Exhibit 10.11

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STOCK PURCHASE AGREEMENT
 
BY AND AMONG

BERKSHIRE BANCORP INC.

AND

THE PURCHASERS

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Dated:  October 30, 2008
 

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STOCK PURCHASE AGREEMENT
 
THIS STOCK PURCHASE AGREEMENT (the “Agreement”) is made as of the 30th day of
October, 2008, by and among Berkshire Bancorp Inc., a Delaware corporation
(“Company”), and the investors listed on Schedule I (the “Schedule of
Purchasers”) attached hereto (“Purchasers”).
 
WITNESSETH:
 
WHEREAS, pursuant to the provisions of this Agreement, the Company desires to
sell to the Purchasers, and the Purchasers desire to purchase from the Company,
60,000 shares (the “Offered Shares”) of the Company’s 8.0% Non-Cumulative
Mandatorily Convertible Perpetual Series A Preferred Stock (the “Preferred
Stock”), to be issued pursuant to the provisions of a Certificate of
Designations (the “Designation”) filed by the Company with the Secretary of
State of the State of Delaware on October 30, 2008, at a price of $1,000.00 per
Offered Share; and
 
WHEREAS, the Offered Shares will be automatically converted into shares of
common stock (the “Common Stock”), par value $.10 per share, of the Company (the
“Conversion Shares”) upon the expiration of three years from the date of
issuance of the Offered Shares; and
 
WHEREAS, the Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (“Securities Act”),
and/or Rule 506 of Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “SEC”) under the Securities Act.
 
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
 
1. Purchase and Sale of Offered Shares.  On the basis of the representations and
warranties contained in this Agreement and subject to its terms and conditions,
the Purchasers hereby agree, severally and not jointly, to purchase from the
Company, and the Company hereby agrees to issue and sell to the Purchasers, an
aggregate of up to 60,000 Offered Shares, for an aggregate purchase price per
Purchaser equal to $1,000.00 multiplied by the number of Offered Shares
purchased by such Purchaser (the “Purchase Price”), as set forth opposite such
Purchaser’s name on the Schedule of Purchasers (the “Purchase”).
 
2. Closing.
 
2.1 The closing of the sale and Purchase of the Offered Shares (the “Closing”)
shall take place at the offices of Blank Rome LLP, The Chrysler Building, 405
Lexington Avenue, New York, New York 10174, at 10:00 a.m., New York time, on
October 30, 2008, or at such other location, date and time, or in such other
manner, as may be agreed upon between Purchasers and the Company (the “Closing
Date”).
 

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2.2 Closing Deliveries.
 
(a) At the Closing, the Company shall deliver to each of the Purchasers or their
representative:
 
(i) a stock certificate or certificates in definitive form, registered in the
Purchaser’s name and in the name of such other persons for which Purchaser acts
as nominee, representing the Offered Shares purchased by such Purchaser;
 
(ii) the opinion of Blank Rome, counsel to the Company, required by Section 5.2
of this Agreement;
 
(iii) the Officer’s Certificate required by Section 5.1 of this Agreement;
 
(iv) the certificate of the Secretary of the Company required by Section 5.4 of
this Agreement;
 
(v) a written consent of stockholders duly executed by each of Momar
Corporation, Moses Marx and Terumah Foundation authorizing (a) the filing of a
certificate of amendment to the certificate of incorporation to increase the
number of authorized shares of Common Stock of the Company to at least 150% of
the number of shares of Common Stock that may be issued upon the conversion in
full (based on the initial Conversion Rate (as defined in the Certificate of
Designations)) of the Preferred Stock and (b) the issuances of the Conversion
Shares in accordance with NASDAQ Market Place Rule 4350(i) (the “Stockholders’
Consent”);;
 
(vi) such other documents as may be required under this Agreement;
 
(vii) the duly executed Registration Rights Agreement in the form attached
hereto as Exhibit C (the “Registration Rights Agreement”); and
 
(viii) the opinion of Todtman, Nachamie, Spizz, and Johns, P.C., special
regulatory counsel to the company, required by Section 5.2.
 
(b) At the Closing, each Purchaser shall deliver to the Company:
 
(i) as payment in full for the Offered Shares being purchased by the Purchaser,
and against delivery of the stock certificate or certificates therefor as
aforesaid, the Purchase Price by wire transfer of immediately available funds;
and
 
(ii) such other documents as may be required by this Agreement.
 
2.3 The Offered Shares delivered for the account of each Purchaser shall be
registered in such names and in such denominations as requested in writing by
such Purchaser not later than two full business days prior to the Closing Date.
 
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3. Representations and Warranties of the Company.  The Company hereby makes the
following representations and warranties to each Purchaser as of the date hereof
and the Closing Date:
 
3.1 The Company is, and for the preceding 12 months has been, subject to the
reporting requirements of Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 (the “Exchange Act”). The Company has timely filed (after giving
effect to any extensions timely filed for) all reports, including, without
limitation, all reports required to be filed on Form 8-K, registrations,
statements and other filings, together with any amendments required to be made
with respect thereto, that were required to be filed since December 31, 2006,
with the SEC under the Exchange Act (all such reports being collectively
referred to herein as the “Company Reports”).  As of their respective dates (and
without giving effect to any amendments or modifications filed after the date of
this Agreement with respect to Company Reports filed before the date of this
Agreement), each of the Company Reports and the contents thereof complied in all
material respects with the statutes, rules, regulations and orders enforced or
promulgated by the SEC (including, without limitation, Regulation FD), and, as
of the respective date any such Company Report was filed, did not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.  Except as
disclosed in Schedule 3.1, as of their respective dates, the financial
statements of the Company included in the Company Reports complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
 
3.2 Except as disclosed in Schedule 3.2, since December 31, 2007, there has been
no material adverse change and no material adverse development in the business,
properties, operations, condition (financial or otherwise), or results of
operations of the Company or its Subsidiaries (as hereinafter defined). Except
as disclosed in Schedule 3.2, since December 31, 2007, the Company has not (i)
declared or paid any dividends, (ii) sold any assets, individually or in the
aggregate, in excess of $100,000 outside of the ordinary course of business or
(iii) had capital expenditures, individually or in the aggregate, in excess of
$100,000. Neither the Company nor any of its Subsidiaries has taken any steps to
seek protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings.  The Company is not as of the date hereof, and after
giving effect to the transactions contemplated hereby to occur at the Closing,
will not be, Insolvent (as defined below). For purposes of this Section 3.2,
“Insolvent” means, with respect to any person, (i) the present fair saleable
value of such person’s assets is less than the amount required to pay such
person’s total indebtedness, or (ii) such person is unable to pay its
liabilities as such liabilities become due.
 
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3.3 Except as contemplated by this Agreement, no event, liability, development
or circumstance has occurred or currently exists, with respect to the Company,
its Subsidiaries or their respective businesses, properties, operations or
financial condition, that would be required to be disclosed by the Company under
applicable securities laws and which has not been so disclosed.
 
3.4 The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full power and authority,
corporate and other, to own or lease, as the case may be, and operate its
properties, whether tangible or intangible, and to conduct its business as
described in the Company Reports and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company.
 
3.5 The Company’s subsidiaries are set forth in Schedule 3.5 (the
“Subsidiaries”).  Unless the context requires otherwise, all references to the
Company in this Agreement include the Subsidiaries.  Each Subsidiary is an
entity duly organized, validly existing and in good standing under the laws of
its state of formation, with full power and authority, corporate or limited
liability company and other, to own or lease, as the case may be, and operate
its properties, whether tangible or intangible, and to conduct its business as
currently conducted.  Each Subsidiary is duly qualified as a foreign entity to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or the ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company or such
Subsidiary.  The Company owns all of the issued and outstanding shares of
capital stock (or other equity or ownership interests) of each Subsidiary, such
ownership is free and clear of any security interests, liens, encumbrances,
claims and charges, and all of such shares have been duly authorized and validly
issued, and are fully paid and nonassessable.  
 
3.6 The Company does not presently own, directly or indirectly, an interest in
any corporation, association, or other business entity, and is not a party to
any joint venture, partnership, or similar arrangement, other than the
Subsidiaries.
 
3.7 The Offered Shares to be sold under this Agreement have been duly authorized
and, when issued and sold and paid for by the Purchasers in accordance with the
terms of this Agreement and the Designation, will be duly authorized, validly
issued, fully paid and non assessable, and the Purchasers will not be subject to
personal liability solely by reason of being such holders and will not be
subject to the preemptive or similar rights of any holders of any security of
the Company.
 
3.8 The Conversion Shares have been duly authorized and reserved and, when
issued upon conversion of the Offered Shares in accordance with the terms of the
Designation, will be validly issued, fully paid and non-assessable, and the
issuance of the Conversion Shares  will not be subject to any preemptive or
similar rights of any holders of any security of the Company.
 
