Document:

exhibit101-19.htm

     

    
      

      

    

    
      Exhibit
10.1

       

      SEVERANCE AND RELEASE
AGREEMENT

       

      
        
          THIS
SEVERANCE AND RELEASE AGREEMENT (the “Agreement”) is made this 15th day of
August 2008 (the “Effective Date”) by and between Thomas M. Kelly (the
“Executive”), First Keystone Financial, Inc., a Pennsylvania corporation (the
“Company”), and First Keystone Bank, a federally chartered savings bank and
wholly owned subsidiary of the Company (the “Bank”).  The Company and
the Bank are sometimes collectively referred to herein as the
“Employers”.

          

          W I T N E S S E T
H:

          

          WHEREAS,
the Executive currently serves as President and Chief Executive Officer of each
of the Employers;

          

          WHEREAS,
the Executive currently is a party to separate amended and restated employment
agreements with the Company and the Bank, each dated as of December 1, 2004 and
each amended as of March 28, 2005 (the “Employment Agreements”), setting forth
the terms and conditions of his employment;

          

          WHEREAS,
the Employers and the Executive have had discussions with respect to the
termination of the Executive’s employment and the payments and benefits the
Employers would agree to make or provide pursuant to such
termination;

          

          WHEREAS,
the Company and the Bank are each a party to separate Supervisory Agreements
with the Office of Thrift Supervision (the “OTS”) dated as February 13, 2006
(the “Supervisory Agreements”);

          

          WHEREAS,
the Supervisory Agreements provide that the Employers are subject to 12 C.F.R.
Part 359 and as a result may not pay any severance or enter into any agreements
with certain specified persons (including the Executive) providing for severance
without obtaining the required approvals or concurrences from the OTS and the
Federal Deposit Insurance Corporation (the “FDIC”); and

          

          WHEREAS,
the Employers have obtained the requisite approvals or concurrences from the OTS
and the FDIC to enter into this Agreement.

          

          NOW,
THEREFORE, in consideration of the mutual premises and covenants contained
herein, and intending to be legally bound, the parties agree as
follows:

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          1.           Termination of Employment
and Employment Agreement; Transition Period.

          

          (a)           Effective
as of November 15, 2008 (the “Date of Termination”), the Executive shall no
longer be an officer or employee of the Employers and shall be deemed to have
resigned as an officer and employee of the Employers. The Employment Agreements,
by mutual agreement of the parties hereto, shall be terminated and be of no
further force and effect as of the Effective Date, and the Executive shall be
entitled only to the rights and payments set forth herein in lieu of any and all
rights and payments under the Employment Agreements.  In addition,
effective as of the Date of Termination, the Executive shall resign from the
Board of Directors of both the Company and the Bank and shall also resign from
and relinquish any and all other positions that he may have as a director,
officer or employee with either Employer or any of their subsidiaries or
affiliates.

          
             

          

        

      

    

    (b)           Between
the Effective Date and the Date of Termination (the “Transition Period”), the
Executive shall relinquish his position as President and Chief Executive Officer
of the Employers but shall remain in the employ of the Employers. During the
Transition Period, the Executive shall report to the Chairman of the Board of
the Company and the Bank or his designee and shall assist the Chairman in the
conduct of the business and operations of the Employers during the Transition
Period in order to provide for an orderly transition while a new president and
chief executive officer for the Employers is sought and engaged.  It
is contemplated that the services provided during the Transition Period will
include, without limitation, meetings or teleconferences between the Executive
and the Chairman of the Board and other executive officers of the Company and
the Bank with respect to the business activities and operations of the
Employers; meeting with existing and potential customers of the Employers;
attendance at meetings of the Board of Directors of the Company and the Bank to
report on the business activities and operations of the Company and the Bank;
and attendance at certain functions of the Employers.

    

    2.           Payments and Benefits to the
Executive.

    

    (a)           During
the Transition Period, the Employers agree to continue to pay the Executive at
an annualized rate equal to his current annual base salary of $230,000
($19,166.67 per month), paid in accordance with the Employers’ normal procedures
applicable to employees. In addition, during the Transition Period, the
Executive will be entitled to continued medical and dental insurance for the
benefit of the Executive, his spouse and his minor children (the “Covered
Persons”).  Notwithstanding anything to the contrary herein, as
provided in Section 2(d), subsequent to the Effective Date, other than medical
and dental insurance for the
Covered Persons, the Executive will not be entitled to participate in or accrue
or earn any benefits under any other benefit plan or arrangement maintained by
the Employers as of the Effective Date or implemented during the Transition
Period.

