Document:

Exhibit 10.10

EXECUTIVE VICE PRESIDENT

EMPLOYMENT, CONFIDENTIALITY

AND NON-DISCLOSURE AGREEMENT

 

PART I

PARTIES TO AGREEMENT

 

Section 1.01 - Parties:  This Employment Agreement (hereinafter referred to as the “Agreement”) is entered into by and between Farmers & Merchants Bank of Central California, a California banking corporation (the “Bank”), its successors and assigns (hereinafter referred to as “Employer”), and Ryan J. Misasi (hereinafter referred to as “Employee”).  Employer and Employee are sometimes collectively referred to hereinafter as the “Parties” and individually as a “Party”.

PART II

EMPLOYMENT

 

Section 2.01 - Employment:  Employer hereby agrees to continue employing Employee, and Employee hereby accepts such continued employment with Employer, in accordance with the terms and conditions set forth herein.

Section 2.02 - Term of Employment:  This Agreement shall become effective on July 1, 2015 provided Employee has executed and returned to Employer the general release of claims in the form attached hereto as Exhibit A.  This Agreement shall terminate on June 30, 2018 unless earlier terminated pursuant to the provisions of Part VII herein.  If this Agreement is not terminated pursuant to Part VII, and provided Employee enters into an effective general release of claims at that time in the form attached hereto as Exhibit A, the Agreement shall renew automatically for an additional two year term, and for successive additional two year terms thereafter, unless earlier terminated pursuant to the provisions of Part VII.

PART III

DUTIES OF EMPLOYEE

 

Section 3.01- General Duties:  During the term of this Agreement, Employee shall be employed as Executive Vice President and Retail Banking Division Manager under the direction of the President and Chief Executive Officer and shall perform and discharge well and faithfully the duties that may be assigned to Employee from time to time by the President and Chief Executive Officer in connection with the conduct of the Employer’s business.  Nothing herein shall preclude Employer’s Board of Directors or Chief Executive Officer from changing Employee’s title or duties as long as the resulting title and duties are reasonably commensurate with the education, employment background and qualifications of the Employee and involve similar responsibilities and scope of duties.

 

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Section 3.02 - Outside Activities:  Employee agrees that, while employed by Employer, Employee will refrain from any outside activities which actually or potentially are in direct conflict with the essential enterprise-related or reputational interest of Employer, that would cause disruption of the Employer’s operations, or that would be in direct competition with the Employer or assist competitors of the Employer.  It shall not be a violation of this Agreement for Employee (A) to serve on corporate, civic or charitable boards or committees, or (B) to deliver lectures or fulfill speaking engagements, so long as such activities do not significantly interfere with the performance of Employee’s responsibilities as an employee of the Employer; provided, however, that Employee shall give the Employer’s Chief Executive Officer not less than fourteen (14) days’ notice of any actions contemplated by clauses (A) or (B), and will refrain from any such action to which the Chief Executive Officer in his/her sole discretion, objects.  It shall not be a violation of this Agreement for Employee to manage personal investments, so long as such activities do not represent a conflict with Employer, as described in Employer’s Employee Code of Conduct, and other pertinent policies and agreements.

PART IV

COMPENSATION

 

Section 4.01 - Salary:  Employee shall be paid an annual base salary of no less than $280,000 per year.  This base salary shall be paid to Employee in such intervals and at such times as other salaried executives of Employer are paid.  Employer’s Board of Directors reserves the right to set the timing and level of salary adjustments for all employees and any particular employee at its sole discretion.

Section 4.02 - Incentive and Retention Programs:  Employee shall be eligible for an annual discretionary incentive bonus.  The amount of the bonus for a given year shall be determined by Employer’s Board of Directors annually by January 31st of each following year and shall be paid no later than February 28th of each following year, provided Employee is still employed by Employer on the payment date.  Employee shall be entitled to participate in the “Farmers & Merchants Bank of Central California Executive Retirement Plan – Equity Component”, “Farmers & Merchants Bank of Central California Executive Retirement Plan – Performance Component” and the “Farmers & Merchants Bank Deferred Compensation Plan”, the terms and conditions of which are set forth in separate agreements so titled.

PART V

BENEFITS

 

Section 5.01 - Benefits:  Employee shall be entitled to participate in whatever vacation, medical, dental, pension, sick leave, 401(k), profit sharing, disability insurance or other plans of general application, or other benefits which are in effect as to other executive officers of Employer, or as may be in effect from time to time, in accordance with the rules established for individual participation in any such plan.

Section 5.02 - Automobile/Automobile Allowance:  Employer shall provide Employee with either an automobile for business and incidental personal use or an automobile allowance as per Employer policy. However, at the sole discretion of the Board of Directors and/or the Employer’s Chief Executive Officer, the Employer reserves the right to change or eliminate this benefit at any time.

 

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Section 5.03 - Membership Fees:  Employer shall reimburse Employee for all appropriate and reasonable expenses incurred in performing Employee’s duties, including providing and paying for the dues and fees of membership in local social, service and civic clubs and/or organizations as Employer deems appropriate and necessary for enhancement of its presence within the local business community.  In order to be eligible for reimbursement of these expenses, Employee must obtain pre-approval for such memberships from Employer’s Chief Executive Officer and must provide Employer with receipts and documented evidence as is required by federal and state laws and regulations.

Section 5.04 - Directors and Officers Liability Insurance Coverage:  To the extent commercially reasonable to do so under prevailing conditions in the insurance market, Employer shall provide directors and officers liability insurance coverage for the protection of Employee on terms and conditions no less favorable to Employee than are in effect on the date that this Agreement shall become effective. Following any termination of Employee’s employment with Employer, such coverage shall be continued under substantially the same terms and conditions as are in effect immediately prior to such termination of employment at no cost to Employee until all applicable statutes of limitation expire with respect to claims arising prior to such termination of employment.  Employee expressly acknowledges, however, that Employer cannot and shall not guarantee the performance of the insurance company issuing such directors and officers liability insurance coverage pursuant to this Section.  In addition to the foregoing, Employer shall also continue to make indemnification and advancement of litigation expense payments to Employee to the maximum extent and for the maximum period permitted by law.

PART VI

EXPENSES

 

Section 6.01 - Travel and Entertainment Expenses:  During the term of this Agreement, Employer shall reimburse Employee for reasonable out of pocket expenses incurred in connection with Employer’s business, including travel expenses, food and lodging while away from Employee’s home, subject to such policies as Employer may from time to time establish for other officers of equivalent title.  Employee shall keep records of Employee’s travel and entertainment expenses in a form suitable to the Internal Revenue Service and the Franchise Tax Board to qualify this reimbursement as a federal and state income tax deduction for Employer.  In addition, Employee shall provide Employer with receipts for all expenses for which Employee seeks reimbursement.

 

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PART VII

TERMINATION OF EMPLOYMENT

 

Section 7.01 - Termination at Option of Employer:  Employer may terminate this Agreement at any time and without “Cause” (as defined below) by giving Employee sixty (60) days written notice of Employer’s intent to terminate this Agreement.  The 60th day after Notice of Termination shall be deemed Employee’s Separation Date.  In the event Employee’s employment is terminated by Employer pursuant to this Section, Employee shall be paid all accrued salary, accrued but unused vacation, and reimbursement expenses for which expense reports have been provided to Employer, or which are provided to Employer prior to the Separation Date, in accordance with Employer’s policies and this Agreement.  In addition to the foregoing amounts, if Employee is terminated by Employer pursuant to this Section, and subject to (A) Employee’s continued employment through, and termination of employment on, the Separation Date; (B) Employee’s continued loyalty to Employer, which includes, but is not limited to, Employee or any outside third party refraining from any announcements to anyone inside or outside Employer that the Employee is leaving Employer; and (C) Employee’s execution and non-revocation of a general release of all claims in the form attached hereto as Exhibit B, which release becomes irrevocable within 60 days following the Separation Date or such earlier deadline provided by Employer, then Employee will be entitled to receipt of the following Severance Package:

	1.	A Severance Payment equivalent to one (1) times Employee’s highest Annual Compensation for services (“Annual Compensation,” defined as Total Compensation as reported in Employer’s previous years’ proxy statements) which Employee has earned during Employee’s employment with Employer.  The Severance Payment shall be paid out in equal increments on regularly scheduled pay days for a period of 12 months following the Separation Date, provided that any payments delayed pending the effectiveness of the release shall be accumulated and paid in a lump sum on the next pay day following the effectiveness of the release, with any remaining payments due paid in accordance with the schedule otherwise provided herein.  Such payments will cease, however, if Employee fails to comply with the provisions of Part IX of this Agreement.

	2.	Payment of all awards of qualified and nonqualified benefit plans and incentive and retention programs in accordance with the terms of those plans and programs, including applicable vesting and forfeiture provisions.  Any such payment or distribution from a nonqualified deferred compensation plan shall be governed by the terms of such plan relating to the timing of distributions.

Section 7.02- Termination for Cause:  Employer may terminate Employee’s employment at any time for “Cause” upon written Notice of Termination to Employee, setting forth in reasonable detail the basis for the determination of “Cause.”  Termination for Cause shall be effective immediately upon receipt of the Notice of Termination by Employee, and the date on which the Notice of Termination is received shall be deemed to be the Separation Date.  If Employee is terminated pursuant to this Section 7.02, Employee shall be entitled only to accrued salary, vacation and reimbursement of expenses for which expense reports have been provided to Employer, or which are provided to Employer within two weeks of the Separation Date, in accordance with Employer’s policies and this Agreement.  Employee shall be entitled to no further compensation or severance payment of any nature; provided however, that Employee will also be entitled to payment of all awards of qualified and nonqualified benefit plans and incentive and retention programs in accordance with the terms of those plans, including any applicable vesting and forfeiture provisions.  Any such payment or distribution from a nonqualified deferred compensation plan shall be governed by the terms of such plan relating to the timing of distributions.

 

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“Cause” for purposes of this Agreement shall be defined as conviction of a felony resulting in a material adverse economic effect on Employer; provided that the determination of such material adverse economic effect shall in any case be made pursuant to a resolution duly adopted by a vote of no less than two-thirds (2/3’s) of the entire Board of Directors of the Bank at a meeting duly held and called for such purpose; and provided further, that Employee shall be given reasonable notice of such meeting and shall have the opportunity, together with counsel, to be heard before the Board of Directors at any such meeting.

Section 7.03 - Termination at Option of Employee:  This Agreement may be terminated by Employee at Employee’s sole discretion by giving one hundred twenty (120) days written Notice of Resignation to Employer.  If Employee terminates his/her employment pursuant to this Section 7.03, and subject to Employee’s continued satisfactory performance of such tasks and duties that may be assigned to Employee through the Separation Date, and Employee’s continued loyalty to Employer through the Separation Date (which includes, but is not limited to, refraining from any announcements by Employee or any outside third party to anyone inside or outside Employer that the Employee is leaving Employer), Employee shall receive accrued salary and payment for accrued but unused vacation through the Separation Date.  Employee shall also be entitled to payment of all awards of qualified and nonqualified benefit plans and incentive and retention programs, in accordance with the terms of those plans, including applicable vesting and forfeiture provisions.  Any such payment or distribution from a nonqualified deferred compensation plan shall be governed by the terms of such plan relating to the timing of distributions.  Alternatively, Employer may, at its option, at any time after Employee gives written Notice of Resignation as herein provided, pay Employee’s accrued salary up to and including the effective Separation Date set forth in Employee’s Notice of Resignation, and thereupon immediately release and terminate Employee’s employment.  Notwithstanding the foregoing, if Employer determines at any time during the 120-day notice period that Employee materially breaches the obligations imposed by the provisions of this Section 7.03 and Part IX of this Agreement, Employer may shorten the notice period and accelerate the Separation Date, thereby reducing the compensation otherwise payable to Employee pursuant to this Section.

Section 7.04 - Option to Terminate on Permanent Disability of Employee:  Employer may terminate this Agreement if, during the term of this Agreement, Employee shall become “Permanently Disabled”, as that term is defined herein.  A termination pursuant to this Section 7.04 shall be deemed a termination without “Cause,” and shall be governed by the procedures, and shall entitle Employee to the Severance Package specified in Section 7.01. For purposes of this Agreement, Employee shall be deemed to have become Permanently Disabled if Employee is unable to perform his/her current duties, with or without reasonable accommodation, for an aggregate of 120 working days over a six month period, by reason of any medically determinable physical or mental impairment.  Employer may issue its Notice of Termination to Employee on or after the 90th working day of Permanent Disability, as defined herein.

The Notice of Termination shall be deemed withdrawn and the Agreement shall remain in effect after a Notice of Termination has been given to Employee under the following circumstances.

 

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	A.	Within thirty (30) days of the Notice of Termination being given to Employee, Employee returns to the full performance of Employee’s duties and provides medical certification that Employee can perform the essential functions of Employee’s duties with or without reasonable accommodation.

	B.	Within thirty (30) days of the Notice of Termination being given to Employee, Employee requests a reasonable accommodation from Employer which would permit Employee to perform the essential functions of Employee’s duties and such reasonable accommodation can be provided by Employer without an undue hardship.

Section 7.05 – Non-Renewal of Agreement.  For the avoidance of doubt, if this Agreement is not renewed automatically by reason of Employee’s failure to execute an effective general release pursuant to Section 2.02, Employee will not be entitled to the Severance Package specified in Section 7.01.

Section 7.06 - Continuation of Medical Benefits:  In the event Employee’s employment is terminated Employee shall be afforded the right to continue his/her medical benefits to the extent provided in the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), at his/her expense.  Employer shall provide Employee with the appropriate COBRA notification within the time required by the law from the Separation Date.

PART VIII

MERGERS AND ACQUISITIONS

Section 8.01 - Merger or Acquisition With a Change of Control.

