Document:

Unassociated Document

     

    Exhibit 10.11

    
      
        

      

       

    

    STOCK
PURCHASE AGREEMENT

     

    BY
AND AMONG

    

    BERKSHIRE
BANCORP INC.

    

    AND

    

    THE
PURCHASERS

    

    
      

    

     

    Dated:  October
30, 2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      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”).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      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.

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

      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.

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

      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;

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

      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-

          
            

          

        

        
          
          

        

      

      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-

          
            

          

        

        
          
          

        

      

      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-

          
            

          

        

        
          
          

        

      

      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.

       

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

      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-

          
            

          

        

        
          
          

        

      

      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

                  

          

        

      

       

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

      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

                

        

      

      

      
        
          
          

        

        
          -19-

          
            

          

        

        
          
          

        

      

      

      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

                

        

      

      

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

      

      

      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

                  	 	 	 	 	 	 	 	 

          

        

      

      

      
        
          
          

        

        
          -21-

          
            

          

        

        
          
          

        

      

       

      DISCLOSURE

       

       

      SCHEDULES
TO

       

       

      STOCK
PURCHASE AGREEMENT

       

       

      DATED
OCTOBER 30, 2008

       

      
        
          
          

        

        
          -22-

          
            

          

        

        
          
          

        

      

       

      Schedule
3.1

       

      Financial
Statements

       

      None.

       

      
        
          
          

        

        
          -23-

          
            

          

        

        
          
          

        

      

      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-

          
            

          

        

        
          
          

        

      

      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-

          
            

          

        

        
          
          

        

      

      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-

          
            

          

        

        
          
          

        

      

       

      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-

          
            

          

        

        
          
          

        

      

      EXHIBIT
A

      RISK
FACTORS

      

      See
attached.

      

      
        
          
          

        

        
          -28-

          
            

          

        

        
          
          

        

      

      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-

          
            

          

        

        
          
          

        

      

       

      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-

          
            

          

        

        
          
          

        

      

       

      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.

       

      
        
          
          

        

        
          -31-

          
            

          

        

        
          
          

        

      

      EXHIBIT
C

      REGISTRATION
RIGHTS AGREEMENT

      

      See
attached.

      

      
        
          
          

        

        
          -32-

          
            

          

        

        
          
          

        

      

      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.

       

      
        
          
          

        

        
          -33-

          
            

          

        

        
          
          

        

      

      “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.

       

      
        
          
          

        

        
          -34-

          
            

          

        

        
          
          

        

      

      “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.

       

      
        
          
          

        

        
          -35-

          
            

          

        

        
          
          

        

      

      (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.

       

      
        
          
          

        

        
          -36-

          
            

          

        

        
          
          

        

      

      (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.

       

      
        
          
          

        

        
          -37-

          
            

          

        

        
          
          

        

      

      (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.

       

      
        
          
          

        

        
          -38-

          
            

          

        

        
          
          

        

      

      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.

       

      
        
          
          

        

        
          -39-

          
            

          

        

        
          
          

        

      

      (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.

       

      
        
          
          

        

        
          -40-

          
            

          

        

        
          
          

        

      

      (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.

       

      
        
          
          

        

        
          -41-

          
            

          

        

        
          
          

        

      

      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.

       

      
        
          
          

        

        
          -42-

          
            

          

        

        
          
          

        

      

      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.

       

      
        
          
          

        

        
          -43-

          
            

          

        

        
          
          

        

      

      (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]

      

       

      
        
          
          

        

        
          -44-

          
            

          

        

        
          
          

        

      

       

      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:

                            	 
      

                    

                  

                

              

            

          

        

      

      

      
        
          
          

        

        
          -45-

          
            

          

        

        
          
          

        

      

      

      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	 

          

        

      

       

      
        
          
          

        

        
          -46-

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
6(B)

       

      Piggyback
Registration Rights

       

      None.

       

      
        
          
          

        

        
          -47-

          
            

          

        

        
          
          

        

      

       

      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.

                

        

      

       

      
        
          
          

        

        
          -48-

          
            

          

        

        
          
          

        

      

      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]

       

      
        
          
          

        

        
          -49-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.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    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).

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    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-

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