Defeasance means that the Company will be deemed to
        have paid and discharged the entire indebtedness represented by such Outstanding Subordinated Notes, which will thereafter be deemed to be “Outstanding” only for the purposes of Section 3.02(5) and the other Sections of this Indenture referred to
        in clauses (i) through (iv) of this paragraph, and to have satisfied all of its other obligations under such Subordinated Notes and this Indenture insofar as such Subordinated Notes are concerned (and the Trustee, at the expense of the Company,
        will execute proper instruments acknowledging the same), 

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    except for the following which will survive until otherwise terminated or discharged hereunder: (i) the rights of Holders
        of such Outstanding Subordinated Notes to receive, solely from the trust fund described in Section 3.02(4)(a) and as more fully set forth in this Section 3.02 and Section 3.03, payments in respect of the principal of and interest, if any, on, such
        Subordinated Notes when such payments are due, (ii) the obligations of the Company and the Trustee with respect to such Subordinated Notes under Section 2.07, Section 2.09, Section 9.02 and Section 9.03, (iii) the rights, powers, trusts, duties and
        immunities of the Trustee hereunder and (iv) this Section 3.02 and Section 3.03. The Company may exercise its option under this Section 3.02(2) notwithstanding the
        prior exercise of its option under Section 3.02(3) with respect to such Subordinated Notes.

    (3) Upon the Company’s exercise of the above option applicable to this Section 3.02(3), the Company will be released from its obligations under clauses
        (ii) and (iii) of Section 9.04 and under Section 9.05, Section 9.06 and Section 9.08 on and after the date the conditions set forth in Section 3.02(4) are satisfied (“Covenant Defeasance”), and such Subordinated Notes will thereafter be deemed to
        be not “Outstanding” for the purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with any such covenant, but will continue to be deemed “Outstanding” for all other purposes
        hereunder. For this purpose, such Covenant Defeasance means that with respect to such Outstanding Subordinated Notes, the Company may omit to comply with, and will have no liability in respect of. any term, condition or limitation set forth in any
        such Section or any such other covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such Section or such other covenant or by reason of reference in any such Section or such other covenant to any other
        provision herein or in any other document and such omission to comply will not constitute a default, but, except as specified above, the remainder of this Indenture and such Subordinated Notes will be unaffected thereby.

    (4) The following will be the conditions to application of Section 3.02(2) or Section 3.02(3) to any Outstanding Subordinated Notes:

        (a) The Company will irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section
        5.08 who will agree to comply with the provisions of this Section 3.02 applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the
        Holders, (i) an amount in Dollars, (ii) Government Obligations that through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment of
        principal of and interest, if any, on such Subordinated Notes, money or (iii) a combination thereof, in any case, in an amount, sufficient, without consideration of any reinvestment of such principal and interest, in the opinion of a nationally
        recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which will be applied by the Trustee (or other qualifying trustee) to pay and discharge, the
        principal of and interest, if any, on, such Outstanding Subordinated Notes on the Stated Maturity of such principal or installment of principal or interest or the applicable Redemption Date, as the case may be.

        (b) Such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, this Indenture or any
        other material agreement or instrument to which the Company or any Subsidiary is a party or by which it is bound.

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        (c) No Event of Default or event which with notice or lapse of time or both would become an Event of Default with respect to such Subordinated Notes
        will have occurred and be continuing on the date of such deposit, and, solely in the case of Legal Defeasance under Section 3.02(2), no Event of Default, or event which with notice or lapse of time or both would become an Event of Default, under
        Section 4.01 will have occurred and be continuing at any time during the period ending on and including the 91st day after the date of such deposit (it being understood that this condition to Legal Defeasance under Section 3.02(2) will
        not be deemed satisfied until the expiration of such period).

        (d) In the case of Legal Defeasance, the Company will have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received
        from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the date of this Indenture there has been a change in applicable federal income tax law, in either case to the effect that, and based thereon such opinion of
        independent counsel will confirm that, the Holders of such Outstanding Subordinated Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the
        same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred.

        (e) In the case of Covenant Defeasance, the Company will have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such
        Outstanding Subordinated Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times
        as would have been the case if such Covenant Defeasance had not occurred.

        (f) The Company will have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to
        the Legal Defeasance or Covenant Defeasance, as the case may be, under this Indenture have been satisfied.

        (g) If the moneys or Government Obligations or combination thereof, as the case may be, deposited under Section 3.02(4)(a) above are sufficient to
        pay the principal of, and interest, if any, on, such Subordinated Notes provided such Subordinated Notes are redeemed on a particular Redemption Date, the Company will have given the Trustee irrevocable instructions to redeem such Subordinated
        Notes on such date and to provide notice of such redemption to Holders as provided in or under this Indenture.

        (h) The Trustee will have received such other documents, assurances and Opinions of Counsel as the Trustee will have reasonably required in its
        discretion.

    (5) Subject to the provisions of the last paragraph of Section 9.03, all money and Government Obligations deposited with the Trustee (or other qualifying
        trustee, collectively for purposes of this Section 3.02(5), the “Trustee”) in accordance with Section 3.02(4)(a) in respect of any Outstanding Subordinated Notes will be held in trust and applied by the Trustee, in accordance with the provisions of
        such Subordinated Notes and this Indenture, to the payment, either directly or through any Paying Agent (other than the Company or any Subsidiary or Affiliate of the Company acting as Paying Agent) as the Trustee may determine in its discretion, to
        the 

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    Holders of all sums due and to become due thereon in respect of principal and interest but such money and Government
        Obligations need not be segregated from other funds, except to the extent required by law.

    The Company will pay and indemnify the Trustee against any tax, fee or other charge, imposed
      on or assessed against the Government Obligations deposited in accordance with this Section 3.02 or the principal or interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of
      the Outstanding Subordinated Notes.

    
      	
              Section 3.03

            	
              Application of Trust Money.

            

    

    Subject to the provisions of the last paragraph of Section 9.03, all money and Government
      Obligations deposited with the Trustee in accordance with Section 3.01 or Section 3.02 will be held in trust and applied by the Trustee, in accordance with the provisions of such Subordinated Notes subject to discharge under Section 3.01 or Legal
      Defeasance or Covenant Defeasance under Section 3.02, and this Indenture, to the payment, either directly or through any Paying Agent (including the Company, acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled
      thereto, of the principal and interest for whose payment such money has or Government Obligations have been deposited with or received by the Trustee; but such money and Government Obligations need not be segregated from other funds, except to the
      extent required by law.

    
      	
              Section 3.04

            	
              Reinstatement.

            

    

    If the Trustee (or other qualifying trustee appointed in accordance with Section 3.02(4)(a))
      or any Paying Agent is unable to apply any moneys or Government Obligations deposited in accordance with Section 3.01(1) or Section 3.02(4)(a) to pay any principal of, or interest, if any, on, the Subordinated Notes by reason of any legal proceeding
      or any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and the Subordinated Notes will be revived and reinstated as though
      no such deposit had occurred, until such time as the Trustee (or other qualifying trustee) or Paying Agent is permitted to apply all such moneys and Government Obligations to pay the principal of, and interest, if any, on the Subordinated Notes as
      contemplated by Section 3.01 or Section 3.02 as the case may be; provided, however,
      that if the Company makes any payment of the principal of, or interest if any on, the Subordinated Notes following the reinstatement of its obligations as aforesaid, the Company will be subrogated to the rights of the Holders of such Subordinated
      Notes to receive such payment from the funds held by the Trustee (or other qualifying trustee) or Paying Agent.

    
      	
              Section 3.05

            	
              Effect on Subordination Provisions.

            

    

    The provisions of Article XI are expressly made subject to the provisions for, and to the
      right of the Company to effect, the satisfaction and discharge of all of the Subordinated Notes as set forth in and in accordance with Section 3.01 and the provisions for, and to the right of the Company to effect, Legal Defeasance and Covenant
      Defeasance of all of the Subordinated Notes as set forth in and in accordance with Section 3.02. As a result, and anything herein to the contrary notwithstanding, if the Company complies with the provisions of Section 3.01 to effect the 

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    satisfaction and discharge of the Subordinated Notes or complies with the provisions of Section 3.02 to effect
      the Legal Defeasance or Covenant Defeasance, upon the effectiveness of such satisfaction and discharge in accordance with Section 3.01 or of Legal Defeasance or Covenant Defeasance in accordance with Section 3.02, in the case of satisfaction and
      discharge in accordance with Section 3.01, or, in the case of Legal Defeasance or Covenant Defeasance in accordance with Section 3.02, the Subordinated Notes as to which Legal Defeasance or Covenant Defeasance, as the case may be, will have become
      effective will thereupon cease to be so subordinated in right of payment to the Senior Indebtedness and will no longer be subject to the provisions of Article XI and, without limitation to the foregoing, all moneys and Government Obligations
      deposited with the Trustee (or other qualifying trustee) in trust in connection with such satisfaction and discharge. Legal Defeasance or Covenant Defeasance, as the case may be, and all proceeds therefrom may be applied to pay the principal of, and
      interest, if any, on, such Subordinated Notes as and when the same will become due and payable notwithstanding the provisions of Article XI without regard to whether any or all of the Senior Indebtedness then outstanding will have been paid or
      otherwise provided for.

    ARTICLE IV

      REMEDIES

    
      	
              Section 4.01

            	
              Events of Default; Acceleration.

            

    

    An “Event of Default” means any one of the following events (whatever the reason for such
      Event of Default and whether it will be voluntary or involuntary or be effected by operation of law or in accordance with any judgment, decree, or order of any court or any order, rule, or regulation of any administrative or governmental body):

    (1) the entry of a decree or order for relief in respect of the Company by a court having jurisdiction in the premises in an involuntary case or proceeding
        under any applicable bankruptcy, insolvency, or reorganization law, now or hereafter in effect of the United States or any political subdivision thereof, and such decree or order will have continued unstayed and in effect for a period of 30
        consecutive days;

    (2) the commencement by the Company of a voluntary case under any applicable bankruptcy, insolvency or reorganization law, now or hereafter in effect of
        the United States or any political subdivision thereof, or the consent by the Company to the entry of a decree or order for relief in an involuntary case or proceeding under any such law;

    (3) the failure of the Company to pay any installment of interest on any of the Subordinated Notes as and when the same will become due and payable, and
        the continuation of such failure for a period of 15 days;

    (4) the failure of the Company to pay all or any part of the principal of any of the Subordinated Notes as and when the same will become due and payable
        under this Indenture;

    (5) the failure of the Company to perform any other covenant or agreement on the part of the Company contained in the Subordinated Notes or in this
        Indenture, and the continuation of such failure for a period of 30 days after the date on which notice specifying such failure, stating that such notice is a “Notice of Default” hereunder and demanding that the Company remedy the 

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    same, will have been given, in the manner set forth in Section 1.05, to the Company by the Trustee, or to the Company and
        the Trustee by the Holders of at least 25% in aggregate principal amount of the Subordinated Notes at the time Outstanding; or the default by the Company under any bond, debenture, note or other evidence of indebtedness for money borrowed by the
        Company having an aggregate principal amount outstanding of at least $50.0 million , whether such indebtedness now exists or is created or incurred in the future, which default (i) constitutes a failure to pay any portion of the principal of such
        indebtedness when due and payable after the expiration of any applicable grace period or (ii) results in such indebtedness becoming due or being declared due and payable prior to the date on which it otherwise would have become due and payable
        without, in the case of clause (i), such indebtedness having been discharged or, in the case of clause (ii), without such indebtedness having been discharged or such acceleration having been rescinded or annulled.

    Upon becoming aware of any Event of Default, the Company will promptly deliver to the Trustee
      a written statement specifying the Event of Default.

    If an Event of Default described in Section 4.01(1) or Section 4.01(2) occurs, then the
      principal amount of all of the Outstanding Subordinated Notes, and accrued and unpaid interest, if any, on all Outstanding Subordinated Notes will become and be immediately due and payable without any declaration or other act on the part of the
      Trustee or any Holder, and the Company waives demand, presentment for payment, notice of nonpayment, notice of protest, and all other notices. Notwithstanding the foregoing, because the Company will treat the Subordinated Notes as Tier 2 Capital,
      upon the occurrence of an Event of Default other than an Event of Default described in Section 4.01(1) or Section 4.01(2), neither the Trustee nor any Holder may accelerate the Maturity of the Subordinated Notes and make the principal of, and any
      accrued and unpaid interest on, the Subordinated Notes, immediately due and payable.

    If any Event of Default occurs and is continuing, the Trustee may also pursue any other
      available remedy to collect the payment of principal of, and interest on, the Subordinated Notes or to enforce the performance of any provision of the Subordinated Notes or this Indenture.

    
      	
              Section 4.02

            	
              Failure to Make Payments.

            

    

    If an Event of Default described in Section 4.01(3) or Section 4.01(4) occurs, the Company
      will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of such Subordinated Notes, the whole amount then due and payable with respect to such Subordinated Notes, with interest upon the overdue principal, and, to the
      extent permitted by applicable law, upon any overdue installments of interest at the rate or respective rates, as the case may be, provided for or with respect to such Subordinated Notes or, if no such rate or rates are so provided, at the rate or
      respective rates, as the case may be, of interest borne by such Subordinated Notes, and, in addition thereto, such further amount of money as will be sufficient to cover the costs and expenses of collection, including the reasonable compensation,
      expenses, disbursements and advances of the Trustee, its agents and counsel and all other amounts due to the Trustee under Section 5.07.

    If the Company fails to pay the money it is required to pay the Trustee, the Trustee, in its
      own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree, and 

     39

    

    
      
        

    

    may enforce the same against the Company or any other obligor upon such Subordinated Notes and collect the
      moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company, wherever situated.

    The Trustee may proceed to protect and enforce its rights and the rights of the Holders of
      Subordinated Notes by such appropriate judicial proceedings as the Trustee will deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise
      of any power granted in this Indenture, or to enforce any other proper remedy.

    Upon the occurrence of a failure by the Company to make any required payment of principal or
      interest on the Subordinated Notes, the Company may not declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company’s capital stock, make any payment of principal
      or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank equal with or junior to the Subordinated Notes, or make any payments under any guarantee that ranks equal with or junior to the
      Subordinated Notes, other than: (i) any dividends or distributions in shares of, or options, warrants or rights to subscribe for or purchase shares of, any class of Company’s common stock; (ii) any declaration of a dividend in connection with the
      implementation of a shareholders’ rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto; (iii) as a result of a reclassification of Company’s capital stock or the
      exchange or conversion of one class or series of Company’s capital stock for another class or series of Company’s capital stock; (iv) the purchase of fractional interests in shares of Company’s capital stock in accordance with the conversion or
      exchange provisions of such capital stock or the security being converted or exchanged; or (v) purchases of any class of Company’s common stock related to the issuance of common stock or rights under any benefit plans for Company’s directors,
      officers or employees or any of Company’s dividend reinvestment plans.

    
      	
              Section 4.03

            	
              Trustee May File Proofs of Claim.

            

    

    In case of any judicial proceeding relative to the Company (or any other obligor upon the
      Subordinated Notes), its property or its creditors, the Trustee will be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the
      Holders and the Trustee allowed in any such proceeding. In particular, the Trustee will be authorized to:

    (1) file and prove a claim for the whole amount, or such lesser amount as may be provided for in the Subordinated Notes, of the principal and interest owing and unpaid in respect of
        such Subordinated Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the
        Trustee, its agents or retained professionals) and of the Holders of such Subordinated Notes allowed in such judicial proceeding, and

    (2) collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;

    40

      

    
      
        

    

    and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or other similar official in any such
      judicial proceeding is authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee will consent to the making of such payments directly to the Holders and to pay to the Trustee any amount due it for the
      reasonable compensation, expenses, disbursements, and advances of the Trustee, its agents and retained professionals, and any other amounts due hereunder.

    No provision of this Indenture will be deemed to authorize the Trustee to authorize or consent
      to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment, or composition affecting the Subordinated Notes or the rights of any Holder or to authorize the Trustee to vote in respect of the claim of any Holder
      in any such proceeding; provided, however, the Trustee may vote on behalf of
      the Holders for the election of a trustee in bankruptcy or similar official and may be a member of a creditors, or other similar committee.

    
      	
              Section 4.04

            	
              Trustee May Enforce Claims Without Possession of Subordinated Notes.

            

    

    All rights of action and claims under this Indenture or the Subordinated Notes may be
      prosecuted and enforced by the Trustee without the possession of any of the Subordinated Notes or the production of such Subordinated Notes in any related proceeding, and any such proceeding instituted by the Trustee will be brought in its own name
      as trustee of an express trust, and any recovery of judgment will, after provision for the payment of the reasonable compensation, expenses, disbursements, and advances of the Trustee, its agents, and retained professionals, be for the ratable
      benefit of the Holders in respect of which such judgment has been recovered.

    
      	
              Section 4.05

            	
              Application of Money Collected.

            

    

    Any money collected by the Trustee in accordance with this Article IV or, after an Event of
      Default, any money or other property distributable in respect of the Company’s obligations under this Indenture will be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on
      account of principal or any interest, upon presentation of the Subordinated Notes and the notation on such Subordinated Notes of the payment if only partially paid and upon surrender of such Subordinated Notes if fully paid:

    FIRST: To the payment of all amounts due the Trustee (including the payment of Trustee’s
      agents, accountants, consultants, counsel and other experts employed by it in the exercise and performance of its powers and duties as Trustee), acting in any capacity hereunder, (including any predecessor trustee) under Section 5.07;

    SECOND: To the payment of amounts then due and unpaid to the holders of Senior Indebtedness,
      to the extent required under the Subordination Provisions established with respect to the Subordinated Notes;

    THIRD: To the payment of the amounts then due and unpaid for principal of and any interest on
      the Subordinated Notes in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the aggregate amounts due and payable on such Subordinated Notes for principal and
      interest, respectively; and

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    FOURTH: The balance, if any, to the Person or Persons entitled thereto.

    
      	
              Section 4.06

            	
              Limitation on Suits.

            

    

    No Holder of any Subordinated Note will have any right to institute any proceeding, judicial
      or otherwise, with respect to this Indenture or any Subordinated Notes, or for the appointment of a receiver or trustee, or for any other remedy under this Indenture, unless:

    (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Subordinated Notes;

    (2) the Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Notes will have made written request to the Trustee to
        institute proceedings in respect of such Event of Default in its own name as Trustee under the Indenture;

    (3) such Holder or Holders have offered to the Trustee security and indemnity reasonably satisfactory to the Trustee to bond against the costs, expenses,
        and liabilities to be incurred in compliance with such request;

    (4) the Trustee for 60 days after its receipt of such notice, request, and offer of indemnity has failed to institute any such proceeding; and

    (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate
        principal amount of the Outstanding Subordinated Notes;

    it being understood and intended that no one or more of such Holders will have any right in any manner whatever
      by virtue of, or by availing of, any provision of this Indenture to affect, disturb, or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right
      under this Indenture, except in the manner provided in this Indenture and for the equal and ratable benefit of all of such Holders.

    
      	
              Section 4.07

            	
              Unconditional Right of Holders to Payments.

            

    

    Notwithstanding any other provision in this Indenture, the Holder of any Subordinated Note
      will have the right, which is absolute and unconditional, to receive payment of the principal of and (subject to Section 2.07 and Section 2.10) any interest on such Subordinated Note on the respective Stated Maturity or Maturities expressed in such
      Subordinated Note (or, in the case of redemption, on the Redemption Date), and to institute suit for the enforcement of any such payment and such rights will not be impaired without the consent of such Holder.

    
      	
              Section 4.08

            	
              Restoration of Rights and Remedies.

            

    

    If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy
      under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company,
      the Trustee and the Holders will be restored severally and respectively to their former positions under this Indenture, and thereafter 

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    all rights and remedies of the Trustee and the Holders will continue as though no such proceeding had been
      instituted.

    
      	
              Section 4.09

            	
              Rights and Remedies Cumulative.

            

    

    Except as otherwise provided with respect to the replacement or payment of mutilated,
      destroyed, lost, or stolen Subordinated Notes in the last paragraph of Section 2.09, no right or remedy conferred in this Indenture upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every
      right and remedy will, to the extent permitted by law, be cumulative and in addition to every other right and remedy given under this Indenture or now or in the future existing at law or in equity or otherwise. The assertion or employment of any
      right or remedy under this Indenture, or otherwise, will not prevent the concurrent assertion or employment of any other appropriate right or remedy.

    
      	
              Section 4.10

            	
              Delay or Omission Not Waiver.

            

    

    No delay or omission of the Trustee or of any Holder of any Subordinated Notes to exercise any
      right or remedy accruing upon any Event of Default will impair any such right or remedy or constitute a waiver of or acquiescence in any such Event of Default. Every right and remedy given by this Article or by law to the Trustee or to the Holders
      may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

    
      	
              Section 4.11

            	
              Control by Holders.

            

    

    The Holders of a majority in aggregate principal amount of the Outstanding Subordinated Notes
      will have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Subordinated Notes, provided that

    (1) such direction will not violate any rule of law or this Indenture or the Subordinated Notes,

    (2) the Trustee may take any other action deemed proper by the Trustee in its discretion which is not inconsistent with such direction, and

    (3) the Trustee will have the right to decline to follow any such direction if the Trustee in good faith will determine that the proceeding so directed
        would involve the Trustee in personal liability.

    
      	
              Section 4.12

            	
              Waiver of Past Defaults.

            

    

    The Holders of not less than a majority in aggregate principal amount of the Outstanding
      Subordinated Notes may on behalf of the Holders of all the Subordinated Notes waive any past default under this Indenture and its consequences, except a default in the payment of the principal of, or interest on, any Subordinated Note, or in respect
      of a covenant or provision of this Indenture which under Article VIII cannot be modified or amended without the consent of the Holder of each Outstanding Subordinated Note.

     

    

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    Upon any such waiver, such default will cease to exist, and any Event of Default arising from
      such default will be deemed to have been cured, for every purpose of this Indenture; but no such waiver will extend to any subsequent or other default or impair any consequent right.

    
      	
              Section 4.13

            	
              Undertaking for Costs.

            

    

    All parties to this Indenture agree, and each Holder of any Subordinated Notes by his
      acceptance of such Subordinated Notes will be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken,
      suffered, or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorney’s fees and
      expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 4.13 will not apply to any suit instituted by the Company, to
      any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Subordinated Notes, or to any suit instituted by any Holder for the
      enforcement of the payment of the principal of or interest, if any, on any Subordinated Notes on or after the Stated Maturity or Maturities expressed in such Subordinated Notes (or, in the case of redemption, on or after the Redemption Date).

    ARTICLE V

      THE TRUSTEE

    
      	
              Section 5.01

            	
              Duties of Trustee.

            

    

    (1) If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it hereby, and use the same
        degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

    (2) Except during the continuance of an Event of Default:

        (a) the duties of the Trustee will be determined solely by the express provisions hereof and the Trustee need perform only those duties that are
        specifically set forth herein and no others, and no implied covenants or obligations will be read into this Indenture against the Trustee; and

        (b) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions
        expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements hereof; however, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements hereof
        (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

    (3) Whether or not therein expressly so provided, every provision hereof that in any way relates to the Trustee is subject to paragraphs (1) and (2) of
        this Section 5.01 and to Section 5.02.

