Exhibit 10.1

 

Form of Note Subscription Agreement

 

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NOTE SUBSCRIPTION AGREEMENT

 

by and among

 

Berkshire Hills Bancorp, Inc.

 

and

 

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Dated as of September 20, 2012

 

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Table of Contents

 

 

Page

 

 

ARTICLE I THE NOTES

1

 

 

 

 

ARTICLE II PURCHASE AND SALE

1

 

 

 

 

Section 2.1

 

Purchase and Sale

1

 

 

 

 

Section 2.2

 

Payment of Purchase Price; Closing

1

 

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY

2

 

 

 

 

Section 3.1

 

Existence and Power

2

 

 

 

 

Section 3.2

 

Capitalization

2

 

 

 

 

Section 3.3

 

Financial Statements

2

 

 

 

 

Section 3.4

 

Tax Matters

2

 

 

 

 

Section 3.5

 

Ownership of Property

3

 

 

 

 

Section 3.6

 

Authorization

3

 

 

 

 

Section 3.7

 

Issuance of Notes

3

 

 

 

 

Section 3.8

 

Governmental Authorization

4

 

 

 

 

Section 3.9

 

Non-Contravention

4

 

 

 

 

Section 3.10

 

No Brokers

4

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER

4

 

 

 

 

Section 4.1

 

Existence and Power

4

 

 

 

 

Section 4.2

 

Authorization

4

 

 

 

 

Section 4.3

 

Governmental Authorization

4

 

 

 

 

Section 4.4

 

Non-Contravention

5

 

 

 

 

Section 4.5

 

Purchaser Qualifications

5

 

 

 

 

Section 4.6

 

No Brokers

6

 

 

 

 

Section 4.7

 

Future or Contemporaneous Transactions Acknowledgement

7

 

 

 

 

ARTICLE V CONDITIONS TO CLOSING

7

 

 

 

 

Section 5.1

 

Conditions to the Obligations of the Company

7

 

 

 

 

Section 5.2

 

Conditions to the Obligations of the Purchaser

7

 

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Page

 

 

ARTICLE VI MISCELLANEOUS

7

 

 

 

 

Section 6.1

 

Transfer Restrictions

7

 

 

 

 

Section 6.2

 

Notices

9

 

 

 

 

Section 6.3

 

Further Assurances

9

 

 

 

 

Section 6.4

 

Amendments and Waivers

10

 

 

 

 

Section 6.5

 

Fees and Expenses

10

 

 

 

 

Section 6.6

 

Successors and Assigns

10

 

 

 

 

Section 6.7

 

Governing Law

10

 

 

 

 

Section 6.8

 

Jurisdiction

10

 

 

 

 

Section 6.9

 

Waiver Of Jury Trial

11

 

 

 

 

Section 6.10

 

Entire Agreement

11

 

 

 

 

Section 6.11

 

Effect of Headings and Table of Contents

11

 

 

 

 

Section 6.12

 

Severability

11

 

 

 

 

Section 6.13

 

Counterparts; Third Party Beneficiaries

11

 

 

 

 

Section 6.14

 

Taxes

11

 

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NOTE SUBSCRIPTION AGREEMENT dated as of September 20, 2012 (this “Agreement”)
between Berkshire Hills Bancorp, Inc., a Delaware corporation (the “Company”)
and                                                              (each, a
“Purchaser” and collectively, the “Purchasers”).

 

BACKGROUND

 

The Purchasers wish to subscribe for and purchase, in the amount set forth next
to each Purchaser’s name on Annex A and the Company desires to issue and sell,
$75,000,000 principal amount of its 6.875% Fixed-to-Floating Rate Subordinated
Notes Due 2027, having the terms described in the private placement memorandum,
dated as of September 20, 2012 (“the Private Placement Memorandum”), attached as
Annex B hereto (the “Notes”) and on the terms and subject to the conditions set
forth herein.

 

In consideration of the mutual covenants and agreements contained in this
Agreement, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

 

ARTICLE I

 

THE NOTES

 

The Notes shall be issued to the Purchasers pursuant to Article II hereof, shall
be subject to the terms and provisions of the Issuing and Paying Agency
Agreement to be dated on or about September 28, 2012, between the Company and
U.S. Bancorp Investments, Inc., as issuing and paying agent (the “IPAA”), and
shall be in the form of note attached hereto as Annex C.

 

ARTICLE II

 

PURCHASE AND SALE

 

Section 2.1                                      Purchase and Sale.  Upon the
terms and subject to the conditions of this Agreement, the Company agrees to
issue and sell to the Purchasers, and the Purchasers agree to purchase from the
Company, $75,000,000 principal amount of Notes at a purchase price equal to
98.850% of such principal amount (the “Purchase Price”).  Each Purchaser shall
purchase the amount of the Notes set forth next to the name of such Purchaser in
Annex A.

 

Section 2.2                                      Payment of Purchase Price;
Closing.  The Company will deliver the Notes to the Purchasers, against payment
by or on behalf of the Purchasers of the Purchase Price therefor (as set forth
above in Section 2.1) by wire transfer in immediately available funds to the
account designated in writing by the Company.  Delivery of the Notes shall be
through the facilities of The Depository Trust Company.  The time and date of
such delivery and payment shall be 9:30 a.m., New York City time, on
September 28, 2012, unless otherwise extended by mutual agreement of the parties
(such time being referred to herein as the “Closing”).

 

The documents to be delivered at the Closing by or on behalf of the parties
hereto pursuant to this Article II, will be delivered at the Closing at the
offices of Sidley Austin LLP,

 

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787 Seventh Avenue, New York, New York (the “Closing Location”).  Final drafts
of the documents to be delivered pursuant to the preceding sentence will be
provided to the parties hereto no later than noon, New York City time, on the
day next preceding the Closing.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to the Purchasers as of the date hereof
that:

 

Section 3.1                                      Existence and Power.  The
Company is duly organized and validly existing as a corporation in good standing
under the laws of the state of Delaware and has all power and authority to enter
into and perform its obligations under this Agreement.

 

Section 3.2                                      Capitalization.  As of the date
hereof, the Company has (i) 50,000,000 authorized Common Shares, par value $0.01
per share, of which 22,211,454 shares are outstanding, and (ii) 1,000,000
authorized shares of preferred stock, par value $0.01 per share, of which no
shares are outstanding. All of the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable and were not issued in violation of any preemptive rights, resale
rights, rights of first refusal or similar rights.

