Document:

Exhibit
10.1

 

WILLOW GROVE BANCORP, INC.

2006
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

ARTICLE 1 PURPOSE

 

The purpose of the Willow
Grove Bancorp, Inc. 2006 Supplemental Executive Retirement Plan is to retain
the services of a select group of officers and highly compensated employees of
Willow Grove Bancorp, Inc. (the “Corporation”), its subsidiaries and any
successors thereto, and to motivate them to contribute to the growth and
profits of the Corporation  This Plan is
intended to comply with the provisions of Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), and shall be interpreted in a manner
consistent with that intention.

 

ARTICLE 2—
DEFINITIONS

 

For purposes hereof,
unless otherwise clearly apparent from the context, where the following terms
appear as proper nouns, they shall have the meanings indicated below.

 

2.1.                              Additions: Interest on Annual Credits, compounded monthly at an
annualized rate of 5.5%. Additions shall be attributed to each Participant’s
Employer Credit Account from the date upon which the Employer Credit Account
first has a positive balance until the date upon which the Corporation determines
the final payment of benefits to a Participant or his Beneficiary pursuant to
Article 4. The Committee may elect to utilize a different interest rate in
future years in its discretion. 

 

2.2.                              Annual Credit: The amount the Corporation will credit
on behalf of a Participant in relation to his Base Credit and Performance-Based
Credit, as appropriate, for each year of his participation in the Plan.

 

2.3.                              Base Credit: The portion of the Annual Credit based
upon a Participant’s salary and years to Retirement from the Corporation. The amount
of the Base Credit and the date upon which it will be attributed to the
Employer Credit Account are specified in Schedule A. This amount may vary from
Participant to Participant and from year to year as determined by the Committee.
Furthermore, since the value of the Base Credit is predicated upon the value of
the Participant’s annual salary when he joined the Plan and adjusted by an
assumed rate of inflation of 3.5 percent per year, the Committee may deem it
appropriate to re-calculate the benefit for one or more Participants if it
deems, in its discretion, that the Participant’s salary has been substantially
modified.

 

2.4.                              Beneficiary: Any person or persons (including,
without limitation, the trustees of any testamentary or inter vivos trust), as
designated from time to time in writing pursuant to Article 5, to whom any
benefits may be payable upon the death of a Participant.

 

2.5.                              Cause: Behavior of a Participant which constitutes any of
the following:

 

a.               Willfully engaging in gross misconduct
with regard to the Corporation which is materially injurious to the
Corporation,

 

b.              Gross negligence in the performance of
the Participant’s duties and responsibilities which is materially injurious to
the Corporation,

 

1

 

c.               Refusal to follow proper and achievable
written direction of the Board of Directors, provided that this shall not be
Cause if the Participant in good faith believed the direction to be illegal,
unethical or immoral and so notifies the Board of Directors,

 

d.              Being convicted of (or pleading nolo
contendere to) a felony involving financial impropriety (or any other crime
which would materially interfere with his service),

 

e.               Willfully breaching any material
obligations under any agreement with the Corporation without proper
justification,

 

f.                 Material fraud or dishonesty with regard
to the Corporation (other than good faith expense account disputes),

 

g.              Continuous and material refusal to
attempt to perform the Participant’s responsibilities and duties after written
notice, and

 

h.              Entering into competition with the
Corporation in any line of business in which the Corporation was involved
during the Participant’s employment.

 

2.6.                              Change of Control: 
A change in the ownership of the Corporation, a change in the effective
control of the Corporation or a change in the ownership of a substantial
portion of the assets of the Corporation as provided under Section 409A of the
Code, as amended from time to time, and any Internal Revenue Service guidance,
including Notice 2005-1, and regulations issued in connection with Section 409A
of the Code.

 

2.7.                              Committee: The Compensation Committee of the Board of Directors
of the Corporation, or such other persons as may be selected by the
Compensation Committee or the Board of Directors to administer the Plan. The
Committee may assign some of the routine administrative functions to any
department of the Corporation or another organization at its discretion.

 

2.8.                              Corporation: Willow Grove Bancorp, Inc., a Pennsylvania
corporation, and any successor thereof, including any affiliated company that
adopts this Plan with the consent of the Board of Directors of the Corporation.

 

2.9.                              Effective Date of the Plan: April 1,
2006.

 

2.10.                        Employer Credit Account: The sum of Annual Credits which are
described in Schedule A, attached hereto and incorporated herein by reference,
and attributable to a Participant plus Additions and less withdrawals and
distributions on such amounts. The Corporation shall maintain a bookkeeping
account to reflect and track each Participant’s Employer Credit Account, as
adjusted from time to time.

 

2.11.                        Participant: Any officer or highly compensated
employee of the Corporation designated by the Committee to be eligible for
participation in the Plan, who has executed an application for participation
pursuant to Section 3.1, and who is participating in this Plan from time to
time.

 

2.12.                        Performance-Based Credit: The portion of the Annual Credit based
upon the Corporation’s performance each year. The Committee will establish two
levels of

 

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performance objectives each year. If the performance
objectives are achieved, then the Participant will earn a Performance-Based
Credit equal to (a) 15% of the Participant’s base salary for the applicable
year if the first level of performance objectives is achieved, or (b) 30% of
the Participant’s base salary for the applicable year if the second level of
performance objectives is achieved. The performance objectives may vary from
Participant to Participant and from year to year as determined by the
Committee. If earned, the Performance-Based Credit will be attributed to the
Employer Credit Account of the applicable Participant no later than the 120th
day following the end of the Corporation’s applicable fiscal year.

 

2.13.                        Plan: The Willow Grove Bancorp, Inc. 2006 Supplemental
Executive Retirement Plan effective April 1, 2006 and as from time to time
amended and in effect.

 

2.14.                        Plan Year: January 1 through December 31, provided that the
first Plan Year shall be from the Effective Date of the Plan through December
31, 2006.

 

2.15.                        Retirement: The attainment by a Participant of both age
sixty-two and five years of participation in the Plan.

 

2.16.                        Specified Employee: 
A person
who is a specified employee as defined in the regulations issued under Section
409A of the Code.

 

2.17.                        Termination of Service: The
termination (by death, Retirement, or otherwise) of a Participant’s service as
an employee of the Corporation, provided that no Termination of Service will be
deemed to have occurred unless it constitutes a “separation from service”
within the meaning of Code Section 409A and the regulations thereunder.

 

ARTICLE
3 — DEFERRED COMPENSATION

 

3.1.                              Eligibility
and Participation: Eligibility to commence participation in this Plan shall
be restricted to those officers or highly compensated employees selected by the
Committee in its sole discretion who qualify as “select management or highly
compensated employees” as defined in Sections 201(2), 301(a)(3), and 401(a)(1)
of the Employee Retirement Income Security Act of 1974 and amendments thereto (“ERISA”),
provided, however, that any such person shall timely complete all forms
necessary for participation in the Plan under this Section.

 

Any individual so
selected shall first become a Participant in the Plan by filing with the
Corporation a written application for participation in a form satisfactory to
the Corporation, within thirty days of the date that he or she is first eligible
to participate in the Plan. If such application is not filed within such
thirty-day period, such individual shall not thereafter be permitted to
participate in the Plan until the next calendar year following the date upon
which he first became eligible to participate. Upon selecting an individual to
become a Participant in the Plan, the Committee shall notify the individual in
writing of the date of eligibility and shall provide the individual with a
written application for participation.

 

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3.2.                              Termination
Event: A Participant shall continue to be eligible to participate in the
Plan until the earliest date on which any of the following events (“a
Termination Event”) occurs:

 

(a)          There
occurs a Change in Control as defined in Section 2.6;

 

(b)         There
occurs a Termination of Service as defined in Section 2.17;

 

(c)          The
Participant becomes disabled to the extent that, by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, the Participant is (i) unable to engage in any substantial gainful
activity, or (ii) receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering employees of
the Corporation; or

 

(d)         The
Plan is terminated in a manner that fully complies with the accelerated payment
provisions of Section 409A of the Code and the regulations promulgated
thereunder, including the requirements that all similar arrangements be
terminated and that all payments be made within 24 months of the termination
date.

