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Securities Purchase Agreement

This is an actual contract by ECB Bancorp.

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Sectors: Banking
Governing Law: North Carolina, View North Carolina State Laws
Effective Date: September 09, 2011
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Exhibit 10.1



FIRST AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT



This First Amended and Restated Securities Purchase Agreement (this " Agreement" ) is dated as of September 9, 2011, by and among ECB Bancorp, Inc., a North Carolina corporation (the " Company" ), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a " Purchaser" and collectively, the " Purchasers" ).



RECITALS



A. The Company and certain of the Purchasers entered into a Securities Purchase Agreement, dated as of June 30, 2011 (the " Original Securities Purchase Agreement" ), and by executing and delivering this Agreement hereby agree to amend and restate the Original Securities Purchase Agreement in its entirety.

B. The Company and each Purchaser is executing and delivering this Agreement in the same form as each other Purchaser, and in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the " Securities Act" ), and Rule 506 of Regulation D (" Regulation D" ) as promulgated by the United States Securities and Exchange Commission (the " Commission" ) under the Securities Act.

C. Each Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, that aggregate number of shares of the Company' s common stock, $3.50 par value per share (the " Common Shares" or " Common Stock" ), set forth below such Purchaser' s name on the signature page of this Agreement. In addition to the Common Shares, each Purchaser who purchases not less than $3.5 Million Purchase Price of Common Shares will receive, and the Company will issue and deliver, a warrant, either (i) in the form attached hereto as Exhibit A-1none , to purchase shares of the Company' s Common Stock in an amount equal to twenty-five percent (25%) of the aggregate number of Common Shares purchased by the Purchaser, at an exercise price per share of Common Stock of $8.00 for a term of five years (the " Common Warrants" ) or (ii) in the form attached hereto as Exhibit A-2none , to purchase shares of the Company' s non-voting mandatorily convertible common shares of the Company (the " Non-Voting Common Stock" ) in an amount equal to twenty-five percent (25%) of the aggregate number of Common Shares purchased by that Purchaser, at an exercise price per share of Non-Voting Common Stock of $8.00 for a term of five years (the " Non-Voting Warrants," and collectively with the Common Warrants, the " Warrants" ). When issued, the Non-Voting Common Stock will have the terms set forth in articles of amendment in the form attached as Exhibit Bnone hereto (the " Non-Voting Articles of Amendment" ) made a part of the Company' s Articles of Incorporation, as amended, by the filing of the Non-Voting Articles of Amendment with the North Carolina Secretary of State (the " North Carolina Secretary" ) and will automatically convert into shares of the Company' s Common Stock subject to and in accordance with the terms and conditions of the Non-Voting Articles of Amendment. The shares of Common Stock and Non-Voting Common Stock issuable upon the exercise of the Warrants and the shares of Common Stock issuable upon the conversion of the Non-Voting Common Stock are referred to herein as the " Underlying Shares" and, together with the Common Shares and the Warrants are collectively referred to herein as the " Securities" .




D. Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, substantially in the form attached hereto as Exhibit Cnone (the " Registration Rights Agreement" ), pursuant to which, among other things, the Company will agree to provide certain registration rights with respect to the Securities under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws.



E. The Company has engaged Sandler O' Neill & Partners, L.P. as its exclusive placement agent (the " Placement Agent" ) for the offering of the Securities.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers hereby agree as follows:



ARTICLE I.



DEFINITIONS



Definitionsnone . In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Article I:

" Action" means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or, to the Company' s Knowledge, threatened in writing against the Company, any Subsidiary or any of their respective properties or any officer, director or employee of the Company or any Subsidiary acting in his or her capacity as an officer, director or employee before or by any federal, state, county, local or foreign court, arbitrator, governmental or administrative agency, regulatory authority, stock market, stock exchange or trading facility.

" Affiliate" means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

" Agency" has the meaning set forth in Section 3.1(oo).

" Agreement" shall have the meaning ascribed to such term in the Preamble.

" Approval" has the meaning set forth in Section 4.15.

" Articles of Incorporation" means the Articles of Incorporation of the Company and all amendments and certificates of designation thereto, as the same may be amended from time to time.

" Authorized Ownership Limit" has the meaning set forth in Section 2.3(b).







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" Bank" means the Company' s wholly owned subsidiary, The East Carolina Bank, a North Carolina chartered banking corporation.



" Bank Board" has the meaning set forth in Section 4.18.

" Bank Board Observer" has the meaning set forth in Section 4.18.

" Bank Board Representative" has the meaning set forth in Section 4.18.

" BHC Act" means the Bank Holding Company Act of 1956, as amended.