	1.	Change of Control means a change of control of Farmers & Merchants Bancorp (“Bancorp”). Such a Change of Control  will be deemed to have occurred immediately before any of the following occur: (i) individuals, who were members of the Board of Directors of Bancorp immediately prior to a meeting of the shareholders of Bancorp which meeting involved a contest for the election of directors, do not constitute a majority of the Board of Directors of Bancorp following such election or meeting, (ii) an acquisition, directly or indirectly, of more than 30% of the outstanding shares of any class of voting securities of Bancorp by any Person, (iii) a merger, consolidation or sale of all, or substantially all, of the assets of Bancorp, wherein Bancorp’s shareholders immediately before such transaction shall own of record (immediately after such transaction) equity securities, other than any warrant or right to purchase such equity securities, of Bancorp or an acquiring entity or any parent entity thereof, possessing less than 70% of the voting power of Bancorp or such acquiring entity or any parent entity thereof  (in making the determination of ownership of such equity securities immediately after such transaction, equity securities owned by shareholders of Bancorp immediately prior to the transaction as shareholders to another party to the transaction shall be disregarded), or (iv) there is a change, during any period of one year, of a majority of the Board of Directors of Bancorp as constituted as of the beginning of such period, unless the election of each director who is not a director at the beginning of such period was approved by a vote of at least a majority of the directors then in office who were directors at the beginning of such period.  If the events or circumstances described in (i)-(iv), above, shall occur to or be applicable to Bank, then such Change of Control shall be deemed for all purposes of this Agreement to also be a “Change of Control” of Bancorp.  For purposes of this Agreement, the term “Person” shall mean and include any individual, corporation, partnership, group, association or other “person”, as such term is used in Section 14(d) of the Securities Exchange Act of 1934, other than Bancorp, Employer, any other wholly owned subsidiary of Bancorp or any employee benefit plan(s) sponsored by Bancorp, Bank or other subsidiary of Bancorp.  Notwithstanding the foregoing, a Change of Control shall not be deemed to have occurred unless the change also constitutes the occurrence of a "change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5), with respect to the Employee.

 

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	2.	In the event of either (i) Employee’s termination of employment during the term of this Agreement and after the signing of an agreement providing for, or otherwise in anticipation of a Change in Control of Employer or Bancorp under Section 8.01.1(i), (ii) or (iv), or (ii) a Change of Control of Employer or Bancorp under Section 8.01.1 (i), (ii) or (iv) during the term of this Agreement and prior to Employee’s termination of employment, and in each case upon the execution by Employee and non-revocation of a general release of all claims provided by Employer, Employer will provide Employee with a Change of Control Compensation Package equal to (A) two (2) times Employee’s highest Annual Compensation paid before the earlier of the (i) termination of employment or (ii) Change of Control; (B) Employee’s monthly premium for continuation coverage under COBRA (as defined in Section 7.06), determined as of the closing or other occurrence of the Change of Control, multiplied by thirty-six (36) months, whether or not such continuation coverage is elected by Employee; and (C) a gross-up payment as defined and set forth herein in Section 8.01.4.

In addition, Employee will be entitled to payment of all awards of benefit plans and incentive and retention programs in accordance with the terms of those plans and programs, including applicable vesting and forfeiture provisions.

Upon the closing or other occurrence of the Change of Control transaction, and subject to the provisions of this Section 8.01, Employee shall receive disbursement of payments due Employee under this Section (except for payments or distributions from or pursuant to any nonqualified deferred compensation plan), in one lump sum payment, less any withholding required by state, federal or local law.  Any payment or distribution from or pursuant to any nonqualified deferred compensation plan shall be governed by the terms of such plan.  If Employee becomes entitled to payment under this Section 8.01.2, Employee shall not be entitled to the Severance Package under Sections 7.01 or 7.04, notwithstanding Employee’s subsequent termination of employment pursuant to those Sections.

	3.	In the event of either (i) Employee’s termination of employment during the term of this Agreement and after the signing of an agreement providing for, or otherwise in anticipation of, a Change of Control of Employer or Bancorp under Section 8.01.1(iii) (and not under (i), (ii) or (iv)) or (ii) a Change of Control of Employer or Bancorp under Section 8.01.1 (iii) (and not under (i), (ii) or (iv)) during the term of this Agreement and prior to Employee’s termination of employment, Employer will provide Employee with a Change of Control Compensation Package equal to (A) one (1) times Employee’s highest Annual Compensation paid before the earlier of the (i) termination of employment or (ii) Change of Control; (B) a gross-up payment as defined and set forth herein in Section 8.01.4.

 

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Upon the closing or other occurrence of the Change of Control transaction, and subject to the provisions of this Section 8.01, Employee shall receive disbursement of payments due Employee under this Section in one lump sum payment, less any withholding required by state, federal or local law, upon the closing or other occurrence of the Change in Control transaction.  If Employee becomes entitled to payment under this Section 8.01.3, Employee shall still be entitled to the Severance Package under Sections 7.01 or 7.04, should Employee’s subsequent termination of employment occur pursuant to those Sections.

	4.	Gross-Up Payment:  Employee shall be entitled to a “Gross-Up Payment” under the terms and conditions set forth herein, and such payment shall include the Excise Tax reimbursement due pursuant to Section 8.01.4.a and any federal and state tax reimbursements due pursuant to Section 8.01.4.b.

		a.	In the event that any payment or benefit (as those terms are defined within the meaning of Internal Revenue Code Section 280G(b)(2)) paid, payable, distributed or distributable to the Employee (hereinafter referred to as “Payments”) pursuant to the terms of this Agreement or otherwise in connection with or arising out of Employee’s employment with Employer or a change of control would be subject to the Excise Tax imposed by Section 4999 of the Internal Revenue Code or any interest or penalties are incurred by Employee with respect to such Excise Tax, then Employee will be entitled to receive an additional payment (“Gross-Up Payment”) in an amount equal to the total Excise Tax, interest and penalties imposed on Employee as a result of the payment and the Excise Taxes on any federal and state tax reimbursements as set forth in Section 8.01.4.b.

		b.	If Employer is obligated to pay Employee pursuant to Section 8.01.4.a, Employer shall also pay Employee an amount equal to the “total presumed federal and state taxes” that could be imposed on Employee with respect to the Excise Tax reimbursements due to Employee pursuant to Section 8.01.4.a and the federal and state tax reimbursements due to Employee pursuant to this section.  For purposes of the preceding sentence, the “total presumed federal and state taxes” that could be imposed on Employee shall be conclusively calculated using a combined tax rate equal to the sum of the (a) the highest individual income tax rate in effect under Federal tax law applicable to Employee and the tax laws of the state in which Employee will be subject to tax on the payment and (b) the hospital insurance portion of FICA.

		c.	No adjustments will be made in this combined rate for the deduction of state taxes on the federal return, the loss of itemized deductions or exemptions, or for any other purpose for paying the actual taxes.

 

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It is further intended that in the event that any payments would be subject to other “penalty” taxes (in addition to the Excise Tax in section 8.01.4.a) imposed applicable federal tax law, that these taxes would also be included in the calculation of the Gross-Up Payment, including any federal and state tax reimbursements pursuant to section 8.01.4.b.

	5.	Determination of Eligibility for and Amount of Gross-Up Payment:  An initial determination as to whether a Gross-Up Payment is required pursuant to this Agreement and the amount of such Gross-Up Payment shall be made at Employer’s expense by an accounting firm appointed by Employer prior to any Change of Control.  The accounting firm shall provide its determination, together with detailed supporting calculations and documentation to Employer and Employee prior to submission of the proposed Change of Control to Employer’s or Bancorp’s shareholders, Board of Directors or appropriate regulators for approval.  If the accounting firm determines that no Excise Tax is payable by Employee with respect to a Payment or Payments, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payment or Payments.  Within ten (10) days of the delivery of the determination to Employee, Employee shall have the right to dispute the determination.  The existence of the dispute shall not in any way affect Employee’s right to receive the Gross-Up Payment in accordance with the determination.  Upon the final resolution of a dispute, Employer or its successor shall promptly pay to Employee any additional amount required by such resolution.  If there is no dispute, the determination shall be binding, final and conclusive upon Employer and Employee, except to the extent that any taxing authority subsequently makes a determination that the Excise Tax or additional Excise Tax is due and owing on the payments made to Employee.  If any taxing authority determines that the Excise Tax or additional Excise Tax is due and owing, Employer or the entity acquiring control of Employer shall pay the Excise Tax and any penalties assessed by such taxing authority.

	6.	Excise Tax Withholding:  Notwithstanding anything contained in this Agreement to the contrary, in the event that according to the determination, an Excise Tax will be imposed on any Payment or Payments, Employer or its successor shall pay to the applicable government taxing authorities as Excise Tax withholding, the amount of the Excise Tax that Employer has actually withheld from the Payment or Payments.

Section 8.02 – Merger or Acquisition Without a Change of Control.  In the event of a merger, consolidation or sale of all, or substantially all, of the assets of Bancorp, wherein Bancorp’s shareholders immediately before such transaction shall own of record (immediately after such transaction) equity securities, other than any warrant or right to purchase such equity securities, of Bancorp or an acquiring entity or any parent entity thereof, possessing more than 70% of the voting power of Bancorp or such acquiring entity or any parent entity thereof (in making the determination of ownership of such equity securities immediately after such transaction, equity securities owned by shareholders of Bancorp immediately prior to the transaction as shareholders to another party to the transaction shall be disregarded) Employee shall be paid a transaction bonus of .166% (one-sixth of one percent) of the deal value (defined as “the sum of any cash and the fair market value of any securities or other assets or property available for distribution to the holders of the acquired company’s equity securities, including amounts distributed after the closing of the acquisition pursuant to any escrow, earn-out or other similar arrangement, after deduction of any items subtracted from proceeds to be distributed to holders of the acquired company’s equity securities, such as costs and fees  that are associated with the transaction”), subject to a minimum of $50,000 and a maximum of $200,000.  Said transaction bonus to be paid through a contribution to the Non-Qualified Executive Retirement Plan – Equity Component.

 

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PART IX

COVENANTS

 

Section 9.01 - Confidential Nature of Relationship.  Employee acknowledges (i) the highly competitive nature of the business and the industry in which Employer competes; (ii) that as a key executive of Employer he/she has participated in and will continue to participate in the service of current customers and/or the solicitation of prospective customers, through which, among other things, Employee has obtained and will continue to obtain knowledge of the “know-how” and business practices of Employer, in which matters Employer has a substantial proprietary interest; (iii) that his/her employment hereunder renders the performance of services which are special, unique, extraordinary and intellectual in character, and his/her position with Employer placed and places him/her in a position of confidence and trust with the customers and employees of Employer; and (iv) that his/her rendering of services to the customers of Employer necessarily requires the disclosure to Employee of Trade and Business Secrets, Proprietary and Confidential Information, and Employer Materials (as defined in Section 9.03 below) of Employer.  In the course of Employee’s employment with Employer, Employee has and will continue to develop a personal relationship with the customers and prospective customers (defined for purposes of this Agreement as customers that Employer is either actively soliciting or in the process of making a proposal for services to as of Employee’s Separation Date) of Employer and a knowledge of those customers’ and prospective customers’ affairs and requirements, and the relationship of Employer with its established clientele has been, and will continue to be, placed in Employee’s hands in confidence and trust.   Employee consequently agrees that it is a legitimate interest of Employer, and reasonable and necessary for the protection of the confidential information, goodwill and business of Employer, which is valuable to Employer, that Employee make the covenants contained herein.

Employee Initials ____

Section 9.02 - Restrictions:  Accordingly, Employee agrees that during the period that he/she is employed by Employer, unless in the normal course of business, he/she shall not, as an individual, employee, consultant, independent contractor, partner, shareholder, or in association with any other person, business or enterprise, directly or indirectly, and regardless of the reason for him/her ceasing to be employed by Employer, engage in the following:

 

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	A.	Disclosure of Proprietary Information or Materials.  Employee agrees that he/she will not directly or indirectly reveal, report, publish or disclose to any person, firm, or corporation not expressly authorized in writing by Employer’s Board of Directors to receive any Trade and Business Secret, Proprietary and Confidential Information or Employer Materials (as defined in Section 9.03 below).  Employee further agrees that he/she will not use any Trade and Business Secret, Proprietary and Confidential Information and/or Employer Materials for any purpose except to perform his/her employment duties for Employer and such Trade and Business Secret, Proprietary and Confidential Information and/or Employer Materials may not be used or disclosed by Employee for his/her own benefit or purpose or for the benefit or purpose of a subsequent employer.  These agreements will continue to apply after Employee is no longer employed by Employer so long as such Trade and Business Secrets, Proprietary and Confidential Information and Employer Materials are not nor have become, by legitimate means, generally known to the public.

 

	B.	Solicitation of Employees.  Employee recognizes that he/she possesses and will possess confidential information about other employees of Employer and its affiliates relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with customer(s) of Employer and its affiliates.  Employee recognizes that the information he/she possesses and will possess about these other employees is not generally known, is of substantial value to Employer and its affiliates in developing their business and in securing and retaining customers, and in managing general daily operations of Employer, and has been and will be acquired by Employee because of his/her business position with Employer and its affiliates.  Employee agrees that at all times during his/her employment with Employer and for a period of twelve (12) months thereafter, Employee will not, directly or indirectly, solicit or recruit any employee of Employer or its affiliates for the purpose of being employed by, or serving as a consultant or information resource to, the Employee, or any competitor of Employer or its affiliates on whose behalf Employee is acting as an agent, representative or employee, and that Employee will not convey such confidential information or trade secrets about other employees of Employer and its affiliates to any other Person or legal entity.  In view of the nature of Employee’s employment with Employer, Employee likewise agrees that Employer and its affiliates would be irreparably harmed by any such solicitation or recruitment in violation of the terms of this paragraph and that Employer and its affiliates shall therefore be entitled to preliminary and/or permanent injunctive relief prohibiting the Employee from engaging in any activity or threatened activity in violation of the terms of this paragraph and to any other relief, including financial compensation commensurate with damages caused, available to them.

