Heritage Direct Savings Account Terms and Conditions

Welcome to the HERITAGE DIRECT SAVINGS ACCOUNT from Heritage Bank N.A., the account that you manage electronically and pays a premium rate of interest. The Annual Percentage Yield is currently 0.30% as of Saturday, May 25, 2013. The rate is subject to change at our discretion and may change daily.

Introduction: In this Deposit Account Agreement and Disclosure, each and all of the depositors are referred to as "you" and "your". Heritage Bank N.A. is referred to as "we," "our," and "us." The term "Agreement" means this Deposit Account Agreement and Disclosure. By selecting "I accept" at the end of this document you indicate that you have received a copy of this disclosure and agree to the terms of the Agreement. We may change the Agreement from time to time, if we choose, we don't have to collect any fees or charges or enforce the Agreement.

Rate Information: As stated earlier, the interest rate and annual percentage yield may change on this account. Check our website at: www.heritagebankna.com for the most current rate information. Interest begins to accrue no later than the business day we receive credit for the deposit of non cash items (for example, checks). Interest will be compounded monthly and will be credited to the account monthly. If you close your account prior to interest being credited, you will receive your accrued interest. We use the daily balance method to calculate the interest on the account. This method applies a daily periodic rate to the principal in the account each day. You must maintain a daily collected (available) balance of $1,000.00 in the account each day to obtain the disclosed annual percentage yield.

Account Fees and Limitations: A monthly service charge of $10.00 will be assessed in any month the balance of your account falls below $1,000.00 on any given day. A service charge of $30.00 will be assessed if you close your HERITAGE DIRECT SAVINGS ACCOUNT within the first 6 months of opening. Accounts with no customer initiated transactions for 24 months are considered Dormant and assessed a $25.00 fee. Each subsequent year that the account remains Dormant a $25.00 Dormant Account Fee will be assessed.

Account Opening Deposit: To open this account you must deposit at least $1,000.00 into the account. You may authorize us to withdraw funds from the linked checking account on your application, mail us a check or send us an incoming wire transfer. Your linked account must be a checking account and cannot be a money market account, even if you have check-writing privileges with that account. For your security we will verify that you have access to the linked account. We will put a temporary hold on your deposit(s) for up to 10 business days or until you complete our verification procedures, whichever is longer.

Deposits: You may make deposits to your HERITAGE DIRECT SAVINGS ACCOUNT by transferring funds from another Heritage Bank account, requesting a withdrawal from your linked checking account via the "Transfer In" button in Online Banking (may take up to three business days), by mailing a check or by sending an incoming wire. DO NOT SEND CASH. Deposited checks must be payable to you and have your HERITAGE DIRECT SAVINGS ACCOUNT number on them. It is your responsibility to verify that your deposit reaches us and that we know where you want your deposit credited. If we do not receive your deposit or are not sure to which account it should be credited, you will be responsible for any loss that results.

We may limit or refuse any part of a deposit. If an item you deposit is returned unpaid or is otherwise charged back to us we will charge it back to your account along with a $6.00 fee for Deposited Items Returned. Foreign Deposited Items Returned you will be charged cost plus $6.00 per returned check. In general, you can't withdraw a deposit for 10 business days.

Withdrawals: You may withdraw funds from your HERITAGE DIRECT SAVINGS ACCOUNT by accessing your account via our Online Banking and 1) transferring to an existing Heritage Bank account or 2) clicking "Transfer Out" to transfer funds to your linked checking account. Withdrawals may take up to 3 business days to reach your linked account from the date of your request. We reserve the right to require written notice, 7 days in advance, before we allow you to withdraw from your account.

Account Ownership: A HERITAGE DIRECT SAVINGS ACCOUNT can be opened for any citizen or permanent resident (per the U.S. Citizenship and Immigration Services) of the 50 United States and the District of Columbia (the "U.S.") by providing us with certain verifying information such as social security number(s), date of birth and U.S. address for each account owner. Any account with a Taxpayer ID # ("TIN") must be opened by mail with a Business, Trust, Estate or Government/Municipal/Public Funds Account Application. All accounts must have a linked checking account at a financial institution chartered in the U.S.