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    (4) No provision hereof will require the Trustee to expend or risk its own funds or incur any liability. The Trustee will be under no obligation to
        exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder has offered to the Trustee security and indemnity reasonably satisfactory to it against any loss, liability or expense.

    (5) The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in
        trust by the Trustee need not be segregated from other funds except to the extent required by law.

    
      	
              Section 5.02

            	
              Certain Rights of Trustee.

            

    

    Subject to Section 315(a) through Section 315(d) of the Trust Indenture Act:

    (1) the Trustee may conclusively rely and will be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument,
        opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or
        parties;

    (2) any request or direction of the Company mentioned herein will be sufficiently evidenced by a Company Request or a Company Order (unless other evidence
        in respect thereof be herein specifically prescribed) and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;

    (3) whenever in the administration of this Indenture the Trustee will deem it desirable that a matter be proved or established prior to taking, suffering
        or omitting any action hereunder, the Trustee (unless other evidence will be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’ Certificate or Opinion of Counsel, or both, which will comply with
        Section 1.02;

    (4) before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee will not be
        liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be full and
        complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. The Trustee may act through its attorneys and agents and will not be responsible for the
        misconduct or negligence of any agent appointed with due care.

    (5) the Trustee will be under no obligation to exercise any of the rights or powers vested in it by or under this Indenture at the request or direction of
        any Holder(s) under this Indenture, unless such Holder(s) will have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities that might be incurred by it in compliance with such request or
        direction;

    (6) the Trustee will not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument,
        opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or 

     45

      

    
      
        

    

    document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters
        as it may see fit, and, if the Trustee will determine to make such further inquiry or investigation, it will be entitled to examine, during business hours and upon reasonable notice, the books, records and premises of the Company, personally or by
        agent, accountant or attorney, at the sole cost of the Company and will incur no liability or additional liability of any kind by reason of such inquiry or investigation;

    (7) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and
        the Trustee will not be responsible for any misconduct or negligence on the part of any agent or professional appointed with due care by it hereunder;

    (8) the Trustee will not be liable for any action taken, suffered or omitted to be taken by it in good faith and reasonably believed by it to be authorized
        or within the discretion or rights or powers conferred upon it by this Indenture;

    (9) in no event will the Trustee be responsible or liable for special, indirect or consequential loss or damage of any kind whatsoever (including, but not
        limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;

    (10) the Trustee will not be required to take notice or be deemed to have notice of any default or Event of Default, except failure by the Company to pay or
        cause to be made any of the payments required to be made to the Trustee, unless a Responsible Officer of the Trustee shall receive written notice of such default or Event of Default from the Company or from the Holders of at least 25% in aggregate
        principal amount of the then Outstanding Subordinated Notes delivered to the Corporate Trust Office of the Trustee and in the absence of such notice so delivered the Trustee may conclusively assume no default or Event of Default exists;

    (11) the Trustee shall have no duty to monitor or confirm compliance by the Company with the terms of this Indenture or any Subordinated Note;

    (12) the Trustee shall not be bound to make any investigation into (i) the performance of or compliance with any of the covenants or agreements set forth
        herein, (ii) the occurrence of any default, or the validity, enforceability, effectiveness or genuineness of this Indenture or any other agreement, instrument or document;

    (13) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified for all
        costs (including those of its retained professionals), are extended to, and will be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed or appointed to act hereunder;

    (14) the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time
        to take specified actions under this Indenture;

    (15) the Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder;

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    (16) the Trustee shall not be liable or responsible for any calculation in connection with the transactions contemplated hereunder nor for any information
        used in connection with such calculation; and

    (17) in no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever
        (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

    
      	
              Section 5.03

            	
              Notice of Defaults.

            

    

    Within 90 days after, a Responsible Officer of the Trustee is notified of the occurrence of
      any default hereunder with respect to the Subordinated Notes, the Trustee will deliver to all Holders entitled to receive reports in accordance with Section 6.03(4), notice of such default hereunder known to the Trustee, unless such default will have
      been cured or waived; provided, however, that, except in the case of a default
      in the payment of the principal of or interest, if any, on, any Subordinated Note, the Trustee will be protected in withholding such notice if and so long as a Responsible Officer of the Trustee in good faith determines that the withholding of such
      notice is in the best interest of the Holders. For the purpose of this Section, the term “default” means any event that is, or after notice or lapse of time or both would become, an Event of Default with respect to Subordinated Notes.

    
      	
              Section 5.04

            	
              Not Responsible for Recitals or Issuance of Subordinated Notes.

            

    

    The recitals contained herein and in the Subordinated Notes, except the Trustee’s certificate
      of authentication, will be taken as the statements of the Company and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this
      Indenture or of the Subordinated Notes, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Subordinated Notes and perform its obligations hereunder and that the statements made by it
      in any Statement of Eligibility on Form T-1 supplied to the Company are true and accurate, subject to the qualifications set forth therein. Neither the Trustee nor any Authenticating Agent will be accountable for the use or application by the Company
      of the Subordinated Notes or the proceeds thereof. The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Subordinated Notes, it will not be accountable for the Company’s use of the
      proceeds from the Subordinated Notes or any money paid to the Company or upon the Company’s direction under any provision hereof, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee,
      and it will not be responsible for any statement or recital herein or any statement in the Subordinated Notes or any other document in connection with the sale of the Subordinated Notes or under this Indenture other than its certificate of
      authentication.

    
      	
              Section 5.05

            	
              May Hold Subordinated Notes.

            

    

    The Trustee, any Authenticating Agent, any Paying Agent, any Registrar or any other Person
      that may be an agent of the Trustee or the Company, in its individual or any other capacity, may become the owner or pledgee of Subordinated Notes and, subject to Section 310(b) 

    

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    and Section 311 of the Trust Indenture Act, may otherwise deal with the Company with the same rights that it
      would have if it were not Trustee, Authenticating Agent, Paying Agent, Registrar or such other Person.

    The Trustee is subject to Section 311(a) of the Trust Indenture Act, excluding any creditor
      relationship listed in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of Trust Indenture Act to the extent indicated.

    
      	
              Section 5.06

            	
              Money Held in Trust.

            

    

    Except as provided in Section 3.02(5), Section 3.03 and Section 9.03, money held by the
      Trustee in trust hereunder need not be segregated from other funds except to the extent required by law and will be held uninvested. The Trustee will be under no liability for interest on any money received by it hereunder except as otherwise agreed
      in writing with the Company.

    
      	
              Section 5.07

            	
              Compensation and Reimbursement.

            

    

    The Company agrees:

    (1) to pay to the Trustee from time to time compensation  for all services rendered by the Trustee acting in any capacity hereunder (which compensation
        will not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

    (2) except as otherwise expressly provided herein, to reimburse the Trustee promptly upon its request for all reasonable expenses, disbursements and
        advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of Trustee’s agents, accountants, consultants, counsel and other experts employed
        by it in the exercise and performance of its powers and duties as Trustee), except any such expense, disbursement or advance as may be attributable to the Trustee’s gross negligence or willful misconduct; and

    (3) to indemnify, defend, protect and hold each of the Trustee acting in any capacity or any predecessor Trustee and their agents, accountants,
        consultants, counsel and other experts employed by it in the exercise and performance of its powers and duties as Trustee harmless from and against any and all losses, liabilities, damages, costs or expenses suffered or incurred by it arising out
        of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company and defending itself against any claim (whether asserted by the Company,
        any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its gross negligence or willful
        misconduct, as determined by a final, non-appealable judgment of a court of competent jurisdiction, and the fees and disbursements of the Trustee’s agents, legal counsel, accountants and experts) and including taxes (other than taxes based upon,
        measured by or determined by the income of the Trustee).  The Trustee will notify the Company promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the Company will not relieve the Company of its obligations
        hereunder.  The Company will defend the claim and the Trustee will cooperate in the defense.  The Trustee may have separate counsel and the Company 

      

    48

      

    
      
        

    

     will pay the
        reasonable fees and expenses of such counsel.  The Company need not pay for any settlement made without its consent, which consent will not be unreasonably withheld.

    The obligations of the Company under this Section 5.07 will survive the satisfaction and
      discharge of this Indenture.

    As security for the performance of the obligations of the Company under this Section, the
      Trustee will have a lien prior to the Subordinated Notes upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of, or interest on, Subordinated Notes. Such lien will survive the
      satisfaction and discharge hereof and the resignation or removal of the Trustee.

    Any compensation or expense incurred by the Trustee after a default specified by Section 4.01
      is intended to constitute an expense of administration under any then applicable bankruptcy or insolvency law. “Trustee” for purposes of this Section 5.07 will include any predecessor Trustee, but the negligence or bad faith of any Trustee will not
      affect the rights of any other Trustee under this Section 5.07. The provisions of this Section 5.07 will, to the extent permitted by law, survive any termination of this Indenture (including, without limitation, termination in accordance with any
      Bankruptcy Laws) and the resignation or removal of the Trustee.

    
      	
              Section 5.08

            	
              Corporate Trustee Required; Eligibility.

            

    

    (1) There will at all times be a Trustee hereunder that is a corporation, organized and doing business under the laws of the United States, any state
        thereof or the District of Columbia, eligible under Section 310(a)(1) of the Trust Indenture Act to act as trustee under an indenture qualified under the Trust Indenture Act and that has a combined capital and surplus (computed in accordance with
        Section 310(a)(2) of the Trust Indenture Act) of at least $50,000,000 and is subject to supervision or examination by federal or state authority. The Trustee will also satisfy the requirements of Section 310(a)(5) of the Trust Indenture Act. If at
        any time the Trustee will cease to be eligible in accordance with the provisions of this Section, it will resign immediately upon written request therefor by the Company or any Holder in the manner and with the effect hereinafter specified in this
        Article,

    (2) The Trustee will comply with Section 310(b) of the Trust Indenture Act; provided,
        however, that there will be excluded from the operation of Section 310(b)(1) of the Trust Indenture Act this Indenture or any indenture or indentures under which
        other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the Trust Indenture Act are met.

    
      	
              Section 5.09

            	
              Resignation and Removal; Appointment of Successor.

            

    

    (1) No resignation or removal of the Trustee and no appointment of a successor Trustee in accordance with this Article V will become effective until the
        acceptance of appointment by the successor Trustee in accordance with Section 5.10.

    (2) The Trustee may resign at any time with respect to the Subordinated Notes by giving written notice thereof to the Company. If the instrument of
        acceptance by a successor Trustee required by Section 5.10 will not have been delivered to the Trustee within 30 days after 

      

    49

      

    
      
        

    

    

      the giving of such notice of resignation, the resigning Trustee may, at the Company’s expense, petition any court of competent jurisdiction for the appointment of a successor
        Trustee.

    (3) The Trustee may be removed at any time with respect to the Subordinated Notes by Act of the Holders of a majority in principal amount of the
        Outstanding Subordinated Notes, delivered to the Trustee and the Company.

    If at any time:

        (a) the Trustee will fail to comply with the obligations imposed upon it under Section 310(b) of the Trust Indenture Act with respect to Subordinated
        Notes after written request therefor by the Company or any Holder who has been a bona fide Holder for at least six months,

        (b) the Trustee will cease to be eligible under Section 5.08 and will fail to resign after written request therefor by the Company or any such
        Holder, or

        (c) the Trustee will become incapable of acting or will be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property will be
        appointed or any public officer will take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

    then, in any such case, (i) the Company, by or in accordance with a Board Resolution, may remove the Trustee with
      respect to the Subordinated Notes, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder who has been a bona fide Holder for at least six months may, on behalf of himself and all others similarly situated, petition any court of
      competent jurisdiction for the removal of the Trustee with respect to all Subordinated Notes and the appointment of a successor Trustee or Trustees.

    (4) If the Trustee will resign, be removed or become incapable of acting, or if a vacancy will occur in the office of Trustee for any cause, with respect
        to the Subordinated Notes, the Company, by or in accordance with a Board Resolution, will promptly appoint a successor Trustee or Trustees with respect to the Subordinated Notes and will comply with the applicable requirements of Section 5.10. If,
        within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Subordinated Notes shall have been appointed by Act of the Holders of a majority in principal amount of the
        Outstanding Subordinated Notes delivered to the Company and the retiring Trustee, the successor Trustee so appointed will, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 5.10, become the
        successor Trustee with respect to the Subordinated Notes and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Subordinated Notes will have been so appointed by the Company or the
        Holders and accepted appointment in the manner required by Section 5.10, any Holder who has been a bona fide Holder for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction
        for the appointment of a successor Trustee with respect to the Subordinated Notes.

    (5) The Company will give notice of each resignation and each removal of the Trustee with respect to the Subordinated Notes and each appointment of a
        successor Trustee with respect to the Subordinated Notes by delivering written notice of such event by first-class mail, postage 

      

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    prepaid, to the Holders as their names and
          addresses appear in the Subordinated Note Register.  Each notice will include the name of the successor Trustee with respect to the Subordinated Notes and
        the address of its Corporate Trust Office.

    
      	
              Section 5.10

            	
              Acceptance of Appointment by Successor.

            

    

    (1) Upon the appointment hereunder of any successor Trustee with respect to all Subordinated Notes, such successor Trustee so appointed will execute,
        acknowledge and deliver to the Company and the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee will become effective and such successor Trustee, without any further act,
        deed or conveyance, will become vested with all the rights, powers, trusts and duties hereunder of the retiring Trustee; but, on the request of the Company or such successor Trustee, such retiring Trustee, upon payment of its charges, will execute
        and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and, subject to Section 9.03, will duly assign, transfer and deliver to such successor Trustee all property and money held by
        such retiring Trustee hereunder, subject nevertheless to its claim, if any, provided for in Section 5.07.

    (2) Upon the appointment hereunder of any successor Trustee with respect to the Subordinated Notes, the Company, the retiring Trustee and such successor
        Trustee will execute and deliver an indenture supplemental hereto wherein each successor Trustee will accept such appointment and which (i) will contain such provisions as will be necessary or desirable to transfer and confirm to, and to vest in.
        such successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Subordinated Notes, (ii) if the retiring Trustee is not retiring with respect to all Subordinated Notes, will contain such provisions as
        will be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Subordinated Notes will continue to be vested in the retiring Trustee, and (iii) will add to or change any
        of the provisions of this Indenture as will be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture will constitute
        such Trustees co-trustees of the same trust, that each such Trustee will be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee will be responsible
        for any notice given to, or received by, or any act or failure to act on the part of any other Trustee hereunder, and, upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee will become
        effective to the extent provided therein, such retiring Trustee will have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture with respect
        to the Subordinated Notes other than as hereinafter expressly set forth, and such successor Trustee, without any further act, deed or conveyance, will become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect
        to the Subordinated Notes; but, on request of the Company or such successor Trustee, such retiring Trustee, upon payment of its charges with respect to the Subordinated Notes and subject to Section 9.03 will duly assign, transfer and deliver to
        such successor Trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to the Subordinated Notes, subject to its claim, if any, provided for in Section 5.07.

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      (3) Upon request of any Person appointed hereunder as a successor Trustee, the Company will execute any and all instruments for more fully and
          certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (1) or (2) of this Section, as the case
          may be.

    

    (4) No Person will accept its appointment hereunder as a successor Trustee unless at the time of such acceptance such successor Person will be qualified
        and eligible under this Article. No resigning or removed Trustee shall have any liability or responsibility for the action or inaction of any successor Trustee.

    
      	
              Section 5.11

            	
              Merger, Conversion, Consolidation or Succession to Business.

            

    

    Any corporation into which the Trustee may be merged or converted or with which it may be
      consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee will be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, will be the
      successor of the Trustee hereunder (provided that such corporation will otherwise be qualified and eligible under this Article), without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any
      Subordinated Notes will have been authenticated but not delivered by the Trustee then in office, any such successor to such authenticating Trustee may adopt such authentication and deliver the Subordinated Notes so authenticated with the same effect
      as if such successor Trustee had itself authenticated such Subordinated Notes. In case any Subordinated Notes will not have been authenticated by such predecessor Trustee, any such successor Trustee may authenticate and deliver such Subordinated
      Notes in either its own name or that of its predecessor Trustee.

    
      	
              Section 5.12

            	
              Appointment of Authenticating Agent.

            

    

    The Trustee may appoint one or more Authenticating Agents acceptable to the Company with
      respect to the Subordinated Notes which will be authorized to act on behalf of the Trustee to authenticate Subordinated Notes issued upon original issue, exchange, registration of transfer, partial redemption, partial repayment, or in accordance with
      Section 2.09, and Subordinated Notes so authenticated will be entitled to the benefits of this Indenture and will be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to
      the authentication and delivery of Subordinated Notes by the Trustee or the Trustee’s certificate of authentication, such reference will be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a
      certificate of authentication executed on behalf of the Trustee by an Authenticating Agent.

    Each Authenticating Agent will be reasonably acceptable to the Company and, except as provided
      in or under this Indenture, will at all times be a corporation that would be permitted by the Trust Indenture Act to act as trustee under an indenture qualified under the Trust Indenture Act, is authorized under applicable law and by its charter to
      act as an Authenticating Agent and has a combined capital and surplus (computed in accordance with Section 310(a)(2) of the Trust Indenture Act) of at least $50,000,000 and is subject to supervision or examination by federal or state authority. If at
      any time an Authenticating Agent will cease to be eligible in accordance with the provisions of this Section, it will resign immediately upon written request therefor by the Company or any Holder in the manner and with the effect specified in this
      Section.

     

    

    52

    

    
      
        

    

    Any corporation into which an Authenticating Agent may be merged or converted or with which it
      may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent will be a party, or any corporation succeeding to all or substantially all of the corporate agency or corporate trust
      business of an Authenticating Agent, will be the successor of such Authenticating Agent hereunder, provided such corporation will be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of
      the Trustee or the Authenticating Agent.

    An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee
      and the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and the Company. Upon receiving such a notice of resignation or upon such a termination, or in
      case at any time such Authenticating Agent will cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent that will be acceptable to the Company and will deliver written notice of
      such appointment by first-class mail, postage prepaid, to all Holders with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Subordinated Note Register. Any successor Authenticating Agent, upon
      acceptance of its appointment hereunder, will become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent No successor Authenticating Agent will be appointed
      unless eligible under the provisions of this Section 5.12.

    The Company agrees to pay each Authenticating Agent from time to time reasonable compensation
      for its services under this Section. If the Trustee makes such payments, it will be entitled to be reimbursed for such payments, subject to the provisions of Section 5.07.

    The provisions of Section 2.11, Section 5.04 and Section 5.05 will be applicable to each
      Authenticating Agent.

    If an Authenticating Agent is appointed under this Section, the Subordinated Notes may have
      endorsed thereon, in addition to or in lieu of the Trustee’s certificate of authentication, an alternate certificate of authentication in substantially the following form:

    This is one of the Subordinated Notes of the series designated therein referred to in the
      within-mentioned Indenture.

    U.S.

        Bank National Association, as Trustee

    By:  

    Authenticating Agent

    By: 

    Name:

    Title:

    

      

      

       

      

      53

      

      
        
          

      

      

    

    
      	
              Section 5.13

            	
              Preferred Collection of Claims against Company.

            

    

    If and when the Trustee will be or become a creditor of the Company (or any other obligor upon
      the Subordinated Notes), the Trustee will be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).

    ARTICLE VI

      HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

    
      	
              Section 6.01

            	
              Holder Lists.

            

    

    The Trustee will preserve in as current a form as is reasonably practicable the most recent
      list available to it of the names and addresses of the Holders. If the Trustee is not the Registrar, the Company will cause to be furnished to the Trustee at least semiannually on January 1 and July 1 a listing of the Holders dated within 10 days of
      the date on which the list is furnished and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders.

    
      	
              Section 6.02

            	
              Preservation of Information; Communications to Holders.

            

    

    The Trustee will comply with the obligations imposed upon it in accordance with Section 312 of
      the Trust Indenture Act.

    Every Holder of Subordinated Notes, by receiving and holding the same, agrees with the Company
      and the Trustee that neither the Company, the Trustee, any Paying Agent or any Registrar will be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders of Subordinated Notes in accordance
      with Section 312(c) of the Trust Indenture Act, regardless of the source from which such information was derived, and that the Trustee will not be held accountable by reason of delivering any material in accordance with a request made under Section
      312(b) of the Trust Indenture Act.

    
      	
              Section 6.03

            	
              Reports by Trustee.

            

    

    (1) Within 60 days after July 15 of each year commencing with the first July 15 following the date of this Indenture, if required by Section 313(a) of the
        Trust Indenture Act, the Trustee will transmit, in accordance with Section 313(c) of the Trust Indenture Act, a brief report dated as of such July 15 with respect to any of the events specified in said Section 313(a) and Section 313(b)(2) that may
        have occurred since the later of the immediately preceding July 15 and the date of this Indenture.

    (2) The Trustee will transmit the reports required by Section 313(a) of the Trust Indenture Act at the times specified therein.

    (3) The Trustee shall comply with Sections 313(b) and 313(c) of the Trust Indenture Act.

    (4) Reports under this Section will be transmitted in the manner and to the Persons required by Section 313(c) and Section 313(d) of the Trust Indenture
        Act.

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              Section 6.04

            	
              Reports by Company.

            

    

    (1) The Company, in accordance with Section 314(a) of the Trust Indenture Act, will:

        (a) file with the Trustee, within 15 days after the Company files the same with the Commission, copies of the annual reports and of the information,
        documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Company may be required to file with the Commission in accordance with Section 13
        or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports in accordance with either of said Sections, then it will file with the Trustee and the Commission, in accordance with rules and
        regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports that may be required in accordance with Section 13 of the Exchange Act in respect of a security listed and
        registered on a national securities exchange as may be prescribed from time to time in such rules and regulations;

        (b) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such
        additional certificates, information, documents and reports with respect to compliance by the Company, with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

        (c) transmit to the Holders within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in Section 313(c) of
        the Trust Indenture Act, such summaries of any information, documents and reports required to be filed by the Company in accordance with paragraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to time
        by the Commission. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such will not constitute constructive notice of any information contained therein or determinable
        from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

    (2) The Company intends to file the reports referred to in Section 6.04(1) with the Commission in electronic form in accordance with Regulation S-T of the
        Commission using the Commission’s Electronic Data Gathering, Analysis and Retrieval system. Compliance with the foregoing, or any successor electronic system approved by the Commission, will constitute delivery by the Company of such reports to the
        Trustee and Holders in compliance with the provision of Section 6.04(1) and Trust Indenture Act Section 314(a). Notwithstanding anything to the contrary herein, the Trustee will have no duty to search for or obtain any electronic or other filings
        that the Company makes with the Commission, regardless of whether such filings are periodic, supplemental or otherwise. Delivery of the reports, information and documents to the Trustee in accordance with this Section 6.04(2) will be solely for the
        purposes of compliance with Section 6.04(1) and with Trust Indenture Act Section 314(a). The Trustee’s receipt of such reports, information and documents (whether or not filed in electronic form) is for informational purposes only and the Trustee’s
        receipt of such will not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is
        entitled to rely 

     55

      

    
      
        

    

    exclusively on Officers’ Certificates). The Trustee shall have no liability or responsibility for the filing, content or
        timelines of any report hereunder aside from any report transmitted under Section 6.03 hereof.

