EXECUTION
FIRST HORIZON ASSET SECURITIES INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2005-AR4
TERMS AGREEMENT
(to Underwriting Agreement,
dated August 23, 2005
between the Company and the Underwriter)
First Horizon Asset Securities Inc. Memphis, Tennessee
0000 Xxxxxxx Xxx Xxxxxx 00,0000
Xxxxxx, Xxxxx 00000
FTN Financial Capital Markets, a division of First Tennessee Bank National
Association (the "Underwriter") agrees, subject to the terms and provisions
herein and of the captioned Underwriting Agreement (the "Underwriting
Agreement"), to purchase such Classes of Series 2005-AR4 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 2005-AR4
Certificates are registered with the Securities and Exchange Commission by means
of an effective Registration Statement (No. 333-125158). Capitalized terms used
and not defined herein have the meanings given them in the Underwriting
Agreement.
Section 1. The Mortgage Pools: The Series 2005-AR4 Certificates shall
evidence the entire beneficial ownership interest in four 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 August 1, 2005 (the "Cut-off Date"):
(a) Aggregate Principal Amount of the Mortgage Pools: Approximately
$425,564,710 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 Term to Maturity: The original term to maturity of each
Mortgage Loan included in Pool I, Pool II, Pool III and Pool IV shall be 360
months.
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, interest 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%:
Principal Interest Class Purchase
Class Balance Rate Price Percentage
----- -------- ---- ----------------
I-A-1 $ 29,815,000.00 Variable(1) 100.770100000%
I-A-2 $ 1,193,000.00 Variable(1) 100.770100000%
II-A-1 $ 216,122,000.00 Variable(1) 100.846500000%
II-A-R $ 100.00 Variable(1) 100.846500000%
III-A-1 $ 54,803,000.00 Variable(1) 100.754400000%
IV-A-1 $ 54,608,000.00 Variable(1) 100.605468750%
IV-A-2 $ 50,000,000.00 Variable(1) 100.605468750%
IV-A-3 $ 2,000,000.00 Variable(1) 100.605468750%
(1) The interest rates for the Offered Certificates are variable and will be
calculated as described in the Prospectus Supplement.
(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 Certificate Principal
Balance thereof plus accrued interest at the per annum initial interest rate
applicable thereto from and including the Cut-off Date up to, but not including,
August 30, 2005 (the "Closing Date").
Section 4. Required Ratings: The Offered Certificates shall have received
Required Ratings of at least "AAA" from Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc. ("S&P") and "AAA" from Fitch Ratings, in the case of
the Class I-A-1, Class I-A-2, Class II-A-1, Class II-A-R, Class III-A-1, Class
IV-A-1, Class IV-A-2 and Class IV-A-3 Certificates.
Section 5. Tax Treatment: One or more elections will be made to treat the
assets of the Trust Fund as a REMIC.
2
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
between the Underwriter and the Company.
Very truly yours,
FTN FINANCIAL CAPITAL MARKETS, a
division of First Tennessee
Bank National Association
By:
-----------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
The foregoing Agreement is
hereby confirmed and
accepted as of the date
first above written.
FIRST HORIZON ASSET SECURITIES INC.
By:
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
FIRST HORIZON HOME LOAN CORPORATION
By:
-----------------------------------
Name: Xxxxx XxXxx
Title: Executive Vice President
