Document:

WARRANT AGREEMENT

                  WARRANT  AGREEMENT  dated  October 7, 1988,  between  COMMERCE
BANK/HARRISBURG,  a Pennsylvania  banking  corporation  (hereinafter  called the
"Bank") as its own Warrant  Agent,  and  COMMERCE  BANCORP,  INC.,  a New Jersey
business corporation (hereinafter called "Commerce").

                  WHEREAS,  the  Bank  proposes  to issue  and sell to  Commerce
40,000 shares of a new class of Bank  non-cumulative  preferred stock, par value
$10.00 per share (the  "Preferred  Stock")  and  warrants  (the  "Warrants")  to
purchase in the aggregate  40,000  shares of the Bank's common stock,  par value
$6.25 per share (the "Common Stock"); and

                  WHEREAS,  the Preferred  Stock will be issued as a certificate
for  Preferred  Stock ("Stock  Certificate")  legended as set forth in Section 4
hereof to indicate  that as legended the  Warrants  will only be  redeemable  in
whole  and not in part with the  Preferred  Stock  and that  until the  Warrants
become  exercisable  they may only be  transferred  in tandem with the Preferred
Stock, and the Warrants will be represented by a Warrant  Certificate  ("Warrant
Certificate")  issued  hereunder which will also indicate that the Warrants will
only be redeemable in whole and in part with the Preferred  Stock and that until
the Warrants become  exercisable they may only be transferred in tandem with the
Preferred Stock; and

                  WHEREAS,   the  Bank  desires  to  set  forth  the  terms  and
conditions of the issuance,  registration,  transfer,  exchange,  redemption and
exercise of Warrants.

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
agreements  herein set  forth,  and  intending  to be  legally  bound  hereby to
Commerce and any of the future holders of the Warrants, the Bank agrees:

                  1.       Warrants and Form of Warrant Certificates.

                           A. The text of the Warrant Certificate and of the
form of election to exercise Warrants and purchase shares of Common Stock
thereunder shall be substantially in the form as set forth in Exhibit A attached
hereto which text is hereby incorporated in this Agreement by reference as
though fully set forth herein.

                           B. Each Warrant shall entitle the registered holder
of the Warrant Certificate representing such Warrant, subject to the provisions
of this Agreement, to purchase, upon the exercise thereof, one fully paid and
non-assessable share of Common Stock at the Warrant Price specified in Section
9. The per share Warrant Price and the number of shares issuable upon exercise
of a Warrant are subject to adjustment upon the occurrence of certain events,
all as hereinafter provided.

<PAGE>

                           C. Each Warrant Certificate shall be executed on
behalf of the Bank by the manual signature of the present or any future Chairman
of the Board, President or Vice President of the Bank, and attested by the
manual signature of the present or any future Secretary or Assistant Secretary
of the Bank.

                  2.       Countersignature and Registration.

                           A. The Bank shall maintain a book (the "Warrant
Register") for the transfer and registration of Warrants. The Warrant
Certificate shall be issued in registered form only. Until the Warrants become
exercisable as provided in this Agreement, the Bank shall initially issue and
register the Warrants in the name of the registered holder(s) of the Preferred
Stock in such denominations and otherwise in accordance with the written order
of the registered owner of the Preferred Stock, signed by the Chairman of the
Board, President or any Vice President and the Secretary or Assistant Secretary
of the Bank and deliver Warrant Certificates evidencing the same. If and when
the Warrants become exercisable as provided in this Agreement, the Bank shall at
all times issue and register the Warrants in the Warrant Registry in the name of
the registered holder(s) thereof in such denominations and otherwise in
accordance with the written order of the registered owner thereof, signed by the
Chairman of the Board, President or any Vice President and the Secretary or
Assistant Secretary of the Bank and deliver Warrant Certificates evidencing the
same. Each Warrant Certificate shall be dated the date of its signature.

                           B. Prior to due presentment for registration of
transfer of any Warrant Certificate, the Bank may deem and treat the person in
whose name such Warrant Certificate shall be registered upon the Warrant
Register (the "registered holder") as the absolute owner of such Warrant
Certificate and of each Warrant represented thereby (notwithstanding any
notation of ownership or other writing on the Warrant Certificate made by anyone
other than the Bank), for the purpose of any exercise thereof, or any
distribution to the holder thereof, and for all other purposes, the Bank shall
not be affected by any notice to the contrary.

                  3.       Transfers and Exchanges.

                           A. Subject to the provisions of this Agreement
(including specifically, but not limited to, Section 19 hereof) and the
provisions of Section 9 of that certain Stock and Warrant Purchase Agreement
dated as of April 29, 1988 by and between the Bank and Commerce, the Bank shall
transfer, from time to time, any outstanding Warrants upon the Warrant Register,
upon presentation of the following: (1) the Warrant Certificate representing the
Warrants to be transferred, properly endorsed and accompanied by appropriate
instructions for transfer; and (2) payment, in cash or by check, bank draft or
postal or express money order payable to the order of the Bank, in United States
currency, of an amount equal to any stamp or other tax or government charge
required to be paid in connection with the transfer thereof. The proposed
transferee of the Warrants shall provide such information and shall execute such
other documents as the Bank shall reasonably request in connection with such
transfer. Upon any such

                                        2

<PAGE>

transfer,  a new  Warrant  Certificate  or  Certificates  representing  an equal
aggregate  number  of  Warrants  shall  be  issued  to the  transferee  and  the
surrendered Warrant Certificate shall be cancelled.

                           B. Warrant Certificates may be surrendered to the
Bank, together with a written, request for exchange, and thereupon the Bank
shall issue in exchange therefor one or more new Warrant Certificates as
requested by the registered holder of the Warrant Certificate or Certificates so
surrendered, representing an equal aggregate number of Warrants.

                           C. The Bank shall not be required to effect any
registration of an original issuance transfer or exchange which will result in
the issuance of a Warrant Certificate for a fraction of a Warrant.

                           D. No service charge shall be made by any exchange or
registration of transfer of Warrant Certificates.

                  4.       Redemptions and Transfers with Preferred Stock.

                           A. The right to receive Preferred Stock and Warrants
shall be evidenced only by a legended Stock Certificate and Warrant Certificate
which, prior to a "change in control" of the Bank (as defined in Section 5
hereof) may be combined, exchanged, redeemed or transferred upon the records of
the Bank as transfer agent ("Transfer Agent"), only as a unit, and the right to
receive the Warrants may not be split up, combined, redeemed, exchanged or
transferred separately from the Preferred Stock. On and after a "change in
control" of the Bank shall have occurred, Warrants, subject to the provisions of
this Agreement and the provisions of Section 9 of that certain Stock and Warrant
Purchase Agreement dated as of April 29, 1988 by and between the Bank and
Commerce, may be combined, exchanged, or transferred upon the records of the
Bank as Transfer Agent separately from the Preferred Stock and the right to
receive the Warrants may be split up, combined, exchanged, or transferred
separately from the Preferred Stock; provided, however, that regardless of
whether or not a "change in control" of the Bank shall have occurred the
Preferred Stock and Warrants may not be redeemed separately. Each such Stock
Certificate shall bear a legend in the following form:

                  "Prior to a "change  in  control"  of the Bank (as  defined in
                  that certain  Warrant  Agreement  dated October 7, 1988 by and
                  between the Bank and Commerce  Bancorp,  Inc.),  each share of
                  Preferred  Stock,  par  value  $10.00  per  share  ("Preferred
                  Stock"), evidenced hereby may be combined, exchanged, redeemed
                  or transferred  only with one Common Stock Purchase Warrant to
                  purchase  one share of Common  Stock and the right to  receive
                  Preferred  Stock and warrants  may not be split up,  combined,
                  exchanged,  redeemed or transferred separately.  On or after a
                  "change in  control"  of the Bank shall have  occurred  Common
                  Stock Purchase Warrants may

                                        3

<PAGE>
                  be split up,  combined,  exchanged or  transferred  separately
                  from the Preferred Stock;  provided,  however, that regardless
                  of whether or not a "change in control" of the Bank shall have
                  occurred  the  Preferred   Stock  and  Common  Stock  Purchase
                  Warrants may not be redeemed  separately."  The Bank will give
                  all Warrant holders prompt written notice of when a "change in
                  control" of the Bank has occurred.

                  5.       Duration and Exercise of Warrants.

                           A. Subject to the provisions of this Agreement
(including specifically, but not limited to, Section 19 hereof), each registered
holder of one or more Warrants shall have the right to purchase from the Bank
(and the Bank shall issue and sell to such registered holder) after a "change in
control" of the Bank (as hereinafter defined) shall have occurred and prior to
the Expiration Date (as hereinafter defined) the number of shares of Common
Stock to which the Warrants represented by such Warrant Certificates are at the
time entitled hereunder.

