Document:

SQBK Exhibit 10.12 12.31.2014 10K

EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the 1st day of March, 2015, by and among SQUARE 1 FINANCIAL, Inc., a Delaware corporation (“Company”), SQUARE 1 Bank, a North Carolina chartered commercial bank (the “Bank”), and FRANK TOWER (“Executive”).
RECITALS
WHEREAS, Company and the Bank wish to continue to employ Executive in a position of substantial responsibility; 
WHEREAS, Company, the Bank and Executive desire to enter into an employment agreement pursuant to the terms of this Agreement; 
NOW, THEREFORE, in consideration of the mutual promises of the parties hereto and for other good and valuable consideration, the receipt and adequacy whereof each party hereby acknowledges, Company, the Bank and Executive hereby agree as follows: 
1.    DEFINITIONS: The following terms shall have the following meanings for all purposes of this Agreement: 
Base Salary means the annual base compensation specified in Section 4 below. 
Board means, unless otherwise indicated by the context, the Board of Directors of Company and the Board of Directors of the Bank.
Cause means any of the reasons listed in Section 7(d) below for which this Agreement may be terminated or Executive may be discharged prior to the end of the Term hereof. 
Change of Control means and shall be deemed to have occurred upon the occurrence of any of the following events. 
(1)    The acquisition by any “person” or “group” (as defined in or pursuant to Sections 13(d) and 14(d) of the Exchange Act) (other than Company, any Subsidiary or any Company or Subsidiary’s employee benefit plan), directly or indirectly, as “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities representing fifty percent (50%) or more of either the then outstanding shares or the combined voting power of the then outstanding securities of Company or the Bank; 
(2)    Either a majority of the directors of Company elected at Company’s annual stockholders meeting shall have been nominated for election other than by or at the direction of the “incumbent directors” of Company, or the “incumbent directors” shall cease to constitute a majority of the directors of Company. The term “incumbent director” shall mean any director who was a director of Company on the Effective Date and any individual who becomes a director of Company subsequent to the Effective Date and who is elected or nominated by or at the direction of at least majority of the then incumbent directors;
(3)    The consummation of (x) a merger, consolidation or other business combination of Company with any other “person” or “group” (as defined in or pursuant to Sections 13(d) and 14(d) of the 1934 Act) or affiliate thereof, other than a merger or consolidation that would result in the outstanding common stock of Company immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into common stock of the surviving entity or a parent or affiliate thereof) more than fifty percent (50%) of the outstanding common stock of Company or such surviving entity or a parent or affiliate thereof outstanding immediately after such merger, consolidation or other business combination, or (y) a plan of complete liquidation of Company or the Bank or an agreement for the sale or disposition of all or substantially all of Company’s or the Bank’s assets; or
(4)    Notwithstanding the foregoing, a Change of Control shall not occur with respect to any “person” (as defined herein) who (i) is a shareholder of Company as of the Effective Date or (ii) becomes a shareholder 

of Company or the Bank after the Effective Date of the Agreement in connection with a sale of stock to such person by Company or the Bank pursuant to a duly authorized resolution of the Company Board provided such person’s ownership interest after the sale is less than 50% of Company’s or the Bank’s outstanding shares.
Code means the Internal Revenue Code of 1986, as amended. 
Effective Date means the first day of the initial Term.
Exchange Act means the Securities Exchange Act of 1934, as amended. 
Good Reason means the occurrence of any of the conditions listed in Section 7(f) below which is followed by the resignation of Executive within twelve (12) months after such occurrence. 
Protected Customer shall mean any person, business or entity who or which: 
(1)    Was known by Executive to have purchased products or services from Company, the Bank or any Subsidiary other than the Bank during the two-year period immediately preceding Executive’s last day of employment with the Bank; or 
(2)    Purchased products or services from Company, the Bank or any Subsidiary other than the Bank during the two-year period immediately preceding Executive’s last day of employment with the Bank, and about whom Executive had access to confidential or proprietary information during this period; or 
(3)    Was known by Executive to have received (during the one-year period prior to Executive’s last day of employment with the Bank) but not yet acted upon a proposal by Company, the Bank or any Subsidiary other than the Bank for the purchase of products or performance of services. 
Release Agreement means the Release Agreement attached hereto as Exhibit A. 
Resignation (or “Resign”) for Good Reason means resignation by Executive in accordance with the provisions of Section 7(f) below. 
Restricted Period means a period of twelve (12) months following Executive’s termination of employment for any reason.
Subsidiary means any corporation at least a majority of the stock of which is owned by Company, either directly or through one or more other Subsidiaries, and any other entity controlled, directly or indirectly, by Company or any other Subsidiary. 
Target Bonus means an annual cash bonus opportunity of not less than 80% of Executive’s Base Salary for the applicable fiscal year of the Company, with such bonus to be provided under the terms of the annual bonus program approved by the Compensation Committee of the Board for such year.
Term means the term of this Agreement specified in Section 3 below, including the Initial Term, the Additional Term, and any extended term pursuant to Section 8(a) below. 
Termination for Cause means discharge of Executive prior to the end of the Term in accordance with the provisions of Section 7(d) below for any of the reasons listed therein. 
Termination without Cause means discharge of Executive prior to the end of the Term in accordance with the provisions of Section 7(e) below.
2.    EMPLOYMENT: 

