exv10w1







Exhibit 10.1



CAPITAL MAINTENANCE AND LIQUIDITY AGREEMENT




     THIS CAPITAL MAINTENANCE AND LIQUIDITY AGREEMENT (Agreement) dated as of July 25, 2008, has
been entered into by and among the FEDERAL DEPOSIT INSURANCE CORPORATION, a Federal banking agency
existing under the laws of the United States having its principal office in Washington, D.C. (the
FDIC), CAPITALSOURCE INC., a corporation duly organized and existing under the laws of the State of
Delaware (the Parent Company), CAPITALSOURCE TRS INC., a corporation duly organized and existing
under the laws of the State of Delaware (Second Tier Holding Company), CAPITALSOURCE FINANCE LLC a
limited liability company duly organized and existing under the laws of the State of Delaware
(CapitalSource Finance), and CAPITALSOURCE BANK (In-Organization), Pasadena, California (the
Applicant).



WITNESSETH:




     WHEREAS, the Board of Directors of the FDIC is charged by Section 5 of the Federal Deposit
Insurance Act (the Act) (12 U.S.C. § 1815) with the responsibility of acting upon applications for
Federal deposit insurance for all depository institutions including, but not limited to, state
nonmember banks and by Section 18(c) of the Act (12 U.S.C. § 1828(c)) with the responsibility of
acting upon each merger application in which a state nonmember bank is the resulting institution.



     WHEREAS, the Applicant is a proposed state nonmember industrial bank being formed as a
wholly-owned subsidiary of CapitalSource Finance, which is a wholly-owned subsidiary of the Second
Tier Holding Company. The Second Tier Holding Company is a wholly-owned subsidiary of the Parent
Company.



     WHEREAS, the FDIC is required to consider, among other things, the seven factors described in
Section 6 of the Act (12 U.S.C. § 1816) (the Statutory Factors) and will generally grant an
application for Federal deposit insurance if it finds favorably upon each factor. As a part of the
approval process, the FDIC also considers the financial resources of a parent holding company in
evaluating the adequacy of an applicant’s capital.



     WHEREAS, the FDIC is required to consider, among other things, the factors described in
Section 18(c)(5) of the Act (12 U.S.C. § 1828(c)(5)) (the Merger Factors) and will generally
approve a merger if it finds favorably upon each factor. As a part of the approval process, the
FDIC may also consider the financial resources of a parent holding company in evaluating the
adequacy of an applicant’s capital.



     WHEREAS, the Applicant, CapitalSource Finance, the Second Tier Holding Company, and the Parent
Company have expressed their willingness to submit to such conditions as the FDIC may determine are
necessary to make a favorable finding on the Statutory Factors and the Merger Factors.



     WHEREAS,
the FDIC is unable to make a favorable finding on the Statutory Factors and the
Merger Factors if the Parent Company, the Second Tier Holding Company, CapitalSource Finance, and
the Applicant do not enter into this Agreement.



     NOW, THEREFORE, in consideration of the terms and conditions contained herein, the receipt and
sufficiency of which are hereby acknowledged, the FDIC, the Parent Company, the Second Tier Holding
Company, CapitalSource Finance, and the Applicant agree as follows:



 









 






	 	1.	 	Approval by FDIC. Upon approval of the Application by the FDIC, this
Agreement shall become fully effective and binding upon the parties hereto.
	 
	 	2.	 	Capital. The Parent Company, the Second Tier Holding Company, and
CapitalSource Finance shall maintain the capital levels of the Applicant at all times
to meet or exceed the levels required for the Applicant to be considered “well
capitalized” under section 325.103(b) of the FDIC Rules and Regulations (12 CFR §
325.103(b)) or any successor laws or regulations. In addition, Applicant’s Total
Risk-Based Capital Ratio as defined in section 325.2(y) of the FDIC Rules and
Regulations or in any successor laws or regulations will be maintained at not less than
fifteen (15) percent and the Applicant will maintain an adequate allowance for loan and
lease losses. (The capital requirements contained in this paragraph will be referred to
as the Minimum Capital Ratios.)






	 	(A)	 	Maintenance of Required Minimum Capital Ratios. If, at
any time, the Applicant’s capital ratios fall below the Minimum Capital Ratios,
the Parent Company, Second Tier Holding Company, and CapitalSource Finance will
immediately contribute sufficient additional capital to the Applicant or take
such other action to enable it to meet the Minimum Capital Ratios.
	 