                           B. For purposes of this Agreement, a "change in
control" of the Bank shall have been deemed to conclusively occur when any of
the following events shall have occurred without prior written consent of the
registered holders of Warrant Certificates representing no less than a majority
of the Warrants:

                                (1) a change in at least four members of the
Bank's Board of Directors or the addition of four or more new members to the
Bank's Board of Directors or any combination of the foregoing, within any two
calendar year period; or

                                (2) a person or group acting in concert as
described in section 13(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (other than a bank or bank holding company as defined in
the Federal Bank Holding Company Act of 1956, as amended) proposes to hold or
acquire beneficial ownership within the meaning of Rule 13(d)(3) promulgated
under the Exchange Act of a number of voting shares of the Bank which
constitutes either (i) more than twenty-five percent of the Bank's outstanding
voting shares or more than ten percent of the Bank's outstanding voting shares
if immediately after such acquisition no other person will own a greater
proportion of the Bank's outstanding voting shares or (ii) more than ten percent
of the Bank's outstanding voting shares, if any of the Bank's voting shares are
subject to the registration requirements of Section 12 of the Exchange Act.

                                (3) a bank or bank holding company (other than
the Acquirer and its subsidiaries) as defined in the Federal Bank Holding
Company Act of 1956, as amended, proposes, either directly or indirectly, (i) to
hold or acquire beneficial ownership within the meaning of Rule 13(d)(3)
promulgated under the Exchange Act of a number of voting shares of the Bank
which constitutes more than five percent of the Bank's outstanding voting
shares, (ii) to acquire all or substantially all of the assets of the Bank or
(iii) to merge or consolidate with the

                                        4

<PAGE>
Bank,  including a merger  through  the  purchase  of assets and  assumption  of
liabilities.  For  purposes  of  subparagraph  (2) of this  Section 5B. the term
"proposes  to hold or  acquire"  and for  purposes of  subparagraph  (3) of this
Section 5B.,  the term  "proposes,  either  directly or  indirectly,  to hold or
acquire or to merge" shall mean when a person or group acting in concert has (A)
the right to acquire or merge (whether such right is exercisable  immediately or
only after the passage of time or upon the receipt of such regulatory  approvals
as is required by  applicable  law)  pursuant to an  agreement,  arrangement  or
understanding  (whether or not in writing) or upon the exercise or conversion of
rights, exchange rights, warrants or options or otherwise;  (B) commenced tender
or exchange  offer with respect to the voting  shares of the Bank or  securities
convertible or exchangeable  into voting shares of the Bank; or (C) the right to
vote pursuant to any agreement,  arrangement or understanding (whether or not in
writing);  provided, however, that such person or group acting in concert, shall
not be deemed to have  acquired  such shares if the  agreement,  arrangement  or
understanding  to vote such  securities  arises  solely from a  revocable  proxy
either (i) given in  response  to a public  proxy or consent  solicitation  made
pursuant to, and in accordance with, the applicable rules and regulations of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and is not also
then  reportable  on Schedule 13D under the Exchange  Act or any  comparable  or
successor  report or (ii) given in response  to a proxy or consent  solicitation
made in connection with the Bank's annual meeting of  shareholders  and in which
the only matter to be voted on is the election of the Bank's Board of Directors.

                           C. The Warrants may be exercised in accordance with
their terms at any time after a "change in control" of the Bank shall have
occurred and will expire unless sooner redeemed as provided in Section 9 hereof,
at 5:00 p.m. New York time on October 7, 2008 (the "Expiration Date"). Each
Warrant not exercised during said period shall become void and all rights
thereunder and all rights in respect thereof under this Agreement shall cease at
the end of such period.

                           D. Subject to the provisions of this Agreement
(including specifically, but not limited to, Section 19 hereof), each registered
holder of Warrants shall have the right to purchase from the Bank (and the Bank
shall issue and sell to such registered holder of Warrants) the whole number of
fully paid and non-assessable shares of Common Stock specified in such Warrants
(subject to adjustment as provided in this Agreement), free of all preemptive
rights of stockholders, upon surrender to the Bank at its principal office in
the Township of East Pennsboro, Pennsylvania of the certificate representing
such Warrant, with the form of election to purchase duly filed in and signed,
and upon payment to the Bank of the full Warrant Price, determined in accordance
with the provisions of Section 9 of this Agreement, for each share of Common
Stock as to which the Warrant is exercised. Payment of such Warrant Price shall
be made in either (i) cash, or by check, bank draft or postal or express money
order, payable in United States currency, to the order of the Bank or (ii)
certificates representing shares of Preferred Stock which will be valued at the
greater of $25 per share or such other price per share as is mutually agreed to
between the Bank and the registered holder of the Warrant which is being
exercised or (iii) any combination of cash and shares of Preferred Stock valued
as provided

                                        5

<PAGE>

in clause (ii),  at the  principal  office of the Bank.  Upon such  surrender of
Warrant  Certificates  and payment of the Warrant Price as  aforesaid,  the Bank
shall issue and cause to be delivered  with all  reasonable  dispatch to or upon
the written order of the registered  holder of such Warrants and in such name or
names as such registered holder may designate, a certificate or certificates for
the number of full shares of Common Stock so purchased upon the exercise of such
Warrants subject to Section 10 of this Agreement in respect to any fraction of a
share of Common Stock otherwise issuable upon the surrender.

                           E. Certificate or certificates representing shares of
Common Stock shall be deemed to have been issued and any person so designated to
be named therein shall be deemed to have become a holder of record of such
shares as of the date of the surrender of such Warrants and payment of the
Warrant Price; provided, however, that if, at the date of surrender of such
Warrants and payment of the Warrant Price, the transfer books for the Common
Stock or other class of stock purchasable upon the exercise of such Warrants
shall be closed, the certificates for the shares in respect of which such
Warrants are then exercised shall be issuable as of the date on which such books
shall next be opened and until such date the Bank shall be under no duty to
deliver any certificate for such shares and any person named in such certificate
shall not be deemed to have become a holder of record of such shares.

                           F. The rights of purchase represented by the Warrants
shall be exercisable, at the election of the registered holders thereof, either
as an entirety or from time to time for part only (in whole shares) of the
number of shares of Common Stock specified therein and, in the event that any
Warrant is exercised in respect of less than all the shares specified therein at
any time after a "change in control" of the Bank shall have occurred and prior
to the Expiration Date, a new Warrant Certificate or Certificates will be issued
to such registered holder for the remaining number of shares specified in the
Warrant Certificates so surrendered.

                           G. The required to be reserved require, in the
opinion state law or applicable Bank covenants that if any Common Stock for
purposes of exercise of Warrants of its counsel, under any Federal or governing
rule or regulation of any national securities exchange or automated quotation
system, registration with or approval of any governmental authority, or listing
on any such national securities exchange or automated quotation system before
such shares may be issued upon exercise, the Bank will in good faith and as
expeditiously as possible endeavor to cause such shares to be duly registered,
approved or listed on the relevant national securities exchange or automated
quotation system, as the case may be.

                  6. Payment of Taxes. The Bank will pay all documentary stamp
taxes attributable to the initial issuance of shares of Common Stock issuable
upon the exercise of Warrants.

                  7. Mutilated or Missing Warrants. In case any of the Warrant
Certificates shall be mutilated, lost, stolen or destroyed, the Bank shall issue
and deliver in exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and

                                        6

<PAGE>
substitution  for the  Warrant  Certificate  lost,  stolen or  destroyed,  a new
Warrant  Certificate  of like  tenor and  representing  an  equivalent  right or
interest;  but only upon  receipt of evidence  satisfactory  to the Bank of such
loss, theft or destruction of such Warrant Certificate.

                  8. Reservation of Common Stock,  etc. There has been reserved,
and the  Bank  shall at all  times  keep  reserved,  out of the  authorized  and
unissued  shares of Common Stock, a number of shares of Common Stock  sufficient
to  provide  for the  exercise  of the  rights of  purchase  represented  by the
Warrants,  and the Transfer  Agent (if other than the Bank) for the Common Stock
and every  subsequent  Transfer Agent for any shares of the Bank's capital stock
issuable upon the exercise of any of the rights of purchase aforesaid are hereby
irrevocably  authorized  and  directed  at all times to reserve  such  number of
authorized and unissued shares as shall be requisite for such purpose.  The Bank
will  keep a copy of this  Agreement  on file  with the  Transfer  Agent for the
Common  Stock and with  every  subsequent  Transfer  Agent for any shares of the
Bank's  capital  stock  issuable  upon the  exercise  of the rights of  purchase
represented  by  the  Warrants.  All  Warrant  Certificates  surrendered  in the
exercise of the rights thereby  evidenced  shall be cancelled and such cancelled
Warrant Certificates, with the forms of election to purchase on the reverse side
thereof duly filled in an signed,  shall constitute  sufficient  evidence of the
number of shares of Common  Stock which have been  issued  upon the  exercise of
such warrants.

