Exhibit
10.1


INDEMNITY AGREEMENT


This
Indemnity Agreement, effective as of _______, _____ is made by and between ACA
Capital Holdings, Inc., a Delaware corporation with executive offices located
at 140 Broadway, New York, NY (the “Company”), and ___________, a director of
the Company residing at _________________ (the “Indemnitee”).


RECITALS


A.             The
Board of Directors of the Company (the “Board”) has determined that it is
desirable and in the best interest of the Company to appoint an additional
independent director for membership on the Board;


B.              The
Company is aware that competent and experienced persons are increasingly
reluctant to serve as directors of corporations unless they are protected by
comprehensive liability insurance or indemnification, due to increased exposure
to litigation costs and risks resulting from their service to such
corporations, and due to the fact that the exposure frequently bears no
reasonable relationship to the compensation of such directors;


C.              The
statutes and judicial decisions regarding the duties of directors are often
difficult to apply, ambiguous, or conflicting, and therefore fail to provide
such directors with adequate, reliable knowledge of legal risks to which they
are exposed or information regarding the proper course of action to take;


D.              Plaintiffs
often seek damages in such large amounts and the costs of litigation may be so
substantial (whether or not the case is meritorious) that the defense and/or
settlement of such litigation is often beyond the personal resources of the
directors;


E.              Based
upon their experience as business managers, the Board has concluded that, to
retain and attract talented and experienced individuals to serve as independent
directors of the Company and its subsidiaries, it is necessary and appropriate
for the Company to contractually indemnify such directors, and to assume for
itself maximum liability for expenses and damages in connection with claims
against such directors in connection with their service to the Company and its
subsidiaries;


F.              Section
145 of the General Corporation Law of the State of Delaware, under which the
Company is organized (“Section 145”), empowers the Company to indemnify by
agreement its officers, directors, employees, and agents, and persons who
serve, at the request of the Company, as directors, officers, employees, or
agents of other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not exclusive;


G.              The
Company desires and has requested the Indemnitee to serve or continue to serve
as an independent director of the Company and/or the subsidiaries of the
Company free from undue concern for claims for damages arising out of or
related to such services to the Company and/or a subsidiary of the Company; and


H.              The
Indemnitee is willing to serve, or to continue to serve, the Company and/or the
subsidiaries of the Company, provided that he or she is furnished the indemnity
provided for herein.













AGREEMENT


NOW,
THEREFORE, the parties hereto, intending to be legally bound, hereby agree as
follows:


1.           Definitions.


(a)          Agent.  For the purposes of this Agreement, “agent”
of the Company means any person who is or was a director, officer, employee, or
other agent of the Company or a subsidiary of the Company; or is or was serving
at the request of, for the convenience of or to represent the interest of the
Company or a subsidiary of the Company as a director, officer, employee, or
agent of another foreign or domestic corporation, partnership, joint venture,
trust, or other enterprise; or was a director, officer, employee, or agent of a
foreign or domestic corporation which was a predecessor corporation of the
Company or a subsidiary of the Company, or was a director, officer, employee,
or agent of another enterprise at the request of, for the convenience of or to
represent the interests of such predecessor corporation.


(b)         Expenses.  For purposes of this Agreement, “expenses”
includes all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys’ fees and related disbursements,
and other out-of-pocket costs such as retainers, court costs, expert fees,
travel expenses and telephone charges) actually and reasonably incurred by the
Indemnitee as a party or as a participant in connection with either the
investigation, defense, or appeal of a proceeding or establishing or enforcing
a right to indemnification under this Agreement, Section 145, or otherwise;
provided, however, that expenses shall not include any judgments, fines, ERISA
excise taxes or penalties or amounts paid in settlement of a proceeding.


(c)          Proceeding.  For the purposes of this Agreement, “proceeding”
means any threatened, pending, or completed action, suit, claim, inquiry or
other proceeding, formal or informal, including arbitration, mediation, other
alternative dispute resolution mechanism, or hearing, whether civil, criminal,
administrative, investigative, or any other type whatsoever.