 

For purposes of this Plan, a Participant will not be
deemed to have “terminated” his or her Service unless he or she has “separated
from service” within the meaning of Section 409A(a)(2)(A)(i) of the Code and the
regulations thereunder.

 

ARTICLE
4 — BENEFITS

 

4.1.                              Benefit:
Should a Participant have a Termination Event, other than a Termination of
Service for Cause, he shall be entitled to receive a Termination Benefit. The
Termination Benefit shall be the vested portion of his Employer Credit Account.

 

4.2.                              Cause:
Should a Participant have a Termination of Service for Cause, he shall forfeit
any Termination Benefit.

 

4.3.                              Distribution
Options: Pursuant to a Participant’s Termination Benefit Election (as
defined herein), the Termination Benefit attributable to such Participant shall
be paid either (i) in a lump sum, (ii) in five equal annual installments, (iii)
in ten equal annual installments, or (iv) in fifteen equal annual installments
(each, a “Termination Benefit Election”); provided, however, that if the
Termination Benefit is to be paid pursuant to a Termination Event described in
Section 3.2(d) above, then the Termination Benefit shall be paid in a lump sum
on the first day of the month immediately following the lapse of six months
after the date of such Termination Event; and provided further, that if the
Termination Benefit is less than $10,000 at the time of Termination of Service,
then the Termination Benefit shall be paid in a lump sum notwithstanding any
installment election made by the Participant. This shall be a one-time election
to be made by the Participant when he or she completes a written application
for participation, which election may not be changed in the future. If,
however, a Participant fails to make a Termination Benefit Election, he shall
receive his benefit in a lump sum.

 

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Should annual
installments be selected, the first such payment shall be made on the sixtieth
day following the Termination Event or as administratively feasible thereafter
if it is not administratively feasible to pay the benefit on the sixtieth day;
provided, however, that if the installments are to be paid to a Specified
Employee due to a Termination of Service, the first installment shall be
delayed until the first day of the month immediately following the lapse of six
months after the date of Termination of Service. Each payment thereafter shall
be made on the annual anniversary of the original payment amount or as soon as
administratively feasible thereafter if it is not administratively feasible to
pay the benefit on the annual anniversary of the original payment.

 

Should a lump sum
distribution apply, the Termination Benefit shall be made on the sixtieth day
following the Termination Event or as soon as administratively feasible thereafter
if it is not administratively feasible to pay the benefit on the sixtieth day;
provided, however, that if the lump sum is to be paid to a Specified Employee
due to a Termination of Service, the lump sum shall be delayed until the first
day of the month immediately following the lapse of six months after the date
of Termination of Service.

 

4.4.                              Vesting:
Each Year’s Annual Credit and Additions will be subject to its own vesting schedule
and shall vest at a rate of 25% for each calendar year, commencing as of the
December 31st next following the date of the Annual Credit or Addition. For
example, Annual Credits attributed to a Participant’s Employer Credit Account
in April 2006 will be 25% vested on December 31, 2006, 50% vested on December
31, 2007, 75% percent vested on December 31, 2008 and 100% vested on December
31, 2009. If a Termination Event occurs, Participants will forfeit any unvested
benefits accrued as of the date of the applicable Termination Event, except
that all unvested benefits shall become fully vested if the Termination Event
is due to a Change in Control, a Termination of Service due to Retirement or
death, or Disability. In the event the Plan is terminated due to Section 6.1
hereof, no further vesting shall occur after the date of termination of the
Plan.

 

ARTICLE
5 — BENEFICIARY

 

5.1                                 Designation:
At the time participation in the Plan commences, or at any later date, each
Participant shall designate on a form satisfactory to the Corporation one or
more Beneficiaries to receive any benefits which may become payable hereunder
in the event of his death (Beneficiary Designation). A Participant can change
any such Beneficiary Designation at any time prior to his death upon written
notice to the Corporation.

 

5.2                                 Subsequent
Beneficiary Designations: If the Participant shall have made more than one
Beneficiary Designation, the Beneficiary Designation most recently filed with
the Corporation prior to the time of the Participant’s death shall govern.

 

5.3                                 No
Beneficiary Designation: If any amounts under the Plan become payable
following a Participant’s death at a time when no Beneficiary Designation is
applicable or when no Beneficiary is in existence, such payments shall be made
in a lump sum to such Participant’s surviving spouse, or if none, such amounts
shall be paid to such Participant’s estate.

 

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ARTICLE
6 — MISCELLANEOUS

 

6.1                                 Amendment
and Termination: The Corporation, acting through the Committee, reserves
the right to amend, in whole or in part, in writing, or to terminate this Plan (including
Schedule A hereto) at any time and in its sole discretion, with or without
notice; provided, however, that no such action shall reduce the amount of a
Participant’s vested Termination Benefit prior to the date of any such
amendment or termination. Any provision herein to the contrary notwithstanding,
amendment or termination of the Plan shall not accelerate, directly or
indirectly, the date on which distribution of any then vested benefit is to be
paid unless such acceleration complies with the requirements of Code Section
409A and the regulations thereunder. In addition, notwithstanding any provision
herein to the contrary, if the Corporation determines, after a review of the
final regulations issued under Section 409A of the Code and all applicable
Internal Revenue Service guidance, that this Plan should be amended to avoid
triggering the tax and interest penalties imposed by Section 409A of the Code,
the Corporation may amend this Plan to the extent necessary to avoid triggering
the tax and interest penalties imposed by Section 409A of the Code.

 

6.2                                 Insurance:
The Corporation may purchase one or more insurance policies on the life of a
Participant, as a means of providing, in whole or in part, for the payment of
benefits hereunder. However, in such event neither such Participant, his
designated Beneficiary, nor any other beneficiary shall have any rights
whatsoever therein or in the proceeds therefrom. The Corporation (or any “Rabbi
Trust” (as described in Section 6.6) formed in connection with the Plan) shall
be the sole owner and beneficiary of any such insurance policy and shall
possess and may exercise all incidents of ownership therein. No such policy,
policies or other property shall be held in any trust for a Participant or any
other person or as collateral security for any obligation of the Corporation
hereunder. This Plan shall under no circumstances be deemed to constitute a
contract of insurance.

 

6.3                                 No
Contract of Employment: The Plan shall under no circumstance be deemed to
have any effect upon the terms or conditions of employment of any employee of
the Corporation whether or not he or she is a Participant hereunder. Neither
the offering of the Plan, the payment of any expenses, costs or benefit amounts
associated with the Plan, nor any documents published in connection with the
Plan shall be construed as having created a contract of employment between the
Participant and the Corporation, nor shall any of such actions or documents affect
any right that the Corporation may have to terminate the service of such person
at will.

 

6.4                                 Benefits
not Transferable: Benefits under this Plan shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge or
encumbrance by any Participant or Beneficiary and any attempt to do so shall be
null and void. Benefits under this Plan shall not be subject to or liable for
the debts, contracts, liabilities, engagements or torts of any Participant or
any Beneficiary, nor may the same be subject to attachment or seizure by any
creditor of any Participant or any Beneficiary under any circumstances.

 

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6.5                                 Determination of Benefits:

 

(a)                                  General. The Committee may require any person claiming
benefits under the Plan (“Claimant”) to submit an application therefor in
writing to the Claims Administrator or to any officer of the Corporation,
together with such other documents and information as the Committee may
require.

 

(b)                                 Claims. Claims for benefits, benefit determinations, appeals
and reviews of any adverse benefit determination and all associated
notifications shall, at a minimum, comply with Section 503 of ERISA and the
applicable provisions of 29 C.F.R. § 2560.503-1 (“ERISA Regulations”).

