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EXHIBIT 10.16

SIXTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT

Harris Trust and Savings Bank
Chicago, Illinois

Ladies and Gentlemen:

Reference is hereby made to that certain Credit Agreement dated as of
January 30, 1998 (the Credit Agreement, as the same has been amended prior to
the date hereof being referred to herein as the Credit Agreement), between
Midwest Banc Holdings, Inc. and Harris Trust and Savings Bank. All capitalized
terms used herein without definition shall have the same meanings herein as
such terms have in the Credit Agreement.

The Company has requested that the Bank waive the Companys non-compliance
with the Non-Performing Assets covenant set forth in Section 8.7 of the Credit
Agreement for the period ending December 31, 2002, and waive any breach of
Section 8.5 of the Credit Agreement arising out of the delivery of the
Companys September 30, 2002, and December 31, 2002, financial reports which
are currently being restated, and, in connection herewith, the Company and the
Bank have agreed to amend Section 9.1 of the Credit Agreement, all on the terms
and conditions set forth in this agreement (herein, the Amendment).

SECTION 1. WAIVERS.

The Company has advised the Bank that as of December 31, 2002, the Company
was not in compliance with Section 8.7 of the Credit Agreement with respect to
the maintenance of a maximum Non-Performing Assets ratio (the Financial
Covenant Default) and that the Company may have been in violation of Section
8.5 of the Credit Agreement with respect to its delivery to the Bank prior to
the date hereof of financial reports and information for periods ending
December 31, 2002, and September 30, 2002, which may not have been prepared in
compliance with the requirements of the Credit Agreement set forth therein (the
Financial Reporting Defaults). The Company has requested that the Bank waive
the Financial Covenant Default and the Financial Reporting Defaults. By
signing below, the Bank hereby waives the Financial Covenant Default for, and
only for, the period ending December 31, 2002, and the Bank hereby waives the
Financial Reporting Defaults, for the periods ending September 30, 2002, and
December 31, 2002; providedthat (a) all financial reports and information
hereafter delivered to the Bank (including restatements of the September 30,
2002, and December 31, 2002, financial reports which the Company hereby agrees
to deliver to the Bank on or before April 30, 2003) shall be prepared in
accordance with the requirements of the Credit Agreement and (b) the waiver and
consent set forth in this Section 1 shall only become effective upon the
satisfaction of the conditions precedent set forth in Section 3 below. Except
as specifically waived to hereby, all of the terms and conditions of the Credit
Agreement shall stand and remain in full force and effect and the Bank reserves
its rights with respect to any other Default or Event of Default that may
existing or hereafter arise.





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SECTION 2. AMENDMENTS.

Subject to the satisfaction of the conditions precedent set forth in
Section 3 below, the Credit Agreement shall be and hereby is amended as
follows:



| |                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2.1. Section 2.1(c) of the Credit Agreement (Interest Rate Options;
LIBOR Portions) shall be amended by striking the phrase determined by
adding .95% to the Adjusted LIBOR for such Interest Period and inserting
the phrase determined by adding 1.20% to the Adjusted LIBOR for such
Interest Period in lieu thereof.



| |                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------
| | 2.2. Section 9.1(e) of the Credit Agreement (Events of Default)
shall be amended and restated in its entirety to read as follows:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (e) any event occurs or condition exists (other than
those described in subsections (a) through (d) above) which
is specified as an event of default under any of the other
Loan Documents; or any of the Loan Documents, or any
material provision thereof, shall for any reason not be or
shall cease to be in full force and effect or is declared
to be null and void; or the issuance against the Borrower
or any Subsidiary (including any Banking Subsidiary) of any
informal or formal administrative agreement or court order,
temporary or permanent, by any federal or state regulatory
agency or court having jurisdiction or control over the
Borrower or such Subsidiary involving activities deemed to
be unsafe or unsound or a breach of fiduciary duty under
applicable law or regulation, such action taking the form
of, but not limited to: (i) a memorandum of understanding,
(ii) a cease and desist order, (iii) the termination of
insurance coverage of customer deposits by the FDIC, (iv)
the suspension or removal of any executive officer or
director, or the prohibition of participation by any others
in the business affairs of the Borrower or such Subsidiary,
or (v) a capital maintenance agreement or any agreement
limit or prohibiting the payment of dividends to the
Company by any of its Subsidiaries;



