FIRST HORIZON ASSET SECURITIES INC. MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2006-AR3 TERMS AGREEMENT (to Underwriting Agreement, dated September 26, 2006 among the Company, First Horizon Home Loan Corporation and the Underwriter)
FIRST
HORIZON ASSET SECURITIES INC.
MORTGAGE
PASS-THROUGH CERTIFICATES
SERIES
2006-AR3
(to
Underwriting Agreement,
dated
September 26, 2006
among
the
Company, First Horizon
Home
Loan
Corporation
and
the
Underwriter)
|
First
Horizon Asset Securities Inc.
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New
York, New York
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|
4000
Horizon Way
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September
26, 2006
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▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
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HSBC
Securities (USA) Inc. (the “Underwriter”) agrees, subject to the terms and
provisions herein and of the captioned Underwriting Agreement (the "Underwriting
Agreement"), to purchase such Classes of First Horizon Mortgage Pass-Through
Trust 2006-AR3, Mortgage Pass-Through Certificates, Series 2006-AR3 (“Series
2006-AR3 Certificates”) specified in Section 2(a) hereof (the “Offered
Certificates”). This letter supplements and modifies the Underwriting Agreement
solely as it relates to the purchase and sale of the Offered Certificates
described below. The Series 2006-AR3 Certificates are registered with the
Securities and Exchange Commission by means of an effective Registration
Statement (No. 333-132046). Capitalized terms used and not defined herein have
the meanings given them in the Underwriting Agreement.
Section
1. The
Mortgage Pools:
The
Series 2006-AR3 Certificates shall evidence the entire beneficial ownership
interest in three mortgage pools (the “Mortgage Pools”) of primarily 30-year
adjustable rate, first lien, fully amortizing, one- to four-family residential
mortgage loans (the “Mortgage Loans”) having the following characteristics as of
September 1, 2006 (the “Cut-off Date”):
(a) Aggregate
Principal Amount of the Mortgage Pools:
Approximately $229,899,485 aggregate principal balance as of the Cut-off Date,
subject to an upward or downward variance of up to 5%, the precise aggregate
principal balance to be determined by the Company.
(b) Original
Terms to Maturity:
The
original term to maturity of each Mortgage Loan included in the Mortgage Pools
shall be (i) between 353 and 360 months, in the case of Pool I, and (ii) between
357 and 360 months, in the case of Pool II and Pool III.
Section
2. The
Certificates:
The
Offered Certificates shall be issued as follows:
(a) Classes:
The
Offered Certificates shall be issued with the following Class designations,
pass-through rates and principal balances, subject in the aggregate to the
variance referred to in Section 1(a) and, as to any particular Class, to an
upward or downward variance of up to 5%:
|
Class
|
Class
Principal
Balance
|
Pass-Through
Rate
|
Class
Purchase
Price
Percentage
|
|
I-A-1
|
$
164,325,000.00
|
Variable(1)
|
100.878906250%
|
|
I-A-2
|
$
6,847,000.00
|
Variable(1)
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100.878906250%
|
|
I-A-IO
|
$
164,325,000.00(2)
|
0.50%
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N/A
|
|
I-A-R
|
$
100.00
|
Variable(1)
|
100.878906250%
|
|
II-A-1
|
$
26,069,000.00
|
Variable(1)
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100.835937500%
|
|
III-A-1
|
$
23,462,000.00
|
Variable(1)
|
100.601562500%
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_________
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(1)
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The
pass-through rates for these classes of Certificates are variable
and will
be calculated as described in the Prospectus Supplement.
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(2)
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Notional
amount.
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(b) The
Offered Certificates shall have such other characteristics as described in
the
related Prospectus.
Section
3. Purchase
Price:
The
Purchase Price for each Class of the Offered Certificates shall be the Class
Purchase Price Percentage therefor (as set forth in Section 2(a) above) of
the
initial Class Principal Balance thereof plus accrued interest at per annum
initial interest rate applicable thereto from and including the Cut-off Date
up
to, but not including, September 29, 2006 (the “Closing Date”).
Section
4. Required
Ratings:
The
Offered Certificates shall have received Required Ratings of at least “AAA” from
each of Fitch, Inc. (“Fitch”) and Standard and Poor’s, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. (“S&P”).
Section
5. Tax
Treatment:
One or
more elections will be made to treat the assets of the Trust Fund as a REMIC.
If
the
foregoing is in accordance with your understanding of our agreement, please
sign
and return to the undersigned a counterpart hereof, whereupon this letter and
your acceptance shall represent a binding agreement among the Underwriter,
First
Horizon Home Loan Corporation and the Company.
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Very
truly yours,
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HSBC
SECURITIES (USA) INC.
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|
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By:
______________________________
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|
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Name:
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Title:
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The
foregoing Agreement is
hereby
confirmed and accepted
as
of the
date first above written.
FIRST
HORIZON ASSET SECURITIES INC.
By:
______________________________
Name:
▇▇▇▇▇▇ ▇▇▇▇▇
Title:
Vice President
FIRST
HORIZON HOME LOAN CORPORATION
By:
______________________________
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Executive Vice President