Exhibit 10.5

                            AGREEMENT

     AGREEMENT, dated this 1st day of December 2004, between
First Keystone Financial, Inc. (the "Corporation"), a
Pennsylvania corporation, and Thomas M. Kelly (the "Executive").

                           WITNESSETH

     WHEREAS, the Executive is presently an officer of the
Corporation and First Keystone Bank (the "Savings Bank")
(together, the "Employers");

     WHEREAS, the Employers desire to be ensured of the
Executive's continued active participation in the business of the
Employers;

     WHEREAS, the Employers currently have an agreement with the
Executive dated May 26, 1999, which is being amended and
superseded by this Agreement to reflect certain mutually agreed
upon revisions, and in accordance with the provisions of Section
310 of the Thrift Activities Handbook of the Office of Thrift
Supervision ("OTS"), the Corporation and the Savings Bank desire
to enter into separate agreements with the Executive with respect
to his employment by each of the Employers; and

     WHEREAS, in order to induce the Executive to remain in the
employ of the Employers and in consideration of the Executive's
agreeing to remain in the employ of the Employers, the parties
desire to modify the severance benefits which shall be due the
Executive by the Corporation in the event that his employment
with the Corporation is terminated under specified circumstances.

     NOW THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereby agree as
follows:

     1.   Definitions.  The following words and terms shall have
the meanings set forth below for the purposes of this Agreement:

     (a)  Average Annual Compensation.  The Executive's "Average
Annual Compensation" for purposes of this Agreement shall be
deemed to mean the average level of compensation paid to the
Executive by the Employers or any subsidiary thereof during the
most recent five taxable years preceding the Date of Termination,
including Base Salary and benefits and bonuses under any employee
benefit plans of the Employers.

     (b)  Base Salary.  "Base Salary" shall have the meaning set
forth in Section 3(a) hereof.

     (c)  Cause.  Termination of the Executive's employment for
"Cause" shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease-and-
desist order or material breach of any provision of this
Agreement.

     (d)  Change in Control of the Corporation.  The term "Change
in Control of the Corporation" shall mean the occurrence of any
of the following events:

          (i) approval by the stockholders of the Corporation of
     a transaction that would result and does result in the
     reorganization, merger or consolidation of the Corporation,
     with one or more other persons, other than a transaction
     following which:

               (A) at least 51% of the equity ownership interests
     of the entity resulting from such transaction are
     beneficially owned (within the meaning of Rule 13d-3
     promulgated under the Securities Exchange Act of 1934, as
     amended ("Exchange Act")) in substantially the same relative
     proportions by persons who, immediately prior to such
     transaction, beneficially owned (within the meaning of Rule
     13d-3 promulgated under the Exchange Act) at least 51% of
     the outstanding equity ownership interests in the
     Corporation; and

               (B) at least 51% of the securities entitled to
     vote generally in the election of directors of the entity
     resulting from such transaction are beneficially owned
     (within the meaning of Rule 13d-3 promulgated under the
     Exchange Act) in substantially the same relative proportions
     by persons who, immediately prior to such transaction,
     beneficially owned (within the meaning of Rule 13d-3
     promulgated under the Exchange Act) at least 51% of the
     securities entitled to vote generally in the election of
     directors of the Corporation;

          (ii) the acquisition of all or substantially all of the
     assets of the Corporation or beneficial ownership (within
     the meaning of Rule 13d-3 promulgated under the Exchange
     Act) of 20% or more of the outstanding securities of the
     Corporation entitled to vote generally in the election of
     directors by any person or by any persons acting in concert,
     or approval by the stockholders of the Corporation of any
     transaction which would result in such an acquisition;

          (iii) a complete liquidation or dissolution of the
     Corporation or the Savings Bank, or approval by the
     stockholders of the Corporation of a plan for such
     liquidation or dissolution;

          (iv) the occurrence of any event if, immediately
     following such event, members of the Corporation Board of
     Directors who belong to any of the following groups do not
     aggregate at least a majority of the Corporation Board of
     Directors:

               (A) individuals who were members of the
     Corporation Board of Directors on the Effective Date of this
     Agreement; or

               (B) individuals who first became members of the
     Corporation Board of Directors after the Effective Date of
     this Agreement either:

                                    2

                    (1) upon election to serve as a member of the
     Corporation Board of Directors by the affirmative vote of
     two-thirds of the members of such Board, or of a nominating
     committee thereof, in office at the time of such first
     election; or

