EXECUTION
FIRST HORIZON ASSET SECURITIES
INC.
MORTGAGE PASS-THROUGH
CERTIFICATES
SERIES 2006-AA8
TERMS AGREEMENT
(to Underwriting
Agreement,
dated February 24, 2006
among the Company, First
Horizon
Home Loan Corporation
and the Underwriter)
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First Horizon
Asset Securities Inc.
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New York, New York
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4000 Horizon
Way
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December 22, 2006
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Irving, Texas
75063
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Credit Suisse Securities (USA) 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 First Horizon Alternative Mortgage Securities Trust
2006-AA8, Mortgage Pass-Through Certificates, Series 2006-AA8 (the
“Series 2006-AA8 Certificates”) specified in Section
2(a) hereof (the “Offered 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-AA8
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-AA8 Certificates shall
evidence the entire beneficial ownership interest in two mortgage
pools (the “ Mortgage Pools ”) of conventional,
adjustable rate, fully amortizing, one- to four-family residential
mortgage loans (the “ Mortgage Loans ”) having
the following characteristics as of December 1, 2006 (the “
Cut-off Date ”):
(a) Aggregate Principal Amount of the Mortgage
Pool : Approximately
$262,040,607 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 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
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