First Busey (BUSE)

On January 22, 2010, First Busey Corporation (the “Company”) and JPMorgan Chase Bank, N.A. (“JPMorgan”) entered into that certain Amendment to Credit Agreement, dated as of September 30, 2009 (the “Amendment”), amending that certain Amended and Restated Credit Agreement, dated as of May 31, 2009 (the “Credit Agreement”).  Pursuant to the Amendment, the Company and JPMorgan made certain changes to the financial covenants contained in the Credit Agreement.  Additionally, in the Amendment, JPMorgan formally waived the Company’s failure to comply with certain of the financial covenants contained in the Credit Agreement as of September 30, 2009.  In relation to the Credit Agreement, the Company and the JPMorgan also entered into Continuing Pledge Agreement, dated as of January 4, 2010 (the “Continuing Pledge Agreement”).  The Continuing Pledge Agreement represents an amendment and restatement of that certain Continuing Pledge Agreement dated January 23, 2007 between the parties.

A copy of the Amendment is attached as Exhibit 99.1 to this report.  A copy of the Continuing Pledge Agreement is attached as Exhibit 99.2 to this report.

On September 24, 2009, First Busey Corporation, a Nevada corporation (the “Company”), entered into an Underwriting Agreement (the “Underwriting Agreement”) with Fox-Pitt Kelton Cochran Caronia Waller (USA) LLC, as the representative of the underwriters named therein (together, the “Underwriters”), providing for the offer and sale in a firm commitment underwritten public offering of 18,000,000 shares of common stock of the Company, $0.001 par value per share.  In addition, pursuant to the terms of the Underwriting Agreement, the Company has granted the Underwriters a 30-day option to purchase up to 2,700,000 additional shares of the Company’s common stock.  The Company has made certain customary representations, warranties and covenants in the Underwriting Agreement concerning the Company and the registration statement related to the offering of the shares.  The Company also has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended.  In addition, pursuant to the Underwriting Agreement, certain directors and executive officers of the Company entered into agreements providing for a 90-day “lock-up” period with respect to sales of specified securities, subject to certain exceptions.

The foregoing description of the Underwriting Agreement is qualified in its entirety by reference to the Underwriting Agreement, a copy of which is filed as Exhibit 1.1 to this Form 8-K and is incorporated by reference herein.

On September 21, 2009, First Busey Corporation, a Nevada corporation (the “Company”), entered into a stock purchase agreement (the “Stock Purchase Agreement”) with all the members of its board of directors, various executive officers and certain other accredited investors.  The Stock Purchase Agreement provides for the Purchasers’ purchase of a new series of Company mandatory convertible preferred stock offered in a private placement (the “Private Offering”).  See Item 8.01 for more detail.

The information provided in Item 8.01 is hereby incorporated in this Item 1.01 by reference.  Any description of the Stock Purchase Agreement is not complete and is qualified in its entirety to the full text of the Stock Purchase Agreement, a copy of which is attached hereto as Exhibit 99.1.

On June 29, 2009, the Company and JPMorgan Chase Bank, N.A. (“JPMorgan”) amended and restated that certain Amended and Restated Credit Agreement, dated January 16, 2006 (the “Original Credit Agreement”).  Pursuant to the Amended and Restated Credit Agreement, dated as of May 31, 2009 (the “New Credit Agreement”), the Company and JPMorgan, among other things, renewed, modified and extended the Company’s line of credit and decreased the maximum principal amount available thereunder from $35 million to $20 million.  The interest rate on the line of credit was increased from LIBOR plus 150 basis points to LIBOR plus 250 basis points.  The line of credit has a maturity date of May 31, 2010.

The New Credit Agreement also includes a term note in the principal amount of $26 million, which replaced the $30 million term note under the Original Credit Agreement.  The interest rate on the new term note is LIBOR plus 275 basis points, as compared to LIBOR plus 175 basis points under the old term note.  The new term note has a maturity date of June 1, 2011, which is unchanged from the old term note.

The New Credit Agreement also made certain changes to the financial covenants contained in the Original Credit Agreement.

A copy of the New Credit Agreement is attached as Exhibit 99.1 to this report.  Copies of the new line of credit note and term note are attached as Exhibits 99.2 and 99.3, respectively, to this report.