(a)    During the Term, Executive shall serve as Executive Vice President - Banking of Company and the Bank, reporting to the Chief Executive Officer of Company and the Bank. In such capacity, Executive shall be responsible for the management and oversight of banking functions for Company and Bank, and shall also be available for assignment to special projects as directed by the Chief Executive Officer.  In addition, Executive will perform all duties and have all powers associated with such position as may be set forth in the Bylaws of Company or the Bank.    Executive agrees that, during the Term, he will devote his full business time and energy to the business, affairs and interests of Company and the Bank and serve diligently and to the best of his ability. Executive may serve as a director, trustee or officer of other corporations and entities, including without limitation charitable organizations, and engage in other activities to the extent those activities and services do not inhibit the performance of Executive’s duties hereunder or, in the opinion of the Board, conflict with the business of Company, the Bank or any Subsidiary. 
(b)    References in this Agreement to services rendered for Company and compensation, benefits, indemnification and liability insurance payable or provided by Company shall include services rendered for and compensation, benefits, indemnification and liability insurance payable or provided by the Bank and any Subsidiary other than the Bank, and references in this Agreement to “ Company “ shall mean and include the Bank and any Subsidiary other than the Bank if Executive performs any services therefor, as the context may require. 
3.    TERM:  The initial Term of this Agreement shall be for the period beginning on March 1, 2015 and continuing through and including March 1, 2017, subject, however, to earlier termination in the manner provided in this Agreement. Commencing as of the first anniversary of the Effective Date and continuing as of each anniversary of the Effective Date thereafter, the Board may, in the sole discretion of the Board, extend the Agreement Term for an additional year, so that the remaining Term of the Agreement again becomes twenty-four (24) full months from the applicable anniversary of the Effective Date, unless the Executive elects not to extend the Term of this Agreement by giving written notice at least thirty (30) days prior to the applicable anniversary date. Notwithstanding the foregoing, the Term of this Agreement shall be extended pursuant to Section 8(a) below upon the occurrence of a Change of Control. 
4.    BASE SALARY; INCENTIVE COMPENSATION: 
(a)    Executive shall receive an annual Base Salary at the rate of $250,000, payable in substantially equal installments no less frequently than monthly (less any amounts withheld as required by law or pursuant to any benefits plan). At least annually, Company shall review and, in its sole discretion, may increase, Executive’s Base Salary. If Executive’s Base Salary is increased by Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement.
(b)    During the Term of this Agreement, Executive shall have a Target Bonus opportunity.  Nothing paid to Executive under any such program will be deemed to be in lieu of other compensation to which Executive is entitled under this Agreement.
5.    EMPLOYEE BENEFITS AND REIMBURSEMENTS: 
(a)    Employee Benefits, Business Expenses.  During the Term, Executive shall participate in any retirement, group insurance, hospitalization, incentive or deferred compensation and other benefit or compensation plans of the Bank presently in effect or hereafter adopted and generally available to all of the Company’s senior officers, subject to the terms and conditions specified in such plans. Executive shall also be entitled to any additional compensation, benefits or perquisites, if any, that may be provided specifically to or for Executive by Company or the Bank from time to time. During the Term, to the extent provided by corporate policies, Executive shall be reimbursed for expenditures (including travel, entertainment, parking and business meetings) made in pursuance and furtherance of the business and good will of Company.
(b)    Vacation and Leave. Executive will be entitled to not less than 28 days of paid time-off each year in accordance with the Company’s policies and procedures for senior officers.  

6.    INDEMNIFICATION: 
(a)    Company, the Bank and any Subsidiary other than the Bank for which Executive provides services shall indemnify and hold Executive harmless from and against all liability and expense resulting from (1) all acts or omissions of Executive while acting in the capacity of a director, officer, trustee, or fiduciary and/or employee of Company, the Bank and any such Subsidiary during Executive’s employment as such director, officer, and/or employee and (2) acts or omissions of Company, the Bank and any such Subsidiary occurring or alleged to have occurred during or prior to Executive’s employment, on terms and conditions no less favorable to Executive than the terms and conditions providing for indemnification of officers and directors under the Articles or Certificate of Incorporation and the Bylaws of Company, the Bank charter and each such Subsidiary’s governing documents. 
(b)    The Bank shall carry directors and officers liability insurance in such amounts as the Bank in its discretion deems appropriate, and any payments made under such policy to Executive or on Executive’s behalf shall be offset against the indemnification obligation set forth in Section 6(a). 
(c)    Notwithstanding the foregoing, the indemnification provided by Section 6(a) shall not apply, and Executive shall not be indemnified, with respect to any acts or omissions which constitute wanton or willful misconduct or willful gross negligence. The indemnity obligation set forth in this Section 6 shall be subject to the prohibitions and limitations established by applicable law and as set forth in applicable regulations adopted by any federal or state bank regulatory agency having jurisdiction over Company, the Bank or any Subsidiary other than the Bank for which Executive performs services. 
(d)    The provisions of this Section 6 shall survive termination of this Agreement. 
7.    TERMINATION: Executive’s employment under this Agreement may be terminated under any of the following conditions. 
(a)    Disability: If Executive is unable to perform the essential functions of Executive’s position on a full-time basis for a period of six (6) consecutive months (or for such shorter period ending with Executive’s eligibility for and receipt of long-term disability benefits under an insurance policy or employee benefit plan provided or made available to Executive by Company) by reason of illness or other physical or mental disability, Company shall have the right to terminate Executive’s employment under this Agreement at the end of the applicable period by written notice thereof. If Executive’s employment is so terminated, Executive shall be paid any salary and benefits to which Executive may be entitled until the end of the payroll period in which the date of termination occurs, and thereafter, Company shall have no further obligation for additional compensation and benefits under this Agreement. A condition of disability shall be determined by Company on the basis of competent evidence. A written opinion of a licensed physician certified in his field of specialization and acceptable to Company, or Executive’s entitlement to or receipt of long-term disability benefits under any insurance policy or employee benefit plan provided or made available to Executive by Company or under federal Social Security law, shall be conclusive evidence of disability. 
(b)    Death: In the event of Executive’s death during the Term, Executive’s estate shall be paid Base Salary at the rate in effect at the time of Executive’s death for a period of one (1) month after the date of Executive’s death and shall be paid for any accrued and unused paid time off.  Such additional compensation and accrued and unused paid time off shall be paid in a single lump sum within thirty (30) days after Executive’s date of death.  In addition, at the time of annual payouts of bonus compensation under any corporate incentive plan in which Executive participates, Executive’s estate shall be paid a bonus (if earned by and payable to Executive under, and as determined in accordance with, the terms of such corporate incentive plan) with respect to the year of Executive’s death, which bonus amount shall be pro-rated based upon the number of months (including partial months up to one additional full month) Executive was employed during the year of Executive’s death.
(c)    Resignation By Executive: Upon thirty (30) days prior notice, Executive may resign or voluntarily leave the employ of Company, other than under circumstances treated as Resignation for Good Reason.  In the event of Executive’s resignation under this Section 7(c), Executive shall be paid any accrued and unpaid salary and accrued 

