Common use of Investment Securities; Derivatives Clause in Contracts

Investment Securities; Derivatives. (i) Except for restrictions that exist for securities to be classified as "held to maturity," none of the investment securities held by Heritage or any of its Subsidiaries, is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time. (ii) Neither Heritage nor any of its Subsidiaries is a party to or has agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as "structured notes," "high risk mortgage derivatives," "capped floating rate notes" or "capped floating rate mortgage derivatives" or (B) are likely to have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate changes.

Investment Securities; Derivatives. (i) Except for restrictions that exist for securities to be classified as "held to maturity," none of the investment securities held by Heritage SouthBanc or any of its Subsidiaries, is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time. (ii) Neither Heritage SouthBanc nor any of its Subsidiaries is a party to or has agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as "structured notes," "high risk mortgage derivatives," "capped floating rate notes" or "capped floating rate mortgage derivatives" or (B) are likely to have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate changes.

Investment Securities; Derivatives. (i) Except for restrictions that exist for securities to be that are classified as "“held to maturity," ” none of the investment securities held by Heritage Patapsco or any of its Subsidiaries, Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time. (ii) Neither Heritage Patapsco nor any of its Subsidiaries is a party to or has agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as "“structured notes," "” “high risk mortgage derivatives," "” “capped floating rate notes" ” or "“capped floating rate mortgage derivatives" ” or (B) are likely to have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate changes.

Investment Securities; Derivatives. (i) Except for restrictions that exist for securities to be that are classified as "“held to maturity," ” none of the investment securities held by Heritage or any of its SubsidiariesCMYF, including but not limited to FHLB stock, is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time. (ii) Neither Heritage nor any of its Subsidiaries CMYF is not a party to or has not agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as "“structured notes," "” “high risk mortgage derivatives," "” “capped floating rate notes" ” or "“capped floating rate mortgage derivatives" ” or (B) are likely to have changes in value as a result of interest or exchange rate changes that significantly materially exceed normal changes in value attributable to interest or exchange rate changes.

Investment Securities; Derivatives. (i) Except for restrictions that exist for securities to be that are classified as "held to maturity," none of the investment securities held by Heritage the Company or any of its Subsidiaries, Subsidiary is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity Person holding such investment freely to dispose of such investment at any time. (ii) Neither Heritage the Company nor any of its Subsidiaries Subsidiary is a party to or has agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as "structured notes," "high risk mortgage derivatives," "capped floating rate notes" or "capped floating rate mortgage derivatives" or (B) are likely to have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate changes.

Investment Securities; Derivatives. (i) Except for restrictions that exist for securities to be that are classified as "held to maturity," none of the investment securities held by Heritage Patapsco or any of its Subsidiaries, Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time. (ii) Neither Heritage Patapsco nor any of its Subsidiaries is a party to or has agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as "structured notes," "high risk mortgage derivatives," "capped floating rate notes" or "capped floating rate mortgage derivatives" or (B) are likely to have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate changes.

Investment Securities; Derivatives. (i) Except for restrictions that exist for securities to be classified as "held to maturity," none of the investment securities held by Heritage AFH or any of its Subsidiaries, is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time. (ii) Neither Heritage AFH nor any of its Subsidiaries is a party to or has agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as "structured notes," "high risk mortgage derivatives," "capped floating rate notes" or "capped floating rate mortgage derivatives" or (B) are likely to have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate changes.

Investment Securities; Derivatives. (i) Except for restrictions that exist for securities to be that are classified as "“held to maturity," ” none of the investment securities held by Heritage SOFB or any of its Subsidiaries, Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time. (ii) Neither Heritage SOFB nor any of its Subsidiaries is a party to or has agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as "“structured notes," "” “high risk mortgage derivatives," "” “capped floating rate notes" ” or "“capped floating rate mortgage derivatives" ” or (B) are likely to have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate changes.

Investment Securities; Derivatives. (i) Except for restrictions that exist for securities to be that are classified as "held to maturity," none of the investment securities held by Heritage Target or any of its Subsidiaries, Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time. (ii) Neither Heritage Target nor any of its Subsidiaries is a party to or has agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as "structured notes," "high risk mortgage derivatives," "capped floating rate notes" or "capped floating rate mortgage derivatives" or (B) are likely to have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate changes.

Investment Securities; Derivatives. (i) Except for restrictions that exist for securities to be that are classified as "“held to maturity," ” none of the investment securities held by Heritage the Company or any of its Subsidiaries, Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time. (ii) Neither Heritage the Company nor any of its Subsidiaries is a party to or has agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as "“structured notes," "” “high risk mortgage derivatives," "” “capped floating rate notes" ” or "“capped floating rate mortgage derivatives" ” or (B) are likely to have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate changes, other than forward loan sale commitments for the delivery of mortgage loans to third party investors, including “To Be Announced” securities, designed to hedge the financial impact of changes in interest rates on the value of derivative mortgage loan commitments.