                  9. Warrant Price; Adjustments; Redemption.

                           A. The Warrant Price at which Common Stock shall be
purchasable upon exercise of warrants shall be, from the date a "change in
control" of the Bank shall have occurred until the Expiration Date, $25.00 per
share of Common Stock, or if adjusted or changed as provided in this Section,
shall be such price as so adjusted or changed ("Warrant Price").

                           B. The Warrant Price and the number of shares
issuable upon exercise or redemption of the Warrants shall be subject to
adjustments as follows:

                                (1) In case the Bank shall (i) pay a dividend in
Common Stock or make a distribution in Common Stock, (ii) subdivide its
outstanding Common Stock, (iii) combine its outstanding Common Stock into a
smaller number of Common Stock or (iv) issue, by reclassification of its Common
Stock, other securities of the Bank (including any such reclassification in
connection with a consolidation or merger in which the Bank is the surviving
corporation), the number of ,shares of Common Stock purchasable upon exercise of
each Warrant immediately prior thereto shall be adjusted so that the holder of
each Warrant shall be entitled to receive the kind and number of shares of
Common Stock or other securities of the Bank which it would have owned or have
been entitled to receive after the happening of any of the events described
above, had such Warrants been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made pursuant
to this subparagraph (1) shall become effective immediately after the effective
date of such event retroactive to the record date, if any, for such event. Such
adjustment shall be made successively whenever any event listed above shall
occur.

                                        7

<PAGE>

                                (2) In case the Bank shall issue rights, options
or warrants to all holders of its outstanding Common Stock, entitling them to
subscribe for or purchase Common Stock at a price per share which is lower at
the record date mentioned below than the then current market price per share of
Common Stock (as defined in subparagraph (7) below), the number of shares of
Common Stock thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of shares of Common Stock theretofore
purchasable upon exercise of each Warrant by a fraction, of which the numerator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights, options or warrants plus, the number of additional
shares of Common Stock offered for subscription or purchase, and of which the
denominator shall be the number of Shares of Common Stock outstanding on the
date of issuance of such rights, options or warrants plus the number of shares
which could be purchased at the current market price per share of Common Stock
at such record date with: (i) the aggregate purchase price of the total number
of shares of Common Stock so offered for subscription or purchase, plus (ii) any
consideration received by the Bank for such rights, options or warrants. Such
adjustment shall be made whenever such rights, options or warrants are issued,
and shall become effective immediately after the record date for the determi
nation of stockholders entitled to receive such rights, options or warrants.

                                (3) In case the Bank shall distribute to all
holders of its Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Bank is the continuing corporation)
evidences of its indebtedness or assets (excluding cash dividends or
distributions payable out of consolidated earnings or earned surplus and
dividends or distributions referred to in subparagraph (1) above or in the
paragraph immediately following this paragraph) or rights, options or warrants,
or convertible or exchangeable securities containing the right to subscribe for
or purchase Common Stock (excluding those referred to in and subparagraph (2)
above), then in each case the number of shares of Common Stock thereafter
purchasable upon the exercise of each Warrant shall be determined by multiplying
the number of shares of Common Stock theretofore purchasable upon the exercise
of each Warrant by a fraction, of which the numerator shall be the then current
market price per share of Common Stock (as defined in subparagraph (7) below) on
the date of such distribution, and of which the denominator shall be the then
current market price per share of Common Stock, less the then fair market value
of the portion of the assets or evidences of indebtedness so distributed or of
such subscription rights, options or warrants, or of such convertible or
exchangeable securities applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made, and shall become effective
on the date of distribution retroactive to the record date for the determination
of stockholders entitled to receive such distribution.

                                In the event of a distribution by the Bank to
all holders of its shares of Common Stock of a subsidiary or securities
convertible into or exercisable for such stock, then in lieu of an adjustment in
the number of shares of Common Stock purchasable upon the exercise of each
Warrant, the holder of each Warrant, upon the exercise thereof at any time after
such distribution, shall be entitled to receive from the Bank, such subsidiary
or both, as the Bank shall

                                        8

<PAGE>
determine,  the stock or other  securities  to which such holder would have been
entitled if such holder had exercised such Warrants  immediately  prior thereto,
all  subject to further  adjustment  as provided  in this  section 9;  provided,
however,  that no  adjustment  in respect of cash  dividends or interest on such
stock or other securities shall be made during the term of a Warrant or upon the
exercise of a Warrant.

                                (4) In case the Bank shall issue shares of
Common Stock (excluding shares issued (i) in any of the transactions described
in subparagraph (1) above, (ii) upon conversion or exchange of other securities
convertible into or exchangeable for shares of Common Stock, (iii) to the Bank's
employees under bona fide stock option or employee benefit plans or incentive
arrangements adopted or approved by the Bank's Board of Directors, if such
shares would otherwise be included in this subparagraph (4) (but only to the
extent that the aggregate number of shares excluded hereby and issued after the
date hereof, shall not exceed 10% of the Bank's shares of Common Stock
outstanding at the time of any issuance), (iv) upon exercise of the Warrants or
the warrants or options issued prior to the date hereof, or (v) as consideration
to shareholders of another corporation when any such corporation is acquired,
merged into or becomes part of the Bank or a subsidiary of the Bank in n arm's
length transaction between the Bank and an unaffiliated third party in
proportion to their stockholdings of such corporation immediately prior to such
transaction, upon such transaction), for a consideration per share less than the
current market price per share (as defined in subparagraph (7) below) on the
date the Bank fixes the offering price of such additional shares, then in each
case the number of shares of Common Stock thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number of shares
of Common Stock theretofore purchasable by a fraction, of which the numerator
shall be the number 'of shares of Common Stock outstanding immediately after the
issuance of such additional shares, and of which the denominator shall be the
total number of shares of Common Stock outstanding immediately prior to the
issuance of such additional shares plus the number of shares of Common Stock
which the aggregate consideration received (determined as provided in
subparagraph (6) below) for the issuance of such additional shares would
purchase at such then current market price per share of Common Stock. Such
adjustment shall be made successively whenever such an issuance is made.

                                (5) In case the Bank shall issue any securities
convertible into or exchangeable for its shares of Common Stock (excluding
securities; issued in transactions described above) for a consideration per
share of Common Stock initially deliverable upon conversion or exchange of such
securities (determined as provided in subparagraph (6) below) less than the
current market price per share (as defined in subparagraph (7) below) in effect
immediately prior to the issuance of such securities, then in each case the
number of shares of Common Stock thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number of shares of Common
Stock theretofore purchasable by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding immediately prior to such issuance
plus the maximum number of shares of Common Stock of the Bank deliverable upon
conversion of or in exchange for such securities at the initial conversion or
exchange price or rate, and of which the denominator shall be the number of
shares of Common

                                        9

<PAGE>

Stock outstanding  immediately prior to the issuance of such securities plus the
number of shares of Common Stock which the aggregate  consideration  received or
to be  received  (determined  as provided  in  subparagraph  (6) below) for such
securities  would purchase at such then current market price per share of Common
Stock. Such adjustment shall be made  successively  whenever such an issuance is
made.

                           (6) For purposes of any computation respecting
consideration received pursuant to subparagraphs (4) and (5) above, the
following shall apply:

                                (i) in the case of the issuance of shares of
Common Stock for cash, the consideration shall be the amount of such cash,
provided that in no case shall any deduction be made for any commissions,
discounts or other expenses incurred by the Bank for any underwriting of the
issue or otherwise in connection therewith;

                                (ii) in the case of the issuance of shares of
Common Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market value
thereof; and

                                (iii) in the case of the issuance of securities
convertible into or exchangeable for shares of Common Stock, the aggregate
consideration received therefor shall be deemed to be the consideration received
by the Bank for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Bank upon the conversion or
exchange thereof (the consideration in each case to be determined in the same
manner as provided in clauses (i) and (ii) of this subparagraph (6)).

                           (7) For the purpose of any computation under
subparagraphs (2), (3), (4) and (5) of this Section 9, the then current market
price per share of Common Stock at any date shall be the average of the daily
closing prices for twenty consecutive trading days commencing five trading days
before the date of such computation. The daily closing price shall be the last
such reported sales price regular way or, in case no such reported sale takes
place on such day, the average of the closing bid and asked prices regular way
for such day, in each case on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or, if not
listed or admitted to trading, the average of the closing bid and asked prices
of the shares of Common Stock in the over-the-counter market as reported by
NASDAQ or the last sale price of the shares of Common Stock as quoted in the
NASDAQ National Market System or any comparable system, or if not approved for
quotation on NASDAQ or any comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Bank for that
purpose.