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3.9 Except as set forth on Schedule 3.9, the number of outstanding shares of
Common Stock, the amount and type of outstanding indebtedness of the Company and
the number of outstanding options, warrants and similar rights convertible into,
or exercisable or exchangeable for, any capital stock of the Company are, in
each case, materially as set forth in the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2007.  Except as disclosed in Schedule
3.9, there are no issued and outstanding preferred shares or trust preferred
securities.  All of the outstanding shares of capital stock of the Company are
validly issued, fully paid and non-assessable and have been issued in compliance
with all applicable law.  There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.
 
3.10 Each of this Agreement and the Registration Rights Agreement (collectively,
the “Transaction Documents”) has been duly authorized, executed and delivered
by, and is a valid and binding agreement of, the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, reorganization,
insolvency, moratorium, conservatorship and similar laws affecting creditors’
rights generally (including, without limitation, statutory or other laws
regarding fraudulent preferential transfers) and equitable principles of general
applicability and except as rights to indemnification under the Transaction
Documents may be limited under applicable law and by public policy.
 
3.11 The execution and performance of each Transaction Document by the Company
and the consummation of the transactions therein contemplated (i) will not
violate any provision of the currently effective certificate of incorporation or
bylaws of the Company or the organizational documents of any Subsidiary and (ii)
except as would not reasonably be expected to result in a material adverse
effect on the business, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole, will not (x) result in the
creation of any lien, charge, security interest or encumbrance upon any assets
of the Company or any Subsidiary pursuant to the terms or provisions of, and
will not conflict with, result in the breach or violation of, or constitute,
either by itself or upon notice or the passage of time or both, a default under,
or give rise to the accelerated due date of any payment due under, any
agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit
or other instrument to which any of the Company or any Subsidiary is a party or
by which any of the Company or any Subsidiary or their respective properties may
be bound or affected or (y) violate any statute or any authorization, judgment,
decree, order, rule or regulation of any court or any regulatory body,
administrative agency or other governmental agency or body applicable to the
Company or any Subsidiary or any of their respective properties.
 
3.12 None of the Company nor any Subsidiary is (a) in violation of its
Certificate of Incorporation or by-laws or certificate of formation or operating
agreement, or similar document, or (b) in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument to which the Company
or any Subsidiary is a party or by which the Company or any Subsidiary or any of
their properties is bound, except, in the case of clause (b), for such defaults
that would not, singly or in the aggregate, have a material adverse effect on
the Company and the Subsidiaries taken as a whole.
 
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3.13 There are no legal or governmental proceedings, orders, judgments, writs,
injunctions, decrees or demands pending or, to the Company’s knowledge,
threatened to which the Company or any Subsidiary is a party or to which any of
the properties of the Company or any Subsidiary is subject other than
proceedings, orders, judgments, writs, injunctions, decrees or demands that
would not have a material adverse effect on the Company and the Subsidiaries
taken as a whole or on the power or ability of the Company to perform its
obligations under, or to consummate the transactions contemplated by the
Agreement.
 
3.14 None of the Company, any Subsidiary nor any of its affiliates (as defined
in Rule 501(b) of Regulation D, each an “Affiliate”) has directly, or through
any agent, (a) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities Act) which
is or will be integrated with the sale of the Offered Shares in a manner that
would require the registration under the Securities Act of the Offered Shares or
(b) offered, solicited offers to buy or sold the Offered Shares by any form of
general solicitation or general advertising (as those terms are used in
Regulation D) or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act.
 
3.15 The books, records and accounts of the Company in all material respects
accurately and fairly reflect, in reasonable detail, the transactions in, and
designation of, the assets of, and the results of operations of, the
Company.  The Company maintains a system of accounting controls sufficient to
provide reasonable assurances that (a) transactions are executed in accordance
with management’s general or specific authorization, (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, (c) access to assets is permitted only in accordance
with management’s general or specific authorization and (d) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
 
3.16 Each of the Company and each Subsidiary has filed all Federal, state, local
and foreign tax returns which are required to be filed through the date hereof
(except where the failure to so file would not have a material adverse effect on
the Company and the Subsidiaries taken as a whole), which returns are true and
correct in all material respects, or have received extensions thereof, and have
paid all taxes shown on such returns and all assessments received by them to the
extent that the same are material and have become due.  All tax liabilities are
adequately provided for on the books of the Company and the Subsidiaries.  To
the Company’s knowledge, there are no tax audits or investigations pending,
which if adversely determined, would have a material adverse effect on the
Company and the Subsidiaries taken as a whole.
 
3.17 There is and there has been no failure on the part of the Company and the
Subsidiaries or, to the Company’s knowledge, any of the officers or directors of
the Company or any Subsidiary to comply in all material respects with the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith.
 
3.18 No registration under the Securities Act of the Offered Shares or the
Conversion Shares is required for the sale of the Shares and Conversion Shares
to the Purchasers under this Agreement and the Designation, assuming the
accuracy of the Purchasers’ representations, warranties and agreements set forth
in Section 4.
 
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3.19 The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 and 15d-14 under the Exchange
Act); such disclosure controls and procedures are designed to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s Chief Executive Officer and its
Chief Financial Officer by others within those entities, and such disclosure
controls and procedures are reasonably effective to perform the functions for
which they were established, subject to the limitation of any such control
system; the Company’s auditors and the Audit Committee of the Board of Directors
of the Company have been advised of: (A) any significant deficiencies in the
Company’s ability to record, process, summarize, and report financial data; and
(B) any fraud, whether or not material, that involves management or other
employees who have a role in the Company’s internal controls; any material
weaknesses in internal controls have been identified for the Company’s auditors;
and since the date of the most recent evaluation of such disclosure controls and
procedures contained in a Company Report, there have been no significant changes
in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
 
3.20         (a) The Company and the Subsidiaries are in compliance with all
rules, regulations, reporting and licensing requirements, and orders applicable
to their business or employees conducting their business (including, but not
limited to, those relating to banking activities) the breach or violation of
which would or could reasonably be expected to have a material adverse effect on
the financial condition or operations of the Company and the Subsidiaries taken
as a whole; and
 
(b) None of the Company or any of the Subsidiaries has received notification or
communication from any agency or department of federal, state or local
government or any of the regulatory authorities with jurisdiction over the
Company or any Subsidiary (“Regulatory Authorities”), or the staff thereof (i)
asserting that any of the Company and the Subsidiaries is not in compliance with
any of the statutes, rules, regulations, or ordinances which such governmental
authority or Regulatory Authority enforces, (ii) threatening to revoke any
license, franchise, permit or governmental authorization which is material to
the financial condition or operations of the Company and the Subsidiaries taken
as a whole, or (iii) requiring any of the Company and the Subsidiaries to enter
into a cease and desist order, consent, agreement or memorandum of
understanding.
 
3.21 Except as set forth on Schedule 3.21, none of the executive officers,
directors or employees of the Company is presently a party to any transaction
with the Company or any of its Subsidiaries (other than for ordinary course
services as employees, executive officers or directors and loans made to such
persons in the ordinary course of business), including any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such executive officer, director or employee
or, to the knowledge of the Company or any of its Subsidiaries, any corporation,
partnership, trust or other entity in which any such officer, director, or
employee has a substantial interest or is an officer, director, trustee or
partner.
 
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3.22 The Company is not presently an issuer of the kind described in paragraph
(i)(1) of Rule 144 under the Securities Act.
 
3.23 The Company has not, in the 12 months preceding the date hereof, received
notice from the NASDAQ Stock Market that the Company is not in compliance with
the listing or maintenance requirements of the NASDAQ Global Market.  The
Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in material compliance with all such listing and
maintenance requirements.
 
4. Representations and Warranties of the Purchasers.  Each of the Purchasers,
severally and not jointly, hereby represents and warrants to the Company as of
the date hereof as to himself or itself, and, as to Section 4.7 hereof, each
Purchaser represents, warrants and acknowledge to the Company and to each other
Purchaser, that:
 
4.1 Such Purchaser has full power and authority to enter into each of the
Transaction Documents.  Each of the Transaction Documents constitutes a valid
and legally binding obligation of the Purchaser, enforceable in accordance with
its terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors’ rights generally, (b) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, and (c) to the extent the indemnification provisions contained in the
Transaction Documents may be limited by applicable federal or state laws.
 
4.2 The Offered Shares acquired by such Purchaser will be acquired for
investment for such Purchaser’s own account.
 
4.3 Such Purchaser acknowledges that he or it has had access to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and all
other Company Reports filed by the Company with the SEC under the Exchange Act
since January 1, 2008. Such Purchaser acknowledges that he or it has received
all the information that he or it has requested relating to the Company and the
purchase of the Offered Shares and further represents that he or it has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the Purchase.  Such Purchaser understands that the
Shares and the Conversion Shares are characterized as “restricted securities”
under the federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering, and that under such
laws and applicable regulations such securities may be not be resold by him or
it without registration under the Securities Act unless an exemption from the
registration provisions of the Securities Act is available.  He or it also
understands that the Company’s determination of the availability of an exemption
from registration to sell the Offered Shares to him or it is predicated in part
on Purchaser’s representations set forth herein. Such Purchaser also represents
that he or it is familiar with SEC Rule 144 promulgated under the Securities Act
(or any successor provision thereto) (“Rule 144”), as presently in effect, and
understands the resale limitations imposed thereby and by the Securities
Act.  He or it also understands that the certificates representing the Offered
Shares and the Conversion Shares will contain legends substantially as set forth
below relating to the restrictions of transfer of such shares under the
Securities Act and that stop transfer orders will be placed on the Offered
Shares and the Conversion Shares with the transfer agent for such shares.
 