and unused paid time off through his date of resignation within thirty (30) days after Executive’s separation from service. 
(d)    Termination For Cause: Company may, by written notice to Executive, terminate Executive’s employment immediately for Cause upon the occurrence of any of the following: 
(1)    Executive’s willful failure to follow or to cooperate in carrying out any of the lawful policies of Company or the Bank or the lawful directions of the Board; 
(2)    Continued and willful neglect by Executive of Executive’s duties for or on behalf of Company, the Bank or any Subsidiary other than the Bank for which Executive provides services; 
(3)    Willful misconduct of Executive in connection with the performance of any of Executive’s duties, including, by way of example, but not limitation, misappropriation of funds or property of Company, the Bank or a Subsidiary other than the Bank or a depositor therein or borrower therefrom, or securing or attempting to secure personally any profit in connection with any transaction entered into on behalf of Company, the Bank or Subsidiary other than the Bank to the prejudice of the Bank or its Subsidiaries; 
(4)    Conduct by Executive which results in Executive’s suspension and/or temporary prohibition or removal and/or permanent prohibition from participation in the conduct of the affairs of Company, the Bank or any Subsidiary other than the Bank pursuant to the rules and regulations of the primary federal or state banking agency for Company, the Bank or the other Subsidiary or any other federal or state banking agency having regulatory jurisdiction over Company, the Bank or the other Subsidiary; 
(5)    Conviction of Executive of a felony (other than a motor vehicle-related felony) or any misdemeanor involving moral turpitude or Executive’s willful violation of any law, rule or regulation to which Company, the Bank or other Subsidiary for which Executive performs services is subject; 
(6)    Willful violation of any code of conduct or standards of ethics applicable to employees of Company or the Bank that results in material and demonstrable damage to the business or reputation of Company or the Bank; 
(7)    The issuance of a permanent injunction or similar remedy against Executive preventing Executive from executing or performing all or part of this Agreement; or
(8)    Executive’s willful violation of a final order or other formal administrative action entered into, by or imposed upon Company, the Bank or any such Subsidiary.
If Executive’s employment is Terminated for Cause or Company and Bank have Cause for termination and Executive voluntarily resigns, Executive shall not be entitled to any further compensation or benefits under this Agreement other than payment of Base Salary through Executive’s last day of employment and for any accrued and unused paid time off which shall be paid within thirty (30) days after Executive’s separation from service. 
Notwithstanding anything herein to the contrary, except as “willful” may be otherwise defined by the rules and regulations of the primary federal or state banking agency for the Bank for which Executive performs services or any other federal or state banking agency having regulatory jurisdiction over the Bank for which Executive performs services, (x) no act or failure to act on Executive’s part shall be considered “willful” unless done, or omitted to be done, by Executive in bad faith and without reasonable belief that Executive’s action or omission was in the best interest of Company or the Bank for which Executive performs services, and (y) no failure to act on Executive’s part shall be considered “willful” if such failure is a result of a condition of disability within the meaning of Section 7(a) of this Agreement. 
Executive shall not be deemed to have been Terminated for Cause under this Agreement unless and until there is delivered to Executive a copy of a resolution adopted at a meeting of the Company Board called and held for the 

purpose, which resolution shall (x) contain findings that Executive has committed an act constituting Cause, and (y) specify the particulars thereof. The resolution of the Board shall be deemed to have been duly adopted if and only if it is adopted by the affirmative vote of a majority of the directors then in office, excluding Executive. Notice of the meeting and the proposed termination for Cause shall be given to Executive a reasonable time before the meeting of the Board. Executive and Executive’s counsel (if the Executive chooses to have counsel present) shall have a reasonable opportunity to be heard by the Board at the meeting.  
(e)    Termination Without Cause: Company may, in its sole discretion, by written notice to Executive terminate Executive’s employment under this Agreement immediately without Cause at any time (other than coincident with or following a Change of Control, in which case a termination without Cause is governed by Section 8 of this Agreement).  In the event of such termination: (i) Executive shall be paid within thirty (30) days following Executive’s separation from service any accrued and unused paid time off as of the date of termination, and (ii) Executive shall be paid within thirty (30) days following Executive’s separation from service a lump sum severance equal to twelve (12) months of Executive’s Base Salary as of the date Executive is Terminated without Cause. Nothing in this Section shall affect Executive’s rights to receive any benefit which has been earned but not paid with respect to Executive’s performance prior to the date of such termination. The payment described in this Section 7(e) shall be contingent upon Executive’s executing the Release Agreement within twenty-two (22) days after the date of such termination, not revoking the Release Agreement, and complying with the terms of the Release Agreement. The payments described in this Section 7(e) will be due Executive regardless of any subsequent employment attained by Executive which is not in violation of this Agreement or the Release Agreement.
(f)    Resignation For Good Reason: 
(1)    Executive may Resign for Good Reason upon the occurrence of any of the following conditions without Executive’s prior written consent: 
(A)    a material adverse change in Executive’s positions, authority and responsibilities relative to his position, authority and responsibilities at the Effective Date;
             (B)    a material reduction in Executive’s Base Salary;
             (C)    a relocation of Executive’s principal place of employment by more than thirty-five (35) miles from its location as of the Effective Date; or
             (D)    a material breach of this Agreement by Company or the Bank.
(2)    In order to invoke a Resignation for Good Reason, Executive shall provide written notice to Company of the existence of one or more of the conditions described in clauses (A) through (D) within ninety (90) days following the initial existence of such condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, and Company shall have thirty (30) days following receipt of such written notice during which it may remedy the condition.  If the condition is not cured within such thirty (30) day period, Executive’s employment shall terminate at the end of such thirtieth (30th) day.
(3)    If Executive Resigns for Good Reason at any time after the date of this Agreement (other than a Resignation for Good Reason during the Term after a Change of Control, which shall be governed by Section 8 below), then Executive shall be paid within thirty (30) days following Executive’s separation from service (A) any accrued and unused paid time off as of the date of Executive’s separation from service, and (B) a lump sum severance payment equal to twelve (12) months of Executive’s Base Salary as of the date Executive Resigns for Good Reason (or if Executive Resigns for Good Reason based on a reduction in Base Salary, the amount will be calculated based on the amount of Base Salary prior to the reduction); provided that nothing in this Section 7(f) shall affect Executive’s rights to receive any benefit which has been earned but not paid with respect to Executive’s performance prior to the date of termination. The payment of the twelve (12) months of Base Salary described in this Section 7(f) shall be contingent upon Executive’s executing the Release Agreement within twenty (22) days after the date of such termination, not revoking the Release Agreement, and complying with the terms of the Release Agreement. The payments described 