    ARTICLE VII

      SUCCESSORS

    
      	
              Section 7.01

            	
              Merger, Consolidation or Sale of All or Substantially All Assets.

            

    

    The Company will not, in any transaction or series of related transactions, consolidate with
      or merge into any Person or sell, assign, transfer, lease or otherwise convey all or substantially all its properties and assets to any Person, unless:

    (1) either the Company will be the continuing Person (in the case of a merger), or the successor Person (if other than the Company) formed by such
        consolidation or into which the Company is merged or which acquires by sale, assignment, transfer, lease or other conveyance all or substantially all the properties and assets of the Company will be a corporation organized and existing under the
        laws of the United States, any state thereof or the District of Columbia and will expressly assume, by an indenture (or indentures, if at such time there is more than one Trustee) supplemental hereto, executed by such successor corporation and
        delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, and interest on, all the Outstanding Subordinated Notes and the due and punctual performance and observance of every obligation in this
        Indenture and the Outstanding Subordinated Notes on the part of the Company to be performed or observed;

    (2) immediately after giving effect to such transaction and treating any indebtedness that becomes an obligation of the Company or any Subsidiary as a
        result of that transaction as having been incurred by the Company or any Subsidiary at the time of the transaction, no Event of Default, and no event which, after notice or lapse of time, or both, would become an Event of Default, will have
        occurred and be continuing; and

    (3) either the Company or the successor Person will have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
        such consolidation, merger, sale, assignment, transfer, lease or other conveyance and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article VII and that all conditions
        precedent herein provided for relating to such transaction have been complied with.

    For purposes of the foregoing, any sale, assignment, transfer, lease or other conveyance of
      all or any of the properties and assets of one or more Subsidiaries of the Company (other than to the Company or another Subsidiary), which, if such properties and assets were directly owned by the Company, would constitute all or substantially all
      of the Company’s properties and assets, will be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

    
      	
              Section 7.02

            	
              Successor Person Substituted for Company.

            

    

    Upon any consolidation by the Company with or merger of the Company into any other Person or
      any sale, assignment, transfer, lease or conveyance of all or substantially all of the 

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    properties and assets of the Company to any Person in accordance with Section 7.01, the successor Person formed
      by such consolidation or into which the Company is merged or to which such sale, assignment, transfer, lease or other conveyance is made will succeed to, and be substituted for, and may exercise every right and power of, the Company under this
      Indenture with the same effect as if such successor Person had been named as the Company herein; and thereafter, except in the case of a lease, the predecessor Person will be released from all obligations and covenants under this Indenture and the
      Subordinated Notes.

    ARTICLE VIII

      SUPPLEMENTAL INDENTURES

    
      	
              Section 8.01

            	
              Supplemental Indentures without Consent of Holders.

            

    

    Without the consent of any Holders of Subordinated Notes, the Company (when authorized by or
      in accordance with a Board Resolution) and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

    (1) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company contained herein
        and in the Subordinated Notes;

    (2) to add to the covenants of the Company for the benefit of the Holders (as will be specified in such supplemental indenture or indentures) or to
        surrender any right or power herein conferred upon the Company with respect to the Subordinated Notes issued under this Indenture (as will be specified in such supplemental indenture or indentures);

    (3) to permit or facilitate the issuance of Subordinated Notes in uncertificated or global form, provided any such action will not adversely affect the
        interests of the Holders;

    (4) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Subordinated Notes and to add to or
        change any of the provisions of this Indenture as will be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, in accordance with the requirements of Section 5.10;

    (5) to cure any ambiguity or to correct or supplement any provision herein that may be defective or that may be inconsistent with any other provision
        herein;

    (6) to make any other provisions with respect to matters or questions arising under this Indenture that will not adversely affect the interests of the
        Holders of then Outstanding Subordinated Notes;

    (7) to add any additional Events of Default (as will be specified in such supplemental indenture);

    (8) to supplement any of the provisions of this Indenture to such extent as will be necessary to permit or facilitate the Legal Defeasance, Covenant
        Defeasance and/or satisfaction

     57

      

    
      
        

    

     and discharge of the Subordinated Notes in accordance with Article III, provided that any such action will not adversely
        affect the interests of any Holder;

    (9) to provide for the issuance of Exchange Notes;

    (10) to conform any provision in this Indenture to the requirements of the Trust Indenture Act; or

    (11) to make any change that does not adversely affect the legal rights under this Indenture of any Holder.

    
      	
              Section 8.02

            	
              Supplemental Indentures with Consent of Holders.

            

    

    With the consent of the Holders of not less than a majority in principal amount of the
      Outstanding Subordinated Notes, by Act of said Holders delivered to the Company and the Trustee, the Company (when authorized by or in accordance with a Board Resolution), and the Trustee may enter into an indenture or indentures supplemental hereto
      for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of the Subordinated Notes or of modifying in any manner the rights of the Holders under this Indenture; provided, that no
      such supplemental indenture, without the consent of the Holder of each Outstanding Subordinated Note affected thereby, will:

    (1) reduce the rate of or change the time for payment of interest, including Defaulted Interest, on any Subordinated Notes;

    (2) reduce the principal of or change the Stated Maturity of any Subordinated Notes, or change the date on which any Subordinated Notes may be subject to
        redemption or reduce the Redemption Price therefore;

    (3) make any Subordinated Note payable in money other than Dollars;

    (4) make any change in provisions of this Indenture protecting the right of each Holder to receive payment of principal of and interest on such
        Subordinated Note on or after the due date thereof or to bring suit to enforce such payment;

    (5) reduce the percentage in principal amount of the Outstanding Subordinated Notes, the consent of whose Holders is required for any such supplemental
        indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in Section 4.12 or Section 9.06 of this Indenture; or

    (6) modify any of the provisions of this Section 8.02, Section 4.12 or Section 9.06, except to increase any such percentage or to provide that certain
        other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Subordinated Note affected thereby.

     

      

    58

      

    
      
        

    

    It will not be necessary for any Act of Holders under this Section 8.02 to approve the
      particular form of any proposed supplemental indenture, but it will be sufficient if such Act will approve the substance thereof.

    
      	
              Section 8.03

            	
              Execution of Supplemental Indentures.

            

    

    As a condition to executing, or accepting the additional trusts created by, any supplemental
      indenture permitted by this Article VIII or the modifications thereby of the trust created by this Indenture, the Trustee will be entitled to receive, and (subject to Section 5.01) will be fully protected in relying upon, an Officers’ Certificate and
      an Opinion of Counsel to the effect that the execution of such supplemental indenture is authorized or permitted by this Indenture, that such supplemental indenture has been duly authorized, executed and delivered by, and is a valid, binding and
      enforceable obligation of, the Company, subject to customary exceptions. The Trustee may, but will not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or
      otherwise.

    
      	
              Section 8.04

            	
              Effect of Supplemental Indentures.

            

    

    Upon the execution of any supplemental indenture under this Article VIII, this Indenture will
      be modified in accordance therewith, and such supplemental indenture will form a part of this Indenture for all purposes; and every Holder theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

    
      	
              Section 8.05

            	
              Reference in Subordinated Notes to Supplemental Indentures.

            

    

    Subordinated Notes authenticated and delivered after the execution of any supplemental
      indenture in accordance with this Article VIII may, and will if required by the Company, bear a notation in form approved by the Company as to any matter provided for in such supplemental indenture. If the Company will so determine, new Subordinated
      Notes so modified as to conform, in the opinion of the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Subordinated Notes.

    
      	
              Section 8.06

            	
              Effect on Senior Indebtedness.

            

    

    No supplemental indenture will directly or indirectly modify or eliminate the Subordination
      Provisions or the definition of “Senior Indebtedness” applicable with respect to the Subordinated Notes in any manner that might terminate or impair the subordination of such Subordinated Notes to such Senior Indebtedness without the prior written
      consent of each of the holders of such Senior Indebtedness.

    
      	
              Section 8.07

            	
              Conformity with Trust Indenture Act.

            

    

    Every supplemental indenture executed in accordance with this Article will conform to the
      requirements of the Trust Indenture Act as then in effect.

    

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    ARTICLE IX

      COVENANTS

    
      	
              Section 9.01

            	
              Payment of Principal and Interest.

            

    

    The Company covenants and agrees for the benefit of the Holders that it will duly and
      punctually pay the principal of, and interest on, the Subordinated Notes, in accordance with the terms thereof and this Indenture. Principal and interest will be considered paid on the date due if the Paying Agent, if other than the Company or a
      Subsidiary thereof, holds as of 11:00 a.m., Eastern time, on the Business Day immediately prior to any Interest Payment Date, an amount in immediately available funds provided by the Company that is designated for and sufficient to pay all principal
      and interest then due. The Company will pay all Additional Interest, if any, on the dates and in the amounts set forth in the Registration Rights Agreement.

    If Additional Interest is payable by the Company in accordance with the Registration Rights
      Agreement, the Company will deliver to the Trustee a certificate to that effect stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable. Unless and until a Responsible Officer
      of the Trustee receives such a certificate or instruction or direction from the Holders in accordance with the terms of this Indenture, the Trustee may assume without inquiry that no Additional Interest is payable. The foregoing will not prejudice
      the rights of the Holders with respect to their entitlement to Additional Interest as otherwise set forth in this Indenture or the Subordinated Notes and pursuing any action against the Company directly or otherwise directing the Trustee to take such
      action in accordance with the terms of this Indenture and the Subordinated Notes. If the Company has paid Additional Interest directly to persons entitled to it, the Company will deliver to the Trustee a certificate setting forth the particulars of
      such payment.

    
      	
              Section 9.02

            	
              Maintenance of Office.

            

    

    The Company will maintain an office or agency in the City of Mountlake Terrace, Washington
       (which may be an office of the Trustee or an Affiliate of the Trustee or Registrar) where Subordinated Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the
      Subordinated Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company fails to maintain any such required
      office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

    The Company may also from time to time designate one or more other offices or agencies where
      the Subordinated Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission will in any manner relieve the Company of its obligation to
      maintain an office or agency in Mountlake Terrace, Washington . The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

     

    

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    The Company hereby designates the Corporate Trust Office of the Trustee as one such office or
      agency of the Company in accordance with Section 9.02.

    
      	
              Section 9.03

            	
              Money for Subordinated Notes Payments to Be Held in Trust.

            

    

    If the Company will at any time act as its own Paying Agent, it will, on or before each due
      date of the principal of, or interest on, any of the Subordinated Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum in Dollars sufficient to pay the principal and interest, as the case may be, so becoming due
      until such sums will be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee of its action or failure so to act.

    Whenever the Company will have one or more Paying Agents, it will, on or prior to each due
      date of the principal of, or interest on, any Subordinated Notes, deposit with any Paying Agent a sum in Dollars sufficient to pay the principal and interest, as the case may be, so becoming due, such sum to be held in trust for the benefit of the
      Persons entitled thereto, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

    The Company will cause each Paying Agent other than the Trustee to execute and deliver to the
      Trustee an instrument in which such Paying Agent will agree with the Trustee, subject to the provisions of this Section that such Paying Agent will:

    (1) hold all sums held by it for the payment of the principal of, or interest on, the Subordinated Notes in trust for the benefit of the Persons entitled
        thereto until such sums will be paid to such Persons or otherwise disposed of as provided in or under this Indenture;

    (2) give the Trustee notice of any default by the Company in the making of any payment of principal, or interest on, the Subordinated Notes; and

    (3) at any time during the continuance of any such default, upon the written request of the Trustee, pay to the Trustee all sums so held in trust by such
        Paying Agent.

    The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
      this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same terms as those upon which
      such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent will be released from all further liability with respect to such sums.

    Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
      trust for the payment of the principal of, or interest on, any Subordinated Note and remaining unclaimed for two years after such principal or interest will have become due and payable will be paid to the Company upon a Company Request, or (if then
      held by the Company) will be discharged from such trust; and the Holder of such Subordinated Note will thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent
      with respect to such trust money, and all liability of the Company as trustee thereof, will thereupon cease.

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              Section 9.04

            	
              Corporate Existence.

            

    

    Subject to Article VII, the Company will do or cause to be done all things necessary to
      preserve and keep in full force and effect (i) the corporate existence of the Company, (ii) the existence (corporate or otherwise) of each Significant Subsidiary and (iii) the rights (charter and statutory), licenses and franchises of the Company and
      each of its Significant Subsidiaries; , provided, however, that the Company will not be required to preserve the existence (corporate or other) of any of its Significant Subsidiaries or any such right, license or franchise of the Company or any of
      its Significant Subsidiaries if the Board of Directors of the Company determines that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Significant Subsidiaries taken as a whole and that the loss
      thereof will not be disadvantageous in any material respect to the Holders.

    
      	
              Section 9.05

            	
              Maintenance of Properties.

            

    

    The Company will, and will cause each Significant Subsidiary to, cause all its properties used
      or useful in the conduct of its business to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and
      improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section will prevent the Company or any Significant Subsidiary from discontinuing the
      operation and maintenance of any of their respective properties if such discontinuance is, in the judgment of the Board of Directors of the Company or of any Significant Subsidiary, as the case may be desirable in the conduct of its business.

    
      	
              Section 9.06

            	
              Dividends.

            

    

    The Company shall not declare
        or pay any dividend, except for dividends payable solely in shares of common stock of the Company, or make any distribution on capital stock or other equity securities of any kind of the Company, in each case except in such amounts as permitted by
        applicable regulations and only upon receipt of any required regulatory approval.

    
      	
              Section 9.07

            	
              Waiver of Certain Covenants.

            

    

    The Company may omit in any particular instance to comply with any term, provision or
      condition set forth in Section 9.02 to Section 9.06, inclusive, with respect to the Subordinated Notes if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Subordinated Notes, by Act of such
      Holders, either will waive such compliance in such instance or generally will have waived compliance with such term, provision or condition, but no such waiver will extend to or affect such term, provision or condition except to the extent so
      expressly waived, and, until such waiver will become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition will remain in full force and effect.

    
      	
              Section 9.08

            	
              Company Statement as to Compliance.

            

    

    The Company will deliver to the Trustee, within 120 days after the end of each fiscal year, an
      Officers’ Certificate covering the preceding calendar year, stating whether or not, to the best of 

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    his or her knowledge, the Company is in default in the performance and observance of any of the terms,
      provisions and conditions of this Indenture (without regard to notice requirements or periods of grace) and if the Company will be in default, specifying all such defaults and the nature and status thereof of which he or she may have knowledge.

    
      	
              Section 9.09

            	
              Tier 2 Capital.

            

    

    If all or any portion of the Subordinated Notes ceases to be deemed to be Tier 2 Capital,
      other than due to the limitation imposed on the capital treatment of subordinated debt during the five (5) years immediately preceding the Maturity Date of the Subordinated Notes, the Company will immediately notify the Trustee and the Holders
      thereof, and thereafter the Company may request that the Holders work with the Company in good faith, subject to the terms of this Indenture, to execute and deliver all agreements as reasonably necessary in order to restructure the applicable
      portions of the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital, and the Company may request, subject to the terms of this Indenture, that the Trustee execute and deliver all such agreements as may be reasonably necessary
      in order to effect any restructuring agreed to by the Company and the Holders; provided, however, that nothing contained in this Section 9.09 shall limit the Company’s right to redeem the Subordinated Notes upon the occurrence of a Tier 2 Capital Event pursuant to Section 10.01(3) hereof.

    ARTICLE X

      REDEMPTION OF SECURITIES

    
      	
              Section 10.01

            	
              Applicability of Article.

            

    

    (1) Except as provided in this Section 10.01, the Subordinated Notes are not subject to redemption at the option of the Company. The Subordinated Notes are
        not subject to redemption at the option of the Holders.

    (2) Subject to the receipt of any required regulatory approvals, with corresponding written notice to the Trustee, the Company may, at its option, on any
        Interest Payment Date on or after September 1, 2023, redeem all or a portion of the Subordinated Notes.

    (3) Subject to the receipt of any required regulatory approvals, the Company may, at its option, redeem all, but not a portion of the Outstanding
        Subordinated Notes at any time upon an Investment Company Event, a Tax Event or a Tier 2 Capital Event.

    (4) The Redemption Price with respect to any redemption permitted under this Indenture will be equal to 100% of the principal amount of the Subordinated
        Notes to be redeemed, plus accrued but unpaid interest and Additional Interest, if any, thereon to, but excluding, the Redemption Date.

    
      	
              Section 10.02

            	
              Election to Redeem; Notice to Trustee.

            

    

    The election of the Company to redeem any Subordinated Notes will be evidenced by a Company
      Order. In case of any redemption of less than all of the Subordinated Notes, the Company will, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice will be satisfactory to the Trustee, but in any event not less
      than 45 days prior to the Redemption 

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    Date), notify the Trustee, of such Redemption Date and of the principal amount of Subordinated Notes to be
      redeemed.

    In the case of any redemption of Subordinated Notes (i) prior to the expiration of any
      restriction on such redemption provided in the terms of such Subordinated Notes or elsewhere in this Indenture or (ii) in accordance with an election of the Company that is subject to a condition specified in the terms of such Subordinated Notes or
      elsewhere in this Indenture, the Company will furnish to the Trustee an Officers’ Certificate evidencing compliance with such restriction or condition.

    
      	
              Section 10.03

            	
              Selection by Trustee of Subordinated Notes to be Redeemed.

            

    

    If less than all of the Subordinated Notes are to be redeemed, the particular Subordinated
      Notes to be redeemed will be selected not more than 45 days prior to the Redemption Date by the Trustee from the Outstanding Subordinated Notes not previously called for redemption unless otherwise required by law or applicable Depositary
      requirements, on a pro rata basis as to the Holders and which may provide for the selection for redemption of portions of the principal amount of Subordinated Notes; provided,
      however, that no such partial redemption will reduce the portion of the principal amount of a Subordinated Note not redeemed to less than the minimum denomination
      for a Subordinated Note established in or under this Indenture. In the event a pro rata redemption is not permitted under applicable law or applicable depositary requirements, the Subordinated Notes to be redeemed will be selected by lot or such
      method as the Trustee will deem fair and appropriate.

    The Trustee will promptly notify the Company and the Registrar (if other than itself) in
      writing of the Subordinated Notes selected for redemption and, in the case of any Subordinated Notes selected for partial redemption, the principal amount thereof to be redeemed.

    For all purposes of this Indenture, unless the context otherwise requires, all provisions
      relating to the redemption of Subordinated Notes will relate, in the case of any Subordinated Notes redeemed or to be redeemed only in part, to the portion of the principal of such Subordinated Notes which has been or is to be redeemed.

    
      	
              Section 10.04

            	
              Notice of Redemption.

            

    

    Notice of redemption will be given in the manner provided in Section 1.05, not less than 30
      nor more than 60 days prior to the Redemption Date to the Holders of Subordinated Notes to be redeemed. Failure to give notice by delivering in the manner herein provided to the Holder of any Subordinated Notes designated for redemption as a whole or
      in part, or any defect in the notice to any such Holder, will not affect the validity of the proceedings for the redemption of any other Subordinated Notes or portions thereof.

    Any notice that is delivered to the Holder of any Subordinated Notes in the manner herein
      provided will be conclusively presumed to have been duly given, whether or not such Holder receives the notice.

    All notices of redemption will state:

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    (1) the Redemption Date,

    (2) the Redemption Price,

    (3) if less than all Outstanding Subordinated Notes are to be redeemed, the identification (and, in the case of partial redemption, the principal amount)
        of the particular Subordinated Note or Subordinated Notes to be redeemed,

    (4) that, in case any Subordinated Note is to be redeemed in part only, on and after the Redemption Date, upon surrender of such Subordinated Note, the
        Holder of such Subordinated Note will receive, without charge, a new Subordinated Note or Subordinated Notes of authorized denominations for the principal amount thereof remaining unredeemed,

    (5) that, on the Redemption Date, the Redemption Price will become due and payable upon each such Subordinated Note or portion thereof to be redeemed,
        together (if applicable) with accrued and unpaid interest and Additional Interest, if any, thereon (subject, if applicable, to the provisos to the first paragraph of Section 10.06), and, if applicable, that interest thereon will cease to accrue on
        and after said date,

    (6) the place or places where such Subordinated Notes are to be surrendered for payment of the Redemption Price and any accrued interest pertaining
        thereto, and

    (7) the section hereunder providing for such redemption.

    The notice of redemption shall include the CUSIP number reference numbers of such Subordinated
      Notes, if any (or any other numbers used by a Depositary to identify such Subordinated Notes).

    Notice of redemption of Subordinated Notes to be redeemed at the election of the Company will
      be given by the Company or, at the Company’s request delivered at least 10 days before the date such notice is to be given (unless a shorter period will be acceptable to the Trustee), by the Trustee in the name and at the expense of the Company.

    
      	
              Section 10.05

            	
              Deposit of Redemption Price.

            

    

    On or prior to 11:00 a.m., Eastern time, on any Redemption Date, the Company will deposit,
      with respect to the Subordinated Notes called for redemption in accordance with Section 10.04, with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 9.03) an
      amount sufficient to pay the Redemption Price of, and (except if the Redemption Date will be an Interest Payment Date) any accrued interest on, all such Subordinated Notes or portions thereof which are to be redeemed on that date.

    
      	
              Section 10.06

            	
              Subordinated Notes Payable on Redemption Date.

            

    

    Notice of redemption having been given as provided above, the Subordinated Notes so to be
      redeemed will, on the Redemption Date, become due and payable at the Redemption Price therein specified, together with accrued and unpaid interest and Additional Interest, if any, thereon 

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    and from and after such date (unless the Company will default in the payment of the Redemption Price and accrued
      interest, if any) such Subordinated Notes will cease to bear interest. Upon surrender of any such Subordinated Note for redemption in accordance with said notice, such Subordinated Note will be paid by the Company at the Redemption Price, together
      with any accrued and unpaid interest and Additional Interest, if any, thereon to but excluding the Redemption Date; provided, however, that installments of interest on Subordinated Notes whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Subordinated Notes registered as such at
      the close of business on the Regular Record Dates therefor according to their terms and the provisions of Section 2.10.

    If any Subordinated Note called for redemption will not be so paid upon surrender thereof for
      redemption, the principal, until paid, will bear interest from the Redemption Date at the rate prescribed therefor in the Subordinated Note or, if no rate is prescribed therefor in the Subordinated Note, at the rate of interest, if any, borne by such
      Subordinated Note.

    
      	
              Section 10.07

            	
              Subordinated Notes Redeemed in Part.

            

    

    Any Subordinated Note which is to be redeemed only in part will be surrendered at any office
      or agency for such Subordinated Note (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney
      duly authorized in writing) and the Company will execute and the Trustee will authenticate and deliver to the Holder of such Subordinated Note without service charge, a new Subordinated Note or Subordinated Notes, containing identical terms and
      provisions, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Subordinated Note so surrendered. If a Global Subordinated Note is so
      surrendered, the Company will execute, and the Trustee will authenticate and deliver to the Depositary for such Global Subordinated Note as will be specified in the Company Order with respect thereto to the Trustee, without service charge, a new
      Global Subordinated Note in a denomination equal to and in exchange for the unredeemed portion of the principal of the Global Subordinated Note so surrendered.

