Unassociated Document


    Exhibit
10.12

     

    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.

     

    “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.

     

    “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.

     

    
      
        
        

      

      
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    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.

     

    (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).

     

    
      
        
        

      

      
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    (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.

     

    (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.

     

    
      
        
        

      

      
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    (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.

     

    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.

     

    
      
        
        

      

      
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    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.

     

    (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.

     

    
      
        
        

      

      
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    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.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    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.

     

    (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.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (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]

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    


    IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.

     

    
      
        
          
            	 
      	
                    BERKSHIRE
      BANCORP INC.

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ Steven Rosenberg

                  
	 
      	 
      	
                    Steven
      Rosenberg

                  
	 
      	 
      	
                    President
      and Chief Executive
Officer

                  


          

        

      

    

    


    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.

     

    
      
        
          
            	 
      	
                    MOSES
      MARX, PURCHASER

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ Moses Marx

                  
	 
      	 
      	
                    Moses
      Marx

                  


          

        

      

    

    


    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.

     

    
      
        
          	 
      	
                  ELLIOTT
      ASSOCIATES, L.P.

                
	 
      	
                  By:

                	
                  Elliot
      Capital Advisors, L.P., as general partner

                
	 
      	
                  By:

                	
                   Braxton
      Associates, Inc., as general partner

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                  By:

                	
                  /s/ Elliot Greenberg

                
	 
      	 
      	
                  Elliot
      Greenberg, Vice
President

                


        

      

    

    


    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    


    IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.

     

    
      
        
          
            
              	 
      	
                      THE
      GEORGE KARFUNKEL 2007 GRANTOR RETAINED ANNUITY TRUST #1

                    
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      /s/ Jay Miller

                    
	 
      	 
      	
                      Jay
      Miller,
Trustee

                    


            

          

        

      

    

    


    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    


    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	 


        

      

    

    


    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
6(B)

     

    Piggyback
Registration Rights

     

    None.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    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.

            


    

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    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]

     

    
      
        
        

      

      
        -20-