                           (8) Whenever the number of shares of Common Stock
purchasable upon the exercise of each Warrant is adjusted, as herein provided,
the Warrant Price payable upon exercise of each Warrant shall be adjusted by
multiplying such Warrant Price

                                       10

<PAGE>

immediately prior to such adjustment by a fraction, of which the numerator shall
be the number of shares of Common  Stock  purchasable  upon the exercise of each
Warrant immediately prior to such adjustment, and of which the denominator shall
be the number of shares of Common Stock purchasable immediately thereafter.

                           (9) No adjustment in the number of Shares of Common
Stock purchasable upon the exercise of each Warrant need be made under
subparagraphs (2) and (3) if the Bank issues or distributes to each holder of
Warrants the rights, options, warrants or convertible or exchangeable
securities, or evidences of indebtedness or assets referred to in those
subparagraphs which each holder of Warrants would have been entitled to receive
had the Warrants been exercised immediately prior to the happening of such event
or the record date with respect thereto. No adjustment need be made for a change
in the par value of the shares of Common Stock.

                           (10) No adjustment in the number of shares of Common
Stock purchasable hereunder shall be required unless such adjustment would
require an increase or decrease of at least one percent in the number of shares
of Common Stock purchasable upon the exercise of each Warrant; provided,
however, that any adjustments which by reason of this subparagraph (10) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest
one-thousandth of a share.

                           (11) If any capital reorganization or
reclassification of the capital stock of the Bank, or consolidation or merger of
the Bank with or into another corporation, or the sale of all or substantially
all of its assets to another corporation shall be effected, then, as a condition
of such reorganization, reclassification, consolidation, merger or sale, lawful
and adequate provision shall be made whereby the holder of each Warrant then
outstanding shall thereafter have the right to purchase and receive on exercise
of such Warrant upon the basis and upon the terms and conditions specified in
this Agreement and in lieu of the shares of the Common fore purchasable and
Warrant, such shares Stock of the Bank immediately thereto receivable upon the
exercise of such of stock, securities or assets as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such Common Stock immediately theretofore
purchasable and receivable upon the exercise of such Warrant had such
reorganization, reclassification, consolidation, merger or sale not taken place,
and in any such case appropriate provision shall be made with respect to the
rights and interests of the registered holders of the Warrants to the end that
the provisions of this Agreement (including, without limitation, provision for
adjustment of the Warrant Price or the Redemption Price (as hereinafter
defined), and of the number of shares issuable upon the exercise of Warrants)
shall thereafter be applicable as nearly as may be in relation to any shares of
stock, securities, or assets thereafter deliverable upon exercise of Warrants.
The Bank shall not effect any such consolidation, merger or sale, unless, prior
to or simultaneously with the consummation thereof, the successor corporation
(if other than the Bank) resulting from such consolidation or merger or the
corporation purchasing such assets

                                       11

<PAGE>

shall assume, by written instrument,  the obligation to deliver to the holder of
each Warrant such shares of stock,  securities or assets as, in accordance  with
the foregoing provisions, such holders may be entitled to purchase.

                           C. The Bank shall have the option to redeem all but
not less than all of the Warrants at any time in accordance with the provisions
of this Paragraph C, on or after January 1, 1990 until the Expiration Date at a
redemption price equal to the positive difference, if any, between the "current
market price" of the Common Stock (as defined in subparagraph B.(7) hereof) and
the Warrant Price ("Redemption Price") or, if adjusted as provided in paragraph
D of this Section 9, such price as so adjusted. The Warrants may not be redeemed
by the Bank prior to January 1, 1990. The Warrants may not be redeemed except in
conjunction with the redemption of all of the Preferred Stock. For the purpose
of this paragraph C, the following provisions, inclusive, shall also be
applicable:

                                (1) The election of the Bank to redeem Warrants
shall be evidenced by a resolution of the Bank's Board of Directors, certified
by the Secretary or any Assistant Secretary of the Bank. Such resolution shall
specify that all of the Warrants are to be redeemed and the date on which the
Warrants are to be redeemed (such date being hereinafter called the "Redemption
Date"). The Bank may not elect to redeem less than all Warrants then
outstanding. The Redemption Date shall in all cases correspond to the redemption
date for the Preferred Stock.

                                (2) The Bank shall together with the redemption
notice for the Preferred Stock, not less than thirty days nor more than sixty
days prior to the Redemption Date, mail a copy of the Notice of Redemption by
first class mail, postage prepaid, to each registered holder of a Warrant. The
notice shall provide:

                                (i) the Redemption Date;

                                (ii) the Redemption Price;

                                (iii) that all then outstanding Warrants are to
be redeemed,

                                (iv) that on the Redemption Date the Redemption
Price will become due and payable upon presentation and surrender of the Warrant
Certificates evidencing such Warrants,

                                (v) the Warrant Price then in effect and the
date on which the right to exercise such Warrants will expire (assuming the
Warrants are then exercisable),the Redemption Date, the Redemption Price, that
all then outstanding Warrants,

                                (vi) assuming the Warrants are then exercisable,
that the Warrants called for redemption may nonetheless be exercised prior to
the close of business on the fifth business day prior to the Redemption Date and
that the Bank has the right, in its discretion,

                                       12
<PAGE>

to permit Warrants to be exercised after the close of business on that date but
before the close of business on the Redemption Date, and

                                (vii) the place where the Warrants are to be
surrendered against payment of the Redemption Price.

                           (3) On or prior to any Redemption Date, the Bank
shall deposit in a special account, an amount in legal tender of the United
States of America for public and private debts, sufficient to pay the Redemption
Price of all Warrants.

                           (4) Notice of Redemption having been mailed as
hereinbefore provided and the Bank having prior to the Redemption Date deposited
for that purpose an amount in cash sufficient to redeem all the Warrants, which
shall not have been exercised prior to the close of business on the fifth
business day prior to the Redemption Date, or such later date as the Bank, in
its discretion, permits, shall become null and void and the holders thereof
shall have no rights with respect thereto other than the right to receive the
Redemption Price.

                           (5) In the event any Warrant shall not be so paid
upon presentation and surrender thereof for redemption, such Warrant shall,
until paid, bear interest from the Redemption Date at the rate of 11% per annum
commencing 30 days after the Redemption Date or (if later) 30 days after the
presentation and surrender of the Warrant for redemption.

                           (6) In the event any Warrants called for redemption
are exercised prior to the close of business on the fifth business day prior to
the Redemption Date (assuming the Warrants are then exercisable), or such later
date as the Bank, in its discretion, permits, any monies which shall have been
deposited for redemption of Warrants and which are not required for that purpose
by reason of such exercise shall be promptly repaid to the Bank.

                      D. In the event of any adjustments (or readjustments) of
the Warrant Price pursuant to the provisions of paragraph B of this Section 9,
the Redemption Price shall be adjusted to a price (rounded to the nearest whole
cent) calculated by dividing the product of (1) the Redemption Price in effect
immediately prior to such adjustment of the Warrant Price and (2) the Warrant
Price in effect as a result of such adjustment, by the Warrant Price in effect
immediately prior to such adjustment.

                      E. Irrespective of any adjustments or changes of the
Warrant Price or adjustments in the Redemption Price or the number or kind of
securities issuable upon exercise of Warrants, Warrant Certificates theretofore
or thereafter issued may continue to express the same Warrant Price, Redemption
Price (if stated), and number of shares of Common Stock as are stated in the
similar Warrant Certificates previously issued.

                                       13

<PAGE>

                      F. Whenever there is an adjustment in the Warrant Price
and the Redemption Price or in the number or kind of securities issuable upon
exercise of the Warrants, or both, as provided in this Section 9, the Bank shall
(a) issue a certificate signed by the Chairman of the Board, President or a Vice
President of the Bank and by, the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Bank, showing in detail the facts
requiring such adjustment and the Warrant Price and the Redemption Price, and
number and kind of securities issuable upon exercise of each Warrant after such
adjustment; and (b) cause a notice stating that such adjustment has been
effected and stating the Warrant Price and the Redemption Price then in effect
and the number and kind of securities issuable upon exercise of each Warrant to
be sent by First Class mail, postage prepaid, to each registered holder of a
Warrant Certificate at his address as it appears on the Warrant Register.