Types of Account Ownership

Individual Accounts: An Individual Account is an account in the name of only one person. Only that person may withdraw money from the account. It does not matter who really owns the money in the account.

Multiple-Party Accounts

Joint Account Ownership: An account with two or more Account Holders is a joint account. Joint Account holders are treated as joint tenants with right of survivorship, if one of the joint Account Holders dies, that person's ownership interest will immediately pass to the other joint account holder(s).

Transactions for Multiple-Party Accounts: Each joint Account Holder, without the consent of any other Account Holder, may make any transaction allowed under the Agreement, including the following:

• withdraw all or any part of the money in the Account
• pledge the Account as collateral to us for any obligation
• endorse and deposit checks and other items payable to any joint Account Holder
• close the Account and decide how to pay the money in the Account.

Any joint Account Holder may act for the other Account Holder(s). We may accept orders and instructions regarding the Account from any joint Account Holder. If we believe that there may be a dispute between joint Account Holders or if we receive inconsistent instructions, we may suspend or close the Account (after giving any notice required by law), we may require a court order to act, and we may require that all joint Account Holders agree in writing to any transaction concerning the Account.

Your obligations under the Agreement are joint and several. This means that each joint Account Holder is fully and personally obligated under the Agreement for all your obligations. Each joint Account Holder is liable for all overdrafts and account charges, even if only one Account Holder caused this to happen, knew about it, or received a benefit from any overdraft or account charges. Also, we may use our right of setoff against the Account. The right of setoff is explained the Account details.

P.O.D Account: A Payable on Death (P.O.D.) Account is an account payable to the Account Holder during his or her lifetime. As the owner of the Account, the Account Holder may withdraw money from the Account. Also, the Account Holder may change the P.O.D. payee on the account. When the Account Holder dies, the Account is owned by the P.O.D. payees. If the P.O.D. Account is held by more than one person, each Account Holder is covered by the above rules for joint accounts. If there is no surviving P.O.D. payee when the last Account Holder dies, state law will determine who owns the money in the Account.

Additional Account Types

Formal Trust Account: A Formal Trust Account is an account held by one or more trustees for the benefit of one or more beneficiaries according to the written trust agreement. The trustees must give us a copy of any trust agreement covering the Account. We act only as the custodian of the trust funds. We are not required to act as trustee or to ask about the powers or duties of any trustee.

Business Accounts: If the account is not owned by a natural person, the Account Holder must supply us with documentation that shows who can sign on behalf of the Account Holder. This applies to corporations, partnerships, sole proprietorships, associations and similar organizations.

Government/Municipal/Public Funds Accounts: This type of account is owned by a government or public entity. For this type of account, you must give us a form that lists us as a depository for the funds of the government or public entity. Also, the form must also say who can conduct transactions for the government or public entity account holder. If required by law, you agree to enter into a Collateral Security Agreement regarding this type of account.

Account Details

Withdrawal Limits: Per Federal Regulations you are allowed no more than 6 electronic or pre-authorized withdrawals from this account per calendar month. If you exceed six withdrawals in more than one month we reserve the right to close your account. Also under Federal Law, we are allowed to require you to give us 7 days notice before you make a withdrawal. (We usually pay withdrawals without a 7 day notice; doing so does not mean that we give up the right to the notice.) We may place a hold on deposits for 10 days. You will not be able withdraw funds until we have confirmed the funds are valid and available.

Automatic Savings Plan: You may authorize Heritage Bank N.A. and your other bank to debit another Heritage Bank account or your checking account ("linked account") in accordance with your instructions on our Automatic Savings Form or on your Account Application. You may direct us to stop your Automatic Savings Plan withdraws by giving us written notice 3 business days prior to your next scheduled withdrawal. You may notify us by completing an online form in online banking, by calling us at (800) 344-7048 or by mailing us at Heritage Bank, ATTN: Customer Ops, P.O. Box 1124, Willmar, MN 56201, in time for us to receive your request 3 business days or more before the payment is scheduled to be made. If you call, we may also require you to put your request in writing and get it to us within 14 days after you call.

