Document:

exv10w20

 

Exhibit 10.20

Great Western Land and Recreation, Inc.

7373 N. Scottsdale Road; Suite C-140

Scottsdale, AZ 85260

FAX: 480-949-6009

Phone: 480-949-6007

September 21, 2006

Final Draft

Mr. Dwight Brooks

Arizona Motion Picture Studio, LLC.

3120 West Carefree Highway; Suite 1-215

Phoenix, AZ 85086

Subject: Details of the Transaction whereby Great Western Invests $20 million Preferred Stock in Six Movies

and the Wagon Bow Ranch, LLC.

Dear Dwight:

The purpose of this letter is to explain a recommended method of your drawing down the $20 million
of Face Value Series G Preferred Stock. The Series G is the same as the Series F. There were not
enough shares authorized for the full $20 million of Series F, so the Board of Directors authorized
the issuance of sufficient convertible preferred stock as Series G. We received authorization from
the Board of Directors for the Series G.

This document outlines the draw down of $20 million stated value Series G Preferred in two steps.
$10 million is to be drawn down prior to September 30, and $10 million after September 30 but can
be issued at your convenience after the first $10 million is assigned and employed for the Projects
(See Note #1). A formula is outlined below to determine the “true” value of the face amount of the
full $20 million of Series G convertible Preferred Stock. (“The Preferred Stock.”)

Since time is of the essence, I am suggesting that we immediately issue $10 million to Arizona
Motion Picture Studio, LLC., (“Movie Studio”) as set forth below. Great Western Land and
Recreation, Inc.(“ Great Western”) and Movie Studio will explore several methods of using this
stock as collateral to borrow sufficient funds to get started on the production of the next couple
of movies. Great Western will assist in the marketing /funding of the Preferred Stock. We should
also mutually explore the possibility of doing a private placement as an alternate method of
raising funds to develop the Ranch and to fund the movies.

We estimate the value of the Preferred Stock as follows: The Series G Convertible Preferred stock
is probably not, on the open market, it’s stated or face value due to the recent drop in the
selling price of the common stock. If the common were over $1.00 in value, as determined by the
trading on the open market, we could possibly make an argument as to its value being close to the
face value or “par.” However, an influence on the price is also improved after considering that
some sort of significant amount of discount also greatly enhances the yield brought about by the
escalating dividend. Thus the dividend, or yield, provides price support and establishes a

 

 

suggested floor level. (Based upon yield and the time-value of money.) At the present time, the
underlying common stock price into which the Series G Preferred is convertible, should be a factor that assists in determining the value of the
Series G convertible stock. Currently we are willing to concede that the price of the Series G is
“worth” twenty five cents-on-the-dollar while the common stock price is in the $.25 per share to
$.39 per share range. The possible conversion value depends on and will be fixed by the amount a
regulated or non-regulated institution or private investor determines on the open market. Unless
the average stock price is greater than $.40 per share or less than $.25 per share on the three
working days prior to the closing of this transaction, the first $10 million of preferred will be
transferred with the suggested value of 25% of the stated value, $2.5 million. Thus we agree we
will arrive at a concrete value with no commitment to the value until the preferred stock is
presented and accepted in a proper market.

At closing, which shall be no later than September 29, 2006, Great Western will deliver to Movie
Studio the $10 million in Series G convertible preferred certificates which Movie Studio will hold
in trust until said shares are distributed to three movie production companies as agreed hereafter.
The appropriate disclaimers and the appropriate investment letter will have been prepared ahead of
the actual closing date. In return, Movie Studio will cause the creation of three newly formed
companies to produce the contemplated three movies. The $10 million in stock as stated above will
be divided equally (or on some basis mutually agreed upon by Movie Studio and Great Western) in the
three movie production companies which will be formed strictly for the production of three movies
as contemplated originally. (See Note #3.) Great Western’s investment in the three movie
production companies will be approximately $3.34 million in stated value stock and a to be
determined value for each movie production. Great Western will have no investment, ownership, or
any other interest whatsoever in Movie Studio.

With the mutual agreement of Movie Studio and Great Western regarding the method of “turning into
cash” the $10 million of preferred stock, it may require a process such as pledging the stock for a
loan, or as a private placement, or converting the stock into common stock and selling it in the
open market. Great Western’s interest (as defined hereafter) in the three companies in which the
stock investment will be made will depend on the ultimate value of the underlying common stock of
Great Western and the conversion value fixed by presenting the stock to a regulated or non
regulated institution or private investor. Great Western’s interest in each of the three movie
production companies shall be 40% of the net profit generated by each of the companies as defined
in Exhibit A attached hereto, less all costs of financing each movie’s production. The ultimate
percentage of Great Western’s share in the net profits of each company will be determined by such
factors as total funds required, funding by third party investors, and the ultimate proceeds of the
preferred stock allocated to each of the three movie companies. Much of this will depend on the
feasibility studies and the ultimate budget structure of each picture’s production. The final
determination of each of the variables as listed above for each production company will be
determined on the day final production funding closes for that company.

1. Great Western will conduct due diligence as needed to satisfy the conditions that the Preferred
Stock investment is not in jeopardy, and the investment into the first three limited liability
companies producing the movies will be invested prudently. Great Western will have the right of
participating in the decision-making process regarding purchases of major equipment, goods and
services by having one representative as a member of each production company’s board of directors.

2. At closing Great Western will deliver all the $10,000,000 stated value Series G preferred stock
certificates (“the Stock”) to Movie Studios as stated above. Brooks will deliver to Great Western
the terms and conditions of the investment in Brooks’ three movies.

2

 

3. Brooks will initially deposit the Preferred Stock into a special corporate account of Movie
Studio, which Movie Studio will hold in trust for the sole purpose of being used as a currency for
the funding of three pictures to be produced by Brooks. However, should there not be sufficient
funds to adequately produce three movies and or the fair market value of the Series G Preferred is below $500,000,
Great Western has the option of providing additional cash, or additional stock (common or
preferred) or receiving a lesser percentage of the equity in each of the movies. Much of the
funding of each of the movies will depend on the ultimate budget to produce the movies. This could
result in the dilution of Great Western’s interest in some of the companies.

Budget Process and Controls:

Movie Studio will develop a budget for the production of each of the three contemplated movies.
Assuming that each movie is done in a series (one at a time), the first three will confirm that the
process is working, there will be profit, the budgeting is accurate and the product is marketable.

After the first three movies (and their respective companies formed to produce the movies) are
complete, then Great Western has the obligation to deliver, on a timely basis, the balance of the
Preferred Stock which is $10 million stated value for the production of three more movies. This
second draw will complete the obligation of Great Western and the ultimate value will depend on two
factors:

1. The price of the common stock at the time of request of the draw of the $10 million; and

2. The price an outside third party will pay for the stock.

By the time the second “draw” of the stock is made by Movie Studio, the price of the stock may very
well be considerably higher, with a stated value of $10,000,000 and a to be determined market
value, considering what a third party will pay for the stock and the price of Great Western’s
common stock at the time of issue.

Movie Production, Story, and Direction:

1. Direction of the three movies is to be the responsibility of Brooks, and Brooks will have full
literary and creative license. Anticipated, but not all inclusive nor required will be the
following movies: The Nat King Cole Story, The Saga of Black Bart, and possibly the Teddy
Roosevelt Story. Brooks has the authority to change, substitute, or negotiate a different
producer, director, movies that will be produced, or schedule of production(s), but the general
theme is both biographical and “Western.”

2. Brooks shall retain the flexibility and authority to form separate limited liability companies
for each film; to develop the budgets and production cost schedules for each film; to hire the
talent he sees fit for each of the films and to hire the supporting cast, stage hands, workers,
distributors, delivery schedules and services necessary to produce each of the six films.

3. The investment participation (share of net profits in each production) will be negotiated
between Brooks and Great Western for each of the film limited liability companies as the budget is
developed, subject to the terms stated above. Great Western’s share of the net profits will depend
on the budget, the currency value of the Stock, and the costs of financing each production. Great
Western will have a representative on each production company’s board of directors and on the
separate development company regarding the development of facilities on Wagon Bow Ranch.

3

 

4. Brooks recognizes that Great Western is a public company, and as such Great Western needs
accurate and timely reporting (at least on a quarterly basis). Great Western is a SEC reporting
company with 7,400 stockholders and about 22 million shares outstanding.

5. The Wagon Bow Ranch. The intention of the six single purpose limited liability companies which
are to be funded by the Great Western stocks delivered to Movie Studios is to independently have
risk limited. In addition, one limited liability company is to be devoted to improving the
over-all appeal of the Town of Trout Creek and to build facilities as noted below in Note #2.
Therefore, both Movie Studios and Great Western agree the objective of this agreement is to have a
portion of any funding allocated to certain structures and systems on the mutually decided upon
areas of the Wagon Bow Ranch. The funds devoted to the Ranch and its development will depend on
the amount determined in the market by an institution or private investor.

	 	 	 	 	 
	 	 	 
	 	/s/ Jay N. Torok
 	 
	 	Jay N. Torok, Chairman of the Board 	 
	 	 	 
	 

Agreed:

	 	 	 	 	 
	Dwight Brooks

	 	Date:
	 	9/21/06
	 

	 	 	 	 
	Dwight Brooks, CEO/Executive Producer of Arizona Motion Picture Studio, LLC.

	 	 	 
	  

	 	 
	 	 
	Footnotes:
	 	 

Note #:1. The “Projects” for which the $20 million of convertible Preferred is to be used
consists of seven limited liability companies, all single asset entities, which will be six movies
to be produced, and the Wagon Bow Ranch.

Note #2: The Wagon Bow project is to be investments, acquisition, and development of certain
facilities necessary to assist in the construction of the Town of Trout Creek and the planned
facilities for the movie set. The movie set is to basically reflect a Western town reminiscent of
the West in the 1880’s to 1900. This can include movie sets, hotels, trailers, food facilities,
hospital dispensary, corrals, recreational facilities, roads, lighting, housing, fire protection
facilities, sanitary systems and infrastructure. Brooks will have a proportionate interest in these
facilities through the formation of a limited liability company and his proportionate interest will
reflect the investment by him and Arizona Motion Picture Studio, LLC. As a general guideline, it
is suggested that Mr. Brooks and/or Movie Studio have 51% or more of the equity ownership in the
limited liability company that is constructing these facilities at the Wagon Bow Ranch (unless
there is agreement between the parties that the percentages should be changed.)

4

 

EXIHIBIT “A”

     As used in this agreement and in all other usages of the terms “net profits” in connection
with the motion picture to which this agreement relates (sometimes herein referred to as the
“motion picture” or the “picture” or the “photoplay”), the term “net profits” means:

     All gross receipts of the sale, rental, license or other use of the motion picture, without
limitation, including royalties or license fees, if any, paid for the right to distribute the sound
track of said motion picture or any portion thereof as a phonograph record, album, audio tape, or
CD separate from the filmed portion of said motion picture, less the following deductions:

	1.	 	All costs of distribution of said motion picture, of every kind and character, without
limitation, including, but not by way of limitation, all costs of prints and replacement
prints, advertising, cartage, storage, exploitation and promotion, distribution fees, taxes
(but not taxes measured by the net income of the Owner), licenses, censorship, editing,
re-editing, re-cutting, dubbing, re-dubbing, sound tracks, master discs, tapes, records, CD’s,
laboratory work, titles, procuring copyrights, making changes in the photoplay, making dupe
negatives, re-dubbed tracks, foreign versions, dues to the Motion Picture Producers and
Distributors of America, Inc. on account of the photoplay, and all costs of collection,
including attorney’s fees and Court costs where applicable, costs of defense of claims against
the photoplay and the Owner, the worldwide distribution licensee, the production thereof,
exchanges of currency and duties; and

	2.	 	All costs of production of said motion picture, including pre-production and
post-production thereof, including, but not by way of limitation, finance charges, the cost of
acquisition of literary rights and clearances thereof, all salaries, fees or other
remuneration of cast, crew and all other personnel involved therein, including fringe benefits
and taxes attributable thereto, and including payments made under the contracts to which this
exhibit is appended; all costs of material, facilities, and services incurred in connection
therewith, whether by purchase, rental or other means of acquisition, and including, but not
limited to, studio and office space, utilities, facilities, material, equipment, and
personnel, cutting rooms and equipment, cameras, film, lights, props, sets, mobile units,
sound equipment and facilities, legal, accounting and audit fees, publicity, travel, meals and
lodging, whether paid direct or by per diem or other reimbursement; and all other expenses,
costs or charges customarily included in production costs of a motion picture in accordance
with standard accounting practices of the motion picture industry in the vicinity of
Hollywood, California.

5Exhibit 4.1

    EXHIBIT
      4.1

     

    

     

    

    
      
        

      

    

    

    DECLARATION
      OF TRUST

     

    COMMERCE
      HARRISBURG CAPITAL TRUST III

     

    DATED
      AS OF SEPTEMBER 29, 2006

     

     

    
 

    
      
        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

    
      
        	 	Page
	 	 
	
                ARTICLE
                  I INTERPRETATION AND DEFINITIONS

              	
                1

              
	
                Section
                  1.1 Definitions

              	
                1

              
	
                ARTICLE
                  II EVENTS OF DEFAULT

              	
                6

              
	
                Section
                  2.1 Events of Default; Waiver

              	
                6

              
	
                Section
                  2.2 Event of Default; Notice

              	
                8

              
	
                ARTICLE
                  III ORGANIZATION

              	
                8

              
	
                Section
                  3.1 Name

              	
                8

              
	
                Section
                  3.2 Office

              	
                9

              
	
                Section
                  3.3 Purpose

              	
                9

              
	
                Section
                  3.4 Authority

              	
                9

              
	
                Section
                  3.5 Title to Property of the Trust

              	
                9

              
	
                Section
                  3.6 Powers and Duties of the Administrative Trustees

              	
                9

              
	
                Section
                  3.7 Prohibition of Actions by the Trust and the Trustees

              	
                12

              
	
                Section
                  3.8 Powers and Duties of the Property Trustee

              	
                12

              
	
                Section
                  3.9 Certain Duties and Responsibilities of the Property
                  Trustee

              	
                14

              
	
                Section
                  3.10 Certain Rights of Property Trustee

              	
                16

              
	
                Section
                  3.11 Delaware Trustee

              	
                18

              
	
                Section
                  3.12 Execution of Documents

              	
                18

              
	
                Section
                  3.13 Not Responsible for Recitals or Issuance of
                  Securities

              	
                18

              
	
                Section
                  3.14 Duration of Trust

              	
                19

              
	
                Section
                  3.15 Mergers

              	
                19

              
	
                ARTICLE
                  IV SPONSOR

              	
                20

              
	
                Section
                  4.1 Sponsor’s Purchase of Common Securities

              	
                20

              
	
                Section
                  4.2 Responsibilities of the Sponsor

              	
                21

              
	
                Section
                  4.3 Right to Proceed

              	
                21

              
	
                Section
                  4.4 Right to Terminate Trust

              	
                21

              
	
                ARTICLE
                  V TRUSTEES

              	
                21

              
	
                Section
                  5.1 Number of Trustees: Appointment of Co-Trustee

              	
                21

              
	
                Section
                  5.2 Delaware Trustee

              	
                22

              
	
                Section
                  5.3 Property Trustee; Eligibility

              	
                22

              
	
                Section
                  5.4 Certain Qualifications of Administrative Trustees and Delaware
                  Trustee
                  Generally

              	
                23

              
	
                Section
                  5.5 Administrative Trustees

              	
                23

              
	
                Section
                  5.6 Delaware Trustee

              	
                24

              
	
                Section
                  5.7 Appointment, Removal and Resignation of Trustees

              	
                24

              
	
                Section
                  5.8 Vacancies among Trustees

              	
                26

              
	
                Section
                  5.9 Effect of Vacancies

              	
                26

              
	
                Section
                  5.10 Meetings

              	
                26

              
	
                Section
                  5.11 Delegation of Power

              	
                27

              
	
                Section
                  5.12 Merger, Conversion, Consolidation or Succession to
                  Business

              	
                27

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

      
        	
                ARTICLE
                  VI DISTRIBUTIONS

              	
                27

              
	
                Section
                  6.1 Distributions

              	
                27

              
	
                ARTICLE
                  VII ISSUANCE OF SECURITIES

              	
                27

              
	
                Section
                  7.1 General Provisions Regarding Securities

              	
                27

              
	
                Section
                  7.2 Execution and Authentication

              	
                28

              
	
                Section
                  7.3 Form and Dating

              	
                29

              
	
                Section
                  7.4 Registrar and Paying Agent

              	
                29

              
	
                Section
                  7.5 Paying Agent to Hold Money in Trust

              	
                30

              
	
                Section
                  7.6 Replacement Securities

              	
                30

              
	
                Section
                  7.7 Outstanding Capital Securities

              	
                30

              
	
                Section
                  7.8 Capital Securities in Treasury

              	
                31

              
	
                Section
                  7.9 Temporary Securities

              	
                31

              
	
                Section
                  7.10 Cancellation

              	
                31

              
	
                Section
                  7.11 CUSIP Numbers

              	
                31

              
	
                ARTICLE
                  VIII TERMINATION OF TRUST

              	
                31

              
	
                Section
                  8.1 Termination of Trust

              	
                31

              
	
                ARTICLE
                  IX TRANSFER OF INTERESTS

              	
                32

              
	
                Section
                  9.1 Transfer of Securities

              	
                32

              
	
                Section
                  9.2 Transfer Procedures and Restrictions

              	
                33

              
	
                ARTICLE
                  X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR
                  OTHERS

              	
                37

              
	
                Section
                  10.1 Liability

              	
                37

              
	
                Section
                  10.2 Exculpation

              	
                37

              
	
                Section
                  10.3 Fiduciary Duty

              	
                38

              
	
                Section
                  10.4 Indemnification

              	
                39

              
	
                Section
                  10.5 Outside Businesses

              	
                41

              
	
                Section
                  10.6 Compensation; Fees

              	
                42

              
	
                ARTICLE
                  XI ACCOUNTING

              	
                42

              
	
                Section
                  11.1 Fiscal Year

              	
                42

              
	
                Section
                  11.2 Certain Accounting Matters

              	
                43

              
	
                Section
                  11.3 Banking

              	
                43

              
	
                Section
                  11.4 Withholding

              	
                43

              
	
                ARTICLE
                  XII AMENDMENTS AND MEETINGS

              	
                44

              
	
                Section
                  12.1 Amendments

              	
                44

              
	
                Section
                  12.2 Meetings of the Holders; Action by Written Consent

              	
                46

              
	
                ARTICLE
                  XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE
                  TRUSTEE

              	
                47

              
	
                Section
                  13.1 Representations and Warranties of Property Trustee

              	
                47

              
	
                Section
                  13.2 Representations and Warranties of Delaware Trustee

              	
                47

              
	
                ARTICLE
                  XIV MISCELLANEOUS

              	
                48

              
	
                Section
                  14.1 Notices

              	
                48

              
	
                Section
                  14.2 Governing Law

              	
                49

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      
        	
                Section
                  14.3 Intention of the Parties

              	
                49

              
	
                Section
                  14.4 Headings

              	
                50

              
	
                Section
                  14.5 Successors and Assigns

              	
                50

              
	
                Section
                  14.6 Partial Enforceability.

              	
                50

              
	
                Section
                  14.7 Counterparts.

              	
                50

              

      

      

        
          
            
            

          

          
            iii

            
              

            

          

          
            
            

          

        

      

    

    DECLARATION
      OF TRUST OF

    COMMERCE
      HARRISBURG CAPITAL TRUST III

    

    September
      29, 2006

     

    DECLARATION
      OF TRUST (“Declaration”) dated and effective as of September  29, 2006, by
      the Trustees (as defined herein), the Sponsor (as defined herein) and by the
      holders, from time to time, of undivided beneficial interests in the Trust
      to be
      issued pursuant to this Declaration;

     

    WHEREAS,
      the Trustees and the Sponsor wish to establish Commerce Harrisburg Capital
      Trust
      III (the “Trust”), a statutory trust formed under the Statutory Trust Act (as
      hereinafter defined) pursuant to this Declaration, and a Certificate of Trust
      filed with the Secretary of State of the State of Delaware (the “ Secretary of
      State”) on September 26, 2006, with an effective date of September 29, 2006, for
      the sole purpose of issuing and selling certain securities representing
      undivided beneficial interests in the assets of the Trust and investing the
      proceeds thereof in certain Debentures of the Debenture Issuer (each as
      hereinafter defined), and engaging in only those other activities necessary,
      advisable or incidental thereto.

     

    NOW,
      THEREFORE, it being the intention of the parties hereto to establish the Trust
      as a statutory trust under the Delaware Statutory Trust Act and that this
      Declaration constitute the governing instrument of such statutory trust, the
      Trustees declare that all assets contributed to the Trust will be held in trust
      for the benefit of the holders, from time to time, of the securities
      representing undivided beneficial interests in the assets of the Trust issued
      hereunder, subject to the provisions of this Declaration.

     

    ARTICLE
      I

    INTERPRETATION
      AND DEFINITIONS

     

    

    Section
      1.1  Definitions

     

    Unless
      the context otherwise requires:

     

    (a)  Capitalized
      terms used in this Declaration but not defined in the preamble above have the
      respective meanings assigned to them in this Section 1.1; 

     

    (b)  a
      term
      defined anywhere in this Declaration has the same meaning
      throughout;

     

    (c)  all
      references to “the Declaration” or “this Declaration” are to this Declaration as
      modified, supplemented or amended from time to time; 

     

    (d)  all
      references in this Declaration to Articles and Sections and Annexes and Exhibits
      are to Articles and Sections of and Annexes and Exhibits to this Declaration
      unless otherwise specified;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)  a
      term
      defined in the Trust Indenture Act has the same meaning when used in this
      Declaration unless otherwise defined in this Declaration or unless the context
      otherwise requires; and

     

    (f)  a
      reference to the singular includes the plural and vice versa.

     

    “Administrative
      Trustee”
has
      the
      meaning set forth in Section 5.1(b).

     

    “Affiliate”
has
      the
      same meaning as given to that term in Rule 405 under the Securities Act or
      any
      successor rule thereunder.

     

    “Agent”
means
      any Paying Agent or Registrar.

     

    “Authorized
      Officer”
of
      a
      Person means any other Person that is authorized to legally bind such former
      Person.

     

    “Business
      Day”
means
      any day other than a Saturday or a Sunday or a day on which banking institutions
      in New York, New York, Wilmington, Delaware or Philadelphia, Pennsylvania,
      are
      authorized or required by law or executive order to close.

     

    “Capital
      Security Beneficial Owner”
means,
      with respect to a Book-Entry Interest, a Person who is the beneficial owner
      of
      such Book-Entry Interest, as reflected on the books of the Clearing Agency,
      or
      on the books of a Person maintaining an account with such Clearing Agency
      (directly as a Clearing Agency Participant or as an indirect participant, in
      each case in accordance with the rules of such Clearing Agency).

     

    “Capital
      Securities”
has
      the
      meaning specified in Section 7.1(a).

     

    “Capital
      Securities Guarantee”
means
      the Guarantee Agreement dated as of September 29, 2006 of the Sponsor in
      respect of the Capital Securities.

     

    “Closing
      Date”
means
      the “Closing Date” under the Purchase Agreement.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, or any
      successor legislation.

     

    “Commission”
means
      the United States Securities and Exchange Commission as from time to time
      constituted, or if at any time after the execution of this Declaration such
      Commission is not existing and performing the duties now assigned to it under
      applicable federal securities laws, then the body performing such duties at
      such
      time.

     

    “Common
      Securities”
has
      the
      meaning specified in Section 7.1(a).

     

    “Company
      Indemnified Person”
means
      (a) any Administrative Trustee; (b) any Affiliate of any Administrative Trustee;
      (c) any officers, directors, stockholders, members, partners, employees,
      representatives or agents of any Administrative Trustee; or (d) any officer,
      employee or agent of the Trust or its Affiliates.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Corporate
      Trust Office”
means
      the office of the Property Trustee at which the corporate trust business of
      the
      Property Trustee shall, at any particular time, be principally administered,
      which office at the date of execution of this Agreement is located at 1100
      North
      Market Street, Rodney Square North, Wilmington, Delaware 19890-0001, Attn:
      Corporate Trust Administration.

     

    “Covered
      Person”
means:
      (a) any officer, director, stockholder, partner, member, representative,
      employee or agent of (i) the Trust or (ii) the Trust’s Affiliates; and (b) any
      Holder of Securities.

