UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                  FORM 10Q - QUARTERLY REPORT UNDER SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

[ X [  Quarterly  report  pursuant  to  Section  13 or 15(d)  of the  Securities
       Exchange Act of 1934 For the quarterly period ended March 31, 2000.

[   ]  Transition report pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of1934

       For the transition period from                            to

                       Commission File Number: (0-26663)

                            IPSWICH BANCSHARES, INC.
                             -----------------------
             (Exact name of Registrant as specified in its charter)

Massachusetts                                                  04-3459169
--------------------------------------------------------------------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                             Identification No.)


23 Market Street, Ipswich, Massachusetts                         01938
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)

       Registrant's telephone number, including area code: (978) 356-7777

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

Title of each class:                  Name of each exchange on which registered:
Common Stock, $0.10 par value                     NASDAQ National Market

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirement for the past 90 days. Yes [ X ]  No [  ]

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by court. Yes [ ] No [ ]

The number of shares  outstanding of the  Registrant's  common stock as of April
28, 2000 was 2,495,427.

<PAGE>
<TABLE>
<CAPTION>
                               IPSWICH BANCSHARES, INC. AND SUBSIDIARY

                                     Consolidated Balance Sheets

                            (Dollars in thousands, except per share data)


                                                                             March 31,   December 31,
                                                                               2000          1999
                                                                           ----------    ----------
                             Assets                                        (unaudited)     (audited)
                             ------
<S>                                                                        <C>           <C>
Cash and due from banks                                                    $    5,673    $    6,552
Interest-bearing deposits and federal funds sold                               10,315         1,707
Investment and mortgage-backed securities available for sale                   32,982        39,502
Investment and mortgage-backed securities held to maturity                     27,873        28,069
Loans held for sale                                                               607             0

Loans:
     Residential                                                              165,968       164,009
     Home equity                                                               24,467        23,385
     Commercial                                                                 4,858         4,873
     Consumer                                                                     987         1,060
                                                                           ----------    ----------
          Total gross loans                                                   196,280       193,327

Allowance for possible loan losses                                             -1,801        -1,798
                                                                           ----------    ----------

      Net loans                                                               194,479       191,529

Stock in FHLB of Boston                                                         3,977         3,977
Savings Bank Life Insurance Company stock                                         253           253
Banking premises and equipment, net                                             3,159         3,168
Other real estate owned                                                            49           111
Accrued interest receivable                                                     1,392         1,248
Other assets                                                                      191           182
                                                                           ----------    ----------

      Total assets                                                         $  280,950    $  276,298
                                                                           ==========    ==========


              Liabilities and Stockholders' Equity

Liabilities:
  Deposits:
     Non-interest-bearing checking accounts                                $   17,691    $   15,209
     Interest-bearing checking accounts                                        27,560        27,481
     Savings accounts                                                          39,247        37,704
     Money market accounts                                                     64,801        62,859
     Certificates of deposit                                                   66,946        66,829
                                                                           ----------    ----------
          Total deposits                                                      216,245       210,082

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                        <C>           <C>
  Borrowed funds                                                               43,000        45,000
  Mortgagors' escrow accounts                                                   1,157           993
  Deferred income tax liability, accrued expenses and other liabilities         2,915         3,248
                                                                           ----------    ----------

      Total liabilities                                                       263,317       259,323


Equity capital                                                                 17,466        16,965
Unrealized gain on investment securities available for sale, net                  167            10
                                                                           ----------    ----------
      Total stockholders' equity                                               17,633        16,975
                                                                           ----------    ----------

      Total liabilities and stockholders' equity                           $  280,950    $  276,298
                                                                           ==========    ==========

Shares outstanding                                                          2,525,427     2,525,427

Selected data (end of period):

  Equity to assets  (in %)                                                       6.28          6.14
  Total equity to risk-weighted assets  (in %)                                  14.45         14.38
  Total non-performing assets, net                                                 80           142
  Book value per share                                                           6.98          6.72
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                     IPSWICH BANCSHARES, INC. AND SUBSIDIARY
                        Consolidated Statements of Income
                  (Dollars in thousands, except per share data)

                                                          Three Months Ended
                                                               March 31,
                                                          2000          1999
                                                        ----------    ----------
                                                       (unaudited)   (unaudited)
<S>                                                     <C>           <C>
Interest and dividend income:
   Loans                                                $    3,505    $    3,812
   Investment securities available for sale                    668           549
   Investment securities held to maturity                      473           168
   Federal funds and interest bearing deposits                  29            15
                                                        ----------    ----------

      Total interest and dividend income                     4,675         4,544

Interest expense:
   Deposits                                                  1,844         1,645
   Borrowed funds                                              633           782
                                                        ----------    ----------

      Total interest expense                                 2,477         2,427
                                                        ----------    ----------

      Net interest and dividend income                       2,198         2,117

Provision for possible loan losses                              15            45
                                                        ----------    ----------

      Net interest and dividend income after
        provision for possible loan losses                   2,183         2,072

Non-interest income:
   Mortgage banking revenues, net                               44           495
   Retail banking fees                                         377           345
   Net gain on sales of securities                               2            49
   Other                                                         5             2
                                                        ----------    ----------

      Total non-interest income                                428           891
                                                        ----------    ----------

      Net interest, dividend and non-interest income         2,611         2,963

Non-interest expenses:
   Salaries and employee benefits                              817           772
   Occupancy and equipment expenses                            225           221
   Data processing services                                    214           172
   Marketing expense                                           194           142
   Professional fees                                           129            65
   Office expense                                               82            99
   Other                                                        97           171
                                                        ----------    ----------

      Total non-interest expenses                            1,758         1,642
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                     <C>           <C>
Expenses from Holding Company & REIT formation                   0           380
                                                        ----------    ----------

Income before income taxes                                     853           941

Income tax expense                                             106           282
                                                        ----------    ----------

      Net income                                        $      747    $      659
                                                        ==========    ==========

Basic earnings per share                                $     0.30    $     0.28
Diluted earnings per share                              $     0.29    $     0.26

Dividends per share                                     $     0.10    $     0.05
                                                        ==========    ==========

Weighted average common shares outstanding (basic)       2,525,427     2,392,286
Weighted average common shares outstanding (diluted)     2,549,142     2,528,059

Selected performance data:
  (Expense ratios exclude one time charges)
   Return on average equity  (in %)                          17.12         18.12
   Return on average assets  (in %)                           1.08          0.97
   Net interest margin  (in %)                                3.26          3.16
   Expenses to average assets  (in %)                         2.54          2.41
   Efficiency ratio  (in %)                                  67.62         55.74
   Mortgage and equity loan production                  $   12,645    $   37,188
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                               IPSWICH BANCSHARES, INC. AND SUBSIDIARY
                                     Consolidated Statements of Changes in Stockholders' Equity
                                             Three Months Ended March 31, 2000 and 1999
                                            (Dollars in thousands, except for share data)
                                                             (unaudited)

                                                                                                Accumulated
                                                                       Additional                   other             Total
                                                 Shares      Common      paid-in     Retained   comprehensive     stockholders'
                                              outstanding     stock      capital     earnings       income            equity
                                              -----------     -----      -------     --------       ------            ------
<S>                                            <C>            <C>        <C>         <C>             <C>             <C>
Balance at December 31, 1998                   2,392,286       239       2,009       11,790           185            14,223

Issuance of stock rights                                                     5                                            5
Cash dividends ($.05 per share)                                                        -120                            -120
Comprehensive income:
  Net income                                                                            659                             659
  Other comprehensive income:
    Unrealized holding gains on
      securities, net of taxes of $47                                                                                    71
    Reclassification adjustment
      for amounts included in net
      income, net of taxes of ($13)                                                                                     -19
                                                                                                                    -------

  Other comprehensive income                                                                           52                52

Total comprehensive income                                                                                              711
                                               ---------       ---       -----       ------           ---            ------

Balance at March 31, 1999                      2,392,286       239       2,014       12,329           237            14,819

Stock options exercised                          133,141        14         226                                          240
Issuance of stock rights                                                    22                                           22
Cash dividends ($.20 per share)                                                        -509                            -509
Comprehensive income:
  Net income                                                                          2,630                           2,630
  Other comprehensive income:
    Unrealized holding gains on
      securities, net of taxes of ($197)                                                                               -294
    Reclassification adjustment
      for amounts included in net
      income, net of taxes of $46                                                                                        67
                                                                                                                    -------

  Other comprehensive income                                                                         -227              -227
                                                                                                                    -------
Total comprehensive income                                                                                            2,403
                                               ---------       ---       -----       ------           ---            ------

Balance at December 31, 1999                   2,525,427       253       2,262       14,450            10            16,975
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                            <C>            <C>        <C>         <C>             <C>             <C>
Issuance of stock rights                                                     7                                            7
Cash dividends ($.10 per share)                                                        -253                            -253
Comprehensive income:
  Net income                                                                            747                             747
  Other comprehensive income:
    Unrealized holding gains on
      securities, net of taxes of $106                                                                                  161
    Reclassification adjustment
      for amounts included in net
      income, net of taxes of ($2)                                                                                       -4
                                                                                                                    -------

  Other comprehensive income                                                                          157               157
                                                                                                                    -------

Total comprehensive income                                                                                              904
                                               ---------       ---       -----       ------           ---            ------

Balance at March 31, 2000                      2,525,427       253       2,269       14,944           167            17,633
                                               =========       ===       =====       ======           ===            ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                IPSWICH BANCSHARES, INC. AND SUBSIDIARY
                                 Consolidated Statements of Cash Flows
                              Three Months Ended March 31, 2000 and 1999
                                        (Dollars in thousands)
                                              (unaudited)

                                                                                    2000       1999
                                                                                   -------    -------
<S>                                                                                <C>        <C>
Net cash flows from operating activities:
  Net income                                                                           747        659

 Adjustments to reconcile net income to net cash (used) provided
           by operating activities:
       Provision for possible loan losses                                               15         45
       Deferred income tax expense                                                    -190        -34
       Depreciation expense                                                             85         83
       (Accretion) amortization of premiums on investment securities, net               -4         19
       (Gain) on sale of loans, net                                                      0       -499
       (Gain) on sale of real estate acquired by foreclosure                            -4          0
       (Gain) on investment securities available for sale, net                          -2        -49
       Origination of loans held for sale                                           -2,556    -35,310
       Proceeds from sale of loans                                                   1,949      4,422
       Proceeds from sale of securitized loans                                           0     37,474
       Decrease in loan origination fees                                               -84       -277
       Decrease in loan discounts                                                        2          1
       Increase in deferred premium on loans sold and mortgage
           servicing rights                                                              0       -440
       Increase in accrued interest receivable                                        -144       -118
       (Increase) decrease in other assets, net                                         -9         11
       Decrease in accrued expenses and other liabilities                             -249       -392
                                                                                   -------    -------

  Net cash (used) provided by operating activities                                    -444      5,595

Net cash flows from investing activities:

  Purchase of investment securities available for sale                              -2,105    -13,364
  Principal paydowns on investment securities available for sale                     1,909      4,364
  Proceeds from the sale of investment securities available for sale                 6,985      4,826
  Principal paydowns on investment securities held to maturity                         196        200
  Purchases of stock in FHLB of Boston                                                   0     -1,072
  Net (increase) decrease in loans                                                  -2,883      7,646
  Proceeds from sale of real estate acquired by foreclosure                             66          0
  Purchases of equipment, net                                                          -76        -39
                                                                                   -------    -------
  Net cash provided by investing activities                                          4,092      2,561

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                                <C>        <C>
Cash flows from financing activities:
  Net proceeds from the issuance of common stock                                         7          5
  Cash dividends                                                                      -253       -120
  Net increase (decrease) in deposits                                                6,163     -5,620
  Proceeds from Federal Home Loan Bank advances                                     16,454    110,999
  Repayment of Federal Home Loan Bank advances                                     -18,454   -118,999
  Increase in mortgagors' escrow accounts                                              164         99
                                                                                   -------    -------

  Net cash provided (used) by financing activities                                   4,081    -13,636
                                                                                   -------    -------

Net increase (decrease) in cash and cash equivalents                                 7,729     -5,480

Cash and cash equivalents at beginning of year                                       8,259     12,095
                                                                                   -------    -------

Cash and cash equivalents at end of year                                            15,988      6,615
                                                                                   =======    =======

Supplemental disclosure of cash flow information:
Cash paid for:
       Interest on deposit accounts                                                  1,844      1,645
       Interest on borrowed funds                                                      633        782
       Cash paid for income taxes                                                      363        417

Supplemental schedule of non-cash investing and financing activities:

  Conversion of residential real estate loans to mortgage-backed securities              0     39,039
  Net increase required by Statement of Financial Accounting Standards No. 115:
       Investment securities                                                           263         88
       Deferred income tax liability                                                   106         36
       Net unrealized gain on investment securities available for sale                 157         52
</TABLE>
<PAGE>


                     IPSWICH BANCSHARES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                             March 31, 2000 and 1999


Basis of Presentation
---------------------
The  consolidated   financial   statements   include  the  accounts  of  Ipswich
Bancshares,  Inc. and its wholly  owned  subsidiary,  Ipswich  Savings Bank (the
Bank)  and the  Bank's  subsidiaries,  Ipswich  Preferred  Capital  Corporation,
Ipswich Securities  Corporation,  Historic Ipswich,  Inc., North Shore Financial
Services,  Inc. and Rowley Investment Corporation  (collectively herein referred
to as the Company). All significant  intercompany accounts and transactions have
been eliminated in consolidation.

Ipswich  Preferred  Capital   Corporation   (IPCC)  was  formed  in  1999  as  a
Massachusetts  business  corporation  which elected to be taxed as a real estate
investment trust for Federal and Massachusetts  tax purposes.  IPCC is 99% owned
by  Ipswich  Savings  Bank.  IPCC holds  mortgage  loans  which were  previously
originated  by  the  Company.  Ipswich  Securities  Corporation  was  formed  to
exclusively  transact  in  securities  on  its  own  behalf  as  a  wholly-owned
subsidiary  of the  Bank.  Historic  Ipswich,  Inc.  and North  Shore  Financial
Services,  Inc. were incorporated for the purpose of holding direct  investments
in real estate and  foreclosed  real  estate,  respectively.  Rowley  Investment
Corporation was incorporated to facilitate the holding and permitting of certain
bank-owned real estate.