in this Section 7(f) will be due Executive regardless of any subsequent employment attained by Executive which is not in violation of this Agreement or the Release Agreement. 
8.    CHANGE OF CONTROL: Notwithstanding the preceding provisions of this Agreement, upon the occurrence of a Change of Control, the following provisions shall apply: 
(a)    The Term shall be extended to a period of one (1) year after the date on which the Change of Control occurs if the remaining Term as of the Change of Control effective date is less than one (1) year.
(b)    If, during the Term, either Executive’s employment is Terminated without Cause or Executive Resigns for Good Reason, in either case, Company shall provide to Executive the following severance benefits: 
(1)    Company shall pay to Executive within thirty (30) days following Executive’s separation from service, in lieu of the compensation specified in Sections 7(e) or 7(f), a lump sum severance payment (subject to any applicable payroll or other taxes required to be withheld) equal to two (2) times the sum of (i) Executive’s Base Salary at the rate then in effect, or if greater, the rate in effect immediately preceding the Change of Control and (ii) the Executive’s Target Bonus for the fiscal year in which the effective date of the Change of Control occurs.  Company’s obligation to make the severance payment shall be contingent upon Executive’s executing the Release Agreement within twenty-two (22) days after the date of such termination, not revoking the Release Agreement, and complying with the terms of the Release Agreement.  
(2)    Company shall pay to Executive within thirty (30) days following Executive’s separation from service a lump sum equal to the amount of Executive’s accrued and unused paid time off determined on the basis of his Base Salary then in effect, or if greater, in effect immediately preceding the Change of Control. 
(3)    The payments described in this Section 8 shall be due Executive regardless of any subsequent employment obtained by Executive.
(c)    In the event the aggregate payments or benefits to be made or afforded Executive in connection with a Change of Control (whether under this Agreement or otherwise) would be deemed to include an “excess parachute payment” under Code Section 280G, then such payments or benefits shall be reduced to the extent necessary to avoid treatment as an “excess parachute payment”, with the reduction among such payments and benefits to be made first to payments and benefits payable or provided under this Agreement starting with the payments to be made last in time.  Golden Parachute Solutions, LLC shall conduct, at the Company’s expense, a binding assessment as to whether or not such payments or benefits constitute or would include “excess parachute payments.”  The assessment of whether or not such payments or benefits constitute or would include “excess parachute payments” shall take into account a reasonable compensation analysis of the value of services provided or to be provided by Executive, including Executive’s agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant applicable to Executive (including, without limitation, those contemplated by Section 9).  In addition, such assessment shall, in connection with the transactions contemplated under the Agreement and Plan of Merger, dated March 2, 2015, by and between PacWest Bancorp and Company, be subject to the review and consent by PacWest Bancorp, which shall not be unreasonably withheld.
9.    NONCOMPETITION, NONSOLICITATION AND NONDISCLOSURE:  
(a)    Executive hereby covenants and agrees that, for the Restricted Period, he shall not, without the written consent of Company, either directly or indirectly: 
(1)    become an officer, employee, consultant, director, independent contractor, agent, joint venturer, partner or trustee of any business whatsoever that competes with the business of  Company, the Bank or any of their respective Subsidiaries in the United States;
(2)    solicit, offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any officer or employee of Company, the Bank 

or any Subsidiary other than the Bank to terminate his employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any business whatsoever that competes with the business of Company, the Bank or any Subsidiary other than the Bank in the United States; or
(3)    solicit, provide any information, advice or recommendation or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any Protected Customer to terminate an existing business or commercial relationship with  Company, the Bank or any Subsidiary other than the Bank.
(4)    For purposes of this Section 9(a), a business that “competes with the business of Company, the Bank or any Subsidiary other than the Bank” shall mean a depository financial institution or venture debt fund the primary business of which is:  the solicitation and acceptance of deposits of money and commercial paper from the venture capital markets and venture financed portfolio companies, the solicitation and funding of loans and the provision of other banking services to the venture capital markets and venture financed portfolio companies, and any other business engaged in by Company or the Bank as of Executive’s termination of employment which is related specifically to the venture capital markets.  
(b)    During the Term and thereafter, Executive shall hold in a fiduciary capacity for the benefit of Company and its Subsidiaries all secret or confidential information, knowledge or data relating to Company and its Subsidiaries and their respective businesses, which shall have been obtained by Executive during Executive’s employment by Company, the Bank and any Subsidiary other than the Bank and which shall not be or become public knowledge (other than by acts by Executive or representatives of Executive in violation of this Agreement). Executive shall not, without the prior written consent of as applicable, Company, the Bank and such other Subsidiary or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than Company, the Bank and such other Subsidiary and those designated by them. After the end of the Restricted Period, the existence and identity of the customers and employees of Company, the Bank, and any Subsidiaries other than the Bank shall not constitute secret or confidential information, knowledge or data. 
(c)    During any period in which Section 9(a) is effective, Section 9(a) shall not preclude Executive from holding any publicly traded stock provided Executive does not acquire any stock interest in any one company in excess of one percent (1%) of the outstanding voting stock of that company. 
(d)    The parties agree that the restrictions contained in this Section 9 are reasonable and fair. If Executive competes in violation of the terms of this Section 9, the parties agree that Company will be irreparably harmed without an adequate remedy at law. Accordingly, Executive acknowledges that if he breaches or threatens to breach any provision of this Section 9, Company shall be entitled to an injunction, both preliminary and permanent, restraining Executive from such breach or threatened breach, but such injunctive relief shall not preclude Company from pursuing all other legal or equitable remedies arising out of such a breach. 
10.    REFORMATION: The parties have attempted to limit Executive’s right to compete only to the extent necessary to protect Company, the Bank and Subsidiaries other than the Bank from unfair competition. The parties recognize, however, that reasonable people may differ in making such a determination. Consequently, the parties hereby agree that, if the scope or enforceability of a restrictive covenant set forth in Section 9 is in any way disputed at any time, a court or other trier of fact may modify and reform such provision to substitute such other terms as are reasonable to protect the legitimate business interests of Company, the Bank and Subsidiaries other than the Bank. 
11.    NOTICES: For the purposes of this Agreement, notices or other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when hand delivered to the party to whom directed or mailed by United States certified mail, return receipt requested, postage prepaid, addressed to such party at such party’s address last known by the party giving such notice. Each party may, from time to time, and shall, upon request of another party, designate an address to which notices should be sent. Notices of change of address shall be effective only upon receipt. 

12.    MODIFICATION; WAIVERS; APPLICABLE LAW: No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, signed by Executive, and on behalf of Company, by such officers as may be specifically designated by Company. No waiver of any breach, condition or provision of this Agreement by any party hereto at any time shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by any party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of North Carolina, except to the extent that federal applies. 
13.    INVALIDITY; ENFORCEABILITY: The invalidity or enforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. Any provision in this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 
14.    SUCCESSOR RIGHTS: This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees, and shall be binding upon Company and any successor to Company. If Executive should die while any amounts would still be payable to Executive hereunder all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee or other designee or, if there is no such designee, to Executive’s estate. 
15.    ATTORNEY’S FEES: In the event that either party incurs costs and fees, including attorney’s fees, in enforcing its rights under this Agreement, the party substantially prevailing in such suit or action including any appeal shall be entitled to recover from the other all such costs and reasonable attorney’s fees.  
16.    EFFECT OF FEDERAL BANKING STATUTES AND REGULATIONS: Notwithstanding anything herein contained to the contrary, any payments to Executive by Company, the Bank or any Subsidiary other than the Bank whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.   In addition, Executive agrees that this Agreement is subject to amendment at any time in order to comply with laws that are applicable to Company and the Bank (including regulations and rules relating to any governmental program in which Company or the Bank may participate).
17.    HEADINGS: Descriptive headings contained in this Agreement are for convenience only and shall not control or affect the meaning or construction of any provision hereof. 
18.    EFFECT ON PRIOR AGREEMENTS: As of the Effective Date, this Agreement supersedes all prior agreements, either expressed or implied, between the parties hereto with respect to the employment of Executive or the engagement of Executive as a consultant.
19. INTERNAL REVENUE CODE SECTION 409A/CONTINUATION OF BENEFITS/REIMBURSEMENTS/WITHHOLDING: This Agreement is intended to and shall comply with Section 409A of the Code.  The parties agree that this Agreement shall at all times be interpreted, construed and operated in a manner to comply with Code Section 409A.  All references to a termination of employment and separation from service shall mean and be administered to comply with the definition of “separation from service” in Section 409A of the Code. All reimbursements provided under this Agreement shall comply with Section 409A of the Code and shall be subject to the following requirements: 
(a)    The amount of expenses eligible for reimbursement, during Executive’s taxable year may not affect the expenses eligible for reimbursement to be provided in another taxable year, and 
(b)    The reimbursement of an eligible expense must be made by December 31 following the taxable year in which the expense was incurred, and in no event shall Company’s obligations to make such reimbursements apply 