    Upon surrender of a Subordinated Note that is redeemed in part, the Company will issue and the
      Trustee will authenticate for the Holder at the expense of the Company a new Subordinated Note equal in principal amount to the unredeemed portion of the Subordinated Notes Note surrendered representing the same indebtedness to the extent not
      redeemed. Notwithstanding anything in this Indenture to the contrary, only a Company Order and not an Opinion of Counsel or an Officers’ Certificate of the Company is required for the Trustee to authenticate such new Subordinated Note.

    ARTICLE XI

      SUBORDINATION OF SECURITIES

    
      	
              Section 11.01

            	
              Agreement to Subordinate.

            

    

    The Company, for itself, its successors and assigns, covenants and agrees, and each Holder of
      Subordinated Notes by the Holder’s acceptance thereof, likewise covenants and agrees, that the 

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    payment of the principal of and interest on each and all of the Subordinated Notes is and will be expressly
      subordinated in right of payment to the prior payment in full of all Senior Indebtedness.

    
      	
              Section 11.02

            	
              Distribution of Assets.

            

    

    (1) Upon any distribution of assets of the Company upon any termination, winding up, liquidation or reorganization of the Company, whether in bankruptcy,
        insolvency, reorganization or receivership proceedings or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of the Company or otherwise (subject to the power of a court of competent jurisdiction
        to make other equitable provision reflecting the rights conferred upon the Senior Indebtedness and the holders thereof with respect to the Subordinated Notes and the Holders thereof by a lawful plan of reorganization under applicable bankruptcy
        law):

        (a) holders of all Senior Indebtedness will first be entitled to receive payment in full in accordance with the terms of such Senior Indebtedness of
        the principal thereof, premium, if any, and the interest due thereon (including interest accruing subsequent to the commencement of any proceeding for the bankruptcy or reorganization of the Company under any applicable bankruptcy, insolvency or
        similar law now or hereafter in effect) before the Holders of the Subordinated Notes are entitled to receive any payment upon the principal of or interest on indebtedness evidenced by the Subordinated Notes;

        (b) any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Holders
        would be entitled except for the provisions of this Article XI, including any such payment or distribution that may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of the
        Subordinated Notes, will be paid by the liquidating trustee or agent or other Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of Senior
        Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, in accordance with the priorities then existing
        among holders of Senior Indebtedness for payment of the aggregate amounts remaining unpaid on account of the principal, premium, if any, and interest (including interest accruing subsequent to the commencement of any proceeding for the bankruptcy
        or reorganization of the Company under any applicable bankruptcy, insolvency or similar law now or hereafter in effect) on the Senior Indebtedness held or represented by each, to the extent necessary to make payment in full of all Senior
        Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness; it being understood that if the Holders fail to file a proper claim in the form required by any proceeding
        referred to in this Section 11.02(1)(b) prior to 30 days before the expiration of the time to file such claim or claims, then the holders of Senior Indebtedness are hereby authorized to file an appropriate claim or claims for and on behalf of the
        Holders, in the form required in any such proceeding; and

        (c) in the event that, notwithstanding the foregoing, any payment or distribution of assets of the Company of any kind or character, whether in cash,
        property or securities, including any such payment or distribution that may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinate to the payment of the Subordinated 

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    Notes will be received by the Trustee or the Holders before all Senior Indebtedness is paid in full, such payment or
        distribution will be paid over to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment of assets of the Company for all Senior Indebtedness remaining unpaid until all such Senior
        Indebtedness will have been paid in full, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness,

    (2) Subject to the payment in full of all Senior Indebtedness, the Holders will be subrogated to the rights of the holders of Senior Indebtedness to
        receive payments or distributions of cash, property or securities of the Company applicable to the Senior Indebtedness until the principal of and interest on the Subordinated Notes will be paid in full and no such payments or distributions to
        holders of such Senior Indebtedness to which the Holders would be entitled except for the provisions hereof of cash, property or securities otherwise distributable to the holders of Senior Indebtedness will, as between the Company, its creditors,
        other than the holders of Senior Indebtedness, and the Holders, be deemed to be a payment by the Company to or on account of the Senior Indebtedness. It is understood that the provisions of this Article XI are intended solely for the purpose of
        defining the relative rights of the Holders of the Subordinated Notes, on the one hand, and the holders of Senior Indebtedness, on the other hand. Nothing contained in this Article XI or elsewhere in this Indenture or any supplemental indenture
        issued in accordance with Article VIII of this Indenture or in the Subordinated Notes is intended to or will impair, as between the Company, its creditors, other than the holders of Senior Indebtedness, and the Holders, the obligation of the
        Company, which is unconditional and absolute, to pay to the Holders the principal of and interest on the Subordinated Notes as and when the same will become due and payable in accordance with their terms or to affect the relative rights of the
        Holders and creditors of the Company, other than the holders of the Senior Indebtedness, nor, except as otherwise expressly provided in this Indenture and the Subordinated Notes with respect to the limitation on the rights of the Trustee and the
        Holders, to accelerate the maturity of the Subordinated Notes and pursue remedies upon such an acceleration, will anything herein or in the Subordinated Notes prevent the Trustee or any Holder from exercising all remedies otherwise permitted by
        applicable law upon any Event of Default under the Indenture occurring, subject to the rights, if any, under this Article XI of the holders of Senior Indebtedness, in respect of cash, property or securities of the Company received upon the exercise
        of any such remedy. Upon any payment or distribution of assets of the Company referred to in this Article XI, the Trustee and the Holders will be entitled to rely upon any order or decree of a court of competent jurisdiction in which such
        termination, winding up, liquidation or reorganization proceeding is pending or upon a certificate of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders for the purpose of ascertaining the
        Persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount hereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts
        pertinent thereto or to this Article XI. In the absence of any such liquidating trustee, agent or other person, the Trustee will be entitled to rely upon a written notice by a Person representing itself to be a holder of Senior Indebtedness (or a
        trustee or representative on behalf of such holder) as evidence that such Person is a holder of Senior Indebtedness (or is such a trustee or representative). If the Trustee determines, in good faith, that further evidence is required with respect
        to the right of any Person, as a holder of Senior Indebtedness, to participate in any payment or distribution in accordance with this Article XI, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee
        as to the amount of Senior Indebtedness held by such Person, as to the extent to which such Person 

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    is entitled to participation in such payment or distribution, and as to other facts pertinent to the rights of such
        Person under this Article XI, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

    With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to
      observe only such of its covenants and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations with respect to the holders of Senior Indebtedness will be read into this Indenture against the Trustee. The
      Trustee, however, will not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness by reason of the execution of this Indenture, or any other supplemental indenture entered into in accordance with Article VIII of this Indenture, and
      will not be liable to any such holders if it will in good faith mistakenly pay over or distribute to or on behalf of the Holders or the Company moneys or assets to which any holders of Senior Indebtedness will be entitled by virtue of this Article XI
      or otherwise.

    
      	
              Section 11.03

            	
              Default With Respect to Senior Indebtedness.

            

    

    In the event and during the continuation of any default in the payment of principal of, or
      premium, if any, or interest on, any Senior Indebtedness, beyond any applicable grace period, or if any event of default with respect to any Senior Indebtedness will have occurred and be continuing, or would occur as a result of the payment referred
      to hereinafter, permitting the holders of such Senior Indebtedness (or a trustee on behalf of the holders thereof) to accelerate the maturity thereof, then, unless and until such default or event of default will have been cured or waived or will have
      ceased to exist, no payment or principal of or interest on the Subordinated Notes, or in respect of any retirement, purchase or other acquisition of any of the Subordinated Notes, will be made by the Company.

    
      	
              Section 11.04

            	
              No Impairment.

            

    

    Nothing contained in this Indenture, any other supplemental indenture entered into in
      accordance with Article VIII of this Indenture, or in any of the Subordinated Notes will: (i) impair, as between the Company and the Holders, the obligations of the Company, to make, or prevent the Company from making, at any time except as provided
      in Section 11.02 and Section 11.03, payments of principal of, or interest (including interest accruing subsequent to the commencement of any proceeding for the bankruptcy or reorganization of the Company under any applicable bankruptcy, insolvency,
      or similar law now or hereafter in effect) on, the Subordinated Notes, as and when the same will become due and payable in accordance with the terms of the Subordinated Notes; (ii) affect the relative rights of the Holders and creditors of the
      Company other than the holders of the Senior Indebtedness; (iii) except as otherwise expressly provided in this Indenture and the Subordinated Notes with respect to the limitation on the rights of the Trustee and the Holders, to accelerate the
      maturity of the Subordinated Notes and pursue remedies upon such an acceleration, prevent the Holder of any Subordinated Notes or the Trustee from exercising all remedies otherwise permitted by applicable law upon default thereunder, subject to the
      rights, if any, under this Article XI of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of such remedy; or (iv) prevent the application by the Trustee or any Paying Agent of any
      moneys deposited with it hereunder to the payment of or on account of the principal of, or interest on, the Subordinated Notes or prevent the 

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      receipt by the Trustee or any Paying Agent of such moneys, if, prior to the third Business Day prior to such deposit, the Trustee or such Paying Agent did not have written notice of any event prohibiting the making of such deposit by the Company.

    
      	
              Section 11.05

            	
              Effectuation of Subordination Provisions.

            

    

    Each Holder by his acceptance of any Notes authorizes and expressly directs the Trustee on
      such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the Subordination Provisions, and appoints the Trustee such Holder’s attorney-in-fact for such purposes, including, in the event of any termination, winding up,
      liquidation or reorganization of the Company (whether in bankruptcy, insolvency, receivership, reorganization or similar proceedings or upon an assignment for the benefit of creditors by the Company, a marshalling of the assets and liabilities of the
      Company or otherwise) tending toward the liquidation of the property and assets of the Company, the filing of a claim for the unpaid balance of the Subordinated Notes in the form required in those proceedings.

    
      	
              Section 11.06

            	
              Notice to Trustee.

            

    

    The Company will give prompt written notice to the Trustee of any fact known to the Company
      that would prohibit the Company from making any payment to or by the Trustee in respect of the Subordinated Notes in accordance with the provisions of this Article XI. The Trustee will not be charged with the knowledge of the existence of any default
      or event of default with respect to any Senior Indebtedness or of any other facts that would prohibit the making of any payment to or by the Trustee or any Paying Agent unless and until a Responsible Officer of the Trustee has received a written
      notice specifying such default, event of default or other facts signed by an Authorized Officer, or by a holder of Senior Indebtedness or a trustee or agent thereof; and prior to the receipt of any such written notice, the Trustee will, subject to
      Article V of this Indenture, be entitled to assume that no such facts exist; provided that, if the Trustee will not have received the notice provided for in this Section 11.06 at least two Business Days prior to the date upon which, by the terms of
      the Indenture, any monies will become payable for any purpose (including, without limitation, the payment of the principal of or interest on any Subordinated Note), then, notwithstanding anything herein to the contrary, the Trustee will have full
      power and authority to receive any monies from the Company and to apply the same to the purpose for which they were received, and will not be affected by any notice to the contrary that may be received by it on or after such prior date except for an
      acceleration of the Subordinated Notes prior to such application. The foregoing will not apply if the Paying Agent is the Company. The Trustee will be entitled to rely on the delivery to it of a written notice by a Person representing himself or
      itself to be a holder of any Senior Indebtedness (or a trustee on behalf of, or agent of, such holder) to establish that such notice has been given by a holder of such Senior Indebtedness or a trustee or agent on behalf of any such holder.

    In the event that the Trustee determines in good faith that any evidence is required with
      respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution in accordance with this Article XI, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the
      Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article XI and, if 

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     such evidence is not furnished to the Trustee, the Trustee may defer any payment to such Person pending such
      evidence being furnished to the Trustee or a judicial determination that such Person has the right to receive such payment.

    
      	
              Section 11.07

            	
              Trustee Knowledge of Senior Indebtedness.

            

    

    Notwithstanding the provisions of this Article XI or any other provisions of this Indenture or
      any other supplemental indenture issued in accordance with Article VIII of this Indenture, neither the Trustee nor any Paying Agent will be charged with knowledge of the existence of any Senior Indebtedness or of any event that would prohibit the
      making of any payment of moneys to or by the Trustee or such Paying Agent, unless and until a Responsible Officer of the Trustee or such Paying Agent has received written notice thereof from the Company or from the holder of any Senior Indebtedness
      or from the representative of any such holder.

    
      	
              Section 11.08

            	
              Senior Indebtedness to Trustee.

            

    

    The Trustee will be entitled to all of the rights set forth in this Article XI in respect of
      any Senior Indebtedness at any time held by it in its individual capacity to the same extent as any other holder of such Senior Indebtedness, and nothing in this Indenture or any other supplemental indenture issued in accordance with Article VIII of
      this Indenture will be construed to deprive the Trustee of any of its rights as such holder.

    
      	
              Section 11.09

            	
              Subordination Not Applicable to Trustee Compensation.

            

    

    Nothing contained in this Article XI will apply to the claims of, or payments to, the Trustee
      under Section 5.07 of this Indenture.

    The Trustee hereby accepts the trusts in this Indenture upon the terms and conditions set
      forth herein.

    
      [Signature Page Follows]

       

      

       

      

       

      

       

      

       

      

       

      

       

      

      

        

        

        

        

        

        

        71

      

      
        
          

      

    

    IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly signed as of the
      date first written above.

    
      	
               

            	
               FS BANCORP, INC.

            
	
               

            	
               

            
	
               

            	
               

            
	
               

            	
               By /s/Joseph C. Adams                       

                      

            
	
               

            	
               Name   Joseph C. Adams

                  

            
	
               

            	
               Title     Chief Executive Officer

            
	
               

            	
               

            
	
               

            	
               

            
	
               

            	
               U.S. BANK NATIONAL ASSOCIATION

            
	
               

            	
               As Trustee

            
	 	 
	 	 
	 	By   /s/Wally Jones                                          

            
	 	Name Wally Jones 

            
	 	 Title Vice President

            

    

    

    

    

    

    

    

    

    

    

    

     

      

     

      

    

        

      

     

      

     

      

     

      

    [Signature Page to Indenture]

    

    

  

  
    
      

  

  
     

      

    EXHIBIT A-1

    

    

    FORM OF DEFINITIVE SUBORDINATED NOTE

    

    

    SUBORDINATED

            NOTE CERTIFICATE

        

    

    FS BANCORP, INC.

    3.75% FIXED-TO-FLOATING RATE SUBORDINATED NOTE

      DUE FEBRUARY 15, 2031

    THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE “SECURITIES ACT”), OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO, AND IN
      ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER; (B) TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT
      OR TO A PERSON THAT YOU REASONABLY BELIEVE TO BE AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT; OR (C) UNDER ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT (INCLUDING, IF AVAILABLE, THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT).

    THIS SUBORDINATED NOTE IS A GLOBAL SUBORDINATED NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
      AND IS REGISTERED IN THE NAME OF CEDE & CO AS NOMINEE OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS SUBORDINATED NOTE IS EXCHANGEABLE FOR SUBORDINATED NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY
      IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SUBORDINATED NOTE (OTHER THAN A TRANSFER OF THIS SUBORDINATED NOTE AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE
      REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES SPECIFIED IN THE INDENTURE.

    UNLESS THIS SUBORDINATED NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR
      REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SUBORDINATED NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO, OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
      CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS 

    

     

    

     A-1-1

    

    
      
        

    

     WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

    TRANSFERS OF THIS SUBORDINATED NOTE WILL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR
      A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS SUBORDINATED NOTE WILL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH RESTRICTIONS SET FORTH IN THE INDENTURE IDENTIFIED HEREIN.

    THE SECURITY AND THE OBLIGATIONS OF THE COMPANY AS EVIDENCED BY THIS SUBORDINATED NOTE (1) ARE NOT A DEPOSIT AND
      ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY OR FUND AND (2) ARE SUBORDINATE IN THE RIGHT OF PAYMENT TO ALL SENIOR INDEBTEDNESS (AS DEFINED IN THE INDENTURE IDENTIFIED HEREIN).

    CERTAIN ERISA CONSIDERATIONS:

    THE HOLDER OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF AGREES,
      REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY
      PLAN MAY ACQUIRE OR HOLD THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR
      84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE AND HOLDING. ANY PURCHASER OR
      HOLDER OF THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER: (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO WHICH TITLE I OF ERISA OR SECTION 4975 OF THE CODE IS
      APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLANS, OR ANY OTHER PERSON OR ENTITY USING THE “PLAN ASSETS” OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE OR (ii) SUCH PURCHASE OR
      HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT AVAILABLE UNDER APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

    ANY FIDUCIARY OF ANY PLAN WHO IS CONSIDERING THE ACQUISITION OF THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN
      SHOULD CONSULT WITH HIS OR 

    

     

    

     

    

    A-1-2

    

    
      
        

    

    

      HER LEGAL COUNSEL PRIOR TO ACQUIRING THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN.

     

      

    A-1-3

      

    
      
        

    

     

      

     

         
      	No. 2031-[●] 	Accredited Investor CUSIP: 30263Y AB0
	
               

            	Accredited Investor ISIN: US30263YAB02

      

        

        

    

    FS BANCORP, INC.

    3.75% FIXED-TO-FLOATING RATE SUBORDINATED NOTE DUE 2031

    THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
      CORPORATION OR ANY OTHER GOVERNMENT AGENCY OR FUND.

    1. Indenture; Holders.  This Subordinated Note is one of
        a duly authorized issue of notes of FS Bancorp, Inc., a Washington corporation (the “Company”), designated as the “3.75 % Fixed-to-Floating Rate Subordinated Notes due 2031” (the “Subordinated Notes”) in an aggregate
        principal amount of $50,000,000 and initially issued on February 10, 2021. The Company has issued this Subordinated Note under that certain Indenture dated as of
        February 10, 2021, as the same may be amended or supplemented from time to time (“Indenture”), between the Company and U.S. Bank National Association, as
        Trustee. All capitalized terms not otherwise defined in this Subordinated Note will have the meanings assigned to them in the Indenture. The terms of this Subordinated Note include those stated in the Indenture and those made part of the Indenture
        by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). This Subordinated Note is subject to all such terms, and the Holder
        (as defined below) is referred to the Indenture and the Trust Indenture Act for a statement of such terms. To the extent any provision of this Subordinated Note irreconcilably conflicts with the express provisions of the Indenture, the provisions
        of the Indenture will govern and be controlling.

    2. Payment.  The Company, for value received, promises to
        pay to Cede & Co., or its registered assigns (the “Holder”), as nominee of the DTC, the principal sum of [•]DOLLARS (U.S.) ($[•]), plus accrued but unpaid
        interest on February 15, 2031 (“Stated Maturity”) and to pay interest thereon (i) from and including the original issue date of the Subordinated Notes to but
        excluding February 15, 2026, at the rate of 3.75% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months and payable semi-annually in arrears on February 15 and August 15 of each year (each, a “Fixed Interest
            Payment Date”), beginning August 15, 2021, and (ii) from and including February 15, 2026 to but excluding the Stated Maturity or the early redemption date contemplated by Section 5 of this Subordinated Note, at the rate per annum,
        reset quarterly, equal to the then current Benchmark (as defined in the Indenture), plus 337 basis points, computed on the basis of a 360-day year
        and the actual number of days elapsed and payable quarterly in arrears on February 15, May 15, August 15  and November 15 of each year (each, a “Floating Interest Payment Date”). The Company will pay all Additional Interest (as defined in
        the Indenture), if any, on the dates and in the amounts set forth in the Registration Rights Agreement (as defined in the Indenture). An “Interest Payment Date” is either a Fixed Interest Payment Date or a Floating Interest Payment Date, as
        applicable.  In the event that any scheduled Fixed Interest Payment Date on this Subordinated Note falls on a day that is not a Business Day (as defined in the Indenture), then payment of interest payable on such Fixed Interest Payment Date will be
        postponed to the next succeeding day that is a Business Day and no additional interest 

      

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    shall accrue.  In the event that any scheduled
          Floating Interest Payment Date on this Subordinated Note falls on a day that is not a Business Day, then payment of interest payable on such Floating Interest Payment Date will be postponed to the next succeeding day that is a Business
        Day unless such day falls in the next succeeding calendar month, in which case such Floating Interest Payment Date will be accelerated to the immediately preceding day that is a Business Day, and, in each case, the amounts payable on such Business
        Day will include interest accrued to, but excluding, such Business Day. All percentages used in or resulting from any calculation of the then-current Benchmark shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage
        point, with 0.000005% rounded up to 0.00001%. Notwithstanding the foregoing, if the Benchmark is less than zero, the Benchmark shall be deemed to be zero.  The Company will appoint an independent calculation agent for the Subordinated Notes prior
        to the commencement of the Floating Interest Rate Period; provided, however, the Company may serve as calculation agent.

    The Company will pay interest on this Subordinated Note to the Person who is the registered
      Holder at the close of business on the fifteenth calendar day prior to the applicable Interest Payment Date, except as provided in Section 2.10 of the Indenture with respect to Defaulted Interest. This Subordinated Note will be payable as to
      principal and interest at the office or agency of the Paying Agent, or, at the option of the Company, payment of interest may be made by check delivered to the Holder at its address set forth in the Subordinated Note Register or by wire transfer to
      an account appropriately designated by the Person entitled to payment; provided, that the Paying Agent will have received written notice of such account designation at least five Business Days prior to the date of such payment (subject to surrender
      of this Subordinated Note in the case of a payment of interest at Maturity).

    3. Paying Agent and Registrar.  U.S. Bank National
        Association, a national banking association, the Trustee (“Trustee”) under the Indenture, will act as the initial Paying Agent and Registrar through its
        offices presently located at 333 Commerce Street, Suite 800, Nashville, TN, 37201, Attn: Wally Jones. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such
        capacity.

    4. Subordination. The indebtedness of the Company
        evidenced by this Subordinated Note, including the principal thereof and interest thereon, is, to the extent and in the manner set forth in the Indenture, subordinate and junior in right of payment to obligations of the Company constituting the
        Senior Indebtedness (as defined in the Indenture) on the terms and subject to the terms and conditions as provided and set forth in Article XI of the Indenture and will rank pari passu in right of payment with all other Subordinated Notes. Holder, by the acceptance of this Subordinated Note, agrees to and will be bound by such provisions of the Indenture and authorizes and directs the
        Trustee on his behalf to take such actions as may be necessary or appropriate to effectuate the subordination so provided.

    5. Redemption.

    (a) The Company may, at its option, on any Interest Payment Date on or after February 15, 2026, redeem this Subordinated Note, in whole or in part,
        without premium or penalty, but in all cases in a principal amount with integral multiples of $1,000. In addition, the Company may redeem all, but not a portion of the Subordinated Notes, at any time upon the occurrence of a Tier 2 Capital Event,
        Tax Event or an Investment Company Event. Any redemption of this 

      

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    Subordinated Note will be subject to the prior
          approval of the Board of Governors of the Federal Reserve System (or its designee) or any successor agency, and any other banking regulatory agency, to the extent such approval shall then be required by law, regulation or policy. This
          Subordinated Note is not subject to redemption at the option of the Holder. The Redemption Price with respect to any redemption permitted under this Indenture will be equal to 100% of the principal amount of this Subordinated Note, or
        portion thereof, to be redeemed, plus accrued but unpaid interest and Additional Interest, if any, thereon to, but excluding, the Redemption Date.