Overdrafts: You may not overdraw your HERITAGE DIRECT SAVINGS ACCOUNT. You agree not to withdraw more money than is available at the time of your request. Any item that overdraws the account will be returned and a $27 overdraft fee will be accessed.

Financial Institution Liability: If we do not properly complete a transaction according to the Agreement, we are not liable for losses or damages greater than the amount of the transaction. We are not liable for consequential damages. When we receive requests from you for a withdrawal or items for deposits, we are acting only as your agent. You are responsible for the condition of a check when you deposit it. If a check or item is returned or payment is delayed as a result of any writing or marking that you or a prior endorser placed on the front or back of the check or item, you will be responsible for any cost and liabilities associated with such return or delay. If any deposited item is lost in the collections process, we may reverse the credit for the deposited item or charge your Account for the item.

Right of Setoff: We may use our right of setoff against any or all of your accounts (except IRA, Keogh Plan and Trust Accounts) without notice, if allowed by law. This means that we may charge your deposit accounts for any of your liabilities or debts to us. If the Account is a joint account, we may set off against any and all accounts of each Account Holder, even though only one joint Account Holder owes us money.

Dormant Accounts: Your Account is considered dormant if you have not made a withdrawal or deposit for 24 months. If your Account is dormant, we may, if allowed by law, charge a $25 dormant account fee on your Account. Funds in abandoned accounts will be sent to a state agency, in accordance with state law. After the funds have been sent to the state, we are not responsible for them. If you choose to reclaim the funds, you may apply to the state agency. We reserve the right not to send statements on accounts we consider dormant, subject to applicable law.

Wholesale Wire and ACH Transactions: From time to time you may be a party to an Automated Clearing House ("ACH") entry or a wholesale (wire) funds transfer which may be credited to your HERITAGE DIRECT SAVINGS ACCOUNT. The Uniform Commercial Code Article 4A governs wholesale wire transfers as well as any commercial ACH credit entry and any consumer ACH credit entry excluded from the Electronic Funds Transfer Act. The Electronic Funds Transfer Agreement and Disclosure provided to you reflects our policies relating to the electronic funds transfers governed by the Electronic Funds Transfer Act.

Provisional Payment: Credit given by us to you with respect to an ACH credit or wholesale (wire) funds transfer entry is provisional until we receive final settlement for such entry through a Federal Reserve Bank. If we do not receive final settlement, you are hereby notified and agree that we are entitled to a refund of the amount credited to your Account in connection with such entry, and the party (the originator of the entry) making payment to you via such entry shall not be deemed to have paid you the amount of such entry.

Notice of Receipt: We will notify you of the receipt of payments in the periodic account statements we provide to you. You acknowledge that we will not give next day notice to you of receipt of an ACH or wholesale (wire) funds transfer item.

Notices: The following terms apply to notices relating to your HERITAGE DIRECT SAVINGS ACCOUNT.

Notice of Amendments: We may change the terms and conditions of the Agreement from time to time. We will notify you of any changes to the Agreement, if required by law. By using the Account after we notify you, you agree to all changes. We will send notices to the most recent email address shown on our records for your account. Notice to only one account holder is required for a joint account.

Account Changes: Any Account Holder or person authorized to sign on an account is required to notify us in writing if any account holder or other person authorized to sign on an account dies or is declared incompetent by a court. You are responsible for notifying us of any change in your address, email address, or name. We are required to pay items drawn only on the listed Account name. We are required to try to communicate with you only at the most recent email address or mailing address you have given us.