	C.	Solicitation of Customers.  During the Employee’s employment by Employer and its affiliates and for a period of twelve (12) months after such employment ceases, the Employee shall not, directly or indirectly (whether as an officer, director, owner, employee, partner, consultant or other participant), use any Trade and Business Secret, Proprietary and Confidential information, or Employer Materials to identify, solicit or entice any Customer or Prospective Customer of Employer or its affiliates to make any changes whatsoever in their current or prospective relationships with Employer or its affiliates, and will not assist any other Person or entity to interfere with or dispute such current or prospective relationships.  If Employee leaves Employer and goes to work for a new employer that is a competitor of Employer, and if that new employer already has an existing relationship with a Customer or Prospective Customer of Employer or its affiliates, this paragraph does not preclude Employee from making contact with such Customer or Prospective Customer on the new employer’s behalf, so long as such contact otherwise complies with the provisions of this paragraph.  In view of the nature of the Employee’s employment with Employer, the Employee likewise agrees that Employer and its affiliates would be irreparably harmed by any such interference or competitive actions in violation of the terms of this paragraph and that Employer and its affiliates shall therefore be entitled to preliminary and/or permanent injunctive relief prohibiting the Employee from engaging in any activity or threatened activity in violation of the terms of this paragraph, in addition to any other relief, including financial compensation commensurate with damages caused, available to them.

 

Employee Initials _____

 

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Section 9.03 – Definitions:

A.            TRADE AND BUSINESS SECRETS means information, including a formula, pattern, compilation, program, device, method, technique or process that derives independent economic value, actual or potential from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

B.            PROPRIETARY AND CONFIDENTIAL INFORMATION means trade secrets, computer programs, designs, technology, ideas, know-how, processes, formulas, compositions, data, techniques, improvements, inventions (whether patentable or not), works of authorship, or other information concerning Employer’s:

(i) Business Activities, including but not limited to: actual or anticipated strategic plans and initiatives; marketing plans, advertising and collateral materials; new product development plans; competitor analyses; analyses of internal financial performance; financial forecasts and budgets; customer and prospect strategies and lists; proprietary designs of facilities and other delivery systems and processes; and any similar information to which Employee has access by virtue of performing his/her duties for Employer.

(ii) Customers, including but not limited to: information about  Employer’s customers or prospective customers, such as the customer’s or prospect’s key decision-makers; customer preferences; customer strategies; terms of any contractual arrangements with Employer; business considerations; loan, deposit and other product and service pricing, terms and conditions, repayment structures, fee arrangements, structure of guarantees from other entities; and any similar information to which Employee has access by virtue of performing his/her duties for Employer.

(iii) Employees, including but not limited to: names of and contact information for Employer’s employees; their compensation, incentive plans, retirement plans, terms of employment, areas of expertise, projects, and experience; and any similar information to which Employee has access by virtue of performing his/her duties for Employer.

“Proprietary and Confidential Information” includes any information, in whatever form or format, including that which has not been memorialized in writing.

 

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C.            EMPLOYER MATERIALS means documents or other media or tangible items that contain or embody PROPRIETARY AND CONFIDENTIAL INFORMATION or any other information concerning the business, operations or plans of Employer and its customers and prospective customers, whether such documents have been prepared by Employee or by others.  EMPLOYER MATERIALS include, but are not limited to blueprints, drawings, photographs, charts, graphs, notebooks, customer lists, computer disks, photographs of proprietary information or documents on cell phones, iPads or other electronic devices, photocopies of proprietary information or documents, emails, text messages, tapes or printouts, sound recordings and other printed, typewritten, handwritten or computer generated documents, as well as samples, prototypes, product collateral materials, advertising materials, models, products and the like.

Employee Initials ____

Section 9.04 - Return of Employer’s Property:  Upon termination of his/her employment with Employer for any reason, Employee will promptly deliver to Employer, without copying or summarizing, all Trade and Business Secrets, Proprietary and Confidential Information, and Employer Materials that are in Employee’s possession or under Employee’s control, including, without limitation, all physical property, keys, documents, lists, electronic storage media, cell phones, iPads, manuals, letters, notes, reports, including all originals, reproductions, recordings, disks, or other media.

Employee acknowledges that Employee has been apprised of the provisions of Labor Code Section 2860 which provides:  “Everything which an Employee acquires by virtue of his employment, except the compensation which is due him from his Employer, belongs to the Employer, whether acquired lawfully or unlawfully, or during or after the expiration of the term of his employment.” Employee understands that any work that Employee created or helped create at the request of Employer, including user manuals, training materials, sales materials, customer and prospective customer information and business data, process manuals, and other written and visual works, are works made for hire in which Employer owns the copyright.  Employee may not reproduce or publish these copyrighted works, except in the pursuit of his/her employment duties with Employer.

Employee Initials ____

Section 9.05 - Separate Covenants:  The covenants of Part IX of this Agreement shall be construed as separate covenants covering their particular subject matter.  In the event that any covenant shall be found to be judicially unenforceable, said covenant shall not affect the enforceability or validity of any other part of this Agreement.

Employee Initials ____

Section 9.06 - Continuing Obligation:  Employee’s obligations set forth in Part IX of this Agreement shall expressly continue in effect beyond Employee’s employment period in accordance with their terms and such obligations shall be binding on Employee’s assigns, executors, administrators and other legal representatives.

Employee Initials ____

 

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PART X

 

ARBITRATION

 

Section 10.01 - Dispute Resolution:  The Parties agree that arbitration shall be the sole and exclusive remedy to redress any dispute, claim, or controversy (“Grievance”) involving the interpretation of this Agreement, the terms and conditions of this Agreement, or any other claims arising out of Employee's employment with Employer or the termination thereof.  It is the intention of the Parties that the arbitration decision will be final and binding and that any and all Grievances shall be disposed of as described herein.

Section 10.02 - Process.

A.            Grievance.  Any and all Grievances must be submitted in writing by the aggrieved Party.  A Grievance from Employee shall be submitted to Employer’s Chief Executive Officer.  Within Thirty (30) days following the submission of the written Grievance, the Party to whom the Grievance is submitted shall respond in writing.  If no written response is submitted within Thirty (30) days, the Grievance shall be deemed denied.

B.            Mediation.  If the Grievance is denied, and before invoking the arbitration procedure described below, the parties shall first participate in mediation.  The mediator shall be selected by mutual agreement of the parties, and shall be conducted in San Joaquin County, California, or such other location as is mutually agreed.  The mediation cost (other than attorney fees) shall be borne by Employer.

C.            Arbitration.  Unless otherwise prohibited by law or specified below, if the Grievance is denied and mediation is unsuccessful, either Party may, within Thirty (30) days of such denial, and prior to the expiration of any applicable statute of limitations, refer the Grievance to arbitration before a single arbitrator pursuant to the California Code of Civil Procedure, including Section 1283.05 permitting discovery.

The arbitrator shall be chosen by mutual agreement from a panel of arbitrators provided by JAMS or, if no agreement is reached, under the rules for Employment Dispute Resolution promulgated by JAMS.

The arbitrator’s award shall be in the form of a written opinion sufficient to allow for appropriate judicial review, shall be a final and binding determination of the dispute, and shall be fully enforceable as an arbitration award by the California courts in accordance with California law.

The arbitrator shall decide whether the conduct complained of violates the legal rights of the complaining party and, if so, shall determine and award the relief allowed by law.

Each party in such arbitration shall be responsible for its/his/her own attorneys’ fees, unless the arbitrator orders otherwise pursuant to applicable law.  Employer shall pay the cost of the arbitration if Employee prevails as determined by the arbitrator; if Employer prevails as determined by the arbitrator, Employee shall pay the cost of the arbitration only to the same extent as would be required had he/she prevailed in a civil suit under California Code of Civil Procedure Sections 1032, 1033 and 1033.5.

 

- 14 -

The arbitrator shall not have jurisdiction or authority to change, add to or subtract from any of the lawful provisions of this Agreement.

D.            Injunctive relief.  Notwithstanding anything to the contrary herein, nothing in this Part X is intended to prevent either Party from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.

E.            Waiver of jury and court trial.  EMPLOYER AND EMPLOYEE ACKNOWLEDGE AND AGREE THAT ARBITRATION SHALL BE THE SOLE FORUM FOR THE RESOLUTION OF ANY AND ALL DISPUTES, WHETHER IN AN INDIVIDUAL OR REPRESENTATIVE CAPACITY, OR AS PART OF A COLLECTIVE ACTION, ARISING OUT OF OR RELATING TO THE EMPLOYMENT RELATIONSHIP.  SUCH DISPUTES INCLUDE, BUT ARE NOT LIMITED TO, CLAIMS FOR DISCRIMINATION OR HARASSMENT (SUCH AS CLAIMS UNDER THE FAIR EMPLOYMENT AND HOUSING ACT, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE AMERICANS WITH DISABILITIES ACT, OR THE AGE DISCRIMINATION IN EMPLOYMENT ACT), RETALIATION, WRONGFUL TERMINATION, BREACH OF WAGE AND HOUR LAWS, BREACH OF CONTRACT, BREACH OF PUBLIC POLICY, FAILURE TO PROVIDE COMPENSATION OR BENEFITS, PHYSICAL OR MENTAL HARM OR DISTRESS, OR ANY OTHER CLAIMS OR DISPUTES, AND HEREBY WAIVES HIS/HER/ITS RIGHT TO PURSUE ANY CLAIM AGAINST THE OTHER PARTY IN ANY OTHER FORUM OR PROCEEDING, INCLUDING ANY RIGHT TO TRIAL BY JURY.

Nothing herein shall prevent Employee from filing an administrative charge with the California Department of Fair Employment and Housing or the federal Equal Employment Opportunity Commission; however, the decision of the arbitrator shall be a complete defense to any suit, action or proceeding instituted in any federal, state or local court or before any administrative agency with respect to any dispute which is arbitrable as herein set forth.

Employee Initials ____

PART XI

 

TAXES

Section 11.01 - Withholding:  All payments to be made to Employee under this Agreement will be subject to required withholding of federal, state and local income and employment taxes as applicable.

Section 11.02 - Section 409A:

 

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A.            Notwithstanding any provision to the contrary in this Agreement, Employer shall delay the commencement of payments or benefits coverage to which Employee would otherwise become entitled under the Agreement in connection with Employee’s termination of employment until the earlier of (i) the expiration of the six-month period measured from the date of Employee’s “separation from service” with Employer (as such term is defined in Treasury Regulations issued under Section 409A of the Code (defined below)) or (ii) the date of Employee’s death, if Employer in good faith determines that Employee is a “specified employee” within the meaning of that term under Code Section 409A at the time of such separation from service and that such delayed commencement is otherwise required in order to avoid a prohibited distribution under Section 409A(a)(2) of the Code.  Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all payments and benefits deferred pursuant to this Section 11.02 (whether they would have otherwise been payable in a single sum or in installments in the absence of such deferral) shall be paid or reimbursed to Employee in a lump sum, and any remaining payments and benefits due under the Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

B.            In addition, to the extent Employer is required pursuant to this Agreement to reimburse expenses incurred by Employee, and such reimbursement obligation is subject to Section 409A of the Code, Employer shall reimburse any such eligible expenses by the end of the calendar year next following the calendar year in which the expense was incurred, subject to any earlier required deadline for payment otherwise applicable under this Agreement; provided, however, that the following sentence shall apply to any tax gross-up payment and related expense reimbursement obligation, including any payment obligations described in Section 8.01, to the extent subject to Section 409A.  Any such tax gross-up payment will be made by the end of the calendar year next following the calendar year in which Employee remits the related taxes.

C.            For purposes of the provisions of this Agreement which require commencement of payments or benefits subject to Section 409A upon a termination of employment, the terms “termination of employment” and “Separation Date” shall mean a “separation from service” with Employer (as such term is defined in Treasury Regulations issued under Code Section 409A), notwithstanding anything in this Agreement to the contrary.

D.            In each case where this Agreement provides for the payment to the Employee of an amount that constitutes nonqualified deferred compensation under Section 409A and such payment is subject to the execution and non-revocation of a release of claims, (1) any payments delayed pending the effectiveness of the release shall be accumulated and paid in a lump sum following the effectiveness of the release, with any remaining payments due paid in accordance with the schedule otherwise provided herein, and (2) if the period between the Separation Date and the last day on which the release could become irrevocable assuming the Employee’s latest possible execution and delivery of the release spans two calendar years, then such deferred payments shall not be made before the second calendar year, even if the release becomes irrevocable in the first calendar year, if such payments constitute nonqualified deferred compensation under Section 409A.

E.            Any series of payments provided under this Agreement (excluding plans or agreements incorporated by reference) shall for all purposes of Code Section 409A be treated as a series of separate payments and not as single payments.

 

- 16 -

F.            The provisions of this Part XI are intended to comply with Code Section 409A and shall be interpreted consistent with such section.

PART XII

GENERAL PROVISIONS

Section 12.01 - Notices:  Any notice to be given to Employer under the terms of this Agreement, and any notice to be given to Employee, shall be addressed to such Party at the mailing address the Party may hereafter designate in writing to the other.  Any such notice shall be deemed to have been duly given four days after the same shall be enclosed in a properly sealed and addressed envelope, registered or certified, and deposited (postage or registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government or upon actual delivery to the Party by messenger or delivery service, with receipt acknowledged in writing by the Party to whom such notice is addressed.

