FIRST HORIZON ASSET SECURITIES INC.
Depositor
FIRST HORIZON HOME LOAN CORPORATION
Master Servicer
and
THE BANK OF NEW YORK
Trustee
-----------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2005
-----------------------------------------------------
FIRST HORIZON ALTERNATIVE MORTGAGE SECURITIES TRUST 2005-FA6
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-FA6
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iii
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS.............................................................................................2
ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND
WARRANTIES..........................................2
SECTION 2.1 Conveyance of
Mortgage
Loans.......................................................................2
SECTION 2.2 Acceptance by
Trustee of the Mortgage
Loans........................................................2
SECTION 2.3 Representations
and Warranties of the Master Servicer; Covenants of the
Seller....................2
SECTION 2.4 Representations
and Warranties of the Depositor as to the Mortgage
Loans...........................2
SECTION 2.5 Delivery of
Opinion of Counsel in Connection with
Substitutions....................................2
SECTION 2.6 Execution and
Delivery of
Certificates.............................................................2
SECTION 2.7 REMIC
Matters......................................................................................2
SECTION 2.8 Covenants of the
Master
Servicer...................................................................2
ARTICLE III ADMINISTRATION AND SERVICING OF
MORTGAGE
LOANS........................................................2
SECTION 3.1 Master Servicer
to Service Mortgage
Loans..........................................................2
SECTION 3.2 Subservicing;
Enforcement of the Obligations of
Servicers..........................................2
SECTION 3.3 Rights of the
Depositor and the Trustee in Respect of the Master
Servicer..........................2
SECTION 3.4 Trustee to Act
as Master
Servicer..................................................................2
SECTION 3.5 Collection of
Mortgage Loan Payments; Certificate Account; Distribution
Account....................2
SECTION 3.6 Collection of
Taxes, Assessments and Similar Items; Escrow
Accounts................................2
SECTION 3.7 Access to
Certain Documentation and Information Regarding the Mortgage
Loans.......................2
SECTION 3.8 Permitted
Withdrawals from the Certificate Account and Distribution
Account........................2
SECTION 3.9 Maintenance of
Hazard Insurance; Maintenance of Primary Insurance
Policies.........................2
SECTION 3.10 Enforcement of
Due-on-Sale Clauses; Assumption
Agreements.........................................2
SECTION 3.11 Realization
Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
Loans...................2
SECTION 3.12 Trustee to
Cooperate; Release of Mortgage
Files...................................................2
SECTION 3.13 Documents
Records and Funds in Possession of Master Servicer to be Held for
the Trustee...........2
SECTION 3.14 Master
Servicing
Compensation.....................................................................2
SECTION 3.15 Access to
Certain
Documentation...................................................................2
SECTION 3.16 Annual
Statement as to
Compliance.................................................................2
SECTION 3.17 Annual
Independent Public Accountants' Servicing Statement; Financial
Statements..................2
SECTION 3.18 Errors and
Omissions Insurance; Fidelity
Bonds....................................................2
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY
THE MASTER
SERVICER......................................................2
SECTION 4.1
Advances...........................................................................................2
SECTION 4.2 Priorities of
Distribution.........................................................................2
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SECTION 4.3 Method of
Distribution.............................................................................2
SECTION 4.4 Allocation of
Losses...............................................................................2
SECTION 4.5
Reserved...........................................................................................2
SECTION 4.6 Monthly
Statements to
Certificateholders...........................................................2
SECTION 4.7 Corridor Reserve
Fund..............................................................................2
SECTION 4.8 Separate
Interest
Trust............................................................................2
SECTION 4.9 Determination of
Pass-Through Rates for LIBOR
Certificates.........................................2
ARTICLE V THE
CERTIFICATES........................................................................................2
SECTION 5.1 The
Certificates...................................................................................2
SECTION 5.2 Certificate
Register; Registration of Transfer and Exchange of
Certificates........................2
SECTION 5.3 Mutilated,
Destroyed, Lost or Stolen
Certificates..................................................2
SECTION 5.4 Persons Deemed
Owners..............................................................................2
SECTION 5.5 Access to List
of Certificateholders' Names and
Addresses..........................................2
SECTION 5.6 Maintenance of
Office or
Agency....................................................................2
ARTICLE VI THE DEPOSITOR AND THE MASTER
SERVICER..................................................................2
SECTION 6.1 Respective
Liabilities of the Depositor and the Master
Servicer....................................2
SECTION 6.2 Merger or
Consolidation of the Depositor or the Master
Servicer....................................2
SECTION 6.3 Limitation on
Liability of the Depositor, the Master Servicer and
Others...........................2
SECTION 6.4 Limitation on
Resignation of Master
Servicer.......................................................2
ARTICLE VII
DEFAULT...............................................................................................2
SECTION 7.1 Events of
Default..................................................................................2
SECTION 7.2 Trustee to Act;
Appointment of
Successor...........................................................2
SECTION 7.3 Notification to
Certificateholders.................................................................2
ARTICLE VIII CONCERNING THE
TRUSTEE...............................................................................2
SECTION 8.1 Duties of
Trustee..................................................................................2
SECTION 8.2 Certain Matters
Affecting the
Trustee..............................................................2
SECTION 8.3 Trustee Not
Liable for Certificates or Mortgage
Loans..............................................2
SECTION 8.4 Trustee May Own
Certificates.......................................................................2
SECTION 8.5 Trustee's Fees
and
Expenses........................................................................2
SECTION 8.6 Eligibility
Requirements for
Trustee...............................................................2
SECTION 8.7 Resignation and
Removal of
Trustee.................................................................2
SECTION 8.8 Successor
Trustee..................................................................................2
SECTION 8.9 Merger or
Consolidation of
Trustee.................................................................2
SECTION 8.10 Appointment of
Co-Trustee or Separate
Trustee.....................................................2
SECTION 8.11 Tax
Matters.......................................................................................2
SECTION 8.12 Periodic
Filings..................................................................................2
ARTICLE IX
TERMINATION............................................................................................2
SECTION 9.1 Termination upon
Liquidation or Purchase of all Mortgage
Loans.....................................2
SECTION 9.2 Final
Distribution on the
Certificates.............................................................2
SECTION 9.3 Additional
Termination
Requirements................................................................2
ARTICLE X
[RESERVED]..............................................................................................2
ARTICLE XI MISCELLANEOUS
PROVISIONS...............................................................................2
SECTION 11.1
Amendment.........................................................................................2
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SECTION 11.2 Recordation of
Agreement;
Counterparts............................................................2
SECTION 11.3 Governing
Law.....................................................................................2
SECTION 11.4 Intention of
Parties..............................................................................2
SECTION 11.5
Notices...........................................................................................2
SECTION 11.6 Severability of
Provisions........................................................................2
SECTION 11.7
Assignment........................................................................................2
SECTION 11.8 Limitation on
Rights of
Certificateholders........................................................2
SECTION 11.9 Inspection and
Audit
Rights.......................................................................2
SECTION 11.10 Certificates
Nonassessable and Fully
Paid........................................................2
SECTION 11.11 Limitations on
Actions; No
Proceedings...........................................................2
SECTION 11.12 Acknowledgment
of
Seller.........................................................................2
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SCHEDULES
Schedule I:
Mortgage Loan Schedule
S-I-1
Schedule II:
Representations and Warranties of the Master Servicer
S-II-1
Schedule III:
Form of Monthly Master Servicer Report
S-III-1
EXHIBITS
Exhibit A-1:
Form of Senior Certificate
A-1-1
Exhibit A-2:
Form of Senior Certificate/Class A-PO
A-2-1
Exhibit B:
Form of Subordinated Certificate
B-1
Exhibit C:
Form of Residual Certificate
C-1
Exhibit D:
Form of Reverse of Certificates
D-1
Exhibit E:
Form of Initial Certification
E-1
Exhibit F:
Form of Delay Delivery Certification
F-1
Exhibit G:
Form of Subsequent Certification of Custodian
G-1
Exhibit H:
Transfer Affidavit
H-1
Exhibit I:
Form of Transferor Certificate
I-1
Exhibit J:
Form of
Investment Letter [Non-Rule 144A]
J-1
Exhibit K:
Form of Rule 144A Letter
K-1
Exhibit L:
Request for Release (for Trustee)
L-1
Exhibit M:
Request for Release (Mortgage Loan)
M-1
</TABLE>
iii
<PAGE>
THIS POOLING AND
SERVICING AGREEMENT,
dated as of July 1,
2005, among
FIRST HORIZON ASSET SECURITIES INC., a
Delaware corporation,
as depositor (the
"Depositor"), FIRST HORIZON HOME LOAN
CORPORATION,
a Kansas corporation, as
master servicer (the "Master Servicer"), and THE BANK OF NEW YORK, a
banking
corporation organized under the laws of the State of New
York, as trustee (the
"Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the
parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal
income
tax purposes will consist of two separate REMICs. The Certificates will
represent the entire beneficial ownership interest in the Trust Fund. The
Regular Certificates will represent
"regular interests" in the Upper REMIC. The
Class A-R Certificates will represent the
residual interests in
the Lower REMIC
and Upper REMIC, as described in Section 2.7. The "latest possible maturity
date" for federal income tax purposes of all REMIC
regular interests created
hereby will be the Latest Possible Maturity
Date.
