FOURTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT

 
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) dated as of
March 1, 2005 is among HEARTLAND FINANCIAL USA, INC., a corporation formed under
the laws of the State of Delaware (the “Borrower”), each of the banks party
hereto (individually, a “Bank” and collectively, the “Banks”) and THE NORTHERN
TRUST COMPANY, as agent for the Banks (in such capacity, together with its
successors in such capacity, the “Agent”).
 
WHEREAS, the Borrower, the Agent and the Banks have entered into a Credit
Agreement dated as of January 31, 2004 (as hereto amended, the “Credit
Agreement”); and
 
WHEREAS, the Borrower, the Agent and the Banks wish to extend the maturity of
the Credit Agreement and make certain other amendments to the Credit Agreement;
 
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
 
1.  Definitions. Terms defined in the Credit Agreement and not otherwise defined
herein shall have the respective meanings given to them in the Credit Agreement
and terms defined in the introductory paragraphs or other provisions of this
Amendment shall have the respective meanings attributed to them therein. In
addition, the following terms shall have the following meanings (terms defined
in the singular having a correlative meaning when used in the plural and vice
versa):
 
“Effective Date” shall mean March 1, 2005, if (i) this Amendment shall have been
executed and delivered by the Borrower, the Agent and the Banks and (ii) the
Borrower shall have performed its obligations under Section 4 hereof.
 
2.  Return on Assets. Section 7.4(e) of the Credit Agreement is hereby amended
to state in its entirety as follows:
 
“(e) Return on Average Assets -Borrower. The Borrower’s consolidated income
shall be at least 0.70% of its average assets, calculated as at the last day of
each fiscal quarter for the four fiscal quarter period ending on that date.”
 
3.  Indebtedness. Section 7.5 of the Credit Agreement is hereby amended to state
in its entirety as follows:
 
“7.5 Indebtedness, Liens And Taxes. The Borrower and each Subsidiary shall:
 
(a) Indebtedness. Not incur, permit to remain outstanding, assume or in any way
become committed for Indebtedness (specifically including but not limited to
Indebtedness in respect of money borrowed from financial institutions but
excluding deposits), except: (i) in the case of the Borrower, Indebtedness
incurred hereunder, and in the case of the Guarantors, under their respective
Guaranty Agreement; (ii) Indebtedness existing on the date of this Agreement and
described on Schedule 7.5(a) hereof; (iii) Indebtedness of any Subsidiary
arising in the ordinary course of the business of such Subsidiary; (iv) in the
case of ULTEA, the US Bank Indebtedness outstanding on the date hereof in the
principal amount of $11,418,871.69, less the aggregate amount of all repayments
thereunder after the date of this Agreement; (v) in the case of CFC,
Indebtedness under commercial paper issued by CFC which, together with any other
commercial paper identified on Schedule 7.5(a) hereto, shall not exceed an
aggregate principal amount of $20,000,000; (vi) in the case of the Borrower,
Trust Indebtedness and Trust Guarantees, and in the case of any Trust Issuer,
Trust Preferred Securities, provided, that the aggregate of such Trust
Indebtedness (and the related Trust Guarantees and Trust Preferred Securities)
shall not exceed $88,000,000 at any time outstanding; (vii) in the event any
transfer or contribution of accounts receivable of ULTEA to a special purpose
vehicle in accordance with Section 7.1(d) is deemed to constitute a secured
financing, Indebtedness of ULTEA to such special purpose vehicle, secured by the
account receivables and related rights transferred to such special purpose
vehicle only (the “Factored Receivables”), provided, that such Indebtedness
shall not exceed an amount equal to $30,000,000 in the aggregate during the term
of this Agreement; (viii) in the case of the Borrower, Indebtedness to the City
of Dubuque, Iowa, in an amount not to exceed $300,000 to be used for the purpose
of funding building improvements; (ix) in the case of the Borrower, Indebtedness
in an aggregate amount not in excess of $2,750,000 under the Agreement to
Organize and Stockholder Agreement dated February 1, 2003 and the Supplemental
Initial Investor Agreement dated February 1, 2003 and (x) additional
Indebtedness not to exceed $1,000,000 at any time outstanding.
 
4.  Revolving Credit Termination Date. The definition of “Revolving Credit
Commitment Termination Date” is hereby amended by the deletion of the date
“March 1, 2005” and the substitution of the date “February 28, 2006” thereof.
 
5.  Conditions to Effective Date. The occurrence of the Effective Date shall be
subject to the satisfaction of the following conditions precedent:
 
(a) The Borrower, the Agent and the Banks shall have executed and delivered this
Amendment.
 
(b) No Default shall have occurred and be continuing under the Credit Agreement,
and the representations and warranties of the Borrower in Section 6 of the
Credit Agreement and in Section 7 hereof shall be true and correct on and as of
the Effective Date and the Borrower shall have provided to the Agent a
certificate of a senior officer of the Borrower to that effect.
 