     

    “Debenture
      Issuer”
means
      Pennsylvania Commerce Bancorp, Inc., a Pennsylvania corporation, or any
      successor entity resulting from any consolidation, amalgamation, merger or
      other
      business combination, in its capacity as issuer of the Debentures under the
      Indenture.

     

    “Debenture
      Trustee”
means
      Wilmington Trust Company, a Delaware banking corporation, as trustee under
      the
      Indenture until a successor is appointed thereunder, and thereafter means such
      successor trustee.

     

    “Debentures”
means
      the 7.75% Junior Subordinated Deferrable Interest Debentures due September
      29,
      2036 of the Debenture Issuer issued pursuant to the Indenture.

     

    “Default”
means
      an event, act or condition that with notice or lapse of time, or both, would
      constitute an Event of Default.

     

    “Definitive
      Capital Securities”
shall
      have the meaning set forth in Section 7.3.

     

    “Delaware
      Trustee”
has
      the
      meaning set forth in Section 5.1.

     

    “Direct
      Action”
shall
      have the meaning set forth in Section 3.8(e).

     

    “Distribution”
means
      a
      distribution payable to Holders in accordance with
      Section 6.1.

     

    “Event
      of Default”
in
      respect of the Securities means an Event of Default (as defined in the
      Indenture) that has occurred and is continuing in respect of the
      Debentures.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended from time to time, or any
      successor legislation.

     

    “Federal
      Reserve Board”
means
      the Board of Governors of the Federal Reserve System.

     

    “Fiduciary
      Indemnified Person”
has
      the
      meaning set forth in Section 10.4(b).

     

    “Fiscal
      Year”
has
      the
      meaning set forth in Section 11.1.

     

    “Holder”
means
      a
      Person in whose name a Security or Successor Security is registered, such Person
      being a beneficial owner within the meaning of the Statutory Trust
      Act.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Indemnified
      Person”
means
      a
      Company Indemnified Person or a Fiduciary Indemnified Person.

     

    “Indenture”
means
      the Indenture dated as of September 29, 2006, among the Debenture Issuer and
      the
      Debenture Trustee, as amended from time to time.

     

    “Investment
      Company”
means
      an investment company as defined in the Investment Company Act.

     

    “Investment
      Company Act”
means
      the Investment Company Act of 1940, as amended from time to time, or any
      successor legislation.

     

    “Legal
      Action”
has
      the
      meaning set forth in Section 3.6(g).

     

    “Like
      Amount”
has
      the
      meaning set forth in Annex I.

     

    “Majority
      in liquidation amount”
means,
      with respect to the Trust Securities, except as provided in the terms of the
      Capital Securities, Holder(s) of outstanding Trust Securities voting together
      as
      a single class or, as the context may require, Holders of outstanding Capital
      Securities or Holders of outstanding Common Securities voting separately as
      a
      class, who are the record owners of more than 50% of the aggregate liquidation
      amount (including the stated amount that would be paid on redemption,
      liquidation or otherwise, plus accrued and unpaid Distributions to the date
      upon
      which the voting percentages are determined) of all outstanding Securities
      of
      the relevant class.

     

    “Officers’
      Certificate”
means,
      with respect to any Person, a certificate signed by the Chairman, the Chief
      Executive Officer, the President, a Vice President, the Chief Financial Officer,
      the Secretary or an Assistant Secretary. Any Officers’ Certificate delivered by
      the Trust shall be signed by at least one Administrative Trustee. Any Officers’
Certificate delivered with respect to compliance with a condition or covenant
      provided for in this Declaration shall include:

     

    (a)  a
      statement that each officer signing the Certificate has read the covenant or
      condition and the definitions relating thereto;

     

    (b)  a
      brief
      statement of the nature and scope of the examination or investigation undertaken
      by each officer in rendering the Certificate;

     

    (c)  a
      statement that each such officer has made such examination or investigation
      as,
      in such officer’s opinion, is necessary to enable such officer to express an
      informed opinion as to whether or not such covenant or condition has been
      complied with; and 

     

    (d)  a
      statement as to whether, in the opinion of each such officer, such condition
      or
      covenant has been complied with.

     

    “Opinion
      of Counsel”
means
      a
      written opinion of counsel, who may be an employee of the Sponsor, and who
      shall
      be acceptable to the Property Trustee.

     

    
      
        
        

      

      
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    “Paying
      Agent”
has
      the
      meaning specified in Section 7.4.

     

    “Payment
      Amount”
has
      the
      meaning specified in Section 6.1.

     

    “Person”
means
      a
      legal person, including any individual, corporation, estate, partnership, joint
      venture, association, joint stock company, limited liability company, trust,
      unincorporated association, or government or any agency or political subdivision
      thereof, or any other entity of whatever nature.

     

    “Property
      Trustee”
has
      the
      meaning set forth in Section 5.3(a).

     

    “Property
      Trustee Account”
has
      the
      meaning set forth in Section 3.8(c)(i).

     

    “Purchase
      Agreement”
means
      the Purchase Agreement dated as of September 29, 2006, among the Trust, the
      Sponsor and Commerce Bank, N.A.

     

    “Quorum”
means
      a
      majority of the Administrative Trustees or, if there are only two Administrative
      Trustees, both of them.

     

    “Registrar”
has
      the
      meaning set forth in Section 7.4.

     

    “Related
      Party”
means,
      with respect to the Sponsor, any direct or indirect wholly owned subsidiary
      of
      the Sponsor or any other Person that owns, directly or indirectly, 100% of
      the
      outstanding voting securities of the Sponsor.

     

    “Responsible
      Officer”
means
      any officer within the Corporate Trust Office of the Property Trustee with
      direct responsibility for the administration of this Declaration and also means,
      with respect to a particular corporate trust matter, any other officer to whom
      such matter is referred because of that officer’s knowledge of and familiarity
      with the particular subject.

     

    “Rule
      3a-5”
means
      Rule 3a-5 under the Investment Company Act, or any successor rule or regulation.
      

     

    “Securities”
or
      “Trust
      Securities”
means
      the Common Securities and the Capital Securities.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended from time to time, or any successor
      legislation.

     

    “Securities
      Guarantee”
means
      the Capital Securities Guarantee.

     

    “Special
      Event”
has
      the
      meaning set forth in Section 4(c) of Annex I hereto.

     

    “Sponsor”
means
      Pennsylvania Commerce Bancorp, Inc., a Pennsylvania corporation, or any
      successor entity resulting from any merger, consolidation, amalgamation or
      other
      business combination, in its capacity as sponsor of the Trust.

     

    
      
        
        

      

      
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    “Statutory
      Trust Act”
means
      Chapter 38 of Title 12 of the Delaware Code, 12 Del. C.§ 3801 et seq.,
      as it
      may be amended from time to time, or any successor legislation.

     

    “Successor
      Delaware Trustee”
has
      the
      meaning set forth in Section 5.7(b)(ii).

     

    “Successor
      Entity”
has
      the
      meaning set forth in Section 3.15(b)(i).

     

    “Successor
      Property Trustee”
has
      the
      meaning set forth in Section 3.8(f)(ii).

     

    “Successor
      Securities”
has
      the
      meaning set forth in Section 3.15(b)(i)(B).

     

    “Super
      Majority”
has
      the
      meaning set forth in Section 2.1(a)(ii).

     

    “10%
      in
      liquidation amount”
means,
      with respect to the Trust Securities, except as provided in the terms of the
      Capital Securities, Holder(s) of outstanding Trust Securities voting together
      as
      a single class or, as the context may require, Holders of outstanding Capital
      Securities or Holders of outstanding Common Securities voting separately as
      a
      class, who are the record owners of 10% or more of the aggregate liquidation
      amount (including the stated amount that would be paid on redemption,
      liquidation or otherwise, plus accrued and unpaid Distributions to the date
      upon
      which the voting percentages are determined) of all outstanding Securities
      of
      the relevant class.

     

    “Treasury
      Regulations”
means
      the income tax regulations, including temporary and proposed regulations,
      promulgated under the Code by the United States Treasury, as such regulations
      may be amended from time to time (including corresponding provisions of
      succeeding regulations).

     

    “Trust
      Indenture Act”
means
      the Trust Indenture Act of 1939, as amended from time to time, or any successor
      legislation.

     

    “Trust
      Securities”
means
      the Common Securities together with the Capital Securities.

     

    “Trustee”
or
      “Trustees”
means
      each Person who has signed this Declaration as a trustee, so long as such Person
      shall continue as a trustee in accordance with the terms hereof, and all other
      Persons who may from time to time be duly appointed, qualified and serving
      as
      trustees in accordance with the provisions hereof, and references herein to
      a
      Trustee or the Trustees shall refer to such Person or Persons solely in their
      capacity as trustees hereunder.

     

    ARTICLE
      II  

    EVENTS
      OF DEFAULT

     

    Section
      2.1  Events
      of Default; Waiver 

     

    (a)  The
      Holders of a Majority in liquidation amount of Capital Securities may, by vote,
      on behalf of the Holders of all of the Capital Securities, waive any past Event
      of Default in respect of the Capital Securities and its consequences,
provided that,
      if the
      underlying Event of Default under the Indenture:

     

    
      
        
        

      

      
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    (i)  is
      not
      waivable under the Indenture, the Event of Default under the Declaration shall
      also not be waivable; or

     

    (ii)  requires
      the consent or vote of greater than a majority in aggregate principal amount
      of
      the holders of the Debentures (a “Super Majority”) to be waived under the
      Indenture, the Event of Default under the Declaration may only be waived by
      the
      vote of the Holders of at least the proportion in aggregate liquidation amount
      of the Capital Securities that the relevant Super Majority represents of the
      aggregate principal amount of the Debentures outstanding.

     

    Upon
      such
      waiver, any such default shall cease to exist, and any Event of Default with
      respect to the Capital Securities arising therefrom shall be deemed to have
      been
      cured, for every purpose of this Declaration, but no such waiver shall extend
      to
      any subsequent or other default or an Event of Default with respect to the
      Capital Securities or impair any right consequent thereon. Any waiver by the
      Holders of the Capital Securities of an Event of Default with respect to the
      Capital Securities shall also be deemed to constitute a waiver by the Holders
      of
      the Common Securities of any such Event of Default with respect to the Common
      Securities for all purposes of this Declaration without any further act, vote,
      or consent of the Holders of the Common Securities.

    

    (b)  The
      Holders of a Majority in liquidation amount of the Common Securities may, by
      vote, on behalf of the Holders of all of the Common Securities, waive any past
      Event of Default with respect to the Common Securities and its consequences,
      provided that,
      if the
      underlying Event of Default under the Indenture:

     

    (i)  is
      not
      waivable under the Indenture, except where the Holders of the Common Securities
      are deemed to have waived such Event of Default under the Declaration as
      provided below in this Section 2.1(b), the Event of Default under the
      Declaration shall also not be waivable; or

     

    (ii)  requires
      the consent or vote of a Super Majority to be waived, except where the Holders
      of the Common Securities are deemed to have waived such Event of Default under
      the Declaration as provided below in this Section 2.1(b), the Event of Default
      under the Declaration may only be waived by the vote of the Holders of at least
      the proportion in aggregate liquidation amount of the Common Securities that
      the
      relevant Super Majority represents of the aggregate principal amount of the
      Debentures outstanding;

     

    provided further,
      the
      Holders of Common Securities will be deemed to have waived any such Event of
      Default and all Events of Default with respect to the Common Securities and
      their consequences if all Events of Default with respect to the Capital
      Securities have been cured, waived or otherwise eliminated, and until such
      Events of Default have been so cured, waived or otherwise eliminated, the
      Property Trustee will be deemed to be acting solely on behalf of the Holders
      of
      the Capital Securities and only the Holders of the Capital Securities will
      have
      the right to direct the Property Trustee in accordance with the terms of the
      Securities. Subject to the foregoing provisions of this Section 2.1(b), upon
      such waiver, any such default shall cease to exist and any Event of Default
      with
      respect to the Common Securities arising therefrom shall be deemed to have
      been
      cured for every purpose of 

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    this
      Declaration, but no such waiver shall extend to any subsequent or other default
      or Event of Default with respect to the Common Securities or impair any right
      consequent thereon.

    

    (c)  A
      waiver
      of an Event of Default under the Indenture by the Property Trustee, at the
      direction of the Holders of the Capital Securities, constitutes a waiver of
      the
      corresponding Event of Default under this Declaration.

     

    Section
      2.2  Event
      of Default; Notice

     

    (a)  The
      Property Trustee shall, within five Business Days after the occurrence of an
      Event of Default, transmit by mail, first class postage prepaid, to the Holders,
      notices of all defaults with respect to the Securities actually known to a
      Responsible Officer, unless such defaults have been cured before the giving
      of
      such notice (the term “defaults” for the purposes of this Section 2.2(a) being
      hereby defined to be an Event of Default as defined in the Indenture, not
      including any periods of grace provided for therein and irrespective of the
      giving of any notice provided therein); provided that,
      except
      for a default in the payment of principal of or interest (including Compounded
      Interest and Additional Sums (as such terms are defined in the Indenture),
      if
      any), the Property Trustee shall be protected in withholding such notice if
      and
      so long as a Responsible Officer in good faith determines that the withholding
      of such notice is in the interests of the Holders.

     

    (b)  The
      Property Trustee shall not be deemed to have knowledge of any default
      except:

     

    (i)  a
      default
      under Sections 5.01(a) (other than the payment of Compounded Interest, and
      Additional Sums) and 5.01(b) of the Indenture; or

     

    (ii)  any
      default as to which the Property Trustee shall have received written notice
      or
      of which a Responsible Officer charged with the administration of the
      Declaration shall have actual knowledge.

     

    (c)  The
      Sponsor and the Administrative Trustees shall file annually with the Property
      Trustee a certification as to whether or not they are in compliance with all
      the
      conditions and covenants applicable to them under this Declaration.

     

    ARTICLE
      III

    ORGANIZATION

     

    Section
      3.1  Name

     

    The
      Trust
      is named “Commerce Harrisburg Capital Trust III” as such name may be modified
      from time to time by the Administrative Trustees following written notice to
      the
      Delaware Trustee, the Property Trustee and the Holders. The Trust’s activities
      may be conducted under the name of the Trust or any other name deemed advisable
      by the Administrative Trustees.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    Section
      3.2  Office

     

    The
      address of the principal office of the Trust is c/o Commerce Bank/Harrisburg,
      N.A., 3801 Paxton Street, Harrisburg, PA 17111. On ten Business Days’ written
      notice to the Delaware Trustee, the Property Trustee and the Holders of
      Securities, the Administrative Trustees may designate another principal
      office.

    

    Section
      3.3  Purpose

     

    The
      exclusive purposes and functions of the Trust are (a) to issue and sell the
      Securities, (b) use the proceeds from the sale of the Securities to acquire
      the
      Debentures, and (c) except as otherwise limited herein, to engage in only those
      other activities necessary, advisable or incidental thereto. The Trust shall
      not
      borrow money, issue debt or reinvest proceeds derived from investments, mortgage
      or pledge any of its assets, or otherwise undertake (or permit to be undertaken)
      any activity that would cause the Trust not to be classified for United States
      federal income tax purposes as a grantor trust.

     

    Section
      3.4  Authority

     

    Subject
      to the limitations provided in this Declaration and to the specific duties
      of
      the Property Trustee, the Administrative Trustees shall have exclusive and
      complete authority to carry out the purposes of the Trust. An action taken
      by
      the Administrative Trustees in accordance with their powers shall constitute
      the
      act of and serve to bind the Trust and an action taken by the Property Trustee
      on behalf of the Trust in accordance with its powers shall constitute the act
      of
      and serve to bind the Trust. In dealing with the Trustees acting on behalf
      of
      the Trust, no Person shall be required to inquire into the authority of the
      Trustees to bind the Trust. Persons dealing with the Trust are entitled to
      rely
      conclusively on the power and authority of the Trustees as set forth in this
      Declaration.

     

    Section
      3.5  Title
      to Property of the Trust

     

    Except
      as
      provided in Section 3.8 with respect to the Debentures and the Property Trustee
      Account or as otherwise provided in this Declaration, legal title to all assets
      of the Trust shall be vested in the Trust. The Holders shall not have legal
      title to any part of the assets of the Trust, but shall have an undivided
      beneficial interest in the assets of the Trust.

     

    Section
      3.6  Powers
      and Duties of the Administrative Trustees

     

    The
      Administrative Trustees shall have the exclusive power, duty and authority,
      and
      are hereby authorized and directed, to cause the Trust to engage in the
      following activities:

     

    (a)  to
      issue
      and sell the Securities in accordance with this Declaration; provided,
      however,
      that
      except as contemplated in Section 7.1(a), (i) the Trust may issue no more than
      one series of Capital Securities and no more than one series of Common
      Securities, (ii) there shall be no interests in the Trust other than the
      Securities, and (iii) the issuance of Securities shall be limited to a
      simultaneous issuance of both Capital Securities and Common Securities on the
      Closing Date;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    (b)  in
      connection with the issue and sale of the Capital Securities at the direction
      of
      the Sponsor, to:

     

    (i)  prepare
      and execute, if necessary, a prospectus in preliminary and final form prepared
      by the Sponsor, in relation to the offering and sale of the Capital Securities
      and to execute and file, if necessary, with the Commission, a registration
      statement, including any amendments thereto, for the offering and sale of the
      Capital Securities;

     

    (ii)  execute
      and file any documents prepared by the Sponsor, or take any acts as determined
      by the Sponsor to be necessary in order to qualify or register or exempt from
      qualification or registration all or part of the Capital Securities in any
      State
      in which the Sponsor has determined to qualify or register such Capital
      Securities for sale or to rely upon an exemption from qualification or
      registration; and

     

    (iii)  execute
      and enter into the Purchase Agreement providing for the sale of the Capital
      Securities;

     

    (c)  to
      acquire the Debentures with the proceeds of the sale of the Capital Securities
      and the Common Securities; provided,
      however,
      that
      the Administrative Trustees shall cause legal title to the Debentures to be
      held
      of record in the name of the Property Trustee for the benefit of the
      Holders;

     

    (d)  to
      give
      the Sponsor and the Property Trustee prompt written notice of the occurrence
      of
      a Special Event;

     

    (e)  to
      establish a record date with respect to all actions to be taken hereunder that
      require a record date be established, including and with respect to,
      Distributions, voting rights, redemptions and exchanges, and to issue relevant
      notices to the Holders of Capital Securities and Holders of Common Securities
      as
      to such actions and applicable record dates;

     

    (f)  to
      take
      all actions and perform such duties as may be required of the Administrative
      Trustees pursuant to the terms of the Securities;

     

    

    (g)  to
      bring
      or defend, pay, collect, compromise, arbitrate, resort to legal action, or
      otherwise adjust claims or demands of or against the Trust (“Legal Action”),
      unless pursuant to Section 3.8(e), the Property Trustee has the exclusive power
      to bring such Legal Action;

     

    (h)  to
      employ
      or otherwise engage employees and agents (who may be designated as officers
      with
      titles) and managers, contractors, advisors, and consultants and pay reasonable
      compensation for such services; 

     

    (i)  to
      incur
      expenses that are necessary or incidental to carry out any of the purposes
      of
      the Trust; 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (j)  to
      act
      as, or appoint another Person to act as, Registrar and Exchange Agent for the
      Securities or to appoint a Paying Agent for the Securities as provided in
      Section 7.4 except for such time as such power to appoint a Paying Agent is
      vested in the Property Trustee;

     

    (k)  to
      give
      prompt written notice to the Property Trustee and to Holders of any notice
      received from the Debenture Issuer of its election to defer payments of interest
      on the Debentures by extending the interest payment period under the
      Indenture;

     

    (l)  to
      take
      all action that may be necessary or appropriate for the preservation and the
      continuation of the Trust’s valid existence, rights, franchises and privileges
      as a statutory trust under the laws of the State of Delaware and of each other
      jurisdiction in which such existence is necessary to protect the limited
      liability of the Holders or to enable the Trust to effect the purposes for
      which
      the Trust was created; 

     

    (m)  to
      take
      any action, not inconsistent with this Declaration or with applicable law,
      that
      the Administrative Trustees determine in their discretion to be necessary or
      desirable in carrying out the activities of the Trust as set out in this Section
      3.6, in-cluding, but not limited to:

     

    (i)  causing
      the Trust not to be deemed to be an Investment Company required to be registered
      under the Investment Company Act;

     

    (ii)  causing
      the Trust to be classified for United States federal income tax purposes as
      a
      grantor trust; and

     

    (iii)  cooperating
      with the Debenture Issuer to ensure that the Debentures will be treated as
      indebtedness of the Debenture Issuer for United States federal income tax
      purposes;

     

    (n)  to
      take
      all action necessary to cause all applicable tax returns and tax information
      reports that are required to be filed with respect to the Trust to be duly
      prepared and filed by the Administrative Trustees, on behalf of the Trust;
      and

     

    (o)  to
      execute all documents or instruments, perform all duties and powers, and do
      all
      things for and on behalf of the Trust in all matters necessary or incidental
      to
      the foregoing.

     

    The
      Administrative Trustees must exercise the powers set forth in this Section
      3.6
      in a manner that is consistent with the purposes and functions of the Trust
      set
      out in Section 3.3, and the Administrative Trustees shall not take any action
      that is inconsistent with the purposes and functions of the Trust set forth
      in
      Section 3.3.

     

    Subject
      to this Section 3.6, the Administrative Trustees shall have none of the powers
      or the authority of the Property Trustee set forth in Section 3.8.

     

    Any
      expenses incurred by the Administrative Trustees pursuant to this Section 3.6
      shall be reimbursed by the Debenture Issuer.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    Section
      3.7  Prohibition
      of Actions by the Trust and the Trustees

     

    The
      Trust
      shall not, and the Trustees (including the Property Trustee and the Delaware
      Trustee)
      shall not, engage in any activity other than as required or authorized by this
      Declaration. The Trust shall not:

     

    (a)  invest
      any proceeds received by the Trust from holding the Debentures, but shall
      distribute all such proceeds to Holders pursuant to the terms of this
      Declaration and of the Securities; 

     

    (b)  acquire
      any assets other than as expressly provided herein;

     

    (c)  possess
      Trust property for other than a Trust purpose;

     

    (d)  make
      any
      loans or incur any indebtedness other than loans represented by the
      Debentures;

     

    (e)  possess
      any power or otherwise act in such a way as to vary the Trust assets or the
      terms of the Securities in any way whatsoever;

     

    (f)  issue
      any
      securities or other evidences of beneficial ownership of, or beneficial interest
      in, the Trust other than the Securities;

     

    (g)  other
      than as provided in this Declaration or Annex I, (i) direct the time, method
      and
      place of conducting any proceeding with respect to any remedy available to
      the
      Debenture Trustee, or exercising any trust or power conferred upon the Debenture
      Trustee with respect to the Debentures, (ii) waive any past default that is
      waivable under the Indenture, or (iii) exercise any right to rescind or annul
      any declaration that the principal of all the Debentures shall be due and
      payable; or 

     

    (h)  consent
      to any amendment, modification or termination of the Indenture or the Debentures
      where such consent shall be required unless the Trust shall have received an
      opinion of independent tax counsel experienced in such matters to the effect
      that such amendment, modification or termination will not cause a substantial
      risk that the Trust will not be classified as a grantor trust for United States
      federal income tax purposes.

     

    Section
      3.8  Powers
      and Duties of the Property Trustee

     

    (a)  The
      legal
      title to the Debentures shall be owned by and held of record in the name of
      the
      Property Trustee in trust for the benefit of the Holders. The right, title
      and
      interest of the Property Trustee to the Debentures shall vest automatically
      in
      each Person who may hereafter be appointed as Property Trustee in accordance
      with Section 5.7. Such vesting and cessation of title shall be effective whether
      or not conveyancing documents with regard to the Debentures have been executed
      and delivered.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (b)  The
      Property Trustee shall not transfer its right, title and interest in the
      Debentures to the Administrative Trustees or to the Delaware Trustee (if the
      Property Trustee does not also act as Delaware Trustee).