Account Termination: We or you may close your Account at any time without reason. Before we close your Account, we will give you any notice required by law. If we close your Account, we will send the balance in the Account to your linked checking account. You may close your Account by completing the Account Closing form in Online Banking. Failure to complete this form may result in the loss of accrued interest. We are not responsible for any withdrawal or other item(s) once your Account is closed.

Governing Law: The Agreement is governed by all applicable Federal and Minnesota laws and regulations and any local clearinghouse rules. You understand that we have to comply with these laws, regulations and rules. If the Agreement is not consistent with any law, regulation or rule, then the law, regulation or rule will govern.

Fees and Expenses: If there is a legal action, or if there is a dispute involving your Account, you agree to pay us our reasonable attorneys' fees, legal expenses and costs, if allowed by law. This includes those fees, expenses and costs incurred due to an appeal. You also agree that we may deduct all of the fees, expenses and costs from your HERITAGE DIRECT SAVINGS ACCOUNT, or we may bill you. We do not have to notify you before we deduct those amounts from your Account.

Electronic Funds Transfer Disclosure Statement For Consumer Accounts

This Disclosure Statement explains your and our rights and responsibilities for Electronic Funds Transfers; electronic transfers of money to or from your HERITAGE DIRECT SAVINGS ACCOUNT. The Electronic Fund Transfers we currently offer are outlined below. We may offer additional services in the future. Please read this Disclosure carefully and keep it for future reference.

Electronic Funds Transfer Services: When you open a HERITAGE DIRECT SAVINGS ACCOUNT with us we will provide the following services:

1. Direct Deposit of Federal Government payroll, disability, veteran's benefits, Social Security or other Federal Government payments that you may receive and that may be deposited to your account.
2. Direct Deposit of your paycheck, provided your employer offers this service and you complete any forms required by your employer.
3. Transfer funds between your HERITAGE DIRECT SAVINGS ACCOUNT and your Heritage Bank N.A. accounts or your linked checking account at another U.S. chartered bank.
4. Transfer funds from your HERITAGE DIRECT SAVINGS ACCOUNT to make payments to your loan account at Heritage Bank N.A.
5. Any other deposit to your HERITAGE DIRECT SAVINGS ACCOUNT which is handled electronically, such as an automated clearing house transaction.

Charges for Electronic Transactions: There is no fee for our electronic fund transfer services. We reserve the right to charge fees at any time and will notify you if we do so as required by law.

Account Transfer Limitations: Per Federal Regulations you are limited to six (6) electronic or pre-authorized withdrawals from your savings account per calendar month. There is no limit to the number of deposits you may make to your HERITAGE DIRECT SAVINGS ACCOUNT.

Record of Transactions

Pre-Authorized Credits: If you have arranged to have direct deposits made to your account at least once every sixty (60) days from the same person or company, for example your employer, you can access our website www.heritagebankna.com to find out whether or not the deposit has been made.

Periodic Statements for all Electronic Fund Transfers in this Disclosure: You will receive a monthly account statement. You are responsible for promptly examining each account statement and reporting any problems to us. Each statement will be considered correct and we will not be responsible for any payment made and charged to your HERITAGE DIRECT SAVINGS ACCOUNT unless you notify us within 60 days after the statement is made available to you. We require you to give us notice in writing within 10 business days of notifying us of any errors.

Preauthorized Electronic Fund Transfers

Stop Payment Rights: If you have told us in advance to make regular electronic fund transfers out of your account(s), you can stop any of these payments. Here's how: You must call us at (800) 344-7048 or write us at Heritage Bank, ATTN: Customer Ops, P.O. Box 1124, Willmar, MN 56201, in time for us to receive your request three (3) business days or more before the payment is scheduled to be made. If you call, we will also require you to put your request in writing and get it to us within fourteen (14) days after you call. If you don't, your stop payment will not bind us after fourteen (14) days. We will charge you $25.00 for each stop payment order you give.