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“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION. THE SHARES MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE
SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE
OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”
 
“THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER SET FORTH IN THE STOCK PURCHASE AGREEMENT BY AND AMONG THE COMPANY AND
THE HOLDER, DATED OCTOBER 30, 2008, A COPY OF WHICH IS ON FILE AT THE OFFICE OF
THE COMPANY.”
 
4.4 Such Purchaser is an “accredited investor” within the meaning of Regulation
D under the Securities Act.
 
4.5 Such Purchaser recognizes that the investment in the Offered Shares involves
risks, including, but not limited to, the risks set forth in the Company Reports
and in EXHIBIT A attached hereto, and represents that he or it has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of his or its investment in the Offered Shares,
and has the ability to bear the economic risks of such investment.  Prior to
making a decision to enter into this Agreement, Purchaser was provided the
opportunity to ask questions of, and receive answers from, the executive
officers of the Company concerning the Company, and to obtain from the Company
information requested from the Company.  Based on the materials provided by the
Company in response to due diligence requests, Purchaser has conducted an
investigation to his or its satisfaction of the investment in the Offered Shares
and has received all information requested from Company that Purchaser considers
necessary or appropriate for deciding whether to purchase the Offered
Shares.  Purchaser acknowledges that he or it has, individually or through
advisers, such knowledge or experience in financial, tax and business matters to
enable him or it to understand and evaluate the merits and risks associated with
an investment in the Offered Shares.
 
4.6 Each Purchaser hereby indemnifies and holds the Company and its officers,
directors and agents free from any liability they may incur (including the costs
of defending any legal action brought against any of the foregoing parties) as a
result of any breach by such Purchaser of the representations of the Purchaser
set forth in this Section 4.
 
4.7 Such Purchaser is not a member of a group, as such term is defined in the
Securities Exchange of 1934, as amended, with any other Purchasers, (ii) such
Purchaser is not acting in concert with any other Purchaser, person or entity in
connection with the transactions contemplated by the terms of this Agreement;
and (iii) such Purchaser is not relying on any representations made to such
Purchaser by any other Purchaser or any other third party in its decision to
purchase the Offered Shares.
 
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5. Conditions to the Purchasers’ Obligations.  The obligations of each Purchaser
to purchase and pay for the Offered Shares set forth opposite his or its name on
the Schedule of Purchasers on the Closing Date are subject to the accuracy of
the representations and warranties of the Company contained in this Agreement or
in any certificate of any officer of the Company delivered pursuant to this
Agreement and to the following further conditions:
 
5.1 Officer’s Certificate.  The Company shall have delivered to each Purchaser,
on the Closing Date a certificate, dated the Closing Date and signed by an
executive officer of the Company, to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct as of
the Closing Date and that the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before such Closing Date.
 
5.2 Opinion of Counsel.  The Company shall have delivered to each Purchaser on
the Closing Date the opinion of Blank Rome LLP, counsel for the Company, dated
such Closing Date, to the effect set forth in Exhibit B attached hereto.  The
Company shall have delivered to each Purchaser on the Closing Date the opinion
of Todtman, Nachamie, Spizz, and Johns, P.C., special regulatory counsel to the
Company, in a form reasonable acceptable to the Purchasers regarding bank
regulatory matters.
 
5.3 Good Standing Certificate.  The Company shall have delivered to each
Purchaser on the Closing Date a certificate, dated as of a reasonably current
date prior to such Closing, issued by the proper authority in Delaware to the
effect that the Company is legally existing and in good standing.
 
5.4 Secretary’s Certificate.  The Company shall have delivered to each Purchaser
on the Closing Date a certificate, dated as of the Closing Date, executed by the
Secretary or Assistant Secretary of the Company certifying, as to (A) the good
standing of the Company in its jurisdiction of incorporation, (B) except for the
Designation and the Certificate of Amendment to the Certificate of Incorporation
to increase the authorized shares of Common Stock, no amendments to the
Company’s charter documents between the date hereof and the Closing Date that
would adversely affect the Company’s obligations under this Agreement were
approved by the Board of Directors or stockholders or filed with the Secretary
of State of the State of Delaware, (C) the effectiveness of resolutions of the
Company’s board of directors authorizing the execution, delivery and performance
of this Agreement by the Company and the transactions contemplated hereby, and
(D) the incumbency of such officer of the Company executing this Agreement or
any other document on behalf of the Company.
 
6. Covenants of the Company.  In further consideration of the agreements of the
Purchasers contained in this Agreement, the Company covenants with each
Purchaser as follows:
 
6.1 The Company will not solicit any offer to buy or offer or sell the Offered
Shares or the Conversion Shares by means of any form of general solicitation or
general advertising (as those terms are used in Regulation D) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act.
 
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6.2 Upon the filing of the certificate of amendment to the certificate of
incorporation of the Company that is the subject of the Stockholders’ Consent,
which shall not be later than 25 days following the date that the Company
distributes an information statement to its stockholders pursuant to Section
6.7, the Company shall take all action necessary to at all times have
authorized, and reserved for the purpose of issuance, the number of shares of
Common Stock issuable as Conversion Shares.
 
6.3 The Company will take such actions as may be reasonably required or
desirable promptly to carry out the provisions of this Agreement.
 
6.4 The Company shall maintain such controls and other procedures, including
without limitation those required by Section 302 of the Sarbanes-Oxley Act and
the applicable regulations thereunder, that are reasonably designed to ensure
that information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms,
including without limitation, controls and procedures reasonably designed to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the Company’s management, including its Chief Executive Officer and its
Principal Financial Officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure, to ensure
that material information relating to the Company, including its Subsidiaries,
is made known to them by others within those entities.
 
6.5 So long as any Purchaser beneficially owns any Preferred Stock or any
Conversion Shares that are not transferable without restriction pursuant to
paragraph (b)(1)(i) of Rule 144, the Company shall timely file all reports
required to be filed with the SEC pursuant to the Exchange Act necessary to
comply with the current information requirements of Rule 144, and the Company
shall not terminate its status as an issuer required to file reports under the
Exchange Act even if the Exchange Act or the rules and regulations thereunder
would permit such termination.
 
6.6 The Company shall promptly secure the listing of all of the Conversion
Shares upon each national securities exchange and automated quotation system, if
any, upon which the Common Stock is then listed (subject to official notice of
issuance) and shall maintain such listing of all Conversion Shares from time to
time issuable under the terms hereof.  The Company shall maintain the Common
Stocks’ listing on the NASDAQ Stock Market.  Neither the Company nor any of its
Subsidiaries shall take any action which would be reasonably expected to result
in the delisting or suspension of the Common Stock on the NASDAQ Stock
Market.  The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 6.6.
 
6.7 As promptly as practicable, but in no event more than ten business days,
after the Closing Date, the Company will file a preliminary information
statement on Schedule 14C with respect to the Stockholders’ Consent.  The
Company shall use its reasonable best efforts to file a definitive information
statement on Schedule 14C with the SEC and to distribute such Information
Statement to its stockholders within 45 business days of the Closing Date and
will file the Certificate of Amendment to the Company’s Certificate of
Incorporation that is the subject of the Stockholders’ Consent promptly after
compliance with any waiting period required by Regulation 14C of the Exchange
Act.
 
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6.8 As promptly as practicable after the date hereof, but in no event later than
November 14, 2008, the Company shall file an application to request
participation in the Treasury Capital Purchase Program with the Federal Reserve,
the Federal Deposit Insurance Corporation and such other governmental agencies,
departments or regulators as may be required, and submit final documentation and
consummate the preferred share purchase no later than 30 days after the Company
has received preliminary acceptance into the Treasury Capital Purchase Program.
 
6.9 Within five (5) business days of the date hereof, the Company shall cause
the delivery to the Purchasers of an opinion of Blank Rome LLP, counsel to the
Company, with respect to (a) certain corporate matters related to the
Subsidiaries and (b) the effect on the Transaction Documents of (i) federal law
(in addition to the Securities Act) and (ii) certain material agreements of the
Company.
 
7. Covenants of the Purchasers.  In further consideration of the agreements of
the Company contained in this Agreement, each Purchaser covenants and agrees
with the Company as follows:
 
7.1 Except as set forth in Section 7.2, without the prior written consent of the
Company, no Purchaser shall sell, assign, transfer, pledge, hypothecate,
mortgage or dispose of, by gift or otherwise, or in any way encumber, all or any
part of the Offered Shares owned by such Purchaser.
 