    

    (b)           In
addition to the amounts paid during the Transition Period pursuant to Section
2(a), the Employers agree to pay an aggregate of $230,000 to the Executive,
representing one times the Executive’s current annual base salary, payable in 12
equal monthly installments on the first business day of each month, commencing
on the first business day of the month immediately following the Date of
Termination.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (c)           The
Employers agree to pay the insurance premiums for continued medical and dental insurance for the
benefit of the Covered Persons until the earlier to occur of (i) the passage of
24 months following the Date of Termination or (ii) the date of the Executive’s
full-time employment with another employer pursuant to which he becomes entitled
under the terms of such employment to medical benefits. The coverage provided
during such period will be comparable to the coverage currently provided by the
Employers to the Covered Persons; provided that any insurance premiums payable
by the Employers or any successors pursuant to this Section 2(c) shall be
payable at such times and in such amounts as if the Executive was still an
employee of the Employers, subject to any increases in such amounts imposed by
the insurance company or COBRA, and the amount of insurance premiums required to
be paid by the Employers in any taxable year shall not affect the amount of
insurance premiums required to be paid by the Employers in any other taxable
year.

     

    
      (d)           The
Employers shall have no obligation to make contributions for service subsequent
to the Date of Termination with respect to the Bank’s 401(k) Plan, the Bank’s
defined contribution supplemental executive retirement plan (the “SERP”), the
Company’s Employee Stock Ownership Plan (the “ESOP”) or any other tax-qualified
or non-tax-qualified retirement or profit sharing plan on behalf of the
Executive, and the Executive shall have no right to participate in or accrue any
additional benefit related to such plans for service after the Date of
Termination.  All of the Executive’s accrued and vested benefits held
under the Employers’ 401(k) Plan, SERP, ESOP or other retirement or benefit
plans as of the Effective Date shall be payable to the Executive in accordance
with the terms of such plans.

    

    
       

    

    (e)           The
value of three weeks of vacation leave shall be paid to the Executive within ten
business days following the Date of Termination.

    

    (f)           The
Executive shall not be entitled to any cash bonus for service in fiscal 2008
under any Employer bonus plan.

    

    (g)           With
respect to that certain mortgage loan (the "Loan") extended to the Executive in
2003 by the Bank bearing an interest rate of 4.875% (the "Advantaged Rate") that
was 1% below that charged on similar loans to non-employees (5.875%) (the
"Prevailing Rate") in accordance with the Bank's Lending Policy as permitted
under Regulation O promulgated by the Board of Governors of the Federal Reserve
System, the Advantaged Rate will be maintained through December 31, 2008 at
which time the interest rate on the Loan will convert to the Prevailing
Rate.

    
       

    

    3.           Stock Option
Plans.  Except as provided herein, it is acknowledged that no
additional arrangements are being provided by the Employers to the Executive
under any of the Company’s stock option plans (the “Option
Plans”).  All outstanding stock options currently held by the
Executive under the Option Plans are exercisable, and such stock options shall
remain exercisable for the time periods set forth in the Option Plans and
related grant agreements except as provided hereby.  As permitted by
the terms of the 2005 Stock Option Plan (“2005 Plan”), the period for exercise
subsequent to the Date of Termination of the options granted pursuant to the
2005 Plan as set forth on Exhibit A shall be extended as permitted by Section
8.05(a) thereof from three months to the lesser of one year from the Date of
Termination or the expiration date of such options.  Set forth as
Exhibit A hereto is a listing of Executive's stock options and the relevant
terms thereof (as modified pursuant to the terms hereof).

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    4.           Solicitation of Employees
and Customers; Use of Customer Lists, etc.  The Executive
acknowledges that, except as required by law or in his own good faith use in any
proceeding, he has no right personally to use or disclose to any person, firm or
corporation, information concerning any customer list, business secrets or
confidential financial information of the Employers that he knew was intended by
the Employers to be confidential and that he did not have reason to believe had
been made public (collectively, “Confidential Information”).  Accordingly,
the Executive covenants and agrees that he shall not use or permit the use of
any Confidential Information, and shall not divulge any Confidential Information
to any person, firm or corporation, except as may be required by applicable law
arising out of his employment with or participation in the affairs of the
Employers.  Further, during the Transition Period and for a period of
24 months subsequent to the Date of Termination, the Executive agrees that he
will not (i) solicit or induce, or cause others to solicit or induce, any
employee of the Employers or their subsidiaries to leave the employment of such
entities, or (ii) solicit (whether by mail, telephone, electronically, personal
meeting or any other means, excluding general solicitations of the public that
are not based in whole or in part on any list of customers of the Employers or
their subsidiaries) any customer of the Employers or their subsidiaries to
transact business with any other person or entity, or their subsidiaries, or
interfere with or damage (or attempt to interfere with or damage) any
relationship between the Employers and their subsidiaries and any such
customers.