" Board of Directors" means the board of directors of the Company.

" Board Representative" has the meaning set forth in Section 4.18.

" Burdensome Condition" has the meaning set forth in Section 5.3(a).

" Business Day" means a day, other than a Saturday or Sunday, on which banks in North Carolina are open for the general transaction of business.

" Buy-In" has the meaning set forth in Section 4.1(e).

" Buy-In Price" has the meaning set forth in Section 4.1(e).

" Closing" means the closing of the purchase and sale of the Securities pursuant to this Agreement.

" Closing Date" means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied, or such other date as the parties may mutually agree.

" COB" means the North Carolina Commissioner of Banks.

" Code" has the meaning set forth in Section 3.1(qq).

" Commission" has the meaning set forth in the Recitals.

" Common Shares" or " Common Stock" has the meaning set forth in the Recitals, and also includes any securities into which the Common Shares or Common Stock may hereafter be reclassified or changed.

" Common Warrants" has the meaning set forth in the Recitals.

" Community Reinvestment Act" has the meaning set forth in Section 3.1(mm).







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" Company" shall have the meaning ascribed to such term in the Preamble.



" Company Counsel" means Kilpatrick Townsend & Stockton LLP.

" Company Deliverables" has the meaning set forth in Section 2.2(a).

" Company Reports" has the meaning set forth in Section 3.1(kk).

" Company' s Knowledge" means with respect to any statement made to the knowledge of the Company, that the statement is based upon the actual knowledge after due inquiry of the executive officers of the Company.

" Control" (including the terms " controlling" , " controlled by" or " under common control with" ) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

" Deadline Date" has the meaning set forth in Section 4.1(e).

" Disclosure Materials" has the meaning set forth in Section 3.1(h).

" DTC" means The Depository Trust Company.

" Effective Date" means the date on which the initial Registration Statement required by the terms hereof is first declared effective by the Commission.

" Endicott" means Endicott Opportunity Partners III, L.P.

" Environmental Laws" has the meaning set forth in Section 3.1(l).

" ERISA" has the meaning set forth in Section 3.1(qq).

" Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

" FDIC" means the Federal Deposit Insurance Corporation.

" Federal Reserve" has the meaning set forth in Section 3.1(kk).

" Form 10-K" has the meaning set forth in Section 4.6.

" GAAP" means U.S. generally accepted accounting principles.

" Guarantor" has the meaning set forth in Section 6.20.

" Indemnified Person" has the meaning set forth in Section 4.8(b).







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" Information" has the meaning set forth in Section 4.17.



" Insurer" has the meaning set forth in Section 3.1(oo).

" Intellectual Property" has the meaning set forth in Section 3.1(r).

" Lead Investor" means either PIMCO, Patriot and/or Endicott, as the case may be.

" Legend Removal Date" has the meaning set forth in Section 4.1(c).

" Lien" means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.

" Loan Investor" has the meaning set forth in Section 3.1(oo).

" Material Adverse Effect" means, with respect to the Company, any change, circumstance or effect, individually or in the aggregate, that (i) is, or is reasonably expected to be, materially adverse to the business, results of operations, or financial condition, of the Company and its Subsidiaries taken as a whole, or (ii) could materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Closing; provided, however , in determining whether a Material Adverse Effect has occurred, there shall be excluded any effect to the extent resulting from the following: (A) changes, after the Original Signing Date, in GAAP or regulatory accounting requirements applicable to financial institutions generally, except to the extent such change disproportionately adversely affects the Company and its Subsidiaries, taken as a whole, (B) changes, after the Original Signing Date, in laws of general applicability, rules and regulations or interpretations thereof by any governmental or regulatory authorities, agencies, courts, commissions or other entities, whether federal, state, local or foreign, or applicable self-regulatory organizations, (C) actions or omissions by the Company taken with the prior written permission of the Purchaser or upon the recommendation of the Purchaser or required under this Agreement, (D) changes, after the Original Signing Date, in global or national or regional political conditions (including the outbreak of war or acts of terrorism) or in general or regional economic or market conditions affecting financial institutions or their holding companies generally except to the extent that any such changes in general or regional economic or market conditions have a disproportionate adverse effect on such party or (E) the public disclosure of this Agreement or the transactions contemplated hereby.

" Material Contract" means any contract of the Company that was filed as an exhibit to the SEC Reports on file as of the Original Signing Date, pursuant to Item 601 of Regulation S-K promulgated under the Securities Act.

" Material Permits" has the meaning set forth in Section 3.1(p).

" Money Laundering Laws" has the meaning set forth in Section 3.1(ii).

