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Exhibit
10.1
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION
AGREEMENT is made and entered into this
day of
,
(“Agreement”), by and between Thornburg Mortgage, Inc.,
a Maryland corporation (the “Company”), and
(“Indemnitee”).
WHEREAS, on March 31,
2008, the Company announced that it raised $1.35 billion through a
private placement offering of senior subordinated secured notes,
warrants for the purchase of common stock and participations in the
principal of the Company’s mortgage-backed securities
portfolio financed with reserve repurchase agreements;
WHEREAS, in order to
successfully raise this new capital, the new investors were granted
the right to receive warrants to purchase, for $0.01 per share, up
to 90% of the fully diluted common shares of the Company, assuming
certain conditions are fulfilled;
WHEREAS, at the request of
the Company, Indemnitee [currently serves] [has served] as a
[director] [advisory director] [officer] of the Company and
may, therefore, be subjected to claims, suits or proceedings
arising as a result of his service;
WHEREAS, Section 2-418
of the Corporations and Associations Article of the Annotated Code
of Maryland, as amended from time to time, the Company’s
Articles of Incorporation, as amended (the “Charter”),
and the Amended and Restated Bylaws of the Company (the
“Bylaws”) provide that they are not exclusive of any
other rights to which those seeking indemnification or advancement
of expenses may be entitled, and thereby contemplate that contracts
may be entered into between the Company and its officers or
directors with respect to indemnification of such officers or
directors;
WHEREAS, as [an inducement
to Indemnitee to continue to serve as such [director] [advisory
director] [officer]] or [recognition of Indemnitee’s past
service as a [director] [advisory director] [officer] and an
inducement to Indemnitee to make himself available to the Company
for consultation with respect to his knowledge relating to his past
service] , the Company has agreed to indemnify and to advance
expenses and costs incurred by Indemnitee in connection with any
such claims, suits or proceedings, to the maximum extent permitted
by law;
WHEREAS, the Company desires
to attract and retain the services of highly qualified individuals,
such as Indemnitee, to serve as [officers] [directors] of
the Company and to indemnify its [officers] [directors] so
as to provide them with the maximum protection permitted by law;
and
WHEREAS, to the extent
permitted by law, this Agreement is a supplement to and in
furtherance of the provisions of the Charter and Bylaws, in each
case as amended from time to time, or resolutions adopted pursuant
thereto, and shall not be deemed a substitute therefor, nor to
diminish or abrogate any rights of the Indemnitee
thereunder.
NOW, THEREFORE, in
consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as
follows:
Section 1.
Definitions . For purposes of this Agreement:
(a) “Additional Warrant
Shares” shall have the meaning assigned to such term in the
Warrant Agreement.
(b) “Change in
Control” means a change in control of the Company occurring
after the Effective Date of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Securities Exchange Act of
1934, as amended (the “Act”), whether or not the
Company is then subject to such reporting requirement;
provided , however , that, without limitation, such a
Change in Control shall be deemed to have occurred if after the
Effective Date (i) any “person” (as such term is
used in Sections 13(d) and 14(d) of the Act) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company’s then outstanding securities without the prior
approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such person attaining such
percentage interest; (ii) there occurs a proxy contest, or the
Company is a party to a merger, consolidation, sale of assets, plan
of liquidation or other reorganization not approved by at least
two-thirds of the members of the Board of Directors then in office,
as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute
less than a majority of the Board of Directors thereafter; or
(iii) during any period of two consecutive years, other than
as a result of an event described in clause (a)(ii) of this
Section 1, individuals who at the beginning of such period
constituted the Board of Directors (including for this purpose any
new director whose election or nomination for election by the
Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who were directors
at the beginning of such period) cease for any reason to constitute
at least a majority of the Board of Directors. Notwithstanding
anything in this Agreement to the contrary, the Company and the
Indemnitee agree that a Change of Control shall be deemed to occur
for purposes of this Agreement at such time as the Warrants first
became exercisable for the Additional Warrant Shares.
(c) “Corporate
Status” means the status of a person who is or was a
director, advisory director, trustee, officer, employee or agent of
the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise for which
such person is or was serving at the request of the
Company.
(d) “Disinterested
Director” means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.
(e) “Effective
Date” means the date set forth in the first paragraph of this
Agreement.