later than Executive’s remaining lifetime (or if longer, through the 20th anniversary of the date first written above).  The right to reimbursement is not subject to liquidation or exchange for another benefit. 
Notwithstanding anything in this Agreement to the contrary, for purposes of the period specified in this Agreement relating to the timing of Executive’s execution of a release of claims as a condition of the Bank’s obligation to pay severance, if such period would begin in one taxable year and end in a second taxable year, any payment otherwise due Executive upon execution of the release of claims shall be made in the second taxable year and without regard to when the release of claims was executed or became irrevocable.
If Executive is a “specified employee” (as defined under Section 409A of the Code) at the time of separation from service, to the extent that any amount payable under this Agreement constitutes “deferred compensation” under Section 409A of the Code (and is not otherwise excepted from Section 409A of the Code coverage by virtue of being considered “involuntary separation pay” or a “short term deferral” or otherwise) and is payable to Executive based upon a separation from service (other than death or “disability” as defined under Section 409A of the Code), such amount shall not be paid until the first day following the six (6) month anniversary of Executive’s separation from service. 
All amounts due and payable under this Agreement shall be paid less all amounts required or authorized to be withheld by law, including all applicable federal, state and local withholding taxes and deductions.
20.    ARBITRATION OF DISPUTES:  Except with respect to the enforcement of the covenants in Section 9 in accordance with Section 9(d) which shall be brought before a court or other trier of fact of competent jurisdiction, any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by binding arbitration, as an alternative to civil litigation and without any trial by jury to resolve such claims, conducted by a single arbitrator who is certified by the American Arbitration Association and is mutually acceptable to Executive and Company, sitting in a location selected by Company within fifty (50) miles from the main office of Company, in accordance with the rules of the American Arbitration Association’s National Rules for the Resolution of Employment Disputes then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. 
21.    NO ATTACHMENT OR OFFSET.  No right to receive payments or benefits under this Agreement shall be subject to setoff, offset, anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect such action shall be null, void and of no effect.
22.    COUNTERPARTS:  This Agreement may be executed in counterparts.
23.    SURVIVORSHIP:  Upon the expiration or other termination of this Agreement or Executive’s employment, the respective rights and obligations of the parties hereto shall survive to the extent necessary to carry out the intentions of the parties under this Agreement.  

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above written. 
	
	
	SQUARE 1 FINANCIAL, INC.

	 

	 

	/s/ Douglas H. Bowers

	By:     Douglas H. Bowers

	Title:  President and Chief Executive Officer

	 

	 

	SQUARE 1 BANK

	 

	 

	/s/ Douglas H. Bowers

	By:     Douglas H. Bowers

	Title:  President and Chief Executive Officer

	 

	 

	 

	/s/ Frank Tower

	Frank Tower

	 

	 

	 

Exhibit A
RELEASE AGREEMENT
We advise you to consult an attorney before you sign this Release. You have until the date which is seven (7) days after this release (this “Release”) is signed and returned to Square 1 Bank and Square 1 Financial, Inc. (collectively, the “Employers”) to change your mind and revoke your Release. This Release shall not become effective or enforceable until after that date. 
In consideration of the payment provided under Section _____________ of your Employment Agreement with the Employers dated as of March 1,2015 (the “Employment Agreement”), by your signature below, you, for yourself and on behalf of your heirs, executors, agents, representatives, successors and assigns, hereby release and forever discharge the Employers, their past and present parent corporations, subsidiaries, divisions, subdivisions, affiliates and related companies and the Employers’ past, present and future agents, directors, officers, employees, representatives, successors and assigns (hereinafter "those associated with the Employers") with respect to any and all claims, demands, actions and liabilities, whether in law or equity, which you may have against the Employers or those associated with the Employers of whatever kind, including but not limited to those arising out of your employment with the Employers or the termination of that employment. You agree that this release covers, but is not limited to, claims arising under the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., and any other local, state or federal law, regulation or order dealing with discrimination in employment on the basis of sex, race, color, national origin, veteran status, marital status, religion, disability, handicap, or age. You also agree that this release includes claims based on wrongful termination of employment, breach of contract (express or implied), tort, or claims otherwise related to your employment or termination of employment with the Employers and any claim for attorneys' fees, expenses or costs of litigation. 
This Release covers all claims based on any facts or events, whether known or unknown by you, that occurred on or before the date of this Release with respect to your employment by the Employers. Except to enforce this Release or any claims excluded from this Release, you agree that you will never commence, prosecute, or cause to be commenced or prosecuted any lawsuit or proceeding of any kind in respect of your employment with the Employers against the Employers or those associated with the Employers in any forum and agree to withdraw with prejudice all complaints or charges, if any, that you have filed against the Employers or those associated with the Employers.  
You acknowledge that you have been given twenty-one (21) days in which to consider the terms and conditions of this Release and the Employers have specifically advised you of your right to seek the advice of an attorney concerning the terms and conditions of this Release. 
Anything in this Release to the contrary notwithstanding, this Release does not include a release of (i) any rights you may have to indemnification or similar benefits under any agreement, law, any organizational document or policy of the Employers, or otherwise, (ii) any rights you may have to benefits or otherwise under the Employers’ benefit plans, including, without limitation, the Employment Agreement; (iii) any claim you may have as the holder or beneficial owners of securities (or other rights relating to securities) of the Employers or their affiliates; (iv) accrued but unpaid salary, vacation, paid time off and other compensation due through the date of your termination of employment; (v) any unreimbursed business expenses; (vi) any claims that may arise in the future from events or actions occurring after the date of your termination of employment or that you may not by law release through an agreement such as this; or (vii) your right to enforce this Release. 