	 	(B)	 	Maintenance of Revised Capital Ratios. If the FDIC
considers it necessary, pursuant to its regulatory authority, for the Applicant
to maintain capital ratios that are greater than the Minimum Capital Ratios
(the Revised Capital Ratios), it will provide written notification of its
determination to the Applicant, CapitalSource Finance, Second Tier Holding
Company, and Parent Company. Within 30 days after the FDIC issues the
notification to the Applicant, CapitalSource Finance, Second Tier Holding
Company, and Parent Company, if Applicant has not met the Revised Capital
Ratios, the Parent Company, Second Tier Holding Company, and CapitalSource
Finance will immediately contribute sufficient additional capital to the
Applicant to enable it to meet the Revised Capital Ratios specified by the
FDIC.
	 
	 	(C)	 	Capital Contributions. All capital contributions to the
Applicant by the Parent Company, Second Tier Holding Company, or CapitalSource
Finance will be in the form of cash, or if appropriate and approved by the
FDIC, other assets acceptable to the FDIC. Any and all such capital
contributions will be credited to the Applicant’s surplus account.






	 	3.	 	Liquidity. The Parent Company, the Second Tier Holding Company, and
CapitalSource Finance will maintain the Bank’s liquidity at such levels that the FDIC
deems appropriate. In particular, the Parent Company, the Second Tier Holding Company,
and CapitalSource Finance will provide the Applicant with financial assistance, as
specified below, to permit the Applicant to meet its short- and long-term liquidity
demands.




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	 	(A)	 	Short-Term Liquidity.






	 	i.	 	The Parent Company and CapitalSource Finance
will enter into a Revolving Line of Credit Agreement with Applicant to
provide $150,000,000 in unsecured financing to Applicant. Parent
Company, CapitalSource Finance, and Applicant will execute and submit
the $150,000,000 unsecured Revolving Line of Credit to the FDIC prior
to the Applicant’s effective date of Federal deposit insurance.
	 
	 	ii.	 	The Applicant may draw on the $150,000,000
unsecured Revolving Line of Credit provided by the Parent Company and
CapitalSource Finance at any time the Applicant or FDIC considers it
necessary.
	 
	 	iii.	 	Any and all agreements related to the
$150,000,000 unsecured Revolving Line of Credit Agreement will only be
made with the prior written approval of the FDIC and upon such terms
and conditions as the FDIC, in its sole discretion, finds acceptable.
	 
	 	iv.	 	The $150,000,000 unsecured Revolving Line of
Credit Agreement is subject to the restrictions of Section 23B of the
Federal Reserve Act and must be on terms and under circumstance,
including credit standards, that are substantially the same, or at
least as favorable to the Applicant, as those prevailing at the time
for comparable transactions with or involving other nonaffiliated
companies.






	 	(B)	 	Long-Term Liquidity. If the Applicant identifies
liquidity requirements that it cannot satisfy, then at the written request of
the Applicant or the FDIC, the Parent Company, directly or through
CapitalSource Finance, within 10 days of receiving the request, will provide
the Applicant with financial support, including cash, in such amount and for
such duration as may be necessary for the Applicant to meet its ongoing
liquidity obligations.






	 	4.	 	Authority of Parent Company, Second Tier Holding Company, CapitalSource
Finance, and Applicant. The Boards of Directors of the Parent Company, the
Second Tier Holding Company, and the Applicant, and the managing member(s) of
CapitalSource Finance, have each approved a resolution (the Resolution) authorizing the
Parent Company, the Second Tier Holding Company, CapitalSource Finance, and the
Applicant, respectively, to enter into this Agreement. A certified copy of the
Resolution for each party is attached hereto as Exhibit A and incorporated herein by
reference.
	 
	 	5.	 	Miscellaneous.






	 	(A)	 	Legally Binding, Enforceable Agreement. The parties
agree that this Agreement is binding and enforceable by the FDIC pursuant to
Section 8 of the FDI Act (12 U.S.C. § 1818) against the Applicant, the Second
Tier Holding Company, CapitalSource Finance, and the Parent Company, their
successors and assignees.




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	 	(B)	 	Capital Maintenance Commitment. The parties agree that
the obligations of the Parent Company, the Second Tier Holding Company, and
CapitalSource Finance that are contained in this Agreement are commitments to
maintain the capital of the Applicant and, if a petition of bankruptcy is filed
by or against the Parent Company, the Second Tier Holding Company, or
CapitalSource Finance, the obligations of the Parent Company, the Second Tier
Holding Company, or CapitalSource Finance contained in this Agreement will be
paid as an administrative expense of the debtor pursuant to section 507(a)(1)
of the Bankruptcy Code (11 U.S.C. § 507(a)(1)).
	 