The following table
sets forth
characteristics of the
Certificates,
together with the minimum denominations and
integral multiples in excess thereof
in which such Classes shall be issuable (except that one Certificate of each
Class of Certificates may be issued in a
different amount and, in addition, one
Residual Certificate representing the Tax Matters Person
Certificate
may be
issued in a different amount):
[Remainder of Page Intentionally Left Blank]
1
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<TABLE>
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Initial Class
Minimum
Integral Multiples
Class Designation
Certificate Balance
Pass-Through Rate
Denominations in
Excess Minimum
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Class A-1
$
25,000,000.00
variable (1)
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-2
(2)
variable (3)
$
500,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-3
$
7,895,000.00
5.500%
$
1,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-4
$
20,264,000.00
5.500%
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-5
$
2,148,000.00
5.500%
$
1,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-6
$
47,230,000.00
5.500%
$
1,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-7
$
8,265,000.00
5.500%
$
1,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-8
$ 100,025,000.00
variable (4)
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-9
(5)
variable (6)
$
500,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-10
$
1,913,000.00
5.500%
$
1,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-11
$
1,123,000.00
5.500%
$
1,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-PO
$
495,116.64
(7)
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class A-R
$
100.00
5.500%
$
100
N/A
--------------------------------------------------------------------------------------------------------------------
Class B-1
$
4,613,000.00
5.500%
$
100,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class B-2
$
2,138,000.00
5.500%
$
100,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class B-3
$
1,238,000.00
5.500%
$
100,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class B-4
$
1,238,000.00
5.500%
$
100,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class B-5
$
900,000.00
5.500%
$
100,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class B-6
$
563,513.00
5.500%
$
100,000
$
1,000
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</TABLE>
(1) The Pass-Through Rate with respect to any
Distribution
Date for the Class
A-1 Certificates is the per annum rate equal to (a)
3.80% with respect to
the
first Distribution Date, and (b)
thereafter, the lesser
of (i) LIBOR plus 0.35%
and (ii) 5.50%, subject to a minimum rate
of 0.35%.
(2) The Class A-2 Certificates are Notional
Amount Certificates
and will accrue
interest during each Interest Accrual Period on a Notional
Amount equal to the
Class Certificate Balance of the Class A-1
Certificates.
The initial
Notional
Amount of the Class A-2 Certificates will
be $25,000,000.
(3) The Pass-Through Rate with respect to any
Distribution
Date for the Class
A-2 Certificates is the per annum rate equal to (a)
1.70% with respect to
the
first Distribution Date, and (b)
thereafter, the lesser of (i) 5.15% minus LIBOR
and (ii) 5.15%, subject to a minimum rate
of 0.00%.
(4) The Pass-Through Rate with respect to any
Distribution
Date for the Class
A-8 Certificates is the per annum rate equal to (a)
3.95% with respect to
the
first Distribution Date, and (b)
thereafter, the lesser
of (i) LIBOR plus 0.50%
and (ii) 5.50%, subject to a minimum rate
of 0.50%.
(5) The Class A-9 Certificates are Notional
Amount Certificates
and will accrue
interest during each Interest Accrual Period on a Notional
Amount equal to the
Class Certificate Balance of the Class A-8
Certificates.
The initial
Notional
Amount of the Class A-9 Certificates will
be $100,025,000.
2
<PAGE>
(6) The Pass-Through Rate with respect to any
Distribution
Date for the Class
A-9 Certificates is the per annum rate equal to (a)
1.55% with respect to
the
first Distribution Date, and (b)
thereafter, the lesser of (i) 5.00% minus LIBOR
and (ii) 5.00%, subject to a minimum rate
of 0.00%.
(7) The Class A-PO Certificates will be
Principal Only Certificates and will not
accrue interest.
3
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Accretion Directed Certificates.......
The
Class A-1, Class A-3, Class A-6, Class A-7, Class A-8 and Class
A-10
Certificates.
Accrual Certificates..................
The
Class A-5 and Class A-10 Certificates.
Accrual Components....................
None.
Book-Entry Certificates...............
All
Classes of Certificates other than the Physical Certificates.
COFI Certificates.....................
None.
Component Certificates................
None.
Components............................
None.
Delay Certificates....................
All
interest-bearing Classes of Certificates other than the
Non-Delay
Certificates, if any.
ERISA-Restricted Certificates.........
The
Residual Certificates, Private Certificates and
Certificates of any Class that no longer satisfy the applicable
rating
requirement of the Underwriters' Exemption.
Floating Rate Certificates............
The
Class A-1 and Class A-8 Certificates.
Inverse Floating Rate Certificates....
The
Class A-2 and Class A-9 Certificates.
LIBOR Certificates....................
The
Class A-1, Class A-2, Class A-8 and Class A-9 Certificates.
NAS Certificates......................
The Class A-4, Class
A-7 and Class A-11 Certificates.
Non-Delay Certificates................
The
LIBOR Certificates.
Notional Amount Certificates..........
The
Class A-2 and Class A-9 Certificates.
Offered Certificates..................
All
Classes of Certificates other than the Private Certificates.
Physical Certificates.................
The
Principal Only Certificates, the Residual Certificates and the
Private Certificates.
Planned Principal Classes.............
None.
Principal Only Certificates...........
The
Class A-PO Certificates.
Private Certificates..................
The
Class A-PO, Class B-4, Class B-5 and Class B-6 Certificates.
Rating Agencies.......................
S&P and Moody's; except that, for purposes of the Class B-1,
Class B-2,
Class B-3,
Class B-4 and Class B-5 Certificates,
S&P shall be the sole
Rating Agency.
The
Class
B-6 Certificates
will not be rated.
Regular Certificates..................
All
Classes of Certificates, other than the Residual Certificates.
Residual Certificates.................
The
Class A-R Certificates.
Retail/Lottery Certificates...........
None.
Scheduled Certificates................
None.
4
<PAGE>
Senior Certificates...................
The
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6,
Class A-7,
Class A-8, Class A-9, Class A-10, Class A-11, Class A-PO
and Class
A-R
Certificates, collectively.
Senior Mezzanine Certificates.........
The
Class A-11 Certificates.
Subordinated Certificates.............
The
Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class
B-6
Certificates.
Super Senior Certificates.............
The
Class A-4 Certificates.
Support Classes.......................
None.
Targeted Principal Classes............
None.
Underwriters..........................
Deutsche Bank Securities Inc. and Bear, Stearns & Co. Inc.
</TABLE>
With respect
to any of the
foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect,
and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such
designations and
amounts. Defined
terms
and provisions herein relating to statistical
rating agencies not designated
above as Rating Agencies shall be of no
force or effect.
5
<PAGE>
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases,
unless the context otherwise requires,
shall have the following meanings:
Accretion Directed Certificates: As specified in the
Preliminary
Statement.
Accretion Termination Date: For the Accrual Certificates, the earlier
of (x) the Cross-over Date and (y) the
Distribution Date on
which (i) the Class
Certificate Balances of the Class A-8
Certificates has been reduced to zero (in
the case of the Class A-10 Certificates),
or (ii) the Class Certificate Balances
of the Class A-1, Class A-3, Class A-6, Class A-7, Class A-8 and Class A-10
Certificates have each been reduced to zero (in the case of the
Class A-5
Certificates).
Accrual Amount:
For each Distribution Date through the applicable
Accretion Termination Date and each Class of Accrual
Certificates,
an amount
equal to the sum of (a) Accrued Certificate
Interest in respect of such Class of
Accrual Certificates in accordance
with clause (i) of
Section 4.2(a), and
(b)
amounts allocable to such Class of Accrual
Certificates
in accordance with
clause (ii) of Section 4.2(a), in each case
on such Distribution Date.
Accrual Certificates:
As specified in the Preliminary Statement.
Accrued Certificate Interest: For any Class of Certificates
entitled to
distributions or accrual of interest for any
Distribution
Date, the interest
accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the Class Certificate Balance (or Notional Amount, in
the
case of the Notional Amount Certificates) of such Class of Certificates
immediately prior to such Distribution Date, less such Class' share of
any Net
Interest Shortfall, allocable among the outstanding Classes of Certificates
based on the Accrued Certificate Interest
otherwise distributable thereto.
Adjusted Mortgage
Rate: As to each Mortgage Loan, and at any time, the
per annum rate equal to the Mortgage Rate
less the Master Servicing Fee Rate.
Adjusted Net Mortgage
Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage
Rate less the related Expense Fee Rate.
