Terms Agreement to Underwriting Agreement for First Horizon Asset Securities Inc. Mortgage Pass-Through Certificates Series 2005-AR4

Summary

This agreement is between First Horizon Asset Securities Inc. and Banc of America Securities LLC. It sets the terms for Banc of America Securities to purchase specific classes of mortgage pass-through certificates (Series 2005-AR4), which represent interests in pools of residential mortgage loans. The agreement details the classes, purchase prices, required credit ratings, and tax treatment of the certificates. The transaction is subject to the terms of a prior Underwriting Agreement and is effective upon signing by both parties.

EX-1.4 4 v025280_ex1-4.txt 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. Charlotte, North Carolina 4000 Horizon Way August 23, 2005 Irving, Texas 75063 Banc of America Securities LLC (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 - ----- ------- ---- ---------------- B-1 $ 7,873,000.00 Variable(1) 99.7737% B-2 $ 3,192,000.00 Variable(1) 98.6581% B-3 $ 2,127,000.00 Variable(1) 96.8220% (1) The interest rates for these classes of 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 (i) at least "AA" from Standard & Poor's, a division of The McGraw Hill Companies, Inc. ("S&P"), in the case of the Class B-1 Certificates, (ii) at least "A" from S&P, in the case of the Class B-2 Certificates, and (iii) at least "BBB" from S&P, in the case of the Class B-3 Certificates. 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 between the Underwriter and the Company. Very truly yours, BANC OF AMERICA SECURITIES 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: Alfred Chang Title: Vice President FIRST HORIZON HOME LOAN CORPORATION By: ------------------------------- Name: Terry McCoy Title: Executive Vice President