IN WITNESS WHEREOF, you have executed this Release on the date set forth below.
	
	
	/s/ Frank Tower

	Frank Tower

	 

	Dated as of: March 1, 2015EXHIBIT 10.1

AGREEMENT

 

This Agreement
(this “Agreement”) is made and entered into as of March 18, 2015, by and among Qumu Corporation (the “Company”)
and Dolphin Limited Partnership III, L.P. (“Dolphin III”), Dolphin Associates III, LLC, and Dolphin Holdings Corp.
III (collectively, “Dolphin”) (each of the Company and Dolphin, a “Party” to this Agreement,
and collectively, the “Parties”).

 

RECITALS

 

WHEREAS, the Company
and Dolphin were parties to an Agreement dated March 18, 2013, as amended on October 31, 2013 (the “Prior Agreement”);

 

WHEREAS, the Prior
Agreement has terminated by its terms and the Company and Dolphin desire to enter into this Agreement;

 

NOW, THEREFORE,
in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound
hereby, agree as follows:

 

1.                  
Board Matters

 

		(a)	If requested in writing by Dolphin on or before the Initial Standstill Period (defined below)(which
request may be made only one time during this period) (the “Request”), the Board shall increase the authorized
number of directors and appoint Donald T. Netter (the “Dolphin Director”) as a member of the Board of Directors
of the Company (“Board”) to fill the vacancy created thereby and as a member of the Governance Committee and
Compensation Committee of the Board, provided that, on the date of such request, Dolphin beneficially owns in the aggregate at
least 4.5% of the then outstanding shares of common stock of the Company (the “Common Stock”). If at any time
that the Dolphin Director is serving on the Board, Dolphin sells Common Stock such that it ceases to beneficially own in the aggregate
at least 4.5% of the then outstanding Common Stock, the Dolphin Director shall immediately submit his resignation as a Board member
and as a member of any committee upon which he serves. If the Board determines to accept the resignation, it shall provide a reason
to Dolphin for such acceptance. For avoidance of doubt, such resignation may be accepted in the sole discretion of the Board for
no reason other than such reduction in ownership. If the Dolphin Director is appointed to the Board, the Dolphin Director may not
be removed by the Board at anytime prior to the 2016 Annual Meeting (as defined below), other than for cause or as a result of
Dolphin selling Common Stock such that it ceases to beneficially own in the aggregate at least 4.5% of the then outstanding Common
Stock. For avoidance of doubt, nothing herein shall require the Board to nominate the Dolphin Director for election to the 

 

    	 

    	 

    

Board at the 2016 annual meeting of shareholders
of the Company (“2016 Annual Meeting”), but if the Dolphin Director is serving on the Board at such time as
the Governance Committee and Board makes its determination of Board nominees in respect to the 2016 Annual Meeting, the Dolphin
Director will be considered using the same standards used for other Board nominees, including those recommended by a shareholder
of the Company. If the Request is made (i) prior to February 27, 2015 and not subsequently withdrawn prior to the date that is
at least twenty calendar days prior to the initial filing of the Company’s proxy statement for the 2015 Annual Meeting (as
defined below) (the “Filing Date”), the Company will, or (ii) on or after February 27, 2015 but at least twenty
calendar days prior to the Filing Date, the Company will use its commercially reasonable efforts to, nominate, recommend, support
and solicit proxies for the election of the Dolphin Director to the Board in the same manner as for the Company’s other nominees
standing for election to the Board at the 2015 annual meeting of shareholders of the Company (including any other meeting of shareholders
held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof, the “2015 Annual Meeting”).

 

		(b)	Upon the execution of this Agreement, during the Standstill Period (as defined below), Dolphin
hereby agrees not to (i) nominate any person for election at any meeting of shareholders of the Company, (ii) submit any proposal
for consideration at, or bring any other business before any meeting of shareholders, directly or indirectly, or (iii) initiate,
encourage or participate in any “withhold” or similar campaign with respect to any meeting of shareholders, directly
or indirectly, and shall not permit any of its Affiliates or Associates, as defined below, to do any of the items in this Section
1(b).  During the Standstill Period, Dolphin shall not publicly or privately encourage or support any other shareholder
to take any of the actions described in this Section 1(b).

 

		(c)	From the date of this Agreement, the Company’s obligations in Section 1(a) shall be subject
to the following: (i) the Dolphin Director must qualify as “independent” pursuant to NASDAQ listing standards and,
with respect to the committee appointments must meet the independence requirements applicable to committee members of such committee,
and (ii) there must not have been any material adverse change in the qualifications of the Dolphin Director as determined by the
Governance Committee in good faith after exercising its fiduciary duties.

 

		(d)	Whether or not the Request is made, Dolphin agrees to appear in person or by proxy at the 2015
Annual Meeting and vote all shares of Common Stock owned beneficially or of record by it (i) in favor of the election of each of
the Company’s nominees for election to the Board and (ii) in accordance with the Board’s recommendation on all other
proposals.

 

    	2

    	 

    

		(e)	Dolphin agrees that it will cause its Affiliates and Associates to comply with the terms of this
Agreement.  As used in this Agreement, the terms “Affiliate” and “Associate” shall
have the respective meanings set forth in Rule 12b-2 promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, or the rules or regulations promulgated thereunder (the “Exchange Act”), and
shall include all persons or entities that at any time during the term of this Agreement become Affiliates or Associates of any
person or entity referred to in this Agreement.

 

2.                  
Standstill Provisions

 

		(a)	Dolphin agrees that, from the date of this Agreement until the date that is (i) if a Request
is not submitted by Dolphin pursuant to Section 1(a), ten (10) business days prior to the deadline for the submission of shareholder
nominations for the 2016 Annual Meeting pursuant to the Company’s bylaws (the “Initial Standstill Period”)
or (ii) if a Request is submitted by Dolphin pursuant to Section 1(a), the later of (X) the Initial Standstill Period or (Y) the
date such Dolphin Director ceases to serve on the Board (such applicable period in clause (i) or (ii) shall be defined as the “Standstill
Period”), neither Dolphin, nor any of its Affiliates or Associates under its control or direction, nor any of the Affiliates
or Associates that control or direct Dolphin will, and Dolphin will cause each of such Affiliates and Associates not to, directly
or indirectly, in any manner:

 

		(i)	become the beneficial owner, as such term is defined in Rule 13d-3 of the Exchange Act, of more
than 9.90% of the Common Stock; 

 

