AGREEMENT
THIS AGREEMENT ("Agreement"), dated as of March 7, 2007, by and among
Beneficial Savings Bank, MHC, a federally chartered mutual holding company
("Beneficial MHC"), Beneficial Mutual Bancorp, Inc., a federally chartered
mid-tier holding company and wholly owned subsidiary of Beneficial MHC
("Bancorp"), Beneficial Mutual Savings Bank, a Pennsylvania-chartered savings
bank and wholly owned subsidiary of Bancorp ("BMSB"), FMS Financial Corporation,
a New Jersey chartered corporation and savings and loan holding company ("FMS"),
and Farmers and Mechanics Bank, a federally chartered savings bank and wholly
owned subsidiary of FMS ("FMB").
RECITALS
WHEREAS, Beneficial MHC, Bancorp, BMSB, FMS and FMB have entered into
an Agreement and Plan of Merger, dated as of October 12, 2006 (the "Merger
Agreement"), which provides for Bancorp's acquisition of FMS, the merger of FMS
with and into Bancorp and the merger of FMB with and into BMSB (such
transactions being collectively referred to hereinafter as the "Merger");
WHEREAS, FMS and FMB have determined, independent of the Merger
Agreement, that certain of FMB's branch offices should be closed;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree that:
1. Consent of Beneficial Parties to Branch Closures and Termination of
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Leases by FMB
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(a) Bancorp hereby consents (i) to FMB's closure of the branch offices
listed on Schedule 1 to this Agreement (the "Branches") and (ii) to the
termination by FMB of the branch leases detailed on Schedule 2 to this Agreement
(the "Branch Leases").
(b) Bancorp further consents to FMB's taking of any or all of such
actions, including the provision of all required branch closure notices, as are
necessary or appropriate, in the judgment of the management of FMB, to effect
the closure of the Branches and the termination of the Branch Leases.
(c) Bancorp hereby agrees that the financial effect on FMS and FMB of
FMB's closure of the Branches and FMB's termination of the Branch Leases shall
not constitute a "Material Adverse Effect," as defined in Article I of the
Merger Agreement, on FMS and, further, that the financial effect of such actions
shall not be taken into account by Bancorp in determining, pursuant to Section
7.2(d) of the Merger Agreement, whether there have occurred or exist as of the
Closing Date any condition(s) or fact(s) that individually or in the aggregate
have a Material Adverse Effect on FMS.
2. Reimbursement of Costs.
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(a) Bancorp hereby agrees, in the event the Merger Agreement is
terminated upon, or as the result of, the actions or events set forth in Section
2(b) of this Agreement, to indemnify FMS and FMB for (i) all of the lease
payments, penalties and other payments paid or payable by FMB under the terms of
the Branch Leases upon or following FMB's termination of such leases and (ii)
all other reasonable and documented expenses incurred by FMS and FMB in
connection with the entering into of this Agreement, the termination of the
Branch Leases and the closing of the Branches, including, without limitation,
the reasonable legal, accounting, printing and postage costs incurred by FMS or
FMB.
(b) Bancorp shall make the payment required by Section 2(a) of this
Agreement in the following circumstances:
(i) the Merger Agreement is terminated pursuant to Section 8.1(f) or
Section 8.1(g) thereof;
(ii) Bancorp does not consummate the Minority Stock Offering (as
defined in Section 2.9 of the Merger Agreement) or is otherwise
unable to consummate the Merger by December 31, 2007 or such
later date agreed to as contemplated in Section 8.1(d) of the
Merger Agreement;
(iii) FMS terminates the Merger Agreement in accordance with Section
8.1(b) or 8.1(c) thereof because Bancorp has intentionally and
willfully breached any of its representations or warranties in
the Merger Agreement or intentionally and willfully failed to
perform or comply with any of its covenants or agreements
therein, to such extent as to permit such termination; or
(iv) Bancorp terminates the Merger Agreement in accordance with
Section 8.1(h) thereof.
(c) Any payment required to be made under this Section 2 shall be paid
by Bancorp to FMS by wire transfer of immediately available funds to an account
designated by FMS within three (3) Business Days after demand by FMS.
(d) Notwithstanding the provisions of Section 8.3(c) of the Merger
Agreement, any reimbursement payable under Section 2(c) of this Agreement shall
be in addition to any Special Payment that may be payable by Bancorp pursuant to
Section 8.3(a) of the Merger Agreement.
3. Miscellaneous.
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(a) Governing Law. This Agreement shall be construed and interpreted
according to the Laws of the Commonwealth of Pennsylvania except to the extent
federal law may apply.