     

    (c)  The
      Property Trustee shall: 

     

    (i)  establish
      and maintain a segregated non-interest bearing trust account (the “Property
      Trustee Account”) in the name of and under the exclusive control of the Property
      Trustee on behalf of the Holders and, upon the receipt of payments of funds
      made
      in respect of the Debentures held by the Property Trustee, deposit such funds
      into the Property Trustee Account and make payments or cause the Paying Agent
      to
      make payments to the Holders from the Property Trustee Account in accordance
      with Section 6.1. Funds in the Property Trustee Account shall be held uninvested
      until disbursed in accordance with this Declaration. The Property Trustee
      Account shall be an account that is maintained with a banking institution the
      rating on whose long-term unsecured indebtedness by a “nationally recognized
      statistical rating organization”, as that term is defined for purposes of Rule
      436(g)(2) under the Securities Act, is at least investment grade;

     

    (ii)  engage
      in
      such ministerial activities as shall be necessary or appropriate to effect
      the
      redemption of the Trust Securities to the extent the Debentures are redeemed
      or
      mature; and

     

    (iii)  upon
      written notice of distribution issued by the Administrative Trustees in
      accordance with the terms of the Securities, engage in such ministerial
      activities as shall be necessary or appropriate to effect the distribution
      of
      the Debentures to Holders upon the occurrence of certain events.

     

    (d)  The
      Property Trustee shall take all actions and perform such duties as may be
      specifically required of the Property Trustee pursuant to the terms of this
      Declaration and the Securities.

     

    (e)  Subject
      to Section 3.9(a), the Property Trustee shall take any Legal Action which arises
      out of or in connection with an Event of Default of which a Responsible Officer
      has actual knowledge or the Property Trustee’s duties and obligations under this
      Declaration or the Trust Indenture Act and if the Property Trustee shall have
      failed to take such Legal Action, the Holders of the Capital Securities may,
      to
      the extent permitted by applicable law, take such Legal Action, to the same
      extent as if such Holders of Capital Securities held an aggregate principal
      amount of Debentures equal to the aggregate liquidation amount of such Capital
      Securities, without first proceeding against the Property Trustee or the Trust;
      provided however, that if an Event of Default has occurred and is continuing
      and
      such event is attributable to the failure of the Debenture Issuer to pay the
      principal of or interest (including Compounded Interest and Additional Sums,
      if
      any), on the Debentures on the date such principal, or interest (including
      Compounded Interest and Additional Sums, if any), is otherwise payable (or
      in
      the case of redemption, on the redemption date), then a Holder of Capital
      Securities may directly institute a proceeding for enforcement of payment to
      such Holder of the principal of or interest (including Compounded Interest
      and
      Additional Sums, if any), on the Debentures having a principal amount

     

    
      
        
        

      

      
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    equal
      to
      the aggregate liquidation amount of the Capital Securities of such Holder (a
      “Direct Action”) on or after the respective due date specified in the
      Debentures. In connection with such Direct Action, the rights of the Holders
      of
      the Common Securities will be subordinated to the rights of such Holder of
      Capital Securities to the extent of any payment made by the Debenture Issuer
      to
      such Holder of Capital Securities in such Direct Action. Except as provided
      in
      the preceding sentences, the Holders of Capital Securities will not be able
      to
      exercise directly any other remedy available to the holders of the
      Debentures.

     

    (f)  The
      Property Trustee shall not resign as a Trustee unless either:

     

    (i)  the
      Trust
      has been completely liquidated and the proceeds of the liquidation distributed
      to the Holders pursuant to the terms of the Securities; or

     

    (ii)  a
      successor Property Trustee has been appointed and has accepted that appointment
      in accordance with Section 5.7 (a “Successor Property Trustee”).

     

    (g)  The
      Property Trustee shall have the legal power to exercise all of the rights,
      powers and privileges of a holder of Debentures under the Indenture and, if
      an
      Event of Default actually known to a Responsible Officer occurs and is
      continuing, the Property Trustee shall, for the benefit of Holders, enforce
      its
      rights as holder of the Debentures subject to the rights of the Holders pursuant
      to the terms of this Declaration and the Securities. 

     

    (h)  For
      such
      time as the Property Trustee is the Paying Agent, the Property Trustee may
      authorize one or more Persons to act as additional Paying Agents and to pay
      Distributions, redemption payments or liquidation payments on behalf of the
      Trust with respect to all Securities and any such Paying Agent shall comply
      with
      Section 317(b) of the Trust Indenture Act. Any such additional Paying Agent
      may
      be removed by the Property Trustee at any time the Property Trustee remains
      as
      Paying Agent and a successor Paying Agent or additional Paying Agents may be
      (but are not required to be) appointed at any time by the Property Trustee
      while
      the Property Trustee is so acting as Paying Agent.

     

    (i)  Subject
      to this Section 3.8, the Property Trustee shall have none of the duties,
      liabilities, powers or the authority of the Administrative Trustees set forth
      in
      Section 3.6.

     

    Notwithstanding
      anything expressed or implied to the contrary in this Declaration or any Annex
      or Exhibit hereto, (i) the Property Trustee must exercise the powers set forth
      in this Section 3.8 in a manner that is consistent with the purposes and
      functions of the Trust set out in Section 3.3, and (ii) the Property Trustee
      shall not take any action that is inconsistent with the purposes and functions
      of the Trust set out in Section 3.3.

     

    Section
      3.9  Certain
      Duties and Responsibilities of the Property Trustee

     

    (a)  The
      Property Trustee, before the occurrence of any Event of Default and after the
      curing or waiving of all Events of Default that may have occurred, shall
      undertake to perform only such duties as are specifically set forth in this
      Declaration and in the Securities and no implied covenants shall be read into
      this Declaration against the Property Trustee. In case an Event of Default
      has
      occurred (that has not been cured or waived pursuant to Section 2.1) of

     

    
      
        
        

      

      
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    which
      a
      Responsible Officer has actual knowledge, the Property Trustee shall exercise
      such of the rights and powers vested in it by this Declaration, and use the
      same
      degree of care and skill in their exercise, as a prudent person would exercise
      or use under the circumstances in the conduct of his or her own
      affairs.

     

    (b)  No
      provision of this Declaration shall be construed to relieve the Property Trustee
      from liability for its own negligent action, its own negligent failure to act,
      or its own willful misconduct, except that:

     

    (i)  prior
      to
      the occurrence of an Event of Default and after the curing or waiving of all
      such Events of Default that may have occurred:

     

    (A)
        the
      duties and obligations of the Property Trustee shall be determined solely by
      the
      express provisions of this Declaration and in the Securities and the Property
      Trustee shall not be liable except for the performance of such duties and
      obligations as are specifically set forth in this Declaration and in the
      Securities, and no implied covenants or obligations shall be read into this
      Declaration against the Property Trustee; and

     

    (B)
        in
      the
      absence of bad faith on the part of the Property Trustee, the Property Trustee
      may conclusively rely, as to the truth of the statements and the correctness
      of
      the opinions expressed therein, upon any certificates or opinions furnished
      to
      the Property Trustee and conforming to the requirements of this Declaration;
      provided,
      however,
      that in
      the case of any such certificates or opinions that by any provision hereof
      are
      specifically required to be furnished to the Property Trustee, the Property
      Trustee shall be under a duty to examine the same to determine whether or not
      on
      their face they conform to the requirements of this Declaration;

     

    (ii)  the
      Property Trustee shall not be liable for any error of judgment made in good
      faith by a Responsible Officer, unless it shall be proved that the Property
      Trustee was negligent in ascertaining the pertinent facts;

     

    (iii)  the
      Property Trustee shall not be liable with respect to any action taken or omitted
      to be taken by it in good faith in accordance with the direction of the Holders
      of not less than a Majority in liquidation amount of the Securities relating
      to
      the time, method and place of conducting any proceeding for any remedy available
      to the Property Trustee, or exercising any trust or power conferred upon the
      Property Trustee under this Declaration; 

     

    (iv)  no
      provision of this Declaration shall require the Property Trustee to expend
      or
      risk its own funds or otherwise incur personal financial liability in the
      performance of any of its duties or in the exercise of any of its rights or
      powers, if it shall have reasonable grounds for believing that the repayment
      of
      such funds or liability is not reasonably assured to it under the terms of
      this
      Declaration or indemnity reasonably satisfactory to the Property Trustee against
      such risk or liability is not reasonably assured to it;

     

    (v)  the
      Property Trustee’s sole duty with respect to the custody, safe keeping and
      physical preservation of the Debentures and the Property Trustee Account shall
      be to 

     

    
      
        
        

      

      
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    deal
      with
      such property in a similar manner as the Property Trustee deals with similar
      property for its own account, subject to the protections and limitations on
      liability afforded to the Property Trustee under this Declaration;

     

    (vi)  the
      Property Trustee shall have no duty or liability for or with respect to the
      value, genuineness, existence or sufficiency of the Debentures or the payment
      of
      any taxes or assessments levied thereon or in connection therewith;

     

    (vii)  the
      Property Trustee shall not be liable for any interest on any money received
      by
      it except as it may otherwise agree in writing with the Sponsor. Money held
      by
      the Property Trustee need not be segregated from other funds held by it except
      in relation to the Property Trustee Account maintained by the Property Trustee
      pursuant to Section 3.8(c)(i) and except to the extent otherwise required by
      law; and

     

    (viii)  the
      Property Trustee shall not be responsible for monitoring the compliance by
      the
      Administrative Trustees or the Sponsor with their respective duties under this
      Declaration, nor shall the Property Trustee be liable for any default or
      misconduct of the Administrative Trustees or the Sponsor.

     

    (ix)  the
      Property Trustee shall not be deemed to have notice of any Event of Default
      unless a Responsible Officer of the Property Trustee has actual knowledge
      thereof or unless written notice of any event which is in fact such a default
      is
      received by the Property Trustee at the Corporate Trust Office of the Property
      Trustee, and such notice references the Securities and this
      Declaration.

     

    Section
      3.10  Certain
      Rights of Property Trustee

     

    (a)  Subject
      to the provisions of Section 3.9:

     

    (i)  the
      Property Trustee may conclusively rely and shall be fully protected in acting
      or
      refraining from acting upon any resolution, certificate, statement, instrument,
      opinion, report, notice, request, direction, consent, order, bond, debenture,
      note, other evidence of indebtedness or other paper or document believed by
      it
      to be genuine and to have been signed, sent or presented by the proper party
      or
      parties;

     

    (ii)  any
      direction or act of the Sponsor or the Administrative Trustees contemplated
      by
      this Declaration may be sufficiently evidenced by an Officers’
Certificate;

     

    (iii)  whenever
      in the administration of this Declaration, the Property Trustee shall deem
      it
      desirable that a matter be proved or established before taking, suffering or
      omitting any action hereunder, the Property Trustee (unless other evidence
      is
      herein specifically prescribed) may, in the absence of bad faith on its part,
      request and conclusively rely upon an Officers’ Certificate which, upon receipt
      of such request, shall be promptly delivered by the Sponsor or the
      Administrative Trustees;

     

    
      
        
        

      

      
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    (iv)  the
      Property Trustee shall have no duty to see to any recording, filing or
      registration of any instrument (including any financing or continuation
      statement or any filing under tax or secu-rities laws) or any rerecording,
      refiling or re-registration thereof;

     

    (v)  the
      Property Trustee may consult with counsel or other experts of its selection
      and
      the advice or opin-ion of such counsel and experts with respect to legal matters
      or advice within the scope of such experts’ area of expertise shall be full and
      complete authorization and protection in respect of any action taken, suffered
      or omitted by it hereunder in good faith and in accordance with such advice
      or
      opinion, such counsel may be counsel to the Sponsor or any of its Affiliates,
      and may include any of its employees. The Property Trustee shall have the right
      at any time to seek instructions concerning the administration of this
      Declaration from any court of competent jurisdiction;

     

    (vi)  the
      Property Trustee shall be under no obligation to exercise any of the rights
      or
      powers vested in it by this Declara-tion at the request or direction of any
      Holder, unless such Holder shall have provided to the Property Trustee security
      and indemnity, reasonably satisfactory to the Property Trustee, against the
      costs, expenses (including reasonable attorneys’ fees and expenses and the
      expenses of the Property Trustee’s agents, nominees or custodians) and
      liabilities that might be incurred by it in complying with such request or
      direction, including such reasonable advances as may be requested by the
      Property Trustee provided, that, nothing contained in this Section 3.10(a)(vi)
      shall be taken to relieve the Property Trustee, upon the occurrence of an Event
      of Default, of its obligation to exercise the rights and powers vested in it
      by
      this Declaration;

     

    (vii)  the
      Property Trustee shall not be bound to make any investigation into the facts
      or
      matters stated in any resolution, certificate, statement, instrument, opinion,
      report, notice, request, direction, consent, order, bond, debenture, note,
      other
      evidence of indebtedness or other paper or document, but the Property Trustee,
      in its discretion, may make such further inquiry or investigation into such
      facts or matters as it may see fit;

     

    (viii)  the
      Property Trustee may execute any of the trusts or powers hereunder or perform
      any duties hereunder either directly or by or through agents, custodians,
      nominees or attorneys and the Property Trustee shall not be responsible for
      any
      misconduct or negligence on the part of any agent or attorney appointed with
      due
      care by it hereunder;

     

    (ix)  any
      action taken by the Property Trustee or its agents hereunder shall bind the
      Trust and the Holders, and the signature of the Property Trustee or its agents
      alone shall be sufficient and effective to perform any such action and no third
      party shall be required to inquire as to the authority of the Property Trustee
      to so act or as to its compliance with any of the terms and provisions of this
      Declaration, both of which shall be conclusively evidenced by the Property
      Trustee’s or its agent’s taking such action;

     

    (x)  whenever
      in the administration of this Declaration the Property Trustee shall deem it
      desirable to receive instructions with respect to enforcing any remedy or right
      or taking any other action hereunder, the Property Trustee (i) may request
      instructions from 

     

    
      
        
        

      

      
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    the
      Holders which instructions may only be given by the Holders of the same
      proportion in liquidation amount of the Securities as would be entitled to
      direct the Property Trustee under the terms of the Securities in respect of
      such
      remedy, right or action, (ii) may refrain from enforcing such remedy or right
      or
      taking such other action until such instructions are received, and (iii) shall
      be protected in conclusively relying on or acting in or accordance with such
      instructions; 

     

    (xi)  except
      as
      otherwise expressly provided by this Declaration, the Property Trustee shall
      not
      be under any obligation to take any action that is discretionary under the
      provisions of this Declaration; and

     

    (xii)  the
      Property Trustee shall not be liable for any action taken, suffered, or omitted
      to be taken by it in good faith, without negligence, and reasonably believed
      by
      it to be authorized or within the discretion or rights or powers conferred
      upon
      it by this Declaration.

     

    (b)  No
      provision of this Declaration shall be deemed to impose any duty or obligation
      on the Property Trustee to perform any act or acts or exercise any right, power,
      duty or obligation conferred or imposed on it, in any jurisdiction in which
      it
      shall be illegal, or in which the Property Trustee shall be unqualified or
      incompetent in accordance with applicable law, to perform any such act or acts,
      or to exercise any such right, power, duty or obligation. No permissive power
      or
      authority available to the Property Trustee shall be construed to be a
      duty.

     

    Section
      3.11  Delaware
      Trustee

     

    Notwithstanding
      any other provision of this Declaration, other than Section 5.2, the Delaware
      Trustee shall not be entitled to exercise any powers, nor shall the Delaware
      Trustee have any of the duties and responsibilities of the Administrative
      Trustees or the Property Trustee described in this Declaration. Except as set
      forth in Section 5.2, the Delaware Trustee shall be a Trustee for the sole
      and
      limited purpose of fulfilling the requirements of Section 3807 of the Statutory
      Trust Act. In the event the Delaware Trustee shall at any time be required
      to
      take any action or perform any duty hereunder, the Delaware Trustee shall be
      entitled to the benefits of Section 3.9(b)(ii)-(viii) and Section 3.10. No
      implied covenants or obligations shall be read into this Declaration against
      the
      Delaware Trustee.

     

    Section
      3.12  Execution
      of Documents

     

    Unless
      otherwise determined by the Administrative Trustees, and except as otherwise
      required by the Statutory Trust Act, a majority of the Administrative Trustees
      or, if there are only two, any Administrative Trustee or, if there is only
      one,
      such Administrative Trustee is authorized to execute and deliver on behalf
      of
      the Trust any documents that the Administrative Trustees have the power and
      authority to execute pursuant to Section 3.6.

     

    Section
      3.13  Not
      Responsible for Recitals or Issuance of Securities

     

    The
      recitals contained in this Declaration and the Securities shall be taken as
      the
      statements of the Sponsor, and the Trustees do not assume any responsibility
      for
      their correctness. The Trustees make no representations as to the value or
      condition of the property of 

     

    
      
        
        

      

      
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    the
      Trust
      or any part thereof. The Trustees make no representations as to the validity
      or
      sufficiency of this Declaration or the Securities.

     

    Section
      3.14  Duration
      of Trust

     

    The
      Trust, unless terminated pursuant to the provisions of Article VIII hereof,
      shall have existence up to September 29, 2036.

     

    Section
      3.15  Mergers

     

    (a)  The
      Trust
      may not merge with or into, consolidate, amalgamate, or be replaced by, or
      convey, transfer or lease its properties and assets substantially as an entirety
      to any Person, except as described in Section 3.15(b) and (c).

     

    (b)  The
      Trust
      may, at the request of the Sponsor, with the consent of the Administrative
      Trustees or, if there are more than two, a majority of the Administrative
      Trustees and without the consent of the Holders, the Delaware Trustee or the
      Property Trustee, merge with or into, consolidate, amalgamate, or be replaced
      by, or convey, transfer or lease its properties and assets as an entirety or
      substantially as an entirety to, a trust organized as such under the laws of
      any
      State; provided that:

     

    (i)  such
      successor entity (the “Successor Entity”) either:

     

    (A)
        expressly
      assumes all of the obligations of the Trust under the Securities; or

     

    (B)
        substitutes
      for the Securities other securities having substantially the same terms as
      the
      Securities (the “Successor Securities”) so long as the Successor Securities rank
      the same as the Securities rank with respect to Distributions and payments
      upon
      liquidation, redemption and otherwise; 

     

    (ii)  the
      Sponsor expressly appoints a trustee of the Successor Entity that possesses
      the
      same powers and duties as the Property Trustee as the holder of the Debentures;
      

     

    (iii)  the
      Successor Securities are listed, or any Successor Securities will be listed
      upon
      notification of issuance, on any national securities exchange or with another
      organization on which the Capital Securities are then listed or
      quoted;

     

    (iv)  if
      the
      Capital Securities (including any Successor Securities) are rated by any
      nationally recognized statistical rating organization prior to such transaction,
      such merger, consolidation, amalgamation, replacement, conveyance, transfer
      or
      lease does not cause the Capital Securities (including any Successor
      Securities), or if the Debentures are so rated, the Debentures, to be downgraded
      by any nationally recognized statistical rating organization;

     

    (v)  such
      merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
      does not adversely affect the rights, preferences and privileges of

     

    
      
        
        

      

      
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    the
      Holders (including the holders of any Successor Securities) in any material
      respect (other than with respect to any dilution of such Holders’ interests in
      the new entity);

     

    (vi)  such
      Successor Entity has a purpose identical to that of the Trust;

     

    (vii)  prior
      to
      such merger, consolidation, amalgamation, replacement, conveyance, transfer
      or
      lease, the Sponsor has received an opinion of counsel to the Trust experienced
      in such matters to the effect that:

     

    (A)
        such
      merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
      does not adversely affect the rights, preferences and privileges of the Holders
      (including the holders of any Successor Securities) in any material respect
      (other than with respect to any dilution of the Holders’ interest in the new
      entity); and

     

    (B)
        following
      such merger, consolidation, amalgamation, replacement, conveyance, transfer
      or
      lease, neither the Trust nor the Successor Entity will be required to register
      as an Investment Company; 

     

    (viii)  the
      Sponsor or any permitted successor or assignee owns all of the common securities
      of such Successor Entity and guarantees the obligations of such Successor Entity
      under the Successor Securities at least to the extent provided by the Capital
      Securities Guarantee; and

     

    (ix)  there
      shall have been furnished to the Property Trustee an Officer’s Certificate and
      an Opinion of Counsel, each to the effect that all conditions precedent in
      this
      Declaration to such transaction have been satisfied.

     

    (c)  Notwithstanding
      Section 3.15(b), the Trust shall not, except with the consent of Holders of
      100%
      in liquidation amount of the Securities, consolidate, amalgamate, merge with
      or
      into, or be replaced by, or convey, transfer or lease its properties and assets
      as an entirety or substantially as an entirety to, any other Person or permit
      any other Person to consolidate, amalgamate, merge with or into, or replace
      it
      if such consolidation, amalgamation, merger, replacement, conveyance, transfer
      or lease would cause the Trust or the Successor Entity not to be classified
      as a
      grantor trust for United States federal income tax purposes.

     

    ARTICLE
      IV

    SPONSOR

     

    Section
      4.1  Sponsor’s
      Purchase of Common Securities

     

    At
      the
      Closing Date, the Sponsor will purchase all of the Common Securities then issued
      by the Trust, in an amount equal to at least 3% of the $15,000,000 of the
      Capital Securities issued and sold.

     

    
      
        
        

      

      
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    Section
      4.2  Responsibilities
      of the Sponsor

     

    In
      connection with the issue and sale of the Capital Securities, the Sponsor shall
      have the exclusive right and responsibility to engage in the following
      activities:

     

    (a)  if
      necessary, to prepare an offering memorandum related to the offer and sale
      of
      the Capital Securities; 

     

    (b)  to
      determine the States in which to take appropriate action to qualify or register
      for sale all or part of the Capital Securities or to qualify for exemption
      from
      qualification or registration in any state or under federal securities laws,
      and
      to do any and all such acts, other than actions which must be taken by the
      Trust, and advise the Trust of actions it must take, and prepare for execution
      and filing any documents to be executed and filed by the Trust, as the Sponsor
      deems necessary or advisable in order to comply with the applicable laws of
      any
      such States;

     

    (c)  to
      take
      any other actions related to the offer and sale of the Capital Securities and
      compliance with respect to federal and state securities laws; and

     

    (d)  to
      negotiate the terms of a Purchase Agreement providing for the sale of the
      Capital Securities.

     

    Section
      4.3  Right
      to Proceed

     

    The
      Sponsor acknowledges the rights of the Holders of Capital Securities, in the
      event that a failure of the Trust to pay Distributions on the Capital Securities
      is attributable to the failure of the Sponsor to pay interest or principal
      on
      the Debentures, to institute a proceeding directly against the Debenture Issuer
      for enforcement of its payment obligations on the Debentures.

     

    Section
      4.4  Right
      to Terminate Trust

     

    The
      Sponsor will have the right at any time to terminate the Trust and, after
      satisfaction of liabilities to creditors of the Trust as required by applicable
      law, to cause the Debentures to be distributed to the holders of the Trust
      Securities in liquidation of the Trust. Such right is subject to (i) the
      Administrative Trustees having received an opinion of counsel to the effect
      that
      such distribution will not cause the holders of Capital Securities to recognize
      gain or loss for United States federal income tax purposes and (ii) the receipt
      of any required regulatory approvals.

     

    ARTICLE
      V

    TRUSTEES

     

    Section
      5.1  Number
      of Trustees: Appointment of Co-Trustee

     

    The
      number of Trustees initially shall be four (4), and:

     

    
      
        
        

      

      
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    (a)  at
      any
      time before the issuance of any Securities, the Sponsor may, by written
      in-strument, increase or decrease the number of Trustees; and

     

    (b)  after
      the
      issuance of any Securities, the number of Trustees may be increased or decreased
      by vote of the Holders of a Majority in liquidation amount of the Common
      Securities voting as a class at a meeting of the Holders of the Common
      Securities; 

     

    provided,
      however,
      that,
      the number of Trustees shall in no event be less than two (2); provided further
      that (1)
      one Trustee will meet the requirements of Section 5.2 hereof (the “Delaware
      Trustee”); (2) there shall be at least one Trustee who is an employee or officer
      of, or is affiliated with, the Sponsor (an “Administrative Trustee”); and (3)
      one Trustee shall be the Property Trustee if, and for so long as this
      Declaration is required to qualify as an indenture under the Trust Indenture
      Act, and such Trustee may also serve as Delaware Trustee if it meets the
      applicable requirements. Notwithstanding the above, unless an Event of Default
      shall have occurred and be continuing, at any time or times, for the purpose
      of
      meeting the legal requirements of the Trust Indenture Act or of any jurisdiction
      in which any part of the Trust’s property may at the time be located, the
      Holders of a Majority in liquidation amount of the Common Securities acting
      as a
      class at a meeting of the Holders of the Common Securities, and the
      Administrative Trustees shall have power to appoint one or more Persons either
      to act as a co-trustee, jointly with the Property Trustee, of all or any part
      of
      the Trust’s property, or to act as separate trustee of any such property, in
      either case with such powers as may be provided in the instrument of
      appointment, and to vest in such Person or Persons in such capacity any
      property, title, right or power deemed necessary or desirable, subject to the
      provisions of this Declaration. In case an Event of Default has occurred and
      is
      continuing, the Property Trustee alone shall have power to make any such
      appointment of a co-trustee.