                    (2) upon election by the stockholders of the
     Corporation Board of Directors to serve as a member of the
     Corporation Board of Directors, but only if nominated for
     election by the affirmative vote of two-thirds of the
     members of such Board, or of a nominating committee thereof,
     in office at the time of such first nomination;

     provided that such individual's election or nomination did
     not result from an actual or threatened election contest or
     other actual or threatened solicitation of proxies or
     consents other than by or on behalf of the Corporation Board
     of Directors; or

          (v) any event which would be described in Section
     1(d)(i), (ii), (iii) or (iv) if the term "Savings Bank" were
     substituted for the term "Corporation" therein and the term
     "Bank Board of Directors" were substituted for the term
     "Corporation Board of Directors" therein.

In no event, however, shall a Change in Control of the
Corporation be deemed to have occurred as a result of any
acquisition of securities or assets of the Corporation, the
Savings Bank, or a subsidiary of either of them, by the
Corporation, the Savings Bank, or any subsidiary of either of
them, or by any employee benefit plan maintained by any of them.
For purposes of this Section 1(d), the term "person" shall
include the meaning assigned to it under Sections 13(d)(3) or
14(d)(2) of the Exchange Act.

     (e)  Code.  "Code" shall mean the Internal Revenue Code of
1986, as amended.

     (f)  Date of Termination.  "Date of Termination" shall mean
(i) if the Executive's employment is terminated for Cause or for
Disability, the date specified in the Notice of Termination, and
(ii) if the Executive's employment is terminated for any other
reason, the date on which a Notice of Termination is given or as
specified in such Notice.

     (g)  Disability.  Termination by the Corporation of the
Executive's employment based on "Disability" shall mean
termination because of any physical or mental impairment which
qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Employers
or any subsidiary or, if no such plan applies, which would
qualify the Executive for disability benefits under the Federal
Social Security System.

     (h)  Good Reason.  Termination by the Executive of the
Executive's employment for "Good Reason" shall mean termination
by the Executive following a Change in Control of the Corporation
based on:

                    (i)  Without the Executive's express written
               consent, a reduction by the Employers in the
               Executive's Base Salary as the same may be
               increased from time to time or, except to the
               extent permitted by

                                    3

               Section 3(b) hereof, a reduction in the package of
               fringe benefits provided to the Executive, taken
               as a whole;

                    (ii) The principal executive office of the
               Employers is relocated outside of the Media,
               Pennsylvania, area or, without the Executive's
               express written consent, the Employers require the
               Executive to be based anywhere other than an area
               in which the Employers' principal executive office
               is located, except for required travel on business
               of the Employers to an extent substantially
               consistent with the Executive's present business
               travel obligations;

                    (iii)     Any purported termination of the
               Executive's employment for Cause, Disability or
               Retirement which is not effected pursuant to a
               Notice of Termination satisfying the requirements
               of paragraph (j) below; or

                    (iv) The failure by the Corporation to obtain
               the assumption of and agreement to perform this
               Agreement by any successor as contemplated in
               Section 9 hereof.

     (i)  IRS.  IRS shall mean the Internal Revenue Service.

     (j)  Notice of Termination.  Any purported termination of
the Executive's employment by the Corporation  for any reason,
including without limitation for Cause, Disability or Retirement,
or by the Executive for any reason, including without limitation
for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto.  For purposes of this
Agreement, a "Notice of Termination" shall mean a dated notice
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so
indicated, (iii) specifies a Date of Termination, which shall be
not less than thirty (30) nor more than ninety (90) days after
such Notice of Termination is given, except in the case of the
Corporation's termination of Executive's employment for Cause;
and (iv) is given in the manner specified in Section 10 hereof.

     (k)  Retirement.  Termination by the Corporation of the
Executive's employment based on "Retirement" shall mean voluntary
termination by the Executive in accordance with the Employers'
retirement policies, including early retirement, generally
applicable to their salaried employees.

