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Consulting Services Agreement

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 This Consulting Services Agreement involves

CAPITALSOURCE INC | CapitalSource Finance LLC

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Governing Law: Maryland     Date: 11/17/2009
Industry: Misc. Financial Services     Sector: Financial

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Exhibit 10.2


          This CONSULTING AGREEMENT, (this “Agreement”), is dated November 16, 2009 and shall be effective as of January 1, 2010, between CapitalSource Inc. (the “Company”) and Dean C. Graham (the “Consultant”).

          WHEREAS, the Company desires to obtain the consulting services of the Consultant as an independent contractor to assist with strategic operations, to provide advice and counsel to its Executive Chairman and Co-Chief Executive Officers and to provide such other advice, counsel and assistance as its Executive Chairman and Co-Chief Executive Officers may require;

          WHEREAS, the Consultant has heretofore entered into an Employment Agreement dated as of April 4, 2005, and amended on each of November 22, 2005, February 1, 2007 and December 31, 2008 (the “Employment Agreement”) with the Company, and the Company and he have entered into a Separation and General Release Agreement dated as of the date hereof (the “Separation Agreement”) providing for termination of his services as an employee and officer of the Company and its subsidiaries on mutually agreed upon terms; and

          WHEREAS, the parties desire to enter into this Agreement to set forth the terms and conditions for the consulting relationship of the Consultant with the Company.

          NOW, THEREFORE, it is AGREED as follows:

           1.  Engagement .

               (a) During the term of this Agreement (as set out in Section 5 hereof), the Consultant shall serve as a consultant to the Company. The Consultant shall make himself reasonably available to perform consulting services as reasonably requested by the Executive Chairman or either of the Co-Chief Executive Officers of the Company. The Consultant shall render advisory and consulting services to the Company of the type customarily performed by persons serving in similar consulting capacities, consistent with the knowledge and experience possessed by the Consultant. The Consultant’s services shall be limited to assisting the Executive Chairman and the Co-Chief Executive Officers in respect of the Company’s strategic operations and providing advice and counsel to the Executive Chairman and either of the Co-Chief Executive Officers of the Company. The Consultant shall perform his services at the Company’s offices in Chevy Chase, Maryland or at such other locations as the Consultant shall determine in his sole discretion. For the sake of clarity, Consultant shall not be required to perform the services contemplated herein at any particular time or place and may chose to provide the services by telephone or conference call.



               (b) The parties acknowledge and agree that the Consultant’s fulfillment of his obligations to the Company hereunder will not require the Consultant’s full business time. In the time that the Consultant is not providing services to the Company, he may accept other employment or engagements and may participate in any other activities without obtaining the Company’s approval thereof; provided, however , that such other employment, engagements and activities do not involve any violation of Section 7 of the Employment Agreement.

           2.  Compensation and Expenses . The Company agrees to pay the Consultant during the term of this Agreement a retainer of $750,000, payable in equal quarterly installments on January 4, 2010, March 15, 2010, July 1, 2010 and October 1, 2010. The Company shall reimburse the Consultant for all reasonable, ordinary and necessary travel and lodging expenses incurred by the Consultant in connection with the Consultant’s performance of services hereunder, provided that all such expenses are in accordance with the Company’s policies applicable to similar expenses incurred by its executive management employees. The Consultant will invoice the Company for any reimbursement of expenses payable hereunder in respect of services performed, and each such invoice shall be accompanied by receipts and other supporting documentation of expenses incurred as reasonably requested by the Company. The Company shall pay the expense reimbursements that are due under this Agreement within 30 days after receiving an invoice from the Consultant for such amounts.

           3.  Participation in Retirement and Employee Benefit Plans . Subject to Section 4(c) of the Separation Agreement, nothing in this Agreement shall entitle the Consultant to participate in or accrue additional benefits under any plan of the Company relating to stock options, stock purchases, equity award, deferred compensation, pension, thrift, profit sharing, employee stock ownership, group life insurance, medical coverage, disability insurance, education, or other retirement or employee benefits, except to the extent that the Consultant may be entitled to continuation coverage (COBRA), at the Consultant’s expense, or other coverage under the health and dental insurance plan maintained by the Company under Section 4(c) terms of the Separation Agreement.

           4.  Office and Support Services . During the term of this Agreement, the Company shall provide the Consultant with reasonable office space, supplies, assistant and other appropriate support services and facilities that are reasonably required by the Consultant in connection with his performance of services hereunder, in each case as reasonably determined by the Company. In accordance with Section 4(d) of the Separation Agreement, the Company hereby agrees to assign and transfer Consultant’s current mobile telephone number to the Consultant.

           5.  Term . The term of this Agreement shall be for twelve months commencing on January 1, 2010. The parties by mutual written agreement may extend the term of this Agreement. The Company may terminate this Agreement at



any time on or after March 31, 2010 with 30 days advance notice; provided, however, unless such termination is due to Consultant’s repeated and willful failure to respond to requests for services from the Company’s Executive Chairman or either of the Co-Chief Executive Officers that continues for at least thirty days after written notice from the Company, the Company shall be obligated to pay Consultant an amount equal to the remaining payments provided in Section 2 in a single lump sum on the date of such termination.

           6.  Indemnification . During the term of this Agreement and thereafter, the Company agrees to indemnify and hold Consultant and Consultant’s heirs and representatives harmless, to the maximum extent permitted by law, against any and all damages, costs, liabilities, losses and expenses (including reasonable attorneys’ fees) as a result of any claim or proceeding (whether civil, criminal, administrative or investigative), or any threatened claim or proceeding (whether civil, criminal, administrative or investigative), against Consultant that arises out of or relates to Consultant’s service hereunder at the request of the Company after the date hereof, and to promptly advance to Consultant or Consultant’s heirs or representatives such expenses upon written request with appropriate documentation of such expense upon receipt of an undertaking by Consultant or on Consultant’s behalf to repay such amount if it shall ultimately be determined that Consultant is not entitled to b

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