 

Section 3.3                                      Financial Statements.  The
Company has previously made available to the Purchaser (i) the audited
consolidated statements of financial condition (including related notes and
schedules) of the Company as of December 31, 2011 and 2010 and the consolidated
statements of income, comprehensive income, changes in shareholders’ equity and
cash flows (including related notes and schedules, if any) of the Company for
each of the three (3) years ended December 31, 2011, as set forth in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2011(as
filed with the United States Securities and Exchange Commission (the “SEC”) on
March 15, 2012) and (ii) the unaudited interim consolidated financial statements
of the Company as of the end of each calendar quarter following December 31,
2011, and for the periods then ended, as set forth in the Company’s applicable
Quarterly Reports on Form 10-Q (“Form 10-Q”) (as filed by the Company with the
SEC on May 10, 2012 and August 9, 2012)(collectively, the “Company Financial
Statements”). The Company Financial Statements fairly present in each case in
all material respects (subject in the case of the unaudited interim statements
to normal year-end adjustments) the consolidated financial position, results of
operations and cash flows of the Company as of and for the respective periods
ending on the dates thereof, in accordance with GAAP during the periods
involved, except as indicated in the notes thereto, or in the case of unaudited
statements, as permitted by Form 10-Q.

 

Section 3.4                                      Tax Matters.  The Company and
its subsidiary, Berkshire Bank (the “Bank”) are members of the same affiliated
group within the meaning of Internal Revenue Code Section 1504(a). The Company,
on behalf of itself and the Bank, has timely filed or caused to be filed all tax
returns (including, but not limited to, those filed on a consolidated, combined
or unitary basis) required to have been filed by the Company and the Bank prior
to the date hereof, or requests for extensions to file such returns and reports
have been timely filed (“Tax Returns”).  All such Tax Returns are true, correct,
and complete in all material respects.

 

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Section 3.5                                      Ownership of Property.  Except
as set forth in Annex D, the Company and the Bank have good and, as to real
property, marketable title to all assets and properties owned by the Company and
the Bank, as applicable, in the conduct of its businesses, whether such assets
and properties are real or personal, tangible or intangible, including assets
and property reflected in the most recent consolidated statement of financial
condition contained in the Company Financial Statements or acquired subsequent
thereto (except to the extent that such assets and properties have been disposed
of in the ordinary course of business, since the date of such consolidated
statement of financial condition), subject to no encumbrances, liens, mortgages,
security interests or pledges, except (i) those items which secure liabilities
for public or statutory obligations or any discount with, borrowing from or
other obligations to the Federal Home Loan Bank of Boston, inter-bank credit
facilities, reverse repurchase agreements or any transaction by the Bank acting
in a fiduciary capacity, and (ii) statutory liens for amounts not yet delinquent
or which are being contested in good faith.  The Company and the Bank, as
lessee, have the right under valid and existing leases of real and personal
properties used by the Company and the Bank in the conduct of their businesses
to occupy or use all such properties as presently occupied and used by each of
them.  Such existing leases and commitments to lease constitute or will
constitute operating leases for both tax and financial accounting purposes and
the lease expense and minimum rental commitments with respect to such leases and
lease commitments are as disclosed in all material respects in the notes to the
Company Financial Statements.

 

Section 3.6                                      Authorization.  The execution,
delivery and performance of this Agreement has been authorized by all necessary
action on the part of the Company and its Affiliates, and this Agreement is a
valid and binding obligation of the Company, enforceable against it in
accordance with its terms (except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditor’s rights generally and subject to general principles of equity subject
to 12 U.S.C. §1818(b)(6)(D) or any successor statute and similar bank regulatory
powers).  For purposes of this Agreement, “Affiliate” shall mean, with respect
to any person, any other person which directly or indirectly controls or is
controlled by or is under common control with such person; “control” (including
its correlative meanings, “controlled by” and “under common control with”) shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise); and
“person” shall mean an individual, corporation, association, partnership, trust,
joint venture, business trust or unincorporated organization, or a government or
any agency or political subdivision thereof.

 

Section 3.7                                      Issuance of Notes.  The Notes
have been duly authorized and issued by the Company and, upon execution,
authentication, delivery and payment therefor as provided in this Agreement and
the IPAA, will be validly issued and outstanding, will constitute valid and
legally binding obligations of the Company enforceable against the Company in
accordance with their terms (except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditor’s rights generally and subject to general principles of equity and
subject to 12. U.S.C. §1818(b)(6)(D) or any successor statute and similar bank
regulatory powers) and will conform in all material respects to the description
thereof set forth in the Private Placement Memorandum.

 

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Section 3.8                                      Governmental Authorization.  As
of the date hereof, no permit, authorization, consent or approval of or by any
governmental authority is required to be obtained or made by the Company in
connection with the execution, delivery and performance by it of this Agreement,
the consummation by it of the transactions contemplated hereby or thereby, or
the issuance, sale or delivery to the Purchaser by the Company of the Notes,
except such as have been already obtained or, solely with respect to the
Company’s ability to redeem the Notes from time to time, as disclosed in the
Private Placement Memorandum.

 

Section 3.9                                      Non-Contravention.  The
issuance and sale of the Notes and the compliance by the Company with all of the
provisions of this Agreement and the IPAA and the consummation of the
transactions herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the termination of or accelerate the performance
required by, or result in a right of termination or acceleration under (A) any
provision of the organizational or governing documents of the Company, (B) any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound or
to which any of the property or assets of the Company is subject or (C) any
statute, order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties; other than in the
case of clauses (B) and (C), for conflicts, breaches, violations, defaults,
terminations or accelerations that would not reasonably be expected to be
material to the Company.

 

Section 3.10                                No Brokers.  Neither the Company nor
its Affiliates have employed any broker or finder in connection with the
transactions contemplated by this Agreement other than those paid exclusively by
the Company or its Affiliates.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF PURCHASERS

 

Each of the Purchasers represent and warrant to the Company as of the date
hereof that:

 

Section 4.1                                      Existence and Power.  Such
Purchaser is duly organized, validly existing and in good standing under the
laws of the state of its organization and has all power and authority to enter
into and perform its obligations under this Agreement.