The  consolidated  financial  statements  have been prepared in conformity  with
generally accepted accounting principles. In preparing the financial statements,
management  is  required  to make  estimates  and  assumptions  that  affect the
reported  amounts of assets and  liabilities as of the date of the balance sheet
and  revenues  and  expenses  for  the  period.   Actual  results  could  differ
significantly from those estimates.

Material  estimates that are particularly  susceptible to significant  change in
the  near-term  relate to the  determination  of the allowance for possible loan
losses, the valuation of real estate acquired by foreclosure,  and the valuation
of originated mortgage servicing rights.

The accompanying  unaudited condensed and consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation  S-X.  Accordingly,  they do not include all of the information
and footnotes required by generally accepted accounting  principles for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31, 2000
are not  necessarily  indicative  of the results  that may be  expected  for the
fiscal year ending  December 31,  2000.  For further  information,  refer to the
audited  consolidated  financial statements and footnotes thereto for the fiscal
year ended  December 31, 1999  included in the  Company's  Annual Report on Form
10-K.

A substantial portion of the Company's loans are secured by real estate in Essex
County in Massachusetts. In addition, other real estate owned is located in that
market. Accordingly, the ultimate collectibility of a substantial portion of the
Company's loan  portfolio and the recovery of the carrying  amount of other real
estate owned are  susceptible to changes in market  conditions in its geographic
area.
<PAGE>
Earnings Per Share
------------------
The  computation  of basic  earnings per share is based on the weighted  average
number of shares of common stock outstanding during each period. The computation
of diluted  earnings per share is based on the weighted average number of shares
of common stock  outstanding  and dilutive  potential  common stock  equivalents
outstanding during each period. Stock option grants are included only in periods
when the results are dilutive.

        2000                 Income               Shares               Per-Share
                          (Numerator)         (Denominator)              Amount
                          ------------------------------------------------------
Basic EPS                    $747                  2,525                $0.30
Effect of stock options       ---                     24                  ---
                                                   -----
Diluted EPS                  $747                  2,549                $0.29
                             ====                  =====                =====

        1999

Basic EPS                    $659                  2,392                $0.28
Effect of stock options       ---                    136                  ---
                                                   -----
Diluted EPS                  $659                  2,528                $0.26
                             ====                  =====                =====

Other Comprehensive Income
--------------------------
Accumulated   other   comprehensive   income   consists   solely  of  unrealized
appreciation on investment securities available for sale, net of taxes.

ITEM 2
------
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
------------  ----------  ---  -----------  ---------  ---------  --------------
OPERATIONS
----------
Certain statements in this Form 10-Q constitute "forward looking statements", as
that term is defined under the Private Securities Litigation Reform Act of 1995.
The words "believe",  "expect",  "anticipate",  "intend",  "plan", "assume", and
other similar expressions which are predictions of or indicate future events and
trends and which do not relate to historical  matters  identify  forward looking
statements.  Reliance should not be placed on forward looking statements because
they involve known and unknown risks, uncertainties and other factors, which are
in some  cases  beyond  the  control  of the  Company  and may cause the  actual
results,  performance,  or achievements of the Company to differ materially from
anticipated future results,  performance or achievements expressed or implied by
such forward looking statements.

Certain factors that may cause such differences  include, but are not limited to
the following:  interest rates may increase,  adversely affecting the ability of
borrowers to repay  adjustable rate loans and the Company's  earnings and income
which derive in significant  part from loans to borrowers;  unemployment  in the
Company's  market  area  may  increase,   adversely  affecting  the  ability  of
individual  borrowers to re-pay loans;  property  values may decline,  adversely
affecting  the ability of borrowers to re-pay loans and the value of real estate
securing  repayment  of loans;  general  economic and market  conditions  in the

<PAGE>
Company's market area may decline,  adversely affecting the ability of borrowers
to re-pay  loans,  the value of real  estate  securing  payment of loans and the
Company's  ability to make profitable loans;  adverse  legislation or regulatory
requirements  may  be  adopted;   and  competitive   pressure  among  depository
institutions  may increase.  Any of the above may also result in lower  interest
income, increased loan losses, additional charge-offs and write-downs and higher
operating  expenses.  The Company  disclaims  any intent or obligation to update
publicly any of the forward looking  statements  herein,  whether in response to
new information, future events or otherwise.

GENERAL
-------
Ipswich  Bancshares,  Inc. (the Company) is a  Massachusetts  corporation  whose
primary business is serving as the holding company for Ipswich Savings Bank (the
Bank).  On July 1, 1999, in connection  with the formation of the Company as the
holding company for the Bank,  each share of the Bank's common stock  previously
outstanding  was converted  automatically  into one share of common stock of the
Company,  and the Bank became a wholly  owned  subsidiary  of the  Company.  The
reorganization had no impact on the consolidated financial statements.

The  Company's  operating  results  for the three  months  ended  March 31, 2000
reflect the operations of the Company and its direct and indirect  subsidiaries,
Ipswich Savings Bank, Ipswich Preferred Capital Corporation,  Ipswich Securities
Corporation,  North Shore Financial Services,  Rowley Investment Corporation and
Historic  Ipswich,  Inc.  The Company is in the  business of making  residential
mortgage loans, while attracting  deposits from the general public to fund those
loans.  The Company operates out of its main office located at 23 Market Street,
Ipswich, Essex County,  Massachusetts,  and its seven full-service retail branch
offices, located in Beverly, Essex,  Marblehead,  North Andover, Rowley, Reading
and Salem, Massachusetts.  The Company operates Automatic Teller Machines at its
Main  Office  and each of its  full-service  retail  branch  offices.  As a bank
holding  company,  the  Company  is  subject  to  regulation,   supervision  and
examination  by the Board of  Governors  of the  Federal  Reserve  (the  Federal
Reserve) and the Bank is subject to regulation,  supervision  and examination by
the  Federal  Deposit  Insurance  Corporation  (the FDIC) and the  Massachusetts
Commissioner of Banks (the Commissioner).

ASSET / LIABILITY MANAGEMENT
----------------------------
The Company does not use static GAP  analysis to manage its interest  rate risk.
It believes that simulation  modeling more accurately  encompasses the impact of
changes in interest rates on the earnings of the Company over time. However, the
Company prepares a GAP schedule to measure its static position.

Assets and  liabilities are classified as interest rate sensitive if they have a
remaining  term to maturity  of 0-12  months,  or are  subject to interest  rate
adjustment  in those time  periods.  Adjustable  rate loans and mortgage  backed
securities are shown as if the entire  balance comes due on the repricing  date.
Estimates of fixed rate loan  amortization  prepayments  are included  with rate
sensitive  assets.  Because  regular  savings,  demand  deposits,  money  market
accounts  and NOW  accounts  may be  withdrawn  at any time and are  subject  to
interest rate  adjustments  at any time,  they are presented  based upon assumed
maturity  structures.  As a result of this analysis,  the static GAP position in
the 0 to 12 months range is a negative $1.8 million at March 31, 2000.
<PAGE>
Interest rate sensitivity statistics are static measures that do not necessarily
take into  consideration  external  factors which may affect the  sensitivity of
assets and  liabilities,  and  consequently can not be used alone to predict the
operating results of a financial institution in a changing environment.

LIQUIDITY
---------
The Company seeks to ensure that sufficient  liquidity is available to meet cash
requirements  while  earning a return on liquid  assets.  The  Company  uses its
liquidity  primarily to fund loans and  investment  commitments,  to  supplement
deposit  outflows,  to fund its share  repurchase  program and to meet operating
expenses.   The  primary   sources  of  liquidity  are  interest  and  principal
amortization from loans,  mortgage backed securities and investments,  sales and
maturities of investments,  loan sales,  deposits, and Federal Home Loan Bank of
Boston (the FHLBB)  advances,  which  includes a $3.2 million  overnight line of
credit.  The Company also uses longer term borrowed  facilities within its total
available credit line with the FHLBB. Advances from the FHLBB were $43.0 million
at March 31, 2000.

During 2000 the primary  sources of  liquidity  were $1.9 million in loan sales,
principal  amortization  from mortgage backed securities of $2.1 million and the
sale of investment  securities  of $7.0 million.  The primary uses of funds were
$12.6  million in  residential  mortgage loan  originations  and $2.1 million in
investment purchases.

CAPITAL RESOURCES
-----------------
Total  stockholders'  equity at March 31, 2000 was $17.6 million, an increase of
$658,000 from $17.0 million at the end of 1999. Included in stockholders' equity
at March 31, 2000 is an unrealized gain on marketable  securities  available for
sale, net of taxes, of $167,000,  an increase of $157,000 as compared to $10,000
at December 31, 1999.  Future  interest rate  increases  could reduce the market
value of these securities and reduce stockholders' equity. The Federal Reserve's
and  the  FDIC's   capital   guidelines   require  the  Company  and  the  Bank,
respectively,  generally to maintain a minimum Tier 1 leverage  capital ratio of
at least 4% (5% to be classified as "well-capitalized").  At March 31, 2000 Tier
1 leverage capital ratio for the Company was 6.32% compared to 6.33% at December
31,  1999 and 6.24% and 6.29% for the Bank on March 31,  2000 and  December  31,
1999, respectively.

The  Federal  Reserve  and  the  FDIC  have  also  imposed   risk-based  capital
requirements  on the Company and the Bank,  respectively,  which give  different
risk  weightings  to  assets  and to off  balance  sheet  assets,  such  as loan
commitments.  The Federal Reserve's and the FDIC's risk-based capital guidelines
require  the  Company and the Bank,  respectively,  to maintain a minimum  total
risk-based capital ratio of 8% (10% to be classified as "well-capitalized")  and
a  Tier  1   risk-based   capital   ratio  of  4%  (6%  to  be   classified   as
"well-capitalized").  At  March  31,  2000,  the  Company's  total  and  Tier  1
risk-based  capital ratios were 14.45% and 13.20% (compared to 14.38% and 13.13%
at December 31, 1999). At March 31, 2000, the Bank's total and Tier 1 risk based
capital ratios were 14.31% and 13.06% (compared to 14.29% and 13.04% at December
31, 1999).

As  of  March  31,  2000,  the  Bank  was  considered  "well-capitalized"  under
applicable regulatory capital guidelines.
<PAGE>
FINANCIAL CONDITION
-------------------
The Company's  total assets at March 31, 2000 were $281 million,  an increase of
$4.7 million from December 31, 1999, assets of $276.3 million.  The increase was
largely due to the addition of $3 million in residential  loans and $8.6 million
in fed funds sold, offset by a decrease in investment  securities  available for
sale of $6.5  million.  Funding the increase in assets was first quarter of 2000
deposit  growth of $6.2  million,  primarily in checking  accounts,  savings and
money market accounts. Conversely,  borrowed funds declined by $2 million in the
first quarter of 2000.

Federal Funds Sold
------------------
Interest-bearing  deposits  and  federal  funds sold at March 31, 2000 was $10.3
million,  versus $1.7 million at December  31,  1999.  The increase in fed funds
sold was  primarily  due to the  Company's  accumulation  of cash to manage  its
borrowing  position  in the  second  quarter  of 2000 and to take  advantage  of
opportunities  to  purchase  investment  securities  and  manage  the  Company's
interest rate risk position.

Investment and Mortgage-Backed Securities
-----------------------------------------
Total investments and mortgage backed securities available for sale at March 31,
2000 was $33  million,  a decrease  of $6.5  million in the first  quarter.  The
decrease was  primarily  the result of the sale of a $5 million US Treasury Bill
which was purchased  with excess  liquidity at year-end  1999. In addition,  the
Company  experienced  a  decrease  in the  portfolio  as a result  of  principal
amortization of $1.9 million in its portfolio of mortgage-backed securities.

Total  investments  and  mortgage-backed  securities  held to maturity was $27.9
million at March 31,  2000,  versus  $28.1  million at December  31,  1999.  The
decline is due to principal  amortization  on the  portfolio of  mortgage-backed
securities.

The  unrealized  gain on the  portfolio of available  for sale  securities,  was
$278,000  at March  31,  2000.  The  increase  in value  is  principally  in the
portfolio of adjustable rate mortgage-backed securities,  which in a rising rate
environment,  will  increase  in  yield as the  underlying  loans  reprice.  The
repricing aspect of these securities helps to sustain the market values.

Loans and Loans Held for Sale
-----------------------------
Loans  held for sale  increased  to  $607,000  at March 31,  2000,  versus $0 at
year-end 1999. The Bank's  portfolio of mortgages held for sale remains at a low
level as a result of the current interest rate environment.

The loan  portfolio  at March 31,  2000 was $196.3  million,  an  increase of $3
million in comparison  to the portfolio at December 31, 1999 of $193.3  million.
The increase was principally in adjustable rate mortgages, which are written for
portfolio  versus sale in the  secondary  market.  The Company will  continue to
place  adjustable  rate  mortgages  in its  portfolio  as a  result  of the more
favorable interest rate risk profile for these loans in comparison to fixed rate
loans.
<PAGE>
CREDIT QUALITY
--------------
Non-Performing Loans
--------------------
Loans placed on non-performing  status at March 31, 2000 was $31,000,  unchanged
since  year-end.  Accrual of  interest  on loans is  discontinued  either when a
reasonable  doubt  exists,  as to the full timely  collection  of principal  and
interest,  or when a loan comes  contractually  past due by ninety  (90) days or
more, unless the loan is adequately secured and in the process of collection.

When a loan is placed on nonaccrual status, all interest previously accrued, but
not collected,  is reversed  against current period interest  income.  Income on
such loans is  recognized  to the extent that cash is received  and the ultimate
collection  of  principal  and  interest  is  probable.   Following   collection
procedures,  the Company generally  institutes  appropriate actions to foreclose
the property.

Real Estate Acquired by Foreclosure
-----------------------------------
Real  estate  acquired  by  foreclosure  totaled  $49,000 at March 31,  2000,  a
decrease of $62,000 since  year-end 1999. The decrease is due to the sale of one
residential  piece  of  OREO  during  the  quarter.   Real  estate  acquired  by
foreclosure is reflected at the lower of the net carrying  value, or fair value,
of the property,  less estimated costs of disposition.  The current portfolio of
real estate in  foreclosure is comprised of three office  condominiums,  and two
pieces of raw land. The Company continues to make efforts to dispose of its OREO
properties.