     

    
      5.           Covenants.

      

        (a)         During the
Transition Period and for a period of 24 months subsequent to the Date of
Termination, the Executive agrees that he will not, directly or indirectly,
through one or more intermediaries or otherwise, (i) acquire, agree to acquire
or make any proposal to acquire, more than 5 percent of the securities of the
Company or any of its subsidiaries, any warrant or option to acquire any such
securities, any security convertible into or exchangeable for any such
securities or any other right to acquire any such securities; (ii) seek or
propose any merger, consolidation, business combination, tender or exchange
offer, sale or purchase of assets or securities, dissolution, liquidation,
restructuring, recapitalization or similar transaction of or involving the
Employers or any of their subsidiaries; (iii) make, or in any way participate
in, any “solicitation” of proxies or consents (whether or not relating to the
election or removal of directors) within the meaning of Rule 14a-1 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) with respect to
any securities of the Employers or any of their subsidiaries, or seek to advise
or influence any person with respect to the voting of any securities of the
Employers or any of their subsidiaries, or demand a copy of the stock ledger,
list of stockholders, or any other books and records of the Employers or any of
their subsidiaries; (iv) form, join or in any way participate in a “group”
(within the meaning of Section 13(d)(3) of the Exchange Act), with respect to
any securities of the Employers or any of their subsidiaries; (v) otherwise act,
alone or in concert with others, to seek to control or influence, in any manner,
the management, Board of Directors or policies of the Employers or any of their
subsidiaries; (vi) have any discussions or enter into any arrangements,
understanding or agreements (whether written or oral) with, or advise, finance,
assist or encourage, any other persons in connection with any of the foregoing,
or knowingly make any investment in any other person or entity that, to the
Executive’s knowledge, engages, or offers or proposes to engage, in any of the
foregoing; (vii) make any publicly disclosed proposal regarding any of the
foregoing; or (viii) make any proposal, statement or inquiry, or disclose any
intention, plan or arrangement (whether written or oral) inconsistent with the
foregoing.

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

      

    

    (b)           During
the Transition Period and for a period of 12 months subsequent to the Date of
Termination, at all meetings of the stockholders of the Company, the Executive
shall  (i) cause all of the shares of Company common stock that he
beneficially owns (the “Shares”) to be counted as present thereat for purposes
of calculating a quorum; and (ii) vote (or cause to be voted), in person or by
proxy, or deliver a written consent (or cause a consent to be delivered)
covering, all the Shares (whether acquired heretofore or hereafter) that are
beneficially owned by the Executive or as to which the Executive has, directly
or indirectly, the right to vote or direct the voting, in accordance with the
manner recommended by the Board of Directors of the Company with respect to all
matters presented for stockholder approval at all meetings of stockholders
initially convened during the Transition Period and the subsequent 12-month
period.  The Executive shall provide written evidence of compliance
with the foregoing agreement at least five business days prior to the date of
each stockholder meeting initially convened during the Transition Period and the
subsequent 12-month period.

    

    6.           Confidentiality.

    

    (a)           Unless
he obtains the prior written consent of the Employers, the Executive shall at
all times keep confidential and shall refrain from using for the benefit of
himself, or any person or entity other than the Employers or their subsidiaries
or affiliates, any material document or information obtained from the Employers
or their subsidiaries, affiliates or predecessors, in the course of his
employment with any of them concerning their properties, operations or business
(unless such document or information is readily ascertainable from public or
published information or trade sources or has otherwise been made available to
the public through no fault of his own) until the same ceases to be material (or
becomes so ascertainable or available); provided, however, that nothing in this
Section 6(a) shall prevent the Executive, with or without the Employers’
consent, from participating in or disclosing documents or information in
connection with any judicial or administrative investigation, inquiry or
proceeding or the Company's public reporting requirements to the extent that
such participation or disclosure is required under applicable law.