(f) “Expenses”
shall include all reasonable and out-of-pocket attorneys’
fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees,
and all other disbursements or expenses of the types customarily
incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or being or preparing to be a
witness in a Proceeding.
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(g) “Independent
Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither is, nor in
the five years preceding the selection or designation of such firm
or member has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party, or
(ii) any other party to or witness in the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement.
If a Change of Control has not occurred, Independent Counsel shall
be selected by the Board of Directors, with the approval of
Indemnitee, which approval will not be unreasonably withheld. If a
Change of Control has occurred, Independent Counsel shall be
selected by Indemnitee, with the approval of the Board of
Directors, which approval will not be unreasonably
withheld.
(h) “Proceeding”
includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding, whether civil,
criminal, administrative or investigative (including on
appeal).
(i) “Warrant
Agreement” means that certain Warrant Agreement, dated as of
March 31, 2008, among the Company and MP TMA LLC, MP TMA
(Cayman) LLC and TMA, Ltd., as the Initial Holders, and each person
who subsequently becomes a party thereto, relating to the grant to
the Initial Holders of the Warrants (as defined therein) to
purchase the Initial Warrant Shares (as defined therein) and the
Additional Warrant Shares (as defined therein).
(j) “Warrant
Shares” shall have the meaning assigned to such term in the
Warrant Agreement.
(k) “Warrants”
shall have the meaning assigned to such term in the Warrant
Agreement.
Section 2. Services
by Indemnitee . Indemnitee has or will serve as a
[director/advisory director] [officer] of the Company.
However, this Agreement shall not impose any obligation on
Indemnitee or the Company to continue Indemnitee’s service to
the Company beyond any period otherwise required by law or by other
agreements or commitments of the parties, if any.
Section 3.
Indemnification - General . The Company shall indemnify and
hold Indemnitee harmless from and against any and all losses,
liabilities, claims, damages and Expenses arising out of any event
or occurrence related to the fact that Indemnitee is or was a
[officer] [director] [advisory director] of the Company or
is or was serving in another Corporate Status, and advance Expenses
to Indemnitee, (a) as provided in this Agreement and
(b) otherwise to the maximum extent permitted by Maryland law
in effect on the date hereof and to such greater extent as
permitted by applicable law as amended from time to time;
provided , however , that no change in Maryland law
shall have the effect of reducing the benefits available to
Indemnitee hereunder based on Maryland law as in effect on the date
hereof. The rights of Indemnitee provided in this Section 3
shall include, without limitation, the rights set forth in the
other sections of this Agreement, including any additional
indemnification permitted by Section 2-418(g) of the
Corporations and Associations Article of the Annotated Code of
Maryland (“MGCL”).
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Section 4.
Proceedings Other Than Proceedings by or in the Right of the
Company . Indemnitee shall be entitled to the rights of
indemnification provided in this Section 4 if, by reason of
his Corporate Status, he is, or is threatened to be, made a party
to or a witness in any threatened, pending, or completed
Proceeding, other than a Proceeding by or in the right of the
Company. Pursuant to this Section 4, Indemnitee shall be
indemnified against all judgments, penalties, fines and amounts
paid in settlement and all Expenses actually and reasonably
incurred by him or on his behalf in connection with a Proceeding by
reason of his Corporate Status unless it is established that
(i) the act or omission of Indemnitee was material to the
matter giving rise to the Proceeding and (a) was committed in
bad faith or (b) was the result of active and deliberate
dishonesty, (ii) Indemnitee actually received an improper
personal benefit in money, property or services, or (iii) in
the case of any criminal Proceeding, Indemnitee had reasonable
cause to believe that his conduct was unlawful.
Section 5.
Proceedings by or in the Right of the Company . Indemnitee
shall be entitled to the rights of indemnification provided in this
Section 5 if, by reason of his Corporate Status, he is, or is
threatened to be, made a party to or a witness in any threatened,
pending or completed Proceeding brought by or in the right of the
Company to procure a judgment in its favor. Pursuant to this
Section 5, Indemnitee shall be indemnified against all amounts
paid in settlement and all Expenses actually and reasonably
incurred by him or on his behalf in connection with such Proceeding
unless it is established that (i) the act or omission of
Indemnitee was material to the matter giving rise to such a
Proceeding and (a) was committed in bad faith or (b) was
the result of active and deliberate dishonesty or
(ii) Indemnitee actually received an improper personal benefit
in money, property or services.