 

Section 4.2                                      Authorization.  The execution,
delivery and performance of this Agreement has been authorized by all necessary
action on the part of such Purchaser and their Affiliates, and this Agreement is
a valid and binding obligation of such Purchaser, enforceable against it in
accordance with its terms (except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditor’s rights generally and subject to general principles of equity).

 

Section 4.3                                      Governmental Authorization.  As
of the date hereof, no permit, authorization, consent or approval of or by any
governmental authority is required to be obtained or made by such Purchaser in
connection with the execution, delivery and performance by it of

 

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this Agreement, the consummation by it of the transactions contemplated hereby
or thereby, or the issuance, sale or delivery to such Purchaser by the Company
of the Notes.

 

Section 4.4                                      Non-Contravention.  The
execution, delivery and performance of this Agreement will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the termination of or accelerate the
performance required by, or result in a right of termination or acceleration
under, (A) any provision of the organizational or governing documents of such
Purchaser or (B) any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Purchaser is a party or by which such
Purchaser is bound or to which any of the property or assets of such Purchaser
is subject, or (C) any statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Purchaser or any of
its respective properties; other than in the case of clauses (B) and (C), for
conflicts, breaches, violations, defaults, terminations or accelerations that
would not reasonably be expected to adversely impact or delay the ability of
such Purchaser to consummate the transactions contemplated hereby.

 

Section 4.5                                      Purchaser Qualifications. 

 

(a)                                  Not Registered Under Securities Act.  Each
of the Purchasers understands that (i) the Notes have not been registered under
the Securities Act of 1933, as amended (“Securities Act”) or any state
securities laws by reason of their issuance by the Company in a transaction
exempt from the registration requirements thereof, (ii) it may need to hold the
Notes indefinitely and continue to bear the economic risk of its investment in
the Notes unless the Notes are subsequently registered under the Securities Act
and such applicable state securities laws or an exemption from such
registrations are available, (iii) it is not anticipated that there will be any
public market for the Notes, (iv) Rule 144 promulgated under the Securities Act
(“Rule 144”) is not presently available with respect to sales of the Notes,
(v) when and if the Notes may be disposed of without registration in reliance
upon Rule 144, such disposition can be made only in accordance with the terms
and conditions of Rule 144 and the provisions of the IPAA and the Notes, (vi) if
the exemption afforded by Rule 144 is not available, public sale of the Notes
without registration will require the availability of an exemption under the
Securities Act, (vii) restrictive legends shall be placed on any certificate
representing the Notes and (viii) a notation shall be made in the appropriate
records of the Company indicating that the Notes are subject to restrictions on
transfer and, if the Company should in the future engage the services of a
transfer agent, appropriate stop-transfer instructions will be issued to such
transfer agent with respect to the Notes.

 

(b)                                 Accredited Investor.  Each Purchaser is an
institution that is an accredited investor within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act, is knowledgeable,
sophisticated and experienced in making, and is qualified to make, decisions
with respect to investments in securities representing an investment decision
like that involved in the investment in the Notes, and is acquiring the Notes
for its own account for investment only and not with a view to a resale in
connection with any distribution thereof (within the meaning of the Securities
Act);

 

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(c)                                  Information and Risk.

 

(i)                                     Each Purchaser has carefully reviewed
the Private Placement Memorandum and has requested, received, reviewed and
considered all information such Purchaser deems relevant in making an informed
decision to invest in the Notes.  Such Purchaser has had an opportunity to
discuss the Company’s business, management and financial affairs and also had an
opportunity to ask questions that were answered to such Purchaser’s
satisfaction;

 

(ii)                                  Each Purchaser recognizes that an
investment in the Notes involves a high degree of risk, including a risk of
total loss of the Purchaser’s investment.  Each Purchaser is able to bear the
economic risk of holding the Notes for an indefinite period, and has knowledge
and experience in the financial and business matters such that it is capable of
evaluating the risks of the investment in the Notes and understands such risks,
including, but not limited to, those set forth and incorporated by reference
under the caption “Risk Factors” in the Private Placement Memorandum and
understands that there is no existing market for the Notes and there is no
expectation that any such market will exist in the future;

 

(iii)                               Each Purchaser represents and warrants that
it has been given access to information regarding the Company (including the
Company’s periodic reports and proxy statement/prospectus relating to the
Company’s proposed acquisition of Beacon Federal Bancorp, Inc. and its
subsidiaries as filed with the SEC) and have utilized such access to its
satisfaction for the purpose of obtaining such information concerning the
Company and the Notes as each Purchaser has deemed necessary to make an
investment decision; and

 

(iv)                              Each Purchaser has, in connection with such
Purchaser’s decision to acquire the Notes as set forth in Annex A, not relied
upon any representations or other information (whether oral or written) with
respect to the Company or any Affiliate of the Company other than the
information contained or incorporated by reference in the Private Placement
Memorandum and the representations and warranties contained in this Agreement,
and such Purchaser has, with respect to all matters relating to the issuance of
the Notes, relied solely upon the advice of such Purchaser’s own counsel and has
not relied upon or consulted counsel to the Company or its Affiliates.

 

(d)                                 Denominations.  Each Purchaser understands
that the Notes must be held in minimum denominations of $1,000 and cannot be
exchanged for Notes in smaller denominations and that each certificate
representing Notes will bear a legend to the foregoing effect.

 

Section 4.6                                      No Brokers.  None of the
Purchasers nor any of their respective Affiliates has employed any broker or
finder in connection with the transactions contemplated by this Agreement other
than those paid exclusively by such Purchaser or its Affiliates.

 

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Section 4.7                                      Future or Contemporaneous
Transactions Acknowledgement.  Each Purchaser acknowledges that, from time to
time, the Company may issue and sell debt of the Company and that such debt
securities may have different terms than the Notes or the transactions may be on
different terms and conditions than those contemplated under this Agreement.

 

ARTICLE V

 

CONDITIONS TO CLOSING

 

Section 5.1                                      Conditions to the Obligations
of the Company.  The obligations of the Company hereunder shall be subject to
the following conditions:

 

(a)                                  All representations and warranties and
other statements of the Purchasers herein are, at and as of the Closing, true
and correct; and

 

(b)                                 Each of the Purchasers shall have performed
all of its obligations hereunder theretofore to be performed.