    

    (b)           The
Executive covenants and agrees that upon any adjudication that he has violated
the terms of Section 6(a), the Employers shall be entitled to seek injunctive
relief and to be awarded damages, together with such party’s costs, reasonable
attorneys’ fees and expenses in connection with enforcing the terms
hereof.

    

    7.           Release of the Employers and
Related Parties.

    

    (a)           In
consideration of the payments and benefits to be provided to the Executive
pursuant to this Agreement, the sufficiency of which is acknowledged hereby, the
Executive, with the intention of binding himself and his heirs, executors,
administrators and assigns, does hereby release, remise, acquit and forever
discharge the Employers and their subsidiaries and affiliates (the “Company
Affiliated Group”), their present and former officers, directors, executives,
agents, attorneys and employees, and the successors, predecessors and assigns of
each of the foregoing (individually, “Company Released Party” and collectively,
the “Company Released Parties”), of and from any and all claims, actions, causes
of action, complaints, charges, demands, rights, damages, debts, sums of money,
accounts, financial obligations, suits, expenses, attorneys’ fees and
liabilities of whatever 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    kind
or nature
in law, equity or otherwise, whether accrued, absolute, contingent, unliquidated
or otherwise and whether now known or unknown, suspected or unsuspected, which
the Executive, individually or as a member of a class, has, owns or holds, or
has at any time heretofore had, owned or held, against any Company Released
Party in any capacity, including, without limitation, any and all claims (i)
arising out of or in any way connected with the Executive’s service to any
member of the Company Affiliated Group (or its predecessors or successors) in
any capacity, or the termination of such service in any such capacity, (ii) with
respect to the Employment Agreements, (iii) for severance or vacation benefits,
unpaid wages, salary or incentive payments, (iv) for breach of contract,
wrongful discharge, impairment of economic opportunity, defamation, intentional
infliction of emotional harm or other tort, (v) for any violation of applicable
state or local labor and employment laws (including, without limitation, all
laws concerning unlawful and unfair labor and employment practices) and (vi) for
employment discrimination under any applicable federal, state or local statute,
provision, order or regulation, and including, without limitation, any claim
under Title VII of the Civil Rights Act of 1964 (“Title VII”), the Civil Rights
Act of 1988, the Fair Labor Standards Act, the Americans with Disabilities Act
(“ADA”), the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), the Age Discrimination in Employment Act (“ADEA”) and any similar or
analogous state statute, excepting only:

    
       

      (A)           the
rights of the Executive (i) relating to any vested stock options held by the
Executive under the Option Plans as of the date hereof (collectively, the
“Equity Arrangements”) and (ii) as a stockholder of the Company;

       

      (B)           the
right of the Executive to receive COBRA continuation coverage in accordance with
applicable law;

       

      (C)           rights
to indemnification the Executive may have under (i) applicable corporate law,
(ii) the articles of incorporation, charter or bylaws of any Company Released
Party, (iii) any other agreement between the Executive and a Company Released
Party, or (iv) as an insured under any director’s and officer’s liability
insurance policy now or previously in force; and

       

      (D)           claims
for benefits under any health, disability, retirement, life insurance or other
similar “employee benefit plan” (within the meaning of Section 3(3) of ERISA) of
the Company Affiliated Group (the “Company Benefit Plans”).

       

      (b)           The
Executive acknowledges and agrees that the release of claims set forth in this
Section 7 is not to be construed in any way as an admission of any liability
whatsoever by any Company Released Party, with any such liability being
expressly denied.

       

      (c)           The
release of claims set forth in this Section 7 applies to any relief no matter
how called, including, without limitation, wages, back pay, front pay,
compensatory damages, liquidated damages, punitive damages, damages for pain or
suffering, costs, and attorney’s fees and expenses.

       

      (d)           The
Executive specifically acknowledges that his acceptance of the terms of the
release of claims set forth in this Section 7 is, among other things, a specific
waiver of his rights, claims and causes of action under Title VII, ADEA, ADA and
any state or local law or regulation in respect of discrimination of any
kind.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    (e)          The
Executive shall have a period of 21 days to consider whether to execute this
Agreement. To the extent the Executive has executed this Agreement within less
than 21 days after its delivery to him, the Executive hereby acknowledges that
his decision to execute this Agreement prior to the expiration of such 21-day
period was entirely voluntary.  If the Executive accepts the terms
hereof and executes this Agreement, he may thereafter, for a period of seven
days following (and not including) the date of execution, revoke this Agreement.
If no such revocation occurs, this Agreement shall become irrevocable in its
entirety, and binding and enforceable against the Executive, on the day next
following the day on which the foregoing seven-day period has elapsed. Any
revocation of this Agreement shall be deemed for all purposes a revocation of
this Agreement in its entirety.