7.2 Notwithstanding anything to the contrary contained herein,
 
(a) with respect to any Purchaser who is a natural person or trust, such
Purchaser may transfer all or any portion of the Offered Shares by will or the
laws of descent and distribution;
 
(b) with respect to any purchaser who is a natural person, such Purchaser may
transfer, during his lifetime, all or any portion of his Offered Shares to or
for the benefit of any spouse, child or grandchild (including any natural born,
adopted or step-child or step-grandchild) of such Purchaser, or to a trust for
the benefit of such Purchaser and/or any of the foregoing or to a partnership or
limited liability company, the partners or members of which include only such
Purchaser and/or any of the foregoing or any other person or entity determined
by the Board; and
 
(c) with respect to any Purchaser that is an entity, such Purchaser may transfer
all or any portion of the Offered Shares to another entity that is controlling,
controlled by or under common control with such Purchaser;
 
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provided, however, that it shall be a condition of any such transfer that (i)
the transferee agrees to be bound by the terms of this Section 7 of this
Agreement , (ii) such Purchaser has complied with all applicable laws in
connection with such transfer and (iii) all such transferred Offered Shares
shall bear all of the legends required by Section 4.3 hereof.
 
8. Indemnification.
 
8.1 The Company agrees to indemnify and hold harmless each Purchaser, and their
respective partners, principals, directors, officers, employees, affiliates or
agents (individually, the “Indemnified Person” or collectively the “Indemnified
Person”) from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) (a)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Company Report filed by the Company with the SEC under the
Exchange Acton on or after January 1, 2008 and prior to the date of this
Agreement, (b) caused by any omission or alleged omission to state in the
Company Reports referred to in 8.1(a) a material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading or (c) that arise out of or are based upon (i) any breach of any
representation that is qualified as to materiality, (ii) any material breach of
a representation that is not so qualified as to materiality or (iii) any
warranty, agreement obligation or covenant of the Company contained herein.
 
8.2 Promptly after receipt of notice of the commencement of any action in
respect of which indemnity may be sought against the Company under this Section,
the Indemnified Person will notify the Company in writing of the commencement
thereof, and the Company will, subject to the provisions hereinafter stated,
assume the defense of such action (including the employment of counsel
reasonably satisfactory to the Indemnified Person and the payment of expenses in
connection with such defense) insofar as such action relates to an alleged
liability in respect of which indemnity may be sought against the Company under
this Section. After notice from the Company of its election to assume the
defense of such claim or action, and provided it continues to meet its
obligations hereunder, the Company shall no longer be liable to the Indemnified
Person under this Section for any legal or other expenses subsequently incurred
by the Indemnified Person in connection with the defense thereof other than
reasonable costs incurred prior to the Company assuming the defense of such
action; provided, however, that if in the reasonable good faith judgment of
counsel to the Indemnified Person or Persons it is advisable for the Indemnified
Person or Persons, because of a conflict of interest of the counsel employed by
Company, to be represented by separate counsel, the Indemnified Person or
Persons shall have the right to employ separate counsel to represent the
Indemnified Persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Indemnified Persons thereof
against the Company, in which event the reasonable fees and expenses of one such
separate counsel to represent all of the Indemnified Persons shall be borne by
the Company.  No Indemnified Person may settle a claim for which it seeks
indemnification under this Agreement without the prior written consent of the
Company, and such consent shall not be unreasonably withheld.
 
-13-

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9. Miscellaneous.
 
9.1 Survival of Warranties.  All of the representations and warranties made
herein shall survive the execution and delivery of this Agreement.  
 
9.2 Successors and Assigns.  This Agreement is personal to each of the parties
and may not be assigned without the written consent of the Company.
 
9.3 Governing Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.  Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper.  Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
 
9.4 Counterparts.  This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Agreement, once executed by a
party, may be delivered to the other party hereto by facsimile or pdf
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
 
9.5 Titles and Subtitles.  The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in interpreting this
Agreement.
 
9.6 Notices.  Unless otherwise provided, any notice, authorization, request or
demand required or permitted to be given under this Agreement shall be given in
writing and shall be deemed effectively given upon personal delivery to the
party to be notified upon receipt following deposit with the United States Post
Office, by registered or certified mail, postage prepaid, or upon receipt after
it is sent by an overnight delivery service, or when sent by facsimile with
machine confirmation of delivery addressed as follows:
 
If to the Purchasers to:

The address set forth opposite their name on the Schedule of Purchasers.

-14-

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With a copy to:

The address set forth below the name of the respective Purchasers on the
Schedule of Purchasers

If to Company:
 
Berkshire Bancorp Inc.
160 Broadway, 1st Floor
New York, New York 10038
Fax: (212) 791-5367
Attn:  Steven Rosenberg, President
(email:  steven.rosenberg@verizon.net)
 
With copies to:

Blank Rome LLP
405 Lexington Avenue, 23rd Floor
New York, New York  10174
Fax: (212) 885-5001
Attention:  Emanuel Adler, Esq.
(email: eadler@blankrome.com)
 
Any party may change its address for such communications by giving notice
thereof to the other parties in conformity with this Section.
 
9.7 Certain Fees and Reimbursements.  Each party represents that it neither is
nor will be obligated for any finders’ or brokers’ fee or commission in
connection with this transaction.
 
9.8 Amendments and Waivers.  Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Purchaser to be charged with the effect
of such amendment or waiver.
 
9.9 Severability.  If any provision of this Agreement is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this
Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).
 
-15-

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9.10 Remedies.  Each party hereto shall have all rights and remedies set forth
in the Transaction Documents and all rights and remedies which such persons have
been granted at any time under any other agreement or contract and all of the
rights which such holders have under any law.  Any person having any rights
under any provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.  Furthermore, each party hereto recognizes that in
the event that it fails to perform, observe, or discharge any or all of its
obligations under the Transaction Documents, any remedy at law may prove to be
inadequate relief to the other parties.  Each party hereto agrees that the other
parties shall be entitled to seek temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages and without
posting a bond or other security.
 
9.11 Neutral Construction.  In view of the fact that each of the parties hereto
have been represented by their own counsel and this Agreement has been fully
negotiated by all parties, the legal principle that ambiguities in a document
are construed against the draftsperson of that document shall not apply to this
Agreement.
 
9.12 Entire Agreement.  This Agreement and the documents referred to herein
constitute the entire agreement among the parties and no party shall be liable
or bound to any other party in any manner by any warranties, representations, or
covenants except as specifically set forth herein or therein.
 
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IN WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as
of the date first above written.
 

 
BERKSHIRE BANCORP INC.
     
By:
/s/ Steven Rosenberg
   
Name: Steven Rosenberg
   
Title: President and CEO

[Signature pages of Purchasers follow]
 
-17-

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Purchaser signature page with respect to Stock Purchase Agreement between
Berkshire Bancorp Inc. and the several Purchasers dated October 30, 2008

     
PURCHASER:
     
/s/ Moses Marx
 
MOSES MARX
   

Address and phone number of Purchaser:
160 Broadway – 1st Floor
 
New York, NY 10038
 
(212) 349-2875

Principal Contact at Purchaser:
Moses Marx
   
Telephone Number of Principal Contact:
(212) 349-2875
   
Email of Principal Contact:
Uneq1@bloomberg.net
   
Social Security or Tax ID No. of Purchaser:
 

Dollar Amount of Subscription subscribed for by the Purchaser:
$
30,000,000
Number of Offered Shares subscribed for by the Purchaser:
 
30,000

 
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Purchaser signature page with respect to Stock Purchase Agreement between
Berkshire Bancorp Inc. and the several Purchasers dated October 30, 2008

       
PURCHASER:
       
ELLIOTT ASSOCIATES, L.P.
 
By:
Elliott Capital Advisors, L.P., as general partner
 
By:
Braxton Associates, Inc., as general partner
       
By:
/s/ Elliot Greenberg
   
Elliot Greenberg, Vice President

Address and phone number of Purchaser:
551 Fifth Avenue, 18th floor
 
New York, NY 10176
 
(212) 986-6000

Principal Contact at Purchaser:
Sundar Srinivasan
       
Telephone Number of Principal Contact:
(212) 986-6000
       
Email of Principal Contact:
ssrinivasan@elliottmgmt.com
       
Social Security or Tax ID No. of Purchaser:
22-2140975
 

Dollar Amount of Subscription subscribed for by the Purchaser:
$
15,000,000
Number of Offered Shares subscribed for by the Purchaser:
 
15,000

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Purchaser signature page with respect to Stock Purchase Agreement between
Berkshire Bancorp Inc. and the several Purchasers dated October 30, 2008

  PURCHASER:        
THE GEORGE KARFUNKEL 2007
GRANTOR RETAINED ANNUITY TRUST #1
              By: 
/s/ Jay Miller
   
Jay Miller, Trustee

Address and phone number of Purchaser:
c/o Jay Miller, Trustee
 
430 East 57th Street, Suite 5D
 
New York, NY 10022
 
(212) 258-5577

Principal Contact at Purchaser:
Jay Miller, Trustee
       
Telephone Number of Principal Contact:
(212) 258-5577
       
Email of Principal Contact:
jmiller@nyc.rr.com
       
Social Security or Tax ID No. of Purchaser:
                    

Dollar Amount of Subscription subscribed for by the Purchaser:
$
15,000,000
Number of Offered Shares subscribed for by the Purchaser:
 
15,000

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SCHEDULE I
 
SCHEDULE OF PURCHASERS
 
Name and Address
 
Number of Offered Shares Purchased
   
Aggregate Purchase Price
               
PURCHASER
           
Moses Marx
160 Broadway, 1st Floor
New York, NY 10038
    30,000     $ 30,000,000                    
NOTICES
                                 
Robert Schenker, Esq.
160 Broadway, 1st Floor
New York, NY 10038
                                 
PURCHASER
                                 
Elliott Associates, L.P.,
712 Fifth Avenue, 35th Floor
New York, NY 10019
    15,000     $ 15,000,000                    
NOTICES
                                 
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue, 18th Floor
New York, NY 10176
Attn:  Max Karpel, Esq.
                                 
