Form of Declaration of Trust

                                                                                          Exhibit
    4.1

    DECLARATION
      OF TRUST 

     

    This
      DECLARATION OF TRUST is made this ____ day of ______________, 2007 (this
“Declaration of Trust”), by and among (i) Community Banks, Inc., a
      Pennsylvania corporation (the “Depositor”), (ii) Wilmington Trust Company,
      a Delaware banking corporation, as trustee (“the Trustee”), and
      (iii) Donald F. Holt and V. Anthony Viozzi, each an individual,
      as administrators (each an “Administrator” and collectively, the
“Administrators”). The Depositor, the Trustee and the Administrators hereby
      agree as follows:

     

    1. The
      trust created hereby (the “Trust”) shall be known as “CMTY Capital Statutory
      Trust V,” in which name the Trustee, the Administrators or the Depositor,
      to the extent provided herein, may engage in the transactions contemplated
      hereby, make and execute contracts, and sue and be sued.

     

    2. The
      Depositor hereby assigns, transfers, conveys and sets over to the Trustee the
      sum of $10.00. The Trustee hereby acknowledges receipt of such amount in trust
      from the Depositor, which amount shall constitute the initial trust estate.
      The
      Trustee hereby declares that it will hold the trust estate in trust for the
      Depositor. It is the intention of the parties hereto that the Trust created
      hereby constitutes a statutory trust under Chapter 38 of Title 12 of the
      Delaware Code, 12 Del. C. §§ 3801, et
      seq.
      (the “Statutory Trust Act”), and that this document constitutes the governing
      instrument of the Trust. The Trustee is hereby authorized and directed to
      execute and file a certificate of trust (the “Certificate of Trust”) with the
      Delaware Secretary of the State in accordance with the provisions of the
      Statutory Trust Act.

     

    3. The
      Depositor, the Trustee and the Administrators will enter into an amended and
      restated Declaration of Trust, satisfactory to each such party, to provide
      for
      the contemplated operation of the Trust created hereby and the issuance of
      the
      Fixed/Floating Rate Capital Securities and Fixed/Floating Rate Common Securities
      referred to therein (the “Securities”). Prior to the execution and delivery of
      such amended and restated Declaration of Trust, other than (i) the filing
      of the Certificate of Trust in accordance with Section 2 herein and as
      further contemplated in Section 4 herein and (ii) entering into a
      Placement Agreement among the placement agents, the Depositor and the Trust,
      neither the Trustee nor the Administrators shall have any duty or liability
      with
      respect to the administration of the trust estate, the investment of the Trust’s
      property or the payment of dividends or other distributions of income or
      principal to the Trust’s beneficiaries, and no implied obligations shall be
      inferred from this Declaration of Trust on the part of the Trustee or the
      Administrators.

     

    (i) The
      Trustee and the Administrators accept the trusts hereby created and agree to
      perform their duties hereunder with respect to the same but only upon the terms
      of this Declaration of Trust. Neither the Trustee nor the Administrators shall
      be personally liable under any circumstances, except for their own willful
      misconduct or gross negligence. In particular, but not by way of
      limitation:

     

    (A) No
      provision of this Declaration of Trust shall require the Trustee or the
      Administrators to expend or risk their personal funds or otherwise incur any
      financial liability in the performance of their rights or duties hereunder,
      if
      the Trustee or any Administrator shall have reasonable grounds for believing
      that repayment of such funds or adequate indemnity against such risk or
      liability is not reasonably assured or provided to it;

     

    (B) Under
      no circumstance shall the Trustee or the Administrators be personally liable
      for
      any representation, warranty, covenant or indebtedness of the
      Trust;

     

    (C) Neither
      the Trustee nor the Administrators shall have liability for their action or
      inaction taken in good faith;

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    (D) All
      funds deposited with the Trustee hereunder may be held in a non-interest bearing
      trust account and the Trustee shall not be liable for any interest thereon;
      and

     

    (E) To
      the extent that, at law or in equity, the Trustee or the Administrators have
      duties and liabilities relating thereto to the Trust, such duties and
      liabilities are replaced by the terms of this Declaration of Trust.

     

    (ii) Notwithstanding
      anything contained herein to the contrary, the Trustee shall not be required
      to
      take any action in any jurisdiction other than the State of Delaware if the
      taking of such action will (i) require the consent or approval or
      authorization or order of or the giving of notice to, or the registration with
      or the taking of any other action in respect of, any state or other governmental
      authority or agency of any jurisdiction other than, in the case of the Trustee,
      the State of Delaware, (ii) result in any fee, tax or other governmental
      charge under the laws of any jurisdiction or any political subdivision thereof
      in existence becoming payable by Wilmington Trust Company, or (iii) subject
      Wilmington Trust Company to personal jurisdiction in any jurisdiction other
      than
      the State of Delaware for causes of action arising from acts unrelated to the
      consummation of the transactions by the Trustee contemplated
      hereby.