Electronic Fund Transfers Initiated By Third Parties: You may authorize a third party to initiate electronic fund transfers between your account and the third party's account. These transfers to make or receive payment may be one-time occurrences or may recur as directed by you. These transfers may use the Automated Clearing House (ACH) or other payments network. Your authorization to the third party to make these transfers can occur in a number of ways. In all cases, these third party transfers will require you to provide the third party with your account number and financial institution information. Thus, you should only provide your financial institution and account information (whether over the phone, the Internet, or via some other method) to trusted third parties whom you have authorized to initiate these electronic fund transfers.

Notice of Varying Amounts: If these regular payments vary in amount, the person you are going to pay will tell you, ten (10) days before each payment, when it will be made and how much it will be. You may choose instead to get this notice only when the payment would differ by more than a certain amount from the previous payment, or when the amount would fall outside certain limits that you set.

Liability for Failure to Stop Payment of Preauthorized Transfers: If you ask us to stop one of these payments three (3) business days or more before the transfer is scheduled, and we do not do so, we will be liable for your losses or damages.

Our Liability for Failure to Make Transfers: If we do not complete a transfer to or from your HERITAGE DIRECT SAVINGS ACCOUNT on time or in the correct amount according to our agreement with you, we are not liable for losses or damages greater than the amount of the transaction. However, there are some exceptions. We will NOT be liable for instance:

• If, through no fault of ours, you do not have enough money in your account to make the transfer.
• If the money in the account is subject to legal process or other claim restricting such transfer.
• If the terminal or system is not working properly and you knew about the breakdown when you started the transfer.
• If circumstances beyond our control (such as fire or flood) prevent the transactions, despite reasonable precautions that we have taken.
• If we did not receive a direct deposit instruction.
• Your online access information has been reported lost or stolen and you are using the reported/suspended online access.
• We have reason to believe that the transaction requested is unauthorized.
• You attempt to complete a transaction which is not a permissible transaction listed above.
• You did not provide us with the correct account information for those accounts to which you wished to direct a transfer.
• There may be other exceptions stated in our agreement with you.

In Case of Errors or Questions About Your Electronic Transfers: Telephone us at (800) 344-7048, write us at Heritage Bank, ATTN: Customer Ops, P.O. Box 1124, Willmar, MN 56201 or login to Online Banking at www.heritagebankna.com and submit a secure contact form as soon as you can, if you think your statement is wrong or if you need more information about a transfer listed on the statement. We must hear from you no later than sixty (60) days after the statement on which the error or problem FIRST appeared was mailed to you or first became available via electronic means, if you elected to receive your statement electronically.

You must provide us with the following information:

1. Tell us your name and account number;
2. Describe the error or the transaction you are unsure about and explain as clearly as you can why you believe it is an error or why you need more information; and
3. Tell us the dollar amount of the suspected error.

If you tell us orally, we will also require that you send us your complaint or question in writing. We will determine whether an error occurred within ten (10) business days after we receive your written complaint or question and will correct any error promptly. If we need more time, however, we may take up to forty five (45) days to investigate your complaint or question. If we decide to do this, we will credit your account within ten (10) business days for the amount you think is in error, so that you will have the use of the money during the time it takes us to complete our investigation. If you do not put your complaint or question in writing, we will not credit your account.

For errors involving new accounts (within thirty (30) days of the first deposit) or foreign-begun transactions (an electronic fund transaction initiated outside the United States or Puerto Rico), we may take up to ninety (90) days to investigate your complaint or question. For new accounts, we may take up to twenty (20) business days to credit your account the amount you think is in error.

We will tell you the results within three (3) business days after completing our investigation. If we decided there was no error, we will send you a written explanation. You may ask for copies of documents that we used in our investigation. If we credit your account with funds while investigating an error, you must repay those funds to us if we conclude that no error occurred.

We may provide you with the results of our investigation electronically if you have agreed to receive electronic communications from us.

Confidentiality: We will disclose information to third parties about your account or the transfers you make:

1. Where it is necessary for completing transfers; or
2. In order to verify the existence and condition of your account for a third party, such as a credit bureau or merchant; or
3. In order to comply with government agency or court orders; or
4. If you give us written permission; or
5. As explained in the separate Privacy Disclosure.