 

(c)                                  Claims Administrator. The Claims Administrator shall be
designated by the Committee. The Committee reserves the right to change the
Claims Administrator from time to time and to designate a special Claims
Administrator when deemed necessary to avoid a conflict of interest.

 

(d)                                 Notification of Benefit Determination. The Claims Administrator will notify
the Claimant of a benefit determination in writing within a reasonable time. Notification
that a claim is wholly or partially denied will normally be given no later than
90 days after receipt of the claim. The notice shall (1) specify the reasons
for the adverse decision, (2) refer to the specific provisions of the Plan on
which the decision is based, (3) describe any additional material necessary to
complete the claim and the reasons that such material is necessary, (4)
describe the appeal and review procedures and the applicable time limits, and
(5) inform the claimant of the right to bring a civil action following review. Should
special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished to the Claimant prior to the
expiration of the initial ninety-day period. The notice shall indicate the
special circumstances requiring an extension of time and the date by which a
final decision is expected to be rendered. In no event shall the period of the
extension exceed ninety days from the end of the initial ninety-day period. Claims
not acted upon within the time prescribed herein shall be deemed denied for
purposes of proceeding to the review stage.

 

(e)                                  Review. A claimant is entitled to have an adverse benefit
determination reviewed by the Committee (the “Named Fiduciary”). The request
for review must be in writing and filed with the Claims Administrator no later
than 60 days following the claimant’s receipt of the adverse determination. The
claimant may submit written comments and other information and documents
relating to the claim, and have reasonable access to and receive copies of all
documents and information relevant to the claim. The claimant may request a
hearing. The Claims Administrator will promptly forward the request for review
and the claim file to the Named Fiduciary. The decision of the Named Fiduciary
shall be made promptly, and not later than sixty days after the Named Fiduciary’s
receipt of a request for review, unless special circumstances require an
extension of time for processing. In such a case, a decision shall be rendered
as soon as possible, but not later than one hundred twenty days after receipt
of the request for review.

 

7

 

(f)                                    Named Fiduciary. The Named Fiduciary shall not be the
Claims Administrator nor subordinate to the Claims Administrator. The Board of
Directors reserves the right to change the Named Fiduciary from time to time,
and to designate a special Named Fiduciary for appeals when deemed necessary.

 

(g)                                 Review Procedure. The Named Fiduciary has the discretion
to decide all questions regarding relevance and reasonable access. In addition,
the Named Fiduciary has the discretion as to whether a hearing shall be held. The
Named Fiduciary will afford no deference to the Claims Administrator’s
decision, and will ensure a full and fair review de novo.

 

(h)                                 Notification of Benefit Determination on
Review. The Named
Fiduciary’s decision will be in writing and sent to the Claims Administrator.
The Claims Administrator will then notify the claimant either by hand delivery
or by first class mail within a reasonable time, and normally not later than 60
days after receipt of the claim for review. If the Named Fiduciary issues an
adverse benefit decision to the Participant or his Beneficiary, the decision
shall (1) specify the reasons for the decision, (2) refer to specific plan
provisions on which the decision was based, (3) inform the claimant of the
right to review all information reviewed by the Named Fiduciary, even
information not relied on in making the decision, and (4) inform the claimant
of the right to bring a civil action.

 

(i)                                     Exhaustion of Remedies. No legal action for benefits under the
Plan may be brought unless and until the Claimant has exhausted his remedies
under this Section 6.5.

 

6.6                                 No
Trust: For tax purposes and for purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), this Plan is
intended to qualify as an unfunded plan maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees, and shall be interpreted accordingly.

 

No action by the
Corporation or its Board of Directors under this Plan shall be construed as
creating a trust, escrow or other secured or segregated fund or other fiduciary
relationship of any kind in favor of any Participant or Beneficiary or any
other persons otherwise entitled to benefits under the Plan. The status of the
Participant and any Beneficiary with respect to any liabilities assumed by the
Corporation hereunder shall be solely that of unsecured creditors of the
Corporation. The Plan constitutes a mere promise by the Corporation to make
benefit payments in the future. Any insurance policy or any other asset
acquired or held by the Corporation in connection with liabilities assumed by
it hereunder, shall not be deemed to be held under any trust, escrow or other
secured or segregated fund or other fiduciary relationship of any kind for the
benefit of a Participant or Beneficiary or to be security for the performance
of the obligations of the Corporation, but shall be and remain a general,
unpledged, unrestricted asset of the Corporation at all times subject to the
claims of general creditors of the Corporation. Notwithstanding the foregoing,
the Corporation may transfer assets, including any insurance policies to a
grantor trust of the type known as a “Rabbi Trust” with the

 

8

 

Corporation as grantor
and owner of such trust, provided that the terms of such trust comply with
Section 409A of the Code.

 

6.7                                 Plan
Administration: The Plan shall be administered by the Committee. The
Committee shall have the exclusive authority, sole discretion and
responsibility for all matters in connection with the operation and
administration of the Plan. The Committee’s powers and duties shall include,
but not be limited to, the following: (a) responsibility for the compilation
and maintenance of all records necessary in connection with the Plan; (b)
authorizing the payment of all benefits under and expenses of the Plan; (c)
authority to engage such legal, accounting and other professional services as
it may deem proper; (d) discretionary authority to interpret the Plan; and (e)
discretionary authority to determine eligibility for benefits under the Plan
and to resolve all issues of fact and law in connection with such determination.
Decisions by the Committee shall be final and binding upon all parties.

 

The Committee, from time
to time, may allocate to other persons or organizations any of its rights,
powers, and duties with respect to the operation and administration of the Plan.
Any such allocation shall be reviewed from time to time by the Committee;
shall, unless the Committee specifies otherwise, carry such discretionary
authority as the Committee possesses regarding the matter; and shall be
terminable upon such notice as the Committee in its sole discretion, deems
reasonable and prudent under the circumstances.

 

6.8                                 Satisfaction
of Claims: Any payment to a Participant or Beneficiary or the legal
representative of either, in accordance with the terms of this Plan shall to
the extent thereof be in full satisfaction of all claims such person may have
against the Corporation. The Corporation may require such payee, as a condition
to such payment, to execute a receipt and release therefore in such form as
shall be determined by the Corporation.

 

6.9                                 Governing
Law: The Plan shall be construed, administered, and governed in all
respects in accordance with ERISA and, to the extent not preempted by ERISA, the
laws of the Commonwealth of Pennsylvania without regard to applicable conflicts
of law or choice of law principles. By electing to participate in the Plan,
each Participant on behalf of himself and his beneficiaries irrevocably and
unconditionally (a) submits to the exclusive personal jurisdiction of the
United States Federal courts and the Commonwealth of Pennsylvania state courts
located in Montgomery County, Pennsylvania (“Pennsylvania Courts”) with respect
to any lawsuit, claim or cause of action arising under or with respect to this
Plan; (b) agrees that the Pennsylvania Courts shall have exclusive subject
matter jurisdiction over any such lawsuit, claim or cause of action; (c) agrees
that venue with respect to any such lawsuit, claim or cause of action is proper
and most convenient in such Pennsylvania Courts; and (d) agrees not to assert
or raise any objection to jurisdiction or venue in the Pennsylvania Courts. BY
ELECTING TO PARTICIPATE IN THE PLAN, EACH PARTICIPANT, ON BEHALF OF HIMSELF AND
HIS BENEFICIARIES, IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY AND
ALL ACTIONS OR PROCEEDINGS BROUGHT WITH RESPECT TO ANY PROVISION OF THIS PLAN
AND/OR WITH RESPECT TO ANY CLAIMS ARISING OUT OF, OR RELATED TO, THIS PLAN, to
the extent not preempted by ERISA.