    

    Section
      5.2  Delaware
      Trustee

     

    If
      required by the Statutory Trust Act, the Delaware Trustee shall be:

     

    (a)  a
      natural
      person who is a resident of the State of Delaware; or

     

    (b)  if
      not a
      natural person, an entity which has its principal place of business in the
      State
      of Delaware, and otherwise meets the requirements of applicable
      law,

     

    provided that,
      if the
      Property Trustee has its principal place of business in the State of Delaware
      and otherwise meets the requirements of applicable law, then the Property
      Trustee shall also be the Delaware Trustee and Section 3.11 shall have no
      application.

    

    Section
      5.3  Property
      Trustee; Eligibility

     

    (a)  There
      shall at all times be one Trustee (the “Property Trustee”) which shall act as
      Property Trustee which shall:

     

    (i)  not
      be an
      Affiliate of the Sponsor; and

     

    (ii)  be
      a
      corporation organized and doing business under the laws of the United States
      of
      America or any State or Territory thereof or of the District of Columbia, or
      a

     

    
      
        
        

      

      
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    corporation
      or Person permitted by the Commission to act as an institutional trustee under
      the Trust Indenture Act, authorized under such laws to exercise corporate trust
      powers, having a combined capital and surplus of at least Fifty Million U.S.
      Dollars ($50,000,000), and subject to supervision or examination by federal,
      state, territorial or District of Columbia authority. If such corporation
      publishes reports of condition at least annually, pursuant to law or to the
      requirements of the supervising or examining authority referred to above, then
      for the purposes of this Section 5.3(a)(ii), the combined capital and surplus
      of
      such corporation shall be deemed to be its combined capital and surplus as
      set
      forth in its most recent report of condition so published.

     

    (b)  If
      at any
      time the Property Trustee shall cease to be eligible to so act under Section
      5.3(a), the Property Trustee shall immediately resign in the manner and with
      the
      effect set forth in Section 5.7(c). 

     

    (c)  If
      the
      Property Trustee has or shall acquire any “conflicting interest” within the
      meaning of Section 310(b) of the Trust Indenture Act, the Property Trustee
      and
      the Holder of the Common Securities (as if it were the obligor referred to
      in
      Section 310(b) of the Trust Indenture Act) shall in all respects comply with
      the
      provisions of Section 310(b) of the Trust Indenture Act.

     

    (d)  The
      initial Property Trustee shall be:

     

    Wilmington
      Trust Company

    1100
      North Market Street

    Rodney
      Square North

    Wilmington,
      DE 19890-0001

    Attention:
      Corporate Trust Administration Department

    

    Section
      5.4  Certain
      Qualifications of Administrative Trustees and Delaware Trustee
      Generally

     

    Each
      Administrative Trustee and the Delaware Trustee (unless the Property Trustee
      also acts as Delaware Trustee) shall be either a natural person who is at least
      21 years of age or a legal entity that shall act through one or more Authorized
      Officers.

     

    Section
      5.5  Administrative
      Trustees

     

    The
      initial Administrative Trustees shall be:

     

    Mark
      Zody

    Gary
      L.
      Nalbandian

    Julie
      A.
      Wilson

     

    
      
        
        

      

      
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    Pennsylvania
      Commerce Bancorp, Inc.

    c/o
      Commerce Bank/Harrisburg, N.A.

    3801
      Paxton Street

    Harrisburg,
      PA 17111

    

    (a)  Except
      as
      expressly set forth in this Declaration and except if a meeting of the
      Administrative Trustees is called with respect to any matter over which the
      Administrative Trustees have power to act, any power of the Administrative
      Trustees may be exercised by, or with the consent of, any one such
      Administrative Trustee.

     

    (b)  Unless
      otherwise determined by the Administrative Trustees, and except as otherwise
      required by the Statutory Trust Act or applicable law, any Administrative
      Trustee is authorized to execute on behalf of the Trust any documents which
      the
      Administrative Trustees have the power and authority to cause the Trust to
      execute pursuant to Section 3.6

     

    Section
      5.6  Delaware
      Trustee

     

    The
      initial Delaware Trustee shall be:

     

    Wilmington
      Trust Company

    1100
      North Market Street

    Rodney
      Square North

    Wilmington,
      DE 19890-0001

    Attention:
      Corporate Trust Administration Department

    

    Section
      5.7  Appointment,
      Removal and Resignation of Trustees

     

    (a)  Subject
      to Section 5.7(b) hereof and to Section 6(b) of Annex I hereto, Trustees may
      be
      appointed or removed without cause at any time:

     

    (i) until
      the
      issuance of any Securities, by written instrument executed by the
      Sponsor;

     

    (ii) unless
      an
      Event of Default shall have occurred and be continuing after the issuance of
      any
      Securities, by vote of the Holders of a Majority in liquidation amount of the
      Common Securities voting as a class at a meeting of the Holders of the Common
      Securities; and

     

    (iii) if
      an
      Event of Default shall have occurred and be continuing after the issuance of
      the
      Securities, with respect to the Property Trustee or the Delaware Trustee, by
      vote of Holders of a Majority in liquidation amount of the Capital Securities
      voting as a class at a meeting of Holders of the Capital
      Securities.

     

    (b)    
        (i)
      The
      Trustee that acts as Property Trustee shall not be removed in accordance with
      Section 5.7(a) until a Successor Property Trustee has been appointed and has
      accepted such appointment by written instrument executed by such Successor
      Property Trustee and delivered to the Administrative Trustees and the Sponsor;
      and

     

    
      
        
        

      

      
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    (ii) the
      Trustee that acts as Delaware Trustee shall not be removed in accordance with
      this Section 5.7(a) until a successor Trustee possessing the qualifications
      to
      act as Delaware Trustee under Sections 5.2 and 5.4 (a “Successor Delaware
      Trustee”) has been appointed and has accepted such appointment by written
      instrument executed by such Successor Delaware Trustee and delivered to the
      Administrative Trustees and the Sponsor.

    

    (c)    
        A
      Trustee
      appointed to office shall hold office until his successor shall have been
      appointed or until his death, removal or resignation. Any Trustee may resign
      from office (without need for prior or subsequent accounting) by an instrument
      in writing signed by the Trustee and delivered to the Sponsor and the Trust,
      which resignation shall take effect upon such delivery or upon such later date
      as is specified therein; provided,
      however,
      that:

     

    (i) No
      such
      resignation of the Trustee that acts as the Property Trustee shall be
      effective:

     

    (A) until
      a
      Successor Property Trustee has been appointed and has accepted such appointment
      by instrument executed by such Successor Property Trustee and delivered to
      the
      Trust, the Sponsor and the resigning Property Trustee; or

     

    (B) until
      the
      assets of the Trust have been completely liquidated and the proceeds thereof
      distributed to the Holders; and

     

    (ii) no
      such
      resignation of the Trustee that acts as the Delaware Trustee shall be effective
      until a Successor Delaware Trustee has been appointed and has accepted such
      appointment by instrument executed by such Successor Delaware Trustee and
      delivered to the Trust, the Sponsor and the resigning Delaware
      Trustee.

     

    (d)  The
      Holders of the Common Securities or, if an Event of Default shall have occurred
      and be continuing after the issuance of the Securities, the Holders of the
      Capital Securities shall use their best efforts to promptly appoint a Successor
      Delaware Trustee or Successor Property Trustee, as the case may be, if the
      Property Trustee or the Delaware Trustee delivers an instrument of resignation
      in accordance with this Section 5.7.

     

    (e)  If
      no
      Successor Property Trustee or Successor Delaware Trustee shall have been
      appointed and accepted appointment as provided in this Section 5.7 within 60
      days after delivery of an instrument of resignation or removal, the Property
      Trustee or Delaware Trustee resigning or being removed, as applicable, may
      petition any court of competent jurisdiction for appointment of a Successor
      Property Trustee or Successor Delaware Trustee. Such court may thereupon, after
      prescribing such notice, if any, as it may deem proper and prescribe, appoint
      a
      Successor Property Trustee or Successor Delaware Trustee, as the case may
      be.

     

    (f)  No
      Property Trustee or Delaware Trustee shall be liable for the acts or omissions
      to act of any Successor Property Trustee or Successor Delaware Trustee, as
      the
      case may be.

     

    
      
        
        

      

      
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    (g)  At
      the
      time of resignation or removal of the Property Trustee or the Delaware Trustee,
      the Debenture Issuer shall pay to such Trustee any amounts that may be owed
      to
      such Trustee pursuant to Section 10.4.

     

    Section
      5.8  Vacancies
      among Trustees

     

    If
      a
      Trustee ceases to hold office for any reason and the number of Trustees is
      not
      reduced pursuant to Section 5.1, or if the number of Trustees is increased
      pursuant to Section 5.1, a vacancy shall occur. A resolution certifying the
      existence of such vacancy by the Administrative Trustees or, if there are more
      than two, a majority of the Administrative Trustees shall be conclusive evidence
      of the existence of such vacancy. The vacancy shall be filled with a Trustee
      appointed in accordance with Section 5.7.

     

    Section
      5.9  Effect
      of Vacancies

     

    The
      death, resignation, retirement, removal, bankruptcy, dissolution, liquidation,
      incompetence or incapacity to perform the duties of a Trustee shall not operate
      to dissolve, terminate or annul the Trust. Whenever a vacancy in the number
      of
      Administrative Trustees shall occur, until such vacancy is filled by the
      appointment of an Administrative Trustee in accordance with Section 5.7, the
      Administrative Trustees in office, regardless of their number, shall have all
      the powers granted to the Administrative Trustees and shall discharge all the
      duties imposed upon the Administrative Trustees by this
      Declaration.

     

    Section
      5.10  Meetings

     

    If
      there
      is more than one Administrative Trustee, meetings of the Administrative Trustees
      shall be held from time to time upon the call of any Administrative Trustee.
      Regular meetings of the Administrative Trustees may be held at a time and place
      fixed by resolution of the Administrative Trustees. Notice of any in-person
      meetings of the Administrative Trustees shall be hand delivered or otherwise
      delivered in writing (including by facsimile, with a hard copy by overnight
      courier) not less than 24 hours before such meeting. Notice of any telephonic
      meetings of the Administrative Trustees or any committee thereof shall be hand
      delivered or otherwise delivered in writing (including by facsimile, with a
      hard
      copy by overnight courier) not less than 24 hours before a meeting. Notices
      shall contain a brief statement of the time, place and anticipated purposes
      of
      the meeting. The presence (whether in person or by telephone) of an
      Administrative Trustee at a meeting shall constitute a waiver of notice of
      such
      meeting except where an Administrative Trustee attends a meeting for the express
      purpose of objecting to the transaction of any activity on the ground that
      the
      meeting has not been lawfully called or convened. Unless provided otherwise
      in
      this Declaration, any action of the Administrative Trustees may be taken at
      a
      meeting by vote of a majority of the Administrative Trustees present (whether
      in
      person or by telephone) and eligible to vote with respect to such matter,
provided that
      a Quorum
      is present, or without a meeting by the unanimous written consent of the
      Administrative Trustees. In the event there is only one Administrative Trustee,
      any and all action of such Administrative Trustee shall be evidenced by a
      written consent of such Administrative Trustee.

     

    
      
        
        

      

      
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    Section
      5.11  Delegation
      of Power

     

    (a)  Any
      Administrative Trustee may, by power of attorney consistent with applicable
      law,
      delegate to any other natural person over the age of 21 his or her power for
      the
      purpose of executing any documents contemplated in Section 3.6, including any
      registration statement or amendment thereto filed with the Commission, or making
      any other governmental filing; and 

     

    (b)  The
      Administrative Trustees shall have power to delegate from time to time to such
      of their number or to officers of the Trust the doing of such things and the
      execution of such instruments either in the name of the Trust or the names
      of
      the Administrative Trustees or otherwise as the Administrative Trustees may
      deem
      expedient, to the extent such delegation is not prohibited by applicable law
      or
      contrary to the provisions of the Trust, as set forth herein.

     

    Section
      5.12  Merger,
      Conversion, Consolidation or Succession to Business

     

    Any
      Person into which the Property Trustee or the Delaware Trustee or any
      Administrative Trustee that is not a natural person, as the case may be, may
      be
      merged or converted or with which it may be consolidated, or any Person
      resulting from any merger, conversion or consolidation to which the Property
      Trustee or the Delaware Trustee, as the case may be, shall be a party, or any
      Person succeeding to all or substantially all the corporate trust business
      of
      the Property Trustee or the Delaware Trustee, as the case may be, shall be
      the
      successor of the Property Trustee or the Delaware Trustee, as the case may
      be,
      hereunder, without the execution or filing of any paper or any further act
      on
      the part of any of the parties hereto, provided such Person shall be otherwise
      qualified and eligible under this Article.

     

    ARTICLE
      VI

    DISTRIBUTIONS

     

    Section
      6.1  Distributions

     

    Holders
      shall receive Distributions in accordance with the applicable terms of the
      relevant Holder’s Securities. If and to the extent that the Debenture Issuer
      makes a payment of interest (including Compounded Interest and Additional Sums),
      or principal on the Debentures held by the Property Trustee or any other
      payments with respect to the Debentures held by the Property Trustee (the amount
      of any such payment being a “Payment Amount”), the Property Trustee shall and is
      directed, to the extent funds are available for that purpose, to make a
      distribution (a “Distribution”) of the Payment Amount to Holders.

     

    ARTICLE
      VII

    ISSUANCE
      OF SECURITIES

     

    Section
      7.1  General
      Provisions Regarding Securities

     

    (a)  The
      Administrative Trustees shall on behalf of the Trust issue one class of capital
      securities representing undivided beneficial interests in the assets of the
      Trust having such terms as are set forth in Annex I (the “Capital Securities”)
      and one class of common securities 

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    representing
      undivided beneficial interests in the assets of the Trust having such terms
      as
      are set forth in Annex I (the “Common Securities”). The Trust shall issue no
      securities or other interests in the assets of the Trust other than the Capital
      Securities and the Common Securities.

     

    (b)  The
      consideration received by the Trust for the issuance of the Securities shall
      constitute a contribution to the capital of the Trust and shall not constitute
      a
      loan to the Trust. 

     

    (c)  Upon
      issuance of the Securities as provided in this Declaration, the Securities
      so
      issued shall be deemed to be validly issued, fully paid and
      non-assessable.

     

    (d)  Every
      Person, by virtue of having become a Holder in accordance with the terms of
      this
      Declaration, shall be deemed to have expressly assented and agreed to the terms
      of, and shall be bound by, this Declaration.

     

    Section
      7.2   Execution
      and Authentication

     

    (a)  The
      Securities shall be signed on behalf of the Trust by an Administrative Trustee
      by manual or facsimile signature. In case any Administrative Trustee of the
      Trust who shall have signed any of the Securities shall cease to be such
      Administrative Trustee before the Securities so signed shall be delivered by
      the
      Trust, such Securities nevertheless may be delivered as though the person who
      signed such Securities had not ceased to be such Administrative Trustee; and
      any
      Securities may be signed on behalf of the Trust by such persons who, at the
      actual date of execution of such Security, shall be the Administrative Trustees
      of the Trust, although at the date of the execution and delivery of the
      Declaration any such person was not an Administrative Trustee.

     

    (b)  One
      Administrative Trustee shall sign the Securities for the Trust by manual or
      facsimile signature. Unless otherwise determined by the Trust, such signature
      shall, in the case of Common Securities, be a manual signature.

     

    A
      Security shall not be valid until authenticated by the manual signature of
      an
      authorized signatory of the Property Trustee. The signature shall be conclusive
      evidence that the Security has been authenticated under this
      Declaration.

     

    Upon
      a
      written order of the Trust signed by one Administrative Trustee, the Property
      Trustee shall authenticate the Capital Securities for original issue. The
      aggregate number of Capital Securities outstanding at any time shall not exceed
      the number set forth in the Terms in Annex I hereto except as provided in
      Section 7.6.

     

    The
      Property Trustee may appoint an authenticating agent acceptable to the Trust
      to
      authenticate Securities. An authenticating agent may authenticate Securities
      whenever the Property Trustee may do so. Each reference in this Declaration
      to
      authentication by the Property Trustee includes authentication by such agent.
      An
      authenticating agent has the same rights as the Property Trustee to deal with
      the Sponsor or an Affiliate.

     

    
      
        
        

      

      
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    Section
      7.3  Form
      and Dating

     

    The
      Capital Securities shall be evidenced by one or more certificates substantially
      in the form of Exhibit A-1 and the Common Securities shall be evidenced by
      one
      or more certificates substantially in the form of Exhibit A-2, each of which
      is
      hereby incorporated in and expressly made a part of this Declaration. The
      Property Trustee’s certificate of authentication shall be substantially in the
      form set forth in Exhibits A-1 and A-2. Certificates representing the Securities
      may be printed, lithographed or engraved or may be produced in any other manner
      as is reasonably acceptable to the Administrative Trustees, as evidenced by
      their execution thereof. The Securities may have letters, CUSIP or other
      numbers, notations or other marks of identification or designation and such
      legends or endorsements required by law, stock exchange rule, agreements to
      which the Trust is subject, if any, or usage (provided that
      any such
      notation, legend or endorsement is in a form acceptable to the Trust). The
      Trust
      at the direction of the Sponsor shall furnish any such legend not contained
      in
      Exhibit A-1 to the Property Trustee in writing. Each Capital Security shall
      be
      dated the date of its authentication. The terms and provisions of the Securities
      set forth in Annex I and the forms of Securities set forth in Exhibits A-1
      and
      A-2 are part of the terms of this Declaration and to the extent applicable,
      the
      Property Trustee and the Sponsor, by their execution and delivery of this
      Declaration, expressly agree to such terms and provisions and to be bound
      thereby.

     

    Initial
      purchasers of Securities who must be “accredited investors” (as defined in Rule
      501(a) under the Securities Act), will receive Capital Securities in the form
      of
      individual certificates in definitive, fully registered form (“Definitive
      Capital Securities”) without distribution coupons and with the Restricted
      Securities Legend set forth in Exhibit A-1 hereto. Capital Securities issued
      upon the registration of transfer or replacement will bear the Restricted
      Securities Legend set forth on Exhibit A-1 unless removed in accordance with
      Section 9.2. 

     

    (a)  Authorized
      Denominations.
      The
      Capital Securities are issuable only in denominations of $100,000 and any
      integral multiple thereof.

     

    Section
      7.4  Registrar
      and Paying Agent

     

    The
      Trust
      shall maintain in Wilmington, Delaware (i) an office or agency where Capital
      Securities may be presented for registration of transfer (“Registrar”), (ii) an
      office or agency where Capital Securities may be presented for payment (“Paying
      Agent”). The Registrar shall keep a register of the Capital Securities and of
      their transfer. The Trust may appoint the Registrar and the Paying Agent and
      may
      appoint one or more co-registrars and one or more additional paying agents
      in
      such other locations as it shall determine. The term “Registrar” includes any
      additional registrar, “Paying Agent” includes any additional paying agent. The
      Trust may change any Paying Agent, Registrar or co-registrar without prior
      notice to any Holder. The Paying Agent shall be permitted to resign as Paying
      Agent upon 30 days’ written notice to the Administrative Trustees. The Trust
      shall notify the Property Trustee of the name and address of any Agent not
      a
      party to this Declaration. If the Trust fails to appoint or maintain another
      entity as Registrar or Paying Agent, the Property Trustee shall act as such.
      The
      Trust or any of its Affiliates may act as Paying Agent or Registrar. The Trust
      shall act as Paying Agent and Registrar for the Common Securities.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    The
      Trust
      initially appoints the Property Trustee as Registrar and Paying Agent for the
      Capital Securities.

     

    Section
      7.5  Paying
      Agent to Hold Money in Trust

     

    The
      Trust
      shall require each Paying Agent other than the Property Trustee to agree in
      writing that the Paying Agent will hold in trust for the benefit of Holders
      or
      the Property Trustee all money held by the Paying Agent for the payment of
      liquidation amounts or Distributions, and will notify the Property Trustee
      if
      there are insufficient funds for such purpose. While any such insufficiency
      continues, the Property Trustee may require a Paying Agent to pay all money
      held
      by it to the Property Trustee. The Trust at any time may require a Paying Agent
      to pay all money held by it to the Property Trustee and to account for any
      money
      disbursed by it. Upon payment over to the Property Trustee, the Paying Agent
      (if
      other than the Trust or an Affiliate of the Trust) shall have no further
      liability for the money. If the Trust or the Sponsor or an Affiliate of the
      Trust or the Sponsor acts as Paying Agent, it shall segregate and hold in a
      separate trust fund for the benefit of the Holders all money held by it as
      Paying Agent.

     

    Section
      7.6  Replacement
      Securities

     

    If
      a
      Holder claims that a Security owned by it has been lost, destroyed or wrongfully
      taken or if such Security is mutilated and is surrendered to the Trust or in
      the
      case of the Capital Securities to the Property Trustee, the Trust shall issue
      and the Property Trustee shall, upon written order of the Trust, authenticate
      a
      replacement Security if the Property Trustee’s and the Trust’s requirements, as
      the case may be, are met. An indemnity bond must be provided by the Holder
      which, in the judgment of the Property Trustee and the Sponsor, is sufficient
      to
      protect the Trustees, the Sponsor, the Trust or any authenticating agent from
      any loss which any of them may suffer if a Security is replaced. The Trust
      may
      charge such Holder for its expenses in replacing a Security.

     

    Section
      7.7  Outstanding
      Capital Securities

     

    The
      Capital Securities outstanding at any time are all the Capital Securities
      authenticated by the Property Trustee except for those cancelled by it, those
      delivered to it for cancellation, and those described in this Section as not
      outstanding.

     

    If
      a
      Capital Security is replaced, paid or purchased pursuant to Section 7.6 hereof,
      it ceases to be outstanding unless the Property Trustee receives proof
      satisfactory to it that the replaced, paid or purchased Capital Security is
      held
      by a bona fide purchaser.

     

    If
      Capital Securities are considered paid in accordance with the terms of this
      Declaration, they cease to be outstanding and Distributions on them shall cease
      to accumulate.

     

    A
      Capital
      Security does not cease to be outstanding because one of the Trust, the Sponsor
      or an Affiliate of the Sponsor holds the Security.

     

    
      
        
        

      

      
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    Section
      7.8  Capital
      Securities in Treasury

     

    In
      determining whether the Holders of the required amount of Securities have
      concurred in any direction, waiver or consent, Capital Securities owned by
      the
      Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be, shall
      be
      disregarded and deemed not to be outstanding, except that for the purposes
      of
      determining whether the Property Trustee shall be fully protected in relying
      on
      any such direction, waiver or consent, only Securities which the Property
      Trustee actually knows are so owned shall be so disregarded.

     

    Section
      7.9  Temporary
      Securities

     

    Until
      Definitive Securities are ready for delivery, the Trust may prepare and, in
      the
      case of the Capital Securities, the Property Trustee shall authenticate
      temporary Securities. Temporary Securities shall be substantially in the form
      of
      Definitive Securities but may have variations that the Trust considers
      appropriate for temporary Securities. Without unreasonable delay, the Trust
      shall prepare and, in the case of the Capital Securities, the Property Trustee
      shall authenticate Definitive Securities in exchange for temporary
      Securities.

     

    Section
      7.10  Cancellation

     

    The
      Trust
      at any time may deliver Capital Securities to the Property Trustee for
      cancellation. The Registrar and Paying Agent shall forward to the Property
      Trustee any Capital Securities surrendered to them for registration of transfer,
      redemption, exchange or payment. The Property Trustee shall promptly cancel
      all
      Capital Securities, surrendered for registration of transfer, redemption,
      exchange, payment, replacement or cancellation and shall dispose of cancelled
      Capital Securities in accordance with its customary procedures unless the Trust
      otherwise directs. The Trust may not issue new Capital Securities to replace
      Capital Securities that it has paid or that have been delivered to the Property
      Trustee for cancellation or that any Holder has exchanged.