(d)         Subsidiary.  For purposes of this Agreement, “subsidiary”
means any corporation or other form of business entity of which more than 50%
of the outstanding voting securities is owned directly or indirectly by the
Company, by the Company and one or more other subsidiaries, or by one or more
other subsidiaries.


2.           Agreement
to Serve.  The Indemnitee agrees to
serve and/or continue to serve as an agent of the Company, in the capacity the
Indemnitee currently serves as an agent of the Company, so long as he or she is
duly appointed or elected and qualified in accordance with the applicable provisions
of the Bylaws of the Company or any subsidiary of the Company or until such
time as he or she tenders his resignation in writing or he or she is removed
from such position.


3.           Liability
Insurance.  To the extent the Company
or any of its subsidiaries maintains an insurance policy or policies providing
liability insurance for agents of the Company and its subsidiaries (“D&O
Insurance”), the Indemnitee shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the coverage
available.


4.           Mandatory
Indemnification.  The Company shall
indemnify the Indemnitee:


(a)          Third
Party Actions.  If the Indemnitee is
a person who was or is a party or other participant or is threatened to be made
a party or other participant to any proceeding (other than an action by or in
the right of the Company) by reason of the fact that he or she is or was an
agent of the Company, 



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or
by reason of anything done or not done by him or her in any such capacity,
against any and all expenses and liabilities of any type whatsoever (including,
but not limited to, judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) actually and reasonably incurred by him or her in
connection with the investigation, defense, settlement or appeal of such
proceeding to the fullest extent authorized or permitted by law, the
Certificate of Incorporation of the Company or the Bylaws of the Company;
provided that he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful; and


(b)         Actions
By or In the Right of the Company. 
If the Indemnitee is a person who was or is a party or other participant
or is threatened to be made a party or other participant to any proceeding by
or in the right of the Company to procure a judgment in its favor by reason of
the fact that he or she is or was an agent of the Company, or by reason of
anything done or not done by him or her in any such capacity, against any
amounts paid in settlement of any such proceeding, to the extent permitted by
law, and all expenses actually and reasonably incurred by him or her in
connection with the investigation, defense, settlement, or appeal of such
proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Company; except that no indemnification under this subsection shall be made in
respect of any claim, issue, or matter as to which such person shall have been
finally adjudged to be liable to the Company unless and only to the extent that
the Court of Chancery or the court in which such proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such amounts which the Court of Chancery or such
other court shall deem proper; and


(c)          The
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendre or its equivalent, shall not, of itself, create a
presumption that the Indemnitee did not act in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his or her conduct was unlawful; and


(d)         Indemnification
for Expenses Incurred as a Witness. 
To the extent that Indemnitee is, by reason of the fact that he or she
is or was an agent of the Company, a witness in any proceeding to which
Indemnitee is not a party, the Company shall indemnify Indemnitee against all
expenses actually and reasonably incurred by Indemnitee in connection
therewith; and


(e)          Exception
for Amounts Covered by Insurance. 
Notwithstanding the foregoing, the Company shall not be obligated to
indemnify the Indemnitee for expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fees, ERISA excise taxes or
penalties, and amounts paid in settlement) that have been paid directly to
Indemnitee under D&O Insurance.


5.           Partial
Indemnification.  If the Indemnitee
is entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of any expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes
or penalties, and amounts paid in settlement) incurred by him or her in the
investigation, defense, settlement, or appeal of a proceeding but not entitled,
however, to indemnification for all of the total amount thereof, the Company
shall nevertheless indemnify the Indemnitee for such amount except as to the
portion thereof to which the Indemnitee is not entitled.