Section 12.02 - Entire Agreement:  This Agreement and the agreements incorporated by reference herein (“Farmers & Merchants Bank of Central California Executive Retirement Plan” and “Farmers & Merchants Bank of Central California Deferred Compensation Plan”) supersede any and all other agreements or understandings, whether oral, implied, or in writing, between the parties hereto with respect to the subject matter hereof and contain all of the covenants and agreements between the Parties with respect to such matters in their entirety.  Each Party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any Party, or anyone acting on behalf of any Party, which is not embodied herein, and that no other agreement, statement or promise not contained in this Agreement shall be valid or binding.  Any modification(s) to this Agreement will be effective only if in writing and signed by the Parties hereto.

Section 12.03 - Notwithstanding any other provision of this Agreement, this Agreement and all rights and obligations of the Parties hereunder shall be subject to the provisions of the Federal Deposit Insurance Act and the regulations adopted thereunder, including without limitation 12 Code of Federal Regulations, Part 359.

Section 12.04 - Partial Invalidity:  If any provisions in this Agreement are held by a court of competent jurisdiction or an arbitrator to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated in any way.

Section 12.05 - Continuing Obligations:  The obligations of the covenants contained in this Agreement shall survive the termination of the Agreement and any employment relationship between Employer and Employee.  Accordingly, neither Employer nor Employee shall be relieved of the continuing obligations of the covenants contained in this Agreement.

Section 12.06 - Employee’s Representations:  Employee represents and warrants that Employee is free to enter into this Agreement and to perform each of the terms and covenants in it.  Employee represents and warrants that Employee is not restricted or prohibited, contractually or otherwise, from entering into and performing this Agreement, and that Employee’s execution and performance of this Agreement is not a violation or breach of any other agreement or other legal obligation between Employee and any other person or entity.

 

- 17 -

Section 12.07 - Governing Law:  This Agreement (not including any plans or agreements incorporated by reference) shall be construed and enforced in accordance with, and the rights of the Parties shall be governed by, the laws of the State of California.

Section 12.08 - Full Settlement:  Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set off, counterclaim, recoupment, defense or other claim, right or action which Employer may have against Employee or others. In no event shall Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Employee under any of the provisions of this Agreement and such amount shall not be reduced whether or not Employee obtains other employment.

Section 12.09 - Successors:  This Agreement shall be binding upon and enforceable against any successors to Employer. No duties provided for under this Agreement may be delegated by any of the parties hereto.  Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and assets of Employer to assume expressly and agree as of the effective time of the Change of Control to perform this Agreement in the same matter and to the same extent that Employer would be required to perform it if no such succession had taken place. If any such successor pursuant to a Change of Control of Employer or Bancorp under Section 8.01.1(iii) (but not under (i), (ii) or (iv)) fails to so assume or agree as of the effective time of the Change in Control to perform this Agreement, then Employee shall immediately be entitled to a payment equal to the total Severance Payment described in Section 7.01.1, payable in one lump sum, less any withholding required by state, federal or local law, upon the closing or other occurrence of the Change in Control transaction, in addition to any payments that Employee may otherwise be entitled to receive under this Agreement, and without regard to any conditions on payment set forth in such Section 7.01 (including, but not limited to, conditions of continued employment, continued loyalty or execution and non-revocation of a release). As used herein, the term “Bank” shall mean Employer as hereinbefore defined and any successor to its business and assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise. This Agreement shall inure to the benefit of and be enforceable by Employee’s legal representatives.

Section 12.10 - No Waiver:  The failure of any of the Parties hereto to insist on strict compliance with any provision of this Agreement, or the failure to assert any right of any Party hereto may have hereunder, shall not be deemed to be a waiver of such provision or right or of any other provision or right contained in this Agreement.

Section 12.11 – Advice of Counsel:  Employee warrants that he/she has consulted with legal counsel of his/her choice to advise him/her with respect to the terms and conditions of this Agreement.

 

- 18 -

	FARMERS & MERCHANTS BANK OF CENTRAL CALIFORNIA and FARMERS & MERCHANTS BANCORP	
Date:  June 23, 2015

	 		
	
By:

	
/s/ Stewart C. Adams, Jr.

	 
	 	
Stewart C. Adams, Jr. 

	 	
Chairman of the Personnel Committee 

 

	Employee: 	/s/ Ryan J. Misasi	
Date:  June 23, 2015

	 	
Ryan J. Misasi

	 

 

 

- 19 -EX-10.1

 Exhibit 10.1 

EXECUTION VERSION 
  

 
  

COMMON STOCK PURCHASE AGREEMENT 

by and between 
 TEEKAY
TANKERS LTD. 
 and 

THE PURCHASERS NAMED ON SCHEDULE A HERETO 
  

 
  

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 ARTICLE 1
	 	 DEFINITIONS
	  	 	1	  
			
	 Section 1.1
	 	 Definitions
	  	 	1	  
			
	 ARTICLE 2
	 	 AGREEMENT TO SELL AND PURCHASE
	  	 	5	  
			
	 Section 2.1
	 	 Sale and Purchase
	  	 	5	  
	 Section 2.2
	 	 Closing
	  	 	5	  
	 Section 2.3
	 	 Mutual Conditions
	  	 	6	  
	 Section 2.4
	 	 Each Purchaser’s Conditions
	  	 	6	  
	 Section 2.5
	 	 The Company’s Conditions
	  	 	7	  
	 Section 2.6
	 	 Company Deliveries
	  	 	8	  
	 Section 2.7
	 	 Purchaser Deliveries
	  	 	9	  
	 Section 2.8
	 	 Independent Nature of Purchasers’ Obligations and Rights
	  	 	9	  
			
	 ARTICLE 3
	 	 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	  	 	9	  
			
	 Section 3.1
	 	 Registration
	  	 	9	  
	 Section 3.2
	 	 Existence
	  	 	10	  
	 Section 3.3
	 	 Purchased Shares; Capitalization
	  	 	11	  
	 Section 3.4
	 	 Subsidiaries
	  	 	11	  
	 Section 3.5
	 	 Teekay Corporation Ownership of Class A and Class B Common Stock
	  	 	11	  
	 Section 3.6
	 	 No Conflict
	  	 	11	  
	 Section 3.7
	 	 No Default
	  	 	12	  
	 Section 3.8
	 	 Authority
	  	 	12	  
	 Section 3.9
	 	 Approvals
	  	 	12	  
	 Section 3.10
	 	 Compliance with Laws
	  	 	12	  
	 Section 3.11
	 	 Due Authorization
	  	 	13	  
	 Section 3.12
	 	 Valid Issuance; No Options or Preemptive Rights; Title
	  	 	13	  
	 Section 3.13
	 	 No Registration Rights
	  	 	13	  
	 Section 3.14
	 	 Periodic Reports
	  	 	13	  
	 Section 3.15
	 	 Litigation
	  	 	14	  
	 Section 3.16
	 	 Insurance
	  	 	14	  
	 Section 3.17
	 	 Books and Records; Sarbanes-Oxley Compliance
	  	 	14	  
	 Section 3.18
	 	 No Material Adverse Change
	  	 	15	  
	 Section 3.19
	 	 Certain Fees
	  	 	15	  
	 Section 3.20
	 	 No Side Agreements
	  	 	15	  
	 Section 3.21
	 	 Investment Company Status
	  	 	15	  
	 Section 3.22
	 	 Passive Foreign Investment Company
	  	 	15	  
	 Section 3.23
	 	 Restricted Securities
	  	 	15	  
	 Section 3.24
	 	 Foreign Corrupt Practices Act
	  	 	15	  

  
 -i- 

							
			
	 ARTICLE 4
	 	 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
	  	 	16	  
			
	 Section 4.1
	 	 Existence
	  	 	16	  
	 Section 4.2
	 	 Authorization, Enforceability
	  	 	16	  
	 Section 4.3
	 	 No Breach
	  	 	16	  
	 Section 4.4
	 	 Certain Fees
	  	 	16	  
	 Section 4.5
	 	 No Side Agreements
	  	 	17	  
	 Section 4.6
	 	 Short Selling
	  	 	17	  
			
	 ARTICLE 5
	 	 COVENANTS
	  	 	17	  
			
	 Section 5.1
	 	 Taking of Necessary Action
	  	 	17	  
	 Section 5.2
	 	 Other Actions
	  	 	17	  
	 Section 5.3
	 	 Payment and Expenses
	  	 	18	  
	 Section 5.4
	 	 Use of Proceeds
	  	 	18	  
	 Section 5.5
	 	 Vessel Acquisition Share Consideration; Lock-Up Arrangement
	  	 	18	  
	 Section 5.6
	 	 Defaulting Purchasers
	  	 	18	  
			
	 ARTICLE 6
	 	 INDEMNIFICATION
	  	 	18	  
			
	 Section 6.1
	 	 Indemnification by the Company
	  	 	18	  
	 Section 6.2
	 	 Indemnification by Purchasers
	  	 	19	  
	 Section 6.3
	 	 Indemnification Procedure
	  	 	19	  
			
	 ARTICLE 7
	 	 MISCELLANEOUS
	  	 	20	  
			
	 Section 7.1
	 	 Interpretation and Survival of Provisions
	  	 	20	  
	 Section 7.2
	 	 Survival of Provisions
	  	 	20	  
	 Section 7.3
	 	 No Waiver; Modifications in Writing
	  	 	21	  
	 Section 7.4
	 	 Binding Effect; Assignment
	  	 	21	  
	 Section 7.5
	 	 Communications
	  	 	21	  
	 Section 7.6
	 	 Entire Agreement
	  	 	22	  
	 Section 7.7
	 	 Governing Law
	  	 	22	  
	 Section 7.8
	 	 Execution in Counterparts
	  	 	22	  
	 Section 7.9
	 	 Termination
	  	 	23	  
	 Section 7.10
	 	 Recapitalization, Exchanges, Etc
	  	 	23	  
	 Section 7.11
	 	 Disclosure
	  	 	23	  

  

					
	Schedule A	 	—	  	List of Purchasers and Commitment Amounts
	Schedule B  	 	—	  	Notice and Contact Information
	Schedule 3.18	 	—	  	No Material Adverse Change
	Exhibit A	 	—	  	Form of Opinion of Perkins Coie LLP
	Exhibit B	 	—	  	Form of Opinion of Watson, Farley & Williams LLP

  
 -ii- 

 COMMON STOCK PURCHASE AGREEMENT 

This COMMON STOCK PURCHASE AGREEMENT, dated August 4, 2015 (this “Agreement”), is by and between TEEKAY TANKERS LTD., a
Marshall Islands corporation (the “Company”), and the purchasers listed on Schedule A hereof (each a “Purchaser” and collectively, the “Purchasers”). 

WHEREAS, to fund a portion of the Vessel Acquisitions (as defined below), the Company desires to sell to the Purchasers, and the Purchasers
desire to purchase from the Company, shares of the Company’s Class A Common Stock (as defined below), in accordance with the provisions of this Agreement, which funding is in addition to that funding to be provided by the Teekay
Corporation Investment (as defined below). 
 NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and each of the Purchasers, severally and not jointly, hereby agree as follows: 

ARTICLE 1 
 DEFINITIONS

 Section 1.1 Definitions. As used in this Agreement, and unless the context requires a different meaning, the
following terms have the meanings indicated: 
 “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, the Person in question. As used herein, the term “control” 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 ownership of voting securities, by contract or otherwise. 

“Agreement” has the meaning set forth in the introductory paragraph, as amended, supplemented, continued or modified. 

“Business Day” means a day other than (i) a Saturday or Sunday or (ii) any day on which banks located in New York,
New York, U.S.A. are authorized or obligated to close. 
 “Class A Common Stock” means the Class A common stock, par
value $0.01 per share, of the Company. 
 “Class B Common Stock” means the Class B common stock, par value $0.01 per share,
of the Company. 
 “Closing” has the meaning specified in Section 2.2. 

“Closing Date” has the meaning specified in Section 2.2. 

“Commission” means the United States Securities and Exchange Commission. 

  
 1 

 “Common Stock Price” has the meaning specified in Section 2.1. 

“Company Entities” and each a “Company Entity” means (i) the Company, (ii) each of the Company
Subsidiaries, other than those Subsidiaries which, individually, would not constitute a “significant subsidiary” as defined in Regulation S-X under the Securities Act, (iii) High-Q and (iv) TTOL. 

“Company Related Parties” has the meaning specified in Section 6.2. 

“Company Subsidiaries” means each of the Company’s Subsidiaries. 

“Company SEC Documents” has the meaning specified in Section 3.14. 

“Credit Agreements” means the Term Loan Agreements and the Revolving Credit Agreements. 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the
Commission promulgated thereunder. 
 “Existing Registration Rights Agreement” means that certain Registration Rights
Agreement, by and among the Company and Teekay Corporation, dated as of December 18, 2007. 
 “GAAP” has the meaning
specified in Section 3.14. 
 “Governmental Authority” means, with respect to a particular Person, any country,
state, county, city and political subdivision in which such Person or such Person’s Property is located or that exercises valid jurisdiction over any such Person or such Person’s Property, and any court, agency, department, commission,
board, bureau or instrumentality of any of them and any monetary authority that exercises valid jurisdiction over any such Person or such Person’s Property. Unless otherwise specified, all references to Governmental Authority herein with
respect to the Company mean a Governmental Authority having jurisdiction over the Company, its Subsidiaries or any of their respective Properties. 

“High-Q” means High-Q Investments Limited, a Hong Kong corporation. 

“Incorporated Documents” has the meaning specified in Section 3.1(a). 

“Indemnified Party” has the meaning specified in Section 6.3. 

“Indemnifying Party” has the meaning specified in Section 6.3. 

“Law” means any federal, state, local or foreign order, writ, injunction, judgment, settlement, award, decree, statute, law,
rule or regulation. 