Allowance for Loan Loss
-----------------------
The allowance for loan loss at March 31, 2000 was $1.8 million,  unchanged since
year-end  1999.  The entire  allowance  for loan losses is  available  to absorb
charge-offs  in any  category  of loans.  Loan  losses are  charged  against the
allowance when management believes that the collectibility of the loan principal
is unlikely. The allowance for possible loan losses is established by management
to absorb future  charge-offs  of loans deemed  uncollectible.  The allowance is
increased by provisions  charged to operating expense and by recoveries on loans
previously  charged-off.  In evaluating current information and events regarding
borrowers ability to repay their obligations,  management  considers  commercial
loans over  $200,000 to be impaired when it is probable that the Company will be
unable to be able to collect all amounts due, according to the contractual terms
of the note agreement;  other loans are evaluated  collectively  for impairment.
When a loan is  considered  to be  impaired,  the  amount of the  impairment  is
measured based on the present value of expected future cash flows  discounted at
the loan's effective interest rate or the fair value of collateral,  if the loan
is  collateral-dependent.  Impairment  losses are included in the  allowance for
loan  losses  through  a charge to the  provision  for loan  losses.  Management
believes that the allowance for possible loan losses is accurate as of March 31,
2000. While management uses available  information to recognize losses on loans,
future additions to the allowance may be necessary.
<PAGE>
------
Liabilities
Deposits  increased by $6.2 million in the first  quarter of 2000,  to end March
31, 2000 at $216.2  million.  Deposits  totaled  $210.1  million at December 31,
1999.  The increase in deposits  resulted  from the Company's  ongoing  checking
account  program which  generated $2.5 million in noninterest  bearing  checking
accounts balances in the first quarter. In addition,  savings accounts increased
by $1.5  million,  and money  markets  by $1.9  million  in the  first  quarter,
respectively.

Federal Home Loan Bank of Boston advances decreased by $2.0 million in the first
quarter of 2000 to $43 million at March 31, 2000.  Borrowed  funds are typically
used to manage the liquidity of the Company and the utilization of borrowings is
dependent on cash flows from other assets and liabilities.

Equity Capital
--------------
Equity capital  increased by $658,000 to $17.6 million at March 31, 2000. Equity
was  principally  impacted by earnings for the first three months of the year of
$747,000  and  an  increase  in  the  unrealized  gain  or  loss  on  investment
securities,  net of taxes of $157,000.  Offsetting these increases were payments
of cash dividends to shareholders which totaled $253,000 in the first quarter.


<PAGE>
         RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000
               COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1999

General
-------
The Company  reported net income of $747,000 or $.29 per fully diluted share for
the first quarter of 2000. This compares with $659,000 or $.26 per fully diluted
share for the first  quarter of 1999.  This  represents a 13.4%  increase in net
income  in 2000  versus  1999.  Earnings  in the  year  2000  were  impacted  by
recognition  of a  $190,000  tax  benefit,  resulting  from a  reduction  in the
Company's valuation reserve.  Offsetting the tax benefit was recognition of some
one-time consulting expenses totaling  approximately  $50,000,  legal consulting
expenses of  approximately  $30,000,  and  expenses  from the  ongoing  checking
account acquisition program which totaled $70,000.

Return on equity for the first quarter of 2000 was 17.12%, versus 18.12% for the
same  quarter  of 1999.  The first  quarter  of 2000  return on assets was 1.08%
versus .97% for the first quarter of 1999.

Net Interest and Dividend Income
--------------------------------
Net interest income for the first quarter of 2000 was $2.2 million,  versus $2.1
million for the same time frame in 1999. The net interest margin  percentage was
3.26% versus 3.16% for the same quarter the previous year.

As a result of the Bank's  interest rate risk  position,  net interest  margins,
while up in the first  quarter  of 2000,  may  experience  pressure  during  the
remainder of the current year,  due to the existing level and shape of the yield
curve.

Non-interest Income
-------------------
Non-interest  income for the first quarter of 2000 was $428,000  versus $891,000
in the first quarter of 1999.  Non-interest  income was significantly  higher in
1999 as a result of mortgage  banking  gains  generated  in that  quarter from a
strong mortgage  refinance  market at the end of 1998 and the beginning of 1999.
The current interest rate  environment  dictates lower  origination  volumes and
causes consumers to favor adjustable rate loan products,  which the Company does
not sell for gains in the secondary market.  Mortgage banking gains are expected
to be lower in the remainder of 2000 in comparison to 1999.

Retail  banking fees increased by 9.3%, or $32,000 in the first quarter of 2000,
versus  the same  quarter  in 1999.  This is  principally  due to the  Company's
ongoing  efforts to generate  checking  account  customers and overall growth in
both deposit dollars and the number of accounts.

Non-interest Expense
--------------------
Total  noninterest  expenses  were $1.8  million  for the first  quarter of 2000
versus $1.6 million for the same time frame in 1999.  Expenses  increased in the
current year over the previous year as a result of recognition of  approximately
$150,000 in  one-time  non-recurring  expenses.  In 1999 the Bank  recognized  a
$380,000 expense charged as a result of the formation of its holding company and
its Real Estate  Investment  Trust.  These expenses had a significant  impact on
1999 earnings.

Income Tax Expense
------------------
The first quarter of 2000, effective tax rate was 12.4% versus 30% for the first
quarter of 1999. The tax rate in 2000 was impacted by the Bank's  realization of
a $190,000  tax benefit  resulting  from a reduction in its  valuation  reserve.
Excluding  the one-time  tax credit,  the tax rate in 2000 is expected to be 35%
versus 28.7% in 1999, which was impacted by one-time tax benefits.
<PAGE>
ITEM 3
------

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The  Company's  success is dependent  upon its ability to manage  interest  rate
risk.  Interest  rate risk can be defined as the exposure of the  Company's  net
interest  income to adverse  movements in interest  rates.  Although the Company
manages other risks,  as in credit and  liquidity  risk, in the normal course of
its business, management considers interest rate risk to be its most significant
market  risk and  could  potentially  have the  largest  material  effect on the
Company's  financial  condition and results of  operations.  Because the Company
does not maintain a trading  portfolio,  it is not exposed to significant market
risk from trading activities.

The  Company's  interest  rate  risk  management  is the  responsibility  of the
Asset/Liability  Management  Committee  (ALCO).  ALCO establishes  policies that
monitor and coordinate  the Company's  sources,  uses and pricing of funds.  The
committee  is also  involved in  formulating  the economic  projections  for the
Company's budget and strategic plan.

The  Company  seeks to  reduce  the  volatility  of its net  interest  income by
managing the  relationship of  interest-rate  sensitive  assets to interest-rate
sensitive  liabilities.  In  recent  years,  the  focus  has  been to  originate
adjustable-rate  residential  loans for portfolio,  which reprice or mature more
quickly than fixed-rate  residential loans. The Company's  adjustable-rate loans
are primarily tied to published indices,  such as the one-year Constant Maturity
Treasury (CMT).

The  Company  utilizes  a  simulation  model  to  analyze  net  interest  income
sensitivity to movements in interest  rates.  The simulation  model projects net
interest income based on both a rise or fall in interest rates (rate shock) over
a twelve and twenty-four month period. The model is based on the actual maturity
and repricing characteristics of interest-rate sensitive assets and liabilities.
The model  incorporates  assumptions  regarding the impact of changing  interest
rates on the prepayment rate of certain assets and liabilities.  The assumptions
are based on nationally  published  prepayment  speeds on assets and liabilities
when  interest  rates  increase or decrease by 200 basis points or greater.  The
model factors in projections  for  anticipated  activity levels by product lines
offered by the  Company.  The  simulation  model also  takes  into  account  the
Company's  increased  ability to control the rates on deposit  products  more so
than adjustable-rate loans tied to published indices.

Interest rate risk  represents the  sensitivity of earnings to changes in market
interest rates. As interest rates change the interest income and expense streams
associated  with  the  Company's  financial  instruments  also  change,  thereby
impacting  net interest  income  (NII),  the primary  component of the Company's
earnings.  ALCO  utilizes  the  results of the  simulation  model and static GAP
reports to quantify the  estimated  exposure of NII to sustained  interest  rate
changes.

The following  reflects the Company's  NII  sensitivity  analysis as of the time
frames analyzed:

Rate Change                        Estimated NII Sensitivity Over Twelve Months
--------------------------------------------------------------------------------
                                   March 31, 2000                April 30, 1999
                                   ---------------------------------------------
+200bp                              -3.44%                       -5.60%
-200bp                              -0.51%                       +5.59%

<PAGE>
The preceding sensitivity analysis does not represent the Company's forecast and
should not be relied upon as being  indicative  of expected  operating  results.
These hypothetical estimates are based upon numerous assumptions including:  the
nature  and  timing  of  interest  rate  levels  including  yield  curve  shape,
prepayments on loans and securities,  deposit decay rates,  pricing decisions on
loans and deposits,  reinvestment/replacement of asset and liability cash flows,
and others.  While  assumptions  are developed  based upon current  economic and
local  market  conditions,  the  Company  cannot make any  assurances  as to the
predictive  nature of these  assumptions  including how customer  preferences or
competitor influences might change.

Also, as market conditions vary from those assumed in the sensitivity  analysis,
actual  results will also differ due to:  prepayment/refinancing  levels  likely
deviating from those assumed, the varying impact of interest rate change caps or
floors on adjustable-rate  assets, the potential effect of changing debt service
levels on customers with adjustable-rate  loans, depositor early withdrawals and
product preference changes, and other internal/external variables.  Furthermore,
the  sensitivity  analysis  does not  reflect  actions  that ALCO  might take in
responding to or anticipating changes in interest rates.


<PAGE>
                     IPSWICH BANCSHARES, INC. AND SUBSIDIARY

PART II - OTHER INFORMATION
Item 1.        Legal Proceedings
--------------------------------
None

Item 2.        Changes in Securities and use of Proceeds
--------------------------------------------------------
None

Item 3.        Defaults Upon Senior Securities
----------------------------------------------
None

Item 4.        Submission of Matters to a Vote of Security Holders
------------------------------------------------------------------
a.      The Bank's Annual Meeting of Stockholders was held on April 26, 2000.

b.      The  following  is a brief  description  of the matter voted upon at the
        Annual Meeting, including the tabulation of votes:

        1.     Election of three Directors, each for a three-year term:

                                               Votes for      Votes Withheld

               William M. Craft               2,142,055           130,664
               David L. Grey                  2,139,131           133,588
               John H. Morrow                 2,131,055           141,664

Item 5.        Other Information
--------------------------------
None

Item 6.        Exhibits and Reports on Form 8-K
-----------------------------------------------
a.      Exhibits

b.      Reports on Form 8-K

        1. The Company filed a current  report on Form 8-K (Item 5) on March 22,
2000, detailing the institution of a Stock Repurchase Plan for the Company.

c.      Exhibits

        2.1 Plan of Reorganization and Acquisition dated as of February 17, 1999
between the Company and Ipswich  Savings Bank  incorporated  by reference to the
Company's Form 8-K filed on July 9, 1999.

        3.1 Articles of  Organization of the Company dated February 12, 1999 and
incorporated by reference herein from the Company's June 30, 1999 Form 10-Q.

        3.2 By-laws of the Company is incorporated by reference  herein from the
Company's June 30, 1999 Form 10-Q.

        4.1  Specimen  stock  certificate  for the  Company's  Common  Stock  is
incorporated by reference herein from the Company's June 30, 1999 Form 10-Q.
<PAGE>
        10.1 Lease dated August 10, 1992 for  premises  located at Route 133 and
Route 1, Rowley,  Massachusetts  is  incorporated  by reference  herein from the
Company's June 30, 1999 Form 10-Q.

        10.2 Lease  dated  April 25,  1994 for  premises  located at 451 Andover
Street,  North Andover,  Massachusetts  is incorporated by reference herein from
the Company's June 30, 1999 Form 10-Q.

        10.3 Lease dated March 4, 1996 for premises located at 588 Cabot Street,
Beverly,  Massachusetts  is incorporated by reference  herein from the Company's
June 30, 1999 Form 10-Q.

        10.4  Lease  dated  July 27,  1997 for  premises  located  at 600 Loring
Avenue,  Salem,  Massachusetts  is  incorporated  by  reference  herein from the
Company's June 30, 1999 Form 10-Q.

        10.5 Lease dated  February 27, 1998 for premises  located at 89 Pleasant
Street,  Marblehead,  Massachusetts is incorporated by reference herein from the
Company's June 30, 1999 Form 10-Q.

        10.6 Lease dated June 12, 1998 for premises  located at 470 Main Street,
Reading,  Massachusetts  is incorporated by reference  herein from the Company's
June 30, 1999 Form 10-Q.

        10.7*  Incentive  Compensation  Plan for Senior  Management  and certain
other officers dated September 15, 1995 is incorporated by reference herein from
the Company's June 30, 1999 Form 10-Q.

        10.8* Director  Recognition  and  Retirement  Plan adopted as of May 18,
1999 is incorporated  by reference  herein from the Company's June 30, 1999 Form
10-Q.

        10.9* Merger and Severance  Benefits  Program dated February 18, 1998 is
incorporated by reference herein from the Company's June 30, 1999 Form 10-Q.

        10.10* Amended and Restated Employment and Severance Agreement dated May
18, 1999  between  Ipswich  Savings  Bank and David L. Grey is  incorporated  by
reference herein from the Company's June 30, 1999 Form 10-Q.

        10.11* Amended and Restated Employment and Severance Agreement dated May
18, 1999 between  Ipswich  Savings Bank and Francis  Kenney is  incorporated  by
reference herein from the Company's June 30, 1999 Form 10-Q.

        10.12*  Amended  and  Restated  Severance  Agreement  dated May 18, 1999
between  Ipswich  Savings Bank and Thomas R. Girard is incorporated by reference
herein from the Company's June 30, 1999 Form 10-Q.

        10.13* Employment  Agreement dated June 18, 1998 between Ipswich Savings
Bank and  Richard P.  Duffett  is  incorporated  by  reference  herein  from the
Company's June 30, 1999 Form 10-Q.

