Exhibit 10.6
RELOCATION AGREEMENT
     This Relocation Agreement (“Agreement”) is entered into on this 22nd day of
August 2008 by and between CapitalSource Inc. (“Company”) and Steven A. Museles
(“Employee”).
RECITALS
     WHEREAS, CapitalSource Bank, a California Industrial Bank and an indirect
wholly owned subsidiary of the Company, has purchased certain assets of Fremont
Bank located in California (the “Transaction”);
     WHEREAS, upon the close of the Transaction, at the request of Company,
Employee became a dual employee of both the Company and CapitalSource Bank;
     WHEREAS, Employee shall be an employee of CapitalSource Bank for an initial
period of 12 months commencing July 25, 2008, unless terminated sooner pursuant
to the Letter Agreement (the “Bank Employment Period”);
     WHEREAS, the headquarters of CapitalSource Bank shall be located in
downtown Los Angeles, California and Employee shall temporarily relocate his
primary residence from Bethesda, Maryland to the Los Angeles, California
metropolitan area during the Bank Employment Period;
     ACCORDINGLY, for good and valuable consideration, including, but not
limited to, Employee’s agreement to relocate his primary residence and accept
employment with CapitalSource Bank during the Bank Employment Period, the
Company agrees to provide Employee with the following relocation benefits:
     1. Moving of Household Goods/Packing. Company shall pay for the assistance
of a relocation company, as well as the packing, transporting, and delivering of
household items and automobiles (i) from Employee’s residence in Bethesda,
Maryland to a location selected by Employee as his primary residence in the Los
Angeles, California metropolitan area, and (ii) from Employee’s residence in Los
Angeles to Bethesda, Maryland upon Employee’s determination to relocate back to
Bethesda, Maryland during or upon expiration of the Bank Employment Period.
     2. Housing. Company shall pay (or reimburse) Employee’s rent, utilities,
and security deposit while Employee resides in the Los Angeles metropolitan area
during the Bank Employment Period.
     3. Airline Flights. The Company shall reimburse Employee for the cost of
airline tickets between the Los Angeles metropolitan area and Bethesda, Maryland
for Employee and his spouse and children in connection with his relocation to
Los Angeles and return to Bethesda, Maryland, as well as two additional
round-trips in the interim. The tickets must be purchased at least 7 days in
advance of traveling, unless otherwise agreed by the parties.

 

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     4. Relocation Allowance. Upon execution of this Agreement, Company shall
pay to Employee a one-time lump sum in the amount of $10,000 as a relocation
allowance.
     5. Car Registration Fees. The Company shall also reimburse Employee for
automobile state license and registration fees and incremental automobile
insurance costs that Employee incurs.
     6. Reimbursement for Tax Advice. Some or all of the relocation benefits
received by Employee under this Agreement may be subject to State and Federal
income taxes. The Company shall reimburse Employee for the cost of obtaining
expert tax advice to determine the tax consequences resulting from Employee’s
receipt of the benefits and payments under this Agreement, as well as his
temporary relocation to the State of California.
     7. Maintenance Costs of Maryland Residence. The Company shall reimburse
Employee for any actual incremental costs Employee incurs for the oversight and
maintenance of Employee’s home in Bethesda, Maryland during his absence, up to
$500 per month. To be reimbursed under this Agreement, such incremental costs
must be incurred by Employee solely because he is not residing in his Bethesda
Maryland home during the Bank Employment Period. For avoidance of any doubt,
reimbursable costs under this paragraph include payments to certain individuals
to walk through, clean and inspect the Bethesda, Maryland home on a weekly
basis. Employee shall not be entitled to reimbursement under this Agreement of
routine costs incurred by Employee for the maintenance of his home in Bethesda,
Maryland.
     8. Children Educational Expenses. The Company shall reimburse Employee for
any expenses incurred by Employee in the selection of and application to a
school or schools for Employee’s children to attend in the Los Angeles
metropolitan area during the Bank Employment Period. The Company shall reimburse
Employee for any tuition-related payments made to Employee’s children’s
school(s) in and around Bethesda, Maryland, which are forfeited as a result of
Employee’s relocation to the Los Angeles metropolitan area. During the Bank
Employment Period, Employee shall not be required to move his family outside the
Los Angeles metropolitan area.
     9. Gross-Up Payment. Company shall pay to Employee a payment (the “Gross-Up
Payment”) in an amount required to fully reimburse Employee for all federal,
state, local income and employment taxes owed on any payment or benefit received
by Employee under this Agreement, including any taxes owed as a result of
receiving the Gross-Up Payment.
     10. Termination or Resignation: The benefits and payments set forth in this
Agreement are not conditioned upon Employee remaining employed with
CapitalSource Bank through the Bank Employment Period. All of the benefits and
payments in this Agreement shall be due and payable for the Bank Employment
Period notwithstanding termination of Employee’s employment with CapitalSource
and/or CapitalSource Bank, and Employee and his family shall have the right to
continue to reside in the California residence leased by the Company until the
end of the lease term without any additional cost to Employee. Notwithstanding
any other provision to the contrary, if Employee is terminated for Cause
pursuant to the terms of his Employment Agreement, Employee’s rights to any
future or unpaid benefits under this

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Agreement shall cease, and Employee shall not be eligible for any unused portion
of the benefits described in this Agreement.
     11. Employment Status. The terms of Employee’s Employment Agreement with
CapitalSource shall supersede any conflicting term herein except that the
parties acknowledge that Employee’s temporary relocation to Los Angeles and
employment by CapitalSource Bank in and of themselves shall not constitute “Good
Reason” or result in a breach by either party of the terms of the Employment
Agreement.
     12. Employee Acknowledgement. Employee has read this Agreement and
understands the terms. By signing below, Employee acknowledges that he has read
and fully understands the provisions contained herein. Employee understands that
he has a right to consult with an attorney as to the meaning and legal effect of
this Agreement and has been given an opportunity to do so. This Agreement
contains the entire agreement between the parties concerning its subject matter
and may be amended or modified only in writing signed by both parties hereto.
This Agreement shall be construed in accordance with the laws of the State of
Maryland.
[SIGNATURE PAGE FOLLOWS]

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/s/ STEVEN A. MUSELES 
      Date:   8/22/08     
 
Steven A. Museles
         
 
   
 
               
 
               
CapitalSource Inc. 
               
 
               
 
               
/s/ JOHN K. DELANEY
      Date:   8/22/08     
John K. Delaney