(c) Each Guarantor shall acknowledge and consent to this Amendment for purposes
of its Guaranty Agreement as evidenced by its signed acknowledgment of this
Amendment on the signature page hereof.
 
(d) The Borrower shall have delivered to the Agent, on behalf of the Banks, such
other documents as the Agent may reasonably request.
 
6.  Effective Date Notice. Promptly following the occurrence of the Effective
Date, the Agent shall give notice to the parties of the occurrence of the
Effective Date, which notice shall be conclusive, and the parties may rely
thereon; provided, that such notice shall not waive or otherwise limit any right
or remedy of the Agent or the Banks arising out of any failure of any condition
precedent set forth in Section 5 to be satisfied.
 
7.  Ratification. The parties agree that the Credit Agreement, as amended
hereby, and the notes have not lapsed or terminated, are in full force and
effect, and are and from and after the Effective Date shall remain binding in
accordance with their terms.
 
8.  Representations and Warranties. The Borrower represents and warrants to the
Agent and the Banks that:
 
(a)  No Breach. The execution, delivery and performance of this Amendment will
not conflict with or result in a breach of, or cause the creation of a Lien or
require any consent under, the articles of incorporation or bylaws of the
Borrower, or any applicable law or regulation, or any order, injunction or
decree of any court or governmental authority or agency, or any agreement or
instrument to which the Borrower is a party or by which it or its property is
bound.
 
(b)  Power and Action, Binding Effect. The Borrower has been duly incorporated
and is validly existing as a corporation under the laws of the State of Delaware
and has all necessary power and authority to execute, deliver and perform its
obligations under this Amendment and the Credit Agreement, as amended by this
Amendment; the execution, delivery and performance by the Borrower of this
Amendment and the Credit Agreement, as amended by this Amendment, have been duly
authorized by all necessary action on its part; and this Amendment and the
Credit Agreement, as amended by this Amendment, have been duly and validly
executed and delivered by the Borrower and constitute legal, valid and binding
obligations, enforceable in accordance with their respective terms.
 
(c)  Approvals. No authorizations, approvals or consents of, and no filings or
registrations with, any governmental or regulatory authority or agency or any
other person are necessary for the execution, delivery or performance by the
Borrower of this Amendment or the Credit Agreement, as amended by this
Amendment, or for the validity or enforceability thereof.
 
9.  Successors and Assigns. This Amendment shall be binding upon and inure to
the benefit of the Borrower, the Agent and the Banks and their respective
successors and assigns, except that the Borrower may not transfer or assign any
of its rights or interest hereunder.
 
10.  Governing Law. This Amendment shall be governed by, and construed and
interpreted in accordance with, the internal laws of the State of Illinois.
 
11.  Counterparts. This Amendment may be executed in any number of counterparts
and each party hereto may execute any one or more of such counterparts, all of
which shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Amendment by telecopy shall be as
effective as delivery of a manually executed counterpart of this amendment.
 
12.  Expenses. Whether or not the effective date shall occur, without limiting
the obligations of the Borrower under the Credit Agreement, the Borrower agrees
to pay, or to reimburse on demand, all reasonable costs and expenses incurred by
the Agent in connection with the negotiation, preparation, execution, delivery,
modification, amendment or enforcement of this Amendment, the Credit Agreement
and the other agreements, documents and instruments referred to herein,
including the reasonable fees and expenses of Mayer, Brown, Rowe & Maw LLP,
special counsel to the Agent, and any other counsel engaged by the Agent.

[Signature Page Follows]

IN WITNESS WHEREOF, this Amendment has been executed as of the date first above
written.
 

HEARTLAND FINANCIAL USA, INC. By:  /s/ John K. Schmidt Name: John K. Schmidt
Title:  Executive Vice President, CFO & COO

 

THE NORTHERN TRUST COMPANY, as agent By: /s/ Thomas Bernhardt Name: Thomas
Bernhardt

Title: Vice President
 
HARRIS TRUST AND SAVINGS BANK

By: /s/ Thomas J. Wilson Name: Thomas J. Wilson Title: Vice President

 
U.S. BANK NATIONAL ASSOCIATION

By: /s/ Jay Strunk Name: Jay Strunk Title: Correspondent OfficerGUARANTOR
ACKNOWLEDGMENT

Each of the undersigned Guarantors hereby acknowledges and consents to the
Borrower’s execution of this Amendment.

CITIZENS FINANCE CO. By:  /s/ John K. Schmidt Name: John K. Schmidt Title: 
Treasurer

ULTEA, INC. By:  /s/ John K. Schmidt Name: John K. Schmidt Title:  Treasurer