Advance: The payment
required to be made by
the Master Servicer
with
respect to any Distribution Date pursuant
to Section 4.1, the amount of any such
payment being equal to the aggregate of
payments of principal and interest (net
of the Master Servicing Fee and net of any net
income in the case of
any REO
Property) on the Mortgage Loans that were due on the related
Due Date and not
received as of the close of business on the
related Determination Date, less the
aggregate amount of any such delinquent payments that the Master Servicer
has
determined would constitute a
Nonrecoverable Advance if advanced.
Agreement: This Pooling and Servicing Agreement and all amendments
or
supplements hereto.
6
<PAGE>
Allocable Share: With respect to any Class of Subordinated
Certificates
on any Distribution Date, such Class' pro rata share (based on the Class
Certificate Balance of each Class entitled
thereto) of each of the components of
the Subordinated Optimal Principal Amount;
provided that, solely for purposes of
this definition, the applicable Subordinated Optimal Principal Amount will
be
reduced by the amounts required to be
distributed to the Class A-PO Certificates
in respect of the applicable Class A-PO Deferred Amount on such Distribution
Date, and any such reduction in the
Subordinate Optimal
Principal Amount
shall
reduce the amounts calculated pursuant to clauses (1), (4), (2),
(3) and (5) of
the definition thereof, in that order, and the Class
Certificate
Balances of
each Class of Subordinated Certificates will be reduced by such amounts in
reverse order of priority until the
respective
Class Certificate Balances of
each Class of Subordinated Certificates has been reduced to zero; provided
further that, except as provided in this
Agreement, no Subordinated Certificates
(other than the Class of Subordinated
Certificates with the
highest priority of
distribution) shall be entitled on any Distribution Date to receive
distributions pursuant to clauses (2), (3) and (5) of the definition of
Subordinated Optimal Principal Amount unless
the Class Prepayment
Distribution
Trigger for such Class is satisfied for
such Distribution Date.
Alternative Title
Product: Any one of the following: (i) Lien
Protection Insurance issued by Integrated Loan Services or ATM Corporation
of
America, (ii) a Mortgage Lien Report issued
by EPN
Solutions/ACRAnet,
(iii) a
Property Plus Report issued by Rapid Refinance Service through
SharperLending.com, or (iv) such other alternative
title insurance product that
the Seller utilizes in connection with its
then current underwriting criteria.
Amount Held for Future
Distribution: As to
any Distribution Date, the
aggregate amount held in the Certificate
Account at the close of business on the
related Determination Date on account of (i)
Principal Prepayments received
after the related Prepayment Period and Liquidation
Proceeds received in the
month of such Distribution Date and (ii) all Scheduled
Payments due after
the
related Due Date.
Appraised Value: With respect to any Mortgage Loan, the Appraised
Value
of the related Mortgaged Property shall be: (i) with
respect to a Mortgage Loan
other than a Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged Property based upon the appraisal
made at the time of the origination
of such Mortgage Loan and (b) the sales price of
the Mortgaged Property
at the
time of the origination of such Mortgage Loan; (ii) with respect to a
Refinancing Mortgage Loan other than a
Streamlined
Documentation Mortgage Loan,
the value of the Mortgaged Property based
upon the appraisal made at the time of
the origination of such Refinancing Mortgage Loan; and (iii) with
respect to a
Streamlined Documentation Mortgage Loan, (a) if the
loan-to-value
ratio with
respect to the Original Mortgage Loan at
the time of the origination thereof was
90% or less, the value of the Mortgaged
Property based upon
the appraisal made
at the time of the origination of the Original Mortgage Loan and (b) if the
loan-to-value ratio with respect to the Original
Mortgage Loan at the time of
the origination thereof was greater than 90%, the value of the Mortgaged
Property based upon the appraisal
(which may be a
drive-by appraisal)
made at
the time of the origination of such
Streamlined Documentation Mortgage Loan.
Available Funds: With respect to any Distribution Date, an amount
equal
to the sum of:
7
<PAGE>
(a) all
scheduled installments of interest, net of the Master
Servicing Fee,
the Trustee Fee and any amounts due to First
Horizon in respect of
the Retained
Yield on such
Distribution
Date, and all scheduled installments of principal due in
respect
of the Mortgage
Loans on the Due Date
in the month in which the
Distribution
Date occurs
and received before the related
Determination
Date, together
with any Advances in respect
thereof;
(b) all
Insurance Proceeds,
Liquidation
Proceeds and
Unanticipated
Recoveries received in
respect of the Mortgage Loans during the
calendar month before the Distribution Date, which in each case
is net of unreimbursed
expenses incurred in connection
with a
liquidation or foreclosure and unreimbursed Advances, if any;
(c) all
Principal Prepayments received in respect of the
Mortgage
Loans during
the related Prepayment Period, plus interest
received thereon, net of any Prepayment Interest Excess;
(d) any
Compensating Interest
in respect of Principal Prepayments in
Full received in respect of the Mortgage Loans during the
related
Prepayment Period; and
(e) any
Substitution
Adjustment Amount or the Purchase Price for any
Deleted Mortgage
Loan or a Mortgage Loan repurchased by the
Seller or the
Master Servicer as of such Distribution Date,
reduced by amounts in reimbursement for Advances previously made
and other amounts
that the Master
Servicer is entitled to be
reimbursed for out of the Certificate Account pursuant to this
Agreement.
Bankruptcy Code: The
United States
Bankruptcy Reform Act
of 1978, as
amended.
Bankruptcy Coverage
Termination Date: The date on which the Bankruptcy
Loss Coverage Amount is reduced to
zero.
Bankruptcy Loss:
With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction;
provided, however, that a Bankruptcy
Loss
shall not be deemed a Bankruptcy
Loss hereunder so long
as the Master
Servicer
has notified the Trustee in writing
that the Master
Servicer is diligently
pursuing any remedies that may exist in connection with the related Mortgage
Loan and either (A) the related
Mortgage Loan is not in default with regard
to
payments due thereunder or (B) delinquent payments of principal and
interest
under the related Mortgage Loan and any related
escrow payments in respect of
such Mortgage Loan are being advanced on a
current basis by the Master Servicer,
in either case without giving effect to any
Debt Service Reduction
or Deficient
Valuation.
Bankruptcy Loss
Coverage Amount:
As of any Determination Date, the
Bankruptcy Loss Coverage Amount shall equal the Initial
Bankruptcy
Coverage
Amount as reduced by (i) the aggregate
amount of Bankruptcy
Losses allocated to
the Certificates since the Cut-off Date and (ii)
any permissible
reductions in
the Bankruptcy Loss Coverage Amount as evidenced by a letter of each
Rating
Agency to the Trustee to the effect that
any such reduction will not result in a
downgrading of the then current ratings
assigned to the
Classes of Certificates
rated by it. As of any Distribution Date on or after the Cross-over
Date, the
Bankruptcy Loss Coverage Amount will be
zero.
8
<PAGE>
Blanket Mortgage: The mortgage or mortgages encumbering the
Cooperative
Property.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) a Saturday or a Sunday,
or (ii) a
day on which banking institutions in the City of
Dallas, or the State
of Texas
or the city in which the Corporate Trust Office of the Trustee is located
are
authorized or obligated by law or executive
order to be closed.
Certificate: Any one
of the Certificates
executed by the Trustee in
substantially the forms attached hereto as
exhibits.
Certificate
Account: The
separate Eligible Account created and
maintained by the Master Servicer pursuant to Section 3.5 with a depository
institution in the name of the Master
Servicer for the benefit of the Trustee on
behalf of Certificateholders and designated
"First Horizon Home Loan Corporation
in trust for the registered holders of First Horizon Asset Securities Inc.
Mortgage Pass-Through Certificates, Series
2005-FA6."
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
who is the beneficial owner of such
Book-Entry Certificate.
Certificate Principal
Balance: With respect
to any Certificate and as
of any Distribution Date, the Certificate Principal Balance on the date of
the
initial issuance of such Certificate, as
reduced by:
(a) all amounts
distributed on
previous Distribution
Dates on such
Certificate on account of principal,
(b) the
principal portion of all Realized Losses previously allocated
to such Certificate, and
(c) in the case
of a Subordinated Certificate, such Certificate's pro
rata share, if any, of
the Subordinated
Certificate
Writedown
Amount for previous Distribution Dates.
Certificate Register:
The register
maintained pursuant to Section 5.2
hereof.
Certificateholder or
Holder: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the
purpose of
giving any consent pursuant to this
Agreement, any Certificate registered in the
name of the Depositor or the Seller or any
affiliate or agent of
the Depositor
or the Seller shall be deemed not to be
Outstanding and the Percentage Interest
evidenced thereby shall not be taken into account in
determining
whether the
requisite amount of Percentage Interests necessary to effect such consent
has
been obtained; provided, however, that if any such Person (including the
Depositor) owns 100% of the Percentage Interests evidenced by a Class of
Certificates, such Certificates shall be deemed to be Outstanding
for purposes
of any provision hereof that requires the
consent of the Holders of Certificates
of a particular Class as a condition to the
taking of any action hereunder. The
Trustee is entitled to rely conclusively on a certification of
the Depositor or
any affiliate of the Depositor in
determining which
Certificates are registered
in the name of an affiliate of the
Depositor.