     2.   Term of Employment.

     (a)  The Corporation hereby employs the Executive as
President and Chief Operating Officer of the Corporation and
Executive hereby accepts said employment and agrees to render
such services to the Corporation on the terms and conditions set
forth in this Agreement.  The term of employment under this
Agreement shall be for three years, commencing on the date of
this Agreement and, subject to the requirements of the succeeding
sentence, shall be deemed
                                    4

automatically, without further action, to extend for an additional
year on each annual anniversary of the date of this Agreement.
Prior to the anniversary of the date of this Agreement and each
annual anniversary thereafter, the Board of Directors of the
Corporation shall consider and review (with appropriate corporate
documentation thereof, and after taking into account all relevant
factors, including the Executive's performance hereunder) extension
of the term under this Agreement, and the term shall continue to
extend in the manner set forth above unless either the Board of
Directors does not approve such extension and provides written notice
to the Executive of such event or the Executive gives written notice
to the Corporation of the Executive's election not to extend the
term, in each case with such written notice to be given not less
than thirty (30) days prior to any such anniversary date.
References herein to the term of this Agreement shall refer both
to the initial term and successive terms.

     (b)  During the term of this Agreement, the Executive shall
perform such executive services for the Corporation as may be
consistent with his titles and from time to time assigned to him
by the Corporation's Board of Directors.

     3.   Compensation and Benefits.

     (a)  The Employers shall compensate and pay Executive for
his services during the term of this Agreement at a minimum base
salary of $207,400 per year ("Base Salary"), which may be
increased from time to time in such amounts as may be determined
by the Boards of Directors of the Employers and may not be
decreased without the Executive's express written consent.  In
addition to his Base Salary, the Executive shall be entitled to
receive during the term of this Agreement such bonus payments as
may be determined by the Boards of Directors of the Employers.

     (b)  During the term of the Agreement, Executive shall be
entitled to participate in and receive the benefits of any
pension or other retirement benefit plan, profit sharing, stock
option, employee stock ownership, or other plans, benefits and
privileges given to employees and executives of the Employers, to
the extent commensurate with his then duties and
responsibilities, as fixed by the Boards of Directors of the
Employers.  The Corporation shall not make any changes in such
plans, benefits or privileges which would adversely affect
Executive's rights or benefits thereunder, unless such change
occurs pursuant to a program applicable to all executive officers
of the Employers and does not result in a proportionately greater
adverse change in the rights of or benefits to Executive as
compared with any other executive officer of the Corporation.
Nothing paid to Executive under any plan or arrangement presently
in effect or made available in the future shall be deemed to be
in lieu of the salary payable to Executive pursuant to Section
3(a) hereof.

     (c)  During the term of this Agreement, Executive shall be
entitled to not less than five weeks paid annual vacation.
Executive shall be entitled to receive any additional
compensation from the Employers for failure to take a vacation
and shall be able to accumulate unused vacation time from one
year to the next.

     (d)  During the term of this Agreement, including any
renewal thereof, the Employers shall provide the Executive with a
full-sized, four-door automobile for the Executive's use, which

                                    5

automobile shall be replaced during the term hereof and any
renewal thereof no less frequently than every three years.

     (e)  The Employers shall provide medical insurance or
reimburse the Executive for the premiums for comparable medical
insurance for the benefit of the Executive and his spouse and
minor children during the term of this Agreement and for a period
of five years following the termination of this Agreement in
accordance with Section 5 hereof, except in the case of a
termination of the Executive for Cause.

     (f)  The Employers shall pay for or reimburse Executive with
respect to expenses incurred thereby in obtaining dental care for
Executive, his spouse and his minor children up to a maximum of
$2,500 per person per year, which amount may be increased from
time to time as may be determined by the Boards of Directors of
the Employers.

     (g)  During the term of this Agreement, the Employers will
pay the Executive's annual membership dues at a country club of
his choice in an amount up to $7,500 per year, subject to
increase from time to time as may be determined by the Boards of
Directors of the Employers.  In addition, the Employer will pay
the Executive's initiation fee at such club.

     (h)  In the event of the Executive's death during the term
of this Agreement, his spouse, estate, legal representative or
named beneficiaries (as directed by the Executive in writing)
shall be paid on a monthly basis the Executive's annual
compensation from the Employers at the rate in effect at the time
of the Executive's death for a period equal to the period then
remaining under this Agreement.

     (i)  The Executive's compensation, benefits and expenses
shall be paid by the Corporation and the Savings Bank in the same
proportion as the time and services actually expended by the
Executive on behalf of each respective Employer.

     4.   Expenses.  The Employers  shall reimburse Executive or
otherwise provide for or pay for all reasonable expenses incurred
by Executive in furtherance of, or in connection with the
business of the Employers, including, but not by way of
limitation, automobile (including costs of leasing, insurance,
repairs, maintenance, and licensing) and traveling expenses, and
all reasonable entertainment expenses (whether incurred at the
Executive's residence, while traveling or otherwise), subject to
such reasonable documentation and other limitations as may be
established by the Boards of Directors of the Employers.  If such
expenses are paid in the first instance by Executive, the
Employers shall reimburse the Executive therefor.