(b) Counterparts; Headings. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The section headings
in this Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
(c) Interpretation. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular,
and all words in any gender shall extend to and include all genders.
(d) Severability. If any provision, clause, or part of this Agreement,
or the application thereof under certain circumstances, is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby unless such
invalidity materially impairs the ability of the parties to consummate the
transactions contemplated by this Agreement. If, however, any provision of this
Agreement is held invalid by a court of competent jurisdiction, then the parties
hereto shall in good faith amend this Agreement to include an alternative
provision that accomplishes a result, which is not materially different.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
BENEFICIAL SAVINGS BANK MHC
By: /s/Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Executive Vice President and Chief Financial Officer
BENEFICIAL MUTUAL BANCORP, INC.
By: /s/Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Executive Vice President and Chief Financial Officer
BENEFICIAL MUTUAL SAVINGS BANK
By: /s/Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Executive Vice President and Chief Financial Officer
FMS FINANCIAL CORPORATION
By: /s/Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
President and Chief Executive Officer
FARMERS AND MECHANICS BANK
By: /s/Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
President and Chief Executive Officer
SCHEDULE 1
Farmers & Mechanics Bank Branches To Be Closed
1. 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxxxx, XX 00000 (Wal-Mart Store #2040)
2. 0000 Xxxxx 00, Xxxxxxxxx, XX 00000 (Wal-Mart Store #2841)
3. 000 Xxxxx 00, Xxxxxxx, XX 00000 (Wal-Mart Store #1869)
4. 0000 Xxxxx 000 Xxxxx, Xxxxxxxxxxx, XX 00000 (Wal-Mart Store #2871)
5. 000 Xxxxxxxxxx Xxxx, Xxxxxxx, XX 00000 (Wal-Mart Store #5047)
6. 000 Xxxxx 00, Xxxxxx Xxxx, XX 00000 (Wal-Mart Store #5340)
7. 000 Xxxxxx Xxxxx Xxxx., Xxxxxxxx, XX 00000 (Wal-Mart Store #2518)
8. 00 Xxxx Xxxx Xxxxxx, Xxxxxxx, XX 00000
9. 0 Xxxxx Xxxx Xxxxxx, Xxxxxxx, XX 00000
10. 000 Xxxxxxxxxx Xxxx, Xxxxx Xxxxxx, XX 00000
11. 000 Xxxxxxxxxx Xxxx, Xxxxxxxxxxx, XX 00000
SCHEDULE 2
Farmers & Mechanics Bank Branch Leases To Be Terminated
1. Sublease Agreement between Wal-Mart Stores East, Inc., and FMB dated June
19, 2001, as amended by Sublease Amendment dated June 19, 2001, with
respect to Wal-Mart Store #2040, 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxxxx, XX
00000.
2. Sublease Agreement between Wal-Mart Stores East, Inc., and FMB dated April
14, 2000, as extended and amended by Renewal of Lease Agreement between
Wal-Mart Stores East, LP, and FMB dated September 21, 2005, with respect to
Wal-Mart Store #2841, 0000 Xxxxx 00, Xxxxxxxxx, XX 00000.
3. Sublease Agreement between Wal-Mart Stores East, Inc., and FMB dated June
19, 2001, as amended by Sublease Amendment dated June 19, 2001, with
respect to Wal-Mart Store #1869, 000 Xxxxx 00, Xxxxxxx, XX 00000.
4. Sublease Agreement between Wal-Mart Stores East, Inc., and FMB dated April
14, 2000, with respect to Wal-Mart Store #2871, 0000 Xxxxx 000 Xxxxx,
Xxxxxxxxxxx, XX 00000.
5. Sublease Agreement between Wal-Mart Stores, Inc., and FMB dated August 28,
2003, with respect to (a) Wal-Mart Store #5047, 000 Xxxxxxxxxx Xxxx,
Xxxxxxx, XX 00000 and (b) Wal-Mart Xxxxx #0000, Xx. Xxxxxx, XX (store not
opened).
6. Sublease Agreement between Wal-Mart Stores, Inc., and FMB dated August 28,
2003, with respect to Wal-Mart Store #5340, 000 Xxxxx 00, Xxxxxx Xxxx, XX
00000.
7. Sublease Agreement between Wal-Mart Stores East, Inc., and FMB dated May 3,
2001, as amended by Sublease Amendment dated May 3, 2001, with respect to
Wal-Mart Store #2518, 000 Xxxxxx Xxxxx Xxxx., Xxxxxxxx, XX 00000.
