AMENDED AND RESTATED SECURITIES SALE AND CONTRIBUTION AGREEMENT

Exhibit 10.6

AMENDED AND RESTATED SECURITIES SALE AND CONTRIBUTION AGREEMENT

dated as of December 28, 2005

between

THORNBURG MORTGAGE DEPOSITOR, L.L.C.

and

THORNBURG MORTGAGE, INC.

TABLE OF CONTENTS

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TABLE OF CONTENTS

(continued)

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AMENDED AND RESTATED SECURITIES SALE AND CONTRIBUTION AGREEMENT

AMENDED AND RESTATED SECURITIES SALE AND CONTRIBUTION AGREEMENT, dated as of December 28, 2005 but effective as of the Effective Date (as further amended, supplemented or otherwise modified and in effect from time to time, the “ Securities Sale and Contribution Agreement ”), between THORNBURG MORTGAGE DEPOSITOR, L.L.C., a Delaware limited liability company, as purchaser (the “ Depositor ”), and THORNBURG MORTGAGE, INC., a Maryland corporation (“ Thornburg ”), as seller (in such capacity, the “ Seller ”).

W I T N E S S E T H

WHEREAS, the Seller owns 100% of the Depositor’s outstanding membership interest;

WHEREAS, the Seller owns Eligible Securities;

WHEREAS, the Depositor and the Seller entered into the Securities Sale and Contribution Agreement dated as of June 30, 2004 (the “ Original Agreement ”) pursuant to which the Depositor agreed to purchase from the Seller and the Seller agreed to sell to the Depositor from time to time Eligible Securities;

WHEREAS, the Depositor and the Seller wish to amend and restate the Original Agreement in its entirety effective upon the Effective Date and to read as set forth in this Agreement;

WHEREAS, it being the intention of the parties hereto that the Securities Sale and Contribution Agreement not effect a novation of the obligations of the parties under the Original Agreement, but merely a restatement, and where applicable, a substitution of the terms governing and evidencing such obligations hereafter.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the Original Agreement is amended and restated in its entirety, and the Depositor and the Seller hereby agree, effective as of the Effective Date, as follows:

ARTICLE I

DEFINITIONS AND OTHER MATTERS

SECTION 1.1 Eligible Securities . As used in herein, “ Eligible Securities ” means securities that (A) with respect to Agency Securities, (i) are direct obligations of, or that are fully guaranteed as to principal and interest by, any Agency, (ii) are either ARM 1-1 (fully indexed), ARM 1-1 (non-fully indexed), ARM 3-1, or ARM 5-1, Securities, (iii) on the date of sale thereof by the Depositor to the Issuer pursuant to any related Eligible Repo Agreement, satisfy each of the eligibility requirements therefor set forth in the Issuer’s Investment Policy on such date, and (iv) on the date of acquisition thereof by the Depositor pursuant to the Securities Sale and Contribution Agreement, conform to all representations and warranties made by the Seller or Depositor with respect thereto in the Securities Sale and Contribution Agreement or the related Repo Agreement, as applicable, and (B) with respect to Private Label Securities, (i) are rated “AAA” (or “Aaa” in case of Moody’s) by at least one of Fitch, Moody’s or S&P, and not rated

below “AAA” (or “Aaa” in the case of Moody’s) by any of Fitch, Moody’s or S&P (ii) are either 1-Month LIBOR Floater, Private Label ARM 1-1 (fully indexed), Private Label ARM 1-1 (non-fully indexed), Private Label ARM 3-1, or Private Label ARM 5-1 Securities, (iii) on the date of sale thereof by the Depositor to the Issuer pursuant to any related Eligible Repo Agreement, satisfy each of the eligibility requirements therefor set forth in the Issuer’s Investment Policy on such date, (iv) are backed by a Prime Residential Mortgage Loan Pool with a weighted average FICO Score (weighted on the initial unpaid principal balance of each mortgage loan on the date each such security is issued and the FICO Score of each mortgagor at the origination of the related mortgage loan) greater than 640, and (v) on the date of acquisition thereof by the Depositor pursuant to the Securities Sale and Contribution Agreement, conform to all representations and warranties made by the Seller or the Depositor with respect thereto in the Securities Sale and Contribution Agreement or the related Repo Agreement, as applicable.