PURCHASER
                                 
The George Karfunkel Grantor
Retained Annuity Trust #1
c/o Jay Miller, Trustee
430 East 57th Street
New York, NY 10022
    15,000     $ 15,000,000                    
NOTICES
                                 
Jay Miller, Esq.
430 East 57th Street, Suite 5D
New York, NY 10022
               

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DISCLOSURE
 
 
SCHEDULES TO
 
 
STOCK PURCHASE AGREEMENT
 
 
DATED OCTOBER 30, 2008
 
-22-

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Schedule 3.1
 
Financial Statements
 
None.
 
-23-

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Schedule 3.2
 
Material Adverse Change and Dividends
 
Material Adverse Change
 
As described in the Company’s Current Report on Form 8-K dated September 17,
2008.
 
Dividends
 
The Company paid dividends on its Common Stock in the amount of $0.10 per share
in each of April 2008 and October 2008.
 
-24-

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Schedule 3.5
 
Subsidiaries

Greater American Finance Group, Inc. Delaware
 
The Berkshire Bank
New York
East 39, LLC
New York
Berkshire Interim Agency, Inc. New York
 
Berkshire 1031 Exchange, LLC
New York
Berkshire Capital Trust I
Delaware
Berkshire Capital Trust II
Delaware
   

Indirect Interests in other entities

With respect to the statements contained in Section 3.6 of this Agreement,
Berkshire Interim Agency, Inc. is a member in Berkshire Agency, LLC, a New York
limited liability company.
 
-25-

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Schedule 3.9
 
Capitalization and Indebtedness
 
The Company has no outstanding preferred or trust preferred shares
outstanding.  The Company’s Subsidiaries, Berkshire Capital Trust I and
Berkshire Capital Trust II, have issued $15 million and $7 million,
respectively, of preferred capital securities, as described in Item 1 of the
Company’s Annual Report on Form 10-K for the year ended December 31, 2007.
 
-26-

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Schedule 3.21
 
Related Party Transactions
 
Lease Agreement between East 39, LLC and the Berkshire Bank
 
Lease Agreement between Bowling Green Associates, L.P. and the Berkshire Bank
 
-27-

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EXHIBIT A
RISK FACTORS

See attached.

-28-

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RISK FACTORS

Investing in the Series A Preferred Stock involves risk.  You should carefully
consider the risks described in our Annual Report on Form 10-K for the year
ended December 31, 2007, as well as the risks related to the Series  A Preferred
Stock described below, before investing in the Series A Preferred Stock. These
risks and uncertainties are not the only ones we face.  Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may
impair our business operations in the future.  If any of the risks set forth
herein actually occur, our business, financial condition or results of
operations could be materially adversely affected. You should also refer to the
other information included and incorporated by reference in this Stock Purchase
Agreement.
 
There is currently no public market for the Series A Preferred Stock, and no
trading market is expected to  develop.
 
The Series A Preferred Stock is a new issue of securities and there is no
existing market for it.  A market is not expected  to develop for the Series A
Preferred Stock.
 
Resale of the Series A Preferred Stock and the common stock issuable upon
mandatory conversion of the Series A Preferred Stock is subject to significant
restrictions.
 
The Series A Preferred Stock and the Common Stock issuable upon conversion of
the Series A Preferred Stock have not been registered under the Securities Act
or any state securities laws. The Series A Preferred Stock and the Common Stock
issuable upon conversion of the Series A Preferred Stock will be “restricted
securities” within the meaning of the Securities Act and  may not be transferred
or resold except in a transaction exempt from or not subject to the registration
requirements of the Securities Act and applicable state securities laws.  In
addition, the Series A Preferred Stock may not be transferred without the
consent of the Corporation, except in very limited circumstances.
 
The price of the Common Stock  may not equal or exceed the conversion price
of  the Series A Preferred Stock.
 
The conversion price of the Series A Preferred Stock is initially $8.16 per
share, subject to adjustment. There can be no assurance that at the time of
mandatory conversion of the Series A Preferred Stock the market price of the
Common Stock will equal  or exceed the conversion price. In addition, the
Corporation’s  right to redeem the Series A Preferred Stock is not conditioned
upon the closing sale price of the Common Stock exceeding the then effective
conversion price of the Series A Preferred Stock.
 
-29-

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The ability to pay dividends on the Series A Preferred Stock and the Common
Stock is limited by Delaware law.
 
Under the Delaware General Corporation Law, the Corporation  may pay dividends
in cash or otherwise only if it has  surplus in an amount at least equal to the
amount of the relevant dividend payment.  Any payment of cash dividends will
depend upon the Corporation’s  financial condition, capital requirements
earnings and other factors deemed relevant by its Board of Directors.  Further,
future agreements could restrict the Corporation’s ability to pay cash
dividends.
 
The Series A Preferred Stock will rank junior to all of our liabilities as well
as the liabilities of our subsidiaries
 
The Series A Preferred Stock will rank junior in right of payment to all of our
existing and further liabilities. In the event that we do not have sufficient
finds to pay both our debt service and accrued dividends on the Series A
Preferred Stock, we will first limit or stop payment such dividends to holders
of Series A Preferred Stock until all amounts due on our liabilities are paid.
In the event of our bankruptcy, liquidation or winding-up, our assets will be
available to pay the liquidation preference of and accrued dividends on, the
Series A Preferred Stock only after all our indebtedness and other liabilities
have been paid.  In addition, the Series A Preferred Stock will effectively rank
junior to all existing and future liabilities of our subsidiaries.  The rights
of holders of the Series A Preferred Stock to participate in the assets of our
subsidiaries upon any liquidation or reorganization of any subsidiary will rank
junior to the prior claims of that subsidiary’s creditors and equity
holders.  In the event of our bankruptcy liquidation or winding-up there may not
be sufficient assets remaining to pay amounts due on any or all of the Series A
Preferred Stock then outstanding.
 
Holders of the Series A Preferred Stock will have no rights as common
stockholders until they acquire the  Common Stock.
 
Until a holder of Series A Preferred Stock acquires shares of Common Stock upon
mandatory conversion of Series A Preferred Stock, the holder of Series A
Preferred Stock will have no rights with respect to the Common Stock, including
voting rights (except as required by applicable state law or the
Corporation’s  certificate of incorporation or certificate of designation
creating the Series A Preferred Stock) and rights to receive any dividends or
other distributions on the  Common Stock.
 
-30-

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EXHIBIT B
FORM OF OPINION

Based upon and subject to the foregoing, we are of the opinion that:
 
1. The Company is validly existing and in good standing as a corporation under
the laws of the State of Delaware and has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as described in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2007.
 
2. The Company has the requisite corporate power and authority to execute and
deliver, and perform its obligations under, the Transaction Documents.
 
3. The execution and delivery by the Company of, and the performance by the
Company of its obligations under, the Transaction Documents, have been duly and
validly authorized by all required corporate action by or on behalf of the
Company.
 
4. The Transaction Documents have been duly and validly executed and delivered
by the Company and constitute the valid and binding obligations of the Company,
each enforceable against the Company in accordance with its terms.
 
5. The execution and delivery by the Company of, the performance by the Company
of its obligations under, and the consummation of the transactions contemplated
by, the Transaction Documents, will not:
 
(a) violate the terms of the Certificate of Incorporation or By-Laws of the
Company, as amended to the date hereof;
 
(b) violate any provision of any Applicable Law, except where such violation
would not reasonably be expected to have a material adverse effect on the
Company and its subsidiaries taken as a whole or on the power or ability of the
Company to perform its obligations under, or to consummate the transactions
contemplated by the Transaction Documents;
 
(c) to our knowledge, except as set forth in the Purchase Agreement, or
elsewhere in this opinion, require any consent, approval, or authorization of,
or registration, declaration or any filing of any certificate, notice,
application, report or other document with, or obtaining of any permit from, any
governmental entity having jurisdiction over the Company, under Applicable Law.
 
