Exhibit 10.5

FLOATING RATE JUNIOR SUBORDINATED NOTE DUE 2035

THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND SUCH SECURITIES, AND ANY INTEREST THEREIN,
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY
SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE SECURITIES MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A UNDER THE SECURITIES ACT.

THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED, RESOLD OR
OTHERWISE TRANSFERRED ONLY (I) TO THE COMPANY, OR (II) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A “QUALIFIED PURCHASER” (AS DEFINED IN SECTION
2(a)(51) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED), AND (B) THE HOLDER
WILL NOTIFY ANY PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.

THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN
AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF SECURITIES, OR ANY INTEREST THEREIN,
IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000 AND
MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID AND OF NO LEGAL
EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY
PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST
ON SUCH SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL
BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES.

THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF
OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE
BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
(“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
“CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN
ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON

 

--------------------------------------------------------------------------------

 

INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY
INTEREST THEREIN. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST
THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF
THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR
OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER
PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO
FINANCE SUCH PURCHASE.”

PMC COMMERCIAL TRUST

Floating Rate Junior Subordinated Note due 2035

No. 1   $27,070,000

     PMC Commercial Trust, a real estate investment trust organized and existing
under the laws of Texas (hereinafter called the “Company,” which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to JPMorgan Chase Bank, National Association
not in its individual capacity, but solely as Property Trustee of PMC Preferred
Capital Trust-A, or registered assigns, the principal sum of to Twenty Seven
Million Seventy Thousand Dollars ($27,070,000) on March 30, 2035. The Company
further promises to pay interest on said principal sum from March 15, 2005, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on March 30, June 30, September 30, and December 30 of each year,
commencing June 30, 2005, or if any such day is not a Business Day, on the next
succeeding Business Day (and no interest shall accrue in respect of the amounts
whose payment is so delayed for the period from and after such Interest Payment
Date until such next succeeding Business Day), except that, if such Business Day
falls in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case, with the same force and effect
as if made on the Interest Payment Date, at a variable rate equal to LIBOR plus
3.25% per annum, together with Additional Tax Sums, if any, as provided in
Section 10.5 of the Indenture, until the principal hereof is paid or duly
provided for or made available for payment; provided, further, that any overdue
principal, premium, if any, or Additional Tax Sums and any overdue installment
of interest shall bear Additional Interest at a variable rate equal to LIBOR
plus 3.25% per annum (to the extent that the payment of such interest shall be
legally enforceable), compounded quarterly, from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand.

     The amount of interest payable shall be computed on the basis of a 360-day
year and the actual number of days elapsed in the relevant interest period. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date shall, as provided in the Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest installment. Any
such interest not so punctually paid or duly provided for shall forthwith cease

2

--------------------------------------------------------------------------------

 

to be payable to the Holder on such Regular Record Date and may either be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities not less than ten (10) days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture.

     So long as no Event of Default has occurred and is continuing, the Company
shall have the right, at any time and from time to time during the term of this
Security, to defer the payment of interest on this Security for a period of up
to twenty (20) consecutive quarterly interest payment periods (each such period,
an “Extension Period”), during which Extension Period(s), no interest shall be
due and payable (except any Additional Tax Sums that may be due and payable). No
Extension Period shall end on a date other than an Interest Payment Date, and no
Extension Period shall extend beyond the Stated Maturity of the principal of
this Security. No interest shall be due and payable during an Extension Period
(except any Additional Tax Sums that may be due and payable), except at the end
thereof, but each installment of interest that would otherwise have been due and
payable during such Extension Period shall bear Additional Interest (to the
extent payment of such interest would be legally enforceable) at a variable rate
equal to LIBOR plus 3.25% per annum, compounded quarterly, from the dates on
which amounts would have otherwise been due and payable until paid or made
available for payment. At the end of any such Extension Period, the Company
shall pay all interest then accrued and unpaid on this Security, together with
such Additional Interest. Prior to the termination of any such Extension Period,
the Company may further defer the payment of interest; provided, that (i) all
such previous and further extensions comprising such Extension Period do not
exceed twenty (20) quarterly interest payment periods, (ii) no Extension Period
shall end on a date other than an Interest Payment Date and (iii) no Extension
Period shall extend beyond the Stated Maturity of the principal of this
Security. Upon the termination of any such Extension Period and upon the payment
of all accrued and unpaid interest and any Additional Interest then due on any
Interest Payment Date, the Company may elect to begin a new Extension Period;
provided, that (i) such Extension Period does not exceed twenty (20) quarterly
interest payment periods, (ii) no Extension Period shall end on a date other
than an Interest Payment Date and (iii) no Extension Period shall extend beyond
the Stated Maturity of the principal of this Security. The Company shall give
the Holder of this Security and the Trustee written notice of its election to
begin any such Extension Period at least one Business Day prior to the next
succeeding Interest Payment Date on which interest on this Security would be
payable but for such deferral or, so long as this Security is held by the Trust,
at least one Business Day prior to the earlier of (i) the next succeeding date
on which Distributions on the Preferred Securities of PMC Preferred Capital
Trust-A would be payable but for such deferral and (ii) the date on which the
Property Trustee of such Trust is required to give notice to any securities
exchange or other applicable self-regulatory organization or to holders of such
Preferred Securities of the record date for the payment of such Distributions.