                      G. The Warrant Price shall not be adjusted or changed and
the Redemption Price and the number of shares issuable upon exercise of a
Warrant shall not be adjusted except in the manner and only upon the occurrence
of the event heretofore specifically referred to in this Section 9.

                  10. Fractional Interests.

                      A. The Bank shall not be required to issue fractions of
shares of Common Stock on the exercise of Warrants as heretofore provided. If
any fraction of a share of Common Stock would, except for the provisions of this
Section, be issuable on the exercise of any Warrant, the Bank will (i) if the
fraction of a share otherwise issuable is equal to or less than one-half,
round-down and issue to the registered holder only the whole number of shares of
Common Stock to which the registered holder is entitled or (ii) if the fraction
of a share otherwise issuable is greater than one-half, round-up and issue to
the registered holder one additional shares of Common Stock in addition to the
largest whole number of shares of Common Stock to which the registered holder is
otherwise entitled.

                      B. If the Bank redeems any of the Warrants as heretofore
provided and the Warrants provide for the issuance of a fractional share of
Common Stock, the Bank shall pay to the registered holder only the product of
(i) the largest whole number of shares of Common Stock to which the registered
holder is otherwise entitled and (ii) the Redemption Price then in effect.

                  11. Rights of Warrant Holders as Stockholders.

                  Nothing  contained in this Agreement or in any of the Warrants
shall be construed as conferring upon the registered  holders thereof  the-right
to vote or to  consent or to receive  notice as  stockholders  in respect of the
meetings of  stockholders  or the election of Directors of the Bank or any other
matter, or any rights whatsoever as stockholders of the Bank.

                                       14

<PAGE>

                  12.  Inspection of this Agreement.  The Bank shall keep copies
of this  Agreement  available for  inspection  by registered  holders of Warrant
Certificates  during  normal  business  hours  at its  principal  office  in the
Township of Pennsboro, Pennsylvania.

                  13.  Notices.

                      A. Any notice pursuant to this Agreement to be given by
the registered holder of any Warrant to the Bank shall be sufficiently given or
made if sent by first- class mail, postage prepaid, addressed (until another
address is designated in writing by the Bank) as follows:

                           Commerce Bank/Harrisburg
                           Erford Road and Senate Avenue
                           East Pennsboro Township
                           Camp Hill, PA 17011
                           Attn: President

                  14.  Supplements  and  Amendments.  The Bank may, from time to
time, by supplemental  agreement or amendment make any changes or corrections in
this Agreement without the approval of any of the registered holders of Warrants
(i) that they  shall deem  appropriate  to cure any  ambiguity  or to correct or
supplement any defective or inconsistent  provision of manifest mistake or error
herein  contained;  or (ii) that they may deem  necessary or desirable and which
shall not in either case adversely  affect the rights,  privileges or immunities
of the registered holders of Warrant Certificates;  but this Agreement shall not
otherwise be modified,  supplemented or altered in any respect (except to extend
the  Expiration  Date)  except  with the  consent in  writing of the  registered
holders of Warrant  Certificates  representing  not less than a majority  of the
Warrants outstanding.

                      15. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Bank shall bind and inure to the benefit
of their respective successors and assigns hereunder.

                      16. Termination. This Agreement shall terminate as of the
close of business on October 7, 2008 or such earlier date upon which all
Warrants have been exercised.

                                       15

<PAGE>

                      17. Governing Law. This Agreement and each Warrant
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Pennsylvania and for all purposes shall be construed
in accordance with the laws of said Commonwealth.

                      18. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Bank, and
the registered holders of the Warrants, any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Bank and the registered holders of the Warrants.

                      19. Violation of Laws or Regulations: Conditions on
Exercise of Warrant.

                           A. Nothing contained herein shall be deemed to
require the Bank, or the registered holders of the Warrants to violate any
federal, state or local laws or regulations in the performance of this
Agreement.

                           B. A Warrant is not exercisable until all the
following events occur and during the following periods of time:

                                (1) Until such Warrant and the Common Stock to
be issued upon the exercise of such Warrant are approved and/or registered with
such federal, state and local regulatory bodies or agencies and securities
exchanges as the Bank may deem necessary or desirable;

                                (2) During any period of time in which the Bank
deems that the exercisability of a Warrant, the offer to sell the Common Stock
issued upon exercise of such Warrant, or the sale thereof, may violate a
federal, state, local or securities exchange rule, regulation or law, or require
the Bank or any class of its securities, or the transaction, to be

                                       16

<PAGE>
registered  under any such rule,  regulation or law, or may cause the Bank to be
legally obligated to issue or sell more shares than the Bank is legally entitled
to issue or sell.

                  20. Descriptive Headings. The descriptive headings of the
several sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.

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

(SEAL)                                               COMMERCE BANK/HARRISBURG

Attest: /s/ Howell C. Mette                          BY: /s/ James Gibson
       -----------------------                           -----------------
            Howell C. Mette,                                James Gibson,
         Secretary                                          President

(SEAL)                                               COMMERCE BANCORP, INC.

Attest: /s/ Peter Musumeci                           BY: Vernon W. Hill, II
       -----------------------                           -------------------
           Peter Musumeci,                                  Vernon W. Hill, II,
          Asst. Secretary                                    President

                                       17

<PAGE>

COMMONWEALTH OF PENNSYLVANIA       :
                                   :        ss.
COUNTY OF                          :

         On this day of , 1988, before me, the undersigned  officer,  personally
appeared James Gibson, who acknowledged  himself to be the President of Commerce
Bank/Harrisburg,  a Pennsylvania banking corporation, and that he as such, being
authorized to do so, executed the foregoing  instrument for the purposes therein
contained by signing the name of the corporation by himself as President.

         IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                                     ------------------------
                                                     Notary Public

                                                     My Commission Expires:

                                       18

<PAGE>

Warrant Number          1                     Shares Deliverable Upon Exercise
                                                       40,000

                                                   Registered Holder
                                                 Commerce Bancorp, Inc.

THIS  WARRANT WILL BE VOID IF NOT  EXERCISED ON OR PRIOR TO 5:00 P.M.,  NEW YORK
TIME, ON OCTOBER 7, 2008,  OR, IF SOONER CALLED FOR  REDEMPTION IF NOT EXERCISED
ON OR PRIOR TO THE CLOSE OF BUSINESS ON THE FIFTH BUSINESS DAY PRIOR TO THE DATE
FIXED FOR  REDEMPTION,  UNLESS BANK, IN ITS  DISCRETION,  PERMITS  EXERCISE AT A
LATER DATE.

PRIOR TO A "CHANGE  IN  CONTROL"  OF THE BANK,  AS SUCH TERM IS  DEFINED  IN THE
WARRANT  AGREEMENT  REFERRED  TO HEREIN,  EACH  COMMON  STOCK  PURCHASE  WARRANT
EVIDENCED HEREBY MAY BE COMBINED,  EXCHANGED,  REDEEMED OR TRANSFERRED ONLY WITH
ONE SHARE OF BANK PREFERRED  STOCK, PAR VALUE $10.00 PER SHARE, AND THE RIGHT TO
RECEIVE WARRANTS AND PREFERRED STOCK MAY NOT BE SPLIT UP,  COMBINED,  EXCHANGED,
REDEEMED  OR  TRANSFERRED  SEPARATELY.  ON OR AFTER A "CHANGE IN CONTROL" OF THE
BANK SHALL HAVE OCCURRED, COMMON STOCK PURCHASE WARRANTS EVIDENCED HEREBY MAY BE
SPLIT UP,  COMBINED,  EXCHANGED OR  TRANSFERRED  SEPARATELY  FROM THE  PREFERRED
STOCK;  PROVIDED,  HOWEVER,  THAT  REGARDLESS  OF  WHETHER  OR NOT A "CHANGE  IN
CONTROL" OF THE BANK SHALL HAVE  OCCURRED THE  PREFERRED  STOCK AND COMMON STOCK
PURCHASE WARRANTS EVIDENCED HEREBY MAY NOT BE REDEEMED SEPARATELY.

THIS WARRANT MAY ONLY BE  EXERCISED  AFTER A "CHANGE IN CONTROL" OF THE BANK HAS
OCCURRED.