     5.   Termination.

     (a)  The Corporation shall have the right, at any time upon
prior Notice of Termination, to terminate the Executive's
employment hereunder for any reason, including without limitation
termination for Cause or Retirement, and Executive shall have the
right, upon prior Notice of Termination, to terminate his
employment hereunder for any reason.

                                    6

     (b)  In the event that (i) Executive's employment is
terminated by the Corporation for Cause or Retirement or in the
event of the Executive's death, or (ii) Executive terminates his
employment hereunder other than for Good Reason, Executive shall
have no right pursuant to this Agreement to compensation or other
benefits for any period after the applicable Date of Termination
except as otherwise provided herein.

     (c)  In the event that (i) Executive's employment is
terminated (including termination due to Disability) by the
Corporation for other than for Cause, Retirement or the
Executive's death and in other than a Change in Control of the
Corporation or (ii) such employment is terminated by the
Executive due to a material breach of this Agreement by the
Corporation, which breach has not been cured within fifteen (15)
days after a written notice of non-compliance has been given by
the Executive to the Corporation, then the Corporation shall,
subject to the provisions of Section 6 hereof, if applicable

     (A)  pay to the Executive, in twenty-four (24) equal monthly
     installments beginning with the first business day of the
     month following the Date of Termination, a cash severance
     amount equal to two (2) times the Executive's Base Salary,
     and

     (B)  maintain and provide for a period ending at the earlier
     of (i) the expiration of the remaining term of employment
     pursuant hereto prior to the Notice of Termination or (ii)
     the date of the Executive's full-time employment by another
     employers (provided that the Executive is entitled under the
     terms of such employment to benefits substantially similar
     to those described in this subparagraph (B)), at no cost to
     the Executive, the Executive's continued participation in
     all group insurance, life insurance, health and accident,
     disability and other employee benefit plans, programs and
     arrangements in which the Executive was entitled to
     participate immediately prior to the Date of Termination
     (other than stock option and restricted stock plans of the
     Employers), provided that in the event that the Executive's
     participation in any plan, program or arrangement as
     provided in this subparagraph (B) is barred, or during such
     period any such plan, program or arrangement is discontinued
     or the benefits thereunder are materially reduced, the
     Corporation shall arrange to provide the Executive with
     benefits substantially similar to those which the Executive
     was entitled to receive under such plans, programs and
     arrangements immediately prior to the Date of Termination.

     (d)  In the event that (i) Executive's employment is
terminated by the Corporation for other than for Cause,
Disability, Retirement or the Executive's death but in connection
with a Change in Control of the Corporation or (ii) such
employment is terminated by the Executive for Good Reason, then
the Corporation shall, subject to the provisions of Section 6
hereof, if applicable

          (A)  pay to the Executive, in thirty-six (36) equal
     monthly installments beginning with the first business day
     of the month following the Date of Termination, a cash
     severance amount equal to three (3) times the Executive's
     Base Salary, and

          (B)  maintain and provide for a period ending at the
     earlier of (i) the expiration of the remaining term of
     employment pursuant hereto prior to the Notice of
     Termination
                                    7

     or (ii) the date of the Executive's full-time employment by
     another employers (provided that the Executive is entitled
     under the terms of such employment to benefits substantially
     similar to those described in this subparagraph (B)), at no
     cost to the Executive, the Executive's continued participation
     in all group insurance, life insurance, health and accident,
     disability and other employee benefit plans, programs and
     arrangements in which the Executive was entitled to participate
     immediately prior to the Date of Termination (other than stock
     option and restricted stock plans of the Employers), provided
     that in the event that the Executive's participation in any
     plan, program or arrangement as provided in this subparagraph
     (B) is barred, or during such period any such plan, program or
     arrangement is discontinued or the benefits thereunder are
     materially reduced, the Corporation shall arrange to provide
     the Executive with benefits substantially similar to those
     which the Executive was entitled to receive under such
     plans, programs and arrangements immediately prior to the
     Date of Termination.