        10.14(a)*Amended  and Restated Split Dollar Agreement dated May 18, 1999
among Ipswich  Savings Bank,  Eastern Bank and David L. Grey is  incorporated by
reference herein from the Company's June 30, 1999 Form 10-Q.

        10.14(b)*Amended and Restated Ipswich Irrevocable  Insurance Trust dated
as of May 18,  1999 by and between  Ipswich  Savings  Bank and  Eastern  Bank is
incorporated by reference herein from the Company's June 30, 1999 Form10-Q.
<PAGE>
        10.15  Contract with Bank's data  processor  dated  February 14, 1997 is
incorporated by reference herein from the Company's June 30, 1999 Form 10-Q.

        10.16* 1992 Incentive and  Non-qualified  Stock Option Plan incorporated
by reference to the Company's  Registration  Statement on Form S-8 filed on July
22, 1999.

        10.17*  1996 Stock  Incentive  Plan  incorporated  by  reference  to the
Company's Registration Statement on Form S-8 filed on July 22, 1999.

        10.18*  1998 Stock  Incentive  Plan  incorporated  by  reference  to the
Company's Registration Statement on Form S-8 filed on July 22, 1999.

        10.19*  Deferred   Compensation  Plan  for  Directors   incorporated  by
reference to the Company's Form S-8 filed on July 22, 1999.

        10.20  Contract  dated April 6, 2000 with US Bancorp for ATM  processing
services.

        11. A statement  regarding  the  computation  of  earnings  per share is
included in the Notes to Consolidated Financial Statements.

        12.    Not applicable.

        27.    Financial Data Schedule.

*       Denotes Management Contract or Compensation Plan.
<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

IPSWICH BANCSHARES, INC.


By:     /s/ David L. Grey                                 Date:  April 28, 2000
        -----------------
        David L. Grey
        President and Chief Executive Officer


By:     /s/ Francis Kenney                                Date:  April 28, 2000
        ------------------
        Francis Kenney
        Treasurer
        (Principal Financial Officer and Principal Accounting Officer)


<PAGE>
                           NETWORK SERVICES AGREEMENT

               THIS NETWORK  SERVICES  AGREEMENT  (this  "Agreement") is entered
into  effective as of the date  provided in Section  15.1 below,  by and between
U.S.  BANK N. A., with its  principal  place of  business  at 601 Second  Avenue
South,  Minneapolis,  Minnesota 55402 ("Bank"),  and IPSWICH SAVINGS BANK, d/b/a
IPSWICHBANK,  with its principal place of business at 23 Market Street, Ipswich,
MA 01038 ("Company").

                                    Recitals

     A. Bank maintains,  operates,  administers and participates in computerized
communication and data processing  networks  (collectively,  the "Bank Network")
which permit and facilitate the  transaction of  computerized  banking and other
similar  computerized  services on a national and international  basis. Bank has
the capability to offer such computerized network services to third parties.

     B. Company offers certain  computerized  network  services to its customers
("Customers"),   and/or  requires  certain   computerized  network  services  in
connection with Company's business.

     C.  Company  desires  to obtain  from Bank and Bank  desires  to provide to
Company the computerized network services and other ancillary services described
herein.

                                    Agreement

               NOW THEREFORE,  in consideration of the foregoing  premises,  the
mutual promises and covenants  contained herein, and for other good and valuable
consideration,  the sufficiency and receipt of which is hereby acknowledged, the
Parties agree as follows:

     1.  Definitions.  In addition to other terms  specifically  defined in this
Agreement,  the following  terms used in this Agreement shall have the following
meanings (unless otherwise expressly provided herein):

             1.1      "AAA" means the American Arbitration Association.

             1.2      "AAA  Rules"  shall  have the  meaning  given such term in
        Section 15.10 below.

             1.3      "ACH" means the Automated Clearing House.

             1.4 "Affiliate"  means, with respect to any Person, any Person that
        controls,  is controlled by or is under common control with such Person.
        A Person shall be presumed to have control when it possesses  the power,
        directly  or  indirectly,  to  direct,  or cause the  direction  of, the
        management or policies of another Person,  whether through  ownership of
        voting securities, by contract, or otherwise.

             1.5 "Average  Monthly  Processing Fee" means an amount equal to the
        fees,  charges and expenses  payable by Company to Bank pursuant to this
        Agreement  for the three  highest  volume months during the term of this
        Agreement  preceding  Company's  breach of this  Agreement,  which three
        months need not be  consecutive,  divided by three,  which  amount shall
        then be multiplied by the number of months  remaining during the term of
        this Agreement.
<PAGE>
             1.6  "Agreement"  means this  Agreement,  as amended,  modified and
        supplemented from time to time.

             1.7      "ATM" means automated teller machine.

             1.8      "Bank"  means  U.S.   Bank  N.  A.,  a  national   banking
        association.

             1.9      "Bank Amendment" shall have the meaning given such term in
        Section 13 below.

             1.10 "Bank Indemnified  Party" or "Bank Indemnified  Parties" means
        individually  or  collectively,  as applicable,  Bank,  its  Affiliates,
        and/or their  respective  directors,  officers,  shareholders,  members,
        managers,  partners,  joint-venturers,  agents, employees,  spouses, and
        legal, personal and/or other representatives.

             1.11     "Bank  Network"  shall have the meaning given such term in
        Recital A above.

             1.12     "Base   Agreement"  means  the  body  of  this  Agreement,
        excluding the Exhibits.

             1.13     "Company" means Ipswich Savings Bank D/B/A IpswichBank.

             1.14 "Company  Indemnified Party" or "Company  Indemnified Parties"
        means,  individually  or  collectively,  as  applicable,   Company,  its
        Affiliates, and/or their respective directors,  officers,  shareholders,
        members, managers, partners,  venturers, agents, employees, spouses, and
        legal,  personal  and/or  other  representatives.   Company  Indemnified
        Parties do not include Customers.

             1.15 "Confidential  Information" shall mean all trade secrets,  and
        confidential and proprietary  business information received by one Party
        from  another  Party in whatever  form or medium.  Without  limiting the
        generality of the foregoing  Confidential  Information shall include (i)
        all technical and operational data, specifications,  materials,  manuals
        and any other  information  received  by Company  from Bank from time to
        time  regarding this Agreement  (including,  without  limitation fee and
        payment  provisions),   Bank,  the  Network  or  the  Network  Services,
        including,  without limitation,  (ii) information  received by Bank from
        Company relating to Company or Company's method of conducting business.

             1.16     "Customers"  shall  have the  meaning  given  such term in
        Recital B above.

             1.17  "Dispute"  means any action,  dispute,  claim or  controversy
        between the Parties pertaining to or in connection with this Agreement.

             1.18     "Effective Date" shall have the meaning given such term in
        Section 15.1 below.

             1.19     "Exhibits" means,  collectively,  the Exhibits attached to
        this Agreement.

             1.20 "Federal  Arbitration  Act" means Title 9 of the United States
        Code, as amended, or any successor provisions thereto.
<PAGE>
             1.21 "Insolvency" means a Party becoming insolvent or unable to pay
        its debts as they  mature,  filing a voluntary  petition in  bankruptcy,
        filing  an answer  admitting  to the  jurisdiction  of the court and the
        material  allegations of an involuntary  petition,  making an assignment
        for the benefit of  creditors,  or  applying  for or  consenting  to the
        appointment of any receiver or trustee for all or  substantially  all of
        its property.

             1.22     "Laws" means,  collectively,  all foreign,  federal, state
        and local laws, rules, ordinances and regulations.

             1.23  "Losses"  means  any  and  all  claims,  judgments,  damages,
        penalties,  fines, costs,  liabilities,  losses or expenses  (including,
        without limitation, reasonable attorneys' fees and expenses).

             1.24  "Material Bank  Amendment"  shall have the meaning given such
        term in Section 13 below.

             1.25 "Network Operating  Regulations"  means the bylaws,  rules and
        regulations of the Network Organizations,  as amended from time to time,
        and as such exist from time to time.

             1.26     "Network  Organization" or "Network  Organizations"  means
        individually or collectively,  as applicable,  PLUS System, Inc., CIRRUS
        System,  Incorporated,  VISA USA, Inc., MasterCard International,  Inc.,
        Greenwood Trust Company and/or American  Express Travel Related Services
        Company, Inc.

             1.27     "Network  Services" shall have the meaning given such term
        in Section 2.1 below.

             1.28  "Nonperformance"  the failure of a Party to pay any  monetary
        obligation  hereunder  or  to  substantially  perform  any  non-monetary
        material condition, obligation, requirement or service hereunder.

             1.29     "Orders" means, collectively, all orders or decrees of any
        governmental agencies, courts or authorities.

             1.30     "Party" or "Parties" means  individually or  collectively,
        as applicable, the Bank and/or Company.

             1.31     "Person"   means  an  individual,   partnership,   limited
        liability company, association, corporation or other entity.

             1.32     "Renewal  Term" shall have the meaning  given such term in
        Section 4.1 below.

             1.33     "Settlement  Account"  shall have the  meaning  given such
        term in Section 3.2(a) below.

             1.34     "Transaction"  shall have the  meaning  given such term in
        the Exhibits.

     2.        Services; Exclusivity.
               ---------------------

             2.1  Services.   Subject  to  the  terms  and  conditions  of  this
        Agreement,  Bank  shall  provide  to Company  the  computerized  network
        services  and other  ancillary  services  set forth in  Exhibits A and B
        attached hereto (collectively, the "Network Services").
<PAGE>
             2.2      Company  Assistance.  At the  request  of  Company  and in
        accordance  herewith,   Bank  shall  assist  Company  as  is  reasonably
        necessary to resolve Bank-based operational or systemic problems.

             2.3 Exclusivity.  During the term of this Agreement,  Bank shall be
        the sole and exclusive provider of the Network Services to Company. Bank
        and Company acknowledge and agree that the damages that will be suffered
        by Bank if Company  breaches  the  provisions  of this  Section  2.3 are
        uncertain  in  amount  and  will be  difficult  to  prove.  Accordingly,
        notwithstanding  anything to the contrary contained herein,  Company and
        Bank  intend to  liquidate  such  damages in the  amount of the  Average
        Monthly  Processing  Fee,  which amount shall be paid by Company to Bank
        upon the demand of Bank in the manner  specified  in Section  3.2 below.
        Company  and Bank agree that such  liquidated  damages are not a penalty
        and are a reasonable  estimate of such damages.  Notwithstanding  Bank's
        right to  liquidated  damages,  Bank shall be entitled to pursue any and
        all remedies  available to Beneficiary  hereunder,  at law or in equity,
        whether in addition to liquidated damages or as an alternative thereto.

     3.        Fees and Payment.
               ----------------

             3.1 Fees. In consideration of the Network Services  provided to the
        Company  hereunder,  Company  shall  pay to Bank the fees,  charges  and
        expenses as set forth in Exhibits A and B attached  hereto.  In addition
        to such fees, charges and expenses, Company shall pay all fees, charges,
        expenses,  penalties,  fines,  assessments  and  additional or increased
        costs of any nature as may be charged by a Network  Organization  or any
        other third party, or as may be otherwise incurred by Bank in connection
        with its performance of this  Agreement,  whether charged or incurred by
        Bank, directly or indirectly.

             3.2      Payment of Fees.
                      ---------------

                    (a) Settlement Account.  Company shall at all times maintain
               a depository  account at a financial  institution  acceptable  to
               Bank for the  purposes  of settling  daily and  monthly  activity
               pursuant  to this  Agreement,  for  billing  and payment of fees,
               charges and expenses due  hereunder,  and for all other  purposes
               described  hereunder or determined to be appropriate by Bank (the
               "Settlement Account").

                    (b) Payment.  Within  twenty-five (25) days after the end of
               each calendar month during the term hereof,  Bank shall calculate
               the  fees,  charges  and  expenses  payable  to Bank  by  Company
               hereunder  with respect to such  concluded  calendar  month,  and
               shall be entitled to debit the Settlement  Account by ACH for all
               such  amounts  on the last  day of the  month  for the  preceding
               calendar month.  In the event funds in the Settlement  Account at
               the  time of such  debit  are  insufficient  to pay Bank the full
               amounts due Bank, Company shall, upon demand by Bank, immediately
               pay Bank such remaining  amounts by ACH or other method specified
               by Bank.
<PAGE>
                    (c) Billing Statements; Disputed Charges. Within twenty-five
               (25) days after the end of each  calendar  month  during the term
               hereof,  Bank shall  deliver to Company a statement  of the fees,
               charges and expenses  payable to Bank by Company  hereunder  with
               respect to such concluded  calendar month. All amounts  reflected
               on such  statement  shall  be final  unless  Company  delivers  a
               written  notice to Bank  disputing any such amounts within ninety
               (90) days after Company's receipt of such statement.

     4.        Term and Termination.
               --------------------

             4.1 Term. Unless terminated  earlier in accordance with Section 4.2
        below,  the  initial  term of this  Agreement  shall  commence as of the
        Effective  Date and terminate five (5) years after the date of the first
        successful  Transaction,  and shall be automatically renewed on the same
        terms and conditions for successive  three (3) year renewal terms (each,
        a "Renewal Term")  thereafter,  unless one Party provides written notice
        to the  other  Party of its  intent  not to renew at least  one (1) year
        prior to the expiration of the term then in effect.

             4.2      Early Termination.
                      -----------------

                   (a) Termination By Bank. Bank may immediately  terminate this
               Agreement by written  notice to Company upon or at any time after
               the occurrence of any of the following events:

                              (i) The  taking of control  or  possession  of the
                      assets of Company by any governmental authority.

                              (ii) The  dissolution,  liquidation  (partially or
                      wholly),  consolidation  or merger of the Company,  or its
                      participation in any other business combination.

                              (iii) The sale,  lease,  assignment,  transfer  or
                      other disposition of any substantial part of the Company's
                      assets in a single  transaction or series of transactions,
                      which Bank reasonably  deems to be material and adverse to
                      Bank and/or Company.

                              (iv) Any  change in the  ownership  of the  voting
                      stock or equity of the Company in a single  transaction or
                      series of transactions,  which Bank reasonably deems to be
                      material and adverse to Bank and/or Company.

                              (v) The  occurrence  of any adverse  change in the
                      financial condition of the Company,  which Bank reasonably
                      deems to be material and adverse to Bank and/or Company.