                            COMMERCE BANK/HARRISBURG

                          Common Stock Purchase Warrant

         THIS CERTIFIES that, for value received,  Commerce Bank/ Harrisburg,  a
Pennsylvania banking corporation (hereinafter called the "Bank"), will, upon the
surrender of this Warrant to the Bank at its principal office in the Township of
East Pennsboro,  Pennsylvania,  provided,  and only if, this Warrant shall be so
surrendered after a "change in control" of the Bank shall have occurred (as such
term is defined in the Warrant Agreement) and on or prior to 5:00 p.m., New York
time, on October 7, 2008, sell and deliver, or cause to be sold or delivered, to
the registered holder or registered assigns,  the above number of fully paid and
nonassessable  shares of the  Bank's  Common  Stock,  par value  $6.25 per share
("Common  Stock"),  evidenced by a certificate  therefor and upon payment of the
full warrant price for the number of whole shares of Common Stock  issuable upon
exercise of this Warrant;  provided,  however,  that as set forth in the Warrant
Agreement,  the Bank has the right, at any time prior to the exercise hereof, to
redeem this

                                        1

<PAGE>
Warrant in whole only, and not in part,  from January 1, 1990,  until 5:00 p.m.,
New York time,  on October 7, 2008,  for the  Redemption  Price set forth in the
Warrant  Agreement  for each  share of  Common  Stock  then  issuable,  upon the
exercise of this Warrant.  This Warrant may not be redeemed by the Bank prior to
January 1, 1990.

         Under certain  conditions set forth in paragraph B of Section 9 of said
Warrant Agreement, the number of shares of the Common Stock purchasable upon the
exercise of this Warrant may be  increased or reduced and the warrant  price and
the price at which this  Warrant may be redeemed  may be adjusted or  securities
other than shares of said Common  Stock may become  purchasable  in lieu thereof
upon the exercise of this Warrant.

         Subject to  adjustment  and change as  aforesaid,  the warrant price at
which said Common Stock shall be purchasable upon the exercise of Warrants shall
be $25.00 per share of Common stock. As provided in the Warrant  Agreement,  the
warrant price is payable upon the exercise of this Warrant,  either in (i) cash,
or by check,  bank draft or postal or  express  money  order,  payable in United
States  dollars,  to the order of the Bank,  or (ii)  certificates  representing
shares of  Preferred  Stock which will be valued at the greater of $25 per share
or such other price per share as is mutually  agreed to between the Bank and the
registered  holder  of the  Warrant  which  is  being  exercised  or  (iii)  any
combination  of cash and shares of Preferred  Stock valued as provided in clause
(ii), at the principal office of the Bank.

         The right of purchase  represented by this Warrant is exercisable as an
entirety or from time to time in part only.

         Upon the exercise of this Warrant the form of election to purchase must
be duly executed and the  accompanying  instructions  for the  registration  and
delivery of Common Stock must be completed.

         This  Warrant  is issued  under and the rights  represented  hereby are
subject to the terms and provisions  contained in the Warrant  Agreement,  dated
October 7, 1988, of the Bank all terms and  provisions  of which the  registered
holder of this Warrant, by acceptance hereof, assents.  Reference is hereby made
to said  Warrant  Agreement  for a more  complete  statement  of the  rights and
limitations  of rights of the  registered  holder  hereof,  and the  rights  and
obligations of the corporation thereunder.  Copies of said Warrant Agreement are
on file at the principal  office of the Bank in the Township of East  Pennsboro,
Pennsylvania.

         The Bank shall not be required  upon the  exercise  of this  Warrant to
issue  fractions of shares,  but shall, as provided in Section 10 of the Warrant
Agreement, (i) if the fraction of a share otherwise issuable is equal to or less
than  one-half,  round-down and issue only the largest whole number of shares of
Common stock to which the warrantholder is entitled of (ii) if the fraction of a
share  otherwise  issuable  is  greater  than  one-half,  round-up  and issue an
additional  share of Common  Stock in addition to the  largest  whole  number of
shares of Common Stock to which the warrantholder is otherwise entitled.

                                        2

<PAGE>

         In the event that this  Warrant  shall not be  exercised on or prior to
5:00  p.m.,  New York  time,  on  October  7,  2008,  or if  sooner  called  for
redemption, as provided in said Warrant Agree ment, before the close of business
on the fifth  business  day prior to the date fixed for  redemption,  unless the
Bank, in its  discretion,  permits  exercise at a later date, this Warrant shall
become void and all the registered holder's rights hereunder shall cease.

         This Warrant is transferable at the principal office of the Bank in the
Township of East  Pennsboro,  Pennsylvania  by the  registered  holder hereof in
person or by attorney  duly  authorized  in writing,  but only in the manner and
subject to the limitations provided in said Warrant Agreement and upon surrender
of this  Warrant  with the form of  assignment  on the reverse  side hereof duly
completed and executed.  This Warrant is transferable from time to time in whole
or in part.  Upon  any  such  transfer,  one or more  new  Warrant  Certificates
representing the right to purchase an equal aggregate number of shares of Common
Stock will be issued to the transferee(s) in exchange for this Warrant.

         If this Warrant  shall be  surrendered  for exercise  within any period
during  which the  transfer  books for the Common  Stock or other class of stock
purchasable  upon the exercise of this  Warrant are closed for any purpose,  the
Bank  shall  not be  required  to  make  delivery  of  certificates  for  shares
purchasable  upon such exercise until the date of the reopening of said transfer
books.

         IN WITNESS WHEREOF, Commerce Bank/Harrisburg has caused this Warrant to
be signed  manually by its  President or one of its Vice  Presidents  and by its
Treasurer or its  Secretary,  and its corporate  seal to be affixed  hereunto or
imprinted hereon.

Dated: October 7, 1988

                                  COMMERCE BANK/HARRISBURG

(SEAL)                            BY: /s/ James Gibson
                                         James Gibson, President

                                  ATTEST: /s/ Howell C. Mette
                                         --------------------
                                                 Howell C. Mette, Secretary

                                        3

<PAGE>

                         [FORM OF ELECTION TO PURCHASE)

TO:      COMMERCE BANK/HARRISBURG

c/o      Erford Road and Senate Avenue
         East Pennsboro Township
         Camp Hill, PA 17011

         The  undersigned   hereby   irrevocably  elects  to  exercise  Warrants
represented  by this  Warrant  Certificate,  and to  purchase  the Common  Stock
issuable upon the exercise of such Warrants,  and requests that certificates for
such shares be issued in the name of

      ____________________________________________________________________
                                     (Name)

      ____________________________________________________________________
                          (Address including Zip Code)

      ____________________________________________________________________
                  (Social Security or other identifying number)

      and be delivered to ________________________________________________
                                     (Name)

      at__________________________________________________________________
                          (Address including Zip Code)

and, if said number of Warrants shall not be all the Warrants  evidenced by this
Warrant  Certificate,  that a new  Warrant  Certificate  for the balance of such
Warrants be registered in the name of and delivered to, the  undersigned  at the
address stated below.

         The undersigned hereby delivers to the Bank an opinion of counsel, that
the proposed  exercise of this Warrant  does not violate  applicable  securities
laws or require  registration  under any such laws of the Bank, any class of its
securities or the  transaction.  The undersigned  acknowledges  that the counsel
rendering  the  opinion  and the  form  and  substance  of the  opinion  must be
satisfactory to the Bank.

Dated:              , 19
      --------------

                                 Name of Warrantholder:
                                 Address (including Zip Code):

                                 _________________________________

                                 _________________________________

                                 _________________________________

                                 Signature:_______________________

                                        4

<PAGE>

                                   ASSIGNMENT

         For value received  hereby sell,  assign and transfer unto the Warrants
represented  by this Warrant  Certificate,  together  with all right,  title and
interest therein, and do hereby irrevocably  constitute and appoint attorney, to
transfer this Warrant  Certificate on the books of the Bank,  with full power of
substitution.

         The  undersigned  hereby  delivers  to  Bank  an  opinion  of  counsel,
reasonably  acceptable to Bank,  that the proposed  assignment of these Warrants
does not violate applicable securities laws.

Dated:              , 19
      --------------

                                 Signature:_______________________

                                        5AMENDMENT NO. 1 TO THE
                      STOCK AND WARRANT PURCHASE AGREEMENT

         Amendment No. 1 dated October 7, 1988 to the Stock and Warrant Purchase
Agreement dated as of April 29, 1988 between Commerce Bank/Harrisburg, a
Pennsylvania banking corporation (the "Bank"), and Commerce Bancorp, Inc., a New
Jersey business corporation (the "Acquiror").

                                   BACKGROUND

         As of April 29, 1988, the Bank and the Acquiror entered into a Stock
and Warrant Purchase Agreement (the "Agreement") whereby the Bank proposed to
issue and sell to the Acquiror and the Acquiror proposed to purchase from the
Bank 40,000 shares of a new class of Bank cumulative preferred stock and
warrants to purchase in the aggregate 40,000 shares of the Bank's common stock,
all upon the terms and subject to the conditions therein set forth. The Bank and
the Acquiror desire to amend certain of the rights and relative preferences of
the Bank cumulative preferred stock so as to make, among other changes, the
preferred stock non- cumulative.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and intending to be legally bound hereby, the parties hereto
agree as follows:

         1. The relative rights and preferences of the Preferred Stock (as such
term is defined in the Agreement) are hereby amended to read in their entirety
as set forth in Exhibit "A" attached hereto and made a part hereof.