    (b) If all or any portion of the Subordinated Notes ceases to be deemed to be Tier 2 Capital, other than due to the limitation imposed on the
        capital treatment of subordinated debt during the five (5) years immediately preceding the Maturity Date of the Subordinated Notes, Company may immediately notify the Trustee and the Holders, and thereafter Company may  request, subject to the
        terms hereof, that the Trustee and the Holders execute and deliver all agreements as reasonably necessary in order to restructure the applicable portions of the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital; provided,
        however, that the foregoing shall not limit the Company’s right to redeem the Subordinated Notes in accordance with Section 5(a) above, including but not limited to upon the occurrence of a Tier 2 Capital Event.

    (c) If less than the then outstanding principal amount of this Subordinated Note is redeemed, (i) a new note shall be issued representing the
        unredeemed portion without charge to the Holder thereof and (ii) such redemption shall be effected on a pro rata basis as to the Holders unless otherwise required by law or applicable Depositary requirements. For purposes of clarity, upon a partial
        redemption, a like percentage of the principal amount of every Subordinated Note held by every Holder shall be redeemed.

    (d) Effectiveness of Redemption.  If notice of redemption
        has been duly given and notwithstanding that any Subordinated Notes so called for redemption have not been surrendered for cancellation, on and after the Redemption Date interest shall cease to accrue on all Subordinated Notes so called for
        redemption, all Subordinated Notes so called for redemption shall no longer be deemed outstanding and all rights with respect to such Subordinated Notes shall forthwith on such Redemption Date cease and terminate (unless the Company shall default
        in the payment of the redemption price), except only the right of the Holder thereof to receive the amount payable on such redemption, without interest.

    6. Events of Default; Acceleration.  An “Event of Default” means any one of the events described in Section 4.01 of the Indenture. If an Event of Default described in Section 4.01(1) or Section 4.01(2) of
        the Indenture occurs, then the principal amount of all of the Outstanding Subordinated Notes, and accrued and unpaid interest, if any, on all Outstanding Subordinated Notes will become and be immediately due and payable without any declaration or
        other act on the part of the Trustee or the Holder, and the Company waives demand, presentment for payment, notice of nonpayment, notice of protest, and all other notices. Notwithstanding the foregoing, because the Company will treat the
        Subordinated Notes as Tier 2 Capital, upon the occurrence of an Event of Default other than an Event of Default described in Section 4.01(1) or Section 4.01(2) of the Indenture, neither the Trustee nor the Holder may accelerate the Maturity of the
        Subordinated Notes and make the principal of, and any accrued and unpaid interest on, the Subordinated Notes, immediately due and payable. If any Event of Default occurs and is 

      

    A-1-6

    
      
        

    

    

      continuing, the Trustee may also pursue any other available remedy to collect the payment of
          principal of, and interest on, the Subordinated Notes then due and payable or to enforce the performance of any provision of the Subordinated Notes or the Indenture.

     
      7. Failure to Make Payments.  If the Company fails to
          make any payment of interest on this Subordinated Note when such interest becomes due and payable and such default continues 

      for a period of 30 days, or if the Company fails to make any payment of the principal of this Subordinated Note when such principal becomes due and payable, the Company will,
        upon demand of the Trustee, pay to the Trustee, for the benefit of the Holder, the whole amount then due and payable with respect to this Subordinated Note, with interest upon the overdue principal, any premium and, to the extent permitted by
        applicable law, upon any overdue installments of interest at the rate or respective rates, as the case may be, provided for or with respect to this Subordinated Note or, if no such rate or rates are so provided, at the rate or respective rates, as
        the case may be, of interest borne by this Subordinated Note.

    Upon an Event of Default, the Company may not declare or pay any dividends or distributions
      on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company’s capital stock, make any payment of principal or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company
      that rank equal with or junior to this Subordinated Note, or make any payments under any guarantee that ranks equal with or junior to this Subordinated Note, other than: (i) any dividends or distributions in shares of, or options, warrants or rights
      to subscribe for or purchase shares of, any class of Company’s common stock; (ii) any declaration of a dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of stock under any such plan in the future, or the
      redemption or repurchase of any such rights pursuant thereto; (iii) as a result of a reclassification of Company’s capital stock or the exchange or conversion of one class or series of Company’s capital stock for another class or series of Company’s
      capital stock; (iv) the purchase of fractional interests in shares of Company’s capital stock in accordance with the conversion or exchange provisions of such capital stock or the security being converted or exchanged; or (v) purchases of any class
      of Company’s common stock related to the issuance of common stock or rights under any of benefit plans for Company’s directors, officers or employees or any of Company’s dividend reinvestment plans.

    8. Denominations, Transfer, Exchange.  The Subordinated Notes are issuable only in registered form without interest coupons in minimum denominations of $100,000 and integral multiples of $1,000 in excess
        thereof. The transfer of this Subordinated Note may be registered and this Subordinated Note may be exchanged as provided in the Indenture. The Registrar may require the Holder, among other things, to furnish appropriate endorsements and transfer
        documents and the Company may require the Holder to pay any taxes and fees required by law or permitted by the Indenture.

    9. Charges and Transfer Taxes. No service charge will be
        made for any registration of transfer or exchange of this Subordinated Note, or any redemption or repayment of this Subordinated Note, or any conversion or exchange of this Subordinated Note for other types of securities or property, but the
        Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges that may be imposed in connection with the transfer or exchange of this Subordinated Note from the Holder requesting such transfer or
        exchange.

    

     A-1-7

      

    
      
        

    

    
      10. Persons Deemed Owners.  The Company and the Trustee
          and any agent of the Company or the Trustee may treat the Person in whose name this Subordinated Note is registered as the owner hereof for all purposes, whether or not this Subordinated Note is overdue, and neither the Company, the Trustee nor
          any such agent will be affected by notice to the contrary.

      11. Amendments; Waivers.  The Indenture permits, with
          certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the
          Subordinated Notes at any time by the Company and the Trustee with the consent of the holders of a majority in principal amount of the then Outstanding Subordinated Notes. The Indenture also contains provisions permitting the holders of specified
          percentages in principal amount of the then Outstanding Subordinated Notes, on behalf of the holders of all Subordinated Notes, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of
          this Subordinated Note will be conclusive and binding upon such Holder and upon all future holders of this Subordinated Note and of any Subordinated Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof,
          whether or not notation of such consent or waiver is made upon this Subordinated Note.

    

    12. No Impairment.  No reference herein to the Indenture
        and no provision of this Subordinated Note or of the Indenture will alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest (if any) and Additional Interest on this Subordinated Note
        at the times, place and rate as herein prescribed.

    13. Sinking Fund; Convertibility.  This Subordinated Note
        is not entitled to the benefit of any sinking fund. This Subordinated Note is not convertible into or exchangeable for any of the equity securities, other securities or assets of the Company or any Subsidiary.

    14. No Recourse Against Others.  No recourse under or upon
        any obligation, covenant or agreement contained in the Indenture or in this Subordinated Note, or for any claim based thereon or otherwise in respect thereof, will be had against any past, present or future shareholder, employee, officer, or
        director, as such, of the Company or of any predecessor or successor, either directly or through the Company or any predecessor or successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by
        any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of this Subordinated Note by the Holder and as part of the consideration for the issuance of this Subordinated Note.

    15. Authentication.  This Subordinated Note will not be
        valid until authenticated by the manual signature of the Trustee or an Authenticating Agent.

    16. Abbreviations.  Customary abbreviations may be used in
        the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts
        to Minors Act). Additional abbreviations may also be used though not in the above list.

    

    A-1-8

      

    
      
        

    

    
      17. Available Information. The Company will furnish to
          the Holders upon written request and without charge a copy of the Indenture. Requests by Holder to the Company may be made to: FS Bancorp, Inc., 6920 220th Street SW, Mountlake Terrace, Washington 98043, Attention: Matthew D. Mullet.

      18. Governing Law.  THIS SUBORDINATED NOTE WILL BE
          DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY LAWS OR PRINCIPLES OF CONFLICT OF LAWS THAT WOULD APPLY THE LAWS OF A DIFFERENT JURISDICTION.

    

    [Signature Page Follows]

     

      

  

   

    
    

      

     

        

     

        

     

        

     

        

     

        

     

        

     

        

    A-1-9

      

    
      
        

    

    IN WITNESS WHEREOF,
      the undersigned has caused this Subordinated Note to be duly executed.

    Dated: [●]

    	 	
            FS BANCORP, INC.

             

             

          
	 	 	 	 
	 	
            By:

          	

          
	 	 	
            Name:

          	
              Joseph C. Adams

          
	 	 	
            Title:

          	
              Chief Executive Officer

          

    

    

    

    

    

    

    

    

    

    

    

    

    [Signature Page to Subordinated Note]

    

     

      

    A-1-10

    

    
      
        

    

    TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    This is one of the Subordinated Notes of FS Bancorp, Inc., referred to in the within-mentioned Indenture:

     

    U.S. BANK NATIONAL ASSOCIATION,

    as Trustee

     

    	
            By:

          	
             

          	
             

          
	
            Name

          	
             

          	
             

          
	
            Title:

          	
             

          	
             

          
	
            Dated:

          	
             

          	
             

          

     

     

     

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      

      

      [Signature Page to Subordinated Note]

      

       

        

      A-1-11

      

      
        
          

      

    

    ASSIGNMENT FORM

     

    To assign this Subordinated Note, fill in the form below: (I) or (we) assign and transfer this Subordinated Note
      to:

     

     

    
       

    

      (Print or type assignee’s name, address and zip code)

     

     

    
       

    

    (Insert assignee’s social security or tax I.D. No.)

     

    and irrevocably appoint _______________________ agent to transfer this Subordinated Note on the books of the Company. The agent may
      substitute another to act for him.

     

    	
            Date:

          	
             

          	
             

          	
            Your signature:

          	
             

          
	
             

          	
             

          	
             

          	
            (Sign exactly as your name appears on the face of this Subordinated Note)

          
	
             

          	
             

          	
             

          	
             

          	
             

          
	
             

          	
             

          	
             

          	
            Tax Identification No:

          	
             

          

     

    	
            Signature Guarantee:

          	
             

          

    (Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions
      with membership in an approved signature guarantee medallion program), pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rule 17Ad-15).

     

    The undersigned certifies that it [is / is not] an Affiliate of the Company and that, to its knowledge, the
      proposed transferee [is / is not] an Affiliate of the Company.

     

    In connection with any transfer or exchange of this Subordinated Note occurring prior to the date that is one year
      after the later of the date of original issuance of this Subordinated Note and the last date, if any, on which this Subordinated Note was owned by the Company or any Affiliate of the Company, the undersigned confirms that this Subordinated Note is
      being:

     

    CHECK ONE BOX BELOW:

     

    [  ]     (1)     acquired for the undersigned’s own account, without transfer;

     

    [  ]     (2)     transferred to the Company;

     

    [  ]     (3)     transferred in accordance and in compliance with Rule 144A under the
      Securities Act of 1933, as amended (the “Securities Act”);

     

    [  ]     (4)     transferred under an effective registration statement under the Securities
      Act;

     

    

     

    

    
      [Signature Page to Subordinated Note]

      

       

        

      A-1-12

      

      
        
          

      

    

    [  ]    (5)     transferred in accordance with and in compliance with Regulation S under the
      Securities Act;

     

    [  ]    (6)     transferred to an institutional “accredited investor” (as defined in Rule
      501(a)(1), (2), (3) or (7) under the Securities Act) or an “accredited investor” (as defined in Rule 501(a)(4) under the Securities Act), that has furnished a signed letter containing certain representations and agreements; or

      

    

    [  ]     (7)     transferred in accordance with another available exemption from the
      registration requirements of the Securities Act .

     

    Unless one of the boxes is checked, the Paying Agent will refuse to register this Subordinated Note in the name of any person other
      than the registered Holder thereof; provided, however, that if box (5), (6) or (7) is checked, the Paying Agent may require, prior to registering any such transfer of this Subordinated Note, in its sole discretion, such legal opinions, certifications
      and other information as the Paying Agent may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act such as the exemption
      provided by Rule 144 under such Act.

      

    	
             

          	
            Signature:

          	
             

          

     

    	
            Signature Guarantee:

          	
             

          

    (Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit
      unions with membership in an approved signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-15).

     

    TO BE COMPLETED BY PURCHASER IF BOX (1) OR (3) ABOVE IS CHECKED.

     

    The undersigned represents and warrants that it is purchasing this Subordinated Note for its own account or an
      account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, and is aware that the sale to it is being made in
      reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is
      relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

      

    	
            Date:

          	
             

          	
             

          	
            Signature:

          	
             

          

    

    

    

    

    

    

    
      

      

      [Signature Page to Subordinated Note]

      

       

        

      A-1-13

      

      
        
          

      

      

      

      
        EXHIBIT A-2

        FORM OF DEFINITIVE SUBORDINATED NOTE

        SUBORDINATED

                NOTE CERTIFICATE

        

        FS BANCORP, INC.

        3.75% FIXED-TO-FLOATING RATE SUBORDINATED NOTE

          DUE FEBRUARY 15, 2031

        THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
          AMENDED (THE “SECURITIES ACT”), OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO, AND IN
          ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER; (B) TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
          ACT OR TO A PERSON THAT YOU REASONABLY BELIEVE TO BE AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT; OR (C) UNDER ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
          REQUIREMENTS OF THE SECURITIES ACT (INCLUDING, IF AVAILABLE, THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT).

        THIS SUBORDINATED NOTE IS A GLOBAL SUBORDINATED NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
          TO AND IS REGISTERED IN THE NAME OF CEDE & CO AS NOMINEE OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS SUBORDINATED NOTE IS EXCHANGEABLE FOR SUBORDINATED NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS
          NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SUBORDINATED NOTE (OTHER THAN A TRANSFER OF THIS SUBORDINATED NOTE AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER
          NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES SPECIFIED IN THE INDENTURE.

        UNLESS THIS SUBORDINATED NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT
          FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SUBORDINATED NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO, OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE
          & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS 

        

        A-2-1

        

        
          
            

        

        
          WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.TRANSFERS OF THIS
            SUBORDINATED NOTE WILL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS SUBORDINATED NOTE WILL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
            WITH RESTRICTIONS SET FORTH IN THE INDENTURE IDENTIFIED HEREIN.

        

        THE SECURITY AND THE OBLIGATIONS OF THE COMPANY AS EVIDENCED BY THIS SUBORDINATED NOTE (1) ARE NOT A DEPOSIT
          AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY OR FUND AND (2) ARE SUBORDINATE IN THE RIGHT OF PAYMENT TO ALL SENIOR INDEBTEDNESS (AS DEFINED IN THE INDENTURE IDENTIFIED HEREIN).

        CERTAIN ERISA CONSIDERATIONS:

        THE HOLDER OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF AGREES,
          REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH
          A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN
          ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,
          95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE AND
          HOLDING. ANY PURCHASER OR HOLDER OF THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER: (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO WHICH TITLE I OF ERISA
          OR SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLANS, OR ANY OTHER PERSON OR ENTITY USING THE “PLAN ASSETS” OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
          PURCHASE OR (ii) SUCH PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT AVAILABLE UNDER APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

        ANY FIDUCIARY OF ANY PLAN WHO IS CONSIDERING THE ACQUISITION OF THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN
          SHOULD CONSULT WITH HIS OR 

        

         

        

        A-2-2

        

        
          
            

        

         HER LEGAL COUNSEL PRIOR TO ACQUIRING THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN.

         

        

        A-2-3

        

        
          
            

        

         

        

         

        

        No. 2031-[●]  

          

         QIB CUSIP: 30263Y AA2

        QIB ISIN: US30263YAA29

        FS BANCORP, INC.

        3.75% FIXED-TO-FLOATING RATE SUBORDINATED NOTE DUE 2031

        THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
          CORPORATION OR ANY OTHER GOVERNMENT AGENCY OR FUND.

        1. Indenture; Holders.  This
            Subordinated Note is one of a duly authorized issue of notes of FS Bancorp, Inc., a Washington corporation (the “Company”), designated as the “3.75 % Fixed-to-Floating Rate Subordinated Notes due 2031” (the “Subordinated Notes”)

            in an aggregate principal amount of $50,000,000 and initially issued on February 10, 2021. The Company has issued this Subordinated Note under that certain
            Indenture dated as of February 10, 2021, as the same may be amended or supplemented from time to time (“Indenture”), between the Company and U.S. Bank
            National Association, as Trustee. All capitalized terms not otherwise defined in this Subordinated Note will have the meanings assigned to them in the Indenture. The terms of this Subordinated Note include those stated in the Indenture and
            those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). This Subordinated Note is subject
            to all such terms, and the Holder (as defined below) is referred to the Indenture and the Trust Indenture Act for a statement of such terms. To the extent any provision of this Subordinated Note irreconcilably conflicts with the express
            provisions of the Indenture, the provisions of the Indenture will govern and be controlling.

        2. Payment.  The Company, for
            value received, promises to pay to Cede & Co., or its registered assigns (the “Holder”), as nominee of the DTC, the principal sum of [•]DOLLARS (U.S.)
            ($[•]), plus accrued but unpaid interest on February 15, 2031 (“Stated Maturity”) and to pay interest thereon (i) from and including the original issue
            date of the Subordinated Notes to but excluding February 15, 2026, at the rate of 3.75% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months and payable semi-annually in arrears on February 15 and August 15 of each year (each, a “Fixed Interest Payment Date”), beginning August 15, 2021, and (ii) from and including February 15, 2026 to but excluding the Stated Maturity or the early redemption date contemplated by Section 5
            of this Subordinated Note, at the rate per annum, reset quarterly, equal to the then current Benchmark (as defined in the Indenture), plus 337 basis

            points, computed on the basis of a 360-day year and the actual number of days elapsed and payable quarterly in arrears on February 15, May 15, August 15  and
            November 15 of each year (each, a “Floating Interest Payment Date”). The
            Company will pay all Additional Interest (as defined in the Indenture), if any, on the dates and in the amounts set forth in the Registration Rights Agreement (as defined in the Indenture). An “Interest Payment Date” is either a Fixed Interest
            Payment Date or a Floating Interest Payment Date, as applicable.  In the event that any scheduled Fixed Interest Payment Date on this Subordinated Note falls on a day that is not a Business Day (as defined in the Indenture), then payment of
            interest payable on such Fixed Interest Payment Date will be postponed to the next succeeding day that is a Business Day and no additional interest shall accrue.  In the event that any scheduled Floating Interest Payment Date on this
            Subordinated 

          

         

          

         A-2-4

          

        
          
            

        

        Note falls on a day that is not a Business
              Day, then payment of interest payable on such Floating Interest Payment Date will be postponed to the next succeeding day that is a Business Day unless such day falls in the next succeeding calendar month, in which case such Floating
            Interest Payment Date will be accelerated to the immediately preceding day that is a Business Day, and, in each case, the amounts payable on such Business Day will include interest accrued to, but excluding, such Business Day. All percentages
            used in or resulting from any calculation of the then-current Benchmark shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with 0.000005% rounded up to 0.00001%. Notwithstanding the foregoing, if the
            Benchmark is less than zero, the Benchmark shall be deemed to be zero.  The Company will appoint an independent calculation agent for the Subordinated Notes prior to the commencement of the Floating Interest Rate Period; provided, however, the
            Company may serve as calculation agent.

        The Company will pay interest on this Subordinated Note to the Person who is the
          registered Holder at the close of business on the fifteenth calendar day prior to the applicable Interest Payment Date, except as provided in Section 2.10 of the Indenture with respect to Defaulted Interest. This Subordinated Note will be payable
          as to principal and interest at the office or agency of the Paying Agent, or, at the option of the Company, payment of interest may be made by check delivered to the Holder at its address set forth in the Subordinated Note Register or by wire
          transfer to an account appropriately designated by the Person entitled to payment; provided, that the Paying Agent will have received written notice of such account designation at least five Business Days prior to the date of such payment
          (subject to surrender of this Subordinated Note in the case of a payment of interest at Maturity).

        3. Paying Agent and Registrar. 
            U.S. Bank National Association, a national banking association, the Trustee (“Trustee”) under the Indenture, will act as the initial Paying Agent and
            Registrar through its offices presently located at 333 Commerce Street, Suite 800, Nashville, TN, 37201, Attn: Wally Jones. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its
            Subsidiaries may act in any such capacity.

        4. Subordination. The indebtedness
            of the Company evidenced by this Subordinated Note, including the principal thereof and interest thereon, is, to the extent and in the manner set forth in the Indenture, subordinate and junior in right of payment to obligations of the Company
            constituting the Senior Indebtedness (as defined in the Indenture) on the terms and subject to the terms and conditions as provided and set forth in Article XI of the Indenture and will rank pari passu in right of payment with all other Subordinated Notes. Holder, by the acceptance of this Subordinated Note, agrees to and will be bound by such provisions of the Indenture and
            authorizes and directs the Trustee on his behalf to take such actions as may be necessary or appropriate to effectuate the subordination so provided.

        5. Redemption.

        (a) The Company may, at its option, on any Interest Payment Date on or after February 15, 2026, redeem this Subordinated
            Note, in whole or in part, without premium or penalty, but in all cases in a principal amount with integral multiples of $1,000. In addition, the Company may redeem all, but not a portion of the Subordinated Notes, at any time upon the
            occurrence of a Tier 2 Capital Event, Tax Event or an Investment Company Event. Any redemption of this Subordinated Note will be subject to the prior approval of the Board of Governors of the Federal 

          

         A-2-5

          

        
          
            

        

        Reserve System (or its designee) or any
              successor agency, and any other banking regulatory agency, to the extent such approval shall then be required by law, regulation or policy. This Subordinated Note is not subject to redemption at the option of the Holder. The Redemption Price
              with respect to any redemption permitted under this Indenture will be equal to 100% of the principal amount of this Subordinated Note, or portion thereof, to be redeemed, plus accrued but unpaid interest and Additional Interest, if
            any, thereon to, but excluding, the Redemption Date.

        (b) If all or any portion of the Subordinated Notes ceases to be deemed to be Tier 2 Capital, other than due to the
            limitation imposed on the capital treatment of subordinated debt during the five (5) years immediately preceding the Maturity Date of the Subordinated Notes, Company may immediately notify the Trustee and the Holders, and thereafter Company
            may  request, subject to the terms hereof, that the Trustee and the Holders execute and deliver all agreements as reasonably necessary in order to restructure the applicable portions of the obligations evidenced by the Subordinated Notes to
            qualify as Tier 2 Capital; provided, however, that the foregoing shall not limit the Company’s right to redeem the Subordinated Notes in accordance with Section 5(a) above, including but not limited to upon the occurrence of a Tier 2 Capital
            Event.

        (c) If less than the then outstanding principal amount of this Subordinated Note is redeemed, (i) a new note shall be issued
            representing the unredeemed portion without charge to the Holder thereof and (ii) such redemption shall be effected on a pro rata basis as to the Holders unless otherwise required by law or applicable Depositary requirements. For purposes of
            clarity, upon a partial redemption, a like percentage of the principal amount of every Subordinated Note held by every Holder shall be redeemed.