6.           Mandatory
Advancement of Expenses.  Subject to
Section 9 below and subject to receipt by the Company of a statement that
reasonably evidences the expenses incurred, the Company shall advance all
expenses actually and reasonably incurred by the Indemnitee in connection with
the 



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investigation,
defense, settlement or appeal of any proceeding to which the Indemnitee is a
party or participant or is threatened to be made a party or participant by
reason of the fact that the Indemnitee is or was an agent of the Company or by
reason of anything done or not done by him or her in any such capacity.
Indemnitee hereby undertakes to repay such amounts advanced only if, and to the
extent that, it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that the Indemnitee is not entitled
to be indemnified by the Company as authorized hereby. The advances to be made
hereunder shall be paid by the Company to the Indemnitee within twenty (20)
days following delivery of a written request therefor by the Indemnitee to the
Company.


7.           Notice
and Other Indemnification Procedures.


(a)          Promptly
after receipt by the Indemnitee of notice of the commencement of or the threat
of commencement of any proceeding or his or her potential involvement as a
participant (be it as a party or otherwise), the Indemnitee shall, if the
Indemnitee believes that indemnification with respect thereto may be sought from
the Company under this Agreement, notify the Company in writing of the
commencement or threat of commencement thereof.


(b)         If,
at the time of the receipt of a notice of the commencement of a proceeding
pursuant to Section 7(a) hereof, the Company has D&O Insurance in effect,
the Company shall give notice of the commencement of such proceeding to the
insurers in accordance with the procedures set forth in the respective
policies. The Company shall thereafter take all necessary action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable as a result
of such proceeding in accordance with the terms of such policies.


(c)          In
the event the Company shall be obligated to advance the expenses for any
proceeding against the Indemnitee, the Company, if appropriate, shall be
entitled to assume the defense of such proceeding, with counsel approved by the
Indemnitee, upon the delivery to the Indemnitee of written notice of its
election so to do. After delivery of such notice, approval of such counsel by
the Indemnitee and the retention of such counsel by the Company, the Company
will not be liable to the Indemnitee under this Agreement for any fees of
counsel subsequently incurred by the Indemnitee with respect to the same
proceeding, provided that (i) the Indemnitee shall have the right to employ his
or her counsel in any such proceeding at the Indemnitee’s expense; and (ii) if
(A) the employment of counsel by the Indemnitee has been previously authorized
by the Company, (B) the Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and the Indemnitee in the
conduct of any such defense or (C) the Company shall not, in fact, have
employed counsel to assume the defense of such proceeding, the fees and expenses
of the Indemnitee’s counsel shall be at the expense of the Company.


8.           Determination
of Right to Indemnification.


(a)          To
the extent the Indemnitee has been successful on the merits or otherwise in
defense of any proceeding referred to in Section 4(a) or 4(b) of this Agreement
or in the defense of any claim, issue or matter described therein, the Company
shall indemnify the Indemnitee against expenses actually and reasonably
incurred by him or her in connection therewith to the extent permitted by law.


(b)         Upon
each submission of a written notice by Indemnitee for indemnification pursuant
to Section 7(a) above, a determination with respect to Indemnitee’s entitlement
thereto because he or she has met all the applicable standards set forth in
this Agreement shall be made in accordance with this Section 8.


(c)          The
Indemnitee shall be entitled to select the decision maker or decision making
body who will determine, on behalf of the Company, the Indemnitee’s entitlement
to indemnification from 



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among
the following:


(1)               All of the members of the Board
of Directors who are not parties to or participants in the proceeding for which
indemnification is being sought, even though less than a quorum, or a committee
of such directors designated by majority vote of such directors, even though
less than a quorum;


(2)               The stockholders of the Company;
or


(3)               Independent legal counsel
selected by the Board, which counsel shall make such determination in a written
opinion.


(d)         As
soon as practicable, and in no event later than 30 days after written notice of
the Indemnitee’s choice of decision maker pursuant to Section 8(c) above, the
Company shall, at its own expense, submit to the selected decision maker its
claim that the Indemnitee is not entitled to indemnification; and the Company
shall act in the utmost good faith to assure the Indemnitee a complete
opportunity to defend against such claim.