 

9

 

6.10                           Gender
and Number: Words used herein in the
masculine, feminine or neuter gender shall be construed as though they were
also used in another gender in all cases where they would so apply. Words used
herein in the singular or plural form shall be construed as though they were
also used in the other form in all cases where they would so apply.

 

6.11                           Severability:
In the event that a court of competent jurisdiction determines that any
provision of the Plan is in violation of any statute or public policy, only
those provisions of the Plan that violate such statute or public policy shall
be stricken. All provisions of the Plan that do not violate any statute or
public policy shall continue in full force and effect. Further, any court order
striking any provision of the Plan shall modify the stricken terms as narrowly
as possible to give as much effect as possible to the intentions of the
Corporation in establishing the Plan.

 

6.12                           Indemnification:
The Corporation agrees to and shall indemnify and hold harmless each
Indemnified Person (as hereinafter defined), to the full extent permitted by
law and the Corporation’s Articles of Incorporation and Bylaws, from and against
all claims, losses, damages, causes of action, suits, and liability of every
kind, including all expenses of litigation, court costs and reasonable attorney’s
fees and expenses, incurred in connection with the Plan. “Indemnified Person”
shall mean each director, officer, Committee member, Claims Administrator or
employee of the Corporation acting as a fiduciary of the Plan.

 

6.13                           Expenses:
The expenses of administering the Plan and any grantor trust described in
Section 6.6 shall be borne by the Corporation.

 

6.14                           Successors
and Assigns: This Plan shall be binding on and inure to the benefit of the
Corporation and the Participants and their Beneficiaries, and their respective
heirs and assigns.

 

6.15                           Captions.
The captions of this Plan are descriptive only and do not affect the intent or
interpretation of the Plan.

 

6.16                           Notices.
Any notice required or permitted to be given hereunder shall be in writing sent
by either personal delivery, overnight delivery, or United Sates, registered or
certified mail, return receipt requested, all of which shall be properly
addressed with postage or delivery charges prepaid, to the Committee or
Participant at their respective addresses described below, or at such other
addresses as either the Corporation or Participant may hereafter designate to
the other in writing:

 

	
  To
  the Committee:

  	
  Compensation Committee
  of the Board of Directors

  
	
   

  	
   

  
	
   

  	
  Willow Grove Bancorp,
  Inc.

  
	
   

  	
   

  
	
   

  	
  170 S. Warner Road

  
	
   

  	
   

  
	
   

  	
  Wayne, Pennsylvania
  19087

  
	
   

  	
   

  
	
   

  	
  Re: Willow Grove
  Bancorp, Inc. 2006 Supplemental

  Executive Retirement Plan

  

 

10

 

	
  To any Participant:

  	
  To the Participant’s
  last known address as shown in the Corporation’s Human Resource Department
  records

  

 

Notices sent by personal delivery shall be deemed given
upon actual receipt. Notices sent by overnight delivery shall be deemed given
on the next business day. Notices sent via United States registered or
certified mail shall be deemed given two business days from mailing.

 

 

ACKNOWLEDGED:

 

Willow Grove Bancorp,
Inc.

 

 

	
  /s/ Donna M. Coughey

  	
   

  	
  March 28, 2006

  	
   

  
	
  By:

  	
  Donna M. Coughey

  	
  Date

  
	
   

  	
  President and Chief
  Executive Officer

  	
   

  
						

 

11Exhibit 10.1

 

SECOND
AMENDMENT TO

FOURTH
AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (“Second
Amendment”) is made and entered into as of the 31th day of March,
2006, by and among MTR GAMING GROUP, INC., a Delaware corporation (“MTRI”),
MOUNTAINEER PARK, INC., a West Virginia corporation (“MPI”), SPEAKEASY GAMING
OF LAS VEGAS, INC., a Nevada corporation (“SGLVI”), PRESQUE ISLE DOWNS, INC., a
Pennsylvania corporation (“PIDI”), SCIOTO DOWNS, INC., an Ohio corporation (“SDI”),
and SPEAKEASY GAMING OF FREMONT, INC., a Nevada corporation (“SGFI” and
together with MTRI, MPI, SGLVI, PIDI and SDI, collectively referred to as the “Borrowers”),
WELLS FARGO BANK, National Association, NATIONAL CITY BANK OF PENNSYLVANIA, CIT
LENDING SERVICES CORPORATION and PNC BANK, National Association (each
individually a “Lender” and, together with each additional financial
institution which may hereafter become a lender pursuant to
Section 10.10(b) of the Credit Agreement, collectively, the “Lenders”),
WELLS FARGO BANK, National Association, as the swingline lender (herein in such
capacity, together with its successors and assigns, the “Swingline Lender”),
and WELLS FARGO BANK, National Association, as the issuer of letters of credit
(in such capacity, together with its successors and assigns, the “L/C Issuer”)
and WELLS FARGO BANK, National Association, as administrative and collateral
agent for the Lenders, Swingline Lender and L/C Issuer (herein, in such
capacity, called the “Agent Bank” and, together with the Lenders, Swingline
Lender and L/C Issuer, collectively referred to as the “Banks”).

 

R_E_C_I_T_A_L_S:

 

WHEREAS:

 

A.            Borrowers and Banks (National City
Bank of Pennsylvania, CIT Lending Services Corporation and PNC Bank, National
Association having acquired their respective Syndication Interests by
Assignment, Assumption and Consent Agreement dated effective as of
March 27, 2006) entered into a Fourth Amended and Restated Credit
Agreement dated as of December 27, 2005, as amended by First Amendment to
Fourth Amended and Restated Credit Agreement dated as of March 23, 2006 (the “Existing
Credit Agreement”) for the purpose of establishing a revolving line of credit
in the initial principal amount of Eighty-Five Million Dollars
($85,000,000.00), including a subfacility for the funding of swingline advances
up to the maximum aggregate amount of Ten Million Dollars ($10,000,000.00) at
any time outstanding and a subfacility for the issuance of letters of credit up
to the maximum aggregate amount of Fifty-Five Million Dollars ($55,000,000.00).

 

B.            For the purpose of this Second
Amendment, all capitalized words and terms not otherwise defined herein shall
have the respective meanings and be

 

 

construed herein as provided in
Section 1.01 of the Existing Credit Agreement and any reference to a
provision of the Existing Credit Agreement shall be deemed to incorporate that
provision as a part hereof, in the same manner and with the same effect as if
the same were fully set forth herein.

 

C.            MTRI, as the issuer, and MPI, SGLVI,
PIDI and SDI, as the guarantors may attempt to offer and sell up to One Hundred
Twenty-Five Million Dollars ($125,000,000.00) of unsecured senior subordinated
notes (“Senior Subordinated Notes”).

 

D.            Borrowers have requested the
following additional amendments and modifications to the Existing Credit
Agreement:

 

(i)            Increasing
the Aggregate Commitment from Eighty-Five Million Dollars ($85,000,000.00) to
One Hundred Five Million Dollars ($105,000,000.00), an increase of Twenty
Million Dollars ($20,000,000.00) (the “Commitment Increase”);

 

(ii)           Restating
the Insurance requirements set forth in Section 5.09;

 

(iii)          Restating
Section 6.01 for the purpose of increasing the maximum permitted Leverage
Ratio for the Fiscal Quarter ending March 31, 2006 only, from 4.35 to 1.00
to 5.25 to 1.00; and

 

(iv)          Amending
Section 6.04 for the purposes of permitting the incurrence of the
Indebtedness to be evidenced by the Senior Subordinated Notes up to the maximum
aggregate amount of One Hundred Twenty-Five Million Dollars ($125,000,000.00).

 

E.             Subject to the terms, provisions
and conditions hereinafter set forth, Banks have agreed to the amendments,
revisions and modifications set forth in this Second Amendment.  Furthermore, Wells Fargo Bank, National
Association (the “Increasing Lender”) has agreed, subject to the terms,
conditions, additional modifications and provisions set forth in this Second
Amendment, to fund the entire Commitment Increase.