     

    (f)           The
Executive acknowledges and agrees that he has not, with respect to any
transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Company Released Party with any
governmental agency, court or tribunal.

     

    (g)          In
addition to any other remedy available to the Employers hereunder, in the event
that, as a result of a challenge brought by an Executive Released Party (as
defined below), the release of claims set forth in this Section 7 becomes null
and void or is otherwise determined not to be enforceable, then the Employers’
obligation to make any additional payments or to provide any additional benefits
under this Agreement shall immediately cease to be of any force and effect, and
the Executive shall promptly return to the Employers any payments or benefits
the provision of which by the Employers was conditioned on the enforceability of
this Agreement.

     

    (h)           The
Executive acknowledges that (i) he is executing this Agreement voluntarily and
without any duress or undue influence by any of the parties hereto, (ii) he has
been advised to consult with an attorney of his choice and has been given an
opportunity to do so, and (iii) he has carefully read this Agreement and the
releases contained herein and understands its contents and
consequences.

    

    8.            
Release of Claims by
the Employers.

     

    (a)           The
Employers, with the intention of binding themselves and their subsidiaries,
affiliates, predecessors and successors and their directors and officers
(individually, a “Releasing Entity” and collectively, the “Releasing Entities”),
do hereby release, remise, acquit and forever discharge the Executive and his
heirs, estate, executors, administrators and assigns (collectively, the
“Executive Released Parties”), of and from any and all claims, actions, causes
of action, complaints, charges, demands, rights, damages, debts, sums of money,
accounts, financial obligations, suits, expenses, attorneys’ fees and expenses
and liabilities of whatever kind or nature in law, equity or otherwise, whether
accrued, absolute, contingent, unliquidated or otherwise and whether now known
or unknown, suspected or unsuspected, which the Employers and their
subsidiaries, affiliates, predecessors and successors, individually or as a
member of a class, have, own or hold, or have at any time heretofore had, owned
or held, against any Executive Released Party, excepting only:

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      (A)           rights
of the Releasing Entities under this Agreement, the Employment Agreements, the
Equity Arrangements and the Company Benefit Plans;

       

      (B)           rights
of the Releasing Entities arising by reason of the Executive having committed a
crime or an act or omission to act which constitutes fraud, willful misconduct
or gross negligence; and

       

      (C)           rights
of the Releasing Entities pursuant to any mortgage or loan agreement between any
Releasing Entity and the Executive or in connection with any indebtedness or
overdraft owed by the Executive to any Releasing Entity.

       

      (b)           The
Releasing Entities acknowledge and agree that the release of claims set forth in
this Section 8 is not to be construed in any way as an admission of any
liability whatsoever by any Executive Released Party, with any such liability
being expressly denied.

       

      (c)           The
release of claims set forth in this Section 8 applies to any relief no matter
how called, including, without limitation, compensatory damages, liquidated
damages, punitive damages, damages for pain or suffering, costs, and attorneys’
fees and expenses.

       

      (d)           Nothing
herein shall be deemed, nor does anything contained herein purport, to be a
waiver of any right or claim or cause of action which by law any of the
Releasing Entities is not permitted to waive.

       

      (e)           The
Employers acknowledge and agree that they have not, with respect to any
transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Executive Released Party with any
governmental agency, court or tribunal.

       

      9.           Representation.  The
Employers and the Executive represent that they have reviewed this Agreement,
and that each of them is fully aware of the content of this Agreement and of its
legal effect, and acknowledge that this is a legally valid and binding
obligation of the parties.

       

      10.           Withholding.  The
Employers may make such provisions as they deem appropriate for the withholding
pursuant to federal, state or local income tax laws of such amounts as the
Employers determine they are required to withhold in connection with the
payments to be made pursuant to this Agreement.