6.             (a) When issued and paid for in accordance with the terms of the
Purchase Agreement, the Shares, and (b) when issued and converted in accordance
with the terms of the Series A Preferred Stock, the Conversion Shares, will be
duly authorized and validly issued, fully paid and non-assessable, free of any
preemptive or similar rights contained in the Certificate of Incorporation or
Bylaws of the Company.
 
7. The offer, issuance, sale and delivery of the Shares to the Purchasers in
accordance with the terms of the Purchase Agreement are exempt from registration
under the Securities Act.
 
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EXHIBIT C
REGISTRATION RIGHTS AGREEMENT

See attached.

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REGISTRATION RIGHTS AGREEMENT
 
This Registration Rights Agreement (this “Agreement”) is made and entered into
as of October 30, 2008, among Berkshire Bancorp Inc., a Delaware corporation
(the “Company”), and the Purchasers listed on Schedule 1 hereto (the
“Purchasers”).
 
This Agreement is made pursuant to the Stock Purchase Agreement, dated as of the
date hereof, between the Company and each Purchaser (the “Stock Purchase
Agreement”) entered into in connection with the transaction described therein.
 
The Company and each Purchaser hereby agrees as follows:
 
1. Definitions.  Capitalized terms used and not otherwise defined herein that
are defined in the Stock Purchase Agreement shall have the meanings given such
terms in the Stock Purchase Agreement.  As used in this Agreement, the following
terms shall have the following meanings:
 
“Advice” shall have the meaning set forth in Section 6(d).
 
“Certificate of Designations” means that Certificate of Designations for the
Company’s 8.0% Non-Cumulative Mandatorily Convertible Perpetual Series A
Preferred Stock filed by the Company with the Secretary of State of the State of
Delaware on October 30, 2008.
 
“Commission” means the U.S. Securities and Exchange Commission.
 
“Effectiveness Date” means, with respect to the initial Registration Statement
required to be filed hereunder, the 90th calendar day preceding the Conversion
Date (as defined in the Certificate of Designations) and, with respect to any
additional Registration Statements which may be required pursuant to Section
3(c), the 90th calendar day following the date on which the Company first knows,
or reasonably should have known, that such additional Registration Statement is
required hereunder; provided, however, that in the event the Company is notified
by the Commission that one of the above Registration Statements will not be
reviewed or is no longer subject to further review and comments, the
Effectiveness Date as to such Registration Statement shall be the fifth Trading
Day (as defined in the Certificate of Designations) following the date on which
the Company is so notified if such date precedes the dates required above
(unless the Company determines that events affecting the Company will require
the filing of an amendment to the Registration Statement).
 
“Effectiveness Period” shall have the meaning set forth in Section 2(a).
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Filing Date” means, with respect to the initial Registration Statement required
hereunder, the 180th calendar day preceding the Conversion Date and, with
respect to any additional Registration Statements that may be required pursuant
to Section 3(c), the 30th calendar day following the date on which the Company
first knows, or reasonably should have known, that such additional Registration
Statement is required hereunder.
 
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“FINRA” means the Financial Industry Regulatory Authority.
 
“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.
 
“Indemnified Party” shall have the meaning set forth in Section 5(c).
 
“Indemnifying Party” shall have the meaning set forth in Section 5(c).
 
“Losses” shall have the meaning set forth in Section 5(a).
 
“Plan of Distribution” shall have the meaning set forth in Section 2.
 
“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
 
“Registrable Securities” means all of (i) the Conversion Shares and (ii) any
shares of Common Stock issued or issuable upon any stock split, dividend or
other distribution, recapitalization or similar event with respect to Conversion
Shares, provided, however, that such securities shall cease to be Registrable
Securities when (i) a  Registration Statement with respect to such securities
shall have become effective under the Securities Act and such securities shall
have been sold or transferred pursuant to such  Registration Statement,
(ii) such securities have been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto), or are transferable without
restriction pursuant to paragraph (b)(1)(i) of such Rule 144 (or any successor
provision thereto), including, without limitation, any requirement as to the
availability of current public information regarding the Company pursuant to
paragraph (c) of Rule 144 or (iii) such securities shall have ceased to be
outstanding.
 
“Registration Statement” means the registration statements required to be filed
hereunder and any additional registration statements contemplated by Section
3(c), including (in each case) the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
 
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.
 
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.
 
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“Securities Act” means the Securities Act of 1933, as amended.
 
2. Shelf Registration.
 
On or prior to each Filing Date, the Company shall prepare and file with the
Commission a “Shelf” Registration Statement covering the resale of 100% of the
Registrable Securities on such Filing Date for an offering to be made on a
continuous basis pursuant to Rule 415.  The Registration Statement shall be on
Form S-3 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
Form S-1 or another appropriate form in accordance herewith) and shall contain
substantially the “Plan of Distribution” attached hereto as Annex A.  Subject to
the terms of this Agreement, the Company shall use its reasonable best efforts
to cause a Registration Statement to be declared effective under the Securities
Act as promptly as possible after the filing thereof, but in any event prior to
the applicable Effectiveness Date, and shall use its reasonable best efforts to
keep such Registration Statement continuously effective under the Securities Act
until all Registrable Securities covered by such Registration Statement have
been sold or otherwise cease to be Registrable Securities (the “Effectiveness
Period”).  The Company shall request effectiveness of a Registration Statement
as of 5:00 p.m. New York City time on a Trading Day.  The Company shall
immediately notify the Holders via facsimile of the effectiveness of a
Registration Statement on the same Trading Day that the Company telephonically
confirms effectiveness with the Commission, which shall be the date requested
for effectiveness of a Registration Statement.  The Company shall use its
commercially reasonable efforts to file a final Prospectus with the Commission
as required by Rule 424 by 5:30 p.m. New York City time on the second Trading
Day after the Effective Date.
 
3. Registration Procedures.
 
In connection with the Company’s registration obligations hereunder, the Company
shall:
 
(a) Not less than five Trading Days prior to the filing of each Registration
Statement and not less than 1 Trading Day prior to the filing of any related
Prospectus or any amendment or supplement thereto (including any document that
would be incorporated or deemed to be incorporated therein by reference), the
Company shall, upon request of any Holder (i) furnish to such Holder drafts of
all such documents proposed to be filed, which documents (other than those
incorporated or deemed to be incorporated by reference) will be subject to the
review of such Holder and (ii) cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of respective counsel to each Holder to
conduct a reasonable investigation within the meaning of the Securities Act;
provided that such investigation shall occur during normal business hours and
that all parties participating in such investigation shall enter into such
confidentiality agreements as reasonably requested by the Company.  The Company
shall not file a Registration Statement or any such Prospectus or any amendments
or supplements thereto to which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith, provided that, the Company is
notified of such objection in writing no later than 3 Trading Days after the
Holders have been so furnished copies of a Registration Statement or 1 Trading
Day after the Holders have been so furnished copies of any related Prospectus or
amendments or supplements thereto.
 
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(b) Prepare and file with the Commission such amendments, including
post-effective amendments, to a Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep a Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period; cause the related Prospectus to be amended or supplemented
by any required Prospectus supplement (subject to the terms of this Agreement),
and as so supplemented or amended to be filed pursuant to Rule 424; and respond
as promptly as reasonably practicable to any comments received from the
Commission with respect to a Registration Statement or any amendment thereto and
provide as promptly as reasonably practicable to any Holder, upon request, true
and complete copies of all correspondence from and to the Commission relating to
a Registration Statement (provided that the Company may excise any information
contained therein which would constitute material non-public information as to
any Holder which has not executed a confidentiality agreement with the Company).
 
(c) If during the Effectiveness Period, the number of Registrable Securities at
any time exceeds 100% of the number of shares of Common Stock then registered in
a Registration Statement, then the Company shall file as soon as reasonably
practicable but in any case prior to the applicable Filing Date, an additional
Registration Statement covering the resale by the Holders of not less than 100%
of the number of such unregistered Registrable Securities.
 
(d) Notify the Holders of Registrable Securities to be sold (which notice shall,
when clauses (iii) through (vi) hereof are applicable, be accompanied by an
instruction to suspend the use of the Prospectus until the requisite changes
have been made) as promptly as reasonably practicable (and, in the case of
(i)(A) below, not less than 1 Trading Day prior to such filing) and (if
requested by any such Person) confirm such notice in writing no later than one
Trading Day following the day (i)(A) when a post-effective amendment to a
Registration Statement is proposed to be filed; (B) when the Commission notifies
the Company whether there will be a “review” of such Registration Statement and
whenever the Commission comments in writing on such Registration Statement; and
(C) with respect to a Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission or any
other federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Registrable Securities or the initiation of any
proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any proceeding for such
purpose; (v) of the occurrence of any event or passage of time that makes the
financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in a Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to a
Registration Statement, Prospectus or other documents so that, in the case of a
Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; and
(vi) the occurrence or existence of any pending corporate development with
respect to the Company that the Company believes may be material and that, in
the determination of the Company, makes it not in the best interest of the
Company to allow continued availability of a Registration Statement or
Prospectus, provided that any and all of such information shall remain
confidential to each Holder until such information otherwise becomes public,
unless, in the opinion of counsel to the Holder, disclosure by a Holder is
required by law, in which case the Holder shall provide the Company with advance
notice of any such written disclosure for the Company’s prior approval;
provided, further, notwithstanding each Holder’s agreement to keep such
information confidential, the Holders make no acknowledgement that any such
information is material, non-public information.
 