 

NOW,
THEREFORE, in consideration of the foregoing and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree to the amendments and modifications to the Existing
Credit Agreement as specifically hereinafter provided as follows:

 

2

 

1.             Definitions.  As of the Second Amendment Effective Date,
Section 1.01 of the Existing Credit Agreement entitled “Definitions” shall
be and is hereby amended to include the following definitions.  Those terms which are currently defined by
Section 1.01 of the Existing Credit Agreement and which are also defined
below shall be superseded and restated by the applicable definition set forth
below:

 

“Aggregate
Commitment” shall mean reference to the aggregate amount committed by Lenders
for advance to or on behalf of the Borrower Consolidation as Borrowings under
the Credit Facility up to the maximum principal amount of One Hundred Five
Million Dollars ($105,000,000.00) as of the Second Amendment Effective Date, as
may be reduced or limited from time to time by: (i) Voluntary Permanent
Reductions, (ii) Mandatory Commitment Reductions, and/or (iii) as provided
in Paragraph 2(c) of the Second Amendment.

 

“Commitment
Increase” shall have the meaning ascribed to such term in Recital Paragraph
D(i) of the Second Amendment.

 

“Credit
Agreement” shall mean the Existing Credit Agreement as amended by the Second
Amendment, together with all Schedules, Exhibits and other attachments thereto,
as it may be further amended, modified, extended, renewed or restated from time
to time.

 

“Existing
Credit Agreement” shall have the meaning set forth in Recital Paragraph A
of the Second Amendment.

 

“Fee Side
Letter” shall mean the Side Letter of Understanding Regarding Commitment
Increase Fee dated concurrently with the Second Amendment, executed by and
between Agent Bank and Borrowers concerning payment of the fee more
particularly therein described.

 

“Increasing
Lender” shall have the meaning ascribed to such term in Recital
Paragraph E of the Second Amendment.

 

“Revolving
Credit Note” shall mean the Revolving Credit Note (First Restated), a copy of
which is marked “Exhibit A”, affixed to the Second Amendment and by this
reference incorporated herein and made a part hereof, executed by Borrowers on
or before the Second Amendment Effective Date, payable to the order of Agent
Bank on behalf of the Lenders, evidencing the Credit Facility, as the same may
be amended, modified, supplemented, replaced, renewed or restated from time to
time, which restated Exhibit A shall fully restate and supersede
Exhibit A attached to the Existing Credit Agreement.

 

3

 

“Schedule of Lenders’ Proportions in Credit Facility” shall mean the
Schedule of Lenders’ Proportions in Credit Facility, a copy of which is set
forth as Schedule 2.01(a), affixed to the Second Amendment and by this
reference incorporated herein and made a part hereof, setting forth the
respective Syndication Interest and maximum amount to be funded under the
Credit Facility by each Lender as of the Second Amendment Effective Date, as
the same may be amended or restated from time to time in connection with an
Assignment and Assumption Agreement, which revised Schedule 2.01(a) shall
fully restate and supersede Schedule 2.01(a) attached to the Existing
Credit Agreement and all previous amendments and restatements thereof.

 

“Second Amendment” shall mean the Second Amendment to Fourth Amended
and Restated Credit Agreement dated as of March 31, 2006.

 

“Second Amendment Effective Date” shall mean March 31, 2006, subject to
the occurrence of each of the Conditions Precedent set forth in
Paragraph 7 of the Second Amendment.

 

“Senior Subordinated Notes” shall have the meaning ascribed to such
term in Recital Paragraph C of the Second Amendment.

 

2.             Commitment Increase.  From and after the Second Amendment Effective
Date:

 

a.             Increasing Lender shall and does
hereby agree to fund the amount of the Commitment Increase, subject to the
terms and conditions set forth in the Credit Agreement;

 

b.             The respective aggregate
Syndication Interests of the Lenders in the Credit Facility shall be as set
forth on the Schedule of Lenders’ Proportions in Credit Facility as of the
Second Amendment Effective Date, a copy of which is marked “Schedule 2.01(a)”
affixed to the Second Amendment and by this reference incorporated herein and
made a part hereof, which shall restate the Schedule of Lenders’ Proportions in
Credit Facility attached as Schedule 2.01(a) to the Existing Credit Agreement,
and all previous amendments and restatements thereof, for the purpose of
showing the Aggregate Commitment, as increased by the Commitment Increase;

 

c.             Notwithstanding the foregoing,
however, in the event Borrowers issue the Senior Subordinated Notes,
availability under the Aggregate Commitment shall be limited to Fifty-Five
Million Dollars ($55,000,000.00) and use of the Credit Facility shall be
limited to the L/C Facility and no Borrowings or Swingline

 

4

 

Advances shall be available
other than Borrowings for the purpose of funding repayment of any L/C
Reimbursement Obligation arising under the PIDI License Letter of Credit and/or
any other Letter of Credit issued by L/C Issuer under the L/C Facility; and

 

d.             Notwithstanding the foregoing,
however, the Commitment Fee payable under Section 2.09(b) of the Credit
Agreement shall be calculated with reference to the Maximum Permitted Balance
without regard to the limitations on availability under the Aggregate
Commitment as set forth above.

 

3.             Restatement of Insurance
Requirements.  As of the Second
Amendment Effective Date, Section 5.09 of the Existing Credit Agreement
entitled “Insurance” shall be and is hereby fully amended and restated in its
entirety as follows:

 

“Section 5.09.  Insurance.  Until Credit Facility Termination, Borrowers
shall obtain, or cause to be obtained, and shall maintain or cause to be
maintained with respect to the Collateral, at their own cost and expense, and
have deposited with Agent Bank the following coverages:

 

a.             Property
Insurance.  Borrowers shall maintain
a special causes of loss (“All Risk” - ISO form or equivalent), perils policy
covering the buildings and improvements, and any other permanent structures for
one hundred percent (100%) of the replacement cost.  Borrowers shall maintain a minimum Ten
Million Dollar ($10,000,000.00) limit of coverage for the perils of flood
(outside of properties located in a Federal Flood Zone “A”) and earthquake
covering the Collateral and a minimum of Two Million Five Hundred Thousand
Dollars ($2,500,000.00) limit of coverage for the perils of flood for
properties within Federal Flood Zone “A”. 
Upon the request of Agent Bank, replacement cost for insurance purposes
will be established by an independent appraiser mutually selected by Borrowers
and Agent Bank.  The policy will include
Agreed Amount (waiving co-insurance), replacement cost valuation and building
ordinance endorsements.  The policy will
include a standard mortgagee clause (ISO form or equivalent, i.e. Borrower’s
acts will not impair mortgagee’s right to recover, exclusive payment of loss to
mortgagee and automatic notice of cancellation or non-renewal to mortgagee) and
provide that all losses in excess of Two Hundred Thousand Dollars ($200,000.00)
be adjusted with the Agent Bank.  The
Borrowers waive any and all rights of subrogation against Banks resulting from
losses to property.

 

5

 

b.             Personal
Property (including machinery, equipment, furniture, fixtures, stock).  Borrowers shall maintain a special causes of
loss (“All Risk”) perils property coverage for all personal property owned,
leased or for which Borrowers are legally liable.  The coverage will include a lenders’ loss
payable endorsement in favor of Agent Bank.

 

The policy providing real property and personal property coverages, as
specified in 5.09(a) and (b) hereinabove, may include a deductible of no more
than Twenty-Five Thousand Dollars ($25,000.00) for any single occurrence.  Flood and earthquake deductibles can be no
more than Two Hundred Fifty Thousand Dollars ($250,000.00), if a separate
deductible applies.