     

    Section
      7.11  CUSIP
      Numbers

     

    The
      Trust
      in issuing the Capital Securities may use “CUSIP” numbers (if then generally in
      use), and, if so, the Property Trustee shall use “CUSIP” numbers in notices of
      redemption as a convenience to Holders of Capital Securities; provided that
      any such
      notice may state that no representation is made as to the correctness of such
      numbers either as printed on the Capital Securities or as contained in any
      notice of a redemption and that reliance may be placed only on the other
      identification numbers printed on the Capital Securities, and any such
      redemption shall not be affected by any defect in or omission of such numbers.
      The Sponsor will promptly notify the Property Trustee of any change in the
      CUSIP
      numbers.

     

    ARTICLE
      VIII

    TERMINATION
      OF TRUST

     

    Section
      8.1  Termination
      of Trust

     

    (a)  The
      Trust
      shall automatically terminate:

     

    
      
        
        

      

      
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    (i)  upon
      the
      bankruptcy of the Sponsor;

     

    (ii)  upon
      the
      filing of a certificate of dissolution or liquidation or its equivalent with
      respect to the Sponsor; or the revocation of the Sponsor’s charter and the
      expiration of 90 days after the date of revocation without a reinstatement
      thereof;

     

    (iii)  following
      the distribution of a Like Amount of the Debentures to the Holders, provided that,
      the
      Property Trustee has received written notice from the Sponsor directing the
      Property Trustee to terminate the Trust (which direction is optional, and except
      as otherwise expressly provided below, within the discretion of the Sponsor)
      and
provided,
      further,
      that
      such direction and such distribution is conditioned on (a) the receipt by the
      Sponsor of any required regulatory approval, and (b) the Administrative
      Trustees’ receipt of an opinion of an independent tax counsel experienced in
      such matters, which opinion may rely on published rulings of the Internal
      Revenue Service, to the effect that the Holders will not recognize any gain
      or
      loss for United States federal income tax purposes as a result of the
      dissolution of the Trust and the distribution of Debentures;

     

    (iv)  upon
      the
      entry of a decree of judicial dissolution of the Trust by a court of competent
      jurisdiction;

     

    (v)  when
      all
      of the Securities shall have been called for redemption and the amounts
      necessary for redemption thereof shall have been paid to the Holders in
      accordance with the terms of the Securities; 

     

    (vi)  upon
      the
      redemption or repayment of the Debentures at Maturity; or

     

    (vii)  the
      expiration of the term of the Trust provided in Section 3.14.

     

    (b)  As
      soon
      as is practicable upon completion of winding up of the Trust pursuant to Section
      3808 of the Statutory Trust Act following the occurrence of an event referred
      to
      in Section 8.1(a), the Administrative Trustees shall file a certificate of
      cancellation with the Secretary of State of the State of Delaware in accordance
      with the Statutory Trust Act.

     

    (c) The
      provisions of Section 3.9 and Article X shall survive the termination of the
      Trust.

    

    ARTICLE
      IX

    TRANSFER
      OF INTERESTS

     

    Section
      9.1  Transfer
      of Securities

     

    (a)  Securities
      may only be transferred, in whole or in part, in accordance with the terms
      and
      conditions set forth in this Declaration and in the terms of the Securities.
      Any
      transfer or purported transfer of any Security not made in accordance with
      this
      Declaration shall be null and void.

     

    
      
        
        

      

      
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    (b)  Subject
      to this Article IX, Capital Securities may only be transferred, in whole or
      in
      part, in accordance with the terms and conditions set forth in this Declaration.
      Any transfer or purported transfer of any Security not made in accordance with
      this Declaration shall be null and void.

     

    (c)  For
      so
      long as the Trust Securities remain outstanding, the Sponsor will covenant
      (i)
      to directly or indirectly maintain 100% direct or indirect ownership of the
      Common Securities of the Trust, provided that any permitted successor of the
      Sponsor under the Indenture may succeed to the Sponsor’s ownership of such
      Common Securities, (ii) not to cause, as sponsor of the Trust, or to permit,
      as
      Holder of the Common Securities, the dissolution, winding-up or termination
      of
      the Trust, except in connection with a distribution of the Debentures as
      provided in the Declaration and in connection with certain mergers,
      consolidations or amalgamations permitted by this Declaration and (iii) to
      use
      its reasonable efforts to cause the Trust (a) to remain a statutory trust,
      except in connection with the distribution of Debentures to the Holders of
      Trust
      Securities in liquidation of the Trust, the redemption of all of the Trust
      Securities, or certain mergers, consolidations or amalgamations, each as
      permitted by this Declaration, and (b) to otherwise continue to be classified
      as
      a grantor trust for United States federal income tax purposes.

     

    (d)  The
      Administrative Trustees shall provide for the registration of Securities and
      of
      the transfer of Securities, which will be effected without charge but only
      upon
      payment (with such indemnity as the Administrative Trustees may require) in
      respect of any tax or other governmental charges that may be imposed in relation
      to it. Upon surrender for registration of transfer of any Securities, the
      Administrative Trustees shall cause one or more new Securities to be issued
      in
      the name of the designated transferee or transferees. Every Security surrendered
      for registration of transfer shall be accompanied by a written instrument of
      transfer in form satisfactory to the Administrative Trustees duly executed
      by
      the Holder or such Holder’s attorney duly authorized in writing. Each Security
      surrendered for registration of transfer shall be canceled by the Property
      Trustee (in the case of Capital Securities) or the Trust (in the case of Common
      Securities). A transferee of a Security shall be entitled to the rights and
      subject to the obligations of a Holder hereunder upon the receipt by such
      transferee of a Security. By acceptance of a Security, each transferee shall
      be
      deemed to have agreed to be bound by this Declaration.

     

    Section
      9.2  Transfer
      Procedures and Restrictions

     

    (a)  General.
      Except
      as otherwise provided in Section 9.2(b), if Capital Securities are issued upon
      the registration of transfer or replacement of Capital Securities bearing the
      Restricted Securities Legend set forth in Exhibit A-1 hereto, or if a request
      is
      made to remove such Restricted Securities Legend on Capital Securities, the
      Capital Securities so issued shall bear the Restricted Securities Legend, or
      the
      Restricted Securities Legend shall not be removed, as the case may be, unless
      there is delivered to the Trust such satisfactory evidence, which shall include
      an Opinion of Counsel, as may be reasonably required by the Trust, that neither
      the legend nor the restrictions on transfer set forth therein are required
      to
      ensure that transfers thereof are made pursuant to an exemption from the
      registration requirements of the Securities Act or, with respect to Restricted
      Securities, that such Securities are not “restricted” within the meaning

     

    
      
        
        

      

      
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    of
      Rule
      144. Upon provision of such satisfactory evidence, the Property Trustee, at
      the
      written direction of the Trust, shall authenticate and deliver Capital
      Securities that do not bear the legend.

     

    (b)  Transfer
      and Exchange of Capital Securities.
      When
      Capital Securities are presented to the Registrar to register the transfer
      of
      such Capital Securities or to exchange such Capital Securities which became
      mutilated, destroyed, defaced, stolen or lost, for an equal number of Capital
      Securities, the Registrar shall register the transfer or make the exchange
      as
      requested if its reasonable requirements for such transaction are met. However,
      the Capital Securities surrendered for registration of transfer or
      exchange:

     

    (i)  shall
      be
      duly endorsed or accompanied by a written instrument of transfer in the form
      included as part of Exhibit A-1 hereto or such other form reasonably
      satisfactory to the Administrative Trustees and the Registrar or co-registrar,
      duly executed by the Holder thereof or his attorney duly authorized in writing;
      and 

     

    (ii)  if
      such
      Capital Securities are being delivered to the Registrar by a Holder for
      registration in the name of such Holder, without transfer, a certification
      from
      such Holder to that effect; or 

     

    (iii)  if
      such
      Capital Securities are being transferred and if the Administrative Trustees
      or
      Registrar so requests, evidence reasonably satisfactory to them as to the
      compliance with the restrictions set forth in the Restricted Securities Legend
      (as defined below).

     

    (c)  Legend.

     

    (i)  Except
      as
      permitted by the following paragraph (ii), each certificate evidencing the
      Capital Securities (and all Capital Securities issued in exchange therefor
      or
      substitution thereof) shall bear a legend (the “Restricted Securities Legend”)
      in substantially the following form:

     

    THIS
      CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
      AS
      AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS OR ANY OTHER
      APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL SECURITY NOR ANY INTEREST OR
      PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
      ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
      UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
      REGISTRATION.

    

    THE
      HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
      OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE (THE “RESALE
      RESTRICTION TERMINATION DATE”) WHICH IS TWO YEARS AFTER THE ORIGINAL ISSUANCE
      DATE HEREOF ONLY
      (A)
      TO PENNSYLVANIA COMMERCE BANCORP, INC. (“THE COMPANY”), (B) PURSUANT TO A
      REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
      ACT, 

     

    
      
        
        

      

      
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    (C)
      SO
      LONG AS THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
      UNDER
      THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A
“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS
      OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
      IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
      INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
      (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
      CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
      INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
      TO, OR FOR OFFER OR SALE IN CON-NECTION WITH, ANY DISTRIBUTION IN VIOLATION
      OF
      THE SECURITIES ACT, OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
      REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF
      THE
      TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT
      TO
      CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
      CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii)
      PURSUANT TO CLAUSE (D), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
      APPEARING ON THE REVERSE OF THIS CAPITAL SECURITY IS COMPLETED AND DELIVERED
      BY
      THE TRANSFEREE TO THE TRUST. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER
      TO
      EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
      TO THE EFFECT OF THIS LEGEND.

    

    THIS
      CAPITAL SECURITY IS NOT TRANSFERRABLE EXCEPT AS SET FORTH IN THE DECLARATION
      OF
      TRUST OF COMMERCE HARRISBURG CAPITAL TRUST III, DATED AS OF SEPTEMBER 29, 2006,
      AS THE SAME MAY BE AMENDED FROM TIME TO TIME.

    

    THE
      HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF
      OR
      THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,
      INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE
      I OF
      THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR
      SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH
      A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON
      OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF
      ANY PLAN MAY ACQUIRE OR HOLD THIS CAPITAL SECURITY OR ANY INTEREST THEREIN.
      ANY
      PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL
      BE
      DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT IS NOT
      AN
      EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN
      TO
      WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
      ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
      USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
      PURCHASE.

    

    
      
        
        

      

      
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    THIS
      CAPITAL SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED
      BY
      THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE
      FEDERAL DEPOSIT INSURANCE CORPORATION. 

    

    (ii)  Upon
      any
      sale or transfer of a Capital Security pursuant to an effective registration
      statement under the Securities Act or pursuant to Rule 144 under the Securities
      Act after such registration statement, if any, ceases to be effective, the
      Registrar shall permit the Holder thereof to exchange such Capital Security
      for
      a Capital Security that does not bear the Restricted Securities Legend and
      rescind any restriction on the transfer of such Capital Security.

     

    (d)  Obligations
      with Respect to Transfers and Exchanges of Capital Securities.

     

    (i)  To
      permit
      registrations of transfers and exchanges, at the Registrar’s request in
      accordance with this Declaration the Trust shall execute and the Property
      Trustee at the written direction of the Administrative Trustees shall
      authenticate Capital Securities. 

     

    (ii)  Registrations
      of transfers or exchanges will be effected without charge, but only upon payment
      (with such indemnity as the Administrative Trustees, on behalf of the Trust,
      or
      the Sponsor may require) in respect of any tax or other governmental charge
      that
      may be imposed in relation to it.

     

    (iii)  The
      Registrar shall not be required to register the transfer of or exchange of
      (A)
      Capital Securities during a period beginning at the opening of business fifteen
      (15) days before the day of mailing of a notice of redemption or any notice
      of
      selection of Capital Securities for redemption and ending at the close of
      business on the day of such mailing or (B) any Capital Security so selected
      for
      redemption in whole or in part, except the unredeemed portion of any Capital
      Security being redeemed in part. 

     

    (iv)  Prior
      to
      the due presentation for registration of transfer of any Capital Security,
      the
      Trust, the Property Trustee, the Paying Agent or the Registrar may deem and
      treat the Person in whose name a Capital Security is registered as the absolute
      owner of that Capital Security for the purpose of receiving Distributions on
      that Capital Security and for all other purposes whatsoever, and none of the
      Trust, the Property Trustee, the Paying Agent, or the Registrar shall be
      affected by notice to the contrary. 

     

    (v)  All
      Capital Securities issued upon any registration of transfer or exchange pursuant
      to the terms of this Declaration shall evidence the same security and shall
      be
      entitled to the same benefits under this Declaration as the Capital Securities
      surrendered upon that registration of transfer or exchange. 

     

    (e)  No
      Obligation of the Property Trustee.

     

    
      
        
        

      

      
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    (i)  None
      of
      the Property Trustee, Paying Agent or Registrar shall have any responsibility
      or
      obligation to any Person other than Registered Holders, with respect to any
      ownership interest in the Capital Securities or with respect to the delivery
      to
      any beneficial owner or other Person of any notice (including any notice of
      redemption) or the payment of any amount, under or with respect to such Capital
      Securities. All notices and communications to be given to the Holders and all
      payments to be made to Holders under the Capital Securities shall be given
      or
      made only to or upon the order of the registered Holders. 

     

    (ii)  The
      Property Trustee and the Registrar shall have no obligation or duty to monitor,
      determine or inquire as to compliance with any restrictions on transfer imposed
      under this Declaration or under applicable law with respect to any transfer
      of
      any interest in any Capital Security other than to require delivery of such
      certificates and other documentation or evidence as are expressly required
      by,
      and to do so if and when expressly required by, the terms of this Declaration,
      and to examine the same to determine substantial compliance as to form with
      the
      express requirements hereof.

     

    ARTICLE
      X

    LIMITATION
      OF LIABILITY OF

    HOLDERS
      OF SECURITIES, TRUSTEES OR OTHERS

     

    Section
      10.1  Liability

     

    (a)  Except
      as
      expressly set forth in this Declaration, the Securities Guarantee and the terms
      of the Securities, the Sponsor shall not be: 

     

    (i)  personally
      liable for the return of any portion of the capital contributions (or any return
      thereon) of the Holders which shall be made solely from assets of the Trust;
      and

     

    (ii)  required
      to pay to the Trust or to any Holder any deficit upon dissolution of the Trust
      or otherwise.

     

    (b)  The
      Debenture Issuer shall be liable for all of the debts and obligations of the
      Trust (other than in respect of the Securities) to the extent not satisfied
      out
      of the Trust’s assets.

     

    (c)  Pursuant
      to Section 3803(a) of the Statutory Trust Act, the Holders shall be entitled
      to
      the same limitation of personal liability extended to stockholders of private
      corporations for profit organized under the General Corporation Law of the
      State
      of Delaware.

     

    Section
      10.2  Exculpation

     

    (a)  No
      Indemnified Person shall be liable, responsible or accountable in damages or
      otherwise to the Trust or any Covered Person for any loss, damage or claim
      incurred by reason of any act or omission performed or omitted by such
      Indemnified Person in good faith on behalf of the Trust and in a manner such
      Indemnified Person reasonably believed to be within the scope of the authority
      conferred on such Indemnified Person by this Declaration or by law,

     

    
      
        
        

      

      
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    except
      that an Indemnified Person shall be liable for any such loss, damage or claim
      incurred by reason of such Indemnified Person’s gross negligence or willful
      misconduct with respect to such acts or omissions.

     

    (b)  An
      Indemnified Person shall be fully protected in relying in good faith upon the
      records of the Trust and upon such information, opinions, reports or statements
      presented to the Trust by any Person as to matters the Indemnified Person
      reasonably believes are within such other Person’s professional or expert
      competence and who has been selected with reasonable care by or on behalf of
      the
      Trust, including information, opinions, reports or statements as to the value
      and amount of the assets, liabilities, profits, losses, or any other facts
      pertinent to the existence and amount of assets from which Distributions to
      Holders might properly be paid.

     

    Section
      10.3  Fiduciary
      Duty

     

    (a)  To
      the
      extent that, at law or in equity, an Indemnified Person has duties (including
      fiduciary duties) and liabilities relating thereto to the Trust or to any other
      Covered Person, an Indemnified Person acting under this Declaration shall not
      be
      liable to the Trust or to any other Covered Person for its good faith reliance
      on the provisions of this Declaration. The provisions of this Declaration,
      to
      the extent that they restrict the duties and liabilities of an Indemnified
      Person otherwise existing at law or in equity (other than the duties imposed
      on
      the Property Trustee under the Trust Indenture Act), are agreed by the parties
      hereto to replace such other duties and liabilities of such Indemnified
      Person.

     

    (b)  Unless
      otherwise expressly provided herein: 

     

    (i)  whenever
      a conflict of interest exists or arises between any Covered Persons; or

     

    (ii)  whenever
      this Declaration or any other agreement contemplated herein or therein provides
      that an Indemnified Person shall act in a manner that is, or provides terms
      that
      are, fair and reasonable to the Trust or any Holder of Securities,

     

    the
      Indemnified Person shall resolve such conflict of interest, take such action
      or
      provide such terms, considering in each case the relative interest of each
      party
      (including its own interest) to such conflict, agreement, transaction or
      situation and the benefits and burdens relating to such interests, any customary
      or accepted industry practices, and any applicable generally accepted accounting
      practices or principles. In the absence of bad faith by the Indemnified Person,
      the resolution, action or term so made, taken or provided by the Indemnified
      Person shall not constitute a breach of this Declaration or any other agreement
      contemplated herein or of any duty or obligation of the Indemnified Person
      at
      law or in equity or otherwise.

    

    (c)  Whenever
      in this Declaration an Indemnified Person is permitted or required to make
      a
      decision: 

     

    
      
        
        

      

      
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    (i)  in
      its
“discretion” or under a grant of similar authority, the Indemnified Person shall
      be entitled to consider such interests and factors as it desires, including
      its
      own interests, and shall have no duty or obligation to give any consideration
      to
      any interest of or factors affecting the Trust or any other Person;
      or

     

    (ii)  in
      its
“good faith” or under another express standard, the Indemnified Person shall act
      under such express standard and shall not be subject to any other or different
      standard imposed by this Declaration.

     

    Section
      10.4  Indemnification

     

    (a)   
        (i)The
      Debenture Issuer shall indemnify, to the full extent permitted by law, any
      Company Indemnified Person who was or is a party or is threatened to be made
      a
      party to any threatened, pending or completed action, suit or proceeding,
      whether civil, criminal, administrative or investigative (other than an action
      by or in the right of the Trust) by reason of the fact that he is or was a
      Company Indemnified Person, against expenses (including attorneys’ fees and
      expenses), judgments, fines and amounts paid in settlement actually and
      reasonably incurred by him in connection with such action, suit or proceeding
      if
      he acted in good faith and in a manner he reasonably believed to be in or not
      opposed to the best interests of the Trust, and, with respect to any criminal
      action or proceeding, had no reasonable cause to believe his conduct was
      unlawful. The termination of any action, suit or proceeding by judgment, order,
      settlement, conviction, or upon a plea of nolo
      contendere
      or its
      equivalent, shall not, of itself, create a presumption that the Company
      Indemnified Person did not act in good faith and in a manner which he reasonably
      believed to be in or not opposed to the best interests of the Trust, and, with
      respect to any criminal action or proceeding, had reasonable cause to believe
      that his conduct was unlawful.

     

    (ii)  The
      Debenture Issuer shall indemnify, to the full extent permitted by law, any
      Company Indemnified Person who was or is a party or is threatened to be made
      a
      party to any threatened, pending or completed action or suit by or in the right
      of the Trust to procure a judgment in its favor by reason of the fact that
      he is
      or was a Company Indemnified Person against expenses (including attorneys’ fees
      and expenses) actually and reasonably incurred by him in connection with the
      defense or settlement of such action or suit if he acted in good faith and
      in a
      manner he reasonably believed to be in or not opposed to the best interests
      of
      the Trust and except that no such indemnification shall be made in respect
      of
      any claim, issue or matter as to which such Company Indemnified Person shall
      have been adjudged to be liable to the Trust unless and only to the extent
      that
      the Court of Chancery of Delaware or the court in which such action or suit
      was
      brought shall determine upon application that, despite the adjudication of
      liability but in view of all the circumstances of the case, such Person is
      fairly and reasonably entitled to indemnity for such expenses which such Court
      of Chancery or such other court shall deem proper.

     

    (iii)  To
      the
      extent that a Company Indemnified Person shall be successful on the merits
      or
      otherwise (including dismissal of an action without prejudice or the settlement
      of an action without admission of liability) in defense of any action, suit
      or
      proceeding referred to in paragraphs (i) and (ii) of this Section 10.4(a),
      or in
      defense of any claim, issue or 

     

    
      
        
        

      

      
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    matter
      therein, he shall be indemnified, to the full extent permitted by law, against
      expenses (including attorneys’ fees) actually and reasonably incurred by him in
      connection therewith.

     

    (iv)  Any
      indemnification under paragraphs (i) and (ii) of this Section 10.4(a) (unless
      ordered by a court) shall be made by the Debenture Issuer only as authorized
      in
      the specific case upon a determination that indemnification of the Company
      Indemnified Person is proper in the circumstances because he has met the
      applicable standard of conduct set forth in paragraphs (i) and (ii). Such
      determination shall be made (1) by the Administrative Trustees by a majority
      vote of a Quorum consisting of such Administrative Trustees who were not parties
      to such action, suit or proceeding, (2) if such a Quorum is not obtainable,
      or,
      even if obtainable, if a Quorum of disinterested Administrative Trustees so
      directs, by independent legal counsel in a written opinion, or (3) by the Common
      Security Holder of the Trust.

     

    (v)  Expenses
      (including attorneys’ fees and expenses) incurred by a Company Indemnified
      Person in defending a civil, criminal, administrative or investigative action,
      suit or proceeding referred to in paragraphs (i) and (ii) of this Section
      10.4(a) shall be paid by the Debenture Issuer in advance of the final
      disposition of such action, suit or proceeding upon receipt of an undertaking
      by
      or on behalf of such Company Indemnified Person to repay such amount if it
      shall
      ultimately be determined that he is not entitled to be indemnified by the
      Debenture Issuer as authorized in this Section 10.4(a). Notwithstanding the
      foregoing, no advance shall be made by the Debenture Issuer if a determination
      is reasonably and promptly made (i) by the Administrative Trustees by a majority
      vote of a Quorum of disinterested Administrative Trustees, (ii) if such a Quorum
      is not obtainable, or, even if obtainable, if a Quorum of disinterested
      Administrative Trustees so directs, by independent legal counsel in a written
      opinion or (iii) the Common Security Holder of the Trust, that, based upon
      the
      facts known to the Administrative Trustees, counsel or the Common Security
      Holder at the time such determination is made, such Company Indemnified Person
      acted in bad faith or in a manner that such person did not believe to be in
      or
      not opposed to the best interests of the Trust, or, with respect to any criminal
      proceeding, that such Company Indemnified Person believed or had reasonable
      cause to believe his conduct was unlawful. In no event shall any advance be
      made
      in instances where the Administrative Trustees, independent legal counsel or
      Common Security Holder reasonably determine that such person deliberately
      breached his duty to the Trust or its Common or Capital Security
      Holders.

     

    (vi)  The
      indemnification and advancement of expenses provided by, or granted pursuant
      to,
      the other paragraphs of this Section 10.4(a) shall not be deemed exclusive
      of
      any other rights to which those seeking indemnification and advancement of
      expenses may be entitled under any agreement, vote of stockholders or
      disinterested directors of the Debenture Issuer or Capital Security Holders
      of
      the Trust or otherwise, both as to action in his official capacity and as to
      action in another capacity while holding such office. All rights to
      indemnification under this Section 10.4(a) shall be deemed to be provided by
      a
      contract between the Debenture Issuer and each Company Indemnified Person who
      serves in such capacity at any time while this Section 10.4(a) is in effect.
      Any
      repeal or modification of this Section 10.4(a) shall not affect any rights
      or
      obligations then existing.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    (vii)  The
      Debenture Issuer or the Trust may purchase and maintain insurance on behalf
      of
      any person who is or was a Company Indemnified Person against any liability
      asserted against him and incurred by him in any such capacity, or arising out
      of
      his status as such, whether or not the Debenture Issuer would have the power
      to
      indemnify him against such liability under the provisions of this Section
      10.4(a).

     

    (viii)  For
      purposes of this Section 10.4(a), references to “the Trust” shall include, in
      addition to the resulting or surviving entity, any constituent entity (including
      any constituent of a constituent) absorbed in a consolidation or merger, so
      that
      any person who is or was a director, trustee, officer or employee of such
      constituent entity, or is or was serving at the request of such constituent
      entity as a director, trustee, officer, employee or agent of another entity,
      shall stand in the same position under the provisions of this Section 10.4(a)
      with respect to the resulting or surviving entity as he would have with respect
      to such constituent entity if its separate existence had continued.