9
<PAGE>
Class: All Certificates bearing the same class designation as set
forth
in the Preliminary Statement.
Class A-1 Corridor Contract: The interest rate cap agreement dated
July
20, 2005 with respect to the Class A-1
Certificates, by and between the Corridor
Contract Counterparty and DBAG, including
the ISDA Master Agreement between the
Corridor Contract Counterparty and DBAG, the schedule thereto and
the related
confirmation (Reference No. 402767N), both
dated as of July 20, 2005.
Class A-1 Corridor Contract Notional Balance: For any Distribution
Date
occurring after the initial Distribution Date, the amount specified as such
in
the Class A-1 Corridor Contract.
Class A-1 Yield Supplement Amount: For any Distribution Date
occurring
after the initial Distribution Date and on or prior to the
Corridor Contract
Termination date on which the LIBOR exceeds
5.15%, an amount equal
to interest
for the related Interest Accrual Period on the lesser of (a) the Class
Certificate Balance of the Class A-1 Certificates immediately prior to such
Distribution Date or (b) the Class A-1 Corridor
Contract Notional Balance for
such Distribution Date at a per annum rate
equal to the excess of (i) the lesser
of LIBOR and 9.15% over (ii) 5.15%.
Class A-8 Corridor Contract: The interest rate cap agreement dated
July
20, 2005 with respect to the Class A-8
Certificates, by and between the Corridor
Contract Counterparty and DBAG, including
the ISDA Master Agreement between the
Corridor Contract Counterparty and DBAG, the schedule thereto and
the related
confirmation (Reference No. 402769N), both
dated as of July 20, 2005.
Class A-8 Corridor Contract Notional Balance: For any Distribution
Date
occurring after the initial Distribution Date, the amount specified as such
in
the Class A-8 Corridor Contract.
Class A-8 Yield Supplement Amount: For any Distribution Date
occurring
after the initial Distribution Date and on or prior to the
Corridor Contract
Termination date on which the LIBOR exceeds
5.00%, an amount equal
to interest
for the related Interest Accrual Period on the lesser of (a) the Class
Certificate Balance of the Class A-8 Certificates immediately prior to such
Distribution Date or (b) the Class A-8 Corridor
Contract Notional Balance for
such Distribution Date at a per annum rate
equal to the excess of (i) the lesser
of LIBOR and 9.00% over (ii) 5.00%.
Class A-PO Deferred Amount: With respect to the Class A-PO
Certificates
and any Distribution Date through the Cross-over Date, the sum of (1) the
applicable PO Percentage of the principal portion of Non-Excess Losses on a
Discount Mortgage Loan allocated to the
Class A-PO
Certificates on such
date,
and (2) all amounts previously allocated to the Class A-PO Certificates in
respect of such losses and not distributed to the Class A-PO Certificates on
prior Distribution Dates.
10
<PAGE>
Class A-PO Deferred
Payment Writedown
Amount: For any Distribution
Date, the amount, if any, distributed on such date in
respect of the Class A-PO
Deferred Amount pursuant to Section 4.2(a)(iv) herein. The Subordinated
Certificate Writedown Amount and the Class A-PO Deferred Payment Writedown
Amount will be allocated to the Classes of
Subordinated
Certificates in inverse
order of priority, until the Class Certificate Balance of each such Class has
been reduced to zero.
Class A-PO
Principal Distribution Amount: With respect to each
Distribution Date and the Class A-PO
Certificates,
an amount equal to the
sum
of:
(1) the applicable PO Percentage of all Scheduled Payments of
principal due on each
Mortgage Loan on the first day of the month
in
which the Distribution
Date occurs,
as specified in the
amortization
schedule at the time applicable thereto, after adjustment for previous
principal prepayments
and the principal portion of Debt Service
Reductions after the
Bankruptcy Loss
Coverage Amount has been reduced
to zero, but before
any adjustment to such
amortization
schedule by
reason of any other bankruptcy or similar proceeding or any moratorium
or similar waiver or grace period;
(2) the applicable
PO Percentage of the Stated Principal
Balance of each
Mortgage Loan which was the subject of a Principal
Prepayment in Full received by the Master Servicer during the related
Prepayment Period;
(3) the applicable PO Percentage of the sum of (i) all partial
Principal Prepayments
for each Mortgage Loan received by the Master
Servicer
during
the related Prepayment Period and (ii) all
Unanticipated
Recoveries in respect
of each Mortgage
Loan received
during the calendar month preceding such Distribution Date;
(4) the applicable PO Percentage of the sum of (a) the
Liquidation Proceeds allocable to principal on each Mortgage Loan
which
became a Liquidated Mortgage Loan during the related Prepayment
Period,
other than
Mortgage Loans described in clause (b), and (b) the
principal balance of each Mortgage Loan that was purchased by a
private
mortgage insurer during the related Prepayment Period as an
alternative
to paying a claim under the related mortgage insurance policy;
and
(5) the applicable PO
Percentage of the sum of (a) the Stated
Principal Balance of
each Mortgage Loan which was repurchased by the
Seller in connection with such Distribution Date, and (b) the
difference, if any,
between the Stated Principal Balance of a Mortgage
Loan that has been
replaced by the Seller with a Substitute Mortgage
Loan pursuant to this
Agreement in connection with such Distribution
Date
and the Stated Principal Balance of such Substitute Mortgage
Loan.
For purposes of clauses (2) and (5) above, the Stated Principal
Balance
of a Mortgage Loan will be reduced by the
amount of any Deficient Valuation that
occurred prior to the reduction of the
Bankruptcy Loss Coverage Amount to zero.
11
<PAGE>
Class Certificate
Balance: With respect to any Class of
Certificates
and as of any Distribution Date the aggregate of the Certificate Principal
Balances of all Certificates of such Class as of such date,
plus the amount of
any Unanticipated Recoveries added to the Class Certificate Balance of such
Class of Certificates pursuant to Section
4.2(g).
Class Prepayment
Distribution
Trigger: For a Class of Subordinated
Certificates (other than the Class of
Subordinated Certificates with the highest
priority of distribution), a trigger that is satisfied on any
Distribution Date
on which a fraction (expressed as a percentage),
the numerator of which
is the
aggregate of the Class Certificate Balance of such Class and each Class
subordinate thereto, if any, and the
denominator of which is the Pool Principal
Balance with respect to such Distribution Date, equals or exceeds such
percentage calculated as of the Closing
Date.
Closing Date: July 29,
2005.
Code: The Internal
Revenue Code of 1986,
including any successor or
amendatory provisions.
COFI: Not
applicable.
COFI Certificates: Not
applicable.
Compensating Interest:
As to any Distribution
Date and any
Principal
Prepayment in respect of a Mortgage Loan
that is received during the period from
the sixteenth day of the month (or, in the
case of the first
Distribution Date,
from the Cut-off Date) prior to the month
of such Distribution
Date through the
last day of such month, an additional payment to the Mortgage Pool made
by the
Master Servicer, to the extent funds are available
from the Master
Servicing
Fee, equal to the amount of interest at
the Adjusted Net Mortgage Rate for that
Mortgage Loan from the date of the
prepayment to the related Due Date; provided
that the aggregate of all such payments as to the Mortgage Loans shall not
exceed 0.0083% of the Pool Principal Balance as of the related
Determination
Date, and provided further that if a
partial Principal
Prepayment is applied on
or after the first day of the month following the month of receipt, no
additional payment is required for such
Principal Prepayment.
Component: Not
applicable.
Component Balance: Not
applicable.
Component Certificates: Not applicable.
Cooperative
Corporation: The
entity that holds title (fee or an
acceptable leasehold estate) to the real
property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a
Cooperative Housing Corporation under
Section 216 of the Code.
Coop Shares: Shares
issued by a Cooperative Corporation.
Cooperative Loan:
Any Mortgage Loan secured by Coop Shares and a
Proprietary Lease.
12
<PAGE>
Cooperative Property:
The real property and
improvements owned by the
Cooperative Corporation, including the allocation of
individual dwelling units
to the holders of the Coop Shares of the
Cooperative Corporation.
Cooperative Unit: A
single family
dwelling located in a Cooperative
Property.
Corporate Trust
Office: The
designated
office of the Trustee
in the
State of New York at which at any
particular time its
corporate trust
business
with respect to this Agreement shall be
administered,
which office at the
date
of the execution of this Agreement is located at The Bank of New York,
101
Barclay Street, 8W, New York, New York 10286 (Attn: Corporate Trust
Mortgage-Backed Securities Group, First Horizon Asset Securities Inc. Series
2005-FA6), facsimile no. (212) 815-3986, and which is the address to which
notices to and correspondence with the
Trustee should be directed.
Corresponding Classes:
As to any Lower REMIC
Interest identified in
Section 2.7, the Class or Classes that are identified in Section 2.7 as
corresponding to such Lower REMIC
Interest.