" New Security" has the meaning set forth in Section 4.21(a).







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" Non-Control Determination" has the meaning set forth in Section 4.15.



" Non-Public Information" has the meaning set forth in Section 4.6.

" Non-Voting Articles of Amendment" has the meaning set forth in the Recitals.

" Non-Voting Common Stock" has the meaning set forth in the Recitals.

" Non-Voting Warrants" has the meaning set forth in the Recitals.

" North Carolina Courts" means the state and federal courts sitting in the State of North Carolina.

" North Carolina Secretary" has the meaning set forth in the Recitals.

" Observer" has the meaning set forth in Section 4.18.

" OFAC" means the office of Foreign Assets Control of the U.S. Treasury Department.

" Offering" has the meaning set forth in Section 4.21(b).

" Original Securities Purchase Agreement" has the meaning set forth in the Recitals.

" Original Signing Date" means June 30, 2011.

" Outside Date" means January 31, 2012.

" Passivity Commitments" means the passivity commitments required by the Federal Reserve to be entered into in connection with the consummation of the transactions contemplated by this Agreement.

" Patriot" means Patriot Financial Partners, L.P. and Patriot Financial Partners Parallel, L.P. collectively.

" Person" means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

" PIMCO" means FIE I LLC

" Placement Agent" has the meaning set forth in the Recitals.

" Press Release" has the meaning set forth in Section 4.6.

" Principal Trading Market" means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the Original Signing Date, and the Closing Date, shall be the NASDAQ Global Market.







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" Proceeding" means an action, claim, suit, investigation or legal proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.



" Prospectus" means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement or any other amendments and supplements to such prospectus, including without limitation any preliminary prospectus, any pre-effective or post-effective amendment and all material incorporated by reference in any prospectus.

" Purchase Price" means $16.00 per share for each Common Share.

" Purchaser" or " Purchasers" shall have the meaning ascribed to such term in the Preamble.

" Purchaser Deliverables" has the meaning set forth in Section 2.2(b).

" Purchaser Obligations" has the meaning set forth in Section 6.20.

" Purchaser Party" has the meaning set forth in Section 4.8(a).

" Purchaser Related Party" has the meaning set forth in Section 6.19.

" Qualifying Ownership Interest" has the meaning set forth in Section 4.18.

" Registration Rights Agreement" has the meaning set forth in the Recitals.

" Registration Statement" means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Registrable Securities (as defined in the Registration Rights Agreement).

" Regulation D" has the meaning set forth in the Recitals.

" Regulation O" has the meaning set forth in Section 3.1(t).

" Regulatory Agreement" has the meaning set forth in Section 3.1(mm).

" Required Approvals" has the meaning set forth in Section 3.1(e).

" Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

" SEC Report s" has the meaning set forth in Section 3.1(h).







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" Secretary' s Certificate" has the meaning set forth in Section 2.2(a)(iv).



" Securities" has the meaning set forth in the Recitals.

" Securities Act" has the meaning set forth in the Recitals.

" Shareholder Approval" has the meaning set forth in Section 4.11.

" Shareholder Proposals" has the meaning set forth in Section 4.11.

" Significant Subsidiaries" has the meaning set forth in Section 3.1(b).

" Subscription Amount" means with respect to each Purchaser, the aggregate amount to be paid for the Common Shares purchased hereunder as indicated on such Purchaser' s signature page to this Agreement.

" Subsidiary" means any entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company.

" TARP" has the meaning set forth in Section 4.10.

" Trading Day" means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the " pink sheets" by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided , that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

" Trading Market" means whichever of the New York Stock Exchange, the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

" Transaction Documents" means this Agreement, the schedules and exhibits attached hereto, the Non-Voting Articles of Amendment and any other documents or agreements executed in connection with the transactions contemplated hereunder.

" Transfer Agent" means First Citizens Bank & Trust Company, or any successor transfer agent for the Company.

" Underlying Shares" has the meaning set forth in the Recitals.







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" Warrants" has the meaning set forth in the Recitals.



ARTICLE II.



PURCHASE AND SALE



2.1 Closingnone .



(a) Purchase of Securitiesnone . Subject to the terms and conditions set forth in this Agreement, at the Closing the Company shall issue and sell to each Purchaser, and each Purchaser shall, severally and not jointly, purchase from the Company, the number of Common Shares as indicated on such Purchaser' s signature page to this Agreement at a per share price equal to the Purchase Price, and, if applicable, the Company shall deliver to each Purchaser a Warrant to purchase the number of shares of Common Stock or Non-Voting Common Stock as indicated on such Purchaser' s signature page to this Agreement.

