Exhibit 10.1


United States Department of the Treasury

1500 Pennsylvania Avenue, NW

Washington, D.C. 20220


Dear Ladies
and Gentlemen: 


          The
company set forth on the signature page hereto (the “Company”) intends to issue in a private placement the number
of shares of a series of its preferred stock set forth on Schedule A hereto
(the “Preferred Shares”) and a
warrant to purchase the number of shares of a series of its preferred stock set
forth on Schedule A hereto (the “Warrant”
and, together with the Preferred Shares, the “Purchases
Securities”) and the United States Department of the Treasury (the “Investor”) intends to purchase from the
Company the Purchased Securities. 


          The
purpose of this letter agreement is to confirm the terms and conditions of the
purchase by the investor of the Purchased Securities. Except to the extent
supplemented or superseded by the terms set forth herein or in the Schedules
hereto, the provisions contained in the Securities Purchase Agreement –
Standard Terms attached hereto as Exhibit A (the “Securities Purchase
Agreement”) are incorporated by reference herein. Terms that are defined in the
Securities Purchase Agreement are used in this letter agreement as so defined.
In the event of any inconsistency between the letter agreement and the
Securities Purchase Agreement, the terms of this letter agreement shall govern.



          Each
of the Company and the Investor hereby confirms its agreement with the other
party with respect to the issuance by the Company of the Preferred Securities
and the purchase by the Investor of the Purchased Securities pursuant to this
letter agreement and the Securities Purchase Agreement on the terms specified
on Schedule A hereto. 


          This
letter agreement (including the Schedules hereto), the Securities Purchase
Agreement (including the Annexes thereto), the Disclosure Schedules and the
Warrant constitute the entire agreement, and supersede all other prior
agreements, understandings, representations and warranties, both written and
oral, between the parties, with respect to the subject matter hereof. This
letter agreement constitutes the “Letter Agreement” referred to in the
Securities Purchase Agreement. 


          This
letter agreement may be executed in any number of separate counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement. Executed signature
pages to this letter agreement may be delivered by facsimile and such
facsimiles will be deemed as sufficient as if actual signature pages had been
delivered. 


***






          In
witness whereof, this letter agreement has been duly executed and delivered by
the duly authorized representatives of the parties hereto as of the date
written below. 


	
 

	
 

	
 


	
 

	
UNITED
 STATES DEPARTMENT OF THE TREASURY


	
 

	
 

	
 


	
 

	
By:________________________________________


	
 

	
 

	
Name:


	
 

	
 

	
Title:


	
 

	
 

	
 


	
 

	
COMPANY:
 FIRST NATIONAL BANK OF NORTHERN
                      CALIFORNIA


	
 

	
 

	
 


	
 

	
By:________________________________________


	
 

	
 

	
Name:


	
 

	
 

	
Title:


	
 

	
 

	
 


	
Date:_____________________________

	
 

	
 












SCHEDULE A 


ADDITIONAL TERMS AND CONDITIONS


	
 

	
 

	
 

	
 

	
 


	
Company
 Information:

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
Name of the
 Company:

	
 

	
FNB Bancorp
 (UST Sequence No. 846)


	
 

	
 

	
 

	
 

	
 


	
 

	
Corporate or
 other organizational form:

	
 

	
corporation


	
 

	
 

	
 

	
 

	
 


	
 

	
Jurisdiction
 of Organization:

	
 

	
California


	
 

	
 

	
 

	
 

	
 


	
 

	
Appropriate
 Federal Banking Agency:

	
 

	
Board of
 Governors of the Federal Reserve System


	
 

	
 

	
 

	
 

	
 


	
 

	
Notice
 Information:

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
To: 

	
Thomas C.
 McGraw

	
Copy:

	
Joseph G.
 Mason


	
 

	
 

	
FNB Bancorp
 LLP

	
 

	
Dodd Mason
 George


	
 

	
 

	
975 El Camino
 Real, 3rd Floor

	
 

	
1740
 Technology


	
 

	
 

	
Drive, Suite
 205

	
 

	
San Jose, CA
 95110


	
 

	
 

	
South San
 Francisco, CA 94080

	
 

	
Telephone:
 (408) 452-1478


	
 

	
 

	
Telephone:
 (650) 875-4865

	
 

	
Email:
Mason@DoddMason.com 


	
 

	
 

	
Email:
TMcGraw@FamilyBank.com 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
Terms of the
 Purchase:

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
Series of
 Preferred Stock Purchased:

	
 

	
Fixed Rate
 Cumulative

 Perpetual Preferred Stock,

 Series A


	
 

	
 

	
 

	
 

	
 


	
 

	
Per Share
 Liquidation Preference of Preferred Stock:

	
 

	
$1,000


	
 

	
 

	
 

	
 

	
 


	
 

	
Number of
 Shares of Preferred Stock Purchased:

	
 

	
12,000


	
 

	
 

	
 

	
 

	
 


	
 

	
Dividend
 Payment Dates on the Preferred Stock:

	
 

	
February 15,
 May 15, August

 15, November 15


	
 

	
 

	
 

	
 

	
 


	
 

	
Series of
 Warrant Preferred Stock:

	
 

	
Fixed Rate
 Cumulative

 Perpetual Preferred Stock,

 Series B


	
 

