[LETTERHEAD OF BERKSHIRE HILLS BANCORP, INC.]

                                                     As of June 26, 2003

Mr. Robert A. Wells
76 Lime Kiln Road
Lenox, MA  01240


Dear Bob:

     As we have discussed, this is to confirm that you have decided to retire as
Chairman of the Board of Berkshire Hills Bancorp,  Inc. (the "Holding  Company")
and  Berkshire  Bank  ("Berkshire  Bank")  (collectively,  "Berkshire")  and  as
Chairman  and  Principal  Executive of each of Berkshire  Hills  Foundation  and
Greater Berkshire Foundation,  Inc. (the "Foundations") effective on the earlier
of (a)  December  31, 2003 or (b) such other date as you shall elect upon notice
to me  ("Your  Retirement  Date").  In  recognition  of your  years of  service,
Berkshire agrees to the following:

     1. You shall be a director of the Holding  Company and Berkshire Bank until
the  expiration  of  your  current  term  in  2004,  and  thereafter  as you are
re-nominated and re-elected. So long as you are a director, you will be a member
of various  Berkshire  committees  to which you are  appointed and a director of
each of the Foundations.

     2. After Your  Retirement  Date,  and so long as you are a director  of the
Holding Company,  you will receive stock awards and options, if any, on the same
basis that they are granted to all other independent directors.

     3.  Within 30 days after Your  Retirement  Date,  but in any event no later
than December 31, 2003, you will receive a lump sum payment of $200,000.00, less
all required and necessary  deductions  and  withholdings.  All salary and other
payments  from  Berkshire and the  Foundations,  other than as set forth in this
letter,  will  cease as of Your  Retirement  Date.  You will  retain all of your
presently  vested  and  unvested  stock  options  and  awards.  If you  are  not
re-elected to the Holding Company's Board, you will be appointed to its Advisory
Board for a term  sufficient  to vest all of your  unvested  stock  options  and
awards.  If you are not re-elected to the Holding  Company's  Board of Directors
and if, for any reason, the Advisory Board does not exist at that time, then all
of your unvested stock options and awards will immediately vest.

     4. You are entitled to certain  benefits  under the executive  supplemental
compensation  agreement  with  Berkshire Bank dated November 7, 1995 and a trust
agreement  dated May 31, 1996 between  Berkshire  Bank and State Street Bank and
Trust Company.  Berkshire Bank will hire, at its expense, a mutually  agreeable,
independent pension actuarial firm (the "Actuary") to calculate,  within 30 days
of Your  Retirement  Date,  all  benefits  due to you under the  agreements.  If
appropriate, the amounts heretofore funded by Berkshire Bank and held under said
agreements  at State  Street Bank and Trust  Company  will be further  funded to
satisfy




<PAGE>
Mr. Robert A. Wells
As of June 26, 2003
Page 2

Berkshire Bank's obligations to you thereunder, or, if overfunded, the amount by
which it is overfunded will be retained by Berkshire  Bank. Said  calculation by
the Actuary will be final and binding on the  parties,  but each party will have
the right to review all  assumptions  and methods of  calculation  prior to said
calculation becoming final.

     5. Until November 22, 2005, you shall have:

        A. Use of your  automobile,  with  Berkshire  Bank paying all automobile
expenses on the same basis that it  presently  does;  and on or about that date,
Berkshire Bank will transfer title of that vehicle to you.

        B. Use of your current office until  December 31, 2003; and  thereafter,
use of either your existing office or the second floor Board Room.

        C. Continued  coverage under Berkshire Bank's existing regular,  or upon
you  and/or  your  spouse  attaining  age 65,  MEDEX  group  medical  and dental
insurance  plans,  as those plans shall  hereafter  be modified for all eligible
employees. You will continue to be responsible for your premium co-payments, the
amount of which will be billed by Berkshire to you periodically.

     6. Your  employment  by Berkshire  and your  engagement  as an  independent
contractor by the Foundations  shall be deemed  terminated as of Your Retirement
Date.

     7. You will  continue  to own the Royal  Macabees  (now  Reassure  America)
Policy (No. 4052-202). You will refund payments made by Berkshire on your behalf
by making a payment to  Berkshire  of  $20,500.00  on or before Your  Retirement
Date.



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<PAGE>
Mr. Robert A. Wells
As of June 26, 2003
Page 3



     Please sign below to signify your agreement with the foregoing,  and I will
then ask the Boards of Directors of Berkshire to affirm this agreement.

                                           Very truly yours,

                                           BERKSHIRE HILLS BANCORP, INC. and
                                           BERKSHIRE BANK

                                       By: /s/ Michael P. Daly
                                           -------------------------------------
                                           Michael P. Daly, President and CEO

                                           AGREED TO:

                                           /s/ Robert A. Wells
                                           -------------------------------------
                                           Robert A. Wells

                                           THIS LETTER AGREEMENT IS AFFIRMED:

                                           BERKSHIRE HILLS BANCORP, INC.

                                       By: /s/ Catherine B. Miller
                                           -------------------------------------
                                           On behalf of its Board of Directors

                                           BERKSHIRE BANK

                                       By: /s/ Catherine B. Miller
                                           -------------------------------------
                                           On behalf of its Board of Directors


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