(b) Closingnone . The Closing of the purchase and sale of the Securities shall take place at the offices of the Company, Kilpatrick Townsend & Stockton LLP, 607 14 th Street, NW, Washington, DC on the Closing Date or at such other locations or remotely by facsimile transmission or other electronic means as the parties may mutually agree and shall occur no later than the fifth Business Day following the date on which the conditions to closing set forth in Article V are satisfied (other than those conditions that by their nature are to be satisfied at Closing but subject to the fulfillment or waiver of those conditions).

(c) Delivery and Paymentnone . At the Closing, the Company shall deliver to each of the respective Purchasers a certificate or certificates, in such reasonable denominations as the Purchaser may have designated in writing not less than three days before the Closing, and registered in the name of the Purchaser (or its designee or nominee), representing the number of Common Shares and, if applicable, a Warrant the Purchaser is acquiring in the transaction. At the Closing, the Purchaser shall deliver its respective Subscription Amount in immediately available funds by wire transfer to a bank account designated by the Company.



2.2 Closing Deliveriesnone .



(a) On or prior to the Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser the following (the " Company Deliverables" ):



(i) this Agreement, including the Registration Rights Agreement and the management rights agreement in the form of Exhibit Fnone , duly executed by the Company;

(ii) one or more stock certificates and warrant certificates (if physical certificates are required by the Purchaser to be held immediately prior to Closing; if not, then facsimile or " .pdf" copies of such certificates shall suffice for purposes of Closing with the original stock certificates to be delivered within three Business Days of the Closing Date), evidencing the Securities subscribed for by Purchaser hereunder, registered in the name of such Purchaser (or, if the Company and such Purchaser agree, the Company shall cause to be made a book-entry record through the facilities of DTC representing the Common Shares registered in the name of such Purchaser);







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(iii) a legal opinion of Company Counsel, dated as of the Closing Date and in the form attached hereto as Exhibit Dnone , executed by such counsel and addressed to the Purchasers; and



(iv) a certificate of the Secretary of the Company, in the form attached hereto as Exhibit Enone (the " Secretary' s Certificate" ), dated as of the Closing Date, (a) certifying the resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Securities, (b) certifying the current versions of the articles of incorporation, as amended, and by-laws, as amended, of the Company and (c) certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company;

(v) the certificate referred to in Section 5.1(g); and

(vi) The Company shall have delivered a certificate evidencing the formation and good standing of each of the Company and the Bank in North Carolina issued by the North Carolina Secretary of State, as of a date within five (5) business days of the Closing Date.



(b) On or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following (the " Purchaser Deliverables" ):



(i) this Agreement, including the Registration Rights Agreement and, with respect to the Lead Investors, the management rights agreement in the form of Exhibit Fnone , duly executed by such Purchaser; and

(ii) its Subscription Amount, in U.S. dollars and in immediately available funds, in the amount indicated below such Purchaser' s name on the applicable signature page hereto by wire transfer in accordance with the Company' s written instructions.



ARTICLE III.



REPRESENTATIONS AND WARRANTIES



On or prior to the Original Signing Date, the Company delivered to Purchaser and Purchaser delivered to the Company a letter setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 3.1 with respect to the Company, or in Section 3.2 with respect to Purchaser, or to one or more covenants contained in Article IV.

3.1 Representations and Warranties of the Companynone . The Company hereby represents and warrants as of the Original Signing Date and the Closing Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date), to each of the Purchasers that:



(a) Subsidiariesnone . The Company has no direct or indirect Subsidiaries other than those listed in Schedule 3.1(a)none hereto. Except as disclosed in Schedule 3.1(a)none hereto, the Company owns, directly or indirectly, all of the capital stock or comparable equity interests of each Subsidiary free and clear of any and all Liens, and all the issued and outstanding shares of capital stock or comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.







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(b) Organization and Qualificationnone . The Company and each of its " Significant Subsidiaries" (as defined in Rule 1-02 of Regulation S-X) is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Significant Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. The Company and each of its Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have a Material Adverse Effect. The Company is duly registered as a bank holding company under the BHC Act. The Bank' s deposit accounts are insured up to applicable limits by the FDIC, and all premiums and assessments required to be paid in connection therewith have been paid when due. The Company has conducted its business in compliance with all applicable federal, state and foreign laws, orders, judgments, decrees, rules, regulations and applicable stock exchange requirements, including all laws and regulations restricting activities of bank holding companies and banking organizations, except for any noncompliance that, individually or in the aggregate, has not had and would not be reasonably expected to have a Material Adverse Effect.



(c) Authorization; Enforcement; Validitynone . The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations he
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