         2. All references to the Bank cumulative preferred stock and Preferred
Stock in the Agreement, the Warrant Agreement or any other document and/or
instrument to be executed in connection with or pursuant to the Agreement shall
hereinafter refer to the preferred stock whose rights and relative preferences
are set forth in Exhibit "A" attached hereto and made a part hereof.

         3. Except as specifically amended herein, the Agreement and all other
documents and/or instruments to be executed in connection with or pursuant to
the Agreement remain unchanged and in full force and effect.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be duly executed all as of the day and year first above written.

(SEAL)                                               COMMERCE BANK/HARRISBURG

Attest: /s/ Howell C. Mette                          By: /s/ James Gibson
       ------------------------------                   -----------------
             Secretary                                       President

(SEAL)                                               COMMERCE BANCORP, INC.

Attest: /s/                                          By: /s/ Vernon W. Hill, II
       ------------------------------                 -----------------------
             Secretary                                       President

<PAGE>
                                   EXHIBIT "A"

                            CERTIFICATE OF AMENDMENT
                                     TO THE
                            ARTICLES OF INCORPORATION
                                       OF
                            COMMERCE BANK/HARRISBURG

         Pursuant to the provisions of the Pennsylvania Consolidated Statutes
Annotated: 7 Pa. C.S.A. Section 1202, relating to the issuance of shares in
classes and series, and the authority conferred on the Board of Directors by the
Articles of Incorporation to make divisions and determinations with respect to
the issuance of shares in classes or series, Commerce Bank/Harrisburg executes
the following Certificate of Amendment to its Articles of Incorporation:

                  1. The name of the corporation is Commerce Bank/Harrisburg.

                  2. A copy of the resolution of the Board of Directors required
by the Pennsylvania Consolidated Statutes Annotated: Pa. C.S.A. Section 1202(f),
setting forth the actions of the Board of Directors and establishing and
designating 40,000 shares of Series A Non-Cumulative Preferred Stock and
determining the relative rights, preferences and limitations thereof is attached
hereto as Exhibit A.

                  3. Said resolution was adopted by a vote of a majority of the
directors present at a meeting thereof duly convened and held on , 1988 , at
which meeting a quorum was at all times present and voting.

                  4. The Articles of Incorporation of Commerce Bank/Harrisburg
are hereby amended so that the designation and number of shares of Series A
Non-Cumulative Preferred Stock, and the relative rights, preferences and
limitations thereof, are as stated in said resolution.

                  IN WITNESS WHEREOF, Commerce Bank/Harrisburg has caused this
Certificate of Amendment to its Articles of Incorporation to be signed by its
President and Secretary this 7th day of October 1988.

                                       COMMERCE BANK/HARRISBURG

                                       By:______________________________
                                             James Gibson, President

                                          ______________________________
                                             Howell C. Mette, Secretary

<PAGE>
                                    EXHIBIT A

              Resolution of the Board of Directors determining the
              designation and number of the Series A Non-Cumulative
                  Preferred Stock, par value $10.00 per share,
          and the relative rights, preferences and limitations thereof.

         RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Bank (the "Board") by the provisions of
Article Fifth of the Articles of Incorporation of the Bank and the provisions of
The Pennsylvania Consolidated Statutes Annotated: 7 Pa. C.S.A. Section 1202, the
Board hereby creates a series of preferred stock, par value $10.00 per share,
and determines the designation and number of shares which constitute such series
and the relative rights, preferences and limitations of such series as follows:

         1. Designation and Number of Shares. The series of preferred stock
shall be designated as "Series A Non-Cumulative Preferred Stock" (hereinafter
called "Series A Preferred Stock") and shall consist of a total of 40,000 shares
par value $10.00 per share.

         2. Dividends. The holders of the Series A Preferred stock shall be
entitled to receive preferential dividends in cash, when, as and if declared by
the Board of Directors out of the funds of the Bank legally available at the
time for the payment of dividends, at a rate of $2.00 per share per annum, and
no more, payable quarterly on the thirtieth (30th) day of January, April, July
and October to holders of record of Series A Preferred Stock at the close of
business on the last day of the preceding month, before any dividend or other
distribution on (i) any equity securities ranking junior to the Series A
Preferred Stock as to the payment of dividends or other distributions ("Junior
Stock") and (ii) ("Common Stock"); provided, however, may, at any time and from
time to of the Series A Preferred Stock dividend fifteen (15) days before or
after those which event the first dividend payable after each such change in the
payment date shall be adjusted accordingly on a daily basis from the dividend
payment date last preceding such change. The first dividend payment date of the
Series A Preferred Stock shall be October 30, 1988.

         Dividends on each share of Series A Preferred Stock outstanding shall
be non- cumulative, whether or not in any fiscal year there shall be any funds
of the Bank legally available for the payment of such dividends, so that if in
any fiscal year or years, dividends in whole or in part are not paid upon the
Series A Preferred Stock, unpaid dividends shall not accumulate as against the
holder(s) of the Common Stock or any Junior Stock, so that except as set forth
in paragraphs 3 and 4 hereof no sums in any later years shall be paid to the
holder(s) of the Series A Preferred Stock with respect to any prior year or
years when dividends were not paid, and so that in no event shall the holder(s)
of the Series A Preferred Stock receive dividends of more than $2.00 per share
in any fiscal year.

         The date on which the Bank shall initially issue a share of Series A
Preferred Stock shall be deemed to be the "date of issuance" of such share
regardless of the number of times the transfer of such share shall be made on
the Bank's stock transfer records and regardless of the number of certificates
which may be issued to evidence such share.

<PAGE>
         If, in any quarterly dividend period or periods, full dividends upon
the outstanding Series A Preferred Stock at the dividend rate set forth herein
shall not have been paid or set apart for payment, then, until such payment is
made or set apart, (i) no dividends or other distributions shall be declared and
paid or set apart for payment upon any equity securities of the Bank other than
securities which have a dividend payment preference superior to the Series A
Preferred Stock; (ii) the Bank and its subsidiaries, if any, shall be prohibited
from repurchasing, redeeming or otherwise acquiring any of the Bank's preferred
stock ranking on a parity with the Series A Preferred Stock or any of the Common
Stock or any Junior Stock; and (iii) the Bank shall be prohibited from issuing
any preferred stock which ranks superior to or on parity with the Series A
Preferred stock as to the payment of dividends and other distributions. If, at
any time, the Bank shall pay less than the total amount of dividends then
payable on the then-outstanding Series A Preferred Stock and on any
then-outstanding class or series of stock of the Bank which ranks on a parity
with the Series A Preferred Stock as to the payment of dividends and other
distributions ("Parity Stock"), the aggregate payment to all holders of Series A
Preferred Stock and to all holders of Parity Stock shall be distributed among
all such holders so that an amount ratably in proportion to the respective
annual dividend rates fixed thereon shall be paid with respect to each
outstanding share of Series A Preferred Stock and Parity Stock.

         Holders of the Series A Preferred Stock shall not be entitled to
participate in any dividends or other distributions (cash, stock or otherwise)
declared or paid on or with respect to any Common Stock, Junior Stock or any
other class of stock or equity security of the Bank or any series of any such
class.

         3. Liquidation. In the event of the liquidation, dissolution or winding
up of the Bank, whether voluntary or involuntary, after all creditors of the
Bank shall have been paid in full, the holders of the outstanding Series A
Preferred Stock shall be entitled to receive an amount equal to $25.00 per share
plus an amount equal to the sum of (i) all unpaid dividends thereon which shall
have been declared but not paid and (ii) all dividends which were not paid on
the Series A Preferred Stock or will not be paid on the Series A Preferred Stock
(whether or not there were any funds legally available for the payment of
dividends at that time) to the date for the payment of such distribution amount
(collectively the "Unpaid Dividends") together with interest on the Unpaid
Dividends as set forth below before any distribution of assets shall be made to
the holder(s) of any Common Stock or Junior Stock. The Unpaid Dividends shall
bear interest at a rate per annum equal to 10% from the date any such Unpaid
Dividends would have been paid in accordance with paragraph 2 hereof (whether or
not there were any funds legally available for the payment of dividends at that
time). If, upon any dissolution, liquidation or winding up of the Bank, the net
assets of the Bank shall be insufficient to pay the holders of all outstanding
shares of Series A Preferred Stock and Parity Stock the full amounts to which
they respectively shall be entitled, the holders of each such stock shall share
ratably in any distribution of assets according to the respective amounts which
would be payable in respect of such stock upon such distribution if all amounts
payable on or with respect to all stock were paid in full.