Section 6.
Court-Ordered Indemnification . Notwithstanding any other
provision of this Agreement, a court of appropriate jurisdiction,
upon application of Indemnitee and such notice as the court shall
require, may order indemnification in the following
circumstances:
(a) if it determines
Indemnitee is entitled to reimbursement under
Section 2-418(d)(1) of the MGCL, the court may order
indemnification, in which case Indemnitee may be entitled to
recover the expenses of securing such reimbursement; or
(b) if it determines that
Indemnitee is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not Indemnitee
(i) has met the standards of conduct set forth in
Section 2-418(b) of the MGCL or (ii) has been adjudged
liable for receipt of an improper personal benefit under
Section 2-418(c) of the MGCL, the court may order such
indemnification as the court shall deem proper. However,
indemnification with respect to any Proceeding by or in the right
of the Company or in which liability shall have been adjudged in
the circumstances described in Section 2-418(c) of the MGCL
shall be limited to Expenses actually and reasonably incurred by
him or on his behalf in connection with a Proceeding.
Section 7.
Indemnification for Expenses of a Party Who is Wholly or Partly
Successful . Notwithstanding any other provision of this
Agreement, and without limiting any
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such provision, to the extent that
Indemnitee is, by reason of his Corporate Status, made a party to
and is successful, on the merits or otherwise, in the defense of
any Proceeding, he shall be indemnified for all Expenses actually
and reasonably incurred by him or on his behalf in connection
therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one
or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee under this
Section 7 for all Expenses actually and reasonably incurred by
him or on his behalf in connection with each successfully resolved
claim, issue or matter, allocated on a proportionate basis. For
purposes of this Section 7, the term “successful, on the
merits or otherwise,” shall include, but shall not be limited
to, (i) the termination of any claim, issue or matter in a
Proceeding by withdrawal or dismissal, with or without prejudice,
(ii) the termination of any claim, issue or matter in a
Proceeding by any other means without any express finding of
liability or guilt against the Indemnitee, with or without
prejudice or (iii) the expiration of 120 days after the making
of a claim or threat of a Proceeding without the institution of the
same and without any promise or payment made to induce a
settlement; provided , however , that in no event
shall the Indemnitee be entitled to indemnification under this
Section with respect to a claim, issue or matter to the extent
(i) applicable law prohibits such indemnification, or
(ii) an admission is made by the Indemnitee in writing to the
Company or in such Proceeding, or a final, nonappealable
determination is made in such Proceeding, that the standard of
conduct required for indemnification under this Agreement has not
been met with respect to such claim, issue or matter.
Section 8.
Contribution . If the indemnity contained in Section 3,
4, 5 or 7 of this Agreement is unavailable or insufficient to hold
Indemnitee harmless in a Proceeding described therein, then in
accordance with applicable law, the Charter and the Bylaws, and
separate from and in addition to, the indemnity provided elsewhere
herein, the Company shall contribute to Expenses, judgments,
penalties, fines and amounts paid in settlement actually and
reasonably incurred by or on behalf of Indemnitee in connection
with such Proceeding or any claim, issue or matter therein, in such
proportion as appropriately reflects the relative benefits received
by, and fault of, the Company on the one hand and Indemnitee on the
other in the acts, transactions or matters to which the Proceeding
relates and other equitable considerations.
Section 9. Advance of
Expenses . The Company shall, without requiring a preliminary
determination of Indemnitee’s ultimate entitlement to
indemnification hereunder, advance all reasonable Expenses incurred
by or on behalf of Indemnitee in connection with any Proceeding to
which Indemnitee is, or is threatened to be, made a party or a
witness, within ten days after the receipt by the Company of a
statement or statements from Indemnitee requesting such advance or
advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall
itemize the Expenses incurred by Indemnitee in reasonable detail
and Indemnitee shall, and hereby undertakes to, repay any Expenses
advanced if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified against such Expenses. To the extent
that Expenses advanced to Indemnitee do not relate to a specific
claim, issue or matter in the Proceeding, such Expenses shall be
allocated on a propor
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