                              (vi) If any statement,  representation or warranty
                      made by Company to Bank, or materials  provided by Company
                      to Bank,  is or are  deemed  by Bank to be  untrue  in any
                      material respect,  either when made or provided, or during
                      the term of this Agreement.
<PAGE>
                              (vii) This  Agreement is  prohibited  by a Network
                      Organization,  or the  performance  of this  Agreement  is
                      substantially    impaired   by   any   Network   Operating
                      Regulations, as determined by Bank.

                              (viii)  The  conviction  by a court  of  competent
                      jurisdiction of a Company  principal or manager for fraud,
                      dishonesty or theft.

                              (ix) Based upon the financial information provided
                      by  Company  pursuant  to this  Agreement  and such  other
                      information  obtained by Bank from any source,  which Bank
                      deems to be  relevant,  the  failure of Company to satisfy
                      Bank's  credit  standards and criteria in effect from time
                      to  time  with  respect  to the  Network  Services  and/or
                      Company's relationships with Bank.

                              (x)   Termination   or   suspension  of  Company's
                      membership rights in any applicable Network Organization.

                    (b) Termination by Company.  In the event of a Material Bank
               Amendment  to which  Company  objects,  Company  shall  provide a
               written  notice  of  objection  to Bank (an  "Objection  Notice")
               within thirty (30) days after Company's receipt of written notice
               of such Material Bank Amendment from Bank. Company and Bank shall
               then use their  reasonable  best  efforts to resolve such dispute
               for a thirty (30) day period after Bank's receipt of an Objection
               Notice.  In the event Bank and Company are unable to resolve such
               dispute within such thirty (30) day period, Company may terminate
               this Agreement by delivering a written termination notice to Bank
               after the expiration of such thirty (30) day  resolution  period.
               Pending resolution of such dispute, the Parties shall continue to
               diligently  observe the terms and  provisions  of this  Agreement
               without  an  increase  in  fees  or  charges  payable  to Bank by
               Company, if any, related to such Material Bank Amendment.  In the
               event  Company  fails to timely  deliver an  Objection  Notice to
               Bank,  Company  shall be deemed to be have accepted such Material
               Bank Amendment.

                    (c)   Termination Upon Event of Default.
                          ---------------------------------

                              (i) Event of Default. The occurrence of any of the
                      following  events shall  constitute  an "event of default"
                      hereunder:

                                      (I) Nonperformance.  A nonperforming Party
                                 shall  have  (a) ten  (10)  days  to  cure  any
                                 Nonperformance   of   a   monetary   obligation
                                 following  written  notice from the other Party
                                 of nonpayment,  and (b) sixty (60) days to cure
                                 any Nonperformance of a non-monetary condition,
                                 obligation,  requirement  or service  following
                                 written  notice  from  the  other  Party of the
                                 Nonperformance,  and so long  thereafter as may
                                 be   reasonably    necessary,    provided   the
                                 non-performing Party proceeds in good faith and
                                 with due  diligence  to  remedy  and cure  such
<PAGE>
                                 Nonperformance.  Such notice shall  specify the
                                 Nonperformance   in   reasonable   detail.   If
                                 Nonperformance   is  not   cured   within   the
                                 applicable  cure  period,  an event of  default
                                 hereunder shall be deemed to have occurred.

                                      (II) Insolvency. If Insolvency occurs with
                                 respect  to either  Party,  an event of default
                                 hereunder  shall  be  deemed  to have  occurred
                                 hereunder.

                              (ii) Result of  Default.  Upon an event of default
                      hereunder,  the performing Party may immediately terminate
                      this Agreement by delivering a written  termination notice
                      to the other  Party  and/or may  pursue  any other  remedy
                      available to the performing Party at law or in equity. The
                      exercise  of any right or remedy  shall not  preclude  the
                      concurrent  or  subsequent  exercise of any other right or
                      remedy, and all rights and remedies shall be cumulative.

                    (d)  Penalty  for  Early  Termination.  In  addition  to the
               Deconversion  Fees set forth in  Exhibits A and B hereto,  in the
               event of early termination by Company,  Company shall pay to Bank
               an Early Termination Fee in an amount equal to the average of the
               three (3)  largest  monthly  processing  fees for the  terminated
               services  during  the Term of the  Agreement,  multiplied  by the
               number of months remaining in the then current Term, then divided
               by fifty percent (50%).  Notwithstanding  the above,  however, in
               the event fifty  percent  (50%) or more of the  ownership  of the
               Company is acquired by one or more unrelated third parties,  Bank
               will not assess an Early Termination Fee.

                    (e) No Other Termination. Except for the right of a Party to
               give notice of non-renewal of this Agreement  pursuant to Section
               4.1 above, neither Party may terminate this Agreement,  except as
               provided in this Section 4.2.

     5.        Exhibits; Network Operating Regulations; Conflict.
               -------------------------------------------------

             5.1  Governing  Authority.   The  Parties'  respective  rights  and
        obligations  hereunder are governed by this  Agreement,  and the Network
        Operating Regulations, as applicable.

             5.2 Exhibits;  Conflict.  The Exhibits are  incorporated  herein by
        this  reference.  Notwithstanding  anything  to the  contrary  contained
        herein,  the  terms  and  provisions  of the  Base  Agreement  shall  be
        modified,  supplemented  and/or  replaced by the terms and provisions of
        the Exhibits. Without limiting the applicability of the other provisions
        of the  Base  Agreement,  the  provisions  of the  Exhibits  shall be in
        addition  to,  and not in lieu  of,  the  other  provisions  of the Base
        Agreement;  provided,  however,  where a provision  or any portion of an
        Exhibit  conflicts with the other provisions of the Base Agreement,  the
        provision or portion  thereof set forth in such Exhibit shall prevail to
        the extent of such conflict.

             5.3 Network Operating Regulations;  Conflict. The Network Operating
        Regulations, if and to the extent applicable, are incorporated herein by
        this  reference.  Notwithstanding  anything  to the  contrary  contained
<PAGE>
        herein,  the terms and provisions of this  Agreement  shall be modified,
        supplemented  and/or replaced by the terms and provisions of the Network
        Operating  Regulations.  Without limiting the applicability of the other
        provisions of this  Agreement,  the provisions of the Network  Operating
        Regulations  shall be in  addition  to,  and not in lieu of,  the  other
        provisions of this Agreement;  provided,  however,  where a provision or
        any  portion of the Network  Operating  Regulations  conflicts  with the
        other provisions of this Agreement, the provision or portion thereof set
        forth in the Network  Operating  Regulations shall prevail to the extent
        of such  conflict.  Company  acknowledges  it will  abide by  applicable
        Network Operating Regulations, as in effect as of the Effective Date.

     6.        Company Obligations.
               -------------------

             6.1  Customer  Service  and  Communications.  Except  as  otherwise
        specifically  set  forth in this  Agreement,  Company  shall  be  solely
        responsible  for  providing all customer  service to the Customers  with
        respect to the Network  Services and Company's  provision of services to
        the Customers,  including  without  limitation  all related  charges and
        expenses of Bank, and settlement, reconciliation and other problems, and
        otherwise  communicating  with  and  servicing  the  Customers.   Bank's
        obligations  under this  Agreement  are limited to providing the Network
        Services  to Company  to enable  Company  to  provide  its goods  and/or
        services to the Customers.

             6.2 Hardware,  Software,  Equipment and Supplies.  Company,  either
        directly   and/or  as  arranged  by  Company  with  the  Customers,   is
        responsible   for   supplying   and    maintaining   all    electricity,
        communications   hardware  and  software,   and  all  other   equipment,
        materials, supplies and other requirements,  necessary for the effective
        use of the Network Services.

             6.3      Information Delivery Requirements.
                      ---------------------------------

                    (a)  Generally.   Company  shall  provide  Bank  with  true,
               accurate  and  complete  information  regarding  Company  and the
               Customers, as and when requested by Bank, in order to permit Bank
               to perform its obligations hereunder.

                    (b)  Financial  Information.  Within  thirty (30) days after
               Company's  receipt  of  Bank's  written  request,  Company  shall
               provide to Bank a copy or copies of Company's  audited  financial
               statements  as  prepared  by  an  independent   certified  public
               accountant  selected by Company, or Form 10-K as filed by Company
               with the Securities and Exchange  Commission,  for Company's most
               recent fiscal year.  Company shall also provide to Bank from time
               to time, as and when  requested by Bank,  such other  information
               regarding the financial  condition of Company.  In the event that
               Company has provided the foregoing financial information pursuant
               to another  relationship  between  Company  and Bank,  or between
               Company  and  any  Affiliate  of Bank  (if  such  information  is
               available to Bank),  Company will be deemed to have complied with
               the requirements of this Section.
<PAGE>
             6.4  Compliance  With  Network  Operating  Regulations  and Network
        Agreements.  Company  shall  (and  shall  cause its  Affiliates  and the
        Customers  to) at all times  comply  with and conduct  their  respective
        activities  in  accordance  with all the  terms  and  provisions  of the
        Network Operating Regulations,  and any other agreement to which Company
        and a Network  Organization are parties (including,  without limitation,
        any Network Organization  membership  agreements),  all as applicable to
        the Network Services and Company's provision of goods and/or services to
        the Customers.

             6.5 Compliance with Laws and Orders. Company shall (and shall cause
        its  Affiliates  and the  Customers  to) at all  times  comply  with and
        conduct their  respective  activities  in  accordance  with all Laws and
        Orders  applicable to the Network  Services and  Company's  provision of
        goods and/or services to the Customers.

     7.        Network Organizations.
               ---------------------

             7.1 Network Organization Membership and Sponsorship.  If it becomes
        necessary for Company to obtain some form of membership with any Network
        Organization(s)  in connection with the Network Services,  Company shall
        obtain and maintain such membership(s). Bank may, as part of the Network
        Services,  use all  reasonable  efforts to perform such acts and do such
        things as may be required by a Network Organization to assist Company in
        obtaining such  membership(s),  including  sponsoring the Company in the
        Network Organization(s). Company shall pay any and all initial and other
        ongoing  registration  and  membership  fees  assessed  by  any  Network
        Organization(s)  with respect to Company's  membership(s)  therein,  and
        shall  reimburse  Bank on demand in the manner  specified in Section 3.2
        above for any and all costs and expenses  incurred by Bank in connection
        with assisting Company in obtaining such membership(s).

             7.2  Network  Organization  Obligations.  Company  shall  take  all
        actions  required  from  time  to time by any  Network  Organization  in
        connection with the Network Services,  and shall pay all fees,  charges,
        fines,  penalties  or  other  costs  assessed  from  time to time by any
        Network  Organization in connection with the Network Services related to
        Company's acts or omissions.  In the event a Network  Organization bills
        Bank or requires Bank to pay any such fees, charges, fines, penalties or
        other costs,  Bank shall provide an invoice or written notice to Company
        of such assessed  amounts,  and Company shall, at the direction of Bank,
        pay such amounts directly to the Network  Organization or reimburse Bank
        on demand for such amounts in the manner specified in Section 3.2 above.

             7.3 Information  Reporting by Bank.  Company  acknowledges that the
        Network  Operating  Regulations  may require or encourage Bank to obtain
        and/or  report  information  regarding  Company  to one or more  Network
        Organizations.  Accordingly,  notwithstanding Section 8.2 below, Company
        hereby  authorizes Bank to provide any  information  obtained by Bank in
        connection with this Agreement to each Network Organization,  and hereby
        forever  releases,  discharges and acquits Bank from any Losses incurred
        by  Company  arising  from or  directly  or  indirectly  related to Bank
        obtaining   and/or   reporting   such   information   to   the   Network
        Organizations,  and shall  indemnify,  defend and hold harmless the Bank
        Indemnified  Parties  from and against  any Losses  incurred by any Bank
        Indemnified Party arising from or directly or indirectly related to Bank
        obtaining   and/or   reporting   such   information   to   the   Network
        Organizations.
<PAGE>
     8.        Confidentiality.
               ---------------

             8.1  Nondisclosure  and Nonuse by  Company.  Except as set forth in
        Section  8.3 below,  and subject to  compliance  with  applicable  court
        procedures,  if any,  Company will hold and use any and all Confidential
        Information of Bank in confidence and as trade secrets of Bank, and will
        not copy, sell, transfer,  sublicense,  assign,  distribute or otherwise
        disclose  in any manner  such  Confidential  Information  or any portion
        thereof, in any form, to any Person, nor permit any third party to do so
        (including  without   limitation,   Company's   employees,   agents  and
        representatives),  without the prior written  consent of Bank.  Internal
        dissemination of any  Confidential  Information of Bank by Company shall
        be limited to those  employees,  agents and  representatives  of Company
        whose duties justify the need to know such Confidential  Information and
        then  only on the  basis  of a clear  understanding  by such  employees,
        agents and  representatives  of their  obligation  to maintain the trade
        secret  and/or  confidential  status of such  Confidential  Information.
        Company shall be responsible  for the actions of its  employees,  agents
        and  representatives  with  respect  to such  Confidential  Information.
        Immediately upon  termination of this Agreement,  or earlier upon Bank's
        request,  Company shall return all  Confidential  Information of Bank to
        Bank without  retaining  any copies  thereof  (including  any  abstracts
        thereof).

             8.2  Nondisclosure  and  Nonuse  by Bank.  Except  as set  forth in
        Section  8.3 below,  and subject to  compliance  with  applicable  court
        procedures,  if any,  Bank  will  hold and use any and all  Confidential
        Information  of Company in  confidence  and as trade secrets of Company,
        and will not copy, sell,  transfer,  sublicense,  assign,  distribute or
        disclose  in any manner  such  Confidential  Information  or any portion
        thereof,  in any form, to any non-Affiliate,  nor permit its Affiliates,
        or the respective  employees,  agents or representatives of Bank and its
        Affiliates  to do so,  without  the prior  written  consent of  Company.
        Internal  dissemination  of any  Confidential  Information of Company by
        Bank  and/or  its  Affiliates  shall  be  limited  to  their  respective
        employees,  agents and representatives  whose duties justify the need to
        know  such  Confidential  Information,  and then  only on the basis of a
        clear  understanding by such employees,  agents and  representatives  of
        their obligation to maintain the trade secret and/or confidential status
        of such  Confidential  Information.  Bank shall be  responsible  for the
        actions of its  Affiliates,  and the  respective  employees,  agents and
        representatives  of  Bank  and  its  Affiliates  with  respect  to  such
        Confidential Information.