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2.3. In consideration of the Waivers set forth in Section 1 above,
the Company acknowledges and agrees that the aggregate amount of Loans
requested by the Company and maintained outstanding under the Credit
Agreement shall not exceed $10,000,000 in the aggregate until the Bank is
in receipt of the financial information and reports for the Company and
its Subsidiaries for the period ending March 31, 2003, and the Companys
current regulatory examinations and financial reporting situation have
been completed and corrected to the Banks satisfaction (which includes,
but is not limited to, the lack of issuance against the Company or any of
its subsidiaries of any formal or informal regulatory agreements or orders of the type described in Section
9.1(e) of the Credit Agreement).

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SECTION 3. CONDITIONS PRECEDENT.

The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:



| |                                                                                
| | -------------------------------------------------------------------------------
| | 3.1. The Company and the Bank shall have executed and delivered this
Amendment.



| |                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------
| | 3.2. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Bank and its counsel.

SECTION 4. REPRESENTATIONS.

In order to induce the Bank to execute and deliver this Amendment, the
Company hereby represents to the Bank that, after giving effect to the waivers
set forth in Section 1 above, the representations and warranties set forth in
Section 6 of the Credit Agreement are and shall be and remain true and correct
(except that the representations contained in Section 6.5 shall be deemed to
refer to the most recent consolidated financial statements of the Company
delivered to the Bank) and the Company is in compliance with the terms and
conditions of the Credit Agreement and no Default or Event of Default exists
under the Credit Agreement or shall result after giving effect to this
Amendment.

SECTION 5. MISCELLANEOUS.

5.1. The Company has heretofore executed and delivered to the Bank certain
Collateral Documents and the Company hereby acknowledges and agrees that,
notwithstanding the execution and delivery of this Amendment, the Collateral
Documents remain in full force and effect and the rights and remedies of the
Bank thereunder, the obligations of the Company thereunder and the liens and
security interests created and provided for thereunder remain in full force and
effect and shall not be affected, impaired or discharged hereby. Nothing
herein contained shall in any manner affect or impair the priority of the liens
and security interests created and provided for by the Collateral Documents as
to the indebtedness which would be secured thereby prior to giving effect to
this Amendment.

5.2. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection
therewith, or in any certificate, letter or communication issued or made
pursuant to or with respect to the Credit Agreement, any reference in any of
such items to the Credit Agreement being sufficient to refer to the Credit
Agreement as amended hereby.

5.3. The Company agrees to pay on demand all costs and expenses of or
incurred by the Bank in connection with the negotiation, preparation, execution
and delivery of this Amendment, including the fees and expenses of counsel for
the Bank.

5.4. This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall
-3-constitute one and the same agreement. Any of the parties hereto may execute this Amendment
by signing any such counterpart and each of such counterparts shall for all purposes be deemed
to be an original. This Amendment shall be governed by the internal laws of the State of Illinois.
This Sixth Amendment and Waiver to Credit Agreement is dated as of
April 14, 2003.

| |                             |                       |                            
| | --------------------------- | --------------------- | ---------------------------
| | MIDWEST BANC HOLDINGS, INC.
|
| | By                          | /S/ Daniel R. Kadolph
| |                             |                      
| |                             | Name:                 | Daniel R. Kadolph          
| |                             |                       |                            
| |                             | Title:                | Senior Vice President & CFO
| |                             |                       |                            

Accepted and agreed to in Chicago, Illinois, as of the date and year last above written.

| |                               |                       |                  
| | ----------------------------- | --------------------- | -----------------
| | HARRIS TRUST AND SAVINGS BANK
|
| | By                            | /S/ Michael S. Cameli
| |                               |                      
| |                               | Name:                 | Michael S. Cameli
| |                               |                       |                  
| |                               | Title:                | Vice President   
| |                               |                       |                  

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