 

Section 5.2                                      Conditions to the Obligations
of the Purchasers.  The obligations of each Purchaser hereunder shall be subject
to the following conditions:

 

(a)                                  All representations and warranties and
other statements of the Company herein are, at and as of the Closing, true and
correct; and

 

(b)                                 The Company shall have performed all of its
obligations hereunder theretofore to be performed.

 

ARTICLE VI

 

MISCELLANEOUS

 

Section 6.1                                      Transfer Restrictions.  Each
Purchaser, and any other holder of the Notes pursuant to a transfer permitted
hereunder shall be permitted to transfer the Notes only in compliance with the
transfer restrictions set forth in the Private Placement Memorandum, the IPAA
and the Notes.  Any such transfer must be made in compliance with the
registration requirements of the Securities Act or any other applicable
securities laws, pursuant to an exemption therefrom or in a transaction not
subject thereto, and unless the Notes are registered pursuant to the Securities
Act, any such transfer shall be subject to the requirement that each Purchaser
provide evidence to the reasonable satisfaction of the Company that the proposed
transferee satisfies the requirements and conditions for the relevant exemption
under the Securities Act.  Each Purchaser understands and agrees that legends to
the following effect will be placed on any certificate evidencing Notes issued
to such Purchaser (as may be modified by the Company and the Issuing and Paying
Agent from time to time):

 

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THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE IS NOT A DEPOSIT AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE “FDIC”) OR ANY OTHER
GOVERNMENT AGENCY OR FUND.

 

THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE IS SUBORDINATED AND JUNIOR
IN RIGHT OF PAYMENT TO THE OBLIGATIONS OF BERKSHIRE HILLS BANCORP, INC. (THE
“ISSUER”) TO ITS GENERAL AND SECURED CREDITORS (TO THE EXTENT OF SUCH SECURITY),
TO DEPOSITS AND LIABILITIES OF BERKSHIRE BANK AND BERKSHIRE BANK MUNICIPAL BANK
AND IS UNSECURED AND INELIGIBLE AS COLLATERAL FOR A LOAN BY THE ISSUER OR ANY OF
ITS BANK SUBSIDIARIES.

 

EACH SUBORDINATED NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $1,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED
TRANSFER OF A SUBORDINATED NOTE IN A DENOMINATION OF LESS THAN $1,000 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER AND MAY BE DISREGARDED BY
THE ISSUER OR ANY OF ITS AGENTS. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED
NOT TO BE THE HOLDER OF SUCH SUBORDINATED NOTE FOR ANY PURPOSE, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF PAYMENTS ON SUCH SUBORDINATED NOTE, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH
SUBORDINATED NOTE.

 

THIS SUBORDINATED NOTE 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 LAWS.  NEITHER THIS NOTE NOR ANY INTEREST 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, THE REQUIREMENTS OF THE SECURITIES ACT. THIS
SUBORDINATED NOTE IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER, EXERCISE
AND OTHER PROVISIONS OF A SUBSCRIPTION AGREEMENT, DATED SEPTEMBER 20, 2012
BETWEEN THE ISSUER AND THE PURCHASERS REFERRED TO THEREIN AND AN ISSUING AND
PAYING AGENCY AGREEMENT, DATED SEPTEMBER 28, 2012, BETWEEN THE ISSUER AND U.S.
BANK NATIONAL ASSOCIATION, AS ISSUING AND PAYING AGENT. COPIES OF WHICH, IN EACH
CASE, ARE ON FILE WITH THE ISSUER. THIS SUBORINDATED NOTE MAY NOT BE TRANSFERRED
OR EXERCISED EXCEPT IN COMPLIANCE WITH SAID AGREEMENTS. ANY SALE OR OTHER
TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENTS WILL BE VOID.

 

THIS IS A GLOBAL NOTE WITHIN THE MEANING OF SECTION 2 OF THE ISSUING AND PAYING
AGENCY AGREEMENT.

 

UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATED
NOTE ISSUED IN EXCHANGE FOR THIS NOTE OR ANY PORTION HEREOF IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE

 

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& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF IS WRONGFUL IN AS SUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

Section 6.2                                      Notices.  All notices and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been given if delivered personally or by
facsimile or seven days after having been sent by certified mail, return receipt
requested, postage prepaid, to the parties to this Agreement at the following
address or to such other address either party to this Agreement shall specify by
notice to the other party:

 

(i)

If to the Company:

 

 

 

Berkshire Hills Bancorp, Inc.

 

24 North Street

 

Pittsfield, Massachusetts 01201

 

Attention: Kevin P. Riley, Executive Vice President/Chief Financial Officer

 

Facsimile: 413-443-3587

 

 

 

with a copy to (which shall not constitute notice):

 

 

 

Wm. Gordon Prescott, Esq.

 

General Counsel and Corporate Secretary

 

Berkshire Hills Bancorp, Inc.

 

24 North Street

 

Pittsfield, Massachusetts 01201

 

Facsimile: 413-443-3587

 

 

 

Luse Gorman Pomerenk & Schick, P.C.

 

5335 Wisconsin Avenue, NW Suite 780

 

Washington, D.C. 20015

 

Attention: Marc P. Levy

 

Facsimile: (202) 362-2902

 

 

(ii)

If to the Purchasers:

 

 

 

                                                                         

 

 

Section 6.3                                      Further Assurances.  Each party
hereto shall do and perform or cause to be done and performed all further acts
and shall execute and deliver all other agreements, certificates, instruments
and documents as any other party hereto reasonably may request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

 

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Section 6.4                                      Amendments and Waivers.

 

(a)                                  Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
duly executed and delivered by the Company and the Purchasers; and

 

(b)                                 No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

 

Section 6.5                                      Fees and Expenses.  Each party
hereto shall pay all of its own fees and expenses (including attorneys’ fees)
incurred in connection with this Agreement and the transactions contemplated
hereby.

 

Section 6.6                                      Successors and Assigns.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, provided that
neither party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other party hereto.

 

Section 6.7                                      Governing Law.  THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.

 

Section 6.8                                      Jurisdiction.  The parties
hereto agree that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may only be brought in the
United States District Court for the Southern District of New York or any New
York State court sitting in the Borough of Manhattan in New York City, and each
of the parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum.  Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court.