Corridor Contract:
The Class A-1
Corridor Contract or the Class A-8
Corridor Contract, as the context may
require.
Corridor Contract Counterparty: Deutsche Bank, New York Branch and
its
successors and permitted assigns.
Corridor Contract
Termination Date: The Distribution Date occurring in
January 2010 (in the case of the Class A-1 Corridor Contract) or the
Distribution Date occurring in February 2010 (in the case of the
Class A-8
Corridor Contract), as the context may
require.
Corridor Reserve
Fund: A fund created as part of the Trust Fund
pursuant to Section 4.7(a) of this
Agreement,
but which is not an
asset of any
REMIC created hereunder.
Cross-over Date: The Distribution Date on which the Class
Certificate
Balance of each Class of Subordinated
Certificates has been reduced to zero.
Custodial Agreement:
The Custodial Agreement dated as of July 29, 2005
by and among the Trustee, the Master
Servicer and the Custodian.
Custodian: First
Tennessee Bank National Association, a national
banking association, and its successors and assigns,
as custodian
under the
Custodial Agreement.
Cut-off Date: July 1,
2005.
Cut-off Date Pool Principal Balance: $225,048,729.64.
Cut-off Date Principal
Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close
of business on the Cut-off Date.
DBAG: Deutsche
Bank AG, New York Branch and its successors and
permitted assigns.
13
<PAGE>
Debt Service Reduction: With respect to any Mortgage Loan,
a reduction
by a court of competent jurisdiction in a proceeding
under the Bankruptcy
Code
in the Scheduled Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting
from a Deficient Valuation or
any reduction that results in a permanent
forgiveness of principal.
Defective Mortgage
Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.2 or
2.3.
Deficient Valuation:
With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then-outstanding indebtedness
under the Mortgage Loan, or any reduction
in the amount of principal to be paid in
connection with any
Scheduled Payment
that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such
court which is final and non-appealable
in a proceeding under the Bankruptcy
Code.
Definitive
Certificates: Any
Certificate
evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.2(e).
Delay Certificates: As
specified in the Preliminary Statement.
Delay Delivery
Mortgage Loans:
The Mortgage Loans for
which all or a
portion of a related Mortgage File is not delivered to the Trustee on the
Closing Date. The number of Delay
Delivery Mortgage Loans shall not exceed
25%
of the aggregate number of Mortgage Loans
as of the Closing Date.
Deleted Mortgage Loan:
As defined in Section 2.3(b) hereof.
Denomination: With respect to each Certificate, the amount set
forth on
the face thereof as the "Initial
Certificate Balance of this Certificate" or the
Percentage Interest appearing on the face
thereof.
Depositor: First Horizon Asset Securities Inc., a Delaware
corporation,
or its successor in interest.
Depository: The
initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE &
Co., as the registered
Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section
8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository
Participant: A
broker, dealer, bank or other financial
institution or other Person for whom from time to time a
Depository
effects
book-entry transfers and pledges of
securities deposited with the Depository.
Determination Date: As to any Distribution Date, the earlier of (i)
the
third Business Day after the 15th day of each month, and (ii) the second
Business Day prior to the related
Distribution Date.
14
<PAGE>
Discount Mortgage Loan: Any Mortgage Loan with an Adjusted Net
Mortgage
Rate of less than 5.50%.
Distribution
Account: The
separate Eligible Account created and
maintained by the Trustee pursuant to
Section 3.5 in the name of the Trustee for
the benefit of the Certificateholders and designated "The Bank of New
York, in
trust for registered Holders of First Horizon Asset
Securities
Inc. Mortgage
Pass-Through Certificates, Series 2005-FA6." Funds in the
Distribution Account
shall be held in trust for the Certificateholders for the uses
and purposes set
forth in this Agreement.
Distribution Account
Deposit Date: As to any Distribution Date, 1:30
p.m. Central time on the Business Day
immediately preceding
such Distribution
Date.
Distribution Date:
The 25th day of each calendar month after the
initial issuance of the Certificates, or if
such 25th day is not a Business Day,
the next succeeding Business Day,
commencing in August 2005.
Due Date: With respect to any Distribution Date, the first day of the
month in which the related Distribution
Date occurs.
Eligible Account: Any
of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of
which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any
amounts are held
on
deposit therein, or (ii) an account or accounts in
a depository
institution or
trust company in which such accounts are
insured by the FDIC or the SAIF (to the
limits established by the FDIC or the SAIF, as
applicable)
and the uninsured
deposits in which accounts are otherwise
secured such that, as
evidenced by an
Opinion of Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such
account or a
perfected first priority security interest against any collateral
(which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the
depository
institution
or
trust company in which such account is
maintained,
or (iii) a trust
account or
accounts maintained with (a) the trust department of a federal or state
chartered depository institution or (b) a
trust company, acting in its fiduciary
capacity or (iv) any other account
acceptable to each
Rating Agency.
Eligible
Accounts may bear interest, and may include, if otherwise qualified under
this
definition, accounts maintained with the
Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying
Underwriting: With
respect to any
ERISA-Restricted
Certificate, a best efforts or firm
commitment underwriting or private placement
that meets the requirements of the
Underwriters' Exemption.
ERISA-Restricted
Certificate: As
specified in the Preliminary
Statement.
Escrow Account:
The Eligible Account or Accounts established and
maintained pursuant to Section 3.6(a)
hereof.
15
<PAGE>
Event of Default: As
defined in Section 7.1 hereof.
Excess Loss: The
amount of any (i) Fraud Loss realized after the Fraud
Loss Coverage Termination Date, (ii) Special Hazard Loss realized after the
Special Hazard Coverage Termination Date or (iii)
Deficient Valuation
realized
after the Bankruptcy Coverage Termination
Date.
Excess Proceeds:
With respect to any
Liquidated
Mortgage Loan, the
amount, if any, by which the sum of any
Liquidation Proceeds, Insurance Proceeds
and/or Unanticipated Recoveries in respect
of such Mortgage Loan received in the
calendar month in which such Mortgage Loan
became a Liquidated
Mortgage Loan,
net of any amounts previously reimbursed to the Master Servicer as
Nonrecoverable Advance(s) with respect to
such Mortgage Loan pursuant to Section
3.8(a)(iii), exceeds (i) the unpaid principal balance of such Liquidated
Mortgage Loan as of the Due Date in the
month in which such Mortgage Loan became
a Liquidated Mortgage Loan plus (ii) accrued
interest at the Mortgage Rate from
the Due Date as to which interest was last
paid or advanced (and not reimbursed)
to Certificateholders up to the Due Date applicable to
the Distribution
Date
immediately following the calendar month
during which such liquidation occurred.
Expense Fee Rate:
As to each
Mortgage Loan, the sum of the related
Master Servicing Fee Rate and the Trustee
Fee Rate.
FDIC: The Federal
Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The
Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States
created and existing under Title III of the
Emergency Home Finance Act of 1970, as
amended, or any successor thereto.
FIRREA: The Financial
Institutions Reform,
Recovery, and
Enforcement
Act of 1989.
First Horizon:
First
Horizon Home Loan Corporation, a Kansas
corporation and an indirect wholly owned
subsidiary of First
Horizon National
Corporation, a Tennessee corporation.
Fitch: Fitch Ratings
and its successors
and/or assigns.
If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 11.5(b) the address for notices to
Fitch shall be Fitch, Inc., One State
Street Plaza, New York, New York 10004, Attention: Residential Mortgage
Surveillance Group, or such other address as
Fitch may hereafter furnish to the
Depositor and the Master Servicer.
FNMA: The Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act,
or any successor thereto.
Fraud Loan: A
Liquidated
Mortgage Loan as to which a Fraud Loss
has
occurred.
16
<PAGE>
Fraud Losses: Realized
Losses on Mortgage
Loans as to which a loss is
sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the
related Mortgage Loan, including a loss
by reason of the denial of coverage under
any related Primary
Insurance Policy
because of such fraud, dishonesty or
misrepresentation.
Fraud Loss Coverage Amount: As of the Closing Date, $4,500,975. As of
any Distribution Date from the first anniversary of the Cut-off Date
and prior
to the fifth anniversary of the Cut-off Date, the Fraud Loss Coverage
Amount
will equal $2,250,487 minus the aggregate
amount of Fraud Losses that would have
been allocated to the Subordinated Certificates in the absence of the Loss
Allocation Limitation since the Cut-off Date.
As of any Distribution Date on or
after the earlier of the Cross-over Date or
the fifth anniversary of the Cut-off
Date, the Fraud Loss Coverage Amount shall
be zero.
Fraud Loss Coverage
Termination Date: The date on which the Fraud Loss
Coverage Amount is reduced to zero.
Index: LIBOR.
Indirect Participant:
A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository
Participant.
Initial Bankruptcy Coverage Amount: $150,000.
Initial Component Balance: Not applicable.