SECTION 1.2 Terms Defined in Schedule 1.01 . As used herein, unless otherwise defined herein, capitalized terms defined in Schedule 1.01 attached to the Amended and Restated Administration Agreement, dated as of December 28, 2005 but effective as of the Effective Date, between the Issuer and Thornburg, as Administrator (and any successors and permitted assigns of Thornburg), as further amended, supplemented or otherwise modified from time to time (the “ Administration Agreement ”), shall have the respective meanings specified therein.

SECTION 1.3 Accounting and UCC Terms . As used herein, unless otherwise specifically defined, and unless the context requires a different meaning:

(a) all accounting terms shall be construed in accordance with United States generally accepted accounting principles; and

(b) all terms defined in Article 9 of the UCC as in effect in the State of New York on the date hereof are used herein as so defined.

SECTION 1.4 Computation of Time Periods . Unless otherwise stated in this Securities Sale and Contribution Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”.

SECTION 1.5 Reference to this Agreement . The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Securities Sale and Contribution Agreement shall refer to this Securities Sale and Contribution Agreement as a whole and not to any particular provision of this Securities Sale and Contribution Agreement. Unless otherwise specified, references in this Securities Sale and Contribution Agreement to any Section are references to such Section of this Securities Sale and Contribution Agreement, and references in any Section or definition to any subsection or clause are references to such subsection or clause of such Section or definition.

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ARTICLE II

SALE OF SECURITIES; DELIVERY OF SECURITIES; PAYMENT

OF DEPOSITOR PURCHASE PRICE

SECTION 2.1 Sale of Securities .

(a) From time to time, pursuant to any Transfer Supplement, the Seller may sell, transfer, assign, set over and convey to the Depositor and the Depositor shall purchase, without recourse, but subject to the terms hereof and except as otherwise provided herein, all the right, title and interest of the Seller in and to each Eligible Security identified on the Transfer Supplement; provided , however , that the Depositor shall not be required to purchase Eligible Securities on any Closing Date having an aggregate Depositor Purchase Price greater than the amount of cash which is received on the applicable Closing Date under one or more related Repo Agreements pursuant to which the Depositor transfers such Eligible Securities to the Issuer, unless the Seller shall agree to contribute to the Depositor as a capital contribution any such excess of the aggregate Depositor Purchase Price of such Portfolio of Eligible Securities over the amount of cash paid to the Depositor by the Issuer under one or related Repo Agreements on such Closing Date; provided , further , that each Security transferred on each Closing Date must be an Eligible Security; provided , further , that the Depositor shall not be required or permitted to purchase any Eligible Securities if the Single Issuer Cap Excess Amount, the Non-S&P Rated Private Label Cap Excess Amount or the Servicer Strength Cap Excess Amount would exist if such Eligible Securities were purchased by the Issuer. The Seller shall provide a notice to the Depositor, the Issuing and Paying Agent, the Administrator, the Collateral Agent and the Issuer not later than 9:50 a.m. New York City time on any Closing Date of its intention to sell a Portfolio to the Depositor pursuant to a Transfer Supplement; provided , however , that the Seller may deliver such notice to the Depositor, the Issuing and Paying Agent, the Administrator, the Collateral Agent and the Issuer at any time prior to 2:00 p.m. Eastern Time on any Closing Date if the Issuer will not issue additional Short Term Notes to fund its purchase of the applicable Portfolio from the Depositor on such Closing Date. In such notice, the Seller shall inform the Depositor of the aggregate PAR Value, the Group, and the Depositor Purchase Price of the Eligible Securities that it intends to sell on such date. Each Transfer Supplement shall be executed by the Seller and the Depositor at the time of the sale of the subject Portfolio.