Liability for Unauthorized Transfers: CONTACT US IMMEDIATELY if you believe than an unauthorized transfer has occurred or may occur concerning your account or that your online access is no longer secure or confidential or may have been used without your permission. Telephoning us at (800) 344-7048 is the best way of keeping your losses to a minimum. If you telephone us, we may require that you send us written confirmation of your notice to be received by us within ten (10) businesses days of your phone call. You may also notify us by logging into Online Banking at www.heritagebankna.com and submitting a secure contact form.

You could lose all the money in your account if you take no action to notify us of the unauthorized transfer or the loss of security or confidentiality of your online access. If you notify us of the loss, your liability for unauthorized transfers will be as follows:

1. If you believe your online access information has been lost or stolen, and you tell us within sixty (60) days after you learn of the loss or theft, you can lose no more than $50 if someone else used your Online Access without your permission.
2. If someone else used your online access without your permission, you could lose as much as $500 if you do NOT contact us within sixty (60) days after you learn of the loss or unauthorized use and we can prove that we could have prevented the loss had you contacted us.
3. If you do NOT contact us within sixty (60) days of the first statement which shows transfers which were not made by you, you may not get back any money lost after those sixty (60) days if we can prove that your contacting us would have prevented those losses.

We can extend these time periods if extenuating circumstances (such as an extended hospital stay) kept you from notifying us.

Right to Bring Civil Action: You may bring a civil action against any person violating any provision of Minnesota Statutes section 47.69 (governing consumer privacy and unauthorized withdrawals). If you prevail in such an action, you may recover the greater of your actual damages or $500. You may also be entitled to recover punitive damages, your court costs and reasonable attorney's fees.

You agree that you will not reveal your online access information to any person not authorized by you to use it and will not leave your computer terminal unattended after you have logged in using your online access or other confidential information.

Business Days: Our business days are Monday through Friday, excluding Federal Holidays. The business cutoff time for transfers between two Heritage Bank accounts is 5:30 PM. The business cutoff time for transfers to and from external linked accounts is 2:00 PM.

Notices: All notices from us will be effective when we have mailed them or delivered them to you electronically to your last known address on our records. Notices from you will be effective when we receive the notice via our website, the address shown in this Agreement, or at our telephone number. We may change the terms and conditions for any EFT service. We will notify you at least twenty one (21) days before the effective date of any change, as required by law. Use of EFT service is governed by the Electronic Funds Transfer Act and any future changes to those regulations.

Enforcement: If you or we bring a legal action to enforce this Agreement or to collect amounts owing as a result of any Account transaction, the party who wins may receive reasonable attorneys' fees and costs, including fees on any appeal, to the extent allowed by law.

Cancellation of Online Banking: You agree that we may cancel this Agreement and your use of Online Banking, if:

• You breach this or any other agreement with us;
• We have reason to believe that there has been an unauthorized use of your Online Banking password;
• We notify you or any other person on your account that we have cancelled or will cancel this Agreement. You or any other person on your account can cancel this Agreement by notifying us in writing.

Service is cancelled the first business day after we receive your written notice. Canceling this Agreement will not affect your or our rights and responsibilities under this Agreement for transactions begun before the Agreement is cancelled. Loss of Online Banking access will affect your ability to conduct transactions on your account.

FACTS: WHAT DOES HERITAGE BANK N.A. DO WITH YOUR PERSONAL INFORMATION?

WHY?
Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

WHAT?
The types of personal information we collect and share depend on the product or service you have with us. This information can include:

• Social Security number and income
• account balances and account transactions
• payment history and credit history

When you are no longer our customer, we continue to share your information as described in this notice.

How?
All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Heritage Bank chooses to share; and whether you can limit this sharing.

Questions?
Call (800) 344-7048 or go to www.heritagebankna.com

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