        (d) Effectiveness of Redemption. 
            If notice of redemption has been duly given and notwithstanding that any Subordinated Notes so called for redemption have not been surrendered for cancellation, on and after the Redemption Date interest shall cease to accrue on all Subordinated
            Notes so called for redemption, all Subordinated Notes so called for redemption shall no longer be deemed outstanding and all rights with respect to such Subordinated Notes shall forthwith on such Redemption Date cease and terminate (unless the
            Company shall default in the payment of the redemption price), except only the right of the Holder thereof to receive the amount payable on such redemption, without interest.

        6. Events of Default; Acceleration. 

            An “Event of Default” means any one of the events described in Section 4.01 of the Indenture. If an Event of Default described in Section 4.01(1) or
            Section 4.01(2) of the Indenture occurs, then the principal amount of all of the Outstanding Subordinated Notes, and accrued and unpaid interest, if any, on all Outstanding Subordinated Notes will become and be immediately due and payable
            without any declaration or other act on the part of the Trustee or the Holder, and the Company waives demand, presentment for payment, notice of nonpayment, notice of protest, and all other notices. Notwithstanding the foregoing, because the
            Company will treat the Subordinated Notes as Tier 2 Capital, upon the occurrence of an Event of Default other than an Event of Default described in Section 4.01(1) or Section 4.01(2) of the Indenture, neither the Trustee nor the Holder may
            accelerate the Maturity of the Subordinated Notes and make the principal of, and any accrued and unpaid interest on, the Subordinated Notes, immediately due and payable. If any Event of Default occurs and is continuing, the Trustee may also
            pursue any other available remedy to collect the payment of 

          

         A-2-6

          

        
          
            

        

        principal of, and interest on, the
              Subordinated Notes then due and payable or to enforce the performance of any provision of the Subordinated Notes or the Indenture.

         
          7. Failure to Make Payments.  If
              the Company fails to make any payment of interest on this Subordinated Note when such interest becomes due and payable and such default continues for a period of 30 days, or if the Company fails to make any payment of the principal of this Subordinated Note when such principal becomes due and payable, the Company will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holder, the whole
              amount then due and payable with respect to this Subordinated Note, with interest upon the overdue principal, any premium and, to the extent permitted by applicable law, upon any overdue installments of interest at the rate or respective
              rates, as the case may be, provided for or with respect to this Subordinated Note or, if no such rate or rates are so provided, at the rate or respective rates, as the case may be, of interest borne by this Subordinated Note.

        

        Upon an Event of Default, the Company may not declare or pay any dividends or
          distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company’s capital stock, make any payment of principal or interest or premium, if any, on or repay, repurchase or redeem any debt securities
          of the Company that rank equal with or junior to this Subordinated Note, or make any payments under any guarantee that ranks equal with or junior to this Subordinated Note, other than: (i) any dividends or distributions in shares of, or options,
          warrants or rights to subscribe for or purchase shares of, any class of Company’s common stock; (ii) any declaration of a dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of stock under any such plan
          in the future, or the redemption or repurchase of any such rights pursuant thereto; (iii) as a result of a reclassification of Company’s capital stock or the exchange or conversion of one class or series of Company’s capital stock for another
          class or series of Company’s capital stock; (iv) the purchase of fractional interests in shares of Company’s capital stock in accordance with the conversion or exchange provisions of such capital stock or the security being converted or
          exchanged; or (v) purchases of any class of Company’s common stock related to the issuance of common stock or rights under any of benefit plans for Company’s directors, officers or employees or any of Company’s dividend reinvestment plans.

        8. Denominations, Transfer, Exchange.  The Subordinated Notes are issuable only in registered form without interest coupons in minimum denominations of $100,000 and integral multiples of $1,000 in
            excess thereof. The transfer of this Subordinated Note may be registered and this Subordinated Note may be exchanged as provided in the Indenture. The Registrar may require the Holder, among other things, to furnish appropriate endorsements and
            transfer documents and the Company may require the Holder to pay any taxes and fees required by law or permitted by the Indenture.

        9. Charges and Transfer Taxes. No
            service charge will be made for any registration of transfer or exchange of this Subordinated Note, or any redemption or repayment of this Subordinated Note, or any conversion or exchange of this Subordinated Note for other types of securities
            or property, but the Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges that may be imposed in connection with the transfer or exchange of this Subordinated Note from the Holder
            requesting such transfer or exchange.

        

         A-2-7

          

        
          
            

        

        
          10. Persons Deemed Owners.  The
              Company and the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Subordinated Note is registered as the owner hereof for all purposes, whether or not this Subordinated Note is overdue, and neither
              the Company, the Trustee nor any such agent will be affected by notice to the contrary.

          11. Amendments; Waivers.  The
              Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Subordinated Notes at any time by the Company and the Trustee with the consent of the holders of a majority in principal amount of the then Outstanding Subordinated Notes. The Indenture also contains provisions permitting
              the holders of specified percentages in principal amount of the then Outstanding Subordinated Notes, on behalf of the holders of all Subordinated Notes, to waive certain past defaults under the Indenture and their consequences. Any such
              consent or waiver by the Holder of this Subordinated Note will be conclusive and binding upon such Holder and upon all future holders of this Subordinated Note and of any Subordinated Note issued upon the registration of transfer hereof or in
              exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Subordinated Note.

        

        12. No Impairment.  No reference
            herein to the Indenture and no provision of this Subordinated Note or of the Indenture will alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest (if any) and Additional
            Interest on this Subordinated Note at the times, place and rate as herein prescribed.

        13. Sinking Fund; Convertibility. 
            This Subordinated Note is not entitled to the benefit of any sinking fund. This Subordinated Note is not convertible into or exchangeable for any of the equity securities, other securities or assets of the Company or any Subsidiary.

        14. No Recourse Against Others.  No recourse under or
            upon any obligation, covenant or agreement contained in the Indenture or in this Subordinated Note, or for any claim based thereon or otherwise in respect thereof, will be had against any past, present or future shareholder, employee, officer,
            or director, as such, of the Company or of any predecessor or successor, either directly or through the Company or any predecessor or successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment
            or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of this Subordinated Note by the Holder and as part of the consideration for the issuance of this Subordinated Note.

        15. Authentication.  This Subordinated Note will not
            be valid until authenticated by the manual signature of the Trustee or an Authenticating Agent.

        16. Abbreviations.  Customary
            abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (=
            custodian), and U/G/M/A (= Uniform Gifts to Minors Act). Additional abbreviations may also be used though not in the above list.

        

         

        

        A-2-8

          

        
          
            

        

        
          17. Available Information. The Company will furnish to the Holders upon written request and without charge a copy of the Indenture. Requests by
              Holder to the Company may be made to: FS Bancorp, Inc., 6920 220th Street SW, Mountlake Terrace, Washington 98043, Attention: Matthew D. Mullet.

           
          18. Governing Law.  THIS SUBORDINATED NOTE WILL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND WILL BE GOVERNED BY, AND
              CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY LAWS OR PRINCIPLES OF CONFLICT OF LAWS THAT WOULD APPLY THE LAWS OF A DIFFERENT JURISDICTION.

        

         

        

        [Signature Page Follows]

         

        

         

        

         

        

         

        

         

        

         

        

         

        

         

        

         

          

         

          

         

          

         

          

         

          

        A-2-9

        

        
          
            

        

        IN WITNESS
            WHEREOF, the undersigned has caused this Subordinated Note to be duly executed.

        Dated: [●]

        	 	
                FS BANCORP, INC.

                 

                 

              
	 	 	 	 
	 	
                By:

              	

              
	 	 	
                Name:

              	
                  Joseph C. Adams

              
	 	 	
                Title:

              	
                  Chief Executive Officer

              

        

        

        

        

        

        

        

        

        [Signature Page to Subordiated Note]

        

         

        

        A-2-10

        

        
          
            

        

        TRUSTEE’S CERTIFICATE OF AUTHENTICATION

         

        This is one of the Subordinated Notes of FS Bancorp, Inc., referred to in the within-mentioned Indenture:

         

        U.S. BANK NATIONAL ASSOCIATION,

        as Trustee

         

        	
                By:

              	
                 

              	
                 

              
	
                Name

              	
                 

              	
                 

              
	
                Title:

              	
                 

              	
                 

              
	
                Dated:

              	
                 

              	
                 

              

         

         

         

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        
          

          

          [Signature Page to Subordiated Note]

          

           

          

          A-2-11

          
            
              

          

        

        

        

        ASSIGNMENT FORM

         

        To assign this Subordinated Note, fill in the form below: (I) or (we) assign and transfer this Subordinated
          Note to:

         

         

        
           

        

          (Print or type assignee’s name, address and zip code)

         

         

        
           

        

        (Insert assignee’s social security or tax I.D. No.)

         

        and irrevocably appoint _______________________ agent to transfer this Subordinated Note on the books of the Company. The agent may
          substitute another to act for him.

         

        	
                Date:

              	
                 

              	
                 

              	
                Your signature:

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                (Sign exactly as your name appears on the face of this Subordinated Note)

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                Tax Identification No:

              	
                 

              

         

        	
                Signature Guarantee:

              	
                 

              

        (Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit
          unions with membership in an approved signature guarantee medallion program), pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rule 17Ad-15).

         

        The undersigned certifies that it [is / is not] an Affiliate of the Company and that, to its knowledge, the
          proposed transferee [is / is not] an Affiliate of the Company.

         

        In connection with any transfer or exchange of this Subordinated Note occurring prior to the date that is one
          year after the later of the date of original issuance of this Subordinated Note and the last date, if any, on which this Subordinated Note was owned by the Company or any Affiliate of the Company, the undersigned confirms that this Subordinated
          Note is being:

         

        CHECK ONE BOX BELOW:

         

        

        [  ]     (1)     acquired for the undersigned’s own account, without transfer;

         

        [  ]     (2)     transferred to the Company;

         

        [  ]     (3)     transferred in accordance and in compliance with Rule 144A under the
          Securities Act of 1933, as amended (the “Securities Act”);

         

        

        
          

          

          [Signature Page to Subordiated Note]

          

           

          

          A-2-12

          
            
              

          

        

         
          [  ]     (4)     transferred under an effective registration statement under the
            Securities Act;

           

          [  ]     (5)     transferred in accordance with and in compliance with Regulation S
            under the Securities Act;

           

          [  ]     (6)     transferred to an institutional “accredited investor” (as defined in
            Rule 501(a)(1), (2), (3) or (7) under the Securities Act) or an “accredited investor” (as defined in Rule 501(a)(4) under the Securities Act), that has furnished a signed letter containing certain representations and agreements; or

           

        

        [  ]     (7)     transferred in accordance with another available exemption from the
          registration requirements of the Securities Act .

         

        Unless one of the boxes is checked, the Paying Agent will refuse to register this Subordinated Note in the name of any person
          other than the registered Holder thereof; provided, however, that if box (5), (6) or (7) is checked, the Paying Agent may require, prior to registering any such transfer of this Subordinated Note, in its sole discretion, such legal opinions,
          certifications and other information as the Paying Agent may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act
          such as the exemption provided by Rule 144 under such Act.

          

        	
                 

              	
                Signature:

              	
                 

              

         

        	
                Signature Guarantee:

              	
                 

              

        (Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit
          unions with membership in an approved signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-15).

         

        TO BE COMPLETED BY PURCHASER IF BOX (1) OR (3) ABOVE IS CHECKED.

         

        The undersigned represents and warrants that it is purchasing this Subordinated Note for its own account or an
          account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, and is aware that the sale to it is being made
          in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the
          transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

          

        	
                Date:

              	
                 

              	
                 

              	
                Signature:

              	
                 

              

        

        

        

        

        

        

        

        

        

        

        

          

          

          [Signature Page to Subordiated Note]

          

           

          

          A-2-13Exhibit 10.1

  

   

  

  
    SUBORDINATED NOTE PURCHASE AGREEMENT

    This SUBORDINATED NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as of February 10, 2021, and is made by and among FS Bancorp, Inc., a Washington corporation (“Company”), and the
      several purchasers of the Subordinated Notes identified on the signature pages hereto (each a “Purchaser” and collectively, the “Purchasers”).

    RECITALS

    WHEREAS, Company has requested that the Purchasers purchase from Company up to $50.0 million  in aggregate principal
        amount of Subordinated Notes (as defined herein), which aggregate amount is intended to qualify as Tier 2 Capital (as defined herein).

    WHEREAS, Company has engaged Raymond James & Associates, Inc. as its lead placement agent and D.A. Davidson & Co. and Janey Montgomery Scott LLC as co-placement agents (collectively, the “Placement Agents”) for the offering of the Subordinated Notes.

    WHEREAS, each of the Purchasers is an institutional “accredited investor” as such term is defined in Rule 501 of Regulation D (“Regulation D”)

        promulgated under the Securities Act of 1933, as amended (the “Securities Act”), or a QIB (as defined below).

    WHEREAS, the offer and sale of the Subordinated Notes by Company is being made in reliance upon the exemptions from registration available under Section 4(a)(2) of the Securities Act and Rule 506(b) of
        Regulation D.

    WHEREAS, each Purchaser is willing to purchase from Company a Subordinated Note in the principal amount set forth on each Purchaser’s signature page (the “Subordinated Note Amount”) in accordance with the terms, subject to the conditions and in reliance on, the recitals, representations, warranties, covenants and agreements set forth herein and in the Subordinated
        Notes.

    NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties
        hereto hereby agree as follows:

    AGREEMENT

    1. DEFINITIONS.

       1.1 Defined Terms.  The following capitalized terms used
        in this Agreement have the meanings defined or referenced below.  Certain other capitalized terms used only in specific sections of this Agreement may be defined in such sections.

    “Affiliate(s)” means,
      with respect to any Person, such Person’s immediate family members, partners, members or parent and subsidiary corporations, and any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with said
      Person and their respective Affiliates. For the purposes of this definition, "control," when used with respect to any specified 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 meanings correlative to the foregoing.

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

    “Applicable Procedures”
      means, with respect to any transfer or exchange of or for beneficial interests in any Subordinated Note represented by a global certificate, the rules and procedures of DTC that apply to such transfer or exchange.

    "Articles of Incorporation"
      means the Articles of Incorporation of Company, as in effect on the Closing Date.

    “Bank” means 1st
      Security Bank of Washington, a savings bank organized under the laws of the State of Washington and a wholly owned Subsidiary of Company.

    “Business Day” means any day other than a Saturday, Sunday or any other day on which banking
      institutions in the State of Washington are permitted or required by any applicable law or executive order to close.

    "Bylaws" means the
      Amended and Restated Bylaws of Company, as in effect on the Closing Date.

    “Closing” has the
      meaning set forth in Section 2.2.

    “Closing Date” means February 10, 2021.

    “Company” has the
      meaning set forth in the preamble hereto and shall include any successors to Company.

    “Company’s Reports” means (i) the Company’s annual, quarterly and other reports, schedules, forms,
      statements and other documents (including exhibits and other information incorporated therein) filed or furnished by the Company with the SEC under the Securities Act, Exchange Act, or the regulations thereunder, in each case since January 1, 2019,
      and (ii) the Company’s reports for the year ended December 31, 2019 and the six months ended June 30, 2020 as filed with the FRB as required by regulations of the FRB.

    “Disbursement” has the
      meaning set forth in Section 3.1.

    "Disqualification Event"
      has the meaning set forth in Section 4.2.4.

    “DTC” has the meaning
      set forth in Section 5.7.

    “Equity Interest” means any and all shares, interests, participations or other equivalents
      (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person which is not a corporation, and any and all warrants, options or other rights to purchase any of the foregoing.

    “Exchange Act” means
      the Securities Exchange Act of 1934, as amended.

    

    

    2

    

    
      
        

    

     “FDIC” means the
      Federal Deposit Insurance Corporation.

    “FRB” means the Board
      of Governors of the Federal Reserve System.

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

    “Global Note” has the
      meaning set forth in Section 3.1.

    “Governmental Agency(ies)” means, individually or collectively, any federal, state, county or local
      governmental department, commission, board, regulatory authority or agency (including each applicable Regulatory Agency) with jurisdiction over Company or a Subsidiary.

    “Governmental Licenses” has the meaning set forth in Section 4.3.

    “Hazardous Materials” means flammable explosives, asbestos, urea formaldehyde insulation,
      polychlorinated biphenyls, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including any substances which are “hazardous substances,” “hazardous wastes,” “hazardous materials” or “toxic substances”
      under the Hazardous Materials Laws and/or other applicable environmental laws, ordinances or regulations.

    “Hazardous Materials Laws” mean any laws, regulations, permits, licenses or requirements pertaining to the protection, preservation, conservation or regulation of the environment which relates to real
      property, including:  the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C.
      Section 6901 et seq.; the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (including the Superfund Amendments and Reauthorization Act of 1986), 42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act,
      as amended, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of
      1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of other jurisdictions or orders and regulations.

    “Indebtedness” means
      and includes:  (i) all items arising from the borrowing of money that, according to GAAP as in effect from time to time, would be included in determining total liabilities as shown on the consolidated balance sheet of Company; and (ii) all
      obligations secured by any lien in property owned by Company or any Subsidiary whether or not such obligations shall have been assumed; provided, however, Indebtedness shall not include deposits or other indebtedness created, incurred or maintained in the ordinary course of Company’s or Bank’s business (including
      federal funds purchased, advances from any Federal Home Loan Bank, secured deposits of municipalities, letters of credit issued by Company or Bank and repurchase arrangements) and consistent with customary banking practices and applicable laws and
      regulations.

    “Indenture” means the
      indenture, dated as of the date hereof, by and between Company and U.S. Bank National Association, a national banking association, as trustee, substantially 

     

    

    3

    

    
      
        

    

     in the form attached hereto as Exhibit

          A, as the same may be amended or supplemented from time to time in accordance with the terms thereof.

    “Leases” means all
      leases, licenses or other documents providing for the use or occupancy of any portion of any Property, including all amendments, extensions, renewals, supplements, modifications, sublets and assignments thereof and all separate letters or separate
      agreements relating thereto.

    “Material Adverse Effect”
      means, with respect to any Person, any change or effect that (i) is or would be reasonably likely to be material and adverse to the financial condition, results of operations or business of such Person, or (ii) would materially impair the ability of
      such Person to perform its respective obligations under any of the Transaction Documents, or otherwise materially impede the consummation of the transactions contemplated hereby; provided, however, that “Material Adverse Effect” shall not be deemed to include the impact of (1) changes in banking and similar laws, rules or
      regulations of general applicability or interpretations thereof by Governmental Agencies, (2) changes in GAAP or regulatory accounting requirements applicable to financial institutions and their holding companies generally, (3) changes after the date
      of this Agreement in general economic or capital market conditions affecting financial institutions or their market prices generally and not specifically related to Company or Purchasers, (4) the effects of the COVID-19 pandemic that do not
      disproportionately affect the operations or business of the Company in comparison to other banking institutions with similar operations, (5) direct effects of compliance with this Agreement on the operating performance of Company or Purchasers,
      including expenses incurred by Company or Purchasers in consummating the transactions contemplated by this Agreement, and (6) the effects of any action or omission taken by Company with the prior written consent of Purchasers, and vice versa, or as
      otherwise contemplated by this Agreement, the Indenture and the Subordinated Notes.

    “Maturity Date” means
      February 15, 2031.

    “Person” means an
      individual, a corporation (whether or not for profit), a partnership, a limited liability company, a joint venture, an association, a trust, an unincorporated organization, a government or any department or agency thereof (including a Governmental
      Agency) or any other entity or organization.

    “Placement Agents” has
      the meaning set forth in the Recitals.

    “Property” means any
      real property owned or leased by Company or any Affiliate or Subsidiary of Company.

    “Purchaser” or “Purchasers” has the meaning set forth in the preamble hereto.

    “QIB” has the meaning
      set forth in Section 5.7.

    “Registration Rights Agreement”
      means the Registration Rights Agreement, dated as of the date hereof, by and among Company and the Purchasers in the form attached as Exhibit B hereto.

    “Regulation D” has the
      meaning set forth in the Recitals.

    

    

     4

    

    
      
        

    

       “Regulatory
          Agencies” means any federal or state agency charged with the 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 authority, body or agency having supervisory or regulatory authority with respect to Company, Bank or any of their Subsidiaries.

    “SEC” means the
      Securities and Exchange Commission.

    “Secondary Market Transaction”
      has the meaning set forth in Section 5.5.

    “Securities Act” has
      the meaning set forth in the Recitals.

    “Subordinated Note”
      means the Subordinated Note (or collectively, the “Subordinated Notes”) in the form attached as an exhibit to the Indenture, as amended, restated, supplemented or modified from
      time to time, and each Subordinated Note delivered in substitution or exchange for such Subordinated Note.

    “Subordinated Note Amount”
      has the meaning set forth in the Recitals.

    “Subsidiary” means,
      with respect to any Person, any corporation or entity in which a majority of the outstanding Equity Interest is directly or indirectly owned by such Person.

    “Tier 2 Capital” has
      the meaning given to the term “Tier 2 capital” in 12 C.F.R. Part 217, as amended, modified and supplemented and in effect from time to time or any replacement thereof.

    “Transaction Documents”
      has the meaning set forth in Section 3.2.1.1.

    “Trustee” means the
      trustee or successor in accordance with the applicable provisions of the Indenture.

      1.2 Interpretations.  The foregoing
        definitions are equally applicable to both the singular and plural forms of the terms defined.  The words “hereof”, “herein” and “hereunder” and words of like import when used in this Agreement shall refer to this Agreement as a whole and not to
        any particular provision of this Agreement.  The word “including” when used in this Agreement without the phrase “without limitation,” shall mean “including, without limitation.”  All references to time of day herein are references to Eastern Time
        unless otherwise specifically provided.  All references to this Agreement, the Subordinated Notes and the Indenture shall be deemed to be to such documents as amended, modified or restated from time to time.  With respect to any reference in this
        Agreement to any defined term, (i) if such defined term refers to a Person, then it shall also mean all heirs, legal representatives and permitted successors and assigns of such Person, and (ii) if such defined term refers to a document, instrument
        or agreement, then it shall also include any amendment, replacement, extension or other modification thereof.

       1.3 Exhibits Incorporated.  All Exhibits
        attached are hereby incorporated into this Agreement.

    5

       

    
      
        

    

    
      2. SUBORDINATED DEBT.

        2.1 Certain Terms.  Subject to the terms
          and conditions herein contained, Company proposes to issue and sell to the Purchasers, severally and not jointly, Subordinated Notes, which will be issued pursuant to the Indenture, in an aggregate principal amount equal to the aggregate of the
          Subordinated Note Amounts.  Purchasers, severally and not jointly, each agree to purchase 

       the Subordinated Notes, which will be issued pursuant to the Indenture, from Company on the
        Closing Date in accordance with the terms of, and subject to the conditions and provisions set forth in, this Agreement, the Indenture and the Subordinated Notes.  The Subordinated Note Amounts shall be disbursed in accordance with Section 3.1.

      2.2 The Closing.  The execution and
        delivery of the Transaction Documents (the “Closing”) shall occur at the offices of Company at 10:00 a.m. (local time) on the Closing Date, or at such other place or time or on
        such other date as the parties hereto may agree.

      2.3 Right of Offset.  Each Purchaser
        hereby expressly waives any right of offset such Purchaser may have against Company or Bank.

      2.4 Use of Proceeds.  Company shall use
        the net proceeds from the sale of Subordinated Notes for general corporate purposes, including providing capital to support the organic growth of its bank subsidiary, potential share repurchase activities, and potential acquisition opportunities.