         Neither consolidation or merger of the Bank with any corporation, nor
the sale of all or part of the Bank's assets for cash, securities or other
property, nor the purchase or redemption by

                                        2

<PAGE>

the Bank of any class of stock permitted by the Articles of Incorporation or any
amendment thereof, shall be deemed a liquidation, dissolution or winding up of
the Bank. Holders of the Series A Preferred Stock shall not be entitled, upon
the liquidation, dissolution or winding up of the Bank, to receive any amounts
with respect to such stock other than the amounts referred to in this paragraph
3. Nothing contained herein shall be deemed to prevent the redemption or
purchase of the Series A Preferred Stock permitted by paragraph 4 herein prior
to liquidation, dissolution or winding up.

         4. Redemption. The shares of Series A Preferred Stock shall be
redeemable at the option of the Bank, in whole only and not in part, at any
time, upon payment of the respective redemption price set forth herein;
provided, however, that such shares shall not be redeemable prior to January 1,
1990.

         If redeemed in the
         12-month period                      Then the Redemption
         beginning January 1, 1990             Price shall be
         -------------------------            ----------------

                  1990                             $26.50
                  1991                              26.25
                  1992                              26.00
                  1993                              25.75
                  1994                              25.50
                  1995                              25.25
                  1996 and thereafter               25.00

plus an amount equal to the sum of (i) all unpaid dividends thereon which shall
have been declared but not paid and (ii) all dividends which were not paid on
the Series A Preferred Stock or will not be paid on the Series A Preferred Stock
(whether or not there were any funds legally available for the payment of
dividends at that time) to the date to and including the date fixed for
redemption (collectively the "Unpaid Dividends") together with interest on the
Unpaid Dividends as set forth below. The Unpaid Dividends shall bear-interest at
a rate per annum equal to 10% from the date any such Unpaid Dividend would have
been paid in accordance with paragraph 2 hereof (whether or not there were any
funds legally available for the payment of dividends at that time) (all of the
foregoing amounts being collectively hereinafter referred to as the "Redemption
Price).

         Notice of the proposed redemption of Series A Preferred Stock shall be
given by the Bank by first class mail, postage prepaid, at least thirty (30)
days and not more than sixty (60) days prior to the date fixed for such
redemption, to the holders of record of all of the shares of Series A Preferred
Stock at their respective addresses appearing on the books of the Bank. Any
notice which is mailed as herein provided shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice.

         On and after the date fixed in the notice of redemption as the date of
redemption (unless default shall be made by the Bank in providing money for the
payment of the aggregate Redemption Price) , or if the Bank shall so elect, on
and after the date (which date shall be the date of redemption or prior thereto)
on which the Bank shall deposit, separate and apart from its

                                        3

<PAGE>

other funds in trust for the pro rata benefit of the holders of the Series A
Preferred Stock so as to be and continue to be available therefor, with a bank
or trust company (other than the Bank or a subsidiary of the Bank) doing
business in the State of New Jersey or the Commonwealth of Pennsylvania, as
"Paying Agent", money sufficient in amount to pay, at the office of the Paying
Agent on the redemption date, the aggregate Redemption Price of the shares of
Series A Preferred Stock (provided the notice of redemption shall state the name
and address of the Paying Agent and the intention of the Bank to deposit said
money on or before the date of redemption with the Paying Agent), and,
notwithstanding that any certificate for shares of Series A Preferred Stock
shall not have been surrendered for cancellation, the shares represented thereby
shall no longer be deemed outstanding and all rights of the holders thereof as
stockholders of the Bank shall cease and terminate, except the right to receive
from the Bank or Paying Agent, as the case may be, the Redemption Price. At any
time on or after the redemption date, or if the Bank shall deposit the money for
such redemption prior to the redemption date, then at any time on or after the
date of deposit, the respective holders of record of the Series A Preferred
Stock shall be entitled to receive the Redemption Price upon actual delivery to
the Bank or the Paying Agent, as the case may be, of certificates for the
shares, such certificates, if required, to be duly endorsed in blank. Any money
deposited with the Paying Agent which remains unclaimed by the holders of shares
of Series A Preferred Stock at the end of five full calendar years after the
redemption date shall be paid by the Paying Agent to the Bank, and thereafter
the holders of the shares of the Series A Preferred Stock shall look only to the
Bank for payment.

         5.       Voting Rights.

                  (a) Except as otherwise set forth in this resolution and
except in statutory proceedings in which, and then only to the extent to which,
their vote is at the time required by law, the holders of shares of Series A
Preferred Stock shall have no right to vote at, to participate in, or to receive
any notice of any meeting of the shareholders of the Bank. Except as otherwise
set forth in this paragraph 5, on any matter on which the holders of Series A
Preferred Stock shall be entitled to vote, they shall be entitled to one vote
for each share held.

                  (b) If and whenever quarterly dividends on the Series A
Preferred Stock shall not have been paid in full for four quarterly dividends
(whether or not consecutive) or more with respect to quarterly dividend payments
on the Series A Preferred Stock which are payable on and after March 1, 1990,
the holders of Series A Preferred Stock shall be entitled to notice of all
meetings of the shareholders of the Bank and to full voting rights (together
with holders of Common Stock but not as separate class unless otherwise required
by law) at all meetings and on all matters including, without limitation, the
election of directors of the Bank, and each share of Series A Preferred Stock
shall be entitled to two votes. At such time as the dividend on the Series A
Preferred Stock for the then current quarterly dividend period shall have been
declared and paid or set apart for payment and the immediately preceding three
quarterly dividends on the Series A Preferred Stock shall have been paid, all
voting rights of the Series A Preferred Stock ; granted by this subparagraph (b)
shall terminate.

                  (c) If and whenever the Bank fails to comply with any of the
"Capital Adequacy Guidelines" or similar type regulations (including, without
limitation, the "Risk-Based

                                        4
<PAGE>

Capital Guidelines"), as amended from time to time, which are established by the
primary regulator of the Bank or the Bank's overall condition as determined by
the primary regulator of the Bank is determined to be marginal or
unsatisfactory, the holders of Series A Preferred Stock shall be entitled to
notice of all meetings of the shareholders of the Bank and to full voting rights
(together with holders of Common Stock but not as separate class unless
otherwise required by law) at all meetings and on all matters including, without
limitation, the election of directors of the Bank, and each share of Series A
Preferred Stock shall be entitled to two votes. At such time as the Bank
complies with the "Capital Adequacy Guidelines" or similar type regulations
(including, without limitation, the "Risk-Based Capital Guidelines"), as amended
from time to time, which are established by the primary regulator of the Bank or
the Bank's overall condition as determined by the Bank's primary regulator
ceases to be marginal or unsatisfactory all voting rights of the Series A
Preferred Stock granted by this subparagraph (c) shall terminate. For, purposes
of this subparagraph (c), the terms "marginal" and "unsatisfactory" with respect
to the Bank's overall condition as determined by the primary regulator of the
Bank shall mean a composite rating under the Uniform Financial Institutions
Rating System of 4 or 5, or such similar or comparable composite rating of the
Bank's overall condition pursuant to any successor composite rating system as is
then in use by the primary regulator of the Bank.

                  (d) So long as any of the Series A Preferred Stock remains
outstanding, the Bank will not, either directly or through merger or
consolidation with any other corporation, without the affirmative vote at a
meeting or the written consent with or without a meeting of the holders of at
least fifty percent (50%) in number of the shares of the series A Preferred
Stock then outstanding voting separately as a class:

                           (i) amend, alter or repeal any of the preferences,
special rights or powers of the shares of Series A Preferred Stock or any of the
provisions of the Articles of Incorporation so as to affect them adversely,

                           (ii) authorize any reclassification of the Series A
Preferred Stock, or

                           (iii) issue any class or classes of the equity
securities of the Bank which have a dividend payment or liquidation payment
preference equal or superior to the Series A Preferred Stock (including by means
of the reissuance of shares reacquired by the Bank by repurchase, redemption or
upon conversion).

         6. Reissuance of Shares. Shares of Series A Preferred Stock which have
been redeemed or purchased, shall have the status of authorized and unissued
shares of preferred stock and may be reissued as part of the series of which
they were originally a part or may be reissued as part of a new series of the
preferred stock to be created by resolution or resolutions of the Board or as
part of any other series of preferred stock, all subject to the conditions or
restrictions on issuance set forth in any resolution or resolutions adopted by
the Board providing for the issue of any series of preferred stock.

                                        5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00006-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00006-of-00352.parquet"}]]