EXHIBIT 1.2
FIRST HORIZON ASSET SECURITIES INC.
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-AR3
TERMS AGREEMENT
(to Purchase Agreement,
dated June 24, 2004,
between the Company and the Purchaser)
First Horizon Asset Securities Inc. June 24, 2005
0000 Xxxxxxx Xxx
Xxxxxx, Xxxxx 00000
Credit Suisse First Boston LLC (the "Purchaser") agrees, subject to the
terms and provisions herein and of the captioned Purchase Agreement (the
"Purchase Agreement"), to purchase such Classes of Series 2005-AR3 Certificates
specified in Section 2 hereof (the "Privately Offered Certificates"). This
letter supplements and modifies the Purchase Agreement solely as it relates to
the purchase and sale of the Privately Offered Certificates described below.
Capitalized terms used and not defined herein have the meanings given them in
the Purchase Agreement.
Section 1. The Mortgage Pools: The Series 2005-AR3 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 June 1, 2005 (the "Cut-off Date"):
(a) Aggregate Principal Amount of the Mortgage Pools: Approximately
$315,111,384 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 Pool I, Pool II, Pool III and Pool IV shall
be 360 months.
Section 2. The Certificates: The Privately Offered Certificates shall be
issued with the following Class designations, interest rates and principal
balances, subject 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(1) Rate(2) Price Percentage
----- ------------- -------- ----------------
B-4 $1,103,000.00 Variable 90.976370000%
B-5 $ 788,000.00 Variable 73.690310000%
B-6 $ 630,283.61 Variable 38.138100000%
----------
(1) Approximate, subject to adjustment as described in the private placement
memorandum.
(2) The pass-through rates on the Class B-4, Class B-5 and Class B-6
Certificates for each distribution date are variable and will be
calculated as described in the private placement memorandum. The initial
interest rate for these Classes of certificates for the first interest
accrual period will be approximately 5.4483% per annum.
Section 3. Purchase Price: The Purchase Price for each Class of the
Privately Offered Certificates shall be the Class Purchase Price Percentage
therefor (as set forth in Section 2 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, June 30, 2005 (the "Closing Date").
Section 4. Required Ratings: The Privately Offered Certificates shall have
received Required Ratings of (i) at least "BB" from Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc. ("S&P"), in the case of
the Class B-4 Certificates and (ii) at least "B" from S&P, in the case of the
Class B-5 Certificates. The Class B-6 Certificates shall not be rated.
Section 5. Tax Treatment: One or more elections will be made to treat the
assets of the Trust Fund as a REMIC.
Section 6. Rule 144A Resales: The Purchaser agrees that it will resell or
otherwise transfer the Privately Offered Certificates only to institutional
purchasers which the Purchaser reasonably believes are "qualified institutional
buyers" as provided by Rule 144A under the Act.
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 Purchaser and the Company.
Very truly yours,
CREDIT SUISSE FIRST BOSTON LLC
By:_________________________________
Name:
Title:
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