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(e) Use its reasonable best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
 
(f) Furnish to each Holder, without charge, at least one conformed copy of each
such Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission (provided that, unless otherwise requested by a
Holder, the Company would not be required to print such prospectuses if readily
available to Holders from any electronic service such as the EDGAR filing
database maintained at www.sec.gov).
 
(g) Subject to the terms of this Agreement, the Company hereby consents to the
use of such Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto,
except after the giving of any notice pursuant to Section 3(d).
 
(h) Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the Registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by each Registration Statement; provided,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.
 
(i) If requested by the Holders, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement,
which certificates shall be free, to the extent permitted by law, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may request.
 
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(j) Upon the occurrence of any event contemplated by Section 3(d) as promptly as
reasonably practicable and taking into account the Company’s good faith
assessment of any adverse consequences to the Company and its stockholders of
the premature disclosure of such event, prepare a supplement or amendment,
including a post-effective amendment, to a Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  If the Company notifies the Holders in accordance with clauses
(iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders
shall suspend use of such Prospectus.  The Company will use its reasonable best
efforts to ensure that the use of the Prospectus may be resumed as promptly as
is reasonably practicable.  The Company shall be entitled to exercise its right
under this Section 3(j) to suspend the availability of a Registration Statement
and Prospectus for a period not to exceed 45 calendar days (which need not be
consecutive days) in any 12 month period.
 
(k) Materially comply with all applicable rules and regulations of the
Commission.
 
(l) The Company may require each selling Holder to furnish to the Company the
number of shares of Common Stock beneficially owned by such Holder and, if
required by the Commission, the natural names of the persons thereof that have
voting and dispositive control over the Registrable Securities.
 
(m) Notwithstanding any other provision hereof, no holder of Registrable
Securities may include any of its Registrable Securities in a Registration
Statement pursuant to this Agreement unless the holder furnishes to the Company
a fully completed selling stockholder  questionnaire to be provided to it by the
Company (the “Questionnaire”) and such other information in writing as the
Company may reasonably request in writing for use in connection with
the  Registration Statement or Prospectus included therein and in any
application to be filed with or under state securities laws. In order to be
named as a selling stockholder in the Registration Statement or Prospectus at
the time of effectiveness of the Registration Statement or such Prospectus, as
applicable, each holder must no later than three (3) days following notice by
the Company of such filing, furnish in writing the completed Questionnaire and
such other information that the Company may reasonably request in writing, if
any, to the Company and the Company will include the information from the
completed Questionnaire and such other information, if any, in the Registration
Statement and the Prospectus, as necessary and in a manner, so that upon
effectiveness of the Registration Statement the holder will be permitted to
deliver the Prospectus to purchasers of the holder’s Registrable
Securities.  Holders that do not deliver a completed written Questionnaire and
such other information, as provided for in this Section 3(m) will not be named
as selling stockholders in the Prospectus.  Each holder named as a selling
stockholder in the Prospectus agrees to promptly furnish to the Company in
writing all information required to be disclosed in order to make information
previously furnished to the Company by the holder not materially misleading and
any other information regarding such Holder and the distribution of such
holder’s Registrable Securities as the Company may from time to time reasonably
request in writing.
 
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4. Registration Expenses.  All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement.  The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with any Trading Market on which the Common Stock is then listed for
trading and (B) in compliance with applicable state securities or Blue Sky laws
reasonably agreed to by the Company in writing (including, without limitation,
fees and disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement.  In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange as required hereunder.  In no
event shall the Company be responsible for any broker or similar commissions of
any Holder or any legal fees or other costs of the Holders.
 
5. Indemnification.
 
(a) Indemnification by the Company.  The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, members, partners, agents, brokers (including brokers who
offer and sell Registrable Securities as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock) and employees (and
any other Persons with a functionally equivalent role of a Person holding such
titles, notwithstanding a lack of such title or any other title) of each of
them, each Person who controls any such Holder (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, members, shareholders, partners, agents and employees (and any other
Persons with a functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each such
controlling Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to (1) any untrue or alleged
untrue statement of a material fact contained in a Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, or (2) any violation or alleged violation by the
Company of the Securities Act, Exchange Act or any state securities law, or any
rule or regulation thereunder, in connection with the performance of its
obligations under this Agreement, except to the extent, but only to the extent,
that (i) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to
such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in a Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto (it being understood that
the Holder has approved Annex A hereto for this purpose) or (ii) in the case of
an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the
use by such Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section
6(d).  The Company shall notify the Holders promptly of the institution, threat
or assertion of any proceeding arising from or in connection with the
transactions contemplated by this Agreement of which the Company is aware.
 
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(b) Indemnification by Holders.  Each Holder shall, severally and not jointly,
notwithstanding any termination of this Agreement, indemnify and hold harmless
the Company, its directors, officers, stockholders, agents and employees (and
any other Persons with a functionally equivalent role of a Person holding such
titles, notwithstanding a lack of such title or any other title), each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, members,
partners, stockholders, agents and employees (and any other Persons with a
functionally equivalent role of a Person holding such titles, notwithstanding a
lack of such title or any other title) of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based solely upon: (x) such Holder’s
failure to comply with the prospectus delivery requirements of the Securities
Act, if any, or (y) any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading (i) to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by
such Holder to the Company specifically for inclusion in such Registration
Statement or such Prospectus or (ii) to the extent that such information relates
to such Holder’s proposed method of distribution of Registrable Securities and
was reviewed and expressly approved in writing by such Holder expressly for use
in a Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or such form of Prospectus or
in any amendment or supplement thereto or (iii) in the case of an occurrence of
an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder
of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of the Advice contemplated in Section 6(d).  In no event
shall the liability of any selling Holder hereunder be greater in amount than
the dollar amount of the net proceeds received by such Holder upon the sale of
the Registrable Securities giving rise to such indemnification obligation.
 
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(c) Conduct of Indemnification Proceedings.  If any proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall have the right to assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have prejudiced the
Indemnifying Party.
 
An Indemnified Party shall have the right to employ separate counsel in any such
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such proceeding; or (3) the named parties to any such
proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and counsel to the Indemnified Party shall
reasonably believe that a material conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of all Indemnifying Parties).  The
Indemnifying Party shall not be liable for any settlement of any such proceeding
effected without its written consent, which consent shall not be unreasonably
withheld or delayed.  No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such proceeding.
 
Subject to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party, provided that the Indemnified Party shall promptly reimburse
the Indemnifying Party for that portion of such fees and expenses applicable to
such actions for which such Indemnified Party is judicially determined to be not
entitled to indemnification hereunder.
 
(d) Contribution.  If the indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall contribute to the
amount paid or payable by such Indemnified Party, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable
considerations.  The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission.  The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in this Agreement,
any reasonable attorneys’ or other fees or expenses incurred by such party in
connection with any proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.  The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in this paragraph.  The indemnity and contribution
agreements contained in this Section are in addition to any liability that the
Indemnifying Parties may have to the Indemnified Parties, provided that no such
other liability shall operate to defeat the intent of the contribution
provisions hereunder.
 
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6. Miscellaneous.
 
(a) Remedies.  In the event of a breach by the Company or by a Holder of any of
their respective obligations under this Agreement, each Holder or the Company,
as the case may be, in addition to being entitled to exercise all rights granted
by law and under this Agreement, including recovery of damages, shall be
entitled to specific performance of its rights under this Agreement.  The
Company and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall not assert
or shall waive the defense that a remedy at law would be adequate
 
(b) No Piggyback on Registrations.  Except as set forth on Schedule 6(b)
attached hereto, neither the Company nor any of its security holders (other than
the Holders in such capacity pursuant hereto) may include securities of the
Company in the initial Registration Statement other than the Registrable
Securities.
 
(c) Compliance.  Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to a Registration
Statement.
 
(d) Discontinued Disposition.  By its acquisition of Registrable Securities,
each Holder agrees that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(d), such Holder will
forthwith discontinue disposition of such Registrable Securities under a
Registration Statement until it is advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed.  The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is
practicable.
 
(e) Piggy-Back Registrations.  If at any time during the Effectiveness Period
there is not an effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans (each, a “Piggyback Registration Statement”), then the Company
shall send to each Holder a written notice of such determination and, if within
fifteen days after the date of such notice, any such Holder shall so request in
writing, the Company shall include in such Piggyback Registration Statement all
or any part of such Registrable Securities such Holder requests to be
registered; provided, however, that, the Company shall not be required to
register any Registrable Securities pursuant to this Section 6(e) that are the
subject of a then effective Registration Statement.
 