(b) Upon execution of any Transfer Supplement by the Seller and the Depositor and receipt by the Seller of the Depositor Purchase Price for each of the Eligible Securities identified on such Transfer Supplement, the Seller hereby sells, assigns, transfers, sets over and conveys to the Depositor all of the Seller’s right, title and interest in, to and under each such Eligible Security. It is intended that each transfer, assignment and conveyance herein contemplated constitutes a sale of the applicable Eligible Securities, conveying good title thereto free and clear of any liens, by the Seller to the Depositor and not a loan secured by such Eligible Securities and that the Eligible Securities not be part of the Seller’s estate in the event of insolvency. In the event that any Eligible Securities are held to be property of the Seller or if for any other reason any Transfer Supplement is held or deemed to create a security interest in (and not a sale of) the related Eligible Securities, the parties intend that the Seller shall be deemed to have granted, and does hereby grant, to the Depositor a first priority perfected security interest in such Eligible Securities and all collateral related thereto now existing or hereafter arising for the purpose of securing the rights of the Depositor under this Securities Sale and Contribution

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Agreement, and that this Securities Sale and Contribution Agreement and each Transfer Supplement shall each constitute a security agreement under applicable law.

(c) It is expressly understood and agreed that the Seller shall not have any obligation to transfer any Securities to the Depositor, and any such transfer by the Seller shall be made in its sole and absolute discretion.

SECTION 2.2 Delivery of Eligible Securities . All Eligible Securities sold by the Seller to the Depositor hereunder shall be transferred to the Depositor by causing such Eligible Securities to be credited to the Issuer Account, maintained with and under the control of the Collateral Agent, in the name of the Issuer in accordance with the Security Agreement, the Administration Agreement and the Securities Account Control Agreement on the related Closing Date.

SECTION 2.3 Determination of Depositor Purchase Price . On each Closing Date, the Seller shall deliver to the Depositor a Transfer Supplement, in accordance with Section 2.1, and shall notify the Depositor of its calculation of the Depositor Purchase Price for each Eligible Security in the Portfolio. The Depositor and the Seller shall use commercially reasonable efforts to close the sale of any Portfolio on any such Closing Date. The Depositor shall pay to the Seller the Depositor Purchase Price of each Eligible Security purchased by it hereunder (to the extent the Depositor Purchase Price is not paid in cash, such unpaid portion of the Depositor Purchase Price shall be deemed a capital contribution in accordance with the terms and conditions as set forth in Section 2.5 herein) not later than 6:00 p.m. New York City time on the applicable Closing Date.

SECTION 2.4 Purchase Commitment Term . Subject to the terms and conditions of the Program Documents, the commitment of the Depositor under this Securities Sale and Contribution Agreement shall expire upon the Collateral Agent’s delivery of Notice of Program Default to the Seller in accordance with Section 5.1 of the Security Agreement.

SECTION 2.5 Capital Contribution .

(a) Payment of Depositor Purchase Price . On the terms and subject to the conditions set forth in this Securities Sale and Contribution Agreement and the other Program Documents, on each Closing Date, the Depositor agrees to pay to the Seller the aggregate Depositor Purchase Price in respect of the sale of the Portfolio of Eligible Securities by the Seller to the Depositor to occur on such Closing Date. Such Depositor Purchase Price shall be paid by the Depositor to the Seller in the form of cash and/or a capital contribution by the Seller to the Depositor as follows:

(i) First , the Depositor Purchase Price for such Eligible Securities shall be paid in cash to the extent that the Depositor has received cash from the Issuer on such Closing Date under one or more related Repo Agreements pursuant to which the Depositor has transferred such Eligible Securities to the Issuer; and

(ii) Second , the Seller shall be deemed to have made a contribution to the capital of the Depositor in an amount equal to such remaining unpaid portion of the Depositor Purchase Price.

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SECTION 2.6 Distributions by the Depositor . The Depositor (I) shall from time to time make distributions to the Seller, as return on equity, from P&I Proceeds received and held by the Depositor, to the extent such P&I Proceeds (a) exceed 10% of the Face Amount of the earliest maturing Class of Short Term Notes then outstanding, or (b) together with the amount of any P&I Proceeds which have been previously applied to the repayment of Short Term Notes in the preceding twelve months, exceed 10% of the average outstanding Face Amount of Short Term Notes on each Business Day during such twelve month period, and (II) may from time to time make further distributions to the Seller from amounts received by the Depositor under the Program Documents; provided that, in either case, the Depositor shall not make any distributions to the Seller on any day to the extent the Depositor shall have failed to pay the Issuer any amounts due and owing to the Issuer on or prior to such date under any Repo Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES;

REMEDIES AND BREACH

SECTION 3.1 Representations and Warranties of the Seller .

The Seller represents and warrants to the Depositor that as of each applicable Closing Date the following will be true and correct in all material respects.