     

    (ix)  The
      indemnification and advancement of expenses provided by, or granted pursuant
      to,
      this Section 10.4(a) shall, unless otherwise provided when authorized or
      ratified, continue as to a person who has ceased to be a Company Indemnified
      Person and shall inure to the benefit of the heirs, executors and administrators
      of such a person.

     

    (b)  The
      Debenture Issuer agrees to indemnify the (i) Property Trustee, (ii) the
      Delaware Trustee, (iii) any Affiliate of the Property Trustee or the Delaware
      Trustee, and (iv) any officers, directors, stockholders, members, partners,
      employees, representatives, custodians, nominees or agents of the Property
      Trustee or the Delaware Trustee (each of the Persons in (i) through (iv) being
      referred to as a “Fiduciary Indemnified Person”) for, and to hold each Fiduciary
      Indemnified Person harmless against, any and all loss, liability, damage, claim,
      action, suit, case or expense including taxes (other than taxes based on the
      income of such Fiduciary Indemnified Person) incurred without negligence or
      bad
      faith on the part of such Fiduciary Indemnified Person, arising out of or in
      connection with the acceptance or administration of the trust or trusts
      hereunder, including the costs and expenses (including reasonable legal fees
      and
      expenses) of defending against or investigating any claim or liability in
      connection with the exercise or performance of any of the powers or duties
      of
      such Fiduciary Indemnified Person hereunder. The obligation to indemnify as
      set
      forth in this Section 10.4(b) shall survive the resignation or removal of the
      Property Trustee or the Delaware Trustee and the satisfaction and discharge
      of
      this Declaration.

     

    Section
      10.5  Outside
      Businesses

     

    Any
      Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee
      may
      engage in or possess an interest in other business ventures of any nature or
      description, independently or with others, similar or dissimilar to the business
      of the Trust, and the Trust and the Holders shall have no rights by virtue
      of
      this Declaration in and to such independent ventures or the income or profits
      derived therefrom, and the pursuit of any such venture, even if competitive
      with
      the business of the Trust, shall not be deemed wrongful or improper. No Covered
      Person, the Sponsor, the Delaware Trustee, or the Property Trustee shall be
      obligated to present any particular investment or other opportunity to the
      Trust
      even if such opportunity is of 

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    a
      character that, if presented to the Trust, could be taken by the Trust, and
      any
      Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee
      shall
      have the right to take for its own account (individually or as a partner or
      fiduciary) or to recommend to others any such particular investment or other
      opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
      may engage or be interested in any financial or other transaction with the
      Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
      or agent for, or act on any committee or body of holders of, securities or
      other
      obligations of the Sponsor or its Affiliates.

     

    Section
      10.6  Compensation;
      Fees

     

    The
      Debenture Issuer agrees:

     

    (a)  to
      pay to
      the Trustees from time to time such compensation for all services rendered
      by
      them hereunder as the parties shall agree in writing from time to time (which
      compensation shall not be limited by any provision of law in regard to the
      compensation of a trustee of an express trust); and

     

    (b)  except
      as
      otherwise expressly provided herein, to reimburse the Trustees upon request
      for
      all reasonable expenses, disbursements and advances incurred or made by the
      Trustees in accordance with any provision of this Declaration (including the
      reasonable compensation and the expenses and disbursements of their respective
      agents and counsel), except any such expense, disbursement or advance as may
      be
      attributable to its negligence or bad faith.

     

    The
      provisions of this Section 10.6 shall survive the dissolution of the Trust
      and
      the termination of this Declaration and the removal or resignation of any
      Trustee.

     

    No
      Trustee may claim any lien or charge on any property of the Trust as a result
      of
      any amount due pursuant to this Section 10.6.

     

    ARTICLE
      XI

    ACCOUNTING

     

    Section
      11.1  Fiscal
      Year

     

    The
      fiscal year (“Fiscal Year”) of the Trust shall be the calendar year, or such
      other year as is required by the Code.

     

    
      
        
        

      

      
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    Section
      11.2  Certain
      Accounting Matters

     

    (a)  At
      all
      times during the existence of the Trust, the Administrative Trustees shall
      keep,
      or cause to be kept, full books of account, records and supporting documents,
      which shall reflect in reasonable detail each transaction of the Trust. The
      books of account shall be maintained on the accrual method of accounting, in
      accordance with generally accepted accounting principles, consistently applied.
      The Trust shall use the accrual method of accounting for United States federal
      income tax purposes. The books of account and the records of the Trust shall
      be
      examined by and reported upon as of the end of each Fiscal Year of the Trust
      by
      a firm of independent certified public accountants selected by the
      Administrative Trustees.

     

    (b)  The
      Administrative Trustees shall cause to be duly prepared and delivered to each
      of
      the Holders, any annual United States federal income tax information statement,
      required by the Code, containing such information with regard to the Securities
      held by each Holder as is required by the Code and the Treasury Regulations.
      Notwithstanding any right under the Code to deliver any such statement at a
      later date, the Administrative Trustees shall endeavor to deliver all such
      information statements within 30 days after the end of each Fiscal Year of
      the
      Trust.

     

    (c)  The
      Administrative Trustees shall cause to be duly prepared and filed with the
      appropriate taxing authority, an annual United States federal income tax return,
      on a Form 1041 or such other form required by United States federal income
      tax
      law, and any other annual income tax returns required to be filed by the
      Administrative Trustees on behalf of the Trust with any state or local taxing
      authority.

     

    Section
      11.3  Banking

     

    The
      Trust
      may maintain one or more bank accounts in the name and for the sole benefit
      of
      the Trust; provided,
      however,
      that
      all payments of funds in respect of the Debentures held by the Property Trustee
      shall be made directly to the Property Trustee Account and no other funds of
      the
      Trust shall be deposited in the Property Trustee Account. The sole signatories
      for such accounts shall be designated by the Administrative Trustees;
provided,
      however,
      that
      the Property Trustee shall designate the signatories for the Property Trustee
      Account.

     

    Section
      11.4  Withholding

     

    The
      Trust
      and the Administrative Trustees shall comply with all withholding requirements
      under United States federal, state and local law. The Trust shall request,
      and
      the Holders shall provide to the Trust, such forms or certificates as are
      necessary to establish an exemption from withholding with respect to each
      Holder, and any representations and forms as shall reasonably be requested
      by
      the Trust to assist it in determining the extent of, and in fulfilling, its
      withholding obligations. The Administrative Trustees shall file required forms
      with applicable jurisdictions and, unless an exemption from withholding is
      properly established by a Holder, shall remit amounts withheld with respect
      to
      the Holder to applicable jurisdictions. To the extent that the Trust is required
      to withhold and pay over any amounts to any authority with respect to
      Distributions or allocations to any Holder, the amount withheld shall be deemed
      to be 

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    a
      Distribution in the amount of the withholding to the Holder. In the event of
      any
      claim of excess withholding, Holders shall be limited to an action against
      the
      applicable jurisdiction. If the amount required to be withheld was not withheld
      from actual Distributions made, the Trust may reduce subsequent Distributions
      by
      the amount of such withholding. 

     

    ARTICLE
      XII

    AMENDMENTS
      AND MEETINGS

     

    Section
      12.1  Amendments

     

    (a)  Except
      as
      otherwise provided in this Declaration (including Section 7 of Annex I hereto)
      or by any applicable terms of the Securities, this Declaration may only be
      amended by a written instrument approved and executed by:

     

    (i)  the
      Administrative Trustees (or if there are more than two Administrative Trustees,
      a majority of the Administrative Trustees); 

     

    (ii)  if
      the
      amendment affects the rights, powers, duties, obligations or immunities of
      the
      Property Trustee, the Property Trustee; and

     

    (iii)  if
      the
      amendment affects the rights, powers, duties, obligations or immunities of
      the
      Delaware Trustee, the Delaware Trustee.

     

    (b)  No
      amendment shall be made, and any such purported amendment shall be void and
      ineffective:

     

    (i)  unless,
      in the case of any proposed amendment, the Property Trustee shall have first
      received an Officers’ Certificate from each of the Trust and the Sponsor that
      such amendment is permitted by, and conforms to, the terms of this Declaration
      (including the terms of the Securities);

     

    (ii)  unless,
      in the case of any proposed amendment which affects the rights, powers, duties,
      obligations or immunities of the Property Trustee, the Property Trustee shall
      have first received:

     

    (A)
        an
      Officers’ Certificate from each of the Trust and the Sponsor that such amendment
      is permitted by, and conforms to, the terms of this Declaration (including
      the
      terms of the Securities); and

     

    (B)
        an
      Opinion of Counsel (who may be counsel to the Sponsor or the Trust) that such
      amendment is permitted by, and conforms to, the terms of this Declaration
      (including the terms of the Securities) and that all conditions precedent,
      if
      any, in this Declaration to the execution and delivery of such amendment have
      been satisfied,

     

    provided,
      however,
      that
      the Property Trustee shall not be required to sign any such amendment;
      and

    

    (iii)  to
      the
      extent the result of such amendment would be to:

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    (A)
        cause
      the
      Trust to fail to continue to be classified for purposes of United States federal
      income taxation as a grantor trust;

     

    (B)
        cause
      the
      Trust to be deemed to be an Investment Company required to be registered under
      the Investment Company Act; or

     

    (C)
        adversely
      affect any right of the Property Trustee (including rights to indemnification)
      hereunder, create or increase any duty or obligation of, or in any other manner
      adversely affect, the Property Trustee.

     

    (c)  At
      such
      time after the Trust has issued any Securities that remain outstanding, any
      amendment that would adversely affect the rights, privileges or preferences
      of
      any Holder may be effected only with such additional requirements as may be
      set
      forth in the terms of such Securities;

     

    (d)  Section
      9.1(c) and this Section 12.1 shall not be amended without the consent of all
      of
      the Holders;

     

    (e)  Article
      Four shall not be amended without the consent of the Holders of a Majority
      in
      liquidation amount of the Common Securities;

     

    (f)  The
      rights of the holders of the Common Securities under Article Five to increase
      or
      decrease the number of, and appoint and remove Trustees shall not be amended
      without the consent of the Holders of a Majority in liquidation amount of the
      Common Securities; and

     

    (g)  Notwithstanding
      Section 12.1(c), this Declaration may be amended without the consent of the
      Holders to:

     

    (i)  cure
      any
      ambiguity, correct or supplement any provision in this Declaration that may
      be
      inconsistent with any other provision of this Declaration or to make any other
      provisions with respect to matters or questions arising under this Declaration
      which shall not be inconsistent with the other provisions of the Declaration;
      and

     

    (ii)  to
      modify, eliminate or add to any provisions of the Declaration to such extent
      as
      shall be necessary to ensure that the Trust will be classified for United States
      federal income tax purposes as a grantor trust at all times that any Securities
      are outstanding or to ensure that the Trust will not be required to register
      as
      an Investment Company under the Investment Company Act;

     

    provided,
      however,
      that in
      each such case, such action shall not adversely affect in any material respect
      the interests of the Holders, and any amendments of this Declaration shall
      become effective when notice thereof is given to the Holders.

    

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    Section
      12.2  Meetings
      of the Holders; Action by Written Consent

     

    (a)  Meetings
      of the Holders of any class of Securities may be called at any time by the
      Administrative Trustees (or as provided in the terms of the Securities) to
      consider and act on any matter on which Holders of such class of Securities
      are
      entitled to act under the terms of this Declaration, the terms of the Securities
      or the rules of any stock exchange on which the Capital Securities are listed
      or
      admitted for trading. The Administrative Trustees shall call a meeting of the
      Holders of such class if directed to do so by the Holders of at least 10% in
      liquidation amount of such class of Securities. Such direction shall be given
      by
      delivering to the Administrative Trustees one or more notices in writing stating
      that the signing Holders wish to call a meeting and indicating the general
      or
      specific purpose for which the meeting is to be called. Any Holders calling
      a
      meeting shall specify in writing the Security Certificates held by the Holders
      exercising the right to call a meeting and only those Securities specified
      shall
      be counted for purposes of determining whether the required percentage set
      forth
      in the second sentence of this paragraph has been met.

     

    (b)  Except
      to
      the extent otherwise provided in the terms of the Securities, the following
      provisions shall apply to meetings of Holders:

     

    (i)  notice
      of
      any such meeting shall be given to all the Holders having a right to vote
      thereat at least seven days and not more than 60 days before the date of such
      meeting. Whenever a vote, consent or approval of the Holders is permitted or
      required under this Declaration or the rules of any stock exchange on which
      the
      Capital Securities are listed or admitted for trading, such vote, consent or
      approval may be given at a meeting of the Holders. Any action that may be taken
      at a meeting of the Holders may be taken without a meeting if a consent in
      writing setting forth the action so taken is signed by the Holders owning not
      less than the minimum amount of Securities in liquidation amount that would
      be
      necessary to authorize or take such action at a meeting at which all Holders
      having a right to vote thereon were present and voting. Prompt notice of the
      taking of action without a meeting shall be given to the Holders entitled to
      vote who have not consented in writing. The Administrative Trustees may specify
      that any written ballot submitted to the Security Holder for the purpose of
      taking any action without a meeting shall be returned to the Trust within the
      time specified by the Administrative Trustees;

     

    (ii)  each
      Holder may authorize any Person to act for it by proxy on all matters in which
      a
      Holder is entitled to participate, including waiving notice of any meeting,
      or
      voting or participating at a meeting. No proxy shall be valid after the
      expiration of eleven months from the date thereof unless otherwise provided
      in
      the proxy. Every proxy shall be revocable at the pleasure of the Holder
      executing it. Except as otherwise provided herein, all matters relating to
      the
      giving, voting or validity of proxies shall be governed by the General
      Corporation Law of the State of Delaware relating to proxies, and judicial
      interpretations thereunder, as if the Trust were a Delaware corporation and
      the
      Holders were stockholders of a Delaware corporation;

     

    (iii)  each
      meeting of the Holders shall be conducted by the Administrative Trustees or
      by
      such other Person that the Administrative Trustees may designate;
      and

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

    (iv)  unless
      the Statutory Trust Act, this Declaration, or the terms of the Securities,
      otherwise provides, the Administrative Trustees, in their sole discretion,
      shall
      establish all other provisions relating to meetings of Holders, including notice
      of the time, place or purpose of any meeting at which any matter is to be voted
      on by any Holders, waiver of any such notice, action by consent without a
      meeting, the establishment of a record date, quorum requirements, voting in
      person or by proxy or any other matter with respect to the exercise of any
      such
      right to vote.

     

    ARTICLE
      XIII

    REPRESENTATIONS
      OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE

     

    Section
      13.1  Representations
      and Warranties of Property Trustee

     

    The
      Trustee that acts as initial Property Trustee represents and warrants to the
      Trust and to the Sponsor at the date of this Declaration, and each Successor
      Property Trustee represents and warrants to the Trust and the Sponsor at the
      time of the Successor Property Trustee’s acceptance of its appointment as
      Property Trustee that:

     

    (a)  The
      Property Trustee is a banking corporation, a national banking association or
      a
      bank or trust company organized under the laws of the United States, any State
      of the United States or the District of Columbia, as the case may be, in any
      case with trust powers and authority to execute and deliver, and to carry out
      and perform its obligations under the terms of, this Declaration;

     

    (b)  The
      execution, delivery and performance by the Property Trustee of this Declaration
      has been duly authorized by all necessary corporate action on the part of the
      Property Trustee. This Declaration has been duly executed and delivered by
      the
      Property Trustee and (assuming due authorization, execution and delivery by
      the
      other parties hereto) constitutes a legal, valid and binding obligation of
      the
      Property Trustee, enforceable against it in accordance with its terms, subject
      to applicable bankruptcy, reorganization, moratorium, insolvency, and other
      similar laws affecting creditors’ rights generally and to general principles of
      equity and the discretion of the court (regardless of whether the enforcement
      of
      such remedies is considered in a proceeding in equity or at law);

     

    (c)  The
      execution, delivery and performance of this Declaration by the Property Trustee
      does not conflict with or constitute a breach of the charter or by-laws of
      the
      Property Trustee; and

     

    (d)  No
      consent, approval or authorization of, or registration with or notice to, any
      Delaware or federal banking authority is required for the execution, delivery
      or
      performance by the Property Trustee of this Declaration.

     

    Section
      13.2  Representations
      and Warranties of Delaware Trustee

     

    The
      Trustee that acts as initial Delaware Trustee represents and warrants to the
      Trust and to the Sponsor at the date of this Declaration, and each Successor
      Delaware Trustee represents 

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    and
      warrants to the Trust and the Sponsor at the time of the Successor Delaware
      Trustee’s acceptance of its appointment as Delaware Trustee that:

     

    (a)  The
      Delaware Trustee is a banking corporation or national banking association duly
      organized, validly existing and in good standing under the laws of the State
      of
      Delaware or the United States, as the case may be, with trust power and
      authority to execute and deliver, and to carry out and perform its obligations
      under the terms of, this Declaration;

     

    (b)  The
      execution, delivery and performance by the Delaware Trustee of this Declaration
      has been duly authorized by all necessary corporate action on the part of the
      Delaware Trustee. This Declaration has been duly executed and delivered by
      the
      Delaware Trustee and (assuming due authorization, execution and delivery by
      the
      other parties hereto) constitutes a legal, valid and binding obligation of
      the
      Delaware Trustee, enforceable against it in accordance with its terms, subject
      to applicable bankruptcy, reorganization, moratorium, insolvency, and other
      similar laws affecting creditors’ rights generally and to general principles of
      equity and the discretion of the court (regardless of whether the enforcement
      of
      such remedies is considered in a proceeding in equity or at law);

     

    (c)  No
      consent, approval or authorization of, or registration with or notice to, any
      federal banking authority is required for the execution, delivery or performance
      by the Delaware Trustee of this Declaration; and

     

    (d)  The
      Delaware Trustee is a natural person who is a resident of the State of Delaware
      or, if not a natural person, an entity which has its principal place of business
      in the State of Delaware.

     

    ARTICLE
      XIV

    MISCELLANEOUS

     

    Section
      14.1  Notices

     

    All
      notices provided for in this Declaration shall be in writing, duly signed by
      the
      party giving such notice, and shall be delivered, telecopied or mailed by first
      class mail, overnight courier service or confirmed telecopy, as
      follows:

     

    (a)  if
      given
      to the Trust, in care of the Administrative Trustees at the Trust’s mailing
      address set forth below (or such other address as the Trust may give notice
      of
      to the Property Trustee, the Delaware Trustee and the Holders):

     

    Commerce
      Harrisburg Capital Trust III

    c/o
      Commerce Bank/Harrisburg, N.A.

    3801
      Paxton Street

    Harrisburg,
      PA 17111 

    Attention:
      Mark Zody

    

    (b)  if
      given
      to the Delaware Trustee, at the mailing address set forth below (or such other
      address as Delaware Trustee may give notice of to the Holders):

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    Wilmington
      Trust Company

    1100
      North Market Street

    Rodney
      Square North

    Wilmington,
      DE 19890-0001

    Attention:
      Corporate Trust Administration Department

     

    (c)  if
      given
      to the Property Trustee, at the Property Trustee’s mailing address set forth
      below (or such other address as the Property Trustee may give notice of to
      the
      Holders):

     

    Wilmington
      Trust Company

    1100
      North Market Street

    Rodney
      Square North

    Wilmington,
      DE 19890-00001

    Attention:
      Corporate Trust Administration Department

    

    (d)  if
      given
      to the Holder of the Common Securities, at the mailing address of the Sponsor
      set forth below (or such other address as the Holder of the Common Securities
      may give notice of to the Property Trustee and the Trust):

     

    Pennsylvania
      Commerce Bancorp, Inc.

    c/o
      Commerce Bank/Harrisburg, N.A.

    3801
      Paxton Street

    Harrisburg,
      PA 17111 

    Attention:
      Mark Zody

    (e)  if
      given
      to any other Holder, at the address set forth on the books and records of the
      Trust.

     

    All
      such
      notices shall be deemed to have been given when received in person, faxed with
      receipt confirmed, or mailed by first class mail, postage prepaid except that
      if
      a notice or other document is refused delivery or cannot be delivered because
      of
      a changed address of which no notice was given, such notice or other document
      shall be deemed to have been delivered on the date of such refusal or inability
      to deliver.

     

    Section
      14.2  Governing
      Law

     

    This
      Declaration and the rights of the parties hereunder shall be governed by and
      interpreted in accordance with the laws of the State of Delaware and all rights
      and remedies shall be governed by such laws without regard to principles of
      conflict of laws.

     

    Section
      14.3  Intention
      of the Parties

     

    It
      is the
      intention of the parties hereto that the Trust be classified for United States
      federal income tax purposes as a grantor trust. The provisions of this
      Declaration shall be interpreted to further this intention of the
      parties.

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    Section
      14.4  Headings

     

    Headings
      contained in this Declaration are inserted for convenience of reference only
      and
      do not affect the interpretation of this Declaration or any provision
      hereof.

     

    Section
      14.5  Successors
      and Assigns

     

    Whenever
      in this Declaration any of the parties hereto is named or referred to, the
      successors and assigns of such party shall be deemed to be included, and all
      covenants and agreements in this Declaration by the Sponsor and the Trustees
      shall bind and inure to the benefit of their respective successors and assigns,
      whether so expressed.

     

    Section
      14.6  Partial
      Enforceability.

     

    If
      any
      provision of this Declaration, or the application of such provision to any
      Person or circumstance, shall be held invalid, the remainder of this
      Declaration, or the application of such provision to persons or circumstances
      other than those to which it is held invalid, shall not be affected
      thereby.

     

    Section
      14.7  Counterparts.

     

    This
      Declaration may contain more than one counterpart of the signature page and
      this
      Declaration may be executed by the affixing of the signature of each of the
      Trustees to one of such counterpart signature pages. All of such counterpart
      signature pages shall be read as though one, and they shall have the same force
      and effect as though all of the signers had signed a single signature
      page.

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the undersigned has caused these presents to be executed as
      of
      the day and year first above written.

    

      
        	 	
                __________________________________

              
	 	
                Mark
                  Zody, as Administrative Trustee

              
	 	 	 
	 	 	 
	 	
                __________________________________

              
	 	
                Gary
                  L. Nalbandian, as Administrative Trustee

              
	 	 	 
	 	 	 
	 	
                __________________________________

              
	 	
                Julie
                  A. Wilson, as Administrative Trustee

              
	 	 	 
	 	 	 
	 	
                WILMINGTON
                  TRUST COMPANY,

              
	 	
                as
                  Delaware Trustee

              
	 	 	 
	 	 	 
	 	
                By
                  

              	
                _______________________________

              
	 	 	
                Name:

              
	 	 	
                Title:

              
	 	 	 
	 	 	 
	 	
                WILMINGTON
                  TRUST COMPANY,

              
	 	
                as
                  Property Trustee

              
	 	 	 
	 	
                By
                  

              	
                _______________________________

              
	 	 	
                Name:

              
	 	 	
                Title:

              
	 	 	 
	 	 	 
	 	
                PENNSYLVANIA
                  COMMERCE BANCORP, INC.

              
	 	
                as
                  Sponsor and Debenture Issuer

              
	 	 	 
	 	 	 
	 	
                By
                  

              	
                _______________________________

              
	 	 	
                Name:

              
	 	 	
                Title:

              

      

    

    

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    ANNEX
      I

     

    TERMS
      OF

    7.75%
      CAPITAL SECURITIES AND

    7.75%
      COMMON SECURITIES

    

    Pursuant
      to Section 7.1 of the Declaration of Trust, dated as of September 29, 2006
      (as
      amended from time to time, the “Declaration”), the designation, rights,
      privileges, restrictions, preferences and other terms and provisions of the
      Securities are set out below (each capitalized term used but not defined herein
      has the meaning set forth in the Declaration):

     

    1.  Designation
      and Number.

     

    (a)  Capital
      Securities.
      One
      Hundred Fifty 7.75% Capital Securities of the Trust with an aggregate
      liquidation amount with respect to the assets of the Trust of Fifteen Million
      Dollars ($15,000,000), and with a liquidation amount with respect to the assets
      of the Trust of $100,000 per security, are hereby designated for the purposes
      of
      identification only as Capital Securities. The certificates evidencing the
      Capital Securities shall be substantially in the form of Exhibit A-1 to the
      Declaration, with such changes and additions thereto or deletions therefrom
      as
      may be required by ordinary usage, custom or practice or to conform to the
      rules
      of any exchange or quotation system on or in which the Capital Securities are
      listed, traded or quoted.