 

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Section 6.9                                      Waiver Of Jury Trial.  EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 6.10                                Entire Agreement.  This Agreement
constitutes the entire agreement between the parties with respect to the subject
matter of this Agreement and supersedes all prior agreements and understandings,
both oral and written, between the parties and/or their Affiliates with respect
to the subject matter of this Agreement.

 

Section 6.11                                Effect of Headings and Table of
Contents.  The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.

 

Section 6.12                                Severability.  If one or more
provisions of this Agreement are held to be unenforceable under applicable law,
such provision shall be deemed to be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforced in accordance with its terms to the maximum
extent permitted by law.

 

Section 6.13                                Counterparts; Third Party
Beneficiaries.  This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures were
upon the same instrument.  No provision of this Agreement shall confer upon any
person other than the parties hereto any rights or remedies hereunder.

 

Section 6.14                                Taxes.  The Purchasers shall be
responsible for and shall timely pay all taxes imposed on Purchasers as a result
of the acquisition or ownership of the Notes issued hereunder.[Remainder of
page intentionally left blank]

 

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

 

 

 

Berkshire Hills Bancorp, Inc.

 

 

 

 

 

By:

 

 

Name: Kevin P. Riley

 

Title: Executive Vice President/Chief Financial Officer

 

 

 

 

 

[                                         ]

 

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ANNEX C

 

FORM OF

SUBORDINATED NOTE CERTIFICATE

 

BERKSHIRE HILLS BANCORP, INC.

6.875% Fixed-to-Floating Rate Subordinated Notes Due 2027

 

THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE IS NOT A DEPOSIT AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE “FDIC”) OR ANY OTHER
GOVERNMENT AGENCY OR FUND.

 

THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE IS SUBORDINATED AND JUNIOR
IN RIGHT OF PAYMENT TO THE OBLIGATIONS OF BERKSHIRE HILLS BANCORP, INC. (THE
“ISSUER”) TO ITS GENERAL AND SECURED CREDITORS (TO THE EXTENT OF SUCH SECURITY),
TO DEPOSITS AND LIABILITIES OF BERKSHIRE BANK AND BERKSHIRE BANK MUNICIPAL BANK
AND IS UNSECURED AND INELIGIBLE AS COLLATERAL FOR A LOAN BY THE ISSUER OR ANY OF
ITS BANK SUBSIDIARIES.

 

EACH SUBORDINATED NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $1,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED
TRANSFER OF A SUBORDINATED NOTE IN A DENOMINATION OF LESS THAN $1,000 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER AND MAY BE DISREGARDED BY
THE ISSUER OR ANY OF ITS AGENTS. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED
NOT TO BE THE HOLDER OF SUCH SUBORDINATED NOTE FOR ANY PURPOSE, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF PAYMENTS ON SUCH SUBORDINATED NOTE, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH
SUBORDINATED NOTE.

 

THIS SUBORDINATED NOTE 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 LAWS.  NEITHER THIS NOTE NOR ANY INTEREST 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, THE REQUIREMENTS OF THE SECURITIES ACT. THIS
SUBORDINATED NOTE IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER, EXERCISE
AND OTHER PROVISIONS OF A SUBSCRIPTION AGREEMENT, DATED SEPTEMBER 20, 2012
BETWEEN THE ISSUER AND THE PURCHASERS REFERRED TO THEREIN AND AN ISSUING AND
PAYING AGENCY AGREEMENT, DATED SEPTEMBER 28, 2012, BETWEEN THE ISSUER AND U.S.
BANK NATIONAL ASSOCIATION, AS ISSUING AND PAYING AGENT, COPIES OF WHICH, IN EACH
CASE, ARE ON FILE WITH THE ISSUER. THIS SUBORDINATED NOTE MAY NOT BE TRANSFERRED
OR EXERCISED EXCEPT IN COMPLIANCE WITH SAID AGREEMENTS. ANY SALE OR OTHER
TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENTS WILL BE VOID.

 

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THIS IS A GLOBAL NOTE WITHIN THE MEANING OF SECTION 2 OF THE ISSUING AND PAYING
AGENCY AGREEMENT.

 

UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATED
NOTE ISSUED IN EXCHANGE FOR THIS NOTE OR ANY PORTION HEREOF IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OTHER
THAN DTC OR A NOMINEE THEREOF IS WRONGFUL IN AS SUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

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Registered No. 1

 

Principal Amount:

 

$75,000,000

 

 

 

 

 

 

 

CUSIP:

 

084680 AA5

 

BERKSHIRE HILLS BANCORP, INC.

6.875% Fixed-to-Floating Rate Subordinated Notes Due 2027

 

1.                                       Payment.

 

(a)                                  BERKSHIRE HILLS BANCORP, INC., a savings
and loan holding company incorporated under the laws of the state of Delaware
(the “Issuer”), for value received, hereby promises to pay to Cede & Co., or
registered assigns, as nominee of DTC, the principal sum of Seventy-Five Million
Dollars (U.S.) ($75,000,000) on September 28, 2027 (the “Maturity Date”) and to
pay interest thereon (i) at the rate of 6.875% per year (computed on the basis
of a 360-day year of twelve 30-day months) from and including September 28, 2012
to but excluding September 28, 2022 or early redemption date (the “Fixed Rate
Interest Period”), payable during the Fixed Rate Interest Period semi-annually
in arrears, on March 28 and September 28 of each year (each, a “Fixed Interest
Payment Date”), and (ii) at the rate per annum equal to the three-month LIBOR
rate plus 511.3 basis points (computed on the basis of a 360-day year based on
the number of days actually elapsed) from and including September 28, 2022 to
the Maturity Date or early redemption date (the “Floating Rate Interest
Period”), payable quarterly on each March 28, June 28, September 28 and
December 28 (each, a “Floating Interest Payment Date” and together with each
Fixed Interest Payment Date, the “Interest Payment Dates”).

 

(b)                                 Any payment of principal of or interest on
this Note that would otherwise become due and payable on a day which is not a
Business Day shall become due and payable on the next succeeding Business Day,
with the same force and effect as if made on the date for payment of such
principal or interest, and no interest shall accrue in respect of such payment
for the period after such day.  The term “Business Day” means any day other than
a Saturday, Sunday, federal holiday or day on which banks in the State of New
York are authorized or obligated by law or executive order to be closed.