(e)          Notwithstanding
a determination by any decision maker listed in Section 8(c) hereof that the
Indemnitee is not entitled to indemnification with respect to a specific
proceeding, the Indemnitee shall have the right to apply to the Court of
Chancery of the State of Delaware, the court in which the Proceeding is or was
pending, or any other court of competent jurisdiction, for the purpose of
enforcing the Indemnitee’s right to indemnification pursuant to the Agreement.


(f)          In
any suit brought by Indemnitee seeking to enforce a right to indemnification
hereunder (but not a suit brought by Indemnitee seeking to enforce a right to an
advancement of expenses hereunder), it shall be a defense that Indemnitee has
not met any applicable standard for indemnification under applicable law. With
respect to any suit brought by Indemnitee seeking to enforce a right to
indemnification or right to advancement of expenses hereunder or any suit
brought by the Company to recover an advancement of expenses (whether pursuant
to the terms of an undertaking or otherwise), neither (i) the failure of
the Company to have made a determination prior to commencement of such suit
that indemnification of such person is proper in the circumstances because such
person has met the applicable standards of conduct under applicable law, nor
(ii) an actual determination by the Company that such person has not met
such applicable standards of conduct, shall create a presumption that such
person has not met the applicable standards of conduct or, in a case brought by
such person seeking to enforce a right to indemnification, be a defense to such
suit.


(g)         In
any suit brought by Indemnitee seeking to enforce a right to indemnification or
to an advancement of expenses hereunder, or by the Company to recover an
advancement of expenses (whether pursuant to the terms of an undertaking or
otherwise), the burden shall be on the Company to prove that the Indemnitee is
not entitled to be indemnified, or to such an advancement of expenses, under
this Agreement or otherwise.


(h)         The
Company shall indemnify the Indemnitee against all expenses incurred by the
Indemnitee in connection with any proceeding under this Section 8 involving the
Indemnitee and against all expenses incurred by the Indemnitee in connection
with any other proceeding between the Company and the Indemnitee involving the
interpretation or enforcement of the rights of the Indemnitee under this
Agreement so long as a court of competent jurisdiction finds that Indemnitee in
any such proceeding was entitled to indemnification or advancement of expenses,
in whole or in part.



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9.           Exceptions.  Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:


(a)          Claims
Initiated by Indemnitee.  To
indemnify or advance expenses (including attorneys’ fees) to the Indemnitee
with respect to proceedings or claims initiated or brought voluntarily by the
Indemnitee against the Company or in defending any counterclaim, cross-claim,
affirmative defense or like claim of the Company), except with respect to
proceedings brought to establish or enforce a right to indemnification or
advancement of expenses under this Agreement or any other statute or law or
otherwise as required under Section 145, but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board of Directors finds it to be appropriate; or


(b)         Lack
of Good Faith.  To indemnify the
Indemnitee for any expenses incurred by the Indemnitee with respect to any
proceeding instituted by the Indemnitee to enforce or interpret this Agreement,
if a court of competent jurisdiction determines that each of the material
assertions made by the Indemnitee in such proceeding was not made in good faith
or was frivolous; or


(c)          Unauthorized
Settlements.  To indemnify the
Indemnitee under this Agreement for any amounts paid in settlement of a
proceeding unless the Company consents to such settlement; or


(d)         Claims
by the Company for Willful Misconduct. 
To indemnify or advance expenses to the Indemnitee under this Agreement
for any expenses incurred by the Indemnitee with respect to any proceeding or
claim brought by the Company against the Indemnitee for willful misconduct,
unless a court of competent jurisdiction determines that each of such claims
was not made in good faith or was frivolous; or


(e)          Section
16(b).  To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, to the extent applicable to the Company, or
any similar successor statute; or


(f)          Willful
Misconduct.  To indemnify the
Indemnitee (x) on account of the Indemnitee’s conduct which is finally adjudged
to have been knowingly fraudulent or deliberately dishonest, or to constitute
willful misconduct or (y) if it is finally adjudged that Indemnitee did not act
in good faith or in a manner he or she reasonably believed to be in or not
opposed to the best interests of the Company; or


(g)         Unlawful
Indemnification.  To indemnify the
Indemnitee if a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is not lawful.