		(ii)	engage in any solicitation of proxies or consents or become a “participant”
in a “solicitation” as such terms are defined in Regulation 14A under the Exchange Act of proxies or consents (including,
without limitation, any solicitation of consents that seeks to call a special meeting of shareholders of the Company), in each
case, with respect to the Common Stock, other than in accordance with Section 1 of this Agreement; provided that nothing
in this subsection shall prohibit Dolphin from taking any action during the Standstill Period in support of the Dolphin Director
(including engaging in a solicitation of proxies for the election of the Dolphin Director) in connection with the 2015 Annual Meeting
(provided such Dolphin Director is nominated by the Board for election at such meeting) or any special meeting of the Company’s
shareholders called by a person or persons other than Dolphin for the purpose of removing or electing directors of the Company;

 

    	3

    	 

    

		(iii)	form, join or in any way participate in any “group” (within
the meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common Stock (other than a “group” that includes
all or some of the persons identified on Exhibit A, but does not include any other entities or persons not identified on
Exhibit A as of the date hereof); provided, however, that nothing herein shall limit the ability of an Affiliate
of Dolphin to join the “group” following the execution of this Agreement, so long as any such Affiliate agrees to be
bound by the terms and conditions of this Agreement;

 

		(iv)	deposit any Common Stock in any voting trust or subject any Common Stock
to any arrangement or agreement with respect to the voting of any Common Stock, other than any such voting trust, arrangement or
agreement in accordance with this Agreement;

 

		(v)	(A) seek representation on the Board (other than in accordance with
Section 1 of this Agreement) or submit nominations in furtherance of a “contested solicitation” for the election or
removal of directors of the Company or take any other action with respect to the election or removal of any directors (other than
in accordance with Section 1 of this Agreement), (B) otherwise seek to control or influence the management, Board or policies of
the Company, other than the Dolphin Director in his capacity as such or (C) instigate, support, encourage or assist any third party
to do any of the actions set forth in clause (A) or (B) above; provided that nothing in this subsection shall prohibit Dolphin
from taking any action during the Standstill Period in support of the Dolphin Director (including engaging in a solicitation of
proxies for the election of the Dolphin Director) in connection with the 2015 Annual Meeting (provided such Dolphin Director is
required to be nominated by the Board for election at such meeting) or any special meeting of the Company’s shareholders
called by a person or persons other than Dolphin for the purpose of removing or electing directors of the Company;

 

		(vi)	(A) make any proposal for consideration by shareholders at any annual
or special meeting of shareholders of the Company, or (B) other than at the direction or with
the consent of the Board, in the Dolphin Director’s capacity as a director of the Company, or with respect to purchases of
Common Stock expressly permitted by Section 2(a)(i), offer, propose, or make any public statement with respect to, or encourage,
solicit or negotiate with any third party with respect to, a merger, consolidation, acquisition of control or other business combination,
tender or exchange offer, purchase, sale or transfer of assets or securities, dissolution, liquidation, reorganization, change
in capital structure, recapitalization, dividend or similar transaction involving the Company;

 

    	4

    	 

    

		(vii)	seek to advise, encourage, support or influence any person with respect
to the voting or disposition of any securities of the Company at any annual or special meeting of shareholders, except in accordance
with Section 1; provided however, that nothing in this subsection shall prohibit Dolphin from taking any action during the
Standstill Period in support of the Dolphin Director (including engaging in a solicitation of proxies for the election of the Dolphin
Director) in connection with the 2015 Annual Meeting (provided such Dolphin Director is required to be nominated by the Board for
election at such meeting) or any special meeting of the Company’s shareholders called by a person or persons other than Dolphin
for the purpose of removing or electing directors of the Company; or

 

		(viii)	make any request or submit any proposal to waive, terminate or amend
the terms of this Agreement other than through non-public communications with the Company that would not be reasonably determined
to trigger public disclosure obligations for any Party.

 

3.                  
Representations and Warranties of the Company

 

The Company represents
and warrants to Dolphin that (a) the Company has the corporate power and authority to execute this Agreement and to bind it thereto,
(b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding
obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
generally affecting the rights of creditors and subject to general equity principles, (c) the execution, delivery and performance
of this Agreement by the Company does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment
or decree applicable to the Company, or (ii) result in any breach or violation of or constitute a default (or an event which with
notice or lapse of time or both could constitute such a breach, violation or default) under or pursuant to, or result in the loss
of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document,
agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound.

 

4.                  
Representations and Warranties of Dolphin

 

Dolphin represents
and warrants to the Company that (a) Dolphin has the corporate power and authority to execute this Agreement and any other documents
or agreements to be entered into in connection with this Agreement and to bind it thereto, (b) this Agreement has been duly authorized,
executed and delivered by Dolphin, and is a valid and binding obligation of Dolphin, enforceable against Dolphin in accordance
with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c)
the execution, delivery and performance of this Agreement by Dolphin does not and will not (i) violate or conflict with any law,
rule, regulation, order, 

 

    	5

    	 

    

judgment or decree applicable to Dolphin,
or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could
constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give
any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment,
understanding or arrangement to which Dolphin is a party or by which it is bound, and (d) as of the date of this Agreement, (i)
Dolphin is deemed to beneficially own in the aggregate Five Hundred Sixty Thousand Five Hundred (560,500) shares of Common Stock,
(ii) Dolphin does not currently have, and does not currently have any right to acquire, any interest in any other securities of
the Company (or any rights, options or other securities convertible into or exercisable or exchangeable (whether or not convertible,
exercisable or exchangeable immediately or only after the passage of time or the occurrence of a specified event) for such securities
or any obligations measured by the price or value of any securities of the Company, including any swaps or other derivative arrangements
designed to produce economic benefits and risks that correspond to the ownership of Common Stock, whether or not any of the foregoing
would give rise to beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act), and whether or not
to be settled by delivery of Common Stock, payment of cash or by other consideration, and without regard to any short position
under any such contract or arrangement), and (iii) none of the shares of Common Stock identified in clause (d)(i) above are pledged
as collateral for any loan or indebtedness, including any margin loan. 

 

5.                  
Press Release

 

Promptly following
the execution of this Agreement, the Company shall file this Agreement as an exhibit on Form 8-K.  Prior to the filing
of the Form 8-K, neither the Company nor Dolphin shall issue any press release or public announcement regarding this Agreement
without the prior written consent of the other Party, except for Dolphin’s filing of Schedule 13D/A in connection with, and
including as an exhibit, this Agreement.  During the Standstill Period, the Company, Dolphin, and the Dolphin Director
shall not make any public announcement or statement that is inconsistent with or contrary to the statements made in the Form 8-K
or any previous mutually agreed press release, except as required by law or the rules of any stock exchange or with the prior written
consent of the other Party.