     

    (b)  Common
      Securities.
      Eight
      7.75% Common Securities of the Trust with an aggregate liquidation amount with
      respect to the assets of the Trust of Eight Hundred Thousand Dollars ($800,000)
      and a liquidation amount with respect to the assets of the Trust of $100,000
      per
      security, are hereby designated for the purposes of identification only as
      Common Securities. The certificates evidencing the Common Securities shall
      be
      substantially in the form of Exhibit A-2 to the Declaration, with such changes
      and additions thereto or deletions therefrom as may be required by ordinary
      usage, custom or practice.

     

    2.  Distributions.

     

    (a)  Distributions
      payable on each Security will be fixed at a rate per annum of 7.75% (the “Coupon
      Rate”) of the liquidation amount of $100,000 per Security (the “Liquidation
      Amount”), such rate being the rate of interest payable on the Debentures to be
      held by the Property Trustee. Distributions in arrears for more than one
      quarterly period will bear additional distributions thereon compounded quarterly
      at the Coupon Rate (to the extent permitted by applicable law). A Distribution
      is payable only to the extent that payments are made in respect of the
      Debentures held by the Property Trustee and to the extent the Property Trustee
      has funds on hand legally available therefor.

     

    (b)  Distributions
      on the Securities will be cumulative, will accumulate from the most recent
      date
      to which Distributions have been paid or, if no Distributions have been paid,
      from September 29, 2006, and will be payable quarterly in arrears on the last
      day of March, June, 

     

    
      
        
        

      

      
        I-1

        
          

        

      

      
        
        

      

    

    September
      and December of each year, commencing on December 31, 2006 (each, a
“Distribution Date”), except as otherwise described below. Distributions will be
      computed on the basis of a 360-day year consisting of twelve 30-day months
      and
      for any period less than a full calendar month on the basis of the actual number
      of days elapsed in such month. As long as no Event of Default has occurred
      and
      is continuing under the Indenture, the Debenture Issuer has the right under
      the
      Indenture to defer payments of interest by extending the interest payment period
      at any time and from time to time on the Debentures for a period not exceeding
      20 consecutive quarterly periods, including the first such quarterly period
      during such period (each an “Extension Period”), during which Extension Period
      no interest shall be due and payable on the Debentures, provided that
      no
      Extension Period shall end on a date other than an Interest Payment Date for
      the
      Debentures or extend beyond the Maturity Date of the Debentures. As a
      consequence of such deferral, Distributions will also be deferred. Despite
      such
      deferral, Distributions will continue to accumulate with additional
      Distributions thereon (to the extent permitted by applicable law but not at a
      rate greater than the rate at which interest is then accruing on the Debentures)
      at the Coupon Rate compounded quarterly during any such Extension Period. Prior
      to the termination of any such Extension Period, the Debenture Issuer may
      further defer payments of interest by further extending such Extension Period;
      provided that
      such
      Extension Period, together with all such previous and further extensions within
      such Extension Period, may not exceed 20 consecutive quarterly periods,
      including the first quarterly period during such Extension Period, or extend
      beyond the Maturity Date of the Debentures. Upon the termination of any
      Extension Period and the payment of all amounts then due, the Debenture Issuer
      may commence a new Extension Period, subject to the above
      requirements.

     

    (c)  Distributions
      on the Securities will be payable to the Holders thereof as they appear on
      the
      books and records of the Trust on the close of business on the 15th day of
      the
      month preceding the month in which the relevant Distribution Date occurs, which
      Distribution Dates correspond to the interest payment dates on the Debentures.
      The relevant record dates for the Common Securities shall be the same as the
      record dates for the Capital Securities. Distributions payable on any Securities
      that are not punctually paid on any Distribution Date, as a result of the
      Debenture Issuer having failed to make a payment under the Debentures, will
      cease to be payable to the Holder on the relevant record date, and such
      defaulted Distribution will instead be payable to the Person in whose name
      such
      Securities are registered on the special record date or other specified date
      determined in accordance with the Indenture. If any date on which Distributions
      are payable on the Securities is not a Business Day, then payment of the
      Distribution payable on such date will be made on the next succeeding day that
      is a Business Day (and without any interest or other payment in respect of
      any
      such delay), except that if such next succeeding Business Day is in the next
      succeeding calendar year, such payment shall be made on the immediately
      preceding Business Day with the same force and effect as if made on such
      date.

     

    (d)  In
      the
      event that there is any money or other property held by or for the Trust that
      is
      not accounted for hereunder, such property shall be distributed Pro Rata (as
      defined herein) among the Holders.

     

    3.  Liquidation
      Distribution Upon Dissolution.

     

    
      
        
        

      

      
        I-2

        
          

        

      

      
        
        

      

    

    In
      the
      event of any termination of the Trust, or if the Sponsor otherwise gives notice
      of its election to liquidate the Trust pursuant to Section 8.1(a)(iii) of the
      Declaration, the Trust shall be liquidated by the Administrative Trustees as
      expeditiously as the Administrative Trustees determine to be possible by
      distributing to the Holders, after satisfaction of liabilities to creditors
      of
      the Trust as provided by applicable law, a Like Amount (as defined below) of
      the
      Debentures, unless such distribution is determined by the Property Trustee
      not
      to be practicable, in which event such Holders will be entitled to receive
      Pro
      Rata out of the assets of the Trust legally available for distribution to
      Holders an amount equal to the aggregate of the liquidation amount of $100,000
      per Security plus accumulated and unpaid Distributions thereon to the date
      of
      payment, after satisfaction of liabilities to creditors of the Trust as provided
      by applicable law (such amount being the “Liquidation
      Distribution”).

     

    “Like
      Amount” means (i) with respect to a redemption of the Securities, Securities
      having a Liquidation Amount equal to the principal amount of Debentures to
      be
      paid in accordance with their terms and (ii) with respect to a distribution
      of
      Debentures upon the liquidation of the Trust, Debentures having a principal
      amount equal to the Liquidation Amount of the Securities of the Holder to whom
      such Debentures are distributed.

     

    If,
      upon
      any such liquidation, the Liquidation Distribution can be paid only in part
      because the Trust has insufficient assets on hand legally available to pay
      in
      full the aggregate Liquidation Distribution, then the amounts payable directly
      by the Trust on the Securities shall be paid on a Pro Rata basis except that
      if
      a Debenture Event of Default has occurred and is continuing, the Capital
      Securities shall have priority over the Common Securities.

     

    4.  Redemption
      and Distribution.

     

    (a)  Upon
      the
      repayment of the Debentures in whole or in part, at maturity or otherwise
      (either at the option of the Debenture Issuer or pursuant to a Special Event,
      as
      described below), the proceeds from such repayment shall be simultaneously
      applied by the Property Trustee (subject to the Property Trustee having received
      written notice no later than 45 days prior to such repayment) to redeem a Like
      Amount of the Securities upon not less than 30 nor more than 60 days notice
      of
      such redemption, at the Redemption Price (as defined below).

     

    (i)  The
      “Redemption Price”, with respect to a redemption of Securities, shall mean (A)
      if in connection with a Special Event (as defined herein) prior to September
      29,
      2011 an amount equal to 105% of the principal of the Securities to be redeemed
      and (B) if on or after September 29, 2011, regardless of whether or not a
      Special Event (as defined herein) has occurred, at 100% of the principal of
      the
      Securities to be redeemed, plus in each case any accrued and unpaid
      Distributions on the Debentures.

     

    (ii) In
      the
      case of an optional redemption, if fewer than all the outstanding Securities
      are
      to be so redeemed, the Securities to be redeemed will be determined as described
      in Section 4(f)(ii) below. Upon the entry of an order for the dissolution of
      the
      Trust by a court of competent jurisdiction, the Debentures thereafter will
      be
      subject to optional repayment, in whole, but not in part, on or after September
      29, 2011 (the “Initial Optional Redemption Date”).

     

    
      
        
        

      

      
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    The
      Debenture Issuer shall have the right (subject to the conditions in the
      Indenture) to elect to prepay the Debentures, in whole or in part, at any time
      on or after the Initial Optional Redemption Date, upon not less than 30 days
      and
      not more than 60 days’ notice, at a price equal to the Redemption Price and,
      simultaneous with such prepayment, to cause a Like Amount of the Securities
      to
      be redeemed by the Trust at the Redemption Price on a Pro Rata
      basis.

     

    (b)  If
      at any
      time an Investment Company Event, a Tax Event or a Regulatory Capital Event
      (each as defined below, and each a “Special Event”) occurs, the Debenture Issuer
      shall have the right (subject to the conditions set forth in the Indenture)
      at
      any time prior to the Initial Optional Redemption Date, upon not less than
      30
      nor more than 60 days’ notice, to prepay the Debentures in whole, but not in
      part, within the 90 days following the occurrence of such Special Event (the
“90
      Day Period”), and, simultaneous with such prepayment, to cause a Like Amount of
      the Securities to be redeemed by the Trust at the Redemption Price on a Pro
      Rata
      basis.

     

    “Investment
      Company Event” means the receipt by the Sponsor of an Opinion of Counsel,
      rendered by a law firm experienced in such matters, to the effect that, as
      a
      result of change in law or regulation or a change in interpretation or
      application of law or regulation by any legislative body, court, governmental
      agency or regulatory authority, the Trust is or will be considered an
“investment company” that is required to be registered under the 1940 Act, which
      change becomes effective on or after the date of original issuance of the
      Securities of Commerce Harrisburg Capital Trust III.

     

    A
“Tax
      Event” shall occur upon receipt by the Debenture Issuer and the Trust of an
      Opinion of Counsel experienced in such matters to the effect that, as a result
      of any amendment to, or change (including any announced prospective change)
      in,
      the laws or any regulations thereunder of the United States or any political
      subdivision or taxing authority thereof or therein, or as a result of any
      official administrative pronouncement or judicial decision interpreting or
      applying such laws or regulations, which amendment or change is effective or
      which pronouncement or decision is announced on or after September 29, 2006,
      there is more than an insubstantial risk that (i) the Trust is, or will be
      within 90 days of the date of such opinion, subject to United States federal
      income tax with respect to income received or accrued on the Debentures, (ii)
      interest payable by the Debenture Issuer on the Debentures is not, or within
      90
      days of the date of such opinion, will not be, deductible by the Debenture
      Issuer, in whole or in part, for United States federal income tax purposes,
      or
      (iii) the Trust is, or will be within 90 days of the date of such opinion,
      subject to more than a de
      minimis
      amount
      of other taxes, duties or other governmental charges.

     

    “Regulatory
      Capital Event” shall mean that the Debenture Issuer shall have received an
      opinion of bank regulatory counsel experienced in such matters to the effect
      that, as a result of (a) any amendment to, or change (including any announced
      prospective change) in, the laws (or any regulations thereunder) of the United
      States or any rules, guidelines or policies of the Federal Reserve Board or
      (b)
      any official administrative pronouncement or judicial decision interpreting
      or
      applying such laws or regulations, which amendment or change is effective or
      such pronouncement or decision is announced on or after September 29, 2006,
      the
      Capital Securities do not constitute, or within 90 days of the date thereof,
      will not constitute, Tier 1 Capital (or its 

     

    
      
        
        

      

      
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    then
      equivalent); provided,
      however,
      that
      the distribution of the Debentures in connection with the liquidation of the
      Trust by the Debenture Issuer shall not in and of itself constitute a Regulatory
      Capital Event unless such liquidation shall have occurred in connection with
      a
      Tax Event.

     

    (c)  On
      and
      from the date fixed by the Administrative Trustees for any distribution of
      Debentures and liquidation of the Trust: (i) the Securities will no longer
      be
      deemed to be outstanding and (ii) any certificates representing Securities
      will
      be deemed to represent beneficial interests in a Like Amount of Debentures
      until
      such certificates are presented to the Debenture Issuer or its agent for
      transfer or reissue.

     

    (d)  The
      Trust
      may not redeem fewer than all the outstanding Securities unless all accumulated
      and unpaid Distributions have been paid on all Securities for all quarterly
      Distribution periods terminating on or before the date of
      redemption.

     

    (e)  The
      procedure with respect to redemptions or distributions of Securities shall
      be as
      follows:

     

    (i)  Notice
      of
      any redemption of, or notice of distribution of Debentures in exchange for,
      the
      Securities (a “Redemption/Distribution Notice”) will be given by the Trust by
      mail to each Holder to be redeemed or exchanged not fewer than 30 nor more
      than
      60 days before the date fixed for redemption or exchange thereof which, in
      the
      case of a redemption, will be the date fixed for redemption of the Debentures.
      For purposes of the calculation of the date of redemption or exchange and the
      dates on which notices are given pursuant to this Section 4(f)(i), a Redemption/
      Distribution Notice shall be deemed to be given on the day such notice is first
      mailed by first-class mail, postage prepaid, to Holders. Each
      Redemption/Distribution Notice shall be addressed to the Holders at the address
      of each such Holder appearing in the books and records of the Trust. No defect
      in the Redemption/Distribution Notice or in the mailing of either thereof with
      respect to any Holder shall affect the validity of the redemption or exchange
      proceedings with respect to any other Holder.

     

    (ii)  In
      the
      event that fewer than all the outstanding Securities are to be redeemed, the
      particular Securities to be redeemed shall be selected on a Pro Rata basis
      (based upon Liquidation Amounts) not more than 60 days prior to the date fixed
      for redemption from the outstanding Capital Securities not previously called
      for
      redemption, provided, however, that with respect to Holders that would be
      required to hold less than 100 but more than zero Securities as a result of
      such
      pro rata redemption, the Trust shall redeem Securities of each such Holder
      so
      that after such redemption such Holder shall hold either 100 Securities or
      such
      Holder no longer holds any Securities, and shall use such method (including,
      without limitation, by lot) as the Trust shall deem fair and appropriate,
      provided, further, that any such proration may be made on the basis of the
      aggregate Liquidation Amount of Securities held by each Holder thereof and
      may
      be made by making such adjustments as the Trust deems fair and appropriate
      in
      order that only Securities in denominations of $100,000 or integral multiples
      thereof shall be redeemed.

     

    
      
        
        

      

      
        I-5

        
          

        

      

      
        
        

      

    

    (iii)  If
      Securities are to be redeemed and the Trust gives a Redemption/Distribution
      Notice, (which notice will be irrevocable), then with respect to Capital
      Securities issued in certificated form and Common Securities, provided that
      the
      Debenture Issuer has paid the Property Trustee a sufficient amount of cash
      in
      connection with the related redemption or maturity of the Debentures, the
      Property Trustee will pay the Redemption Price to the Holders by check mailed
      to
      the address of the relevant Holder appearing on the books and records of the
      Trust on the redemption date. If a Redemption/Distribution Notice shall have
      been given and funds deposited as required, if applicable, then immediately
      prior to the close of business on the date of such deposit, or on the redemption
      date, as applicable, Distributions will cease to accumulate on the Securities
      so
      called for redemption and all rights of Holders so called for redemption will
      cease, except the right of the Holders of such Securities to receive the
      Redemption Price, but without interest on such Redemption Price, and such
      Securities shall cease to be outstanding.

     

    (iv)  Payment
      of accumulated and unpaid Distributions on the Redemption Date of the Securities
      will be subject to the rights of Holders on the close of business on a regular
      record date in respect of a Distribution Date occurring on or prior to such
      Redemption Date.

     

    Neither
      the Administrative Trustees nor the Trust shall be required to register or
      cause
      to be registered the transfer of (i) any Securities beginning on the opening
      of
      business 15 days before the day of mailing of a notice of redemption or any
      notice of selection of Securities for redemption or (ii) any Securities selected
      for redemption except the unredeemed portion of any Security being redeemed.
      If
      any date fixed for redemption of Securities is not a Business Day, then payment
      of the Redemption Price payable on such date will be made on the next succeeding
      day that is a Business Day (and without any interest or other payment in respect
      of any such delay) except that, if such next succeeding Business Day falls
      in
      the next calendar year, such payment shall be made on the immediately preceding
      Business Day, in each case with the same force and effect as if made on such
      date fixed for redemption. If payment of the Redemption Price in respect of
      any
      Securities is improperly withheld or refused and not paid either by the Property
      Trustee or by the Sponsor as guarantor pursuant to the relevant Securities
      Guarantee, Distributions on such Securities will continue to accumulate from
      the
      original redemption date to the actual date of payment, in which case the actual
      payment date will be considered the date fixed for redemption for purposes
      of
      calculating the Redemption Price.

     

    (v)  Redemption/Distribution
      Notices shall be sent by the Property Trustee on behalf of the Trust to (A)
      in
      respect of the Capital Securities, the
      Clearing Agency or its nominee (or any successor Clearing Agency or its nominee)
      if the Global Certificates have been issued or, if Definitive Capital Security
      Certificates have been issued, to the Holder thereof, and (B) in respect of
      the
      Common Securities to the Holder thereof.

     

    (vi)  Subject
      to the foregoing and applicable law (including, without limitation, United
      States federal securities laws and banking laws), provided the acquiror is
      not
      the Holder of the Common Securities or the obligor under the Indenture, the
      Sponsor or any of its subsidiaries may at any time and from time to time
      purchase outstanding Capital Securities by tender, in the open market or by
      private agreement.

     

    
      
        
        

      

      
        I-6

        
          

        

      

      
        
        

      

    

    5.  Voting
      Rights - Capital Securities.

     

    (a)  Except
      as
      provided under Sections 5(b) and 7 and as otherwise required by law and the
      Declaration, the Holders of the Capital Securities will have no voting
      rights.

     

    (b)  So
      long
      as any Debentures are held by the Property Trustee, the Trustees shall not
      (i)
      direct the time, method and place of conducting any proceeding for any remedy
      available to the Debenture Trustee or executing any trust or power conferred
      on
      such Debenture Trustee with respect to the Debentures, (ii) waive any past
      default that is waivable under Section 5.07 of the Indenture, (iii) exercise
      any
      right to rescind or annul a declaration of acceleration of the maturity of
      the
      principal of the Debentures or (iv) consent to any amendment, modification
      or
      termination of the Indenture or the Debentures, where such consent shall be
      required, without, in each case, obtaining the prior approval of the Holders
      of
      a majority in liquidation amount of all outstanding Capital Securities;
provided,
      however,
      that
      where a consent under the Indenture would require the consent of each holder
      of
      Debentures affected thereby, no such consent shall be given by the Property
      Trustee without the prior approval of each Holder of the Capital Securities.
      The
      Trustees shall not revoke any action previously authorized or approved by a
      vote
      of the Holders of the Capital Securities except by subsequent vote of such
      Holders. The Property Trustee shall notify each Holder of Capital Securities
      of
      any notice of default with respect to the Debentures. In addition to obtaining
      the foregoing approvals of such Holders of the Capital Securities, prior to
      taking any of the foregoing actions, the Trustees shall obtain an opinion of
      counsel experienced in such matters to the effect that the Trust will continue
      to be classified as a grantor trust for United States federal income tax
      purposes on account of such action.

     

    If
      an
      Event of Default under the Declaration has occurred and is continuing and such
      event is attributable to the failure of the Debenture Issuer to pay principal
      of
      or interest on the Debentures on the due date (or in the case of redemption,
      on
      the redemption date), then a Holder of Capital Securities may directly institute
      a proceeding for enforcement of payment to such Holder of the principal of
      or
      interest on a Like Amount of Debentures (a “Direct Action”) on or after the
      respective due date specified in the Debentures. In connection with such Direct
      Action, the rights of the Common Securities Holder will be subordinated to
      the
      rights of such Holder of Capital Securities to the extent of any payment made
      by
      the Debenture Issuer to such Holder of Capital Securities in such Direct Action.
      Except as provided in the second preceding sentence, the Holders of Capital
      Securities will not be able to exercise directly any other remedy available
      to
      the holders of the Debentures.

     

    Any
      approval or direction of Holders of Capital Securities may be given at a
      separate meeting of Holders of Capital Securities convened for such purpose,
      at
      a meeting of all of the Holders of Securities in the Trust or pursuant to
      written consent. The Property Trustees will cause a notice of any meeting at
      which Holders of Capital Securities are entitled to vote, or of any matter
      upon
      which action by written consent of such Holders is to be taken, to be mailed
      to
      each Holder of record of Capital Securities. Each such notice will include
      a
      statement setting forth (i) the date of such meeting or the date by which such
      action is to be taken, (ii) a description of any resolution proposed for
      adoption at such meeting on which such Holders are entitled to vote or of such
      matter upon which written consent is sought and (iii) instructions for the
      delivery of proxies or consents.

     

    
      
        
        

      

      
        I-7

        
          

        

      

      
        
        

      

    

    No
      vote
      or consent of the Holders of the Capital Securities will be required for the
      Trust to redeem and cancel Capital Securities or to distribute the Debentures
      in
      accordance with the Declaration and the terms of the Securities.

     

    Notwithstanding
      that Holders of Capital Securities are entitled to vote or consent under any
      of
      the circumstances described above, any of the Capital Securities that are owned
      by the Sponsor or any Affiliate of the Sponsor shall not be entitled to vote
      or
      consent and shall, for purposes of such vote or consent, be treated as if they
      were not outstanding.

     

    6.  Voting
      Rights - Common Securities.

     

    (a)  Except
      as
      provided under Sections 6(b), 6(c), and 7 or as otherwise required by law and
      the Declaration, the Holders of the Common Securities will have no voting
      rights.

     

    (b)  Unless
      an
      Event of Default shall have occurred and be continuing, any Trustee may be
      removed at any time by the holder of the Common Securities. If an Event of
      Default has occurred and is continuing, the Property Trustee and the Delaware
      Trustee may be removed at such time by the holders of a Majority in liquidation
      amount of the outstanding Capital Securities. In no event will the holders
      of
      the Capital Securities have the right to vote to appoint, remove or replace
      the
      Administrative Trustees, which voting rights are vested exclusively in the
      Sponsor as the holder of the Common Securities. No resignation or removal of
      a
      Trustee and no appointment of a successor trustee shall be effective until
      the
      acceptance of appointment by the successor trustee in accordance with the
      provisions of the Declaration.

     

    (c)  So
      long
      as any Debentures are held by the Property Trustee, the Trustees shall not
      (i)
      direct the time, method and place of conducting any proceeding for any remedy
      available to the Debenture Trustee, or executing any trust or power conferred
      on
      such Debenture Trustee with respect to the Debentures, (ii) waive any past
      default that is waivable under Section 5.07 of the Indenture, (iii) exercise
      any
      right to rescind or annul a declaration of acceleration of the maturity of
      the
      principal of the Debentures or (iv) consent to any amendment, modification
      or
      termination of the Indenture or the Debentures, where such consent shall be
      required, without, in each case, obtaining the prior approval of the Holders
      of
      a Majority in liquidation amount of all outstanding Capital Securities;
provided,
      however,
      that
      where a consent under the Indenture would require the consent of each holder
      of
      Debentures affected thereby, no such consent shall be given by the Property
      Trustee without the prior approval of each Holder of the Common Securities.
      The
      Trustees shall not revoke any action previously authorized or approved by a
      vote
      of the Holders of the Common Securities except by subsequent vote of such
      Holders. The Property Trustee shall notify each Holder of Common Securities
      of
      any notice of default with respect to the Debentures. In addition to obtaining
      the foregoing approvals of such Holders of the Common Securities prior to taking
      any of the foregoing actions, the Trustees shall obtain an opinion of counsel
      experienced in such matters to the effect that the Trust will continue to be
      classified as a grantor trust for United States federal income tax purposes
      on
      account of such action.

     

    
      
        
        

      

      
        I-8

        
          

        

      

      
        
        

      

    

    If
      an
      Event of Default under the Declaration has occurred and is continuing and such
      event is attributable to the failure of the Debenture Issuer to pay principal
      of
      or interest on the Debentures on the due date (or in the case of redemption,
      on
      the redemption date), then a Holder of Common Securities may institute a Direct
      Action for enforcement of payment to such Holder of the principal of or any,
      or
      interest on a Like Amount of Debentures on or after the respective due date
      specified in the Debentures. In connection with such Direct Action, the rights
      of the Common Securities Holder will be subordinated to the rights of such
      Holder of Capital Securities to the extent of any payment made by the Debenture
      Issuer to such Holder of Common Securities in such Direct Action. Except as
      provided in the second preceding sentence, the Holders of Common Securities
      will
      not be able to exercise directly any other remedy available to the holders
      of
      the Debentures.