On September 21, 2006, First Busey Corporation, a Nevada corporation (“First Busey”), announced it has entered into a merger of equals transaction pursuant to an Agreement and Plan of Merger, dated as of September 20, 2006 (the “Merger Agreement”), by and between First Busey and Main Street Trust, Inc., an Illinois corporation (“Main Street”), to be effected through the merger of Main Street with and into First Busey (the “Merger”), with First Busey surviving the Merger.  Following the effectiveness of the Merger, Busey Bank, a wholly-owned subsidiary of First Busey, and Main Street Bank & Trust, a wholly-owned subsidiary of Main Street, will be merged, with Busey Bank surviving the merger.  On September 21, 2006, First Busey issued a joint press release announcing the execution of the Merger Agreement (the “Press Release”).  A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.  A copy of the Merger Agreement is attached hereto as Exhibit 2.1 and is incorporated herein by reference.  The description of the Merger Agreement contained in this Current Report on Form 8-K is qualified in its entirety by reference to the full text of the Merger Agreement.

Under the terms of the Merger Agreement, Main Street shareholders will receive 1.55 shares of common stock of First Busey for each share of common stock of Main Street (the “Exchange Ratio”) owned by the shareholder, with cash to be paid in lieu of fractional shares of First Busey common stock.  The exchange is expected to qualify as a tax-free transaction.  Main Street stock options will convert upon completion of the Merger into stock options with respect to First Busey common stock, subject to adjustment to reflect the Exchange Ratio.  The options held by employees of both First Busey and Main Street will accelerate upon completion of the Merger both as to vesting and as to exercisability.

The Merger has been approved by the Board of Directors of each of First Busey and Main Street, and is subject to certain regulatory approvals as well as the approval and adoption of the Merger Agreement by a majority of the shareholders of First Busey and Main Street, the receipt by Main Street and First Busey of opinions that the Merger will qualify as a tax-free transaction, and other customary closing conditions.  First Busey and Main Street have made customary representations and warranties about their business and covenants pending the closing of the Merger, including covenants by each of First Busey and Main Street to conduct its business in the ordinary course and to cause a shareholder meeting to be held to vote upon the Merger Agreement.  Each party has agreed not to (i) solicit proposals related to alternative business combination transactions or (ii) subject to certain exceptions, enter into discussions or negotiations or provide confidential information in connection with any proposals for alternative business combination transactions.  First Busey will register under the Securities Act of 1933, as amended (the “Securities Act”), the shares to be issued in connection with the Merger.

Each party also has the right to terminate the Merger Agreement under certain circumstances.  Either First Busey or Main Street may, with certain exceptions, terminate the Merger Agreement if the Merger is not consummated by September 20, 2007.

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Upon completion of the Merger and pursuant to the Merger Agreement, Douglas C. Mills, the Chairman, President and Chief Executive Officer of First Busey, will be appointed as the Chairman of the combined company through the 2009 annual meeting of shareholders of the combined company, after which, Gregory B. Lykins, the current Chairman of the Board of Main Street, is expected to be appointed as Chairman.  In addition, the Merger Agreement provides that Van A. Dukeman, the President and Chief Executive Officer of Main Street, will become President and Chief Executive Officer of the combined company and Chairman of the Board of Busey Bank. Lee O’Neill, Chairman and Chief Executive Officer of Busey Bank, will become President and Chief Executive Officer of the resulting bank.  David B. White, Executive Vice President, Treasurer and Chief Financial Officer of Main Street, will serve as the Executive Vice President and Chief Operating Officer of the combined company.  Barbara J. Harrington, Chief Financial Officer of First Busey, will continue to serve as the Chief Financial Officer and as an Executive Vice President of the combined company.  In connection with the Merger Agreement, Mr. Mills has entered into a letter agreement that provides for the terms of his appointment as Chairman, among other things, and Ms. Harrington has entered into an Employment Agreement, each of which is contingent upon the closing of the Merger and each of which is described below.

The combined company’s board of directors will initially be comprised of ten members, with five appointed by Main Street and five appointed by First Busey. As a result of the Merger, if approved and consummated, the First Busey articles of incorporation and by-laws will be amended to implement provisions relating to, among other things, the increase in total number of authorized shares of the combined company and the board of directors of the combined company after the Merger.