  
 2 

 “Lien” means any mortgage, claim, encumbrance, pledge, lien (statutory or
otherwise), security agreement, conditional sale or trust receipt or a lease, consignment or bailment, preference or priority or other encumbrance upon or with respect to any property of any kind; provided, however, that any charter or services
contracts to which the Company’s vessels are subject shall not be deemed Liens. 
 “Material Adverse Effect” means any
change, event or effect that, individually or together with any other changes, events or effects, has a material adverse effect on (i) the condition (financial or otherwise), business, assets or results of operations of the Company Entities,
taken as a whole, or (ii) the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated by this Agreement on a timely basis; provided, however, that a Material Adverse Effect
shall not include any material and adverse effect on the foregoing to the extent such material and adverse effect results from, arises out of, or relates to (w) the announcement of the proposed Vessel Acquisitions, the Teekay Corporation
Investment or of the transactions contemplated by this Agreement or the satisfaction of the obligations set forth herein, (x) a general deterioration in the economy or changes in the general state of the industries in which the Company
operates, except to the extent that the Company Entities, taken as a whole, are adversely affected in a disproportionate manner as compared to other industry participants, (y) the outbreak or escalation of hostilities involving the United
States, the declaration by the United States of a national emergency or war or the occurrence of any other calamity or crisis, including acts of terrorism, or (z) any change in accounting requirements or principles imposed upon any of the
Company Entities or their businesses or any change in applicable Law, or the interpretation thereof. 
 “NYSE” means The
New York Stock Exchange, Inc. 
 “Person” means an individual or a corporation, limited liability company, partnership,
joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other form of entity. 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

 “Prospectus” has the meaning specified in Section 3.1(a). 

“Purchase Price” means, with respect to a particular Purchaser, the amount set forth opposite such Purchaser’s name
under the column titled “Purchase Price” set forth on Schedule A hereto. 
 “Purchased Shares” means,
with respect to a particular Purchaser, the number of shares of Class A Common Stock set forth opposite such Purchaser’s name under the column titled “Class A Common Stock” set forth on Schedule A. 

“Purchaser” and “Purchasers” have the meanings set forth in the introductory paragraph. 

“Purchaser Related Parties” has the meaning specified in Section 6.1. 

“Registration Statement” has the meaning specified in Section 3.1(a). 

  
 3 

 “Representatives” of any Person means the Affiliates, officers, directors,
managers, employees, agents, counsel, accountants, investment bankers and other representatives of such Person. 
 “Revolving Credit
Agreements” means (i) the Secured Facility Agreement dated November 28, 2007 among Everest Spirit Holding L.L.C. and the other Borrowers named therein; Nordea Bank Finland PLC, New York Branch, as Agent; and Nordea Bank Norge ASA,
Citigroup Global Markets Limited, ING Bank N.V., London Branch, and the other Lenders named therein and (ii) the Facility Agreement dated December 6, 2006 and amended June 18, 2008 for a US$194,000,000 secured reducing revolving loan
facility (including additional US$23,000,000 option) among SPT Explorer L.L.C. (formerly T.S. Hull No. 1328 L.L.C.), SPT Navigator L.L.C. (formerly T.S. Hull No. 1329 L.L.C.), Great East Hull No. 1680 L.L.C., Pinnacle Spirit L.L.C.
(formerly Great East Hull No. 1681 L.L.C.) as joint and several borrowers and Danish Ship Finance. 
 “Rules” has the
meaning specified in Section 3.1(a). 
 “Securities Act” means the Securities Act of 1933, as amended from time
to time, and Rules. 
 “Share Consideration” has the meaning specified in Section 5.5. 

“Short Sales” means, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange
Act, and forward sale contracts, options, puts, calls, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements. 

“Subsidiary” means, as to any Person, any corporation or other entity of which: (i) such Person or a Subsidiary of such
Person is a general partner or manager; (ii) a majority of the outstanding equity interest having by the terms thereof ordinary voting power to elect a majority of the board of directors or similar governing body of such corporation or other
entity (irrespective of whether or not at the time any equity interest of any other class or classes of such corporation or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more of its Subsidiaries; or (iii) any corporation or other entity as to which such Person consolidates for accounting purposes. 

“Term Loan Agreements” means (i) the Secured Credit Facility Agreement dated December 17, 2003 among Great West
Hull No. 1519 L.L.C., Great West Hull No. 1520 L.L.C., DSME Hull No. 5254 L.L.C., DSME Hull No. 5255 L.L.C., The Export-Import Bank of Korea, Fortis Capital Corporation, and Landesbank Hessen-Thuringen Girozentrale for a
US$128,000,000 secured credit facility, (ii) the Facility Agreement dated May 11, 2004 for a US$150,400,000 secured credit facility among Donegal Spirit L.L.C. (formerly H.H.I. Hull No. 1704 L.L.C.), Galway Spirit L.L.C. (formerly
H.H.I. Hull No. 1705 L.L.C.), Limerick Spirit L.L.C. (formerly H.H.I. Hull No. 1706 L.L.C.), and H.H.I. Hull No. 1707 L.L.C. as joint borrowers, the Export-Import Bank of Korea and Fortis Capital Corp. as lenders, (iii) the
Facility Agreement dated December 15, 2006 and amended March 17, 2010 for a US$255,528,228 senior 

  
 4 

 
secured loan among Summit Spirit L.L.C., Zenith Spirit L.L.C., Bermuda Spirit L.L.C., Hamilton Spirit L.L.C. as joint borrowers and Credit Agricole CIB as lender, and (iv) the Facility
Agreement dated January 30, 2015 for a US$126,637,500 secured term loan facility among Teekay Tankers Ltd. as borrower, ABN AMRO Capital USA LLC and DNB Capital LLC as lenders. 

“Teekay Corporation Investment” means the purchase by Teekay Corporation of shares of the Company’s Class A Common
Stock at a per share price equal to the Common Stock Price and in an aggregate amount of $30 million. 
 “TTOL” means
Teekay Tanker Operations Ltd. 
 “Vessel Acquisitions” means the acquisition by the Company of Principal Maritime Tankers
Corporation’s fleet of up to 12 Suezmax vessels. Each such vessel shall be acquired pursuant to the terms of a separate Vessel Acquisition MOA. 

“Vessel Acquisition MOAs” means the binding, separate memoranda of understanding between the applicable ship-owning
subsidiary of Principal Maritime Tankers Corporation and the Company, pursuant to which the Company shall acquire each of up to 12 Suezmax vessels included in the Vessel Acquisitions, with the closing of a particular vessel acquisition under a
particular Vessel Acquisition MOA being independent from any vessel acquisitions under any other Vessel Acquisition MOAs. 

“Walled-Off Person” has the meaning specified in Section 4.5. 

ARTICLE 2 
 AGREEMENT TO
SELL AND PURCHASE 
 Section 2.1 Sale and Purchase. 

(a) Subject to the terms and conditions hereof, the Company hereby agrees to issue and sell to each Purchaser and each Purchaser hereby agrees,
severally and not jointly, to purchase from the Company, its respective Purchased Shares, and each Purchaser agrees, severally and not jointly, to pay the Company the Common Stock Price for each Purchased Share as set forth in paragraph
(b) below. The obligations of each Purchaser under this Agreement are independent of the obligations of each other Purchaser, and the failure or waiver of performance by any Purchaser does not excuse performance by any other Purchaser or by the
Company. 
 (b) The amount per share of Class A Common Stock each Purchaser will pay to the Company to purchase the Purchased Shares
(the “Common Stock Price”) hereunder shall be $6.65. 
 Section 2.2 Closing. Subject to the terms and
conditions hereof, the consummation of the purchase and sale of the Purchased Shares hereunder (the “Closing”) shall take place at 9:00 am, Pacific Time, on the third Business Day following the date hereof, at the offices of
Perkins Coie LLP, 1120 N.W. Couch Street, Tenth Floor, Portland, Oregon 97209-4128, or at such other location or on such other date as mutually agreed by the parties (the “Closing Date”).

  
 5 

 
The parties agree that the Closing may occur via delivery of this Agreement and other closing deliveries by facsimile, electronic mail, courier service or personal delivery. 

Section 2.3 Mutual Conditions. The respective obligations of each party to consummate the purchase and issuance and sale of
the Purchased Shares shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be waived by a party on behalf of itself in writing, in whole or in part, to the extent permitted
by applicable Law): 
 (a) No Law shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Authority
of competent jurisdiction that temporarily, preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated hereby illegal;

 (b) There shall not be pending any suit, action or proceeding by any Governmental Authority seeking to restrain, preclude, enjoin or
prohibit the transactions contemplated by this Agreement; 
 (c) The Company and the applicable counterparties shall have executed and
delivered the Vessel Acquisition MOAs relating to the Vessel Acquisitions; 
 (d) Teekay Corporation shall have made the Teekay Corporation
Investment; and 
 (e) No stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued,
and no proceedings for that purpose shall have been instituted or threatened by any governmental agency. 
 Section 2.4 Each
Purchaser’s Conditions. The obligation of each Purchaser to consummate the purchase of its Purchased Shares shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be
waived by a particular Purchaser on behalf of itself in writing with respect to its Purchased Shares, in whole or in part, to the extent permitted by applicable Law): 

(a) The Company shall have performed and complied with the covenants and agreements contained in this Agreement that are required to be
performed and complied with by the Company on or prior to the Closing Date; 
 (b) The Company shall have filed with the Commission pursuant
to Rule 424(b) a prospectus supplement regarding the sale of the Purchased Shares that, in accordance with the Securities Act and the Rules, permits the sale of the Purchased Shares pursuant to this Agreement; 

(c) (i) The representations and warranties of the Company contained in this Agreement that are qualified by materiality or a Material Adverse
Effect shall be true and correct when made and as of the Closing Date as if made on and as of the Closing Date (except that any such representations and warranties made as of a specific date shall be required to be true and correct as of such date
only) and (ii) (A) all other representations and warranties of the Company 

  
 6 

 
contained in this Agreement, other than Section 3.3(a) (Purchased Shares; Capitalization) shall be true and correct in all material respects when made and as of the Closing Date as if made
on and as of the Closing Date (except that any such representations and warranties made as of a specific date shall be required to be true and correct in all material respects as of such date only) and (B) the representations and warranties of
the Company contained in Section 3.3(a) shall be true and correct when made; 
 (d) The Company shall have delivered, or caused to be
delivered, to the Purchasers at the Closing, the Company’s closing deliveries described in Section 2.6; 
 (e) The Purchased
Shares shall have been approved for listing on the NYSE, subject to notice of issuance; 
 (f) No notice of delisting from the NYSE shall
have been received by the Company with respect to its Class A Common Stock; 
 (g) The Class A Common Stock shall not have been
suspended by the Commission or the NYSE from trading on the NYSE nor shall suspension by the Commission or the NYSE have been threatened in writing by the Commission or the NYSE; and 

(h) Since the date of this Agreement, no Material Adverse Effect shall have occurred. 

Section 2.5 The Company’s Conditions. The obligation of the Company to consummate the sale of the Purchased Shares to a
Purchaser shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions with respect to such Purchaser (any or all of which may be waived by the Company in writing, in whole or in part, to the extent
permitted by applicable Law): 
 (a) The representations and warranties of such Purchaser contained in this Agreement that are qualified by
materiality shall be true and correct when made and as of the Closing Date (except that any such representations and warranties made as of a specific date shall be required to be true and correct as of such date only) and (ii) all other
representations and warranties of such Purchaser contained in this Agreement shall be true and correct in all material respects when made and as of the Closing Date (except that any such representations of such Purchaser made as of a specific date
shall be required to be true and correct in all material respects as of such date only); and 
 (b) Such Purchaser shall have delivered, or
caused to be delivered, to the Company at the Closing such Purchaser’s closing deliveries described in Section 2.7; 
 By
acceptance of the applicable Purchased Shares, each Purchaser shall be deemed to have represented to the Company that such Purchaser has performed and complied in all material respects with the covenants and agreements contained in this Agreement
that are required to be performed and complied with by it on or prior to the Closing Date; and the representations and warranties of such Purchaser contained in this Agreement that are qualified by materiality are true and correct as of the Closing
Date (except that any such representations and warranties made as of a specific date shall be required to be true and correct as of such date only) and all other 

  
 7 

 
representations and warranties of such Purchaser are true and correct in all material respects as of the Closing Date (except that any such representations and warranties made as of a specific
date shall be required to be true and correct in all material respects as of such date only). 
 Section 2.6 Company
Deliveries. At the Closing, subject to the terms and conditions hereof, the Company will deliver, or cause to be delivered, to each Purchaser: 

(a) Evidence of the issuance of the Purchased Shares purchased by such Purchaser at the Closing by book-entry transfer through the facilities
of The Depository Trust Company, using a “DWAC” settlement process; provided, however, that such issuance must occur after or simultaneously with the delivery of the Purchase Price as set forth in Section 2.7(a);
such Purchased Shares will be free of any and all Liens and restrictions on transfer, other than any Liens as are created by such Purchaser; 

(b) A certificate of the Registrar of Corporations of the Republic of the Marshall Islands, dated a recent date, to the effect that the Company
is in good standing; 
 (c) A cross-receipt executed by the Company and delivered to such Purchaser certifying that it has received the
Purchase Price from such Purchaser as of the Closing Date; 
 (d) An opinion addressed to the Purchasers from Perkins Coie LLP, legal counsel
to the Company, dated as of the Closing Date, in the form and substance attached hereto as Exhibit A; 
 (e) An opinion addressed
to the Purchasers from Watson Farley & Williams LLP, special counsel to the Company relating to Marshall Islands law, dated as of the Closing Date, in the form and substance attached hereto as Exhibit B; 

(f) A certificate, dated the Closing Date and signed by the Chief Executive Officer or the Chief Financial Officer of the Company, in his
capacity as such, stating that: 
  

	 	(i)	The Company has performed and complied with the covenants and agreements contained in this Agreement that are required to be performed and complied with by the Company on or prior to the Closing Date; and

  

	 	(ii)	(A) The representations and warranties of the Company contained in this Agreement that are qualified by materiality or Material Adverse Effect were true and correct when made and are true and correct as of the Closing
Date, (B) all other representations and warranties of the Company (other than the representations and warranties contained in Section 3.3(a)) were true and correct in all material respects when made and are true and correct in all material
respects as of the Closing Date; in each case (with respect to being true and correct as of the Closing Date) as though made at and as of the Closing Date (except that representations and warranties made as of a specific date shall be required to be
true and correct or true and correct in all material respects, as applicable, as of such date only), and (C) the representations and warranties of the Company contained in Section 3.3(a) were true and correct when made; and

  
 8 

 (g) A certificate of the Secretary of the Company, certifying as to (i) the Amended and
Restated Articles of Incorporation and Bylaws of the Company, (ii) resolutions of the Company’s Board of Directors authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated thereby,
including the issuance of the Purchased Shares, and (iii) the signatures of the officers executing this Agreement. 