    3. DISBURSEMENT.

      3.1 Disbursement.  On the Closing Date,
        assuming all of the terms and conditions set forth in Section 3.2 have been satisfied by Company and Company has executed and delivered to each of the Purchasers this
        Agreement and any other related documents in form and substance reasonably satisfactory to Purchasers, each Purchaser shall disburse in immediately available funds the Subordinated Note Amount set forth on such Purchaser’s signature page to Company
        in exchange for an electronic securities entitlement through the facilities of DTC (defined below) in accordance with the Applicable Procedures in the Subordinated Note with a principal amount equal to such Subordinated Note Amount (the “Disbursement”).  Company will deliver to the Trustee a global certificate representing the Subordinated Notes (the “Global
            Note”) registered in the name of Cede & Co., as nominee for DTC.

      3.2 Conditions Precedent to Disbursement.

          3.2.1 Conditions to the Purchasers’
            Obligation. The obligation of each Purchaser to consummate the purchase of the Subordinated Notes to be purchased by them at Closing and to effect
        the Disbursement is subject to delivery by or at the direction of Company to such Purchaser (or, with respect to the Indenture, the Trustee) each of the following (or written waiver by such Purchaser prior to the Closing of such delivery):

              3.2.1.1 Transaction Documents. 
        This Agreement, the Indenture, the Global Note and the Registration Rights Agreement (collectively, the “Transaction Documents”), each duly authorized and executed by Company,
        and delivery of written instruction to the Trustee (with respect to the Indenture).

    

    

              

      

     

    

    6

      

    
      
        

    

                        3.2.1.2 Authority Documents.

     

      

    
      	
              (a)

            	
              A copy, certified by the Secretary or Assistant Secretary of Company, of the Articles of Incorporation of Company, as amended;

            

    

    
      	
              (b)

            	
              A certificate of existence of Company issued by the Secretary of State of the State of Washington;

            

    

    
      	
              (c)

            	
              A copy, certified by the Secretary or Assistant Secretary, of the Bylaws, as amended, of Company;

            

    

    
      	
              (d)

            	
              A copy, certified by the Secretary or Assistant Secretary of Company, of the resolutions of the board of directors (and any committee
                thereof) of Company authorizing the execution, delivery and performance of the Transaction Documents;

            

    

    
      	
              (e)

            	
              An incumbency certificate of the Secretary or Assistant Secretary of Company certifying the names of the officer or officers of Company
                authorized to sign the Transaction Documents and the other documents provided for in this Agreement; and

            

    

    
      	
              (f)

            	
              The opinion of Breyer & Associates PC, counsel to Company, dated as of the Closing Date, substantially in the form set forth at Exhibit C attached hereto addressed to the Purchasers and Placement Agents.

            

    

              3.2.1.3 Other Requirements.  Such
        other certificates, affidavits, schedules, resolutions, notes and/or other documents which are provided for hereunder or as a Purchaser may reasonably request.

               3.2.1.4 Aggregate Investments. 
        Prior to, or contemporaneously with the Closing, each Purchaser shall have actually subscribed for the Subordinated Note Amount set forth on such Purchaser’s signature page.

      3.2.2 Conditions to Company’s Obligation.

             3.2.2.1 The obligation of Company to consummate the sale of the Subordinated Notes and to effect the Closing is subject to:
        (i) with respect to a given Purchaser, delivery by or at the direction of such Purchaser to Company (or written waiver by Company prior to the Closing of such delivery) of this Agreement and the Registration Rights Agreement, each duly authorized
        and executed by such Purchaser; (ii) with respect to a given Purchaser, Company's 

      

    

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      receipt of the Subordinated Note Amount set forth on such Purchaser's signature page; and (iii) Company's receipt of the Indenture, duly authorized and executed by the
        Trustee.

      

    4. REPRESENTATIONS AND WARRANTIES OF COMPANY.

    Company hereby represents and warrants to each Purchaser as follows:

      4.1 Organization and Authority.

          4.1.1 Organization Matters of Company and
            Its Subsidiaries.

                4.1.1.1 Company is validly existing and in good standing under the laws of the State of Washington and has all requisite
        corporate power and authority to conduct its business and activities as presently conducted, to own its properties, and to perform its obligations under the Transaction Documents.  Company is duly qualified as a foreign corporation to transact
        business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good
        standing would not result in a Material Adverse Effect on Company and Bank taken as a whole.  Company is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended.

               4.1.1.2 The Bank is the only Subsidiary of the Company and has been duly chartered and is validly existing as a Washington
        stock savings bank, in each case in good standing under the laws of the State of Washington, has corporate power and authority to own, lease and operate its properties and to conduct its business and is duly qualified as a foreign corporation to
        transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good
        standing would not result in a Material Adverse Effect on Company and the Bank taken as a whole.  All of the issued and outstanding shares of capital stock or other equity interests in the Bank have been duly authorized and validly issued, are
        fully paid and non-assessable and are owned by Company, directly, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim; none of the outstanding shares of capital stock of, or other Equity Interests in the Bank were
        issued in violation of the preemptive or similar rights of any securityholder of the Bank or any other entity.

                4.1.1.3 The deposit accounts of Bank are insured by the FDIC up to applicable limits.  Neither Company nor Bank has received
        any notice or other information indicating that Bank is not an “insured depository institution” as defined in 12 U.S.C. Section 1813, nor has any event occurred which could reasonably be expected to adversely affect the status of Bank as an
        FDIC-insured institution.

        4.1.2 Capital Stock and Related Matters. 
        All of the outstanding capital stock of Company has been duly authorized and validly issued and is fully paid and nonassessable.  There are, as of the date hereof, no outstanding options, rights, warrants or other agreements or instruments
        obligating Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the capital stock of Company or obligating Company to grant, extend or enter 

      

     

    

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    into any such agreement or commitment to any Person other than Company except pursuant to Company’s
        equity incentive plans duly adopted by Company’s Board of Directors.

    
      4.2 No Impediment to Transactions.

    

        4.2.1 Transaction is Legal and Authorized. 
        The issuance of the Subordinated Notes pursuant to the Indenture, the borrowing of the aggregate of the Subordinated Note Amount, the execution of the Transaction Documents and compliance by Company with all of the provisions of the Transaction
        Documents are within the corporate and other powers of Company.

        4.2.2 Agreement, Indenture and
            Registration Rights Agreement.  This Agreement, the Indenture and the Registration Rights Agreement have been duly authorized, executed and delivered by Company, and, assuming due authorization, execution and delivery by the other
        parties thereto, including the Trustee for purposes of the Indenture, are the legal, valid and binding obligations of Company, enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency,
        reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles.

        4.2.3 Subordinated Notes.  The Subordinated Notes have been duly authorized by Company and when executed by Company and completed and authenticated by the Trustee in accordance with, and in
        the form contemplated by, the Indenture and issued, delivered to and paid for as provided in this Agreement, will have been duly issued under the Indenture and will
        constitute legal, valid and binding obligations of Company, entitled to the benefits of the Indenture, and enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
        moratorium or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles. When executed and delivered, the Subordinated Notes will be substantially in the form attached as an exhibit to the Indenture.

        4.2.4 Exemption from Registration.  Neither the Company, nor any of its Subsidiaries or Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or
        general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Subordinated Notes.  Assuming the accuracy of the representations and warranties of each Purchaser set forth in this Agreement, the Subordinated
        Notes will be issued in a transaction exempt from the registration requirements of the Securities Act.  No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”) is applicable to the Company or, to the Company’s knowledge, any Person described in Rule 506(d)(1) (each, a “Company Covered
            Person”).  The Company has exercised reasonable care to determine whether any Company Covered Person is subject to a Disqualification Event.  The Company has complied, to the extent applicable, with its disclosure obligations under
        Rule 506(e).

        4.2.5 No Defaults or Restrictions. 
        Neither the execution and delivery of the Transaction Documents nor compliance with their respective terms and conditions will (whether with or without the giving of notice or lapse of time or both) (i) violate, conflict with or result in a breach
        of, or constitute a default under:  (1) the Articles of Incorporation or Bylaws of Company; (2) any of the terms, obligations, covenants, conditions or provisions of any corporate restriction 

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    or of any contract, agreement, indenture,
          mortgage, deed of trust, pledge, bank loan or credit agreement, or any other agreement or instrument to which Company or Bank, as applicable, is now a party or by which it or any of its properties may be bound or affected; (3) any judgment,
          order, writ, injunction, decree or demand of any court, arbitrator, grand jury, or Governmental Agency applicable to the Company or the Bank; or (4) any statute, rule or regulation applicable to Company, except, in the case of items (2), (3) or (4), for such violations and conflicts that would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect on Company
          and the Bank taken as a whole, or (ii) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any property or asset of Company.  Neither Company nor Bank is in default in the performance, observance
          or fulfillment of any of the terms, obligations, covenants, conditions or provisions contained in any indenture or other agreement creating, evidencing or securing Indebtedness of any kind or pursuant to which any such Indebtedness is issued, or
          any other agreement or instrument to which Company or Bank, as applicable, is a party or by which Company or Bank, as applicable, or any of its properties may be bound or affected, except, in each case, only such defaults that would not
          reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect on Company and Bank taken as a whole.

        4.2.6 Governmental Consent.  No
        governmental orders, permissions, consents, approvals or authorizations are required to be obtained by Company that have not been obtained, and no registrations or declarations are required to be filed by Company that have not been filed in
        connection with, or, in contemplation of, the execution and delivery of, and performance under, the Transaction Documents, except for applicable requirements, if any, of the Securities Act, the Exchange Act or state securities laws or “blue sky”
        laws of the various states and any applicable federal or state banking laws and regulations.

    4.3 Possession of Licenses and Permits. 
        Company and the Bank possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate Governmental
        Agencies necessary to conduct the business now operated by them except where the failure to possess such Governmental Licenses would not, singularly or in the aggregate, have a Material Adverse Effect on Company and the Bank taken as a whole;
        Company and the Bank are each in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, individually or in the aggregate, have a Material Adverse Effect on Company and the Bank
        taken as a whole; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a
        Material Adverse Effect on Company and the Bank taken as a whole; and neither Company nor the Bank has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses.

    4.4 Financial Condition.

         4.4.1 Company Financial Statements. 
        The financial statements of Company included in Company’s Reports (including the related notes, where applicable) (i) have been prepared from, and are in accordance with, the books and records of Company; (ii) fairly present in all material
        respects the results of operations, cash flows, changes in stockholders’ equity and financial position of Company and its consolidated Subsidiaries, for the respective fiscal periods 

      

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    or as of the respective dates therein set
          forth (subject in the case of unaudited statements to recurring year-end audit adjustments normal in nature and amount), as applicable; (iii) complied as to form, as of their respective dates of filing in all material respects with applicable
          accounting and banking requirements as applicable, with respect thereto; and (iv) have been prepared in accordance with GAAP consistently applied during the periods involved, except, in each case, (x) as indicated in such statements or in the
          notes thereto, (y) for any statement therein or omission therefrom that was corrected, amended, or supplemented or otherwise disclosed or updated in a subsequent Company's Report, and (z) to the extent that any unaudited interim financial
          statements do not contain the footnotes required by GAAP, and were or are subject to normal and recurring year-end adjustments, which were not or are not expected to be material in amount, either individually or in the aggregate.  The
        books and records of Company have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements.  Company does not have any material liability of any nature whatsoever
        (whether absolute, accrued, contingent (including any off-balance sheet obligations) or otherwise and whether due or to become due), except for those liabilities that are reflected or reserved against on the consolidated balance sheet of Company
        contained in Company’s Reports for Company’s most recently completed quarterly or annual fiscal period, as applicable, and for liabilities incurred in the ordinary course of business consistent with past practice or in connection with this
        Agreement and the transactions contemplated hereby.

      4.4.2 Absence of Default.  Since the date of
        the latest audited financial statements included in Company’s Reports, no event has occurred which either of itself or with the lapse of time or the giving of notice or both, would give any creditor of Company the right to accelerate the maturity
        of any material Indebtedness of Company.  Company is not in default under any other Lease, agreement or instrument, or any law, rule, regulation, order, writ, injunction, decree, determination or award, non-compliance with which could reasonably be
        expected to result in a Material Adverse Effect on Company.

      4.4.3 Solvency.  After giving effect to the
        consummation of the transactions contemplated by this Agreement, Company has capital sufficient to carry on its business and transactions and is solvent and able to pay its debts as they mature.  No transfer of property is being made and no
        Indebtedness is being incurred in connection with the transactions contemplated by this Agreement with the intent to hinder, delay or defraud either present or future creditors of Company or the Bank.

      4.4.4 Ownership of Property.  Company and
        the Bank each has good and marketable title as to all real property owned by it and good title to all assets and properties owned by Company and such Subsidiary in the conduct of its businesses, whether such assets and properties are real or
        personal, tangible or intangible, including assets and property reflected in the most recent balance sheet contained in Company’s Reports or acquired subsequent thereto (except to the extent that such assets and properties have been disposed of in
        the ordinary course of business, since the date of such balance sheet), subject to no encumbrances, liens, mortgages, security interests or pledges, except (i) those items which secure liabilities for public or statutory obligations or any discount
        with, borrowing from or other obligations to the Federal Home Loan Bank, inter-bank credit facilities, reverse repurchase agreements or any transaction by Bank acting in a fiduciary capacity, (ii) statutory liens for amounts not yet delinquent or
        which are being contested in good faith and (iii) such as do not, individually or in the aggregate, materially affect 

      

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      the value of such property and do not materially interfere with the use made and proposed to be made
          of such property by Company or the Bank.  Company and the Bank each, as lessee, has the right under valid and existing Leases of real and personal properties that are material to Company or the Bank, as applicable, in the conduct of its business
          to occupy or use all such properties as presently occupied and used by it.  Such existing Leases and commitments to lease constitute or will constitute operating leases for both tax and financial accounting purposes and the lease expense and
          minimum rental commitments with respect to such Leases and lease commitments are as disclosed in all material respects in Company’s Reports.

      4.5 No Material Adverse Change.  Since the date of the latest
          audited financial statements included in Company’s Reports, there has been no development or event which has had or could reasonably be expected to have a Material
          Adverse Effect on Company and the Bank taken as a whole.

    

    4.6 Legal Matters.

       4.6.1 Compliance with Law. 
        Company and the Bank (i) have complied with and (ii) is not under investigation with respect to, and, to Company’s knowledge, have not been threatened to be charged with or given any notice of any material violation of any applicable statutes,
        rules, regulations, orders and restrictions of any domestic or foreign government, or any Governmental Agency, having jurisdiction over the conduct of its business or the ownership of its properties, except where any such failure to comply or
        violation would not have a Material Adverse Effect on Company or the Bank. Company and the Bank are each compliant with their own privacy policies and written commitments to their respective customers, consumers and employees, concerning data
        protection and the privacy and security of personal data and the nonpublic personal information of their respective customers, consumers and employees, and in each case the failure to comply with which would not result, individually or in the
        aggregate, in a Material Adverse Effect on Company or the Bank.

       4.6.2 Regulatory Enforcement Actions. 
        Company and the Bank are in compliance in all material respects with all laws administered by and regulations of any Governmental Agency applicable to it or to them, except
        where the failure to comply with which would not have a Material Adverse Effect on Company or the Bank.  None of Company or the Bank, nor any of their officers or directors is now operating under any restrictions, agreements, memoranda, commitment
        letter, supervisory letter or similar regulatory correspondence, or other commitments (other than restrictions of general application) imposed by any Governmental Agency, nor are, to Company’s knowledge, (a) any such restrictions threatened, (b)
        any agreements, memoranda or commitments being sought by any Governmental Agency, or (c) any legal or regulatory violations previously identified by, or penalties or other remedial action previously imposed by, any Governmental Agency unresolved.

       4.6.3 Pending Litigation. 
        There are no actions, suits, proceedings or written agreements pending, or, to Company’s knowledge, threatened or proposed, against Company or the Bank, at law or in equity or before or by any Governmental Agency that, either separately or in the
        aggregate, would reasonably be expected to have a Material Adverse Effect on Company and the Bank taken as a whole or affect issuance or payment of the Subordinated Notes; and neither Company nor the Bank is a party to or named as subject to the
        provisions of any order, writ, 

      

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      injunction, or decree of, or any written agreement with, any Governmental Agency that, either separately or in the aggregate, will have a Material Adverse Effect on Company
        and the Bank taken as a whole.
         4.6.4 Environmental.    No
          Property is or, to Company’s knowledge, has been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, transportation or presence of any Hazardous Materials and neither Company nor the
          Bank has engaged in such activities.  There are no claims or actions pending or, to Company’s knowledge, threatened against Company or the Bank by any Governmental Agency or by any other Person relating to any Hazardous Materials or pursuant to
          any Hazardous Materials Law except for such actions or claims that would not reasonably be expected to have a Material Adverse Effect on Company and the Bank taken as a whole.

    

       4.6.5 Brokerage Commissions. 
        Except for commissions paid to the Placement Agents, neither Company nor any Affiliate of Company is obligated to pay any brokerage commission or finder’s fee to any Person in connection with the transactions contemplated by this Agreement.

       4.6.6 Investment Company Act. 
        Neither Company nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

    4.7 No Misstatement.  None of the
        representations, warranties, covenants or agreements made in the Transaction Documents (including any exhibits or schedules thereto and any certificates delivered to the Purchasers in connection therewith), nor any statements made in the Investor
        Presentation, contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein not misleading in light of the circumstances when made or furnished to Purchasers, except for any
        statement therein or omission therefrom which was corrected, amended or supplemented or otherwise disclosed or updated in a subsequent exhibit, report, schedule or document prior to the date hereof.

    4.8 Reporting Compliance. Company is
        subject to, and is in compliance in all material respects with, the reporting requirements of Section 13 and Section 15(d), as applicable, of the Exchange Act. The Company’s Reports at the time they were or hereafter are filed with the SEC,
        complied and will comply in all material respects with the requirements of the Exchange Act and did not and will not include any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light
        of the circumstances under which they were or are made, not misleading.

    4.9 Internal Control Over Financial Reporting. 
        Company and Bank maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their
        respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
        purposes in accordance with GAAP, including, but not limited to, a system of accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general 

      

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    or specific authorizations; (ii) transactions
          are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization;
          and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  Since the end of Company’s most recent audited fiscal year, (y) Company
          has no knowledge of (i) any material weakness in Company’s internal control over financial reporting (whether or not remediated) or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role
          in Company’s internal controls and (z) there has been no change in Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, Company’s internal control over financial
          reporting.

     
      4.10 Disclosure Controls and Procedures. 
          Company and Bank maintain an effective system of disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 of the Exchange Act), that (i) are designed to ensure that information required to be disclosed by Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and
          forms and that material information relating to Company and Bank is made known to Company’s principal executive officer and principal financial officer by others within Company and Bank to allow timely decisions regarding disclosure, and (ii) are
          effective in all material respects to perform the functions for which they were established.  As of the date hereof, Company has no knowledge that would cause it to believe that the evaluation to be conducted of the effectiveness of Company’s
          disclosure controls and procedures for the most recently ended fiscal quarter period will result in a finding that such disclosure controls and procedures are ineffective in any material respect for such quarter ended.  Based on the evaluation of
          Company’s and the Bank’s  disclosure controls and procedures described above, Company is not aware of (1) any significant deficiency in the design or operation of internal controls which could adversely affect Company’s ability to record,
          process, summarize and report financial data or any material weaknesses in internal controls or (2) any fraud, whether or not material, that involves management or other employees who have a significant role in Company’s internal controls.  Since
          the most recent evaluation of Company’s disclosure controls and procedures described above, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls.

    

    5. GENERAL COVENANTS, CONDITIONS AND AGREEMENTS.

    Company hereby further covenants and agrees with each Purchaser as follows:

    5.1 Compliance with Transaction Documents. 
        Company shall comply with, observe and timely perform each and every one of its covenants, agreements and obligations under the Transaction Documents.

    5.2 Affiliate Transactions.  Company shall
        not itself, nor shall it cause, permit or allow the Bank to enter into any material transaction, including, the purchase, sale or exchange of property or the rendering of any service, with any Affiliate of Company except in the ordinary course of
        business and pursuant to the reasonable requirements of Company’s or such Affiliate’s business and upon terms consistent with applicable laws and regulations and reasonably found by the appropriate board(s) of directors to be fair and reasonable
        and no less favorable to Company 

      

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    or such Affiliate than would be obtained in a
          comparable arm’s length transaction with a Person not an Affiliate. 
      5.3 Compliance with Laws.

         5.3.1 Generally.  Company
          shall comply and cause the Bank to comply in all material respects with all applicable statutes, rules, regulations, orders and restrictions in respect of the conduct of its business and the ownership of its properties, except, in each case,
          where such non-compliance would not reasonably be expected to have a Material Adverse Effect on Company .

         5.3.2 Regulated Activities. 
          Company shall not itself, nor shall it cause, permit or allow the Bank to (i) engage in any business or activity not permitted by all applicable laws and regulations, except where such business or activity would not reasonably be expected to have
          a Material Adverse Effect on Company or the Bank or (ii) make any loan or advance secured by the capital stock of another bank or depository institution, or acquire the capital stock, assets or obligations of or any interest in another bank or depository institution, in each case other than in accordance with applicable laws and regulations and safe and sound banking practices.

    

       5.3.3 Taxes.  Company shall and
        shall cause the Bank to promptly pay and discharge all taxes, assessments and other governmental charges imposed upon Company or Bank or upon the income, profits, or property of Company or  Bank and all claims for labor, material or supplies which,
        if unpaid, might by law become a lien or charge upon the property of Company or Bank if such nonpayment could reasonably be expected to have a Material Adverse Effect on the Company and the Bank taken as a whole.  Notwithstanding the foregoing,
        neither  Company nor  the Bank shall be required to pay any such tax, assessment, charge or claim, so long as the validity thereof shall be contested in good faith by appropriate proceedings, and appropriate reserves therefor shall be maintained on
        the books of Company and  Bank.

                   5.3.4            Tier 2 Capital. If all or any portion of the Subordinated Notes ceases to be deemed to be Tier 2 Capital,
        other than due to the limitation imposed on the capital treatment of subordinated debt during the five (5) years immediately preceding the Maturity Date of the Subordinated Notes, the Company may immediately notify the Holder (as defined in the
        Indenture), and thereafter, subject to the terms of the Indenture, Company may request that  the Holder  work together with the Company in good faith to execute and deliver all agreements as reasonably necessary in order to restructure the
        applicable portions of the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital; provided, however, that nothing contained in this Agreement shall limit the Company's right to redeem the Subordinated Notes, including upon
        the occurrence of a Tier 2 Capital Event as described in the Subordinated Notes and the Indenture.

    5.4 Absence of Control.  It is the intent
        of the parties to this Agreement that in no event shall Purchasers, by reason of any of the Transaction Documents, be deemed to control, directly or indirectly, Company, and Purchasers shall not exercise, or be deemed to exercise, directly or
        indirectly, a controlling influence over the management or policies of Company.