             8.3  Exceptions.  Notwithstanding  Sections 8.1 and 8.2 above,  the
        following shall not constitute Confidential Information: (i) information
        which is  publicly  available,  other  than as the result of a breach of
        Sections 8.1 or 8.2 by a Party,  (ii)  information  disclosed by a Party
        pursuant  to any  applicable  legal  or  regulatory  requirement,  (iii)
        information  disclosed by Bank to a Network Organization as contemplated
        by  Section  7.3  above,  or (iv)  information  disclosed  by a Party in
        connection  with any civil,  criminal or  administrative  proceeding  or
        arbitration to which the Parties are parties.

             8.4 Remedies.  Notwithstanding  anything to the contrary  contained
        herein,  if a Party or any of its employees,  agents or  representatives
        shall use,  disclose,  or attempt to use or  disclose  any  Confidential

<PAGE>
        Information  of the other Party in any manner  other than in  connection
        with supporting  Company's use of the Network Services,  the other Party
        shall have the right,  in addition to such other  remedies  which may be
        available to it hereunder,  at law or in equity, to immediate injunctive
        relief  enjoining  such use,  disclosure,  or attempted use or attempted
        disclosure,  without the  requirement  of posting  bond or  necessity of
        proving  actual  monetary  damages,  it being  acknowledged  that  legal
        remedies  are   inadequate  to  protect  such  other  Party  under  such
        circumstances and that the unavailability of immediate injunctive relief
        would subject such other Party to irreparable harm.

     9.        Legal Compliance.
               ----------------

             9.1 Suspension of Network  Services.  Bank may, at its sole option,
        suspend  any  or all  Network  Services  based  upon  Bank's  reasonable
        determination  of the  occurrence or potential for occurrence of illegal
        or wrongful activity, fraudulent use or attempted fraudulent activity by
        Company, any Customer or any other third party.

             9.2  Notification of  Noncompliance.  Company shall promptly notify
        Bank of any failure, of which Company obtains knowledge, by any Company,
        its  Affiliates  or any  Customer  to  comply  with any  Laws or  Orders
        applicable  to the Network  Services  or  Company's  provision  of goods
        and/or services to the Customers.

     10.  Insurance.  Company shall obtain and maintain in full force and effect
at all  times  during  the  term of this  Agreement  all  insurance  that may be
required to be obtained from time to time by Bank, any government agencies,  any
Network  Organization or reasonably prudent business  practices,  and will, upon
request, provide Bank with written evidence of such insurance.  Without limiting
the generality of the foregoing, Company shall obtain and maintain in full force
and effect at all times during the term of this Agreement,  a policy or policies
of comprehensive general liability insurance, including products and contractual
liability insurance, in an amount not less than one million dollars ($1,000,000)
combined single limit with an insurance company  acceptable to Bank. If any such
insurance is on a claims made basis,  such insurance  shall include  appropriate
"tail"  coverage in  comparable  amounts,  which  requirement  shall survive the
expiration or termination of this Agreement as to the Network Services  provided
hereunder.  If possible,  all such insurance shall include an extended discovery
period endorsement.  Each such insurance policy shall name Bank as an additional
insured.  Company shall promptly  inform Bank of Company's  receipt of notice of
cancellation or material change in the terms of such insurance.

     11.       Indemnification.
               ---------------

             11.1  Indemnification by Company.  Company shall indemnify,  defend
        and hold Bank Indemnified  Parties harmless from and against any and all
        Losses paid or incurred by any Bank  Indemnified  Party  arising from or
        directly or indirectly relating to:

                    (a)  Company's  breach  of any  term  or  provision  of this
               Agreement;

                    (b) The  violation  by  Company,  its  Affiliates,  or their
               respective  employees,  agents or  representatives  of any Law or
               Order with respect to the use of or provision of Network Services
               or Company's provision of goods and/or services to the Customers;
<PAGE>
                    (c)  The  breach  by  Company,  its  Affiliates,   or  their
               employees,  agents or representatives of any term or provision of
               the Network  Organization  Regulations with respect to the use of
               or provision of Network Services or Company's  provision of goods
               and/or services to the Customers;

                    (d)  The  willful  misconduct,  fraud,  intentional  tort or
               negligence  of  Company,  the  Customers,   or  their  respective
               employees,  agents or representatives  with respect to the use of
               or provision of Network  Services,  Company's  provision of goods
               and/or services to the Customers,  or the Customers' provision of
               goods and/or services to their respective customers; or

                    (e) Any claim made by any third  party  (including,  without
               limitation, any Customer, or customers of a Customer) against any
               Bank  Indemnified  Party,  attributable  in  whole  or in part to
               Company,  its  Affiliates,  the  Customers,  or their  respective
               employees,  agents or representatives  with respect to the use of
               or provision of Network  Services,  Company's  provision of goods
               and/or services to the Customers,  or the Customers' provision of
               goods and/or services to their respective customers.

             11.2 Indemnification by Bank. Bank shall indemnify, defend and hold
        Company Indemnified Parties harmless from and against any and all Losses
        paid or  incurred  by any  Company  Indemnified  Party  arising  from or
        directly or indirectly  relating to Bank's  willful  misconduct,  fraud,
        intentional  tort or  gross  negligence  in the  performance  or lack of
        performance  of the Network  Services.  Notwithstanding  anything to the
        contrary  contained  herein,  (i) except as expressly  set forth in this
        Section  11.2,  Bank shall have no duty of indemnity or liability to any
        Company  Indemnified  Party for any Losses;  and (ii) Bank shall have no
        duty of indemnity or liability to any person claiming  through a Company
        Indemnified Party (including,  without limitation, the Customers, or any
        customers of the Customers) for any Losses.

             11.3  Survival.  This Section 11 shall survive the  termination  or
        expiration of this Agreement.

     12.  Representations and Warranties.  Each Party represents and warrants to
the other Party as follows:

             12.1 Organization.  Such Party is duly organized,  validly existing
        and in good standing  pursuant to applicable  state and/or  federal laws
        under  which it is  organized,  and is  qualified  to do business in all
        jurisdictions  as  may be  required  for  the  conduct  of its  business
        activities hereunder.

             12.2  Power and  Authority.  Such  Party has full  power and lawful
        authority to (i) own and operate its assets,  properties  and  business;
        (ii) carry on its business as presently  conducted  and (iii) enter into
        and perform this  Agreement.  The persons  executing this Agreement have
        full authority to bind such Party to the terms and conditions hereof.

             12.3  Authorizations;  No  Violations.  Such Party's  execution and
        delivery of this Agreement,  and performance  hereof: (i) are within its
        organizational  powers;  (ii) have been duly authorized by all necessary
        organizational  action,  if  required  by its  governing  organizational
        documents;  (iii) does not and will not  conflict  with or  constitute a

<PAGE>
        breach or violation of its governing organizational documents, (iv) does
        not and will not  conflict  with or  constitute a breach or violation of
        any Law or Order by which such Party or any of its properties, assets or
        business is bound or affected;  (v) does not and will not conflict  with
        or  constitute  a  breach  or  violation  of  any  material   agreement,
        indenture,  deed of trust, lease, mortgage,  loan agreement or any other
        material instrument or undertaking to which such Party is a party, or by
        which such Party or any of its  properties,  assets or  business  may be
        bound  or  affected;  and  (vi)  does  not  and  will  not  require  the
        authorization or consent of any third party.

             12.4 Binding  Obligation.  This  Agreement  constitutes a valid and
        legally binding obligation of such Party, enforceable in accordance with
        its terms and conditions.

     13. Bank  Amendments.  Bank shall have the right from time to time,  in its
sole  discretion,  to amend all or any portion of this Agreement  and/or to make
any and all modifications, updates, improvements,  adjustments, changes or other
amendments  to the Bank Network  and/or the Network  Services  (collectively,  a
"Bank  Amendment").  Bank shall give Company  written notice of a Bank Amendment
not less than thirty (30) days before the effective date of such Bank Amendment;
provided,  however,  Bank  shall  not be  required  to  notify  Company  of Bank
Amendments  relating to the Bank Network or the Network  Services  which are not
material and adverse to Company,  as reasonably  determined by Bank. If any Bank
Amendment  results in a material  increase in fees or charges payable to Bank by
Company,  or  is  otherwise  material  and  adverse  to  Company  as  reasonably
determined by Bank  (collectively,  a "Material Bank Amendment"),  the notice of
Bank Amendment sent by Bank to Company shall so specify.

     14.       Use of Service Marks, Trademarks, Names and Logos.
               -------------------------------------------------

             14.1 Bank Service Marks,  Trademarks,  Names and Logos. Company may
        not use a service  mark,  the name or logo of Bank or any  Affiliate  of
        Bank for  promotion or any other  purpose  without  Bank's prior written
        consent,  which consent shall not be unreasonably  withheld. Any request
        for such consent  shall be in writing and shall  include  samples of, or
        designs  for,  Company's  proposed  use,  which shall  conform  with the
        graphic  standards  adopted from time-to-time by Bank or its Affiliates.
        Such  use  shall  be in  full  compliance  with  such  other  terms  and
        conditions specified by Bank.

             14.2 Network  Organization  Service  Marks,  Trademarks,  Names and
        Logos. Company may not use a trademark,  service mark, name or logo of a
        Network  Organization for promotion or any other purpose unless such use
        is  authorized by such Network  Organization.  Such use shall be in full
        compliance with the Network Organization's  Operating  Regulations,  and
        such other terms and conditions specified by such Network Organization.

     15.       Miscellaneous.
               -------------

             15.1 Effective  Date.  This Agreement will be deemed binding on the
        date of the last party's execution hereof, as set forth in the signature
        blocks below (the "Effective Date").
<PAGE>
             15.2  Force  Majeure.  Notwithstanding  anything  to  the  contrary
        contained  herein,  no Party  shall be liable to the other Party for any
        failure  or delay on its part to  perform,  and  shall be  excused  from
        performing,  any of its obligations hereunder if such failure,  delay or
        nonperformance  results  in whole or in part from any cause  beyond  the
        reasonable control of such Party, including, without limitation, any act
        of God; any fire, flood or weather condition; any earthquake; any act of
        a public  enemy,  war,  riot,  explosion,  labor or  material  shortage,
        blackouts or brownouts;  any  interruption or shortage of, or failure or
        delay in,  transportation,  utilities,  material,  supplies,  equipment,
        machinery,  power or spare  parts;  and any act of any military or civil
        authority.

             15.3 Survival.  All obligations of a Party  hereunder  and/or under
        the  Network  Operating  Regulations  arising or  accruing  prior to the
        termination or expiration of this  Agreement  shall survive and continue
        in full force and effect notwithstanding such termination or expiration,
        including,  without limitation,  any obligation for the payment of fees,
        charges, penalties or other amounts.

             15.4 Notices. All notices, demands or other communications required
        or permitted to be given hereunder shall be in writing,  and any and all
        such items  shall be deemed to have been duly  delivered  upon  personal
        delivery; or as of the third business day after mailing by United States
        mail,  registered  or  certified,  return  receipt  requested,   postage
        prepaid,  addressed  as  follows;  or as of  the  immediately  following
        business day after deposit with Federal  Express or a similar  overnight
        courier  service by which  receipt may be  confirmed,  charges  prepaid,
        addressed  as follows;  or upon  delivery by facsimile  (with  telephone
        confirmation of delivery and machine generated proof of transmission) to
        the facsimile number set forth below:
<TABLE>
<CAPTION>

               To Bank:                                   with a copy to:

<S>            <C>                                        <C>
               U.S. Bank National Association             U.S. Bank Legal Department

               One Mellon Bank Center                     950 Seventeenth Street, Suite 600
               500 Grant Street                           Denver, Colorado  80202
               Pittsburgh, Pennsylvania  15258-0001       Attn: Network Services Counsel
               Attention:    Network Services             Phone:        (303) 585-4631
               Phone:        (800) 541-4583               Facsimile:    (303) 585-4646
               Facsimile:    (412) 236-2249


               To Company:                                with a copy to:

               IpswichBank                                IpswichBank

               23 Market Street                           23 Market Street
               Ipswich, MA 01938                          Ipswich, MA 01938
               Attention:    Richard P. Duffett, SVP      Attn:  David L. Grey, President
               Or Operations Department Head              Phone:        978-356-7777
               Phone:        978-356-7777                 Facsimile:    978-356-9732
               Facsimile:    978-356-9732
</TABLE>
<PAGE>
Any Party may change its notice information by written notice given to the other
Party in accordance with this Section.

               15.5 Entire Agreement.  This Agreement, the Exhibits, the Network
    Operating Regulations and all other matters incorporated by reference herein
    or therein  constitute the entire agreement between the Parties with respect
    to the subject matter hereof,  and supersedes and replaces in their entirety
    any and all prior  agreements  between  the  Parties  with  respect  to such
    subject matter, either oral or in writing.

               15.6  Waivers.  No course of dealing and no failure by a Party to
    enforce any provision of or to exercise any right under this Agreement shall
    be construed  as a waiver of such  provision or right or affect the validity
    of this  Agreement  or  limit,  prevent  or  impair  the  right of any Party
    subsequently to enforce such provision or exercise such right. The waiver by
    a Party of any breach or default of this  Agreement by the other Party shall
    be in  writing,  and will not  operate  or be  construed  as a waiver of any
    subsequent or other breach or default.

               15.7 Assignability; Binding Effect. Neither Party may assign this
    Agreement to any third entity or person without the prior written consent of
    the other  Party;  except  that  either  Party may assign or  delegate  this
    Agreement  or any  portion  hereof  to any  entity  or  person  controlling,
    controlled by, or under common control of either Party,  or to any entity or
    person acquiring substantially all of the assets of either Party. Subject to
    the  preceding  sentences,  this  Agreement  shall be binding upon and shall
    inure to the  benefit of the  Parties and their  respective  successors  and
    permitted assigns.

               15.8  Amendments.  Except as specifically  provided  elsewhere in
    this  Agreement,  no amendment to this Agreement  shall be effective or bind
    any Party  unless  set forth in writing  and  signed by the duly  authorized
    representatives of the Parties.