Section 2.7 Purchaser Deliveries. At the Closing, subject to the terms and conditions hereof, each Purchaser will deliver,
or cause to be delivered, to the Company: 
 (a) Payment to the Company of the Purchase Price set forth opposite such Purchaser’s name
under the column titled “Purchase Price” on Schedule A hereto by wire transfer of immediately available funds to an account that the Company shall have designated, at least two Business Days prior to the Closing Date, in writing;
provided, however, that such delivery must occur before or simultaneously with the delivery of the Purchased Shares as set forth in Section 2.6(a); and 

(b) A cross-receipt executed by such Purchaser and delivered to the Company certifying that it has received its Purchased Shares as of the
Closing Date. 
 Section 2.8 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each
Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under this Agreement. The failure or
waiver of performance under this Agreement of any Purchaser by the Company does not excuse performance by any other Purchaser and the waiver of performance of the Company by any Purchaser does not excuse performance by the Company with respect to
each other Purchaser. Nothing contained herein, and no action taken by any Purchaser pursuant hereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of group or entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. It is expressly understood and agreed that each
provision contained in this Agreement is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers. 

ARTICLE 3 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

The Company represents and warrants to each Purchaser as follows: 

Section 3.1 Registration. 

  
 9 

 (a) The Company has filed with the Commission, pursuant to the Securities Act, and the rules and
regulations adopted by the Commission thereunder (the “Rules”), a registration statement on Form F-3 (File No. 333- 205643), including a prospectus, relating to its Class A Common Stock, and such registration statement has
become effective. Such registration statement, including financial statements, exhibits and Incorporated Documents (defined below), as amended to the date of this Agreement, is hereinafter referred to as the “Registration
Statement,” and the prospectus included in the Registration Statement, as proposed to be supplemented by a prospectus supplement (including any preliminary prospectus supplement) relating to the Class A Common Stock to be sold pursuant
hereto and to be filed pursuant to Rule 424(b) under the Securities Act, is hereinafter referred to as the “Prospectus.” Any reference herein to the Registration Statement or Prospectus includes all documents incorporated, or
deemed to be incorporated, therein by reference pursuant to the requirements of Item 6 of Form F-3 under the Securities Act (the “Incorporated Documents”). 

(b) The Company meets the requirements for use of Form F-3 under the Securities Act. The initial effective date of the Registration Statement
was not earlier than three years before the date of this Agreement. The Commission has not issued any order preventing or suspending the use of the Prospectus or suspending the effectiveness of the Registration Statement, and, to the Company’s
knowledge, no proceeding or examination for such purpose has been instituted or threatened by the Commission. 
 (c) The Registration
Statement, on its effective date and on the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and the Rules. Any amendment to the Registration Statement filed after the date hereof will
conform in all material respects, when filed, to the requirements of the Securities Act and the Rules. The Prospectus, when filed with the Commission and on the Closing Date, conformed and will conform in all material respects to the requirements of
the Securities Act and the Rules. The prospectus supplement, when it is filed with the Commission pursuant to Rule 424(b) to register the Purchased Shares, will conform in all material respects to the requirements of the Securities Act and the
Rules. The Incorporated Documents conformed, and any further documents incorporated by reference after the date hereof into the Registration Statement or the Prospectus will conform, when filed with the Commission, in all material respects to the
requirements of the Exchange Act or the Securities Act, as applicable, and the rules and regulations of the Commission thereunder. 
 (d) The
Registration Statement and any amendment thereto, at the time it became effective, and the Prospectus and any amendment or supplement thereto, at the time it was filed with the Commission pursuant to Rule 424 under the Securities Act, did not and
does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 

Section 3.2 Existence. Each of the Company Entities has been duly incorporated or formed, as applicable, and is validly
existing as a limited liability company, limited partnership or corporation, as applicable, in good standing under the Laws of its jurisdiction of incorporation or formation, as applicable, and has the full limited liability company, limited
partnership or corporate, as applicable, power and authority, and has all governmental licenses, authorizations, 

  
 10 

 
consents and approvals, necessary to own, lease or hold its Properties and assets and to conduct the businesses in which it is engaged, and is duly registered or qualified to do business and in
good standing as a foreign limited liability company, limited partnership or corporation, as applicable, in each jurisdiction in which its ownership or leasing of Property or the conduct of its business requires such qualification, except where the
failure to so register or qualify would not reasonably be expected to have a Material Adverse Effect. 
 Section 3.3
Purchased Shares; Capitalization. 
 (a) As of the date of this Agreement, prior to the issuance and sale of (i) the
Purchased Shares, as contemplated hereby, and (ii) the shares to be issued as part of the Teekay Corporation Investment and the Vessel Acquisitions, the issued and outstanding equity interests of the Company consist of 103,365,091 shares of
Class A Common Stock and 23,232,757 shares of Class B Common Stock, as adjusted for the sale of any Class A Common Stock pursuant to any grant of restricted shares or options to purchase Class A Common Stock under the Company’s
2007 Long Term Incentive Plan (as it may be amended). All of such shares have been duly authorized and validly issued and are fully paid and nonassessable. 

(b) The Class A Common Stock is listed on the NYSE, and the Company has not received any notice of delisting. 

(c) The Class A Common Stock is, and the Purchased Shares will be upon issuance, “covered securities” for purposes of
Section 18 of the Securities Act. 
 Section 3.4 Subsidiaries. The Company owns, directly or indirectly, 100% of the
equity interests in each of the Company Subsidiaries, 50% of the equity interests in High-Q and 50% of the equity interests in TTOL; such equity interests are duly authorized and validly issued in accordance with the organizational documents of each
Subsidiary, High-Q and TTOL and are fully paid and nonassessable; and the Company owns such equity interests free and clear of all Liens except for Liens under the Credit Agreements. 

Section 3.5 Teekay Corporation Ownership of Class A and Class B Common Stock. As of the date of this Agreement, prior
to the issuance of the shares to be issued as part of the Teekay Corporation Investment, Teekay Corporation owns directly or indirectly 23,232,757 shares of Class B Common Stock and 12,643,196 shares of Class A Common Stock. All such shares
have been duly authorized and are validly issued, fully paid and nonassessable; and Teekay Corporation owns all such shares free and clear of all Liens. 

Section 3.6 No Conflict. None of (a) the offering, issuance and sale by the Company of the Purchased Shares and the
application of the proceeds therefrom, (b) the execution, delivery and performance of this Agreement by the Company, or (c) the consummation of the transactions contemplated hereby conflicts or will conflict with, or results or will result
in a breach or violation of or imposition of any Lien upon any Property or assets of the Company Entities pursuant to, (i) the formation or governing documents of any of the Company Entities, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which any of the Company Entities is a party, by which any of them is bound or to which any of their respective

  
 11 

 
Properties or assets is subject, or (iii) any Law applicable to any of the Company Entities or any injunction of any Governmental Authority having jurisdiction over any of the Company
Entities or any of their Properties, except in the cases of clause (ii) and (iii) for such conflicts, breaches, violations or defaults that would not reasonably be expected to have a Material Adverse Effect. 

Section 3.7 No Default. None of the Company Entities is in violation or default of (a) any provision of its respective
formation or governing documents, (b) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party, by which it is
bound or to which its Property is subject, or (c) any Law of any Governmental Authority having jurisdiction over the Company Entities or any of their Properties, as applicable, except, in the case of clauses (b) or (c), as would not
reasonably be expected to have a Material Adverse Effect. 
 Section 3.8 Authority. The Company has all requisite power
and authority to enter into this Agreement and the Vessel Acquisition MOAs. On the Closing Date, the Company will have all requisite power and authority to issue, sell and deliver the Purchased Shares, in accordance with and upon the terms and
conditions set forth in this Agreement, and to consummate the Teekay Corporation Investment and the Vessel Acquisitions pursuant to the Vessel Acquisition MOAs. On the Closing Date, all corporate action required to be taken by the Company for the
authorization, issuance, sale and delivery of the Purchased Shares, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and of the Teekay Corporation Investment and the Vessel Acquisitions shall
have been validly taken. No approval from the holders of outstanding Class A Common Stock or Class B Common Stock is required (including, without limitation, under the Company’s Amended and Restated Articles of Incorporation or Bylaws or
the rules of the NYSE) in connection with the Company’s issuance and sale of the Purchased Shares to the Purchasers or the Teekay Corporation Investment or the Vessel Acquisitions. 

Section 3.9 Approvals. Except for the filing with the Commission pursuant to Rule 424(b) of a prospectus supplement
regarding the sale of the Purchased Shares, no authorization, consent, approval, waiver, license, qualification or written exemption from, nor any filing, declaration, qualification or registration with, any Governmental Authority or any other
Person is required in connection with the execution, delivery or performance by the Company of this Agreement or the Company’s issuance and sale of the Purchased Shares, except as may be required under the state securities or “Blue
Sky” Laws. 
 Section 3.10 Compliance with Laws. Neither the Company nor any of its Subsidiaries is in violation of
any Law applicable to the Company or its Subsidiaries, except as would not reasonably be expected to have a Material Adverse Effect. The Company and its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not reasonably be expected to have a Material Adverse Effect, and neither the Company nor
any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit, except where such potential revocation or modification would not reasonably be expected to have a
Material Adverse Effect. 

  
 12 

 Section 3.11 Due Authorization. This Agreement has been duly and validly
authorized and has been or validly executed and delivered by the Company, and constitutes the legal, valid and binding obligations of the Company, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and by general principles of equity, including principles of commercial reasonableness, fair dealing and good faith. 

Section 3.12 Valid Issuance; No Options or Preemptive Rights; Title. The Purchased Shares to be issued and sold by the
Company to each Purchaser hereunder have been duly authorized and, when issued and delivered against payment therefor pursuant to this Agreement, will be validly issued, fully paid and non-assessable, and will be free of any and all Liens and
restrictions on transfer, other than such Liens as are created by the Purchasers. The holders of outstanding Company Securities are not entitled to statutory, preemptive or other similar contractual rights to subscribe for Class A Common Stock
(except as described in the Company SEC Documents and as provided in Section 78 of the Marshall Islands Business Corporations Act); and, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, Company securities or ownership interests in the Company are outstanding (other than (i) grants of restricted shares or options to purchase Class A Common Stock under the
Company’s 2007 Long Term Incentive Plan and (b) the conversion features of the Company’s Class B Common Stock under the Company’s Amended and Restated Articles of Incorporation). 

Section 3.13 No Registration Rights. Except as contemplated by the Existing Registration Rights Agreements and for a
registration rights agreement to be entered into with affiliates of Principal Maritime Tankers Corporation as part of the Vessel Acquisitions, there are no contracts, agreements or understandings between the Company and any Person granting such
Person the right to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company or to require the Company to include such securities in any securities registered or to be registered
pursuant to any registration statement filed by or required to be filed by the Company under the Securities Act. All such rights under the Existing Registration Rights Agreements have been waived with respect to the registration of the Purchased
Shares. 
 Section 3.14 Periodic Reports. The Company’s forms, registration statements, reports, schedules and
statements required to be filed by it under the Exchange Act or the Securities Act (all such documents filed prior to the date hereof, collectively the “Company SEC Documents”) have been filed with the Commission on a timely basis.
The Company SEC Documents, including, without limitation, any audited or unaudited financial statements and any notes thereto or schedules included therein, at the time filed (or in the case of registration statements, solely on the dates of
effectiveness) (except to the extent corrected by a subsequent Company SEC Document) (a) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading, (b) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be, (c) in the
case of the financial statements, complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto, (d) in the case of the financial
statements, were prepared in 

  
 13 

 
accordance with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”) (except as may be indicated in the notes thereto
or, in the case of unaudited statements, for the absence of certain footnote disclosure and normal, recurring year-end adjustments or as otherwise permitted by the rules and regulations of the Commission), and (e) fairly present (subject in the
case of unaudited statements to normal and recurring audit adjustments) in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates thereof and the consolidated results of its
operations and cash flows for the periods then ended. In addition, the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Company SEC Documents fairly presents the information called for in all
material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto. KPMG LLP is an independent registered public accounting firm with respect to the Company and has not resigned or been dismissed
as independent registered public accountants of the Company as a result of or in connection with any disagreement with the Company on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures.

 Section 3.15 Litigation. As of the date hereof, except as set forth in the Company SEC Documents, there are no legal
or governmental proceedings pending to which any Company Entity is a party or to which any Property or asset of any Company Entity is subject that would reasonably be expected to have a Material Adverse Effect or which challenges the validity of
this Agreement or the right of any Company Entity to enter into this Agreement or to consummate the transactions contemplated hereby and, to the knowledge of the Company, no such proceedings are threatened by Governmental Authorities or others.

 Section 3.16 Insurance. The Company and its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged. The Company does not have any reason to believe that it or any Subsidiary will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business. 

Section 3.17 Books and Records; Sarbanes-Oxley Compliance. 

(a) The Company and its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences. The Company is not aware of any material weakness in the internal controls over financial reporting of any of the Company Entities. 