    

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      5.5 Secondary Market Transactions. Each
          Purchaser shall have the right at any time and from time to time to securitize such Purchaser’s Subordinated Notes or any portion thereof in a single asset securitization or a pooled loan securitization of rated single or multi-class securities
          secured by or evidencing ownership interests in the Subordinated Notes (each such securitization is referred to herein as a “Secondary Market Transaction”). In connection
          with any such Secondary Market Transaction, Company shall, at Company’s expense, cooperate with any such Purchaser and otherwise reasonably assist any such Purchaser in satisfying the market standards to which any such Purchaser customarily
          adheres or which may be reasonably required in the marketplace or by applicable rating agencies in connection with any such Secondary Market Transaction. Subject to any written confidentiality obligation, all information regarding Company may be
          furnished, without liability except in the case of gross negligence or willful misconduct, to any Purchaser and to any Person reasonably deemed necessary by a Purchaser in connection with participation in such Secondary Market Transaction. All
          documents, financial statements, appraisals and other data relevant to Company or the Subordinated Notes may be retained by any such Person subject to the terms of applicable confidentiality agreements.

      5.6 Insurance. At its sole cost and
          expense, Company shall maintain, and shall cause  Bank to maintain, bonds and insurance in such amounts as are prudent and customary in the businesses in which it
          is engaged. All such bonds and policies of insurance shall be in a form, and with insurers of recognized financial responsibility against such losses and risks.

    

    5.7 DTC Registration.  Company shall use
        commercially reasonable efforts to cause the Subordinated Notes to be quoted on Bloomberg and, with respect to Subordinated Notes held by Qualified Institutional Buyers as defined in Rule 144A of the Securities Act (“QIB”), shall cause such
        Subordinated Notes to be registered in the name of Cede & Co. as nominee of The Depository Trust Company (“DTC”).

    5.8 Rule 144A Information.  While any Subordinated Notes remain “restricted securities” within the meaning of the Securities Act, Company will make available, upon request, to any seller of
        such Subordinated Notes the information specified in Rule 144A(d)(4) under the Securities Act, unless Company is then subject to Section 13 or 15(d) of the Exchange Act.

    6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASERS.

    Each Purchaser hereby represents and warrants to Company, and covenants with Company,
      severally and not jointly, as follows:

    6.1 Legal Power and Authority.  The
        Purchaser has all necessary power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby, is an entity duly organized, validly existing and in good standing under
        the laws its jurisdiction of organization.

    6.2 Authorization and Execution.  The
        execution, delivery and performance of this Agreement and the Registration Rights Agreement have been duly authorized by all necessary action on the part of such Purchaser, and, assuming due authorization, execution and delivery by the other
        parties thereto, this Agreement and the Registration Rights Agreement are each a legal, valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance 

      

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    with its terms, except as enforcement thereof
          may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles.

     
      6.3 No Conflicts.  Neither the
          execution, delivery or performance of the Transaction Documents nor the consummation of any of the transactions contemplated thereby will conflict with, violate, constitute a breach of or a default (whether with or without the giving of notice or
          lapse of time or both) under (i) the Purchaser’s organizational documents, (ii) any agreement to which the Purchaser is party, (iii) any law applicable to the Purchaser or (iv) any order, writ, judgment, injunction, decree, determination or award
          binding upon or affecting the Purchaser.

      6.4 Purchase for Investment.  The
          Purchaser is purchasing the Subordinated Note for his, her or its own account and not with a view to distribution and with no present intention of reselling, distributing or otherwise disposing of the same.  The Purchaser has no present or
          contemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providing for, or which is likely to compel, a disposition of the Subordinated Notes in any manner.

      6.5 Institutional Accredited Investor. 
          The Purchaser is and will be on the Closing Date either (a) an institutional “accredited investor” as such term is defined in Rule 501(a) of Regulation D and as contemplated by subsections (1), (2), (3) and (7) of Rule 501(a) of Regulation D, and has no less than $5,000,000 in total assets, or (b) a QIB.

    

    6.6 Financial and Business Sophistication. 
        The Purchaser has such knowledge and experience in financial and business matters that such Purchaser is capable of evaluating the merits and risks of the prospective investment in the Subordinated Notes.  The Purchaser has relied solely upon its
        own knowledge of, and/or the advice of its own legal, financial or other advisors with regard to, the legal, financial, tax and other considerations involved in deciding to invest in the Subordinated Notes.

    6.7 Ability to Bear Economic Risk of Investment. 
        The Purchaser recognizes that an investment in the Subordinated Notes involves substantial risk, including risks related to the Company's business, operating results, financial condition and cash flows, which risks it has carefully considered in
        connection with making an investment in the Subordinated Notes.  The Purchaser has the ability to bear the economic risk of the prospective investment in the Subordinated Notes, including the ability to hold the Subordinated Notes indefinitely, and
        further including the ability to bear a complete loss of all of the Purchaser’s investment in Company.

    6.8 Information.  The Purchaser
        acknowledges that:  (i) the Purchaser is not being provided with the disclosures that would be required if the offer and sale of the Subordinated Notes were registered under the Securities Act, nor is the Purchaser being provided with any offering
        circular or prospectus prepared in connection with the offer and sale of the Subordinated Notes; (ii) the Purchaser has conducted its own examination of Company and the terms of the Subordinated Notes to the extent the Purchaser deems necessary to
        make its decision to invest in the Subordinated Notes (including meeting with representatives of the Company); (iii) the Purchaser has availed itself of publicly available financial and other information concerning Company to the extent the
        Purchaser deems necessary to make his, her or its decision to purchase the Subordinated Notes; and (iv) it has not received nor relied on any form of general solicitation 

      

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    or general advertising (within the meaning of
          Regulation D) from the Company in connection with the offer and sale of the Subordinated Notes.  The Purchaser has reviewed the information set forth in Company’s Reports and the exhibits and schedules hereto and contained in the investor data
          room established by Company in connection with the transactions contemplated by this Agreement.

     
      6.9 Access to Information.  The
          Purchaser acknowledges that the Purchaser and his, her or its advisors have been furnished with all materials relating to the business, finances and operations of Company that have been requested by the Purchaser or his, her or its advisors and
          have been given the opportunity to ask questions of, and to receive answers from, persons acting on behalf of Company concerning terms and conditions of the transactions contemplated by this Agreement in order to make an informed and voluntary
          decision to enter into this Agreement.

      6.10 Investment Decision.  The Purchaser
          has made its own investment decision based upon the Purchaser’s own judgment, due diligence and advice from such advisors as the Purchaser has deemed necessary and not upon any view expressed by any other person or entity, including the Placement
          Agents (or, with respect to the Indenture, the Trustee).  Neither such inquiries nor any other due diligence investigations conducted by the Purchaser or its advisors or representatives, if any, shall modify, amend or affect the Purchaser’s right
          to rely on Company’s representations and warranties contained herein.  The Purchaser is not relying upon, and has not relied upon, any advice, statement, representation or warranty made by any Person by or on behalf of Company, including without limitation the Placement Agents (or, with respect to the Indenture, the Trustee), except for the express statements, representations and warranties of Company made
          or contained in this Agreement.  Furthermore, the Purchaser acknowledges that (i) the Placement Agents have not performed any due diligence review on behalf of the Purchaser and (ii) nothing in this Agreement or any other materials presented by
          or on behalf of Company to the Purchaser in connection with the purchase of the Subordinated Notes constitutes legal, tax or investment advice.

    

    6.11 Private Placement; No Registration; Restricted
            Legends.  The Purchaser understands and acknowledges that the Subordinated Notes are being sold by Company without registration under the Securities Act in reliance on the exemption from federal and state registration set forth in,
        respectively, Rule 506(b) of Regulation D promulgated under Section 4(a)(2) of the Securities Act and Section 18 of the Securities Act, or any state securities laws, and accordingly, may be resold, pledged or otherwise transferred only if
        exemptions from the Securities Act and applicable state securities laws are available to it.  It is not subscribing for the Subordinated Notes as a result of or subsequent to any general solicitation or general advertising, in each case within the
        meaning of Rule 502(c) of Regulation D, including any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or meeting. The
        Purchaser further acknowledges and agrees that all certificates or other instruments representing the Subordinated Notes will bear the restrictive legend set forth in the form of Subordinated Note, which is attached as an exhibit to the Indenture. 
        The Purchaser further acknowledges his, her or its primary responsibilities under the Securities Act and, accordingly, will not sell or otherwise transfer the Subordinated Notes or any interest therein without complying with the requirements of the
        Securities Act and the rules and regulations promulgated thereunder and the requirements set forth in this Agreement. Neither the Placement Agents nor the Company have or has made or are or is making any representation, 

      

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    warranty or covenant, express or implied, as
          to the availability of any exemption from registration under the Securities Act or any applicable state securities laws for the resale, pledge or other transfer of the Subordinated Notes, or that the Subordinated Notes purchased by it will ever
          be able to be lawfully resold, pledged or otherwise transferred.

     
      6.12 Placement Agents.  The Purchaser
          will purchase the Subordinated Note(s) directly from Company and not from the Placement Agents and understands that none of the Placement Agents nor any other broker or dealer has any obligation to make a market in the Subordinated Notes.

      6.13 Tier 2 Capital. If the Company
          provides notice as contemplated in Section 5.3.4 of the occurrence of the event contemplated in such section, thereafter, upon the Company’s request, the Purchasers will use commercially reasonable efforts to work with the Company in good faith
          to execute and deliver all agreements as reasonably necessary in order to restructure the applicable portions of the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital; provided, however, that nothing contained in this
          Agreement shall limit the Company's right to redeem the Subordinated Notes upon the occurrence of a Tier 2 Capital Event as described in the Indenture.

      6.14 Not Savings Accounts, etc. The
          Purchaser acknowledges and agrees that the Subordinated Notes are not savings accounts or deposits of the Bank and are not insured or guaranteed by the FDIC or any Governmental Agency, and that no Governmental Agency has passed upon or will pass upon the offer or sale of the Subordinated Notes or has made or will make any finding or determination as to the fairness of this investment.

    

    6.15 Accuracy of Representations.  The
        Purchaser understands that each of the Placement Agents and Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement, and
        agrees that if any of the representations or acknowledgements made by the Purchaser are no longer accurate as of the Closing Date, or if any of the agreements made by the Purchaser are breached on or prior to the Closing Date, the Purchaser shall
        promptly notify the Placement Agents and Company.

    6.16 Representations and Warranties Generally. 
        The representations and warranties of the Purchaser set forth in this Agreement are true and correct as of the date hereof and will be true and correct as of the Closing Date and as otherwise specifically provided herein.  Any certificate signed by
        a duly authorized representative of the Purchaser and delivered to Company or to counsel for Company shall be deemed to be a representation and warranty by the Purchaser to Company as to the matters set forth therein.

    7. MISCELLANEOUS.

    7.1 Prohibition on Assignment by Company. 
        Except as described in Article VII of the Indenture, Company may not assign, transfer or delegate any of its rights or obligations under this Agreement or the Subordinated Notes without the prior written consent of Purchasers.

    7.2 Time of the Essence.  Time is of the essence of this
        Agreement.

    

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      7.3 Waiver or Amendment.  No waiver or
          amendment of any term, provision, condition, covenant or agreement herein shall be effective unless in writing and signed by all of the parties hereto. Waiver or amendment of any term of the Indenture and/or the Subordinated Note shall be
          governed by the terms of the Indenture. Notwithstanding the foregoing, the Company may amend or supplement the Subordinated Notes without the consent of the Holders of the Subordinated Notes to cure any ambiguity, defect or inconsistency or to
          provide for uncertificated Subordinated Notes in addition to or in place of certificated Subordinated Notes, or to make any change that does not adversely affect the rights of any Holder of any of the Subordinated Notes. No failure to exercise or
          delay in exercising, by a Purchaser or any Holder of the Subordinated Notes, of any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude any
          other or further exercise thereof, or the exercise of any other right or remedy provided by law. The rights and remedies provided in this Agreement are cumulative and not exclusive of any right or remedy provided by law or equity.

      7.4 Severability.  Any provision of this
          Agreement which is unenforceable or invalid or contrary to law, or the inclusion of which would adversely affect the validity, legality or enforcement of this Agreement, shall be of no effect and, in such case, all the remaining terms and
          provisions of this Agreement shall subsist and be fully effective according to the tenor of this Agreement the same as though any such invalid portion had never been included herein.  Notwithstanding any of the foregoing to the contrary, if any
          provisions of this Agreement or the application thereof are held invalid or unenforceable only as to particular persons or situations, the remainder of this Agreement, and the application of such provision to persons or situations other than those to which it shall have been held invalid or unenforceable, shall not be affected thereby, but shall continue valid and enforceable to the fullest extent permitted by
          law.

    

    7.5 Notices.  Any notice which any party
        hereto may be required or may desire to give hereunder shall be deemed to have been given if in writing and if delivered personally, or if mailed, postage prepaid, by United States registered or certified mail, return receipt requested, or if
        delivered by a responsible overnight commercial courier promising next business day delivery, addressed:

    	
            if to Company:

          	
            FS Bancorp, Inc.

              6920 220th Street SW

            Mountlake Terrace, WA 98043

            Attention: Matthew D. Mullet

             

            

          
	
            with a copy to:

          	
            Breyer & Associates PC

              8180 Greensboro Drive

            McLean, VA 22102

            Attention: John F. Breyer, Jr.

             

            

          
	
            if to Purchasers:

          	
            To the address indicated on such Purchaser’s signature page.

          

    

    

    or to such other address or addresses as the party to be given notice may have furnished in writing to the party
      seeking or desiring to give notice, as a place for the giving of notice; provided that no 

    

     20

      

    
      
        

    

    change in address shall be effective until five (5) Business Days after being given to the other party in the manner
        provided for above.  Any notice given in accordance with the foregoing shall be deemed given when delivered personally or, if mailed, three (3) Business Days after it shall have been deposited in the United States mails as aforesaid or, if sent by
        overnight courier, the Business Day following the date of delivery to such courier (provided next business day delivery was requested). 
       

        

      7.6 Successors and Assigns.  This
          Agreement shall inure to the benefit of the parties and their respective heirs, legal representatives, successors and assigns; except that, unless a Purchaser consents in writing, no assignment made by Company in violation of this Agreement shall
          be effective or confer any rights on any purported assignee of Company.  The term “successors and assigns” will not include a purchaser of any of the Subordinated Notes from any Purchaser merely because of such purchase.

      7.7 No Joint Venture.  Nothing contained
          herein or in any document executed pursuant hereto and no action or inaction whatsoever on the part of a Purchaser, shall be deemed to make a Purchaser a partner or joint venturer with Company.

      7.8 Documentation.  All documents and
          other matters required by any of the provisions of this Agreement to be submitted or furnished to a Purchaser shall be in form and substance satisfactory to such Purchaser.

      7.9 Entire Agreement.  This Agreement,
          the Indenture, the Registration Rights Agreement and the Subordinated Notes along with the exhibits thereto constitute the entire agreement between the parties hereto with respect to the subject matter hereof and may not be modified or amended in any manner other than by supplemental written agreement executed by the parties hereto.  No party, in entering into this Agreement, has relied upon any
          representation, warranty, covenant, condition or other term that is not set forth in this Agreement, the Indenture, the Registration Rights Agreement or in the Subordinated Notes.

    

    7.10 Choice of Law.  This Agreement shall
        be governed by and construed in accordance with the laws of the State of New York without giving effect to its laws or principles of conflict of laws.  Nothing herein shall be deemed to limit any rights, powers or privileges which a Purchaser may
        have pursuant to any law of the United States of America or any rule, regulation or order of any department or agency thereof and nothing herein shall be deemed to make unlawful any transaction or conduct by a Purchaser which is lawful pursuant to,
        or which is permitted by, any of the foregoing.

    7.11 No Third Party Beneficiary.  This
        Agreement is made for the sole benefit of Company and the Purchasers, and no other person shall be deemed to have any privity of contract hereunder nor any right to rely hereon to any extent or for any purpose whatsoever, nor shall any other person
        have any right of action of any kind hereon or be deemed to be a third party beneficiary hereunder; provided, that the Placement Agents may rely on the
        representations and warranties contained herein to the same extent as if it were a party to this Agreement.

    

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      7.12 Legal Tender of United States.  All
          payments hereunder shall be made in coin or currency which at the time of payment is legal tender in the United States of America for public and private debts.

      7.13 Captions; Counterparts.  Captions
          contained in this Agreement in no way define, limit or extend the scope or intent of their respective provisions.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of
          which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument.  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 signature page were an
          original thereof.

      7.14 Knowledge; Discretion.  All
          references herein to a Purchaser’s or Company’s knowledge shall be deemed to mean the knowledge of such party based on the actual knowledge of such party’s Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer or such
          other persons holding equivalent offices.  Unless specified to the contrary herein, all references herein to an exercise of discretion or judgment by a Purchaser, to the making of a determination or designation by a Purchaser, to the application
          of a Purchaser’s discretion or opinion, to the granting or withholding of a Purchaser’s consent or approval, to the consideration of whether a matter or thing is satisfactory or acceptable to a Purchaser, or otherwise involving the decision
          making of a Purchaser, shall be deemed to mean that such Purchaser shall decide using the reasonable discretion or judgment of a prudent lender.

      7.15 Waiver Of Right To Jury Trial.  TO
          THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH ANY OF THE TRANSACTION DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF COMPANY OR PURCHASERS.  THE PARTIES ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT
          AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF THEIR OWN FREE WILL.  THE PARTIES FURTHER ACKNOWLEDGE THAT (I) THEY HAVE READ AND UNDERSTAND THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (II) THIS WAIVER HAS BEEN
          REVIEWED BY THE PARTIES AND THEIR COUNSEL AND IS A MATERIAL INDUCEMENT FOR ENTRY INTO THIS AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT AND (III) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH TRANSACTION DOCUMENTS AS IF FULLY INCORPORATED
          THEREIN.

    

    7.16 Expenses.  Except as otherwise
        provided in this Agreement, each of the parties will bear and pay all other costs and expenses incurred by it or on his, her or its behalf in connection with the transactions contemplated pursuant to this Agreement.

    7.17 Survival.  Each of the representations
        and warranties set forth in this Agreement shall survive the consummation of the transactions contemplated hereby for a period of 

      

    

      

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        22

        

        
          
            

        

         one year after the date hereof.  Except as otherwise provided herein, all covenants
            and agreements contained herein shall survive until, by their respective terms, they are no longer operative. 

         

        

        [Signature Pages Follow]

         

        

         

          

         

          

        23

        

        
          
            

        

      

      

    

    IN WITNESS WHEREOF, Company has caused this Subordinated Note Purchase Agreement to be executed by its duly authorized representative as of the date first above written.

    	 	
            COMPANY:

             

              

            FS BANCORP, INC.

             

            

            By:      __________________________       

                

            Name: Joseph C. Adams

            

            Title:    Chief Executive
                Officer

          
	 	 

    

    

    

    

    

    

    

    

    

    

    

      

      

      

      

      

      

      

      

      

      

      

      

      

        

        

         

         

          

        

            

          

         

          

        [Company Signature Page to Subordinated Note Purchase Agreement]

        

        
          
            

        

        

      

      

    

    IN WITNESS WHEREOF, the Purchaser has caused this Subordinated Note Purchase Agreement to be executed by its duly authorized representative as of the date first above written.

    	 	 
	 	
            PURCHASER:

             

            

            [INSERT PURCHASER’S NAME]

             

            

             

            

            By:       ___________________________

                

            Name:     [●]

            Title:         [●]

          
	 	
             

              

            Address of Purchaser:

             

            [●]

             

          
	 	
            Principal Amount of Purchased Subordinated
                  Note:

             

            $[●]

             

             

          

     

    

     

    

    

      

        

        

        

        

        

        

        

          

          

          

          

          

          

          

          

        

        

        

        

          [Purchaser Signature Page to Subordinated Note Purchase Agreement]

        

        
          
            

        

        

      

      

    

    EXHIBIT A

    INDENTURE

    

    

    

    

    

    

    

      

      

      

      

      

        

        

        

          

          

          

          

          
            
              

          

          

        

        

      

      

    

    EXHIBIT B

    REGISTRATION RIGHTS AGREEMENT

     

      

    

      

     

      

     

      

    

      

     

      

    

      

     

      

     

      

    
      
        

    

    

        EXHIBIT C

    OPINION OF COUNSEL

    1. Based solely on a certificate of good standing issued by the Secretary of State of Washington dated          , 2021, Company is a corporation duly organized, validly existing,
        and in good standing under the laws of the State of Washington. Company has the corporate power and authority to carry on its business and to own, lease, and operate its properties and assets in all material respects as described in the Company’s
        Reports.

    2. Based solely on a certificate of good standing issued by the Washington State Department of Financial Institutions, dated          , 2021,  Bank is validly existing as a
        Washington stock savings bank and in good standing under the laws of the State of Washington. Bank has the corporate power to own its properties and conduct its business in all material respects as described in the Company’s Reports.

    3. Company has the necessary corporate power and authority to execute, deliver, and perform its obligations under the Transaction Documents to which it is a party and to consummate
        the transactions contemplated by the Transaction Documents.

    4. Each of the Subordinated Note Purchase Agreement, the Indenture and the Registration Rights Agreement has been duly and validly authorized, executed, and delivered by Company,
        and each of the Subordinated Note Purchase Agreement, the Indenture and the Registration Rights Agreement will constitute valid and binding obligations of Company, enforceable against Company in accordance with their terms, except that the
        enforcement thereof may be subject to: (A) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws now or hereafter in effect relating to creditors’ rights generally; and
        (B) general principles of equity (whether applied by a court of law or equity) and the discretion of the court before which any proceeding therefor may be brought.

    5. The Subordinated Notes have been duly and validly authorized and executed by Company and, when authenticated and delivered by the Trustee and when issued by Company and
        delivered to and paid for by the applicable Purchasers in accordance with the terms of the Subordinated Note Purchase Agreement, the Indenture, and the Subordinated Notes, will have been duly executed, issued and delivered and will constitute
        legal, valid and binding obligations of Company, enforceable against Company in accordance with their terms, except that the enforcement thereof may be subject to: (A) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent
        conveyance, fraudulent transfer or other similar laws now or hereafter in effect relating to creditors’ rights generally; and (B) general principles of equity (whether applied by a court of law or equity) and the discretion of the court before
        which any proceeding therefor may be brought.

    6. The execution and delivery by the Company of the Subordinated Note Purchase Agreement, the Indenture and the Registration Rights Agreement do not, and the performance by it of
        its obligations thereunder will not, (i) result in a violation by the Company of any Washington statute or any rule or regulation thereunder or (ii) result in a violation of the Company’s Articles of Incorporation, as amended, or Bylaws, as
        amended.

     

      

     

    
    
      
        

    

    7. Assuming (a) the accuracy of the representations and warranties and compliance with the covenants and agreements of the Purchasers contained in
          the Subordinated Note Purchase Agreement and (b) compliance with the offering and transfer restrictions described in the Subordinated Note Purchase Agreement, the Indenture and the Subordinated Notes, the sale of the Subordinated Notes to the
          Purchasers under the Subordinated Note Purchase Agreement in the manner contemplated by the Subordinated Note Purchase Agreement is not required to be registered under the Securities Act of 1933, as amended, it being understood that no opinion is
          expressed as to any reoffer or resale of any such Subordinated Notes.

     

      

     

      

     

      

     

      

    

      

      

      

        

        

        

        

        

        

        

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

            28

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