	
 

	
 

	
 

	
 


	
 

	
Number of
 Warrant Shares:

	
 

	
600.006


	
 

	
 

	
 

	
 

	
 


	
 

	
Number of Net
 Warrant Shares (after net settlement):

	
 

	
600


	
 

	
 

	
 

	
 

	
 


	
 

	
Exercise
 Price of the Warrant:

	
 

	
$0.01


	
 

	
 

	
 

	
 

	
 


	
 

	
Purchase
 Price:

	
 

	
$12,000,000












	
 

	
 

	
 

	
 

	
 


	
Closing:

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Location of
 Closing:

	
 

	
Hughes
 Hubbard & Reed LLP

 One Battery Park Plaza

 New York, NY 10004


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Time of
 Closing:

	
 

	
9:00 a.m.
 (EST)


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Date of
 Closing:

	
 

	
February 27,
 2009


	
 

	
 

	
 

	
 

	
 


	
Wire Information for Closing:

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
ABA Number:

	
 

	
[REDACTED TEXT]


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Bank:

	
 

	
First National Bank of Northern California


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Account Name:

	
 

	
FNB Bancorp


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Account Number:

	
 

	
[REDACTED TEXT]


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Beneficiary:

	
 

	
not applicable


	
 

	
 

	
 

	
 

	
 





Contact for Confirmation of Wire Information:



David A. Curtis 

Senior Vice President and

Chief Financial Officer 

First National Bank of Northern California

975 El Camino Real, 3rd Floor

South San Francisco, CA 94080 


Telephone: (650) 875-4862

Email: DCurtis@FamilyBank.com 






SCHEDULE B 


CAPITALIZATION


	
 

	
 

	
 


	
Capitalization
 Date:      January 31, 2009

	
 


	
 

	
 

	
 


	
Common Stock

	
 


	
 

	
 

	
 


	
 

	
Par value:

	
no par


	
 

	
 

	
 


	
 

	
Total
 Authorized:

	
10,000,000


	
 

	
 

	
 


	
 

	
Outstanding:

	
3,030,000


	
 

	
 

	
 


	
 

	
Subject to
 warrants, options, convertible

 securities, etc.:

	
365,252
 (stock option plan only)


	
 

	
 

	
 


	
 

	
Reserved for
 benefit plans and other issuances:

	
365,252
 (stock option plan only)


	
 

	
 

	
 


	
 

	
Remaining
 authorized but unissued:

	
6,970,000 (includes
 365,252 shares reserved for options granted and remaining unexercised and
 options to be granted under the terms of the FNB Bancorp stock option plans)


	
 

	
 

	
 


	
 

	
Shares
 issued after Capitalization Date (other

 than pursuant to warrants, options,

 convertible securities, etc. as set forth

 above):

	
none


	
 

	
 

	
 


	
Preferred
 Stock

	
 


	
 

	
 

	
 


	
 

	
Par value:

	
no par


	
 

	
 

	
 


	
 

	
Total
 Authorized:

	
5,000,000


	
 

	
 

	
 


	
 

	
Outstanding
 (by series):

	
none


	
 

	
 

	
 


	
 

	
Reserved for
 issuance:

	
none


	
 

	
 

	
 


	
 

	
Remaining
 authorized but unissued:

	
5,000,000














	
 

	
 

	
 


	
Holders of
 5% or more of any class of capital stock

	
 

	
Primary
 Address


	
 

	
 

	
 


	
The Ricco
 Lagomarsino Trust (10.24%)

	
 

	
26 Hillcrest
 Drive

 Daly City, CA 94014


	
 

	
 

	
 


	
 

	
 

	
 


	
Thomas G.
 Atwood c/o Cypress Abbey Company (11.01%)

	
 

	
P.O. Box 516

 Colma, CA 94014


	
 

	
 

	
 


	
 

	
 

	
 


	
Thomas C.
 McGraw (5.16%, excluding stock options)

	
 

	
510 Fawn
 Drive

 San Anselmo, CA 94960














	
 

	
 

	
 


	
SCHEDULE C


	
 

	
 

	
 


	
LITIGATION


	
 

	
 

	
 


	
List any
 exceptions to the representation and warranty in Section 2.2(l) of the
 Securities Purchase Agreement – Standard Terms.


	
 

	
 

	
 


	
If none,
 please so indicate by checking the box:

	
x

	
 













	
 

	
 

	
 


	
SCHEDULE D


	
 


	
COMPLIANCE WITH LAWS


	
 


	
List any
 exceptions to the representation and warranty in the second sentence of
 Section 2.2(m) of the Securities Purchase Agreement – Standard Terms.


	
 

	
 

	
 


	
If none,
 please so indicate by checking the box:

	
x

	
 


	
 

	
 

	
 


	
List any
 exceptions to the representation and warranty in the last sentence of Section
 2.2(m) of the Securities Purchase Agreement – Standard Terms.


	
 


	
If none,
 please so indicate by checking the box:

	
x

	
 













	
 

	
 

	
 


	
SCHEDULE E


	
 


	
REGULATORY AGREEMENTS


	
 


	
List any
 exceptions to the representation and warranty in Section 2.2(s) of the
 Securities Purchase Agreement – Standard Terms.


	
 


	
If none,
 please so indicate by checking the box:

	
x