             15.9 Headings.  Titles and headings  preceding the text of sections
        and  paragraphs  of  this  Agreement  have  been  inserted   solely  for
        convenience  of reference  and shall  neither  constitute a part of this
        Agreement nor affect its meaning, interpretation or effect.

             15.10    Arbitration.
                      -----------

                    (a) Arbitration Proceedings. Notwithstanding anything to the
               contrary  contained  herein,  upon the  demand of  either  Party,
               whether made before or after the initiation of legal proceedings,
               but not more than thirty  (30) days after  service of process for
               such  proceeding,  any  Dispute  shall  be  resolved  by  binding
               arbitration  administered  by the  AAA  in  accordance  with  its
               Arbitration Rules for Commercial  Financial Disputes in effect at
               the time, including, if applicable,  the Supplementary Procedures
               for  Large,  Complex  Disputes,  but  excluding  the  use  of the
               Expedited Procedures (as modified, the "AAA Rules").  Arbitration
               shall be  governed by the  Federal  Arbitration  Act and shall be
               conducted in the State of Massachusetts.  Judgment upon any award
               rendered  may be entered in any court  having  jurisdiction.  The
               award of the arbitrators shall specify in writing the factual and

<PAGE>
               legal  bases  for the  award.  All  awards  shall be based on the
               Parties'  actual  damages  and  the  arbitrators  shall  have  no
               authority to award  punitive  damages.  The Parties agree to keep
               all Disputes and arbitration  proceedings hereunder confidential.
               If a Party fails to answer or otherwise  acknowledge  a demand to
               arbitrate  a  Dispute  in  accordance  with  the AAA  Rules,  the
               arbitrators  shall  enter an award  without a hearing in favor of
               the Party demanding the arbitration.  The Parties  understand and
               agree that no Dispute decided by arbitration may later be pursued
               before a court except for the purpose of enforcing (i) compliance
               with this arbitration provision,  or (ii) a final decision by the
               arbitrators.

                    (b) No  Limitation  on Remedies.  This  provision  shall not
               limit  the  right of any Party to seek  equitable  relief,  or to
               exercise  any  self-help  or other  rights or remedies  available
               pursuant to the express terms of this Agreement.

                    (c) Costs and Expenses. The arbitrators may make an award of
               attorney  fees  and  expenses  of   arbitration   proceedings  if
               permitted by law. Any Party who refuses to submit to  arbitration
               as requested or who refuses to comply with the award  rendered by
               arbitrators  or the court  shall  bear the  reasonable  costs and
               expenses  of  enforcement  or  compliance,  whether  incurred  in
               connection with arbitration or judicial proceedings.

               15.11  Governing  Law.  This  Agreement  shall be governed by and
        construed in accordance with the laws of the State of Colorado,  without
        regard to conflicts of laws principles.

               15.12  Severability.  The  provisions of this  Agreement  will be
        deemed  severable,  and if any  provision  of  this  Agreement  is  held
        illegal,  void or invalid under  applicable  law, such  provision may be
        changed to the extent reasonably  necessary to make the provision legal,
        valid and binding.  If any provision of this  Agreement is held illegal,
        void or  invalid  in its  entirety,  the  remaining  provisions  of this
        Agreement  will not be affected,  but will remain  binding in accordance
        with their terms.

               15.13  Expenses.  Subject  to  Section  15.10(c)  above,  in  any
        proceeding  or other  attempt to enforce,  construe or to determine  the
        validity  of this  Agreement,  the  non-prevailing  Party  will  pay the
        reasonable  expenses  of  the  prevailing  Party,  including  reasonable
        attorneys' fees and costs,  expert witness fees, fees of consultants and
        court costs incurred in connection therewith.

               15.14  Employment  of  Agents.  Bank in its sole  discretion  may
        engage agents,  including,  without  limitation,  its Affiliates and the
        Network  Organizations,  to perform part or all of its obligations under
        this  Agreement  at any time  without the  consent of Company;  provided
        however that such action shall not affect Bank's  obligations to Company
        hereunder.
<PAGE>
               15.15 Relationship of the Parties.  The Parties to this Agreement
        are independent contractors. The Parties expressly acknowledge and agree
        that it is not their intention or purpose hereunder to create, nor shall
        this Agreement be construed as creating any type of  partnership,  joint
        venture,  employer/employee  relationship,  franchise, or agency between
        the Parties.  Neither  Party to have any authority to act, or attempt to
        act, or represent itself, directly or by implication, as an agent of the
        other or in any manner assume or create, or attempt to assume or create,
        any obligation on behalf of or in the name of the other.

               15.16  Counterparts.  This  Agreement may be executed in multiple
        counterparts, each of which shall be deemed to be an original and all of
        which, when taken together, shall constitute one and the same Agreement.

               15.17  Facsimile  Signature.  This  Agreement  may be executed by
        facsimile  signature and a facsimile  signature of this Agreement  shall
        constitute an original signature.

               15.18 Consent to Jurisdiction; Venue; Service of Process. Company
        submits to personal  jurisdiction in the State of Massachusetts  for the
        enforcement of the provisions of this Agreement and  irrevocably  waives
        any and all rights to object to such  jurisdiction  for the  purposes of
        litigation  to enforce or interpret  any  provision  of this  Agreement.
        Company hereby consents to the  jurisdiction of any, and agrees that any
        action, suit or proceeding  initiating or involving any Party to enforce
        or  interpret  this  Agreement  shall be  brought in a, state or federal
        court in the State of Massachusetts.  Company hereby  irrevocably waives
        any  objection  which it may have to the laying of the venue of any such
        action,  suit  or  proceeding  in any  such  court  and  hereby  further
        irrevocably  waives any claim that any such action,  suit or  proceeding
        brought in such a court has been brought in an  inconvenient  forum.  In
        the event  Company at any time does not maintain a registered  agent for
        service  of  process  in the  State  of  Massachusetts,  Company  hereby
        appoints the  Secretary of the State of  Massachusetts  as its agent for
        service of process; provided,  however, Bank shall deliver to Company in
        accordance with the notice  requirements of this Agreement a copy of any
        such  service  of  process  made  upon  the  Secretary  of the  State of
        Massachusetts.  Bank and Company  hereby consent that service of process
        in any  action,  suit or  proceeding  may be made by  service  upon  the
        aforesaid  agent for  service of  process  (in the case of service to be
        made upon Company),  by personal service upon the party being served, or
        by  delivery  in  accordance  with  the  notice   requirements  of  this
        Agreement.

        15.19 Waiver of Jury Trial. EACH PARTY  IRREVOCABLY  WAIVES ITS RIGHT TO
        TRIAL  BY  JURY  IN  ANY  ACTION  OR  PROCEEDING  OF ANY  ISSUE,  CLAIM,
        COUNTERCLAIM  OR OTHER  CAUSE OF ACTION,  WHETHER IN  CONTRACT  OR TORT,
        BASED UPON OR ARISING OUT OF THIS  AGREEMENT,  OR ANY OTHER AGREEMENT OR
        DEALINGS RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.
<PAGE>
               IN WITNESS  WHEREOF,  the Parties have executed this Agreement as
of the last date written below.

                                            BANK:

                                            U.S. BANK N.A.


                                            By:

                                            Name:

                                            Title:

                                            Effective Date:


                                            COMPANY:

                                            IPSWICH SAVINGS BANK

                                            d/b/a IPSWICHBANK

                                            By:

                                            Name: Richard P. Duffett

                                            Title: Senior Vice President

                                            Effective Date:
<PAGE>
                                    EXHIBIT A
                          to NETWORK SERVICES AGREEMENT
                                     between
                            U.S. BANK and IPSWICHBANK




EFT AUTHORIZATION
-----------------

        Services Rendered:
        ------------------

---- -------------- ------------------------------------------------
1~~        X        Sponsored Membership to Cirrus
---- -------------- ------------------------------------------------
1          X        Amexco Program Participation
---- -------------- ------------------------------------------------
1~~        X        Sponsored Membership to Plus
---- -------------- ------------------------------------------------

A.      EFT PROCESSING SERVICES

1.      Authorization.  In accordance with the agreed upon authorization method,
        and the Cardholder data supplied by the Company, Bank will authorize and
        deny transaction activity initiated by the Company's  Cardholders at ATM
        and POS terminals.

2.      Dial-Up Terminal  Driving.  Bank shall provide  electronic links between
        Company's  terminals and the Bank switch to facilitate the operation and
        transaction routing in a dial-up environment.

3.      Gateway Services.  Bank shall provide to the Company electronic links to
        regional  and  national  Networks as set forth in Section C below and as
        Section C may be amended from time to time.

4.      Leased  Line  Terminal  Driving.  Bank shall  provide  electronic  links
        between Company terminals and the Bankswitch to facilitate the operation
        and monitoring of Company ATMs.

5.      Reporting. Bank shall provide a variety of reports available on a daily,
        weekly  and/or  monthly  basis,   including:   settlement   information,
        maintenance   activity,   ATM  performance,   cardholder   activity  and
        specialized report requests. Reports shall be distributed through remote
        job entry, hardcopy,  microfiche and datamover. Log reports, critical to
        investigation of Company inquiries, can be viewed on-line.

6.      Surcharge/Service  Charge  Support.  Bank shall support  surcharging  of
        fixed amounts and associated terminal messages required by the Networks.
        Bank shall  provide  reports  necessary  to track  income and  automated
        interfaces  to host systems in order for Company to meet service  charge
        requirements.

7.      Transaction Processing.  Bank shall provide base transaction processing,
        which includes:  authorization;  placing holds on accounts;  transaction
        posting and settlement; and availability of stand in services.
<PAGE>
8.      Transaction  Settlement  Processing.  Bank  shall  offer  "Single  Point
        Settlement" by which Bank shall settle the net difference between debits
        and  credits  for  transactions  each day.  This  includes  transactions
        processed through each Network to which Bank has Gateway connections.

9.      24 - Hour  Monitoring.  Bank  hotline  group  shall  provide  monitoring
        services 24 hours a day, seven days a week.  This service varies by type
        of telecommunications solution used by the Company.

B.      SPONSORED MEMBERSHIPS

1.      Sponsorship.  Bank has developed and owns certain computer  programs and
        equipment  ("Access  Equipment")  used to provide Company with access to
        each  of  Cirrus,  Plus  and/or  Amexco  Networks  (each  a  "Membership
        Network").  Bank  desires  to  provide  and  Company  desires  to accept
        Sponsored  Membership  so that  Company may use the Access  Equipment to
        interface with the Membership Network.

2.      Settlement.   Bank  shall  initiate  settlement  of  Membership  Network
        transactions  each day to Company.  Company shall  maintain  appropriate
        settlement accounts according to the operating procedures established by
        Bank as the same may be amended from time to time.

3.      Incorporation   of   Membership   Network   Operating   Rules.   Company
        acknowledges  receipt of a copy of Membership  Network's operating Rules
        and agrees to be bound by said Rules as they may be amended from time to
        time.  Company  further  agrees to  promptly  discharge  all  duties and
        liabilities which are imposed upon it by Membership  Network's operating
        Rules.

4.      Indemnification.  With respect to Sponsored Membership, Company shall be
        responsible  for  any  and  all  loss  resulting  from  any  transaction
        initiated  by a Card issued by Company or its  affiliates  except to the
        extent that such loss was caused by the  malfunction of an ATM for which
        another member of Membership  Network is  responsible.  Company shall be
        responsible  for any and all loss resulting  from the  malfunction of an
        ATM for which it is  responsible.  Company shall indemnify Bank and hold
        Bank  harmless  from any and all loss for which  Company is liable under
        this paragraph or under the Membership Network operating Rules.  Company
        shall  indemnify  Bank  against any loss  including  attorneys  fees and
        expenses)  arising out of the failure of Company to meet its obligations
        pursuant to the  Sponsored  Membership or under the  Membership  Network
        operating Rules as amended from time to time.

5.      Compliance   with   Applicable   Law.  With  respect  to  the  Sponsored
        Membership,  Company shall be solely responsible for its compliance with
        any and all federal, state, local statutes and regulations applicable to
        its ownership and operation of ATMs, its participation in the Membership
        Network  and its  utilization  of the  service  of  Bank  in  connection
        therewith,   including  without   limitation  any  disclosure  of  other
        obligations   under  Regulation  E  of  the  Federal  Reserve  Board  of
        Governors,  the Electronic  Funds  Transfer Act and all analogous  state
        laws and regulations.

6.      Termination. Either party may terminate the Sponsored Membership without
        cause upon one year (1) year prior written notice to the other.  Company
        acknowledges that in the event the Sponsored Membership is terminated in
        accordance  with the foregoing,  Company's  membership in the Membership
        Network shall terminate  contemporaneously  therewith unless Company has
        obtained a new sponsor.
<PAGE>
        In the event that  Company  breaches  any of its  obligations  under the
        Sponsored  Membership  including  Company's  obligation  to abide by the
        Membership  Network  operating  Rules,  Bank  shall  have  the  right to
        terminate the  Sponsored  Membership  immediately  upon the provision of
        written notice to Company.

C.      NETWORKS

*
        Company  elects to connect  through Bank  interface  with the  following
Network Gateways:

--------- ----------------------------- --------- ----- ------------------------
  n/a     AFFN                                    n/a   MAC 3RD PARTY
--------- ----------------------------- --------- ----- ------------------------
  n/a     ALASKA OPTION                           n/a   MAGICLINE
--------- ----------------------------- --------- ----- ------------------------
   X      AMEX                                    n/a   MONEY STATION
--------- ----------------------------- --------- ----- ------------------------
  n/a     BANKMATE                                 X    NYCE
--------- ----------------------------- --------- ----- ------------------------
  n/a     CASHSTATION                              X    PLUS
--------- ----------------------------- --------- ----- ------------------------
  n/a     CASHSTREAM                              n/a   PLUS DUALITY
--------- ----------------------------- --------- ----- ------------------------
   X      CIRRUS                                  n/a   PRESTOP-PUBLIX
--------- ----------------------------- --------- ----- ------------------------
  n/a     CIRRUS DUALITY                          n/a   PULSE
--------- ----------------------------- --------- ----- ------------------------
   X      DISCOVER                                n/a   SHAZAM
--------- ----------------------------- --------- ----- ------------------------
  n/a     EXCHANGE/ACCEL                          n/a   STAR
--------- ----------------------------- --------- ----- ------------------------
  n/a     EXPLORE/STARR                           n/a   TYME
--------- ----------------------------- --------- ----- ------------------------
  n/a     HONOR                                    X    VISA
--------- ----------------------------- --------- ----- ------------------------
  n/a     MAC                                     n/a   VISANET
--------- ----------------------------- --------- ----- ------------------------
<PAGE>
D.      FEES

        1. Sponsored  Memberships.  Bank shall charge and reimburse  Company for
        services of the  Membership  Network  that  Company uses as set forth in
        Section C above. Fees may be adjusted from time to time as determined by
        either the  Membership  Network or Bank.  In the event that  changes are
        initiated by Membership  Network,  such change shall be effective on the
        date  defined  by  Membership  Network.  In the event that  changes  are
        initiated  by Bank  and  such  changes  result  in an  increased  fee to
        Company,  such increase  shall be effective  upon ninety (90) days prior
        written notice to Company.