 

6.                  
Specific Performance

 

Each of Dolphin,
on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other Party hereto
would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or
were otherwise breached and that such injury may not be adequately compensable by the remedies available at law (including the
payment of money damages).  It is accordingly agreed that Dolphin, on the one hand, and the Company, on the other hand
(the “Moving Party”), shall each be entitled to specific enforcement of, and injunctive relief to prevent any
violation of, the terms hereof, without the requirement to post bond or other security, and the other Party hereto will not take
action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief
is available at law or in equity.  This Section 6 is not the exclusive remedy for any violation of this Agreement.

 

    	6

    	 

    

7.                  
Expenses

 

The Company and
Dolphin shall pay their own expenses incurred in connection with the matters related to this Agreement.

 

8.                  
Severability

 

If any term, provision,
covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.  It is hereby stipulated and declared to be the intention of the Parties
that the Parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such
which may be hereafter declared invalid, void or unenforceable.  In addition, the Parties agree to use their best efforts
to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid,
void or enforceable by a court of competent jurisdiction.

 

9.                  
Notices

 

Any notices, consents,
determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
Party); or (iii) one business day after deposit with a nationally recognized overnight delivery service, in each case properly
addressed to the Party to receive the same.  The addresses and facsimile numbers for such communications shall be:

 

If to the Company:

 

Qumu Corporation

7725 Washington Avenue South

Minneapolis, Minnesota 55439

Attention: Chief Executive Officer

Telephone: (952) 683-7900

Facsimile:  (952) 944-7808

 

with a copy (which shall not constitute notice) to:

 

Lindquist & Vennum LLP

4200 IDS Center

80 South Eighth Street

Minneapolis, Minnesota 55402

Attention: Charles P. Moorse, Esq.

Telephone: (612) 371-3211

Facsimile: (612) 371-3207

 

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If to Dolphin:

 

Olshan Frome Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

Attention: Steve Wolosky, Esq.

Telephone: (212) 451-2333

Facsimile: (212) 451-2222

 

10.               
Applicable Law

 

This Agreement
shall be governed by and construed and enforced in accordance with the laws of the State of Minnesota without reference to the
conflict of laws principles thereof.  Each of the Parties hereto irrevocably agrees that any legal action or proceeding
with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment
in respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors
or assigns, shall be brought and determined exclusively in the state or federal court of Minnesota and any state or federal appellate
court therefrom within the State of Minnesota or the Eighth Judicial Circuit.  Each of the Parties hereto hereby irrevocably
submits, with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally,
to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement in
any court other than the aforesaid courts.  Each of the Parties hereto hereby irrevocably waives, and agrees not to assert
in any action or proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction
of the above-named courts for any reason, (ii) any claim that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment
in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by applicable legal
requirements, any claim that (A) the suit, action or proceeding in such court is brought in an inconvenient forum, (B) the venue
of such suit, action or proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by
such courts.

 

11.               
Counterparts

 

This Agreement
may be executed in two or more counterparts, each of which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each of the Parties and delivered to the other Party (including by means of electronic delivery
or facsimile).

 

    	8

    	 

    

		12.	Entire Agreement; Amendment and Waiver; Successors and Assigns; Third
Party Beneficiaries

 

This Agreement
contains the entire understanding of the Parties hereto with respect to its subject matter and supersedes in all respects the Prior
Agreement.  There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between
the Parties other than those expressly set forth herein.  No modifications of this Agreement can be made except in writing
signed by an authorized representative of each the Company and Dolphin, except that the signature of an authorized representative
of the Company will not be required to permit an Affiliate of Dolphin to agree to be listed on Exhibit A and be bound by
the terms and conditions of this Agreement.  No failure on the part of any Party to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right,
power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  All
remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.  The terms and conditions
of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Parties hereto and their respective
successors, heirs, executors, legal representatives, and permitted assigns.  No Party shall assign this Agreement or
any rights or obligations hereunder without, with respect to Dolphin, the prior written consent of the Company, and with respect
to the Company, the prior written consent of Dolphin.  This Agreement is solely for the benefit of the Parties hereto
and is not enforceable by any other persons.

 

13.               
Mutual Non-Disparagement

 

Subject to applicable
law, each of the Parties covenants and agrees that, during the Standstill Period, or if earlier, until such time as the other Party
or any of its agents, subsidiaries, Affiliates, successors, assigns, officers, key employees or directors shall have breached this
Section, neither it nor any of its respective agents, subsidiaries, Affiliates, successors, assigns, officers, key employees or
directors, shall in any way publicly disparage, call into disrepute, or otherwise defame or slander the other Party or such other
Party’s subsidiaries, Affiliates, successors, assigns, officers (including any current officer of a Party or a Party’s
subsidiary who no longer serves in such capacity following the execution of this Agreement), directors (including any current director
of a Party or a Party’s subsidiary who no longer serves in such capacity following the execution of this Agreement), employees,
shareholders, agents, attorneys or representatives, or any of their products or services, in any manner that may reasonably be
expected to damage the business or reputation of such other Party or such Party’s products or services, or damage the business
or reputation of its subsidiaries, Affiliates, successors, assigns, officers (or former officers), directors (or former directors),
employees, shareholders, agents, attorneys or representatives.  Nothing in this Agreement shall prohibit Dolphin from
communicating with Dolphin III’s limited partners and agents or, subject to the terms of Section 2, with officers and directors
of the Company, with respect to public information concerning the Company.

 

[The remainder
of this page intentionally left blank]

 

 

    	9

    	 

    

IN WITNESS WHEREOF, this Agreement has been duly executed
and delivered by the duly authorized signatories of the Parties as of the date hereof.

 

	 	QUMU CORPORATION
	 	 
	 	 	 
	 	By:  	/s/  Sherman L. Black
	 	 	Sherman L. Black

Chief Executive Officer

 

 

DOLPHIN LIMITED PARTNERSHIP III, L.P.

 

By:  Dolphin Associates III, LLC, its General
Partner

 

By:  Dolphin Holdings Corp. III,
its Managing Member

 

	By:  	/s/  Donald T. Netter
	 	      Donald T. Netter

      Senior Managing Director

 

 

DOLPHIN ASSOCIATES III, LLC

 

By:  Dolphin Holdings Corp. III, its Managing
Member

 

	By:  	/s/  Donald T. Netter
	 	      Donald T. Netter

      Senior Managing Director

 

 

DOLPHIN HOLDINGS CORP. III

 

	By:  	/s/  Donald T. Netter
	 	      Donald T. Netter

      Senior Managing Director

 

 

 

[Signature Page to Agreement]

    	10

    	 

    

EXHIBIT A

 

Dolphin Limited Partnership III, L.P.

Dolphin Associates III, LLC

Dolphin Holdings Corp. III

Donald T. Netter

 

 

 

 

 

 

 

 

 

    	11

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