BERKSHIRE HILLS
                                    BANCORP


December 15, 2008


Mr. David B. Farrell
210 Rote Hill Road
Sheffield, MA 01257

Dear Dave,

I am  pleased  to  outline  the  details  we have  discussed  for you to begin a
consulting  arrangement (the "Agreement") with Berkshire Hills Bancorp, Inc. and
its  subsidiaries  (collectively,  the "Company")  effective  December 15, 2008.
While in the consulting  role, you will be working as an independent  contractor
and will be ineligible  to  participate  in any benefits  available to Berkshire
employees.  You will,  however,  be  entitled  to  reimbursement  of  reasonable
expenses.  As we  discussed,  you will need to  resign  your  membership  on the
Company's  Audit  Committee and you understand that you may no longer qualify as
an "independent"  director for three years subsequent to the termination of this
Agreement.

During  the  term of this  agreement,  you  will be  working  with  confidential
information  and trade secrets  belonging to the Company.  You  acknowledge  and
agree that all such  information is confidential  and the exclusive  property of
the Company and agree that you will never disclose to anyone, either directly or
indirectly,  during the term of this  Agreement or at any time  thereafter,  any
confidential information concerning the Company.

Six month agreement for consulting; independent contractor status
  o Performance review in 90 days
  o $20,835 monthly fee; bill to be submitted for payment
  o Bonus potential based on successful performance of consulting duties

DUTIES

Evaluate and gain insight of wealth management and insurance practices,
processes, etc.
  o Assess present state
  o Analyze success of integration with overall company and brand
  o Develop tactics and oversee implementation of needed improvements


<PAGE>


Mr. David B. Farrell
December 15, 2008
Page 2


Assess and develop strategy for growth through acquisition for wealth management
and insurance divisions
  o Identify companies that should be considered for acquisition and pursue
    as warranted
  o Develop pricing model and execution strategy
  o Establish criteria for and pipeline of potential acquisition targets

Assist in developing leadership competencies for wealth management and insurance
leaders
  o Serve as  mentor  and  coach  for  leaders  in these  areas
  o Support corporate leadership development initiative

Periodic  review with Chief  Executive  Officer of impressions and progress with
wealth management and insurance divisions

Assess potential for global utilization of Six Sigma; develop plan for execution

Assist Chief  Executive  Officer with all aspects of  management  oversight  for
wealth management and insurance divisions


If the terms of this letter are  satisfactory to you, please  countersign  where
indicated below and return a fully executed copy to my attention. I look forward
to working with you over the coming months to meet the Company's  objectives set
forth in this letter.

Best Regards,

/s/ Michael P. Daly
Michael P. Daly
President and Chief Executive Officer

ACCEPTED:

/s/ David Farrell
-----------------------
David Farrell

Date:  12-15-08
      -----------------