 

c.             Business
Interruption/Extra Expense. 
Borrowers shall maintain combined Business Interruption/Extra Expense
coverage for the Hotel/Casino Facilities with a limit representing no less than
one hundred percent (100%) of the net profit plus continuing expenses
(including debt service) for the race track, hotel and casino facilities
(including all video lottery/slot operations). 
Such coverage shall include an extensions for off premises power losses
at One Million Dollars ($1,000,000.00) and extended period of indemnity of one
hundred eighty (180) days endorsement. 
These coverages may have deductible of no greater than forty-eight (48)
hours, or Twenty-Five Thousand ($25,000.00), if a separate deductible
applies.  This coverage will be
specifically endorsed to include Agent Bank as loss payee.

 

d.             Boiler
and Machinery.  Borrowers shall
maintain a Boiler and Machinery policy for the Casino Facilities written on a
Comprehensive Form with a combined direct and indirect limit of no less than
Ten Million Dollars ($10,000,000.00). 
The policy shall include extensions for Agreed Amount (waiving co-insurance)
and Replacement Cost Valuation.  The
policy may contain deductibles of no greater than Twenty-Five Thousand Dollars
($25,000.00) direct and two times average daily value for business income.

 

e.             Crime
Insurance.  Borrowers shall obtain a
comprehensive crime policy, including Innkeepers Legal and Safe Deposit Legal
coverages and the following coverages:

 

6

 

(i)            employee dishonesty
- One Million Dollars ($1,000,000.00);

 

(ii)           money and
securities (inside) - Five Hundred Thousand Dollars ($500,000.00);

 

(iii)          money and
securities (outside) - Five Hundred Thousand Dollars ($500,000.00);

 

(iv)          depositor’s forgery
- One Million Dollars ($1,000,000.00);

 

(v)           computer fraud - One
Million Dollars ($1,000,000.00).

 

The policy must be amended so that money is defined to include “tokens
and chips” (as defined in Regulation 12.010 of the Nevada Gaming
Authorities).  The policy may contain
deductibles of no greater than Fifty Thousand Dollars ($50,000.00) for all coverages
listed above.

 

f.              Commercial
General Liability (1998 Form or Equivalent).  Borrowers shall maintain a Commercial General
Liability policy with a One Million Dollar ($1,000,000.00) combined single
limit for bodily injury and property damage, including Products Liability,
Contractual Liability, and all standard policy form extensions.  The policy must provide a Two Million Dollar
($2,000,000.00) general aggregate (per location, if multi-location risk) and be
written on an “occurrence form”.  The
policy will also include extensions for Liquor Legal Liability, Employee
Benefits Legal Liability and Spectator Liability coverages (if necessary, a
separate policy can be secured for Spectator Liability).  If the general liability policy contains a
self-insured retention, it shall be no greater than Twenty-Five Thousand
Dollars ($25,000.00) per occurrence, with an aggregate retention of no more
than One Million Dollars ($1,000,000.00), including expenses.

 

The policy shall be endorsed to include Agent Bank as an additional
insured on behalf of the Banks. 
Definition of additional insured shall include all officers, directors,
employees, agents and

 

7

 

representatives
of the additional insured.  The coverage
for additional insured shall apply on a primary basis irrespective of any other
insurance whether collectible or not (ISO Form #CG20261185 Additional Insured -
Designated Person or Organization, or Equivalent).

 

g.             Care,
Custody and Control Liability. 
Borrowers shall maintain a care, custody and control liability policy
with a single limit of no less than One Hundred Thousand Dollars ($100,000.00)
(each horse)/One Million Dollars ($1,000,000.00) (in the aggregate) per
occurrence for any injury, damage or death to horses in the care, custody and
control of the Borrowers.  The Agent Bank
shall be included as an additional insured under such policy.

 

h.             Automobile.  Borrowers shall maintain a comprehensive
Automobile Liability Insurance Policy written under coverage “symbol 1”,
providing a One Million Dollar ($1,000,000.00) combined single limit for bodily
injury and property damage covering all owned, non-owned and hired vehicles of
the Borrowers.  If the policy contains a
self insured retention it shall be no greater than Ten Thousand Dollars
($10,000.00) per occurrence with an aggregate retention of no more than Two
Hundred Fifty Thousand Dollars ($250,000.00), including expenses.  The following additional coverages must be
purchased by Borrowers:

 

(i)            Garage Liability.  A One Million Dollar ($1,000,000.00) combined
single limit for bodily and property damage for the garage operation.

 

(ii)           Garagekeepers
Legal Liability.  Five Hundred
Thousand Dollar ($500,000.00) limit for comprehensive and collision coverages
for physical damage to vehicles in the Borrowers’ care, custody and
control.  The policy can be subject to a
deductible of no greater than Two Thousand Five Hundred Dollars ($2,500.00) for
each auto and Ten Thousand Dollars ($10,000.00) for each loss.

 

i.              Workers
Compensation and Employers Liability Insurance.  Borrowers shall maintain a standard workers

 

8

 

compensation policy covering the states of
Nevada, West Virginia (as West Virginia is a monopolistic state coverage must
be secured through the state fund) and any other state where the company is
operating, including employers liability coverage subject to a limit of no less
than One Million Dollars ($1,000,000.00) each employee, One Million Dollars
($1,000,000.00) each accident, One Million Dollars ($1,000,000.00) policy
limit.  The policy shall include
endorsements for Voluntary Compensation, Stop Gap Liability, Long-Shoreman’s
and Harbors Workmans Compensation Act and Maritime Coverages (as
applicable).  If the Borrowers have
elected to self-insure Workers Compensation coverage in the State of Nevada (or
any other state), the Agent Bank must be furnished with a copy of the
certificate from the state(s) permitting self-insurance and evidence of a Stop
Loss Excess Workers Compensation policy with a specific retention of no greater
than One Hundred Fifty Thousand Dollars ($150,000.00) per occurrence.

 

j.              Retention.  If Borrowers’ general liability and
automobile policies include a self-insured retention, it is agreed and fully
understood that Borrowers are solely responsible for payment of all amounts due
within said self-insured retentions.  Any
Indemnification/Hold Harmless provision is extended to cover all liabilities
associated with said self-insured retentions.

 

k.             Umbrella
Liability.  An Umbrella Liability
policy shall be purchased with a limit of not less than Fifty Million Dollars
($50,000,000.00) providing excess coverage over all limits and coverages
indicated in paragraphs (f), (h) and (i) above. 
The limits can be obtained by a combination of Primary and Excess
Umbrella policies, provided that all layers follow form with the underlying
policies indicated in (f), (h) and (i) are written on an “occurrence”
form.  This policy shall be endorsed to
include the Agent Bank as an additional insured on behalf of the Banks, in the
same manner set forth in Section 5.09(f) hereinabove.

 

l.              Key
Man Life Insurance.  The Borrower
Consolidation shall maintain key-man life insurance on the life of Arneault in
an aggregate amount of no less than Eight Million Dollars ($8,000,000.00).  Each such key man life insurance policy or
policies shall designate MTRI as the beneficiary thereof and shall provide that
written notice shall be given to Agent Bank no less than thirty (30) days prior
to any cancellation or termination thereof.