The Merger Agreement, which has been included to provide investors with information regarding its terms, contains representations and warranties of each of First Busey and Main Street. The assertions embodied in those representations and warranties were made for purposes of the Merger Agreement and are subject to exceptions, qualifications and limitations agreed by the respective parties in connection with negotiating the terms of the Merger Agreement.

In addition, certain representations and warranties were made as of a specific date, may be subject to a contractual standard of materiality different from what a shareholder might view as material, or may have been used for purposes of allocating risk between the respective parties rather than establishing matters as facts. Investors should read the Merger Agreement, together with the other information concerning First Busey and Main Street that each company publicly files in reports and statements with the Securities and Exchange Commission (the “SEC”).

On September 20, 2006, concurrently with execution of the Merger Agreement, First Busey entered into letter agreements with Douglas C. Mills, the Chairman of the Board of Directors, President and Chief Executive Officer of First Busey, and Edwin A. Scharlau II, Chairman of the Board of Busey Investment Group, and entered into employment agreements with David D. Mills, President and Chief Operating Officer of Busey Bank N.A., a wholly-owned subsidiary of First Busey, and Barbara J. Harrington, Chief Financial Officer of First Busey, each of which are contingent upon the effectiveness of the Merger and are described below.

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Pursuant to the letter agreement with Mr. Douglas C. Mills (the “Mills Letter”), Mr. Mills agreed to resign from his officer positions with First Busey and its subsidiaries effective upon the closing of the Merger.  Additionally, the Mills Letter provides that, effective upon the closing of the Merger, Mr. Mills will receive a one-time variable change of control payment, equal to the greater of $900,000 or three times the “Severance Payment” as defined in the Mills Letter, subject to a cap of $995,000, plus a potential gross-up to cover excise taxes, if any.  Mr. Douglas Mills will continue as an employee and as Non-Executive Chairman of the Board of Directors of First Busey and receive an annual salary of $50,000.  The Mills Letter also includes a non-competition agreement, among other things.

Additionally, First Busey entered into a letter agreement with Mr. Edwin A. Scharlau II (the “Scharlau Letter”) pursuant to which Mr. Scharlau agreed to resign from his officer positions with First Busey and its subsidiaries effective upon closing of the Merger.  Additionally, the Scharlau Letter provides that, effective upon closing of the Merger, Mr. Scharlau will receive a one-time change of control payment of $500,000, plus a potential gross-up to cover excise taxes, if any, will continue as an employee and as the Non-Executive Vice Chairman of First Busey with an annual salary of $50,000, and will be subject to a non-competition agreement, among other things.

Furthermore, First Busey entered into an Employment Agreement with Mr. David D. Mills (the “Mills Agreement”), pursuant to which, upon effectiveness of the Merger, Mr. David Mills will serve as Executive Vice President of First Busey and as the President and Chief Executive Officer of Busey Bank N.A. with an annual base salary of $225,000, a bonus opportunity and other benefits.  Pursuant to the Mills Agreement, Mr. David Mills is entitled to a severance payment if he is terminated without cause or if he is constructively discharged or disabled.  Mr. David Mills is also entitled to a change of control payment if he terminates the Mills Agreement or First Busey or its successor terminates the Mills Agreement and Mr. Mills’ employment either within the 18 month period immediately preceding a change of control or at any time after a change of control.  The Mills Agreement also includes a non-competition agreement, among other things.

In addition, First Busey entered into an Employment Agreement with Ms. Barbara J. Harrington (the “Harrington Agreement”), pursuant to which, upon effectiveness of the Merger, Ms. Harrington will serve as Chief Financial Officer and Executive Vice President of First Busey, with an annual base salary of $145,000, a bonus opportunity and other benefits.  Pursuant to the Harrington Agreement, Ms. Harrington is entitled to a severance payment if she is terminated without cause or if she is constructively discharged or disabled.  Ms. Harrington is also entitled to a change of control payment if she terminates the Harrington Agreement or First Busey or its successor terminates the Harrington Agreement and Ms. Harrington’s employment either within the 18-month period immediately preceding a change of control or at any time after a change of control.  The Harrington Agreement also includes a non-competition agreement, among other things.

P. David Kuhl, the Chairman and Chief Executive Officer of Busey Bank, tendered his resignation, which was accepted on September 20, 2006 by the Board of Directors of Busey Bank, effective immediately.

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