     During any such Extension Period, the Company shall not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company’s capital stock or
(ii) make any payment of principal of or any interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the

3

--------------------------------------------------------------------------------

 

Company that rank pari passu in all respects with or junior in interest to this
Security (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with (1) any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, (2) a dividend
reinvestment or stockholder stock purchase plan and (3) the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Company’s capital stock (or any capital stock of a
Subsidiary of the Company) for any class or series of the Company’s capital
stock or of any class or series of the Company’s indebtedness for any class or
series of the Company’s capital stock, (c) the purchase of fractional interests
in shares of the Company’s capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any Rights Plan, the
issuance of rights, stock or other property under any Rights Plan, or the
redemption or repurchase of rights pursuant thereto or (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock).

     Payment of principal of, premium, if any, and interest on this Security
shall be made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
Payments of principal, premium, if any, and interest due at the Maturity of this
Security shall be made at the Place of Payment upon surrender of such Securities
to the Paying Agent, and payments of interest shall be made, subject to such
surrender where applicable, by wire transfer at such place and to such account
at a banking institution in the United States as may be designated in writing to
the Paying Agent at least ten (10) Business Days prior to the date for payment
by the Person entitled thereto unless proper written transfer instructions have
not been received by the relevant record date, in which case such payments shall
be made by check mailed to the address of such Person as such address shall
appear in the Security Register. Notwithstanding the foregoing, so long as the
Holder of this Security is the Property Trustee, the payment of the principal of
(and premium, if any) and interest (including any overdue installment of
interest and Additional Tax Sums, if any) on this Security will be made at such
place and to such account as may be designated by the Property Trustee.

     The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Trustee on his or her behalf to take such actions
as may be necessary or appropriate to effectuate the subordination so provided
and (c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.

4

--------------------------------------------------------------------------------

 

     Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

5

--------------------------------------------------------------------------------

 

[REVERSE OF SECURITY]

     This Security is one of a duly authorized issue of securities of the
Company (the “Securities”) issued under the Junior Subordinated Indenture, dated
as of March 15, 2005 (the “Indenture”), between the Company and JPMorgan Chase
Bank, National Association, as Trustee (in such capacity, the “Trustee,” which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee, the holders of Senior Debt, the Holders of the
Securities and the holders of the Preferred Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered.

     All terms used in this Security that are defined in the Indenture or in the
Amended and Restated Trust Agreement, dated as of March 15, 2005 (as modified,
amended or supplemented from time to time, the “Trust Agreement”), relating to
the PMC Preferred Capital Trust-A (the “Trust”) among the Company, as Depositor,
the Trustees named therein and the Holders from time to time of the Trust
Securities issued pursuant thereto, shall have the meanings assigned to them in
the Indenture or the Trust Agreement, as the case may be.

     The Company may, on any Interest Payment Date, at its option, upon not less
than thirty (30) days’ nor more than sixty (60) days’ written notice to the
Holders of the Securities (unless a shorter notice period shall be satisfactory
to the Trustee) on or after March 30, 2010 and subject to the terms and
conditions of Article XI of the Indenture, redeem this Security in whole at any
time or in part from time to time at a Redemption Price equal to one hundred
percent (100%) of the principal amount hereof, together, in the case of any such
redemption, with accrued interest, including any Additional Interest, through
but excluding the date fixed as the Redemption Date.

     In addition, upon the occurrence and during the continuation of a Special
Event, the Company may, at its option, upon not less than thirty (30) days’ nor
more than sixty (60) days’ written notice to the Holders of the Securities
(unless a shorter notice period shall be satisfactory to the Trustee), redeem
this Security, in whole but not in part, subject to the terms and conditions of
Article XI of the Indenture at a Redemption Price equal to one hundred seven and
one half percent (107.5%) of the principal amount hereof, together, in the case
of any such redemption, with accrued interest, including any Additional
Interest, through but excluding the date fixed as the Redemption Date.

     In the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof. If less than all the Securities are
to be redeemed, the particular Securities to be redeemed shall be selected not
more than sixty (60) days prior to the Redemption Date by the Trustee from the
Outstanding Securities not previously called for redemption, by such method as
the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of a portion of the principal amount of any Security.

     The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the

6

--------------------------------------------------------------------------------

 

Outstanding Securities. The Indenture also contains provisions permitting
Holders of specified percentages in principal amount of the Securities, on
behalf of the Holders of all Securities, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

     No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium, if any, and
interest, including any Additional Interest (to the extent legally enforceable),
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is restricted to transfers to “Qualified
Purchasers” (as such term is defined in the Investment Company of 1940, as
amended), and registrable in the Securities Register, upon surrender of this
Security for registration of transfer at the office or agency of the Company
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Securities
Registrar and duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and thereupon one or more new Securities, of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

     The Securities are issuable only in registered form without coupons in
minimum denominations of $100,000 and any integral multiple of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities are exchangeable for a like aggregate principal amount of
Securities and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

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

     The Company and, by its acceptance of this Security or a beneficial
interest herein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that, for United States federal, state and
local tax purposes, it is intended that this Security constitute indebtedness.

7

--------------------------------------------------------------------------------

 

     This Security shall be construed and enforced in accordance with and
governed by the laws of the State of New York, without reference to its conflict
of laws provisions (other than Section 5-1401 of the General Obligations Law).

8

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed on this 15th day of March, 2005.

                PMC COMMERCIAL TRUST
 
       

  By:   /s/ Jan F. Salit

       

      Name: Jan F. Salit

      Title: Executive Vice President

9

--------------------------------------------------------------------------------

 

     This is one of the Securities referred to in the within-mentioned
Indenture.

     Dated:

           

  JPMORGAN CHASE BANK, National Association, not in its individual capacity, but
solely as Trustee
 
       

  By:   /s/ Maria D. Calzado

       

      Vice President

10