 

2.                                       Subordinated Notes, Noteholders.  This
Note is a duly authorized issue of notes of the Issuer designated as 6.875%
Fixed-to-Floating Rate Subordinated Notes Due 2027 (herein called the
“Subordinated Notes” or the “Notes”) issued under the Issuing and Paying Agency
Agreement, dated as of September 28, 2012 (the “Issuing and Paying Agency
Agreement”), between the Issuer and U.S. Bank National Association, as Issuing
and Paying Agent (herein called the “Issuing and Paying Agent”, which term
includes any successor issuing and paying agent under the Issuing and Paying
Agency Agreement) and reference is hereby made to the Issuing and Paying Agency
Agreement for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Issuer and the Issuing and Paying Agent
and of the terms upon which the Subordinated Notes are, and are to be,
authenticated and delivered.

 

3

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The holder in whose name any Subordinated Notes are registered on the Security
Register is referred to as a “Noteholder,” and such holders collectively are
referred to as the “Noteholders.”

 

3.                                       Optional Redemption.  The Issuer may,
at its option beginning with the Floating Interest Payment Date on September 28,
2022, or on any scheduled Floating Interest Payment Date thereafter, redeem the
Subordinated Notes in whole or in part at a redemption price equal to 100% of
the principal amount of the redeemed Subordinated Notes, plus any accrued but
unpaid interest to the date of the redemption. The option of redemption is
subject to consultation with the Federal Reserve Bank of Boston.

 

The Issuer will notify by mail Noteholders of the Subordinated Notes to be
redeemed at least 30 but not more than 60 calendar days before the scheduled
redemption.  If the Issuer is redeeming less than all the Subordinated Notes,
the Issuing and Paying Agent under the Issuing and Paying Agency Agreement must
select the Subordinated Notes to be redeemed by such method as the Issuing and
Paying Agent deems fair and appropriate subject to the rules and procedures of
DTC.

 

Any time the Subordinated Notes remain outstanding, to the extent the Issuer
makes a reasonable determination (as evidenced by an officers’ certificate
delivered to the Issuing and Paying Agent) that, as a result of the occurrence
of any amendment to, or change (including any announced prospective change) in,
the laws (or any rules or regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws, rules or regulations, which amendment or change is effective
or which pronouncement, action or decision is announced on or after the date of
issuance of the Subordinated Notes, there is more than an insubstantial risk
that the Issuer is not, or will not be entitled to treat the Subordinated Notes
as “Tier 2” capital (or the then equivalent thereof) for purposes of the capital
adequacy guidelines of the Federal Reserve Board (the “Federal Reserve”), as
then in effect and applicable to the Issuer.  The Issuer may, at its option,
redeem the Subordinated Notes in whole or in part on not fewer than 30 nor
greater than 60 days’ prior notice mailed to the holders of the Subordinated
Notes, subject to the Federal Reserve’s approval, to the extent required.  In
the event of any such redemption, the redemption price shall be 105% of the
aggregate principal amount of the notes being redeemed (plus accrued and unpaid
interest through the early redemption date).

 

On and after any redemption date, interest will cease to accrue on the
Subordinated Notes called for redemption. On or prior to any redemption date,
the Issuer is required to deposit with the Issuing and Paying Agent money
sufficient to pay the redemption price of and accrued interest on the notes to
be redeemed on such date.

 

4.                                       Subordination.  The indebtedness of the
Issuer evidenced by the Subordinated Notes, including the principal and interest
on this Note, shall be subordinate and junior in right of payment to the
Issuer’s obligations to its creditors (except any other obligations which
expressly by their terms rank on a parity with or subordinate or junior to the
Subordinated Notes).  In the event of any bankruptcy, insolvency, receivership,
reorganization, or similar proceedings or any liquidation, dissolution,
assignment for the benefit of creditors or winding up of the Issuer, Berkshire
Bank or Berkshire Bank Municipal Bank, whether voluntary or involuntary, all
obligations of the Issuer (except any other obligations which expressly by their
terms rank on a

 

4

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parity with or subordinate or junior to the Subordinated Notes) shall be
entitled to be paid in full before any payment shall be made on account of the
principal of or interest on the Subordinated Notes, including this Note.  In the
event of any such proceeding, after payment in full of all sums owing with
respect to such prior obligations, the Noteholders, together with the holders of
any obligations of the Issuer ranking on a parity with the Subordinated Notes,
shall be entitled to be paid from the remaining assets of the Issuer the unpaid
principal thereof, and the unpaid interest thereon before any payment or other
distribution, whether in cash, property or otherwise, shall be made on account
of any capital stock or any obligations of the Issuer ranking subordinate or
junior to the Subordinated Notes.

 

Nothing herein shall impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of and interest on this Note in accordance
with its terms.

 

5.                                       Consolidation, Merger and Sale of
Assets.  The Issuer shall not consolidate with or merge into another corporation
or convey or transfer its properties and assets substantially as an entirety to
any person or entity, unless:

 

(a)                                  the corporation formed by such
consolidation or into which the Issuer is merged or the person or entity which
acquires by conveyance or transfer the properties and assets of the Issuer
substantially as an entirety shall be a corporation organized and existing under
the laws of the United States of America, any State thereof or the District of
Columbia and expressly shall assume, by a supplemental agreement, the due and
punctual payment of the principal of and any interest on the Subordinated Notes
according to their terms, and the due and punctual performance and observance of
all covenants and conditions to be performed by the Issuer in the Issuing and
Paying Agency Agreement; and

 

(b)                                 immediately after giving effect to such
transaction, no Event of Default (as defined below), and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have
occurred and be continuing.

 

6.                                       Events of Default; Acceleration.  If
any of the following events shall occur and be continuing (each an “Event of
Default”):

 

(a)                                  the Issuer or any Major Subsidiary
Depository Institution thereof shall consent to the appointment of a receiver,
liquidator, trustee or other similar official in any bankruptcy, liquidation,
insolvency or similar proceeding with respect to the Issuer or any Major
Subsidiary Depository Institution thereof; or

 

(b)                                 a court or other governmental agency or body
having jurisdiction shall enter a decree or order for the appointment of a
receiver, liquidator, trustee or other similar official in any bankruptcy,
receivership, liquidation, insolvency or similar proceeding with respect to the
Issuer or any Major Subsidiary Depository Institution thereof and such decree or
order shall have remained in force for 30 days;

 

then, and in each such case, unless the principal of this Note already shall
have become due and payable, the holder of this Note, by notice in writing to
the Issuer, may declare the principal amount of this Note to be due and payable
immediately and, upon any such declaration the same

 

5

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shall become and shall be immediately due and payable.  The Issuer waives
demand, presentment for payment, notice of nonpayment, notice of protest, and
all other notices.