      

      11.           Amendment and
Waiver.  The terms of this Agreement may not be modified other
than in a writing signed by the parties.  No term or condition of this
Agreement shall be deemed to have been waived, nor shall there be any estoppel
against enforcement of any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel.  No such
written waiver shall be deemed a continuing waiver unless specifically stated
therein, and each such waiver shall operate only as to the specific term or
condition for the future or as to any act other than that specifically
waived.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    12.           Notices.  All
notices, demands, consents or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been given when: (i)
personally delivered, or (ii) sent postage prepaid by registered or certified
mail, return receipt requested, such receipt showing delivery to have been made,
or (iii) sent overnight by prepaid receipt courier addressed as
follows:

    

    
      
        	 
      	
                If
      to the Executive:

              	
                Thomas
      M. Kelly

                At
      his last address on file with

              
	 
      	 
      	
                the
      Employers

                 

              
	 
      	
                If
      to the Employers:

              	
                First
      Keystone Financial, Inc.

                First
      Keystone Bank

              
	 
      	 
      	
                22
      West State Street

                Media,
      Pennsylvania 19063

              
	 
      	 
      	
                Attention:

              	
                Donald
      S. Guthrie

              
	 
      	 
      	 
      	
                Chairman
      of the Board

              

      

    

    

    13.           Entire
Agreement.  This Agreement incorporates the entire
understanding among the parties relating to the subject matter hereof, recites
the sole consideration for the promises exchanged and supersedes any prior
agreements between the Employers and the Executive with respect to the subject
matter hereof, including but not limited to the Employment
Agreements.  In entering into this Agreement, no party has relied upon
any representation or promise except those set forth herein.

    

    14.           Invalid
Provisions.  If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its deletion from this Agreement.

    

    15.           Binding
Nature.  This Agreement shall be binding upon and inure to the
benefit of the Executive and the Employers and their respective heirs and/or
successors and permitted assigns.  If any party to the Agreement
breaches or threatens to breach any provision of this Agreement, then any
non-breaching party shall be entitled to injunctive relief to prevent such
breaches of this Agreement and to specifically enforce the terms and provisions
hereof, in addition to any other remedy to which the non-breaching party may be
entitled at law or in equity.

    

    16.           Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, except to the
extent that applicable federal law preempts the laws of Commonwealth of
Pennsylvania.

    

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

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, the Company and the Bank have caused this Agreement to be
executed by their duly authorized representatives and the Executive has executed
this Agreement, all as of the day and year first written above.

    

    WITNESSES:

     

    
      
        
          	 
      	
                  FIRST
      KEYSTONE FINANCIAL, INC.

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                  /s/
      Carol Walsh

                	
                  By:

                	
                  /s/
      Donald S. Guthrie

                
	
                   
      Carol Walsh

                	 
      	
                  Donald
      S. Guthrie

                
	 
      Corporate Secretary	 
      	
                  Chairman
      of the Board

                

        

      

    

     

     

     

    
      	 
      	
              FIRST
      KEYSTONE BANK

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              /s/
      Carol Walsh

            	
              By:

            	
              /s/
      Donald S. Guthrie

            
	
               
      Carol Walsh

            	 
      	
              Donald
      S. Guthrie

            
	 
      Corporate Secretary	 
      	
              Chairman
      of the Board

            

    

     

     

     

    
      	 
      	
              EXECUTIVE

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              /s/
      Carol Walsh

            	
              By:

            	
              /s/
      Thomas M. Kelly

            
	
               
      Carol Walsh

            	 
      	
              Thomas
      M. Kelly

            
	 	 
      	
               

            

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
A

      

      Options –
Thomas M. Kelly

      

      
        	
                
                   

                   

                  Amount

                

              	 
      	
                
                   

                   

                  Plan

                

              	 
      	
                
                   

                   

                  Exercise
      Price

                

              	 
      	
                
                   

                   

                  Expiration
      Date

                

              	 
      	
                Exercise
      Period Post 

                Termination:

                
                  The
      earlier to occur of:

                

              
	
                  
      3,677 

              	 
      	
                1995

              	 
      	
                $12.125

              	 
      	
                9/29/2009

              	 
      	
                  
      Expiration Date or 1 year*

              
	
                 
      8,073

              	 
      	
                1998

              	 
      	
                $12.125

              	 
      	
                9/29/2009

              	 
      	
                Expiration
      Date or 1 year

              
	
                11,750

              	 
      	 
      	 
      	 
      	 
      
	
              	 	 	 	 	 

      

      __________________

      
        	
                *

              	
                Reflects
      the modified exercise period as provided in Section 3 of the agreement
      pursuant to which the Company agreed to modify the option grant in
      accordance with and permitted by the terms of 1995 Stock Option
      Plan.WWW.EXFILE.COM -- PERFORMANCE HEALTH -- 16029 -- EXHIBIT 10-124 TO FORM 10-Q

    Exhibit
10.124

    

    AMENDMENT
AGREEMENT

    

    This
Amendment Agreement (the “Agreement”) is made and entered into as of May 1, 2008
by and between Portfolio
Lenders II, LLC (the “Investor”) and Performance Health Technologies,
Inc. (“PHT”).