     (e)  In the event of the failure by the Employers to elect
or to re-elect or to appoint or to re-appoint the Executive to
the offices of President and Chief Operating Officer of the
Corporation and the Savings Bank or a material adverse change
made by the Employers in the Executive's functions, duties or
responsibilities as President and Chief Operating Officer of the
Corporation and the Savings Bank without the Executive's express
written consent, the Executive shall be entitled to terminate his
employment hereunder and shall be entitled to the payments and
benefits provided for in Section 5(c)(A) and (B); however, such
termination shall not otherwise constitute a material breach of
this Agreement by the Corporation.

     6.   Payment of Additional Benefits under Certain Circumstances.

     (a)  If the payments and benefits pursuant to Section 5
hereof, either alone or together with other payments and benefits
which the Executive has the right to receive from the Employers
(including, without limitation, the payments and benefits which
the Executive would have the right to receive from the Savings
Bank pursuant to Section 5 of the Agreement between the Savings
Bank and the Executive dated as of the date hereof (the "Savings
Bank Agreement"), before giving effect to any reduction in such
amounts pursuant to the provision of Section 6 of the Savings
Bank Agreement), would constitute a "parachute payment" as
defined in Section 280G(b)(2) of the Code (the "Initial Parachute
Payment," which includes the amounts paid pursuant to clause (A)
below), then the Corporation shall pay to the Executive, in
thirty-six (36) equal monthly installments beginning with the
first business day of the month following the Date of Termination
or in a lump sum within five business days of the Date of
Termination (at the Executive's election), a cash amount equal to
the sum of the following:

     (A)  the amount by which the payments and benefits that
     would have otherwise been paid by the Savings Bank to the
     Executive pursuant to Section 5 of the Savings Bank
     Agreement are reduced by the provisions of Section 6 of the
     Savings Bank Agreement;

     (B)  twenty (20) percent (or such other percentage equal to
     the tax rate imposed by Section 4999 of the Code) of the
     amount by which the Initial Parachute Payment exceeds the
     Executive's "base amount" from the Employers, as defined in
     Section 280G(b)(3) of
                                    8

     the Code, with the difference between the Initial Parachute
     Payment and the Executive's base amount being hereinafter
     referred to as the "Initial Excess Parachute Payment"; and

     (C)  such additional amount (tax allowance) as may be
     necessary to compensate the Executive for the payment by the
     Executive of state and federal income and excise taxes on
     the payment provided under clause (B) above and on any
     payments under this clause (C).  In computing such tax
     allowance, the payment to be made under clause (B) above
     shall be multiplied by the "gross up percentage" ("GUP").
     The GUP shall be determined as follows:

                                      Tax Rate
                              GUP = ------------
                                     1- Tax Rate

     The Tax Rate for purposes of computing the GUP shall be the
     highest marginal federal and state income and employment-
     related tax rate (including Social Security and Medicare
     taxes), including any applicable excise tax rate, applicable
     to the Executive in the year in which the payment under
     clause (B) above is made and shall also reflect the phase
     out of deductions and the ability to deduct certain of such
     taxes.

     (b)  Notwithstanding the foregoing, if it shall subsequently
be determined in a final judicial determination or a final
administrative settlement to which the Executive is a party that
the actual excess parachute payment as defined in Section
280G(b)(1) of the Code is different from the Initial Excess
Parachute Payment (such different amount being hereafter referred
to as the "Final Excess Parachute Payment"), then the
Corporation's independent tax counsel or accountants shall
determine the amount (the "Adjustment Amount") which either the
Executive must pay to the Corporation or the Corporation must pay
to the Executive in order to put the Executive (or the
Corporation, as the case may be) in the same position the
Executive (or the Corporation, as the case may be) would have
been if the Initial Excess Parachute Payment had been equal to
the Final Excess Parachute Payment.  In determining the
Adjustment Amount, the independent tax counsel or accountants
shall take into account any and all taxes (including any
penalties and interest) paid by or for the Executive or refunded
to the Executive or for the Executive's benefit.  As soon as
practicable after the Adjustment Amount has been so determined,
the Corporation shall pay the Adjustment Amount to the Executive
or the Executive shall repay the Adjustment Amount to the
Corporation, as the case may be.