 

The Issuer shall promptly notify and promptly provide copies of the notice to
the Issuing and Paying Agent who will promptly mail notice to the Noteholders.

 

The term “Major Subsidiary Depository Institution” is used herein as in 12
C.F.R. Part 225, Appendix A, or any successor regulation.

 

7.                                       Failure to Make Payment.  In the event
of failure by the Issuer to make any required payment of principal or interest
on this Note (and, in the case of payment of interest, such failure to pay shall
have continued for 30 calendar days), the Noteholder may, among other things,
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Issuer and collect the amounts adjudged or decreed
to be payable in the manner provided by law.

 

8.                                       Payment Procedures.  Payment of the
principal and interest payable on the Maturity Date will be made by wire
transfer in immediately available funds to a bank account in the United States
designated by the Noteholder, upon presentation and surrender of this Note at
the office of the Issuer or at such other place or places as the Issuer shall
designate by notice to the Noteholders, provided that this Note is presented to
the Issuer in time for the Issuer to make such payments in such funds in
accordance with its normal procedures.  Payments of interest (other than
interest payable on the Maturity Date or upon early redemption) shall be made by
wire transfer in immediately available funds or check mailed to the person
entitled thereto, as such person’s address appears on the Security Register
maintained by the Issuing and Paying Agent as of the applicable Regular Record
Date or to such other address in the United States as any Noteholder shall
designate to the Issuing and Paying Agent in writing not later than the relevant
Regular Record Date.  Interest payable on any Interest Payment Date shall be
payable to the holder in whose name this Note is registered at the close of
business on the fifteenth calendar day (whether or not a Business Day)
immediately preceding the applicable Interest Payment Date (such date being
referred to herein as the “Regular Record Date”) except that interest not
punctually paid may be paid to the Noteholder in whose name this Note is
registered at the close of business on a Special Record Date fixed by the Issuer
(a “Special Record Date”) notice of which shall be given to the holder not less
than 30 calendar days prior to such Special Record Date.  (The Regular Record
Date and Special Record Date are referred to herein collectively as the “Record
Dates”).  To the extent permitted by applicable law, interest shall accrue, at
the rate at which interest accrues on the principal of this Note, on any amount
of principal of or interest on this Note not paid when due.  All payments on
this Note shall be applied first to accrued interest and then the balance, if
any, to principal.

 

9.                                       Form of Payment, Maintenance of Payment
Office.  Payments of principal of and interest on this Note shall be made in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts.  Until the
date on which all of the Subordinated Notes shall have been surrendered or
delivered to the Issuer or the Issuing and Paying Agent for cancellation or
destruction, or become due and payable and a sum sufficient to pay the principal
of and interest on all of the Subordinated Notes

 

6

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shall have been either paid or reserved for payment by the Issuer as provided
herein, the Issuer shall at all times maintain an office or agency in the State
of New York where Subordinated Notes may be presented or surrendered for
payment.

 

10.                                 Registration of Transfer, Security
Register.  Except as otherwise provided herein, this Note is transferable in
whole or in part, and may be exchanged for a like aggregate principal amount of
Subordinated Notes of other authorized denominations, by the Noteholder in
person, or by his attorney duly authorized in writing, at the office of the
Issuing and Paying Agent.  The Issuing and Paying Agent shall maintain a
register providing for the registration of the Subordinated Notes and any
exchange or transfer thereof (the “Security Register”).  Upon surrender or
presentation of this Note for exchange or registration of transfer, the Issuer
shall execute and deliver in exchange therefor a Note or Notes of like aggregate
principal amount, each in a denomination of $1,000 or any amount in excess
thereof which is an integral multiple of $1,000 (and, in the absence of an
opinion of counsel satisfactory to the Issuer to the contrary), bearing the
restrictive legends set forth on the face of this Note and that is or are
registered in such name or names requested by the Noteholder.  Any Note
presented or surrendered for registration of transfer or for exchange shall be
duly endorsed, or accompanied by a written instrument of transfer in the form
and such evidence of due authorization and guarantee of signature as may
reasonably be required by the Issuer in form satisfactory to the Issuer, duly
executed by the Noteholder or his attorney duly authorized in writing, with such
tax identification number or other information for each person in whose name a
Note is to be issued, and accompanied by evidence of compliance with any
restrictive legends appearing on such Note or Notes as the Issuer may reasonably
request to comply with applicable law.  No exchange or registration of transfer
of this Note shall be made on or after the fifteenth day immediately preceding
the Maturity Date.  This Note is subject to the restrictions on transfer of a
subscription agreement between the Issuer of this Note and the purchaser
referred to therein, a copy of which is on file with the Issuer.  The Note may
not be sold or otherwise transferred except in compliance with said agreement.

 

11.                                 Charges and Transfer Taxes.  No service
charge (other than any cost of delivery) shall be imposed for any exchange or
registration of transfer of this Note, but the Issuer may require the payment of
a sum sufficient to cover any stamp or other tax or governmental charge that may
be imposed in connection therewith (or presentation of evidence that such tax or
charge has been paid).

 

12.                                 Ownership.  Prior to due presentment of this
Note for registration of transfer, the Issuer may treat the Noteholder as the
absolute owner of this Note for receiving payments of principal of and interest
on this Note and for all other purposes whatsoever.

 

13.                                 Priority.  The Subordinated Notes rank pari
passu among themselves and pari passu, in the event of any bankruptcy,
insolvency, receivership, reorganization, or similar proceedings or any
liquidation, dissolution, assignment for the benefit of creditors or winding up
of the Issuer, Berkshire Bank or Berkshire Bank Municipal Bank, whether
voluntary or involuntary, with all other present or future unsecured
subordinated debt obligations of the Issuer, except any unsecured subordinated
debt that may be expressly stated to be senior to or subordinate or junior to
the Subordinated Notes.