     

    Any
      approval or direction of Holders of Common Securities may be given at a separate
      meeting of Holders of Common Securities convened for such purpose, at a meeting
      of all of the Holders of Securities in the Trust or pursuant to written consent.
      The Administrative Trustees will cause a notice of any meeting at which Holders
      of Common Securities are entitled to vote, or of any matter upon which action
      by
      written consent of such Holders is to be taken, to be mailed to each Holder
      of
      record of Common Securities. Each such notice will include a statement setting
      forth (i) the date of such meeting or the date by which such action is to be
      taken, (ii) a description of any resolution proposed for adoption at such
      meeting on which such Holders are entitled to vote or of such matter upon which
      written consent is sought and (iii) instructions for the delivery of proxies
      or
      consents.

     

    No
      vote
      or consent of the Holders of the Common Securities will be required for the
      Trust to redeem and cancel Common Securities or to distribute the Debentures
      in
      accordance with the Declaration and the terms of the Securities.

     

    7.  Amendments
      to Declaration and Indenture.

     

    In
      addition to the requirements set out in Section 12.1 of the Declaration, the
      Declaration may be amended from time to time by the Sponsor, the Property
      Trustee and the Administrative Trustees without the consent of the Holders
      (i)
      to cure any ambiguity, correct or supplement any provisions in the Declaration
      that may be inconsistent with any other provisions, or to make any other
      provisions with respect to matters or questions arising under the Declaration
      which shall not be inconsistent with the other provisions of the Declaration
      and
      (ii) to modify, eliminate or add to any provisions of the Declaration to such
      extent as shall be necessary to ensure that the Trust will be classified for
      United States federal income tax purposes as a grantor trust at all times that
      any Securities are outstanding or to ensure that the Trust will not be required
      to register as an “Investment Company” under the Investment Company Act;
provided,
      however,
      that in
      each case, such action shall not adversely affect in any material respect the
      interests of any Holder, and any amendments of the Declaration shall become
      effective when notice thereof is given to the Holders. The Declaration may
      also
      be amended by the Trustees and the Sponsor with (i) the consent of Holders
      representing a Majority in liquidation amount of all outstanding Securities,
      and
      (ii) receipt by the Trustees of an Opinion of Counsel to the effect that such
      amendment or the exercise of any power granted to the Trustees in accordance
      with such amendment will not affect the Trust’s status as a grantor trust for
      United States federal income 

     

    
      
        
        

      

      
        I-9

        
          

        

      

      
        
        

      

    

    tax
      purposes or the Trust’s exemption from status as an Investment Company under the
      Investment Company Act, provided that,
      without
      the consent of each Holder of Trust Securities, the Declaration may not be
      amended to (i) change the amount or timing of any Distribution on the Trust
      Securities or otherwise adversely affect the amount of any Distribution required
      to be made in respect of the Trust Securities as of a specified date or (ii)
      restrict the right of a holder of Trust Securities to institute suit for the
      enforcement of any such payment on or after such date.

     

    8.  Pro
      Rata.

     

    A
      reference in these terms of the Securities to any payment, distribution or
      treatment as being “Pro Rata” shall mean pro rata to each Holder according to
      the aggregate liquidation amount of the Securities held by the relevant Holder
      in relation to the aggregate liquidation amount of all Securities outstanding
      unless, in relation to a payment, an Event of Default under the Declaration
      has
      occurred and is continuing, in which case any funds available to make such
      payment shall be paid first to each Holder of the Capital Securities pro rata
      according to the aggregate liquidation amount of Capital Securities held by
      the
      relevant Holder relative to the aggregate liquidation amount of all Capital
      Securities outstanding, and, only after satisfaction of all amounts owed to
      the
      Holders of the Capital Securities, to each Holder of Common Securities pro
      rata
      according to the aggregate liquidation amount of Common Securities held by
      the
      relevant Holder relative to the aggregate liquidation amount of all Common
      Securities outstanding.

     

    9.  Ranking.

     

    The
      Capital Securities rank pari passu
      with the
      Common Securities and payment thereon shall be made Pro Rata with the Common
      Securities, except that, if an Event of Default under the Declaration occurs
      and
      is continuing, no payments in respect of Distributions on, or payments upon
      liquidation, redemption or otherwise with respect to, the Common Securities
      shall be made until the Holders of the Capital Securities shall be paid in
      full
      the Distributions, Redemption Price, Liquidation Distribution and other payments
      to which they are entitled at such time.

     

    10.  Acceptance
      of Securities Guarantee and Indenture.

     

    Each
      Holder of Capital Securities and Common Securities, by the acceptance thereof,
      agrees to the provisions of the Capital Securities Guarantee and the Common
      Securities Guarantee, respectively, including the subordination provisions
      therein and to the provisions of the Indenture.

     

    11.  No
      Preemptive Rights.

     

    The
      issuance of Capital Securities and the issuance of Common Securities is not
      subject to preemptive or other similar rights. The Holders shall have no
      preemptive rights to subscribe for any additional securities.

     

    12.  Miscellaneous.

     

    These
      terms constitute a part of the Declaration.

     

    
      
        
        

      

      
        I-10

        
          

        

      

      
        
        

      

    

    The
      Sponsor will provide a copy of the Declaration, the Capital Securities
      Guarantee, the Common Securities Guarantee (as may be appropriate), and/or
      the
      Indenture (including any supplemental indenture) to a Holder without charge
      upon
      written request to the Sponsor at its principal place of business.

     

    

    
      
        
        

      

      
        I-11

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A-1

    

    FORM
      OF
      CAPITAL SECURITY CERTIFICATE

    

    THIS
      CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
      AS
      AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS OR ANY OTHER
      APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL SECURITY NOR ANY INTEREST OR
      PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
      ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
      UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
      REGISTRATION.

    

    THE
      HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
      OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE (THE “RESALE
      RESTRICTION TERMINATION DATE”) WHICH IS TWO YEARS AFTER THE ORIGINAL ISSUANCE
      DATE HEREOF ONLY (A) TO PENNSYLVANIA COMMERCE BANCORP, INC. (“THE COMPANY”), (B)
      PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
      THE
      SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE
      PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT
      REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE
      144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
      INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
      IN
      RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE
      MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
      ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
      ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES
      AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CON-NECTION WITH, ANY
      DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANY OTHER
      AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES
      ACT,
      SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER,
      SALE
      OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN
      OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO
      EACH
      OF THEM, AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE THAT A CERTIFICATE OF
      TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS CAPITAL SECURITY IS
      COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE TRUST. SUCH HOLDER FURTHER
      AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS
      TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

    

    THIS
      CAPITAL SECURITY IS NOT TRANSFERRABLE EXCEPT AS SET FORTH IN THE DECLARATION
      OF
      TRUST OF COMMERCE HARRISBURG CAPITAL TRUST III, 

     

    
      
        
        

      

      
        A1-1

        
          

        

      

      
        
        

      

    

    DATED
      AS
      OF SEPTEMBER 29, 2006, AS THE SAME MAY BE AMENDED FROM TIME TO
      TIME.

    

    THE
      HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF
      OR
      THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,
      INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE
      I OF
      THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR
      SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH
      A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON
      OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF
      ANY PLAN MAY ACQUIRE OR HOLD THIS CAPITAL SECURITY OR ANY INTEREST THEREIN.
      ANY
      PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL
      BE
      DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT IS NOT
      AN
      EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN
      TO
      WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
      ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
      USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
      PURCHASE.

     

    THIS
      CAPITAL SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED
      BY
      THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE
      FEDERAL DEPOSIT INSURANCE CORPORATION. 

    

    
      
        
        

      

      
        A1-2

        
          

        

      

      
        
        

      

    

    

    [FORM
      OF
      FACE OF SECURITY]

    

    

      
        	
                Certificate
                  Number 1

              	
                Aggregate
                  Liquidation 

              
	 	
                Amount:
                  $15,000,000

              

      

    

    

    Certificate
      Evidencing 7.75% Capital Securities

    

    of

    

    Commerce
      Harrisburg Capital Trust III

    

    

    7.75%
      Capital Securities

    (liquidation
      amount $100,000 per Capital Security)

    

    Commerce
      Harrisburg Capital Trust III, a statutory trust created under the laws of the
      State of Delaware (the “Trust”), hereby certifies that Commerce Bank, N.A. (the
“Holder”) is the registered owner of $15,000,000 in aggregate liquidation amount
      of Capital Securities of the Trust representing an undivided beneficial interest
      in the assets of the Trust designated the 7.75% Capital Securities (liquidation
      amount $100,000 per Capital Security) (the “Capital Securities”). Subject to the
      Declaration (as defined below), the Capital Securities are transferable on
      the
      books and records of the Trust, in person or by a duly authorized attorney,
      upon
      surrender of this certificate duly endorsed and in proper form for transfer.
      The
      designation, rights, privileges, restrictions, preferences and other terms
      and
      provisions of the Capital Securities represented hereby are issued and shall
      in
      all respects be subject to the provisions of the Declaration of Trust of the
      Trust dated as of September 29, 2006, as the same may be amended from time
      to
      time (the “Declaration”), including the designation of the terms of the Capital
      Securities as set forth in Annex I to the Declaration. Capitalized terms used
      but not defined herein shall have the meaning given to them in the Declaration.
      The Sponsor will provide a copy of the Declaration, the Capital Securities
      Guarantee and the Indenture (including any supplemental indenture) to a Holder
      without charge upon written request to the Trust at its principal place of
      business.

    

    Upon
      receipt of this certificate, the Holder is bound by the Declaration and is
      entitled to the benefits thereunder and to the benefits of the Capital
      Securities Guarantee to the extent provided therein.

    

    By
      acceptance, the Holder agrees to treat, for United States federal income tax
      purposes, the Debentures as indebtedness and the Capital Securities as evidence
      of indirect beneficial ownership in the Debentures.

    

    
      
        
        

      

      
        A1-3

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Trust has executed this certificate this 29th
      day of
      September, 2006.

    

    

      
        	 	
                Commerce
                  Harrisburg Capital Trust III

              
	 	 	 
	 	 	 
	 	
                By:

              	
                 

              
	 	 	
                Name:

              
	
                 

              	 	
                Administrative
                  Trustee

              

      

    

    

    PROPERTY
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

    

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

    

    Dated:
      September 29, 2006

    

    

    

      
        	Wilmington
                Trust Company, 
	
                not
                  in its individual capacity but solely as 

              
	
                Property
                  Trustee

              
	 	 
	 	 
	
                By:
                  

              	 
	 	
                Authorized
                  Signatory

              

      

    
      
        
        

      

      
        A1-4

        
          

        

      

      
        
        

      

    

    [FORM
      OF REVERSE OF SECURITY]

    

    Distributions
      payable on each Capital Security will be fixed at a rate per annum of 7.75%
      (the
“Coupon Rate”) of the liquidation amount of $100,000 per Capital Security, such
      rate being the rate of interest payable on the Debentures to be held by the
      Property Trustee. Distributions in arrears for more than one quarterly period
      will bear interest thereon compounded quarterly at the Coupon Rate (to the
      extent permitted by applicable law). A Distribution is payable only to the
      extent that payments are made in respect of the Debentures held by the Property
      Trustee and to the extent the Property Trustee has funds on hand legally
      available therefor.

    

    Distributions
      on the Capital Securities will be cumulative, will accumulate from the most
      recent date to which Distributions have been paid or, if no Distributions have
      been paid, from September 29, 2006 and will be payable quarterly in arrears,
      on
      the last day of March, June, September and December of each year, commencing
      on
      December 31, 2006, except as otherwise described below. Distributions will
      be
      computed on the basis of a 360-day year consisting of twelve 30-day months
      and,
      for any period less than a full calendar month, the number of days elapsed
      in
      such month. As long as no Event of Default has occurred and is continuing under
      the Indenture, the Debenture Issuer has the right under the Indenture to defer
      payments of interest by extending the interest payment period at any time and
      from time to time on the Debentures for a period not exceeding 20 consecutive
      calendar quarterly periods, including the first such quarterly period during
      such extension period (each an “Extension Period”), provided that
      no
      Extension Period shall end on a date other than an Interest Payment Date for
      the
      Debentures or extend beyond the Maturity Date of the Debentures. As a
      consequence of such deferral, Distributions will also be deferred. Despite
      such
      deferral, quarterly Distributions will continue to accumulate with interest
      thereon (to the extent permitted by applicable law, but not at a rate exceeding
      the rate of interest then accruing on the Debentures) at the Coupon Rate
      compounded quarterly during any such Extension Period. Prior to the termination
      of any such Extension Period, the Debenture Issuer may further defer payments
      of
      interest by further extending such Extension Period; provided that
      such
      Extension Period, together with all such previous and further extensions within
      such Extension Period, may not exceed 20 consecutive quarterly periods,
      including the first quarterly period during such Extension Period, end on a
      date
      other than an Interest Payment Date for the Debentures or extend beyond the
      Maturity Date of the Debentures. Payments of accumulated Distributions will
      be
      payable to Holders as they appear on the books and records of the Trust on
      the
      first record date after the end of the Extension Period. Upon the termination
      of
      any Extension Period and the payment of all amounts then due, the Debenture
      Issuer may commence a new Extension Period, subject to the above
      requirements.

    

    Subject
      to receipt by the Sponsor of any required regulatory approvals and to certain
      other conditions set forth in the Declaration and the Indenture, the Property
      Trustee may, at the direction of the Sponsor, at any time liquidate the Trust
      and cause the Debentures to be distributed to the holders of the Securities
      in
      liquidation of the Trust or, simultaneously with any redemption of the
      Debentures, cause a Like Amount of the Securities to be redeemed by the
      Trust.

    

    The
      Capital Securities shall be redeemable as provided in the
      Declaration.

    

    
      
        
        

      

      
        A1-5

        
          

        

      

      
        
        

      

    

    _____________________

     

    ASSIGNMENT

    

    FOR
      VALUE
      RECEIVED, the undersigned assigns and transfers this Capital Security
      Certificate to:

     

    
      
        

      

    

    (Insert
      assignee’s social security or tax identification number)

    

    
      
        

      

    

    (Insert
      address and zip code of assignee)

    

    and
      irrevocably appoints

    
      
        

      

    

    
      
        

      

    

    agent
      to
      transfer this Capital Security Certificate on the books of the Trust. The agent
      may substitute another to act for him or her.

    

    Date:
      _______________________

    

    Signature:
      ____________________________

    (Sign
      exactly as your name appears on the other side of this Cap-ital Security
      Certificate)

    

    Signature
      Guarantee*** : ___________________________________

    

    _______________________

     

    
      
        	
                ***

              	
                Signature
                  must be guaranteed by an “eligible guarantor institution” that is a bank,
                  stockbroker, savings and loan association or credit union meeting
                  the
                  requirements of the Registrar, which requirements include membership
                  or
                  participation in the Securities Transfer Agents Medallion Program
                  (“STAMP”) or such other “signature guarantee program” as may be determined
                  by the Registrar in addition to, or in substitution for, STAMP,
                  all in
                  accordance with the Securities and Exchange Act of 1934, as amended.
                  

              

      

       

    

    
      
        
        

      

      
        A1-6

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A-2

    

    FORM
      OF COMMON SECURITY CERTIFICATE

    

    THIS
      COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS OR ANY OTHER
      APPLICABLE SECURITIES LAW. NEITHER THIS COMMON SECURITY NOR ANY INTEREST OR
      PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
      ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
      UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
      REGISTRATION.

    

    THE
      HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
      OR
      OTHERWISE TRANSFER THIS COMMON SECURITY, PRIOR TO THE DATE (THE “RESALE
      RESTRICTION TERMINATION DATE”) WHICH IS TWO YEARS AFTER THE ORIGINAL ISSUANCE
      DATE HEREOF ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
      WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS
      THIS
      COMMON SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
      SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
      INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN
      ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
      IS
      GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
      INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
      (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
      COMMON SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
      ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
      OFFER OR SALE IN CON-NECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
      SECURITIES ACT, OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
      REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF
      THE
      TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT
      TO
      CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
      CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii)
      PURSUANT TO CLAUSE (D), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
      APPEARING ON THE REVERSE OF THIS COMMON SECURITY IS COMPLETED AND DELIVERED
      BY
      THE TRANSFEREE TO THE TRUST. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER
      TO
      EACH PERSON TO WHOM THIS COMMON SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
      TO THE EFFECT OF THIS LEGEND.

    

    THIS
      COMMON SECURITY IS NOT TRANSFERRABLE EXCEPT AS SET FORTH IN SECTION 9.1(c)
      OF
      THE DECLARATION OF TRUST OF COMMERCE HARRISBURG 

     

    
      
        
        

      

      
        A2-1

        
          

        

      

      
        
        

      

    

    CAPITAL
      TRUST III, DATED AS OF SEPTEMBER 29, 2006, AS THE SAME MAY BE AMENDED FROM
      TIME
      TO TIME.

    

    THE
      HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF
      OR
      THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,
      INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE
      I OF
      THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR
      SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH
      A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON
      OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF
      ANY PLAN MAY ACQUIRE OR HOLD THIS CAPITAL SECURITY OR ANY INTEREST THEREIN.
      ANY
      PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL
      BE
      DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT IS NOT
      AN
      EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN
      TO
      WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
      ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
      USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
      PURCHASE.

     

    THIS
      COMMON SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY
      THE
      UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL
      DEPOSIT INSURANCE CORPORATION. 

    

    

      
        
          
          

        

        
          A2-2

          
            

          

        

        
          
          

        

      

    Certificate
      Evidencing Common Securities

    

    of

    

    Commerce
      Harrisburg Capital Trust III

    

    

    7.75%
      Common Securities

    (liquidation
      amount $100,000 per Common Security)

    

    

    Commerce
      Harrisburg Capital Trust III, a statutory trust formed under the laws of the
      State of Delaware (the “Trust”), hereby certifies that Pennsylvania Commerce
      Bancorp, Inc. (the “Holder”) is the registered owner of eight (8) Common
      Securities of the Trust representing an undivided beneficial interest in the
      assets of the Trust designated the 7.75% Common Securities (liquidation amount
      $100,000 per Common Security) (the “Common Securities”). Subject to the
      limitations in Section 9.1(c) of the Declaration (as defined below), the Common
      Securities are transferable on the books and records of the Trust, in person
      or
      by a duly authorized attorney, upon surrender of this certificate duly endorsed
      and in proper form for transfer. The designation, rights, privileges,
      restrictions, preferences and other terms and provisions of the Common
      Securities represented hereby are issued and shall in all respects be subject
      to
      the provisions of the Declaration of Trust of the Trust dated as of September
      29, 2006, as the same may be amended from time to time (the “Declaration”),
      including the designation of the terms of the Common Securities as set forth
      in
      Annex I to the Declaration. Capitalized terms used but not defined herein shall
      have the meaning given to them in the Declaration. The Sponsor will provide
      a
      copy of the Declaration, the Capital Securities Guarantee (as may be
      appropriate) and the Indenture (including any supplemental indenture) to a
      Holder without charge upon written request to the Sponsor at its principal
      place
      of business.

    

    Upon
      receipt of this certificate, the Holder is bound by the Declaration and is
      entitled to the benefits thereunder to the extent provided therein.

    

    By
      acceptance, the Holder agrees to treat, for United States federal income tax
      purposes, the Debentures as indebtedness and the Common Securities as evidence
      of indirect beneficial ownership in the Debentures.

    IN
      WITNESS WHEREOF, the Trust has executed this certificate this 29th
      day of
      September, 2006.

    

      
        	
                Commerce
                  Harrisburg Capital Trust III

              
	 	 
	 	 
	
                By:

              	
                 

              
	 	
                Name:

              
	 	
                Administrative
                  Trustee

              

      

      
        
          
          

        

        
          A2-3

          
            

          

        

        
          
          

        

      

     

    PROPERTY
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION

    

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

    

    Dated:
      September 29, 2006

    

    

      
        	
                Wilmington
                  Trust Company,

              
	
                not
                  in its individual capacity but solely as Property
                  Trustee

              
	 	 
	 	 
	
                By:

              	 
	 	
                Authorized
                  Signatory

              

      

    
      
        
        

      

      
        A2-4

        
          

        

      

      
        
        

      

    

    [FORM
      OF
      REVERSE OF SECURITY]

    

    Distributions
      payable on each Common Security will be fixed at a rate per annum of 7.75%
      (the
“Coupon Rate”) of the liquidation amount of $100,000 per Common Security, such
      rate being the rate of interest payable on the Debentures to be held by the
      Property Trustee. Distributions in arrears for more than one quarterly period
      will bear interest thereon compounded quarterly at the Coupon Rate (to the
      extent permitted by applicable law). A Distribution is payable only to the
      extent that payments are made in respect of the Debentures held by the Property
      Trustee and to the extent the Property Trustee has funds available
      therefor.

    

    Distributions
      on the Common Securities will be cumulative, will accrue from the most recent
      date to which Distributions have been paid or, if no Distributions have been
      paid, from September 29, 2006 and will be payable quarterly in arrears, on
      the
      last day of March, June, September and December of each year, commencing on
      December 31, 2006, except as otherwise described below. Distributions will
      be
      computed on the basis of a 360-day year consisting of twelve 30-day months
      and,
      for any period less than a full calendar month, the number of days elapsed
      in
      such month. As long as no Event of Default has occurred and is continuing under
      the Indenture, the Debenture Issuer has the right under the Indenture to defer
      payments of interest by extending the interest payment period at any time and
      from time to time on the Debentures for a period not exceeding 20 consecutive
      calendar quarterly periods, including the first such quarterly period during
      such extension period (each an “Extension Period”), provided that
      no
      Extension Period shall end on a date other than an Interest Payment Date for
      the
      Debentures or extend beyond the Maturity Date of the Debentures. As a
      consequence of such deferral, Distributions will also be deferred. Despite
      such
      deferral, Distributions will continue to accumulate with interest thereon (to
      the extent permitted by applicable law, but not at a rate exceeding the rate
      of
      interest then accruing on the Debentures) at the Coupon Rate compounded
      quarterly during any such Extension Period. Prior to the termination of any
      such
      Extension Period, the Debenture Issuer may further defer payments of interest
      by
      further extending such Extension Period; provided that
      such
      Extension Period, together with all such previous and further extensions within
      such Extension Period, may not exceed 20 consecutive quarterly periods,
      including the first quarterly period during such Extension Period, or end on
      a
      date other than an Interest Payment Date for the Debentures or extend beyond
      the
      Maturity Date of the Debentures. Payments of accrued Distributions will be
      payable to Holders as they appear on the books and records of the Trust on
      the
      first record date after the end of the Extension Period. Upon the termination
      of
      any Extension Period and the payment of all amounts then due, the Debenture
      Issuer may commence a new Extension Period, subject to the above
      requirements.

    

    Subject
      to the receipt by the Sponsor of any required regulatory approval and to certain
      other conditions set forth in the Declaration and the Indenture, the Property
      Trustee may, at the direction of the Sponsor, at any time liquidate the Trust
      and cause the Debentures to be distributed to the holders of the Securities
      in
      liquidation of the Trust or, simultaneous with any redemption of the Debentures,
      cause a Like Amount of the Securities to be redeemed by the Trust.

     

    

    

    
      
        
        

      

      
        A2-5

        
          

        

      

      
        
        

      

    

    Under
      certain circumstances, the right of the holders of the Common Securities shall
      be subordinate to the rights of the holders of the Capital Securities (as
      defined in the Declaration), as provided in the Declaration.

    

    The
      Common Securities shall be redeemable as provided in the
      Declaration.

    

    
      
        
        

      

      
        A2-6

        
          

        

      

      
        
        

      

    

    _____________________

    

    ASSIGNMENT

    

    FOR
      VALUE
      RECEIVED, the undersigned assigns and transfers this Common Security Certificate
      to:

     

    
      
        

      

    

    (Insert
      assignee’s social security or tax identification number)

    

    

    
      
        

      

    

    (Insert
      address and zip code of assignee)

    

    

    and
      irrevocably appoints

    
      
        

      

       

    

    
      
        

      

       

    

    agent
      to
      transfer this Common Security Certificate on the books of the Trust. The agent
      may substitute another to act for him or her.

    

    

    Date:
      _______________________

    

    Signature:
      ____________________________

    (Sign
      exactly as your name appears on the other side of this Common Security
      Certificate)

    

    Signature
      Guarantee: ___________________________________

     

    
       

      A2-7

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