Terms Agreement to Underwriting Agreement for First Horizon Asset Securities Inc. Mortgage Pass-Through Certificates Series 2005-FA10

Summary

This agreement is between First Horizon Asset Securities Inc. and Citigroup Global Markets Inc. It sets the terms for Citigroup to purchase specific classes of mortgage pass-through certificates backed by residential mortgage loans, with a total principal amount of about $474 million. The agreement details the classes, interest rates, purchase prices, and required credit ratings for the certificates. The certificates are registered with the SEC and will be treated as REMICs for tax purposes. The agreement is effective upon signing by both parties.

EX-1.3 2 v031044_ex1-3.txt EXECUTION FIRST HORIZON ASSET SECURITIES INC. MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2005-FA10 TERMS AGREEMENT (to Underwriting Agreement, Dated August 24, 2005 between the Company and the Underwriter) First Horizon Asset Securities Inc. New York, New York 4000 Horizon Way November 28, 2005 Irving, Texas 75063 Citigroup Global Markets 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 Alternative Mortgage Securities Trust 2005-FA10, Mortgage Pass-Through Certificates, Series 2005-FA10 Certificates (the "Series 2005-FA10 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-FA10 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-FA10 Certificates shall evidence the entire beneficial ownership interest in two pools (the "Mortgage Pools") of conventional, fixed rate, first lien, fully amortizing, one- to four-family residential mortgage loans (the "Mortgage Loans") having the following characteristics as of November 1, 2005 (the "Cut-off Date"): (a) Aggregate Principal Amount of the Mortgage Pools: Approximately $474,015,504.66 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 shall range from 240 to 360 months. The original term to maturity of each Mortgage Loan included in Pool II shall range from 120 to 180 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%: 1 Class Principal Balance or Notional Interest Class Purchase Class Amount Rate Price Percentage ----- ------ ---- ---------------- I-A-1 $ 64,500,000.00 Variable(1) 98 ###-###-####% I-A-2 $254,993,215.00(2) Variable(1) 98 ###-###-####% I-A-3A $ 11,860,000.00 5.500% 98 ###-###-####% I-A-3B $ 725,000.00 5.500% 98 ###-###-####% I-A-4A $ 39,610,000.00 5.500% 98 ###-###-####% I-A-4B $ 2,421,000.00 5.500% 98 ###-###-####% I-A-5 $103,557,000.00 5.500% 98 ###-###-####% I-A-6 $ 6,328,785.00 5.500% 98 ###-###-####% I-A-7 $190,493,215.00 Variable(1) 98 ###-###-####% I-A-8 $ 64,500,000.00(3) Variable(1) 98 ###-###-####% I-A-R $ 100.00 5.500% 98 ###-###-####% II-A-1 $ 32,193,000.00 5.250% 98.750000000% --------- (1) The interest rates for these classes of Offered Certificates are variable and will be calculated as described in the Prospectus Supplement. (2) The Class I-A-2 Certificates will have a notional amount equal to the aggregate class principal balance of the Class I-A-1 and Class I-A-7 Certificates, as described in the Prospectus Supplement. (3) The Class A-8 Certificates will have a notional amount equal to the principal balance of the Class A-1 Certificates, 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 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, November 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 McGraw-Hill Companies, Inc. and "Aaa" by Moody's Investors Service, Inc. 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, CITIGROUP GLOBAL MARKETS INC. 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