 

7

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14.                                 Notices.  All notices to the Issuer under
this Note shall be in writing and addressed to the Issuer at 24 North Street,
Pittsfield, Pennsylvania 01201, Attention:  Kevin P. Riley, Chief Financial
Officer, or to such other address as the Issuer may provide by notice to the
holder.  All notices to the Noteholders shall be in writing and sent by
first-class mail to each Noteholder at his or its address as set forth in the
Security Register.  For so long as the Notes of any series are represented by
Global Notes, any notices to Noteholders will be delivered to DTC as the sole
Noteholder in accordance with its applicable policies as in effect from time to
time.

 

15.                                 Denominations.  The Subordinated Notes are
issuable only as unregistered Notes without interest coupons in denominations of
$1,000 or any amount in excess thereof which is a whole multiple of $1,000.

 

16.                                 Modification and Assignment.

 

(a)                                  Without the consent of any Noteholders, the
Issuer and the Issuing and Paying Agent may enter into one or more modifications
of the Subordinated Notes, in form satisfactory to the Issuing and Paying Agent,
to (i) evidence the succession of another corporation to the Issuer and the
assumption by any such successor of the obligations of the Issuer contained in
the Subordinated Notes, (ii) change or eliminate any of the provisions of the
Issuing and Paying Agency Agreement, provided that any such change or
elimination shall become effective only when there is no outstanding Note
created prior to the execution of such amendment or modification which is
entitled to the benefit of such provisions (iii) establish other forms or terms
of Subordinated Notes as permitted in the Issuing and Paying Agency Agreement,
(iv) evidence and provide for the acceptance of appointment under the Issuing
and Paying Agency Agreement by a successor Issuing and Paying Agent, (v) cure
any ambiguity, correct or supplement any provisions in the Subordinated Notes
which may be inconsistent with any other provisions herein or in the Note
Subscription Agreement, the Issuing and Paying Agency Agreement, or make any
other provisions with respect to matters or questions arising herein or in the
Note Subscription Agreement or the Issuing and Paying Agency Agreement; provided
that such action shall not adversely affect the interests of any Noteholder in
any material respect, and (vi) modify the restrictions on and procedures for
resales and other transfers of the Subordinated Notes to reflect any change in
applicable law or regulation (or the interpretation thereof) or in practices
relating to the resale or other transfer of restricted securities generally, or
(vii) modify, eliminate or add to the provisions of the Issuing and Paying
Agency Agreement to such extent as shall be necessary to qualify the Issuing and
Paying Agency Agreement (including any supplemental agreement thereto) under the
Trust Indenture Act of 1939, as amended, or under such similar statute hereafter
enacted.

 

(b)                                 With the consent of the Noteholders of a
majority in aggregate principal amount of the outstanding Subordinated Notes
affected thereby, the Issuer may enter into one or more amendments hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, or of modifying in any manner the rights
of the Noteholders; provided, however, that no such amendment shall, without the
consent of the Noteholders affected thereby: (i) change the stated maturity date
of the principal (or any installment of principal) of any Note, or (ii) change
any Interest Payment Date on which interest on any Note is to be paid, or
(iii) reduce the principal amount of any Note, or (iv) reduce the rate of
interest on any Note or (v) change the manner of calculation of interest, or
(vi) change any of

 

8

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the redemption provisions of any Note, or (vii) change any place of payment, or
(viii) the currency in which, the principal of, or premium, if any, or interest
on, any Note is payable, or (ix) impair the right to institute suit for the
enforcement of any required payment in respect of any Note on or after the
stated maturity thereof, or (x) reduce the percentage of the aggregate principal
amount of the outstanding Notes, the consent of whose Noteholders is required
for the modification and amendment of, or (xi) waiver under the Notes or certain
defaults hereunder, or (xii) modify any Notes relating to their modification,
amendment or waiver other than to increase the percentage necessary for such
action or to provide that other provisions of the Notes cannot be modified,
amended or waived without the consent of the Noteholders of each outstanding
Note affected thereby.

 

17.                                 Absolute and Unconditional Obligation of the
Issuer.  No provisions of this Note shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, places and rate, and in the coin or
currency, herein prescribed.

 

18.                                 Waiver and Consent.

 

(a)                                  Any consent or waiver given by the
Noteholder shall be conclusive and binding upon such Noteholder and upon all
future holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.

 

(b)                                 No delay or omission of the Noteholder to
exercise any right or remedy accruing upon any Event of Default shall impair
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein.

 

(c)                                  Any insured depository institution which
shall be a Noteholder or which otherwise shall have any beneficial ownership
interest in any Note shall, by its acceptance of such Note (or beneficial
interest therein), be deemed to have waived any right of offset with respect to
the indebtedness evidenced thereby.

 

19.                                 Further Issues.  The Issuer may, without the
consent of the Noteholders, create and issue additional notes having the same
terms and conditions of the Subordinated Notes (except for the issue date, issue
price and initial Interest Payment Date) so that such further notes would rank
equally and ratably with the Subordinated Notes and form a single series with
the Subordinated Notes.  No additional Subordinated Notes may be issued if any
Event of Default has occurred and is continuing with respect to the Subordinated
Notes.

 

20.                                 Governing Law.  This Note shall be governed
by and construed in accordance with the laws of the State of New York, except
that sections pertaining to the capital treatment of the Notes as “Tier 2”
capital and certain events of bankruptcy, insolvency or reorganization of the
Issuer or a receivership of Berkshire Bank or Berkshire Bank Municipal Bank will
be governed exclusively by federal law.

 

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IN WITNESS WHEREOF, the undersigned has caused this Note to be duly executed and
attested.

 

 

BERKSHIRE HILLS BANCORP, INC.

 

 

 

 

 

By:

 

 

 

Name:

Michael P. Daly

 

 

Title:

President and Chief Executive Officer

 

 

ATTEST:

 

 

 

 

 

 

Name: Wm. Gordon Prescott

 

Title: General Counsel and Secretary

 

 

 

 

 

Dated:                   , 2012

 

 

[Note Signature Page]

 

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CERTIFICATE OF AUTHENTICATION

 

 

 

This is one of the Notes referred

 

to in the within-mentioned Issuing

 

and Paying Agency Agreement

 

 

 

U.S. BANK NATIONAL ASSOCIATION

 

as Issuing and Paying Agent

 

 

 

 

 

By

 

 

 

Authorized Signature

 

 

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