Insurance Policy:
With respect to any
Mortgage Loan
included in the
Trust Fund, any insurance policy,
including all riders
and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds:
Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than
any amount included in such Insurance
Proceeds in respect of Insured
Expenses.
Insured Expenses:
Expenses covered by an Insurance Policy or any other
insurance policy with respect to the
Mortgage Loans.
Interest Accrual
Period: With respect to each Class of Delay
Certificates and any Distribution Date, the
calendar month prior to the month of
such Distribution Date. With respect to any Non-Delay Certificates and any
Distribution Date, the one month period
commencing on the 25th day of the month
preceding the month in which such
Distribution
Date occurs and ending on the
24th day of the month in which such
Distribution Date occurs.
Latest Possible
Maturity Date: As to each Class of Certificates, the
Distribution Date following the third
anniversary of the scheduled maturity date
of the Mortgage Loan having the latest
scheduled maturity date as of the Cut-off
Date.
Lender PMI Mortgage Loan: Not applicable.
LIBOR: The London
interbank offered rate for one month United
States
dollar deposits calculated in the manner
described in Section 4.9.
17
<PAGE>
LIBOR Business Day:
Any day on which banks in London, England and The
City of New York are open and conducting
transactions
in foreign
currency and
exchange.
LIBOR Certificates: As
specified in the Preliminary Statement.
LIBOR Determination Date: For the LIBOR Certificates, the second LIBOR
Business Day immediately preceding the commencement of each Interest Accrual
Period for such Certificates.
Liquidated Mortgage
Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO
Property) which was liquidated in the
calendar month preceding the month of such
Distribution Date and as to which the
Master Servicer has determined (in
accordance with this
Agreement) that it has
received all amounts it expects to receive
in connection with the liquidation of
such Mortgage Loan, including the final
disposition of an REO Property.
Liquidation Proceeds:
All cash amounts,
other than Insurance Proceeds
and Unanticipated Recoveries, received in connection with the partial or
complete liquidation of defaulted
Mortgage Loans,
whether through trustee's
sale, foreclosure sale or otherwise or amounts
received in connection with any
condemnation or partial release of a Mortgaged
Property and any other
proceeds
received in connection with an REO Property, less the sum of related
unreimbursed Master Servicing Fees,
Servicing Advances and Advances.
Loan-to-Value Ratio:
With respect to any
Mortgage Loan and as
of any
date of determination, the fraction
(expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which
is the Appraised Value of the related
Mortgaged Property.
Loss Allocation Limitation: As defined in Section 4.4(h).
Lost Mortgage
Note: Any Mortgage Note, the original of which was
permanently lost or destroyed and has not
been replaced.
Lower REMIC: The segregated pool of assets consisting of the Trust
Fund
but excluding the Retained Yield, the Corridor Reserve Fund, the Corridor
Contracts, the Separate Interest Trust, the
Yield Supplement
Amount, the Lower
REMIC Interests, the RU Interest and the RL
Interest.
Lower REMIC Interests: The REMIC regular interests, within the meaning
of the REMIC Provisions, issued by the
Lower REMIC as set forth in Section 2.7.
Maintenance: With respect to any Cooperative Unit, the rent paid by
the
Mortgagor to the Cooperative Corporation
pursuant to the Proprietary Lease.
Majority in
Interest: As to any Class of Regular
Certificates,
the
Holders of Certificates of such Class
evidencing, in the aggregate, at least 51%
of the Percentage Interests evidenced by
all Certificates of such Class.
18
<PAGE>
Master Servicer:
First Horizon Home Loan Corporation, a Kansas
corporation, and its successors and assigns, in
its capacity as master servicer
hereunder.
Master Servicer
Advance Date: As to any Distribution Date, 1:30 p.m.
Central time on the Business Day
immediately preceding such Distribution Date.
Master Servicing
Fee: As to each
Mortgage Loan and any
Distribution
Date, an amount payable out of each full payment
of interest received
on such
Mortgage Loan and equal to one-twelfth of the Master Servicing Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as
of the Due
Date in the month of such Distribution Date (prior to giving effect to any
Scheduled Payments due on such Mortgage Loan on such Due Date), subject to
reduction as provided in Section 3.14.
Master Servicing
Fee Rate: For each Mortgage Loan a per annum rate
equal to 0.369%.
MERS: Mortgage
Electronic
Registration Systems,
Inc., a
corporation
organized and existing under the laws of
the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS
System.
MERS(R) System:
The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage
Identification Number for any MERS Mortgage Loan.
MLPA: The Mortgage Loan Purchase Agreement dated as of July 29, 2005,
by and between First Horizon Home Loan
Corporation, as seller, and First Horizon
Asset Securities Inc., as purchaser, as related to the transfer, sale and
conveyance of the Mortgage Loans.
MOM Loan: Any Mortgage
Loan as to which MERS
is acting as
mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Statement: The
statement delivered to
the
Certificateholders
pursuant to Section 4.6.
Moody's: Moody's
Investors Service, Inc., and its successors
and/or
assigns. If Moody's is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 11.5(b) the address for notices to
Moody's
shall be Moody's Investors Service, Inc., 99 Church Street, New York,
New York
10007, Attention: Residential Pass-Through
Monitoring, or such other address as
Moody's may hereafter furnish to the
Depositor or the Master Servicer.
Mortgage: The
mortgage, deed of
trust or other instrument creating a
first lien on an estate in fee simple or
leasehold interest in real property
securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.1(b)
hereof
pertaining to a particular Mortgage Loan
and any additional
documents delivered
to the Trustee to be added to the Mortgage
File pursuant to this Agreement.
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<PAGE>
Mortgage Loan
Schedule: The list of Mortgage Loans (as from time to
time amended by the Master Servicer to reflect the addition of Substitute
Mortgage Loans and the deletion of Deleted Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the
Trust
Fund and from time to time subject to this Agreement, attached hereto as
Schedule I, setting forth the following information with respect to each
Mortgage Loan:
(1) the loan
number;
(2) the Mortgagor's name and the street address of the
Mortgaged
Property, including the zip code;
(3) the maturity
date;
(4) the original
principal balance;
(5) the Cut-off Date
Principal Balance;
(6) the first payment
date of the Mortgage Loan;
(7) the Scheduled
Payment in effect as of the Cut-off Date;
(8) the Loan-to-Value
Ratio at origination;
(9) a code indicating
whether the
residential dwelling
at
the time of origination was represented to be
owner-occupied;
(10) a code indicating
whether the residential dwelling is
either (a) a detached
single family dwelling (b) a
dwelling in a de minimis PUD, (c) a condominium unit or
PUD (other than a de minimis PUD), (d) a two-to-four
unit residential property or (e) a Cooperative Unit;
(11) the Mortgage Rate;
(12) the purpose for the Mortgage Loan;
(13) the type of documentation program pursuant to which the
Mortgage Loan was originated;
(14) the Master Servicing Fee for the Mortgage Loan; and
(15) a code indicating
whether the Mortgage
Loan is a MERS
Mortgage Loan.
Such schedule shall
also set forth the total of the amounts described
under (4) and (5) above for all of the
Mortgage Loans.
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<PAGE>
Mortgage Loans: Such
of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions
hereof as from time to time are held as a
part of the Trust Fund (including any REO
Property), the
mortgage loans so held
being identified in the Mortgage Loan
Schedule,
notwithstanding
foreclosure or
other acquisition of title of the related
Mortgaged Property.
Mortgage Note:
The original executed note or other evidence of
indebtedness evidencing the indebtedness of
a Mortgagor under a Mortgage Loan.
Mortgage Pool: The
aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgage Rate:
The annual rate of
interest borne by a
Mortgage Note
from time to time, net of any insurance premium charged by the mortgagee to
obtain or maintain any Primary Insurance
Policy.
Mortgaged Property:
The underlying
property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Coop Shares and
Proprietary Lease.
Mortgagor: The
obligor(s) on a Mortgage Note.
NAS Certificates: As
specified in the Preliminary Statement.
NAS I Distribution Percentage: 0% through the Distribution Date in
July
2010; 30% of the NAS I Percentage
thereafter
through the
Distribution Date
in
July 2011; 40% of the NAS I Percentage
thereafter through the
Distribution Date
in July 2012; 60% of the NAS I Percentage
thereafter
through the
Distribution
Date in July 2013; 80% of the NAS I Percentage thereafter through the
Distribution Date in July 2014; and 100% of
the NAS I Percentage thereafter.
NAS I Percentage: For any Distribution Date, the lesser of (x) 100%
and
(y) the percentage (carried to six places rounded up)
obtained by dividing (1)
the aggregate Class Certificate Balance of the Class A-4 and Class A-11
Certificates immediately preceding such Distribution Date by (2) the Pool
Principal Balance of the Mortgage Pool
(excluding the
applicable PO Percentage
of the principal balance of each Discount
Mortgage Loan) for
such Distribution
Date.
