July 28, 1998

Board of Trustees
Plymouth Savings Bank
226 Main Street
Wareham, Massachusetts 02571

Members of the Board:

The Notice to effect a mutual holding company reorganization with the organization of a mutual savings bank to be reorganized simultaneously into a mutual holding company, the organization of a stock savings bank owned by the mutual holding company and the merger of Plymouth Savings Bank (PSB) with the stock savings bank has been reviewed by the Federal Deposit Insurance Corporation (FDIC) pursuant to 12 C.F.R. Section 303.15 and other pertinent FDIC regulations.

Based on the information presented and representations made. the FDIC plans to issue a letter of non-objection to the proposed conversion transaction, provided that PSB satisfies the following conditions:

(1) PSB must execute the enclosed Tolling Agreement and deliver it to this office no later than August 7, 1998.

(2) PSB must receive final approval from the appropriate State Authority and the Board of Governors of the Federal Reserve System for establishment of the stock savings bank and the holding company and for acquisition of the bank by the holding company.

Provided that PSB meets these conditions and provided further that there has been no significant alteration to the terms of the conversion transaction (by action of other regulators or other-wise) subsequent to the date of this letter, the FDIC will issue a letter of non-objection to the proposed Conversion transaction.

As part of the Notice, PSB has requested, in accordance with 12 C.F.R. Section 333.4(a), waiver of a certain provision of the FDIC's regulations with respect to mutual-to-stock conversions, specifically, the depositor vote requirement (12 C.F.R. Section 333.4(d)(2)).

Under the conversion regulations, PSB's waiver request is appropriate for consideration by the FDIC's Board of Directors under the good cause exception to the Conversion Regulations, 12 C.F.R. Section 333.4(a), rather than the conflicts with State law exception under 12 C.F.R. Section 3 333 3.4(b). The FDIC's Board has determined that the depositor vote requirement in the Conversion Regulations does not present a conflict with Massachusetts law, but rather is supplemental to Massachusetts law and procedures for mutual-to-stock conversions.

The FDIC's Board of Directors has considered the information provided by PSB with respect to the commercial borrowings and commercial relationships of the respective corporators of the bank in light of the following standards presented in the preamble to the Conversion Regulations with respect to the waiver of the depositor vote requirement:

" ...on a case-by-case basis, the Board will consider waiving the depositor voting requirement if it is demonstrated, to the Board's satisfaction, that the alternative voting mechanism established under the applicable state law satisfies the concerns expressed above about the need for a vote on the conversion by parties that are not insiders and do not have a potential conflict of interest in reviewing the proposed conversion." 59 Fed. Reg. 61233, 61238 (November 30, 1994).

Applying this standard, the FDIC's Board of Directors has determined that a sufficient number of PSB's corporators are not insiders and have no apparent potential for conflict of interest and that a majority of the independent corporators voted to approve the Plan of Reorganization.

Based on the information presented and representations made, the Board of Directors of the FDIC approves the waiver of the requirement for the depositor vote.

Enclosed is our Order and Basis for the applications filed on behalf of PSB in conjunction with its Notice of Mutual Holding Company Reorganization. These include considerations of deposit insurance merger applications.

Please advise the Boston Regional Office in writing when you have consummated the transactions. If an extension of the time limitation included in the Order is required, a letter requesting a specific extension of the limitation including reasons therefore should be submitted to the Boston Regional Office.

Sincerely,

Mark S. Schmidt
Associate Director

cc: Josefina Rotman Childress
Goodwin Procter & Hoar, LLP
Exchange Place
Boston, Massachusetts 02109-2881

FEDERAL DEPOSIT INSURANCE CORPORATION

RE: Plymouth Savings Bank Wareham, Massachusetts

Applications for Federal Deposit Insurance and Consent to Merge

ORDER AND BASIS FOR CORPORATION APPROVAL

Pursuant to Sections 5 and 18(c) and other provisions of the Federal Deposit Insurance Act, applications have been filed on behalf of Plymouth Interim Mutual Bank, Wareham, Massachusetts, a newly formed, Bank Insurance Fund member, state-chartered mutual savings bank and Plymouth Interim Stock Bank, Wareham, Massachusetts (Stock Bank), a newly formed, Bank Insurance Fund member, state-chartered stock savings bank for federal deposit insurance and for the FDIC's consent to merge Stock Bank with Plymouth Savings Bank, Wareham, Massachusetts (PSB), a Bank Insurance Fund member, state-chartered mutual savings bank with total resources of $749,840,000 and total deposits of $647,233,000 as of March 31, 1998.

This transaction is the result of PSB's plan of reorganization which, solely to facilitate this undertaking, includes:

1) the formation of a de novo mutual savings bank to be named Plymouth Interim Mutual Bank (New Mutual);

2) the immediate reorganization of New Mutual as a State-chartered mutual holding company to be named Plymouth Bancorp, Inc. (PBI);

3) the formation of a new stock savings bank, a subsidiary of PBI, which will be named Plymouth Interim Stock Bank (Stock Bank); and

4) the merger of PSB and Stock Bank, with the resultant institution retaining the charter and by-laws of Stock Bank and the name Plymouth Savings Bank.

Plymouth Savings Bank will be a wholly owned subsidiary of PBL The principal office will be at 226 Main Street, Wareham, Massachusetts, the present location of PSB.

A review of available information, including the Community Reinvestment Act (CRA) Statements of the proponent, discloses no inconsistencies with the purposes of the CRA. The new institution is expected to continue to meet the credit needs of its entire community, consistent with the safe and sound operation of the institution.

Favorable findings have been accorded to all factors considered pertinent to each application. Accordingly, it is the FDIC's judgment that the applications should be and hereby are approved subject to the following conditions:

1. That federal deposit insurance shall not become effective unless and until the applicants have been established as a stock savings bank and a mutual savings bank by the State authority and PBI has been established as a mutual holding company by the State authority.

2. PSB must receive final approval from the appropriate State Authority and the Board of Governors of the Federal Reserve System for establishment of the stock savings bank and the holding company and for acquisition of the bank by, the holding company.

3. That Stock Bank shall not issue minority shares without prior written notification and non-objection from the FDIC.

4. That, prior to a sale, transfer or other disposition of any shares of Plymouth Savings Bank by PBS to any person (including any Employee Stock Ownership Plan), or a conversion of the mutual holding company to stock form. Plymouth Savings Bank will provide written notification to the FDIC and provide the FDIC with copies of all documents filed with state and federal banking and./or securities regulators in connection with any such sale, transfer, disposition or conversion.

5. That, should any shares of stock be issued to persons other than PBL any dividends waived by PBI must be retained by the savings bank and segregated. earmarked, or otherwise identified on its books and records, such amounts must be taken into account in any valuation of the bank and PB1 and factored into the calculation used in establishing a fair and reasonable basis for exchanging bank shares for holding company shares in any subsequent conversion of PBI to stock form; such amounts shall not be available for payment to or the value thereof transferred to minority shareholders of the bank, by any means including through dividend payments or at liquidation.

6. That the transaction shall not be consummated sooner than fifteen calendar days after the date of this Order nor later than six months after the date of this Order unless such period is extended for good cause by the FDIC.

7. That until the conditional commitment herein granted becomes effective, the FDIC shall have the night to alter, suspend, or withdraw the said commitment should any interim development be deemed to warrant such action.

Dated at Washington, D.C., this 28th day of July 1998.

Mark S. Schmidt
Associate Director