(b) The Company has established and maintains disclosure controls and procedures (to the extent required by and as defined in Rules 13a-15(e)
under the Exchange Act) which are designed to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed,

  
 14 

 
summarized and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding
required disclosure. The Company has carried out evaluations of the effectiveness of its disclosure controls and procedures and, to the Company’s knowledge, such disclosure controls and procedures are effective in all material respects to
perform the functions for which they were established. 
 (c) There is and has been no failure on the part of the Company or, to the
Company’s knowledge, the Company’s directors or officers in their capacities as such, to comply in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith. 
 Section 3.18 No Material Adverse Change. As of the date hereof, except as set forth in
Schedule 3.18, since March 31, 2015, there has been no change, event, occurrence, effect, fact, circumstance or condition that has had or would reasonably be likely to have a Material Adverse Effect. 

Section 3.19 Certain Fees. No fees or commissions are or will be payable by the Company to brokers, finders, or investment
bankers with respect to the sale of any of the Purchased Shares or the consummation of the transactions contemplated by this Agreement. The Company agrees that it will indemnify and hold harmless each Purchaser from and against any and all claims,
demands, or liabilities for broker’s, finder’s, placement, or other similar fees or commissions incurred by the Company in connection with the sale of the Purchased Shares or the consummation of the transactions contemplated by this
Agreement. 
 Section 3.20 No Side Agreements. There are no agreements by, among or between the Company or any of
its Affiliates, on the one hand, and any Purchaser or any of their Affiliates, on the other hand, with respect to the transactions contemplated hereby other than this Agreement nor promises or inducements for future transactions between or among any
of such parties. 
 Section 3.21 Investment Company Status. The Company is not an “investment company” or a
company controlled by an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 

Section 3.22 Passive Foreign Investment Company. To the knowledge of the Company, after consultation with United States
federal income tax counsel, none of the Company Entities is a Passive Foreign Investment Company within the meaning of Section 1297 of the Internal Revenue Code of 1986, as amended. 

Section 3.23 Restricted Securities. The Purchased Shares are not characterized as “restricted securities” under
the federal securities Laws. 
 Section 3.24 Foreign Corrupt Practices Act. No Company Entity, nor, to the Company’s
knowledge, any director, officer, employee, agent or representative of the Company Entities, has taken any action, directly or indirectly, that would result in a violation by such Persons of the Foreign Corrupt Practices Act of 1977, as amended
(such act, including the rules and regulations thereunder, the “FCPA”), including, making use of the mails or any means or 

  
 15 

 
instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything
else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any Person acting in an official
capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence official action or secure an improper advantage; and the Company Entities have conducted their businesses in
compliance with applicable anti-corruption laws and have instituted and maintain policies and procedures designed to promote and achieve compliance with such laws. 

ARTICLE 4 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS 

Each Purchaser, severally and not jointly, hereby represents and warrants to the Company that: 

Section 4.1 Existence. Such Purchaser is duly organized and validly existing and in good standing under the Laws of its
jurisdiction of organization, with all requisite power and authority to own, lease, use and operate its Properties and to conduct its business as currently conducted.  

Section 4.2 Authorization, Enforceability. Such Purchaser has all necessary corporate, limited liability company or
partnership power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and performance by such Purchaser of this Agreement has been
duly authorized by all necessary action on the part of such Purchaser; and this Agreement constitutes the legal, valid and binding obligations of such Purchaser, enforceable in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally or by general principles of equity, including principles of commercial reasonableness, fair dealing and good faith. 

Section 4.3 No Breach. The execution, delivery and performance of this Agreement by such Purchaser and the consummation by
such Purchaser of the transactions contemplated hereby will not (a) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any material agreement to which such Purchaser is a party
or by which such Purchaser is bound or to which any of the Property or assets of such Purchaser is subject, (b) conflict with or result in any violation of the provisions of the organizational documents of such Purchaser, or (c) violate
any statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over such Purchaser or the property or assets of such Purchaser, except in the cases of clauses (a) and (c), for such conflicts, breaches,
violations or defaults as would not prevent the consummation of the transactions contemplated by this Agreement with respect to such Purchaser.  

Section 4.4 Certain Fees. No fees or commissions are or will be payable by such Purchaser to brokers, finders, or
investment bankers with respect to the purchase of any of the Purchased Shares or the consummation of the transaction contemplated by this Agreement. 

  
 16 

 Section 4.5 No Side Agreements. There are no other agreements by, among or
between such Purchaser and any of its Affiliates, on the one hand, and the Company or any of its Affiliates, on the other hand, with respect to the transactions contemplated hereby other than this Agreement nor promises or inducements for future
transactions between or among any of such parties; provided, however, that, subject to such Purchaser’s compliance with its obligations under the U.S. federal securities Laws and its internal policies (a) such Purchaser, for
purposes of this Section, shall not be deemed to include any employees, subsidiaries or Affiliates that are effectively walled off by appropriate “Chinese Wall” information barriers approved by such Purchaser’s legal or compliance
department (and thus have not been privy to any information concerning the transactions contemplated by or referred to in this Agreement) (a “Walled-Off Person”) and (b) the foregoing representations in this Section shall not
apply to any transaction by or on behalf of such Purchaser that was effected by a Walled-Off Person in the ordinary course of trading without the advice or participation of such Purchaser or receipt of confidential or other information regarding the
transactions contemplated by or referred to in this Agreement provided by such Purchaser to such entity. 
 Section 4.6
Short Selling. Such Purchaser has not entered into or effected any Short Sales of the Company’s Class A Common Stock owned by it between the time it first began discussion with the Company about the transactions
contemplated by this Agreement and the date hereof (it being understood that, without implication that the contrary would otherwise be true, the entering into of a total return swap shall not be considered a Short Sale of Class A Common Stock);
provided, however, that, subject to such Purchaser’s compliance with its obligations under the U.S. federal securities Laws and its internal policies: (a) such Purchaser, for purposes hereof, shall not be deemed to include any
Walled-Off Person and (b) the foregoing representations in this Section shall not apply to any transaction by or on behalf of Purchaser that was effected by a Walled-Off Person in the ordinary course of trading without the advice or
participation of Purchaser or receipt of confidential or other information regarding the transactions contemplated by or referred to in this Agreement provided by Purchaser to such entity. 

ARTICLE 5 
 COVENANTS

 Section 5.1 Taking of Necessary Action. Each of the parties hereto shall use its commercially reasonable efforts
promptly to take or cause to be taken all action and promptly to do or cause to be done all things necessary, proper or advisable under applicable Law and regulations to consummate and make effective the transactions contemplated by this Agreement.
Without limiting the foregoing, the Company and each Purchaser shall use its commercially reasonable efforts to make all filings and obtain all consents of Governmental Authorities that may be necessary or, in the reasonable opinion of the other
parties, as the case may be, advisable for the consummation of the transactions contemplated by this Agreement. 
 Section 5.2
Other Actions. The Company shall, prior to the Closing, file a supplemental listing application with the NYSE to list the Purchased Shares and file a prospectus supplement to the Prospectus with the Commission to register the Purchased
Shares in accordance with the Securities Act and the Rules. Each Purchaser agrees solely with the Company that its trading activities, if any, with respect to its Purchased Shares will be in compliance with all applicable state and federal
securities Laws and the rules and regulations of the NYSE. 

  
 17 

 Section 5.3 Payment and Expenses. The Company and each Purchaser shall be
responsible for its own fees and expenses in connection with the transactions contemplated by this Agreement. 
 Section 5.4
Use of Proceeds. The Company shall use the collective proceeds from the sale of the Purchased Shares to partially fund the Vessel Acquisitions. 

Section 5.5 Vessel Acquisition Share Consideration; Lock-Up Arrangement. 

(a) The Vessel Acquisition MOAs provide that the Company will issue shares of its Class A common stock (the “Share
Consideration”) as partial consideration for the vessels to be acquired, with such shares (a) to be valued on a per share basis at the Common Stock Price and (b) subject to the terms of the Vessel Acquisition MOAs, having an
aggregate value of $50.0 million. The Company agrees that it will neither (i) substitute another form of consideration for the Share Consideration to be issued under the Vessel Acquisition MOAs or (ii) value the Share Consideration for
purposes of the Vessel Acquisition MOAs on a per share basis less than the Common Stock Price. 
 (b) As part of the Vessel Acquisitions, the
recipients of Share Consideration under the Vessel Acquisition MOAs (which will not include any of the Purchasers) will agree not to, directly or indirectly, transfer, sell or dispose of the Share Consideration until the earlier of (a) delivery
of all vessels subject to the Vessel Acquisitions and (b) November 15, 2015. The Company agrees not to waive such restrictions or to shorten the duration thereof without the prior written consent of the Purchasers. 

Section 5.6 Defaulting Purchasers. If any Purchaser defaults in its obligation to purchase the Purchased Shares allocated
to it under this Agreement, the Company will not waive such default or fail to use commercially reasonable efforts to enforce its rights against such defaulting Purchaser with respect to such default, in each case without the prior written consent
of the non-defaulting Purchasers. In addition, the Company will not waive or in any way reduce any Purchaser’s investment amount hereunder without the prior written consent of the other Purchasers. 

ARTICLE 6 

INDEMNIFICATION 

Section 6.1 Indemnification by the Company. The Company agrees to indemnify each Purchaser and its Representatives
(collectively, “Purchaser Related Parties”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in
connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel
and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way
related to the 

  
 18 

 
breach of any of the representations, warranties or covenants of the Company contained herein or in any certificates of the Company or its officers delivered to the Purchasers hereunder, provided
that such claim for indemnification relating to a breach of the representations or warranties is made prior to the expiration of such representations or warranties. 

Section 6.2 Indemnification by Purchasers. Each Purchaser agrees, severally and not jointly, to indemnify the Company and
its Representatives (collectively, “Company Related Parties”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of
action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and
disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising
out of, or in any way related to the breach of any of the representations, warranties or covenants of such Purchaser contained herein, provided that such claim for indemnification relating to a breach of the representations and warranties is made
prior to the expiration of such representations and warranties. 
 Section 6.3 Indemnification Procedure. Promptly after
any Company Related Party or Purchaser Related Party (hereinafter, the “Indemnified Party”) has received notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third person, which the
Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”) written notice of such claim or the commencement of such
action, suit or proceeding, but failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially
prejudiced by such failure. Such notice shall state the nature and the basis of such claim to the extent then known. The Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel who shall be reasonably
acceptable to the Indemnified Party, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle any such action or claim, it shall promptly notify the
Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall
include, but shall not be limited to, furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such cooperation of the
Indemnified Party shall be at the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying
Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however, that
the Indemnified Party shall be entitled (i) at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has failed to assume the
defense or employ counsel reasonably acceptable to the Indemnified Party or (B) if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and 

  
 19 

 
counsel to the Indemnified Party shall have concluded that there may be reasonable defenses available to the Indemnified Party that are different from or in addition to those available to the
Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, then the Indemnified Party shall have the right to select a separate counsel and to assume such legal
defense and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred. Notwithstanding any
other provision of this Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, includes a complete release from
liability of, and does not include any admission of wrongdoing or malfeasance by, the Indemnified Party. 
 ARTICLE 7 

MISCELLANEOUS 

Section 7.1 Interpretation and Survival of Provisions. Article, Section, Schedule, and Exhibit references are to this
Agreement, unless otherwise specified. All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from
time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.” Whenever any party has an obligation under this Agreement, the expense of complying with that obligation shall be an
expense of such party unless otherwise specified. Whenever any determination, consent, or approval is to be made or given by any Purchaser, such action shall be in such Purchaser’s sole discretion unless otherwise specified in this Agreement.
If any provision in this Agreement is held to be illegal, invalid, not binding, or unenforceable, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid, not binding, or unenforceable
provision had never comprised a part of this Agreement, and the remaining provisions shall remain in full force and effect. This Agreement has been reviewed and negotiated by sophisticated parties with access to legal counsel and shall not be
construed against the drafter. 
 Section 7.2 Survival of Provisions. The representations and warranties set forth in
Sections 3.1, 3.2, 3.3, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, 3.19, 3.21, 4.4, and 4.5 hereunder shall survive the execution and delivery of this Agreement until the date 30 days after the applicable statute of limitations, and the
other representations and warranties set forth herein shall survive for a period of twelve (12) months following the Closing Date regardless of any investigation made by or on behalf of the Company or any Purchaser. The covenants made in this
Agreement shall survive the Closing of the transactions described herein and remain operative and in full force and effect regardless of acceptance of any of the Purchased Shares and payment therefor and repayment or repurchase thereof. All
indemnification obligations of the Company and the Purchasers pursuant to this Agreement and the provisions of Article VI shall remain operative and in full force and effect unless such obligations are expressly terminated in a writing by the
parties, regardless of any purported general termination of this Agreement. 

  
 20 

 Section 7.3 No Waiver; Modifications in Writing. 

(a) No failure or delay on the part of any party in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. The remedies provided for herein are cumulative and are not exclusive of
any remedies that may be available to a party at law or in equity or otherwise. 
 (b) Except as otherwise provided herein, no amendment,
waiver, consent, modification, or termination of any provision of this Agreement shall be effective unless signed by each of the parties hereto affected by such amendment, waiver, modification or termination. Any amendment, supplement or
modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by the Company or any Purchaser from the terms of any provision of this Agreement shall be effective only in the
specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on the Company or any Purchaser in any case shall entitle the Company or such Purchaser to
any other or further notice or demand in similar or other circumstances. 
 Section 7.4 Binding Effect; Assignment 

(a) This Agreement shall be binding upon the Company, the Purchasers, and their respective successors and permitted assigns. Except as
expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and permitted assigns. 