NAS I Principal
Distribution Amount:
For any Distribution
Date, the
total of the amounts described in clauses (1) through
(5) of the definition
of
Senior Optimal Principal Amount for such date (determined without the
application of the related Senior
Percentage and Senior
Prepayment
Percentage)
multiplied by the NAS I Distribution
Percentage for such date.
NAS II Distribution
Percentage: 0% through
the Distribution
Date in
July 2010; 30% of the NAS II Percentage
thereafter through the Distribution Date
in July 2011; 40% of the NAS II Percentage
thereafter
through the
Distribution
Date in July 2012; 60% of the NAS II Percentage thereafter through the
Distribution Date in July 2013; 80% of the
NAS II Percentage
thereafter through
the Distribution Date in July 2014; and 100% of the NAS II Percentage
thereafter.
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<PAGE>
NAS II Percentage: For
any Distribution
Date, the lesser of
(x) 100%
and (y) the percentage (carried to six places rounded up)
obtained by dividing
(1) the Class Certificate Balance of the Class A-7 Certificates immediately
preceding such Distribution Date plus the initial Class
Certificate Balance
of
the Class A-7 Certificates by (2) the
aggregate Class Certificate Balance of the
Class A-7, Class A-8 and Class A-10
Certificates for such Distribution Date.
NAS II Principal
Distribution Amount:
For any Distribution
Date, (1)
the remaining Senior Optimal Principal Amount and the Accrual Amount for
the
Class A-5 Certificates available for the distributions of
the amounts allocable
to the Senior Certificates set forth in Sections 4.2(c)(iii)(2)(A)
and
4.2(c)(iii)(2)(C), multiplied by (2) the
NAS II Distribution Percentage for such
date.
Net Interest
Shortfall: For any
Distribution Date, the sum of (a) the
amount of interest which would otherwise have been received for any Mortgage
Loan that was the subject of (x) a Relief
Act Reduction or (y) a Special Hazard
Loss, Fraud Loss, or Deficient Valuation,
after the exhaustion of the respective
amounts of coverage for those types of losses provided by the Subordinated
Certificates; and (b) any Net Prepayment
Interest Shortfalls.
Net Mortgage
Rate or "NMR":
With respect to a Mortgage Loan, the
Mortgage Rate thereof, less the Master Servicing Fee and the Trustee Fee
with
respect to the Mortgage Loan, expressed as a per annum
percentage of its Stated
Principal Balance.
Net Prepayment
Interest Shortfalls:
As to any Distribution
Date, the
amount by which the aggregate of Prepayment
Interest Shortfalls in respect of
the Mortgage Loans during the related
Prepayment Period
exceeds an amount equal
to the Compensating Interest paid in respect of the
Mortgage Loans, if any, for
such Distribution Date.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Non-Discount Mortgage
Loan: Any Mortgage Loan with a Net Mortgage Rate
that is equal to or greater than 5.50%.
Non-Excess Loss: Any
Realized Loss other than an Excess Loss.
Non-PO Percentage:
(a) With respect to a
Discount Mortgage
Loan, the
fraction, expressed as a percentage, equal
to the NMR divided by 5.50%, and (b)
with respect to each Non-Discount Mortgage
Loan, 100%.
Nonrecoverable
Advance: Any portion
of an Advance
previously made or
proposed to be made by the Master
Servicer that, in the good faith judgment
of
the Master Servicer, will not be ultimately
recoverable by the
Master Servicer
from the related Mortgagor, related
Liquidation Proceeds or otherwise.
Notice of Final
Distribution: The
notice to be provided
pursuant to
Section 9.2 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and
surrender thereof.
Notional Amount: As
specified in the Preliminary Statement.
Notional Amount Component: Not applicable.
22
<PAGE>
Notional Amount
Certificates:
As specified in the Preliminary
Statement.
Novation Agreements:
Each of the two
Novation Agreements
dated as of
July 29, 2005 by and among Deutsche Bank,
New York Branch, DBAG and the Separate
Interest Trust, by the Bank of New York, not in
its individual
capacity, but
solely as trustee.
Offered Certificates:
As specified in the Preliminary Statement.
Officer's Certificate:
A Certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board,
the President,
a Managing
Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Master
Servicer, or (ii), if provided for in
this Agreement, signed by a Servicing
Officer, as the case may be, and delivered
to the Depositor and the Trustee, as the case may be, as required by this
Agreement.
Opinion of Counsel:
A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, including, in-house counsel,
reasonably acceptable to the Trustee;
provided, however, that with respect to
the interpretation or application of the
REMIC Provisions, such counsel must (i)
in fact be independent of the Depositor and
the Master Servicer,
(ii) not have
any direct financial interest in the Depositor or the
Master Servicer or in any
affiliate of either, and (iii) not be
connected with the Depositor or the Master
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar
functions.
Optional Termination: The termination of the trust created
hereunder in
connection with the purchase of the Mortgage
Loans pursuant to Section 9.1(a)
hereof.
Original Mortgage Loan: The Mortgage Loan refinanced in connection
with
the origination of a Refinancing Mortgage
Loan.
Original Subordinated
Principal Balance: The aggregate of the Class
Certificate Balances of the Subordinated
Certificates as of the Closing Date.
OTS: The Office of
Thrift Supervision.
Outside Reference Date: Not applicable.
Outstanding: With
respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated
under
this Agreement except:
(a) Certificates
theretofore canceled
by the Trustee or delivered to
the Trustee for cancellation; and
(b) Certificates
in exchange for which or in lieu of which
other
Certificates have been
executed and delivered by the Trustee
pursuant to this Agreement.
23
<PAGE>
Outstanding Mortgage
Loan: As of any Due
Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and
which did not become a
Liquidated Mortgage Loan prior to such Due
Date.
Ownership Interest:
As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such
Certificate as the
Holder thereof and any other interest
therein, whether direct or indirect, legal
or beneficial.
Pass-Through Rate: For any interest bearing Class of Certificates,
the
per annum rate set forth or calculated in the manner described in the
Preliminary Statement.
Percentage Interest:
As to any Certificate,
the percentage
interest
evidenced thereby in distributions required to be made on the related
Class,
such percentage interest being set forth on the face
thereof or equal to
the
percentage obtained by dividing the
Denomination
of such Certificate by the
aggregate of the Denominations of all
Certificates of the same Class.
Permitted Investments:
At any time,
any one or more of the
following
obligations and securities:
(i)
obligations of the
United States or any
agency thereof,
provided such obligations are backed by the full faith and
credit of the United States;
(ii) general
obligations of or
obligations
guaranteed by any
state of the United
States or the District
of Columbia
receiving the highest long-term debt rating of each Rating
Agency;
(iii) commercial
or finance company paper which is then
receiving the highest
commercial or finance company paper
rating of each Rating Agency;
(iv)
certificates of
deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution
or trust company incorporated under the laws of the United
States or of any state thereof and subject to supervision
and examination
by federal and/or state banking
authorities, provided
that the commercial paper and/or
long term unsecured
debt obligations of
such depository
institution or
trust company (or in the case of the
principal depository
institution
in a holding company
system, the commercial
paper or long-term
unsecured debt
obligations of such holding company, but only if Moody's
is not a Rating
Agency) are then rated one of the two
highest long-term and/or the highest short-term ratings of
each Rating Agency for such securities;
(v) demand
or time deposits or
certificates of deposit issued
by any bank or trust company or savings institution to the
extent that such
deposits are fully
insured by the
FDIC
and receiving the highest short-term debt rating of each
Rating Agency;
(vi) guaranteed
reinvestment
agreements
issued by any bank,
insurance company or
other corporation and
receiving the
highest short-term
debt rating of each
Rating Agency and
containing, at
the time of the issuance of such
agreements, such terms
and conditions as will
not result
in the downgrading or withdrawal of the rating then
assigned to the Certificates by either Rating Agency;
24
<PAGE>
(vii) repurchase
obligations
with respect to any security
described in clauses
(i) and (ii) above,
in either case
entered into
with a depository institution or trust
company (acting as
principal)
described in clause (iv)
above;
(viii) securities (other than stripped bonds, stripped coupons
or
instruments sold at a
purchase price in excess of 115% of
the face amount thereof) bearing interest or sold at a
discount issued by any corporation incorporated under the
laws of the United States or any state thereof which, at
the time of such
investment, have one
of the two highest
ratings of each Rating Agency (except if the Rating Agency
is Moody's
or S&P,
such rating shall be the highest
commercial paper
rating of Moody's or S&P, as applicable,
for any such securities);
(ix) units
of a taxable money-market portfolio having the
highest rating
assigned by each
Rating Agency (except if
Fitch is a Rating Agency and has not rated the portfolio,
the highest rating
assigned by Moody's) and restricted to
obligations issued or
guaranteed by the
United States of
America or entities
whose obligations
are backed by the
full faith and credit of the United States of America and
repurchase agreements
collateralized by such obligations;
and
(x)
such
other investments bearing interest or sold at a
discount acceptable
to each Rating Agency as will not
result in the downgrading or withdrawal of the rating then
assigned to the
Certificates by either Rating Agency, as
evidenced by a signed
writing delivered by each Rating
Agency;
provided that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive
interest only payments with respect to
the obligations underlying such
instrument.