10.         Right
to Bring Suit.  If (a) a claim under
Section 4(a) or 4(b) hereof with respect to any right to indemnification is not
paid in full by the Company within sixty days after a written demand has been
received by the Company or (b) a claim under Section 6 hereof with respect to
any right to the advancement of expenses is not paid in full by the Company
within twenty days after a written demand has been received by the Company,
then Indemnitee may at any time thereafter bring suit against the Company to
recover the unpaid amount of the claim.


11.         Subrogation.  Upon a payment to Indemnitee under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of the Indemnitee to recover against any person for such
liability, and Indemnitee shall execute all documents and instruments
reasonably required and shall take such other actions as may be reasonably
necessary to secure such rights, including the execution of such documents as
may be necessary for the Company to bring suit to enforce such rights.



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12.         Nonexclusivity.  The provisions for indemnification and
advancement of expenses set forth in this Agreement shall not be deemed exclusive
of any other rights which the Indemnitee may have under any provision of law,
the Company’s Certificate of Incorporation or Bylaws, the vote of the Company’s
stockholders or disinterested directors, other agreements, or otherwise, both
as to actions in his or her official capacity and to actions in another
capacity while occupying his or her position as an agent of the Company, and
the Indemnitee’s rights hereunder shall continue after the Indemnitee has
ceased acting as an agent of the Company and shall inure to the benefit of the
heirs, executors and administrators of the Indemnitee.


13.         Interpretation
of Agreement.  It is understood that
the parties hereto intend this Agreement to be interpreted and enforced so as
to provide indemnification to the Indemnitee to the fullest extent now or
hereafter permitted by law.


14.         Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal, or unenforceable for any reason
whatsoever, (i) the validity, legality, and enforceability of the remaining
provisions of the Agreement (including, without limitation, all portions of any
paragraphs of this Agreement containing any such provision held to be invalid,
illegal, or unenforceable, that are not themselves invalid, illegal, or
unenforceable) shall not in any way be affected or impaired thereby, and (ii)
to the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any paragraphs of this Agreement containing
any such provision held to be invalid, illegal, or unenforceable, that are not
themselves invalid, illegal, or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable and to give effect to Section 13 hereof.


15.         Modification
and Waiver.  No supplement,
modification, or amendment of this Agreement shall be binding unless executed
in writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.


16.         Successors
and Assigns.  The terms of this
Agreement shall bind, and shall inure to the benefit of, the successors, heirs,
executors, and administrators and assigns of the parties hereto.


17.         Notice.  All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed
duly given (i) if delivered by hand and receipted for by the party addressee,
(ii) if mailed by certified or registered mail with postage prepaid, on the
third business day after the mailing date, (iii) sent by a recognized overnight
courier, on the next business day after the date on which it was so sent, or
(iv) sent by facsimile, the successful transmission and receipt of which is
confirmed in a written report. Addresses for notice to either party are as
shown on the signature page of this Agreement, or as subsequently modified by
written notice.


18.         Governing
Law.  This Agreement shall be
governed exclusively by and construed according to the laws of the State of
Delaware.


19.         Consent
to Jurisdiction.  To the fullest
extent permitted by law, the Company and the Indemnitee each hereby irrevocably
consent to the jurisdiction of the Court of Chancery of the State of Delaware
for all purposes in connection with any action or proceeding that arises out of
or relates to this Agreement.


20.         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.



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The parties hereto have entered into this Indemnity Agreement effective
as of the date first above written.


	
  

  	
  ACA CAPITAL HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for notice purposes:

  
	
   

  	
   

  	
  ACA Capital Holdings, Inc.

  
	
   

  	
   

  	
  140 Broadway, 47th Floor

  
	
   

  	
   

  	
  New York, NY 10005

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Facsimile: 212-375-2302

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address for notice purposes:

  
	
   

  	
   

  	
  [                              ]

  
	
   

  	
   

  	
  [                              ]

  
	
   

  	
   

  	
  [                              ]

  
						



 



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