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Anything in the contrary notwithstanding,  if, in the opinion of the Company’s
managing underwriter for an offering evidenced by a Piggyback Registration
Statement, the inclusion of all or a portion of the Registrable Securities, when
added to the securities being registered, will either (i) exceed the maximum
amount of the securities of the Company which can be marketed at a price
reasonably related to their then-current market value or (ii) otherwise
materially adversely affect the entire offering, then the Company may exclude
from such offering all or a portion of the Registrable  Securities.
 
If securities are proposed to be offered for sale pursuant to such Piggyback
Registration Statement by other security holders of the Company and the total
number of securities to be offered by the Purchasers or their permitted
assignees and such other selling security holders is required to be reduced
pursuant to a request from the managing underwriter (which request shall be made
only for the reasons and in the manner set forth above), after inclusion of all
of the securities being offered by the Company, the number of Registrable
Securities to be offered by the Purchasers or their permitted assignees pursuant
to such Piggyback Registration Statement shall equal the number which bears the
same ratio to the maximum number of securities that the underwriter believes may
be included for all the selling security holders (including the Purchasers or
their permitted assignees) as the original number of Registrable  Securities
proposed to be sold by the Purchasers or their permitted assignees)  bears to
the total original number of securities proposed to be offered by a Purchaser or
permitted assignee and the other selling security holders.  If, as a result of
the provisions of this Section 6(e), the Purchaser or permitted assignee shall
not be entitled to include all Registrable Securities in a Piggyback
Registration Statement that the Seller or assignee has requested to be so
included, a Purchaser or permitted assignee may withdraw its request to include
Registrable Securities in such Piggyback Registration Statement prior to its
effectiveness.
 
Notwithstanding the provisions of this Section 6(e), the Company  shall have the
right at any time after it shall have given written notice of the proposed
filing of a Piggyback Registration Statement, pursuant to this Section 6(e)
(irrespective of whether any written request for inclusion of Registrable
Securities shall have already been made) to elect not to file any such proposed
Piggyback Registration Statement or to withdraw the same after its filing but
prior to the effective date thereof.
 
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(f) Amendments and Waivers.  The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and each of the Holders.  Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of all of
the Registrable Securities to which such waiver or consent relates.
 
(g) Notices.  Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be delivered as set forth in the
Stock Purchase Agreement.
 
(h) Successors and Assigns.  This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder.  The Company may not assign its
rights (except by merger) or obligations hereunder without the prior written
consent of all of the Holders of the then-outstanding Registrable Securities.
 
(i) No Inconsistent Agreements.  Neither the Company nor any of its Subsidiaries
has entered, as of the date hereof, nor shall the Company or any of its
Subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities, that conflicts with the provisions hereof.
 
(j) Neutral Construction.  In view of the fact that each of the parties hereto
have been represented by their own counsel and this Agreement has been fully
negotiated by all parties, the legal principle that ambiguities in a document
are construed against the draftsperson of that document shall not apply to this
Agreement.
 
(k) Execution and Counterparts.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
 
(l) Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect (to the
extent permitted by law) to any choice or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York.
 
(m) Construction.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Stock Purchase Agreement.
 
(n) Cumulative Remedies.  The remedies provided herein are cumulative and not
exclusive of any other remedies provided by law.
 
(o) Severability.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction.  It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
 
(p) Headings.  The headings in this Agreement are for convenience only, do not
constitute a part of this Agreement, and shall not be deemed to limit or affect
any of the provisions hereof.
 
[SIGNATURE PAGE OF THE COMPANY FOLLOWS]
 
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
 

 
BERKSHIRE BANCORP INC.
             
By:
              
Name:
   
Title:
               
[PURCHASER]
             
By:
               
Name:
   
Title:
 

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SCHEDULE I
 
SCHEDULE OF PURCHASERS
 
Moses Marx
160 Broadway, 1st Floor
New York, NY 10038
    30,000            
Elliott Associates, L.P.,
712 Fifth Avenue, 35th Floor
New York, NY 10019
    15,000            
The George Karfunkel Grantor
Retained Annuity Trust #1
c/o Jay Miller, Trustee
430 East 57th Street
New York, NY 10022
    15,000  

 
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SCHEDULE 6(B)
 
Piggyback Registration Rights
 
None.
 
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ANNEX A
 
PLAN OF DISTRIBUTION
 
We are registering the shares offered by this prospectus on behalf of the
selling stockholders.  The selling stockholders, which as used herein includes
donees, pledgees, transferees or other successors-in-interest selling shares of
common stock or interests in shares of common stock received after the date of
this prospectus from a selling stockholders as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or
otherwise dispose of any or all of their shares of common stock or interests in
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions directly or through one
or more underwriters, broker-dealers or agents.  If the shares of common stock
are sold through underwriters or broker-dealers, the selling stockholders will
be responsible for underwriting discounts or commissions or agent’s
commissions.  These dispositions may be at fixed prices, at prevailing market
prices at the time of sale, at prices related to the prevailing market price, at
varying prices determined at the time of sale, or at negotiated prices.  To the
extent any of the selling stockholders gift, pledge or otherwise transfer the
shares offered hereby, such transferees may offer and sell the shares from time
to time under this prospectus, provided that this prospectus has been amended or
supplemented under Rule 424(b)(3) or other applicable provision of the
Securities Act to include the name of such transferee in the list of selling
stockholders under this prospectus.
 
The selling stockholders may use any one or more of the following methods when
disposing of shares or interests therein:
 
 
·
in the over-the-counter market;

 
·
on any national securities exchange or market, if any, on which our common stock
may be listed at the time of sale;

 
·
in transactions otherwise than on an exchange or in the over-the-counter market,
or in a combination of any such transactions;

 
·
through block trades in which the broker or dealer so engaged will attempt to
sell the shares as agent, but may position and resell a portion of the block as
principal to facilitate the transaction;

 
·
through purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus;

 
·
in ordinary brokerage transactions and transactions in which the broker solicits
purchasers;

 
·
through writing of options, swaps, forwards, or derivatives;

 
·
in privately negotiated transactions;

 
·
in transactions to cover short sales;

 
·
through transactions in which broker-dealers may agree with the selling
stockholders to sell a specified number of such shares at a stipulated price per
share;

 
·
through any other legally permissible method; and

 
·
through a combination of any such methods of sale.

 
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The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock, from time to time, under
this prospectus, or under an amendment or supplement to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act amending the
list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus.
 
The selling stockholders may sell their shares of our common stock directly to
purchasers or may use brokers, dealers, underwriters or agents to sell such
shares. In effecting sales, brokers and dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions, discounts or concessions from a selling
stockholder or, if any such broker-dealer acts as agent for the purchaser of
such shares, from a purchaser in amounts to be negotiated. Such compensation
may, but is not expected to, exceed that which is customary for the types of
transactions involved. Broker-dealers may agree with a selling stockholder to
sell a specified number of such shares at a stipulated price per share, and, to
the extent such broker-dealer is unable to do so acting as agent for a selling
stockholder, to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer commitment to the selling
stockholders.  Broker-dealers who acquire shares as principal may thereafter
resell such shares from time to time in transactions, which may involve block
transactions and sales to and through other broker-dealers, including
transactions of the nature described above, in the over-the-counter market or
otherwise at prices and on terms then prevailing at the time of sale, at prices
then related to the then-current market price or in negotiated transactions. In
connection with such resales, broker-dealers may pay to, or receive from, the
purchasers of such shares commissions as described above.
 
The selling stockholders and any broker-dealers or agents that participate with
the selling stockholders in sales of their shares of our common stock may be
deemed to be “underwriters” within the meaning of the Securities Act in
connection with such sales. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of such shares purchased
by them may be deemed to be underwriting commissions or discounts under the
Securities Act.
 
From time to time, the selling stockholders may engage in short sales, short
sales against the box, puts and calls and other hedging transactions in our
securities, and may sell and deliver their shares of our common stock in
connection with such transactions or in settlement of securities loans. These
transactions may be entered into with broker-dealers or other financial
institutions. In addition, from time to time a selling stockholder may pledge
our shares pursuant to the margin provisions of our customer agreements with our
broker-dealer. Upon delivery of such shares or a default by a selling
stockholder, the broker-dealer or financial institution may offer and sell such
pledged shares from time to time.
 
The selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.
 
We are required to pay all fees and expenses incident to the registration of the
common stock. We have agreed to indemnify the selling stockholders against
certain losses, claims, damages and liabilities.
 
The selling stockholders are subject to applicable provisions of the Securities
Exchange Act of 1934 and the SEC’s rules and regulations, including Regulation
M, which provisions may limit the timing of purchases and sales of the shares by
the selling stockholders.
 
In order to comply with certain states’ securities laws, if applicable, the
shares may be sold in those jurisdictions only through registered or licensed
brokers or dealers.  In certain states the shares may not be sold unless the
shares have been registered or qualified for sale in such state, or unless an
exemption from registration or qualification is available and is obtained.
 
[Remainder of This Page Intentionally Left Blank]
 
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