                     Conversion and One Time Processing Fees

--------------------------------------------------------------------------------
Conversion Support Fee - ATM                         Waived  per FIID
--------------------------------------------------------------------------------
Conversion Support Fee - Debit                       Waived  per FIID
--------------------------------------------------------------------------------
Gateway/On-Line Processor - Std X9.5                 100 per hour, not to exceed
                                                     $5,000
--------------------------------------------------------------------------------
Gateway/On-Line Processor - Non Std                  7,000  plus $250 per hour
                                                     over 50 hrs.
--------------------------------------------------------------------------------
Telecommunications                                   TBD
--------------------------------------------------------------------------------
Travel Expenses [Out Of Pocket]                      At Cost


                    Transaction and Service Processing Fees*

--------------------------------------------------------------------------------
ATM & POS "PIN Based" Transactions

--------------------------------------------------------------------------------
  Transactions 1 - 10,000                      875  monthly minimum
--------------------------------------------------------------------------------
        Transactions 10,001 - 50,000          0.07  per transaction
--------------------------------------------------------------------------------
        Transactions 50,001 - 100,000         0.06  per transaction - during the
                                                    first three years of the
                                                    Agreement
--------------------------------------------------------------------------------
        Transactions 50,001 - 100,000         0.06  per transaction - during
                                                    years four and five of the
                                                    Agreement
--------------------------------------------------------------------------------
        Transactions >100,000                 0.06  per transaction
--------------------------------------------------------------------------------
        Dial-up ATMs                          0.15  per transaction
--------------------------------------------------------------------------------
<PAGE>
Debit "Signature-based" Transactions


  MasterCard or Visa Gateway                            100  per month
--------------------------------------------------------------------------------
        Transactions [Completed, Denied &
        Reversed]
--------------------------------------------------------------------------------
        Transactions 1 - 20,000                        0.09  per transaction
--------------------------------------------------------------------------------
        Transactions 20,001 - 50,000                   0.08  per transaction
--------------------------------------------------------------------------------
        Transactions >50,000                           0.07  per transaction
--------------------------------------------------------------------------------
        RAP Transaction                                0.03  per reapply
--------------------------------------------------------------------------------
        Quarterly Reporting Fees                        100  per quarter
--------------------------------------------------------------------------------
        Off-line Float Assessment [VISA only]          At Cost monthly
--------------------------------------------------------------------------------


Settlement & Adjustments                   ASAP          ASAP           Manual
--------------------------------------------------------------------------------
                                        ATM & POS        Debit
--------------------------------------------------------------------------------
  Closed Non-settled       Per Item          3             15              20
  Transaction
--------------------------------------------------------------------------------
        Closed Settled     Per Item          3             15              20
        Transaction
--------------------------------------------------------------------------------
        ASAP Error         Per Item          1              1             N/A
--------------------------------------------------------------------------------


ATM Monthly Support Fees

--------------------------------------------------------------------------------
  Full monitoring [Lease line or Dial-up                 50  per ATM
  ATMs]
--------------------------------------------------------------------------------
        800# Monitoring [Dial-up ATMs only]              10  per ATM
--------------------------------------------------------------------------------


  *Transaction fee includes:  gateway access to Cirrus, Plus, Visa,  MasterCard,
  Discover, Amexco & one regional network;  positive balance authorization,  one
  daily balance refresh; one daily ACH transmission & CRT terminal transactions.
<PAGE>
                            Optional Processing Fees

--------------------------------------------------------------------------------
Administrative
--------------------------------------------------------------------------------
  Delivery/Postage/Ground Transportation               At cost
--------------------------------------------------------------------------------
        Third Party Audit Review                        250  per copy
--------------------------------------------------------------------------------
        ACH Posting Tapes                               500  per tape
--------------------------------------------------------------------------------
        Customer Requested Training                     600  per day, + expenses
--------------------------------------------------------------------------------
        Custom Programming                              250  per hour
--------------------------------------------------------------------------------
        Research Fee (In Excess Of 30 Days)*            100  per hour
--------------------------------------------------------------------------------


  *There is a 30 minute minimum for  research  requests

Business Card

--------------------------------------------------------------------------------
        Business Card Set-Up                            500  one time
--------------------------------------------------------------------------------
        Business Card Support                            50  per month
--------------------------------------------------------------------------------


Card Management
--------------------------------------------------------------------------------
  Card Postage                                      At Cost
--------------------------------------------------------------------------------
        Card Transmission Fee                          3.75
--------------------------------------------------------------------------------
        Pin Mailers                                    0.15
--------------------------------------------------------------------------------
        Pin Postage                                 At Cost
--------------------------------------------------------------------------------
        Re-issue Cards                         To Be Quoted
--------------------------------------------------------------------------------
        Re-issue PINS                          To Be Quoted
--------------------------------------------------------------------------------

Debit Card Activation

--------------------------------------------------------------------------------
  Automated Debit Card Activation System                0.5  per call
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Fraud Reporting Service              Core        Mid-Tier      Strategic
--------------------------------------------------------------------------------
  Visa RIS Reporting                  25            50             75  per month
--------------------------------------------------------------------------------
  MasterCard SAFE Reporting           25            50             75  per month
--------------------------------------------------------------------------------

<PAGE>
Fraud Watch [Self Service License]
--------------------------------------------------------------------------------
        Fraud License                                 7,500  one time
--------------------------------------------------------------------------------
        Fraud Setup Fee                                 500  one time
--------------------------------------------------------------------------------
        Fraud File Fix                                  250  per hour
--------------------------------------------------------------------------------
        Fraud Transaction Fee                             0  per transaction
--------------------------------------------------------------------------------
        Account Residing Fee                           0.01  per active card
--------------------------------------------------------------------------------


Fraud Watch  [Service Bureau]
--------------------------------------------------------------------------------
        Fraud Setup Fee                                 500  one time
--------------------------------------------------------------------------------
        Fraud File Fix                                  250  per hour
--------------------------------------------------------------------------------
        Fraud Transaction Fee                             0  per transaction*
--------------------------------------------------------------------------------
        Account Residency Fee                          0.01  per card*
--------------------------------------------------------------------------------

  *The minimum  monthly fee for the total of the fraud  transaction  and account
  residency fees is $100.


Hot Card Service

--------------------------------------------------------------------------------
  Hot Carding                                            15  per call
--------------------------------------------------------------------------------
        Misdirected Calls                                 5  per call
--------------------------------------------------------------------------------

Report Options
--------------------------------------------------------------------------------
  Datamover Transmission RJE                           0.03  per 100 lines
--------------------------------------------------------------------------------
        Datamover Transmission In                      0.06  per 100 lines
--------------------------------------------------------------------------------
        Datamover Transmission Out                     0.11  per 100 lines
--------------------------------------------------------------------------------
        Microfiche Original                            2.25  per sheet
--------------------------------------------------------------------------------
        Microfiche Copy                                0.25  per sheet
--------------------------------------------------------------------------------
<PAGE>
Set Up Fees [Post Conversion]
--------------------------------------------------------------------------------
        ATM Deployment/Re-deployment Fee                250  per ATM
--------------------------------------------------------------------------------
        ATM Feature Set-Up                              250  per ATM
--------------------------------------------------------------------------------
        ATM Screen Group Change                         250  per Group
--------------------------------------------------------------------------------
        Bilingual Screen Setup                          250  per Group
--------------------------------------------------------------------------------
        Administrative Terminal Set-Up                  100  per CRT
--------------------------------------------------------------------------------
        Datamover Set-Up Fee                            500  per FIID
--------------------------------------------------------------------------------
        File Mergers                                  5,000  + $100 per custom
                                                               program hr
--------------------------------------------------------------------------------
        Gateway Setup Fee                               250  per Gateway
--------------------------------------------------------------------------------
        Multi- Marketing Message Set-Up                 200  per Set Up
--------------------------------------------------------------------------------
        Optional Receipt Set-Up                         250  per Set Up
--------------------------------------------------------------------------------
        Surcharging Routine Set-Up                    2,500  per FIID
--------------------------------------------------------------------------------
        Interactive ATM Change                        1,000  per ATM
--------------------------------------------------------------------------------
        Bank Acquisition/Project Management          To Be Quoted
--------------------------------------------------------------------------------

Special Report Options
--------------------------------------------------------------------------------
  CAF [Cardholder Account File] Report                   50  per report
--------------------------------------------------------------------------------
        CAF Tape                                        100  per tape
--------------------------------------------------------------------------------
        CMF [Card Management File] Report                50  per report
--------------------------------------------------------------------------------
        CMF Tape                                        100  per tape
--------------------------------------------------------------------------------
        CAF/CMF Combined Report                         250  per report
--------------------------------------------------------------------------------
        Special Reports                                 125  per prgrm hr. $50
                                                            setup per report
--------------------------------------------------------------------------------
        Raw Data File                                   300  per month +
                                                              transmission costs
--------------------------------------------------------------------------------
<PAGE>
Special Support Services
--------------------------------------------------------------------------------
  Bilingual Screen Support Fee                           25  per ATM
--------------------------------------------------------------------------------
        On-Line Processor                               250  per month
--------------------------------------------------------------------------------
        Multiple Account Access                         200  per month
--------------------------------------------------------------------------------
        ATM Local Surcharging Support*                 0.05  per tran  [$25 per
                                                              month minimum]
--------------------------------------------------------------------------------
        ATM Host Surcharging Support*                  0.07  per tran  [$25 per
                                                             month minimum]
--------------------------------------------------------------------------------

  *The $25 per month minimum is per ATM

--------------------------------------------------------------------------------
        Full Statement Print                           0.25  per statement
--------------------------------------------------------------------------------
        Mini Statement Print                           0.15  per statement
--------------------------------------------------------------------------------
        Other Regional Networks                         100  per month, per
                                                             network
--------------------------------------------------------------------------------

                                Telecommunication Services
--------------------------------------------------------------------------------
Monthly Telecommunications Fees
--------------------------------------------------------------------------------
  Packet Switching Com Fee [Dial-up]                   0.25  per minute
--------------------------------------------------------------------------------
        Special Processor Line [Point To                700  per month
        Point]
--------------------------------------------------------------------------------
        Special Processor Line [Shared]                 150  per month
--------------------------------------------------------------------------------
        Line Rental                                     150  per drop
--------------------------------------------------------------------------------
        Dial Back-Up                                     84  per month
--------------------------------------------------------------------------------

One Time Telecommunications Fees
--------------------------------------------------------------------------------
  ATM Line Install - Regular [>= 45 Business            650
  Days]
--------------------------------------------------------------------------------
        ATM Line Install - Expedited [< 45            1,350
        Business Days]
--------------------------------------------------------------------------------
        ATM Disconnect Fee                              200  per ATM
--------------------------------------------------------------------------------
        Back End/Intercept Processor Line             2,200
        Install - Regular
--------------------------------------------------------------------------------
        Back End/Intercept Processor Line             2,900
        Install - Expedite
--------------------------------------------------------------------------------
        Line Disconnect Fee                             200  per drop
--------------------------------------------------------------------------------
        Modem Install                                   300  per modem
--------------------------------------------------------------------------------
        Modem Disconnect                                200  per modem
--------------------------------------------------------------------------------
<PAGE>
Equipment and Software Sales
--------------------------------------------------------------------------------
  Cables And Connectors                                 TBD
--------------------------------------------------------------------------------
        Outside View(R)32                                 280  per seat
--------------------------------------------------------------------------------
        Data Talker - Cleo Board                        750  per PC
--------------------------------------------------------------------------------
        Digital DSU's                                   750  per DSU
--------------------------------------------------------------------------------
        Modem Maintenance [AT&T]                        252  annual per unit
--------------------------------------------------------------------------------
        Modem Purchase                                  250  per modem
--------------------------------------------------------------------------------
        Modem Splitter  - 4 Port                        345  per splitter
--------------------------------------------------------------------------------
        Modem Splitter  - 8 Port                      1,170  per splitter
--------------------------------------------------------------------------------


Leasing
--------------------------------------------------------------------------------
  ATM Modem Lease                                        30  per unit per month
--------------------------------------------------------------------------------
        Digital DSU  Lease                              150  per unit per month
--------------------------------------------------------------------------------


                                    De-conversion Fees
--------------------------------------------------------------------------------
De-conversion Support Fee                             2,500  per FIID
--------------------------------------------------------------------------------
ATM Disconnect Fee                                      200  per ATM
--------------------------------------------------------------------------------

In addition to  de-conversion  fees,  customer  will pay all third party charges
including ATM, modem & line disconnect fees.


IN ADDITION TO THE FEES AND CHARGES SET FORTH IN THIS  ADDENDUM,  COMPANY AGREES
TO PAY ALL FEES,  CHARGES,  PENALTIES,  FINES,  ASSESSMENTS  AND  ADDITIONAL  OR
INCREASED  COSTS OF ANY NATURE AS MAY BE CHARGED BY MASTERCARD OR VISA OR BY ANY
THIRD  PARTY OR AS MAY BE  OTHERWISE  INCURRED  BY BANK IN  CONNECTION  WITH THE
MATTERS  CONTEMPLATED  BY THIS  AGREEMENT,  WHETHER  CHARGED OR INCURRED BY BANK
EITHER DIRECTLY OR INDIRECTLY.