 

9

 

m.            Ratings.  Except as provided below, all policies
indicated above shall be written with insurance companies licensed and admitted
to do business in all states where the Borrower Consolidation, or any of them,
is operating and shall be rated no lower than “A XII” in the most recent
addition of A.M. Best’s or “AA-” in the most recent edition of Standard &
Poor’s, or such other carrier reasonably acceptable to Agent Bank.  All policies discussed above shall be
endorsed to provide that in the event of a cancellation, non-renewal or
material modification, Agent Bank shall receive thirty (30) days prior written
notice thereof.  The Borrowers shall
furnish Agent Bank with Certificates of Insurance executed by an authorized
agent evidencing compliance with all insurance provisions discussed above on an
annual basis.  The Borrowers shall also
furnish actual policy endorsements evidencing appropriate status of Agent Bank
(as mortgagee, loss payee and additional insured).  Certificates of Insurance executed by an
authorized agent of each carrier providing insurance evidencing continuation of
all coverages have been provided on the Restatement Date and will be provided
annually on or before ten (10) days prior to the expiration of each
policy.  All certificates and other
notices related to the insurance program shall be delivered to Agent Bank
concurrently with the delivery of such certificates or notices to such carrier
or to Borrowers, or any of them, as applicable. 
Notwithstanding the foregoing, however, Agent Bank, on behalf of the
Lenders, consents to the following coverages with the Standard and Poor’s
ratings set forth below:

 

(i)            Excess Liability
with Great American at A-;

 

(ii)           Umbrella with AIG
(National Union Fire Insurance Co.) at AA+;

 

(iii)          General Liability
and Auto with American Specialty/Discover P&C at A+;

 

(iv)          Crime with AIG
(National Union Fire Insurance Co.) at AA+;

 

(v)           Property Insurance
with Allian, Global Risks U.S. Insurance Company at AA-, Affiliated FM at
BBBpi; Continental Casualty Company at A-, Liberty Mutual Fire Insurance

 

10

 

Company at A,
Travelers Property Casualty Company at A+ and/or Zurich American Insurance
Company at A+.

 

n.             Other
Coverage.  Any other insurance
reasonably requested by Agent Bank or Requisite Lenders in such amount and
covering such risks as may be reasonably required and customary in the race
track hotel/casino industry in the general location of the Hotel/Casino
Facilities.  Approval of any insurance by
Agent Bank shall not be a representation of solvency of any insurer or
sufficiency of any coverage required under this Credit Agreement.  All requirements are considered minimum in
terms of the purchase and maintenance of insurance under this Credit Agreement.”

 

4.             Restatement of Leverage Ratio
Covenant.  As of the Second Amendment
Effective Date, Section 6.01 of the Existing Credit Agreement entitled “Leverage
Ratio” shall be and is hereby fully amended and restated in its entirety as
follows:

 

“Section 6.01.  Leverage Ratio.  Commencing as of the Fiscal Quarter ending
March 31, 2006 and continuing as of each Fiscal Quarter end until Credit
Facility Termination, the Borrower Consolidation shall maintain a Leverage
Ratio no greater than the ratios described hereinbelow to be calculated as of
the end of each Fiscal Quarter in accordance with the following schedule:

 

	
  Fiscal Quarter End

  	
   

  	
  Maximum Leverage Ratio

  
	
   

  	
   

  	
   

  
	
  As of the Fiscal Quarter
  ending March 31, 2006

  	
   

  	
  5.25 to 1.00

  
	
   

  	
   

  	
   

  
	
  As of the Fiscal Quarter ending June 30, 2006 and as of each
  Fiscal Quarter end through Credit Facility Termination

  	
   

  	
  4.35 to 1.00”

  

 

5.             Amendment of Limitation on
Indebtedness Covenant.  As of the Second
Amendment Effective Date, Section 6.04 of the Existing Credit Agreement
entitled “Limitation on Indebtedness” shall be and is hereby amended by adding
an additional Subsection (h) as follows:

 

“h.           Indebtedness which
may be incurred by Borrowers under the Senior Subordinated Notes up to the
maximum aggregate amount of One Hundred Twenty-Five Million Dollars
($125,000,000.00), so long as a portion of the net proceeds of such

 

11

 

Senior
Subordinated Notes are used to reduce the Funded Outstandings under the Credit
Facility to zero ($0.00) concurrently or substantially concurrent with
Borrowers’ receipt of such net proceeds.”

 

6.             Restatement of Notices and
Delivery Section.  As of the Second
Amendment Effective Date, Section 10.03 of the Existing Credit Agreement
entitled “Notices and Delivery” shall be and is hereby fully amended and
restated in its entirety as follows:

 

“Section 10.03.  Notices and
Delivery.

 

a.             The Borrowers agree
that the Agent Bank may make any material delivered by the Borrowers to the
Agent Bank, as well as any amendments, waivers, consents, and other written
information, documents, instruments and other materials relating to the
Borrowers, any of their Subsidiaries or Affiliates, or any other materials or
matters relating to this Credit Agreement, the Notes or any of the transactions
contemplated hereby (collectively, the “Communications”) available to the
Lenders by posting such notices on an electronic delivery system (which may be
provided by the Agent Bank, an Affiliate of the Agent Bank, or any Person that
is not an Affiliate of the Agent Bank), such as IntraLinks, or a substantially
similar electronic system (the “Platform”) at the expense of Borrowers.  The Borrowers acknowledge that (i) the
distribution of material through an electronic medium is not necessarily secure
and that there are confidentiality and other risks associated with such
distribution, (ii) the Platform is provided “as is” and “as available” and
(iii) neither the Agent Bank nor any of its Affiliates warrants the accuracy,
completeness, timeliness, sufficiency, or sequencing of the Communications
posted on the Platform.  The Agent Bank
and its Affiliates expressly disclaim with respect to the Platform any liability
for errors in transmission, incorrect or incomplete downloading, delays in
posting or delivery, or problems accessing the Communications posted on the
Platform and any liability for any losses, costs, expenses or liabilities that
may be suffered or incurred in connection with the Platform.  No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects, is made by the Agent Bank or any of
its Affiliates in connection with the Platform. 
Borrowers agree to pay to

 

12

 

Agent Bank
annually in advance, the cost of maintaining and using the Platform.

 

b.             Each Lender agrees that notice to it (as provided
in the next sentence) (a “Notice”) specifying that any Communication has been
posted to the Platform shall for purposes of this Credit Agreement constitute
effective delivery to such Lender of such information, documents or other
materials comprising such Communication. 
Each Lender agrees (i) to notify, on or before the date such Lender
becomes a party to this Credit Agreement, the Agent Bank in writing of such
Lender’s e-mail address to which a Notice may be sent (and from time to time
thereafter to ensure that the Agent Bank has on record an effective e-mail
address for such Lender) and (ii) that any Notice may be sent to such e-mail
address.

 

c.             Notwithstanding
the foregoing, any Communications may be personally served, faxed or sent by
courier service or United States mail and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of a facsimile (or
on the next Banking Business Day if such facsimile is received on a non-Banking
Business Day or after 5:00 p.m. on a Banking Business Day) or four (4) Banking
Business Days after deposit in the United States mail (registered or certified,
with postage prepaid and properly addressed). 
Notices to Agent Bank pursuant to Articles II shall not be effective
until received by Agent Bank.

 

d.             For the purposes
hereof, the addresses of the parties hereto (until notice of a change thereof
is delivered as provided in this Section 10.03) shall be as set forth below
each party’s name on the signature pages hereof, or, as to each party, at such
other address as may be designated by such party in an Assignment and
Assumption Agreement or in a written notice to all of the other parties.  All non-electronic deliveries to be made to
Agent Bank for distribution to the Lenders shall be made to Agent Bank at the
addresses specified for notice on the signature page hereto and in addition, a
sufficient number of copies of each such delivery shall be delivered to Agent
Bank for delivery to each Lender at the address specified for deliveries on the
signature page hereto or such other address as may be designated by Agent Bank
in a written notice.

 

13

 

7.             Conditions Precedent to Second
Amendment Effective Date.  The
occurrence of the Second Amendment Effective Date is subject to Agent Bank
having received the following documents and payments, in each case in a form
and substance reasonably satisfactory to Agent Bank, and the occurrence of each
other condition precedent set forth below on or before March 31, 2006:

 

a.             Due execution by
Borrowers and Banks of five (5) duplicate originals of this Second Amendment;

 

b.             Due execution by
Borrowers of the original Revolving Credit Note (First Restated);

 

c.             An original
Certificate of Corporate Resolution for each of the Borrowers authorizing each
respective Borrower to enter into all documents and agreements to be executed
by it pursuant to this Second Amendment and further authorizing and empowering
the officer or officers who will execute such documents and agreements with the
authority and power to execute such documents and agreements on behalf of each
respective corporation;

 

d.             Borrowers shall
have executed and delivered to Agent Bank any further amendments to the
Security Documentation reasonably requested by Agent Bank for the purpose of
securing repayment of the Commitment Increase and the Bank Facilities and shall
pay the costs of the 110.5 endorsement or other applicable endorsement to the Title
Insurance Policies evidencing its continued application to the Bank Facilities,
as increased by the Commitment Increase, and to the Security Documentation;

 

e.             On the Second
Amendment Effective Date, Borrowers shall pay the Commitment Increase Fee required
in the Fee Side Letter to be retained by Agent Bank or distributed to Lenders
as determined by Agent Bank.