     

    (iii) Except
      as expressly provided in this Section 3, in accepting and performing the
      trusts hereby created, the Trustee acts solely as Trustee hereunder and not
      in
      its individual capacity, and all persons having any claim against the Trustee
      by
      reason of the transactions contemplated by this Declaration of Trust shall
      look
      only to the Trust’s property for payment or satisfaction thereof.

     

    (iv) The
      Trustee may resign without cause at any time so long as Trustee provides the
      Depositor and the Administrators at least thirty days’ prior written notice of
      such resignation. If no successor has been appointed within such thirty day
      period, the Trustee may, at the expense of the Trust, petition a court of
      competent jurisdiction to appoint a successor trustee.

     

    4. The
      Depositor, the Administrators and the Trustee hereby authorize and direct the
      Depositor, as the sponsor of the Trust, to file and execute on behalf of the
      Trust such applications, reports, surety bonds, irrevocable consents,
      appointments of attorney for service of process and other papers and documents
      as shall be necessary or desirable to register the Securities under the
      securities or blue sky laws of such jurisdictions as the Depositor, on behalf
      of
      the Trust, may deem necessary or desirable. In the event that any filing
      referred to above is required by the rules and regulations of the state
      securities or blue sky laws to be executed on behalf of the Trust by one or
      more
      of the Administrators, each of the Administrators, in its or his capacity as
      an
      Administrator of the Trust, is hereby authorized and, to the extent so required,
      directed to join in any such filing and to execute on behalf of the Trust any
      and all of the foregoing, it being understood that Wilmington Trust Company
      in
      its capacity as a Trustee of the Trust shall not be required to join in any
      such
      filing or execute on behalf of the Trust any such documents unless required
      by
      the rules and regulations of the state securities or blue sky laws. In
      connection with the filings referred to above, the Depositor and Donald F.
      Holt and V. Anthony Viozzi, each as Administrator and not in their
      individual capacities, hereby constitute and appoint Donald F. Holt and
      V. Anthony Viozzi and each of them, as its true and lawful
      attorneys-in-fact and agents, with full power of substitution and
      resubstitution, for the Depositor or such Administrator or in the Depositor’s or
      such Administrator’s name, place and stead, in any and all capacities, to sign
      any and all documents with the administrators of the state securities or blue
      sky laws, granting unto said attorneys-in-fact and agents full power and
      authority to do and perform each and every act and thing requisite and necessary
      to be done in connection therewith, as fully to all intents and purposes as
      the
      Depositor or such Administrator might or could do in person, hereby ratifying
      and confirming all that said attorneys-in-fact and agents or any of them, or
      their respective substitute or substitutes, shall do or cause to be done by
      virtue hereof.

     


    
      
        
        

      

      
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    5. The
      Administrators hereby authorize and direct the Depositor to negotiate the
      placement agreement, to be entered into among the Trust, the Depositor and
      the
      placement agents therein relating to the sale and issuance of the Securities,
      on
      behalf of the Trust.

     

    6. This
      Declaration of Trust may be executed in one or more counterparts.

     

    7. The
      number of Administrators initially shall be two and thereafter the number of
      Administrators shall be such number as shall be fixed from time to time by
      a
      written instrument signed by the Depositor which may increase or decrease the
      number of Administrators. Subject to the foregoing, the Depositor is entitled
      to
      appoint or remove without cause any Administrator or the Trustee at any time.
      The Trustee or any Administrator may resign upon 30 days’ prior written notice
      to the Depositor.

     

    8. This
      Declaration of Trust shall be governed by, and construed in accordance with,
      the
      laws of the State of Delaware (without regard to conflict of laws
      principles).

     

    Signatures
      appear on the following page

     


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Declaration of Trust to
      be
      duly executed as of the day and year first above written.

     

    WILMINGTON
      TRUST COMPANY,

    as
      Trustee

    


    


    By:_______________________________

    


    Print
      Name:_________________________ 

     

    Title:______________________________ 

    


    


    COMMUNITY
      BANKS, INC.,
      as Depositor

    


    


    By:________________________________ 

    


    Print
      Name:__________________________ 

     

    Title:_______________________________ 

    


    


    ADMINISTRATORS
      OF CMTY
      CAPITAL STATUTORY TRUST V

    


    


    By:________________________________ 

    DONALD
      F. HOLT, as Administrator

    


    


    By:_________________________________ 

    V.
      ANTHONY VIOZZI, as Administrator

    


    


    
      
        
        

      

      
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