(a) Due Organization and Authority . The Seller (i) is a corporation, duly organized, validly existing and in good standing under the laws of the State of Maryland, and (ii) has all requisite power and authority to carry on its business as now conducted in all material respects and to perform its obligations under this Securities Sale and Contribution Agreement.

(b) No Conflicts . The execution and delivery of this Securities Sale and Contribution Agreement by the Seller, and the performance and compliance with the terms of this Securities Sale and Contribution Agreement by the Seller, will not violate the Seller’s organizational documents or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach of, any material agreement or other instrument to which it is a party or which is applicable to it or any of its assets, in each case which, in the Seller’s good faith and reasonable judgment, materially and adversely affects the ability of the Seller to carry out the transactions contemplated by this Securities Sale and Contribution Agreement.

(c) Due Execution . The Seller has the full power and authority to enter into and consummate all transactions contemplated by this Securities Sale and Contribution Agreement, has duly authorized the execution, delivery and performance of this Securities Sale and Contribution Agreement, and has duly executed and delivered this Securities Sale and Contribution Agreement.

(d) Enforceability . This Securities Sale and Contribution Agreement, assuming due authorization, execution and delivery by the Depositor, constitutes a valid, legal and binding obligation of the Seller, enforceable against the Seller in accordance with the terms hereof, subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium and other

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laws affecting the enforcement of creditors’ rights generally, and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.

(e) No Violation . The Seller is not in violation of (and its execution and delivery of this Securities Sale and Contribution Agreement and its performance and compliance with the terms of this Securities Sale and Contribution Agreement will not constitute a violation of) any law, any order or decree of any court or arbiter, or any order, regulation or demand of any federal, state or local governmental or regulatory authority, which violation, in the Seller’s good faith and reasonable judgment, is likely to affect materially and adversely either the ability of the Seller to perform its obligations under this Securities Sale and Contribution Agreement or the financial condition of the Seller.

(f) No Litigation . No litigation is pending or, to the Seller’s knowledge, threatened against the Seller the outcome of which, in the Seller’s good faith and reasonable judgment, would reasonably be expected to prohibit the Seller from entering into this Securities Sale and Contribution Agreement or materially and adversely affect the ability of the Seller to perform its obligations under this Securities Sale and Contribution Agreement.

(g) No Broker’s Fees . The Seller has not dealt with any broker, investment banker, agent or other person, other than the Issuer, the Depositor, and each Short Term Note Dealer, and their respective Affiliates that may be entitled to any commission or compensation in connection with the sale of Eligible Securities or the consummation of any of the other transactions contemplated hereby.

(h) No Consents Necessary . No consent, approval, authorization or order of, registration or filing with, or notice to, any governmental authority or court is required, under federal or state law (including, with respect to any bulk sale laws), for the execution, delivery and performance of or compliance by the Seller with this Securities Sale and Contribution Agreement, or the consummation by the Seller of any transaction contemplated hereby, other than (1) the filing or recording of financing statements, instruments of assignment and other similar documents necessary in connection with the Seller’s sale of Eligible Securities to the Depositor, (2) such consents, approvals, authorizations, qualifications, registrations, filings or notices as have been obtained or made and (3) where the lack of such consent, approval, authorization, qualification, registration, filing or notice would not, in the Seller’s good faith and reasonable judgment, have a material adverse effect on the performance by the Seller under this Securities Sale and Contribution Agreement.

(i) Ordinary Course of Business . The performance of the transactions contemplated by this Securities Sale and Contribution Agreement are in the ordinary course of business of the Seller.

(j) No Untrue Information . Neither this Securities Sale and Contribution Agreement, any Transfer Supplement nor any written statement, written report or other document prepared by the Seller pursuant to this Securities Sale and Contribution Agreement or in connection with the transactions contemplated hereby contains any untrue statement of a material fact relating to the Seller or the Securities transferred by the Seller to the Depositor hereunder.

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(k) Financial Statements . The Seller has delivered to the Depositor consolidated financial statements as of December 31, 2004 as to its last three complete fiscal years and any later quarter ended more than sixty (60) days prior to the execution of this Securities Sale and Contribution Agreement. All such financial statements fairly present the pertinent results of operations and changes in financial position at the end of each such