 

f.              Reimbursement to
Agent Bank by Borrower for all reasonable fees and out-of-pocket expenses
incurred by Agent Bank in connection with the Commitment Increase and the
Second Amendment, but not limited to, reasonable attorneys’ fees of Henderson
& Morgan, LLC and all other like expenses remaining unpaid as of the Second
Amendment Effective Date; and

 

g.             Such other
documents, instruments or conditions as may be reasonably required by Agent
Bank.

 

14

 

8.             Representations of Borrowers.  Borrowers hereby represent to the Banks,
which representations shall survive the Second Amendment Effective Date and be
deemed incorporated into Article IV of the Credit Agreement, that:

 

a.             The representations
and warranties contained in Article IV of the Existing Credit Agreement and
contained in each of the other Loan Documents (other than representations and
warranties which expressly speak only as of a different date, which shall be
true and correct in all material respects as of such date) are true and correct
on and as of the Second Amendment Effective Date in all material respects as
though such representations and warranties had been made on and as of the
Second Amendment Effective Date, except to the extent that such representations
and warranties are not true and correct as a result of a change which is
permitted by the Credit Agreement or by any other Loan Document or which has
been otherwise consented to by Agent Bank or, where applicable, the Requisite
Lenders;

 

b.             Since the date of
the most recent financial statements referred to in Section 5.08 of the
Existing Credit Agreement, no Material Adverse Change has occurred and no event
or circumstance which could reasonably be expected to result in a Material
Adverse Change has occurred;

 

c.             No event has
occurred and is continuing which constitutes a Default or Event of Default
under the terms of the Credit Agreement; and

 

d.             The execution,
delivery and performance of this Second Amendment, the Revolving Credit Note
and each of the related documents has been duly authorized by all necessary
action of Borrowers and this Second Amendment, the Revolving Credit Note and each
of the related documents constitute valid, binding and enforceable obligation
of Borrowers.

 

9.             Incorporation by Reference.  This Second Amendment shall be and is hereby
incorporated in and forms a part of the Existing Credit Agreement.

 

10.           Governing Law.  This Second Amendment to Credit Agreement
shall be governed by the internal laws of the State of Nevada without reference
to conflicts of laws principles.

 

11.           Counterparts.  This Second Amendment may be executed in any
number of separate counterparts with the same effect as if the signatures
hereto and hereby were upon the same instrument.  All such counterparts shall together
constitute one and the same document.

 

15

 

12.           Continuance of Terms and Provisions.  All of the terms and provisions of the Credit
Agreement shall remain unchanged except as specifically modified herein.

 

13.           Replacement Schedule and Exhibit
Attached.  The following replacement
Schedule and Exhibit are attached hereto and incorporated herein and made a
part of the Credit Agreement as follows:

 

	
  Schedule 2.01(a) -

  	
  Schedule of Lenders’ Proportions in Credit Facility as of Second
  Amendment Effective Date

  
	
   

  	
   

  
	
  Exhibit A -

  	
  Revolving
  Credit Note (First Restated) - Form

  

 

16

 

IN WITNESS WHEREOF, the parties
hereto have caused this Second Amendment to Fourth Amended and Restated Credit
Agreement to be executed as of the day and year first above written.

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  MTR GAMING GROUP, INC., a Delaware corporation, MOUNTAINEER
  PARK, INC., a West Virginia corporation, SPEAKEASY GAMING OF LAS VEGAS, INC.,
  a Nevada corporation, PRESQUE ISLE DOWNS, INC., a Pennsylvania corporation,
  SCIOTO DOWNS, INC., an Ohio corporation and SPEAKEASY GAMING OF FREMONT,
  INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Edson R. Arneault

  	
   

  
	
   

  	
   

  	
  Edson R. Arneault,

  
	
   

  	
   

  	
  President

  

 

S-1

 

	
   

  	
   

  	
  BANKS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WELLS FARGO BANK,

  
	
   

  	
   

  	
  National Association,

  
	
   

  	
   

  	
  Agent Bank, Lender,

  
	
   

  	
   

  	
  Swingline Lender and

  
	
   

  	
   

  	
  L/C Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Greg Rossiter

  	
   

  
	
   

  	
   

  	
   

  	
  Greg Rossiter,

  
	
   

  	
   

  	
   

  	
  Assistant Vice President

  

 

S-2

 

	
   

  	
   

  	
  NATIONAL CITY BANK OF

  
	
   

  	
   

  	
  PENNSYLVANIA,

  
	
   

  	
   

  	
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Emil Kwaczala

  	
   

  
	
   

  	
   

  	
   

  	
  Emil Kwaczala,

  
	
   

  	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  20 Stanwix Street

  
	
   

  	
   

  	
  Pittsburgh, PA 15222-4802

  
	
   

  	
   

  	
  Attn: Emil Kwaczala, VP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone: (412) 644-7727

  
	
   

  	
   

  	
  Facsimile: (412) 644-8889

  

 

S-3

 

	
   

  	
   

  	
  CIT LENDING SERVICES CORPORATION,

  
	
   

  	
   

  	
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Scott Plushay

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  	
  Scott Plushay

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
  VP

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1 CIT Drive

  
	
   

  	
   

  	
  Livingston, NJ 07039

  
	
   

  	
   

  	
  Attn: Shamik Ghosh, A.V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone: (973) 422-3826

  
	
   

  	
   

  	
  Facsimile: (973) 535-1732

  
							

 

S-4

 

	
   

  	
   

  	
  PNC BANK,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  National Association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ David G. Schaich

  	
   

  
	
   

  	
   

  	
   

  	
  David G. Schaich,

  
	
   

  	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  One PNC Plaza

  
	
   

  	
   

  	
  249 Fifth Avenue, 5th Floor

  
	
   

  	
   

  	
  Pittsburgh, PA 15222-2707

  
	
   

  	
   

  	
  Attn: David G. Schaich, V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone: (412) 762-1199

  
	
   

  	
   

  	
  Facsimile: (412) 762-4718

  

 

S-5

 

SCHEDULE OF
LENDERS’ PROPORTIONS

IN
CREDIT FACILITY

(As of Second
Amendment Effective Date)

 

	
  NAME OF LENDER

  	
   

  	
  MAXIMUM AMOUNT

  OF PRINCIPAL

  	
   

  	
  PROPORTIONATE

  SYNDICATION

  INTEREST IN CREDIT

  FACILITY

  	
   

  
	
  Wells Fargo
  Bank, National Association

  	
   

  	
  $

  	
  50,000,000.00

  	
   

  	
  47.6190476

  	
  %

  
	
  National
  City Bank of Pennsylvania

  	
   

  	
  20,000,000.00

  	
   

  	
  19.0476191

  	
  %

  
	
  CIT Lending
  Services Corporation

  	
   

  	
  20,000,000.00

  	
   

  	
  19.0476191

  	
  %

  
	
  PNC Bank,
  National Association

  	
   

  	
  15,000,000.00

  	
   

  	
  14.2857142

  	
  %

  
	
  TOTAL

  	
   

  	
  $

  	
  105,000,000.00

  	
   

  	
  100.0

  	
  %

  

 

 

SCHEDULE 2.01(a)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}]]