     

    Recitals

    

    WHEREAS, the Investor holds a
convertible promissory note dated May 14, 2007 issued by PHT in the principal
amount of $300,000 (the “Note”) with an original maturity date of July 13, 2007
as extended to November 1, 2007 and further extended to June 1, 2008 (the
“Maturity Date”) and warrants to purchase 1,500,000 shares of PHT Common Stock
at $0.30 per share (the “Original Warrants”) which were issued pursuant to a
Subscription Agreement dated May 14, 2007 (the “Subscription Agreement”);
and

    

    WHEREAS, the Note has not been
repaid as of the Maturity Date; and

    

    WHEREAS, the parties desire to
amend the Subscription Agreement, the Note and the Original Warrants on the
terms set forth herein;

     

    NOW, THEREFORE, in
consideration of the covenants, promises and representations set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:

     

    1.           Amendment of Note
and Subscription Agreement

     

    
      	
              1.1  

            	
              The
      Maturity Date of the Note is amended to December 31,
      2008.

            

    

    

    
      	
              1.2  

            	
              The
      Conversion Price set forth in Section 1A of the Note is amended as
      follows:

            

    

    

    “Conversion.  The
Holder is entitled, at its option, to convert, and sell on the same day, at any
time and from time to time commencing on the date hereof until the Maturity
Date,  all or any part of the principal amount of the Note plus
accrued interest, into shares (the “Conversion Shares”) of the Borrower’s Common
Stock, at the price per share equal to the lesser of (i) $0.35 per share or (ii)
70% of the average of the closing bid price for the Borrower’s Common Stock for
the 20 days preceding the notice of conversion, as reported by the exchange on
which the Borrower’s Common Stock is then traded with a floor of $0.15 (the
“Conversion Price”).  No fraction of shares or scrip representing
fractions of shares will be issued on conversion, but the number of shares
issuable shall be rounded to the nearest whole share.  To convert this
Note, the Holder hereof shall deliver written notice thereof, substantially in
the form of Exhibit “A” to this Note, with appropriate insertions (the
“Conversion Notice”), to the Borrower at its address as set forth
herein.  The date upon 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    which the
conversion shall be effective (the “Conversion Date”) shall be deemed to be the
date set forth in the Conversion Notice.”

     

    
      	
              1.3  

            	
              Section
      2.3(b) of the Subscription Agreement shall be deleted in its entirety
      after the issuance of the Warrants set forth in Section 2.1 of this
      Amendment.

            

    

    

    2.           Warrants

    

    
      	
              2.1  

            	
              Pursuant
      to Section 2.3(b) of the Subscription Agreement PHT shall issue to the
      Investor Warrants to purchase 300,000 shares of PHT on substantially the
      same terms as the Original
Warrants.

            

    

    

    
      	
              2.2  

            	
              PHT
      shall issue to the Investor five year Warrants to purchase 150,000 shares
      of PHT common stock having an exercise price of $0.30 having the same
      terms as the Original Warrants.

            

    

    

    
      	
              2.3  

            	
              The
      Original Warrants shall be amended as follows:  (i) 300,000 of
      the Original Warrants shall have an exercise price of $0.10 per share, and
      (ii) 1,200,000 of the Original Warrants shall have an exercise price of
      $0.30 per share.

            

    

    

    IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed by their duly authorized
officers on the date first hereinabove written.

    

     

    
      	 	

              PERFORMANCE
      HEALTH TECHNOLOGIES, INC.

              

              

              By:   /s/ Robert D.
      Prunetti

              

                
      

              Robert
      D. Prunetti

              President
      and Chief Executive Officer 

            
	 	 
	 	

              PORTFOLIO
      LENDERS II, LLC

              

              

              By:    /s/ Thomas P.
      Gallagher

              

                
      

              Thomas
      P. Gallagher

              Title: 

            

    

     

    

    

     

    

    

    

    

     

    
      
        
        

      

      
        - 2
-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]