	 	(C)	 	Conservatorship or Receivership of the Applicant. In
the event of an appointment of a conservator or receiver for the Applicant, the
obligations of the Applicant, the Second Tier Holding Company, CapitalSource
Finance, and Parent Company hereunder with respect to the Agreement shall
survive said appointment and be enforceable by FDIC.
	 
	 	(D)	 	Governing Laws. This Agreement and the rights and
obligations hereunder shall be governed by and shall be construed in accordance
with the Federal law of the United States, and, in the absence of controlling
Federal law, in accordance with the laws of the State of Delaware.
	 
	 	(E)	 	No Waiver. No failure or delay on the part of the
Applicant or the FDIC in the exercise of any right or remedy shall operate as a
waiver or termination thereof, nor shall any partial exercise of any right or
remedy preclude other or further exercise of any other right or remedy.
	 
	 	(F)	 	Fees and Expenses. The Parent Company, Second Tier
Holding Company, and CapitalSource Finance shall pay any attorneys’ fees and
other reasonable expenses incurred by the Applicant in exercising its rights or
seeking any remedies hereunder.
	 
	 	(G)	 	Severability. In the event any one or more of the
provisions contained herein should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good faith to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
	 
	 	(H)	 	No Oral Change. This Agreement may not be modified,
amended, changed, discharged or terminated orally, but may be done so only with
the written consent of the FDIC.
	 
	 	(I)	 	Enforcement by Applicant. The Applicant may, in its
discretion, enforce this Agreement against the Parent Company, the Second Tier
Holding Company, and CapitalSource Finance.




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	 	(J)	 	Modification. This Agreement reflects the complete and
full agreement of the parties and may not be modified, released, renewed or
extended in any manner except by a writing signed by all the parties.
	 
	 	(K)	 	Addresses for and Receipt of Notice. Any notice
hereunder shall be in writing and shall be delivered by hand or sent by United
States express mail or commercial express mail, postage prepaid, and addressed
as follows:




If to the Parent Company:



CapitalSource Inc.

Attention: Treasurer

4445 Willard Avenue, 12th Floor

Chevy Chase, MD 20815



If to the Second Tier Holding Company:



CapitalSource TRS Inc.

Attention: Treasurer

4445 Willard Avenue, 12th Floor

Chevy Chase, MD 20815



If to CapitalSource Finance:



CapitalSource Finance LLC

Attention: Treasurer

4445 Willard Avenue, 12th Floor

Chevy Chase, MD 20815



If to the Applicant:



CapitalSource Bank Attention: President

300 North Lake Avenue, Suite 150

Pasadena, CA 91106



with a copy to:



CapitalSource Bank

Attention: General Counsel

4445 Willard Avenue, 12th Floor

Chevy Chase, MD 20815



If to the FDIC:



Associate Director, Supervision and Applications Branch 
Federal Deposit
Insurance Corporation

550 17th Street, NW

Washington, D.C. 20429




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	 	(L)	 	Complete Agreement. The parties agree that this
Agreement is the complete and exclusive statement of the agreement between the
parties, and supersedes all prior written or oral communications,
representations and agreements relating to the subject matter of this
Agreement.






	 	(M)	 	No Assignment. This agreement may not be assigned or
transferred, in whole or in part, without the prior written consent of the
FDIC.
	 
	 	(N)	 	Joint and Several Liability. The obligations,
liabilities, agreements and commitments of the Parent Company, the Second Tier
Holding Company, and CapitalSource Finance in paragraphs 2 and 3 above are
joint and several, and the FDIC may pursue any right or remedy that it may have
against one or more of them without releasing or discharging any other party.





     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year indicated above.



	 	 	 	 	 
	FEDERAL DEPOSIT INSURANCE CORPORATION	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Title:

	 	 

	 	 
	 
	 	 

	 	 
	 
	CAPITALSOURCE INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ JOHN K. DELANEY	 	 
	 

	 	 

	 	 
	Title:

	 	     JOHN K. DELANEY	 	 






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	CAPITALSOURCE TRS INC.	 	 
	 
	 	 	 	 
	By: 

Title:

	 	/s/ JOHN K. DELANEY
 

     JOHN K. DELANEY
	 	 
	 
	 	 	 	 
	CAPITALSOURCE FINANCE LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/ JOHN K. DELANEY	 	 
	Title:

	 	 

     JOHN K. DELANEY
	 	 
	 
	 	 	 	 
	CAPITALSOURCE BANK (in-organization)	 	 
	 
	 	 	 	 
	 

	 	/s/ STEVEN A. MUSELES	 	 
	 	 	 
	Name:

	 	       STEVEN A. MUSELES	 	 
	 

	 	EXECUTIVE VICE PRESIDENT	 	 







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