(b) All or any portion of the rights and obligations of any Purchaser under this Agreement may be transferred by such Purchaser to any
Affiliate of such Purchaser without the consent of the Company. No portion of the rights and obligations of any Purchaser under this Agreement may be transferred by such Purchaser to a non-Affiliate without the prior written consent of the Company.
As a condition to any assignment hereunder, the assignee shall agree in writing to be bound by the provisions of this Agreement, and, notwithstanding any such assignment, the Purchaser shall remain liable for the payment of the purchase price of the
applicable Purchased Shares if not timely paid by such assignee. The Company may not transfer any of its rights or obligations under this Agreement to any Person. 

Section 7.5 Communications. All notices and demands provided for hereunder shall be in writing and shall be given by
registered or certified mail, return receipt requested, telecopy, air courier guaranteeing overnight delivery or personal delivery to the following addresses: 

If to any Purchaser: 
 To the respective address
listed on Schedule B hereof 

  
 21 

 If to the Company: 

Teekay Tankers Ltd. 
 4th Floor,
Belvedere Building 
 69 Pitts Bay Road 

Hamilton HM 08, Bermuda 

Attention: Corporate Secretary 

Facsimile: (441) 292-3931 

with a copy to: 
 Perkins Coie
LLP 
 1120 N.W. Couch Street, 10th Floor 

Portland, Oregon 97209-4128 

Attention: David Matheson 

Facsimile: (503) 346-2008 
 or to such
other address as the Company or such Purchaser may designate in writing. All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; at the time of transmittal, if sent via
electronic mail; upon actual receipt if sent by certified mail, return receipt requested, or regular mail, if mailed; when receipt acknowledged, if sent via facsimile; and upon actual receipt when delivered to an air courier guaranteeing overnight
delivery. 
 Section 7.6 Entire Agreement. This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto and thereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein with respect to the rights granted by the Company or any of its Affiliates or any Purchaser or any of its Affiliates set forth herein. This Agreement and the other agreements and documents referred to
herein or therein supersede all prior agreements and understandings between the parties with respect to such subject matter, other than confidentiality or non-disclosure agreements entered into between the Company and any Purchasers with respect to
the transactions contemplated hereby. 
 Section 7.7 Governing Law. This Agreement will be construed in accordance with
and governed by the laws of the State of New York without regard to principles of conflicts laws thereof that would apply the laws of any other jurisdiction. 

Section 7.8 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, including facsimile or .pdf format counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute
but one and the same Agreement. 

  
 22 

 Section 7.9 Termination. 

(a) Notwithstanding anything herein to the contrary, this Agreement may be terminated at any time at or prior to the Closing by (i) with
respect to any particular Purchaser, the written consent of such Purchaser, upon a breach in any material respect by the Company of any covenant or agreement set forth in this Agreement or (ii) with respect to any particular Purchaser, written
notice by the Company to such Purchaser upon a breach in any material respect by such Purchaser of any covenant or agreement set forth in this Agreement. For the avoidance of doubt, the termination of this Agreement with respect to any particular
Purchaser shall not affect the Agreement with respect to any other Purchaser. 
 (b) Notwithstanding anything herein to the contrary, this
Agreement shall automatically terminate (i) at any time at or prior to the Closing if a Law shall have been enacted or promulgated, or if any action shall have been taken by any Governmental Authority of competent jurisdiction that permanently
restrains, permanently precludes, permanently enjoins or otherwise permanently prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated by this Agreement illegal, (ii) if the Company
shall determine, at any time prior to the Closing, not to consummate the Vessel Acquisitions or (iii) if the Closing shall not have occurred by 5:00 p.m. Eastern Time on the fifth Business Day following the date of this Agreement. 

(c) In the event of the termination of this Agreement as provided in this Section 7.9, (1) this Agreement shall forthwith
become null and void, and (2) there shall be no liability on the part of any Party hereto, except as set forth in Section 5.3 and Article VI of this Agreement. 

Section 7.10 Recapitalization, Exchanges, Etc. Affecting the Class A Common Stock. The provisions of this Agreement shall
apply to the full extent set forth herein with respect to any and all equity interests of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in
exchange for or in substitution of, the Class A Common Stock, and shall be appropriately adjusted for combinations, recapitalizations and the like occurring after the date of this Agreement and prior to the Closing. 

Section 7.11 Disclosure. Each Purchaser agrees not to disclose information about this Agreement or the transactions
contemplated hereby or referred to herein (including the Teekay Corporation Investment and the Vessel Acquisitions) until and to the extent the Company publicly discloses such information. The Company shall disclose on Commission Form 6-K, within
four Business Days of the date of this Agreement, the transactions contemplated by this Agreement or referred to herein (including the Teekay Corporation Investment and the Vessel Acquisitions). The Company will not disclose the names of the
Purchasers unless advised by its outside counsel that such disclosure is required by applicable Law, including any rules or regulations of the Commission or NYSE. From and after the filing of the prospectus supplement required to be filed by this
Agreement prior to the Closing, the Company shall have disclosed all material, non-public information (if any) regarding the Company or any of its Subsidiaries delivered to any of the Purchasers by the Company or any of its Subsidiaries or any of
its or their respective Representatives in connection with the transactions contemplated by this Agreement. 

  
 23 

 [Signature pages follow] 

  
 24 

 IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first
above written. 
  

			
	TEEKAY TANKERS LTD.
		
	By:	 	  

		 	Name: Kevin Mackay
		 	Title: Chief Executive Officer

 Signature Page to Common Stock Purchase Agreement 

 
			
	PURCHASER:
	
	ENTITY
NAME:                                       
               
		
	By:	 	  

		 	Name:
		 	Title:

 Signature Page to Common Stock Purchase Agreement 

 Schedule A – List of Purchasers and Commitment Amounts 

 

									
	 Purchaser
	  	Number of Shares of
Class A Common Stock	 	  	Aggregate
Purchase Price*	 
	 Investor 1
	  	 	1,600,000	  	  	$	10,640,000.00	  
	 Investor 2
	  	 	2,255,639	  	  	$	15,000,000.00	  
	 Investor 3
	  	 	647,753	  	  	$	4,307,557.45	  
	 Investor 4
	  	 	1,607,886	  	  	$	10,692,441.90	  
	 Investor 5
	  	 	2,556,391	  	  	$	17,000,000.15	  
	 Investor 6
	  	 	451,128	  	  	$	3,000,001.20	  
		  	  
	  
	 	  	  
	  
	 
	 Total
	  	 	9,118,797	  	  	$	60,640,000.70	  
		  	  
	  
	 	  	  
	  
	 

  

	*	The Purchase Price for each Purchaser is equal to the product of (a) the number of shares set forth opposite such Purchaser’s name under the column titled “Class A Common Stock” above, multiplied
by (b) $6.65, being the Common Stock Price per share. 

 Schedule A to Common Stock Purchase Agreement 

 Schedule B – Notice and Contact Information 

 

			
	 Purchaser
	  	 Notice and Contact Information

		
	Name of Investor 1:	  	
Address:                        
                      
  

Facsimile
No.:                                    

 

Email:                         
                         
  

Attention:                        
                    
  

		
	Name of Investor 2:	  	
Address:                        
                      
  

Facsimile
No.:                                      

 

Email:                         
                         
  

Attention:                        
                      
  

		
	Name of Investor 3:	  	
Address:                        
                        
  

Facsimile
No.:                                      

 

Email:                         
                         
  

Attention:                        
                    
  

		
	Name of Investor 4:	  	
Address:                        
                      
  

Facsimile
No.:                                      

 

Email:                         
                         
  

Attention:                        
                    

 Schedule B to Common Stock Purchase Agreement 

			
	Name of Investor 5:	  	
Address:                        
                          
  

Facsimile
No.:                                        
 
  

Email:                         
                             

 

Attention:                        
                        
  

		
	Name of Investor 6:	  	
Address:                        
                          
  

Facsimile
No.:                                        
 
  

Email:                         
                             

 

Attention:                        
                        

 Schedule B to Common Stock Purchase Agreement 

 Schedule 3.18 – No Material Adverse Change 

None. 
 Schedule 3.18 to Common Stock Purchase
Agreement 

 Exhibit A – Form of Opinion of Perkins Coie LLP 

Capitalized terms used but not defined herein have the meanings assigned to such terms in the Common Stock Purchase Agreement (the “Purchase
Agreement”). The Company shall furnish to the Purchasers at the Closing an opinion of Perkins Coie LLP, counsel for the Company, addressed to the Purchasers and dated the Closing Date in form reasonably satisfactory to the Purchasers,
stating that: 
 (i) To our knowledge, except as described in the Company SEC Documents filed prior to the date of the Purchase
Agreement, there are no outstanding options, warrants, or agreements for the purchase or acquisition from the Company of Company securities or ownership interests in the Company, or rights to convert any obligations into or exchange any securities
for Company securities or ownership interests in the Company. 
 (ii) No consent, approval, authorization or other action by, or filing with,
any Governmental Authority is required for the issuance and sale by the Company of the Purchased Shares, the execution, delivery and performance by the Company of the Purchase Agreement or the completion of the transactions contemplated by the
Purchase Agreement, except for those that have been obtained or as may be required under state securities or “Blue Sky” laws, as to which we do not express any opinion. 

(iii) To our knowledge, there are no contracts, agreements or understandings between any of the Company Entities and any person granting such
person the right to require any of the Company Entities to file a registration statement under the Securities Act with respect to any securities of the Company owned or to be owned by such person or to require any of the Company Entities to include
such securities in any securities being registered pursuant to any other registration statement filed by any Company Entity under the Securities Act, except for such rights granted pursuant to the Existing Registration Rights Agreements. 

(iv) None of the offering, issuance and sale by the Company of the Purchased Shares, the execution, delivery and performance of the Purchase
Agreement by the Company, or the completion of the transactions contemplated thereby conflicts with or constitutes a breach or violation of, or a default under (or an event which, with notice or lapse of time or both, would constitute such a
default), any indenture, contract, mortgage, deed of trust, note agreement, loan agreement, lease or other agreement or instrument filed as an exhibit to the Company’s Annual Report on Form 20-F for the year ended December 31, 2014, or the
Quarterly Report on Form 6-K for the quarter ended March 31 (including any document filed as an exhibit to any document incorporated by reference therein). (We do not comment or opine as to compliance with any financial covenants or financial
ratios contained in any such documents.) 
 (v) The Company is not, and after giving effect to the use of proceeds from the sale of the
Purchased Shares pursuant to the Purchase Agreement will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 

Exhibit A to Common Stock Purchase Agreement 

 (vi) We confirm that the Class A common stock of the Company is listed on the New York Stock
Exchange, and, consequently, the Purchased Shares, when issued and delivered by the Company pursuant to the terms of the Purchase Agreement, will be “covered securities” for purposes of Section 18 of the Securities Act. 

Exhibit A to Common Stock Purchase Agreement 

 Exhibit B – Form of Opinion of Watson, Farley & Williams LLP 

Capitalized terms used but not defined herein have the meanings assigned to such terms in the Common Stock Purchase Agreement (the
“Purchase Agreement”). The Company shall furnish to the Purchasers at the Closing an opinion of Watson, Farley & Williams LLP, special Marshall Islands and New York counsel for the Company, addressed to the Purchasers and
dated the Closing Date in form reasonably satisfactory to the Purchasers, stating that: 
 (i) The Company has been duly incorporated and is
validly existing in good standing as a corporation under the law of the Republic of the Marshall Islands (“Marshall Islands Law”), and has the corporate power and authority to own or lease its properties and to conduct its business,
in each case in all material respects as described in the Registration Statement and the Prospectus. 
 (ii) Each of the entities listed in
Schedule A to this opinion (the “Marshall Islands Significant Subsidiaries”) is validly existing in good standing as a limited liability company or a corporation, as applicable, under Marshall Islands Law, and each has the
limited liability company or corporate power and authority, as applicable, to own or lease its properties and to conduct its business, in each case in all material respects as described in the Registration Statement and the Prospectus. 

(iii) The Purchased Shares, when issued and delivered by the Company only after receipt of payment therefor pursuant to and in compliance with
the Purchase Agreement and the Prospectus, will be validly issued, fully paid and nonassessable. 
 (iv) There are no preemptive rights or
other rights to subscribe for or to purchase any equity interests in the Company, in each case pursuant to the organizational documents of the Company. 

(v) The Purchase Agreement has been duly authorized and validly executed by the Company, and constitutes a legally binding obligation of the
Company, enforceable against the Company in accordance with its terms. 
 (vi) The execution, delivery and performance of the Purchase
Agreement by the Company, including without limitation, the offering, issuance and sale of the Purchased Shares as contemplated thereunder, or the consummation of the transactions contemplated thereby, do not and will not (i) conflict with or
constitute a violation of the organizational documents of the Company or any Marshall Islands Significant Subsidiary, (ii) violate any statute, law, rule, regulation, judgment, order or decree of which we are aware of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority situated in the Republic of the Marshall Islands directed to the Company or result in a proceeding before such court, regulatory body, administrative agency, governmental
body, arbitrator or other authority in the Republic of the Marshall Islands to which any of them is a party, or (iii) to our knowledge, result in the creation or imposition of any lien upon any property or assets of the Company or any Marshall
Islands Significant Subsidiary under Marshall Islands Law (other than liens referred to (including by incorporation by reference) or described in the Prospectus). 

Exhibit B to Common Stock Purchase Agreement 

 (vii) Except as referred to (including by incorporation by reference) or described in the
Prospectus, no permit, consent, approval, authorization, order, registration, filing or qualification of or with any court, governmental agency or body of the Republic of the Marshall Islands having jurisdiction over the Company or any of its
properties is required in connection with the execution and delivery of the Purchase Agreement by the Company, or the performance of the transactions contemplated thereby, including without limitation, the offering, issuance and sale of the
Purchased Shares as contemplated thereunder. 
 (viii) The choice of New York law to govern the Purchase Agreement constitutes a valid choice
of law under Marshall Islands Law. 
 Exhibit B to Common Stock Purchase Agreement

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