     (c)  In each calendar year that the Executive receives
payments of benefits under this Section 6, the Executive shall
report on his state and federal income tax returns such
information as is consistent with the determination made by the
independent tax counsel or accountants of the Corporation as
described above.  The Corporation shall indemnify and hold the
Executive harmless from any and all losses, costs and expenses
(including without limitation, reasonable attorneys' fees,
interest, fines and penalties) which the Executive incurs as a
result of so reporting such information.  The Executive shall
promptly notify the Corporation in writing whenever the Executive
receives notice of the institution of a judicial or
administrative proceeding, formal or informal, in which the
federal tax treatment under Section 4999 of the Code of any
amount paid or payable under this Section 6 is being reviewed or
is in dispute.  The Corporation shall assume

                                    9

control at its expense over all legal and accounting matters
pertaining to such federal tax treatment (except to the extent
necessary or appropriate for the Executive to resolve any such
proceeding with respect to any matter unrelated to amounts paid or
payable pursuant to this Section 6) and the Executive shall
cooperate fully with the Corporation in any such proceeding.  The
Executive shall not enter into any compromise or settlement or
otherwise prejudice any rights the Corporation may have in connection
therewith without the prior consent of the Corporation.

     7.   Mitigation; Exclusivity of Benefits.

     (a)  The Executive shall not be required to mitigate the
amount of any benefits hereunder by seeking other employment or
otherwise, nor shall the amount of any such benefits be reduced
by any compensation earned by the Executive as a result of
employment by another employers after the Date of Termination or
otherwise.

     (b)  The specific arrangements referred to herein are not
intended to exclude any other benefits which may be available to
the Executive upon a termination of employment with the Employers
pursuant to employee benefit plans of the Employers or otherwise.

     8.   Withholding.  All payments required to be made by the
Corporation hereunder to the Executive shall be subject to the
withholding of such amounts, if any, relating to tax and other
payroll deductions as the Corporation may reasonably determine
should be withheld pursuant to any applicable law or regulation.

     9.   Assignability.  The Corporation may assign this
Agreement and its rights and obligations hereunder in whole, but
not in part, to any corporation, bank or other entity with or
into which the Corporation may hereafter merge or consolidate or
to which the Corporation may transfer all or substantially all of
its assets, if in any such case said corporation, bank or other
entity shall by operation of law or expressly in writing assume
all obligations of the Corporation hereunder as fully as if it
had been originally made a party hereto, but may not otherwise
assign this Agreement or its rights and obligations hereunder.
The Executive may not assign or transfer this Agreement or any
rights or obligations hereunder.

     10.  Notice.  For the purposes of this Agreement, notices
and all other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective
addresses set forth below:


     To the Corporation:      Chairman of the Board
                              First Keystone Financial, Inc.
                              22 West State Street
                              Media, Pennsylvania  19063

     To the Executive:        Thomas M. Kelly
                              At the address last appearing on the personnel
                              records of the Savings Bank

                                    10

     11.  Amendment; Waiver.  No provisions of this Agreement may
be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by the
Executive and such officer or officers as may be specifically
designated by the Board of Directors of the Corporation to sign
on its behalf.  No waiver by any party hereto at any time of any
breach by any other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or
subsequent time.

     12.  Governing Law.  The validity, interpretation,
construction and performance of this Agreement shall be governed
by the laws of the United States where applicable and otherwise
by the substantive laws of the Commonwealth of Pennsylvania.

     13.  Nature of Obligations.  Nothing contained herein shall
create or require the Corporation to create a trust of any kind
to fund any benefits which may be payable hereunder, and to the
extent that the Executive acquires a right to receive benefits
from the Corporation hereunder, such right shall be no greater
than the right of any unsecured general creditor of the
Corporation.

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

     15.  Validity.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.

     16.  Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.

     17.  Entire Agreement.  This Agreement embodies the entire
agreement between the Corporation and the Executive with respect
to the matters agreed to herein.  All prior agreements between
the Corporation and the Executive with respect to the matters
agreed to herein, including without limitation the Agreement
between the Corporation and the Executive dated May 26, 1999, are
hereby superseded and shall have no force or effect.
Notwithstanding the foregoing, nothing contained in this
Agreement shall affect the agreement of even date being entered
into between the Savings Bank and the Executive.

                                    11


     IN WITNESS WHEREOF, this Agreement has been executed as of
the date first above written.


Attest:                      FIRST KEYSTONE FINANCIAL, INC.



/s/ Carol Walsh              By:  /s/Donald S. Guthrie
--------------------              ---------------------------------
Carol Walsh                       Donald S. Guthrie
                                  Chairman of the Board


Attest:                      EXECUTIVE



/s/ Carol Walsh              By:  /s/Thomas M. Kelly
--------------------              ---------------------------------
Carol Walsh                       Thomas M. Kelly, Individually





















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