25
<PAGE>
Permitted Transferee:
Any person other than (i) the United States, any
State or political subdivision thereof, or any agency
or instrumentality of any
of the foregoing, (ii) a foreign
government,
International
Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code
(including
the tax
imposed by section 511 of the Code on
unrelated business
taxable income) on any
excess inclusions (as defined in section
860E(c)(l) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) an "electing large
partnership" as defined in section 775 of the Code, (vi) a Person that is not
(a) a citizen or resident of the United
States, (b) a corporation, partnership,
or other entity created or organized in or under
the laws of the United States,
any state thereof or the District of
Columbia, (c) an
estate whose income from
sources without the United States is includible in gross income for United
States federal income tax purposes
regardless of its connection with the conduct
of a trade or business within the United
States or (d) a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial
decisions of the
trust, unless such Person
has furnished the transferor and the Trustee with a duly
completed Internal
Revenue Service Form W-8ECI or any
applicable
successor form, and (vii) any
other Person so designated by the Depositor based upon an Opinion of
Counsel
that the Transfer of an Ownership Interest in a Residual
Certificate
to such
Person may cause any REMIC created hereunder to fail to qualify as a REMIC
at
any time that the Certificates are outstanding;
provided, however, that if a
person is classified as a partnership
under the Code, such
person shall only be
a Permitted Transferee if all of its beneficial owners are described in
subclauses (a), (b), (c) or (d) of clause
(vi) and the governing
documents of
such person prohibits a transfer of any interest in such person to any
person
described in clause (vi). The terms "United
States," "State" and
"International
Organization" shall have the meanings set forth in section 7701
of the Code or
successor provisions. A corporation will
not be treated as an instrumentality of
the United States or of any State or
political subdivision thereof for these
purposes if all of its activities are subject to tax and,
with the exception of
the Federal Home Loan Mortgage Corporation,
a majority of its board of directors
is not selected by such government
unit.
Person: Any
individual,
corporation,
partnership,
joint venture,
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political
subdivision thereof.
Physical Certificates:
As specified in the Preliminary Statement.
Planned Principal Classes: Not applicable.
PO Percentage:
(a) With respect to any Discount Mortgage Loan, a
fraction, expressed as a percentage, equal
to (5.50%-NMR) divided by 5.50%, and
(b) with respect to any Non-Discount
Mortgage Loan, 0%.
Pool Principal
Balance: With respect to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in
the month preceding
the month of
such Distribution Date, and for the first
Distribution Date, as
of the Closing
Date, less any Principal Prepayments received on or after such Due Date and
distributed to Certificateholders on the
prior Distribution Date.
Prepayment Interest Excess: As to any Principal Prepayment received by
the Master Servicer from the first day
through the fifteenth day of any calendar
month (other than the calendar month in which the Cut-off
Date occurs), all
amounts paid by the related Mortgagor in respect of interest
on such Principal
Prepayment. All Prepayment Interest Excess
shall be paid to the Master Servicer
as additional master servicing
compensation.
Prepayment Interest
Shortfall:
As to any Distribution
Date, Mortgage
Loan and Principal Prepayment received (a) during the
period from the sixteenth
day of the month preceding the month of
such Distribution Date
(or, in the case
of the first Distribution Date, from the Cut-off Date)
through the last day of
such month, in the case of a Principal
Prepayment
in Full, or (b) during the
month preceding the month of such
Distribution
Date, in the case of a
partial
Principal Prepayment, the amount, if any, by which one
month's interest at the
related Adjusted Mortgage Rate on such
Principal Prepayment
exceeds the amount
of interest actually paid by the Mortgagor in
connection
with such Principal
Prepayment.
26
<PAGE>
Prepayment Period:
(a) With respect to
any Principal
Prepayments in
Full and any Distribution Date, the period from the
sixteenth day of the month
preceding the month of such Distribution Date (or, in the case of the first
Distribution Date, from the Cut-off Date)
through the fifteenth day of the month
of such Distribution Date, and (b) with respect to any other Principal
Prepayments and any Distribution Date, the month preceding the month of such
Distribution Date.
Primary Insurance
Policy: Each policy of primary
mortgage guaranty
insurance or any replacement policy
therefor with respect to any Mortgage Loan.
Principal Only Certificates: As specified in the Preliminary
Statement.
Principal Prepayment:
Any payment of
principal by a Mortgagor on a
Mortgage Loan that is received in advance
of its scheduled Due
Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by
the Master Servicer in accordance with
the terms of the related Mortgage Note.
Principal Prepayment
in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance
of a Mortgage Loan.
Private Certificates:
As specified in the Preliminary Statement.
Proprietary Lease:
With respect to any
Cooperative
Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of
related
Coop Shares.
PUD: Planned Unit
Development.
Purchase Price:
With respect to any Mortgage Loan required to be
purchased by the Seller pursuant to Section 2.2 or 2.3
hereof or purchased
at
the option of the Master Servicer pursuant to Section 3.11, an
amount equal to
the sum of (i) 100% of the unpaid principal
balance of the
Mortgage Loan on the
date of such purchase, (ii) accrued interest thereon at
the applicable Mortgage
Rate (or at the applicable Adjusted
Mortgage Rate if the purchaser is the Master
Servicer) from the date through which
interest was last paid by the Mortgagor to
the Due Date in the month in which the
Purchase Price is to
be distributed
to
Certificateholders, and (iii) any costs and
damages incurred by the Trust in
connection with the noncompliance of such Mortgage Loan with any
specifically
applicable predatory or abusive lending
law.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified
as such under the laws of the state of its
principal place of
business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states
and to write the
insurance provided by the insurance policy issued by it, approved as a
FNMA-approved mortgage insurer and having a claims paying
ability rating of at
least "AA" or equivalent rating by a
nationally recognized
statistical
rating
organization. Any replacement insurer with
respect to a Mortgage Loan must have
at least as high a claims paying
ability rating as the insurer it replaces
had
on the Closing Date.
27
<PAGE>
Rating Agency: Each of the Rating Agencies specified in the
Preliminary
Statement. If any such organization or a successor is no longer in
existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the
Depositor,
notice of which designation shall be given
to the Trustee.
References herein to
a given rating category of a Rating Agency shall mean such rating category
without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount
(not less than zero or more than the Stated
Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of the Liquidated Mortgage Loan as
of the date of such liquidation, plus
(ii) interest at the Adjusted
Net Mortgage
Rate from the Due Date
as to which
interest was last paid or advanced (and not
reimbursed) to Certificateholders up
to the Due Date in the month in which
Liquidation
Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Mortgage Loan
from time to time, minus (iii) any Liquidation Proceeds, Insurance Proceeds
and/or Unanticipated Recoveries received during the month in which such
liquidation occurred (or during the calendar month preceding the related
Distribution Date, as applicable), to the extent applied as recoveries of
interest at the Adjusted Net Mortgage Rate and to principal of the
Liquidated
Mortgage Loan. With respect to each Mortgage Loan, other than a Liquidated
Mortgage Loan, which has become the subject of a
Deficient Valuation,
if the
principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient
Valuation and the
principal balance of the
Mortgage Loan as reduced by the Deficient
Valuation.
Recognition Agreement:
With respect to any Cooperative Loan, an
agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights
of such originator in the Cooperative
Property.
Record Date:
With respect to any Distribution Date, the close of
business on the last Business Day of the
month preceding the month in which such
Distribution Date occurs.
Reference Bank: A leading bank with an established place of
business in
London engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, not controlled by, or under the common
control with, the
Trustee.
Refinancing Mortgage
Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing
mortgage loan.
Regular Certificates:
As specified in the Preliminary Statement.
Relief Act: The Servicemembers Civil Relief Act or any similar
state or
local legislation or regulations.
28
<PAGE>
Relief Act Reductions:
With respect to any
Distribution Date and
any
Mortgage Loan as to which there has been a
reduction in the
amount of interest
collectible thereon for the most recently
ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which interest
collectible on such Mortgage Loan for the most
recently ended calendar month is
less than interest accrued thereon for such
month pursuant to the Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within the meaning
of section
860D of the
Code. REMIC Change of Law: Any proposed,
temporary or final regulation, revenue ruling, revenue procedure
or
other official announcement or interpretation
relating to REMICs and
the REMIC
Provisions issued after the Closing
Date.
REMIC Pool: Either of
the Lower REMIC or the Upper REMIC.
REMIC Provisions:
Provisions of the federal income tax law relating to
real estate mortgage investment conduits,
which appear at
sections 860A through
860G of Subchapter M of Chapter 1 of the Code,
and related provisions, and
regulations promulgated thereunder,
as the foregoing may
be in effect from time
to time as well as provisions of applicable
state laws.
REO Property: A
Mortgaged Property
acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Request for Release:
The Request for
Release submitted by
the Master
Servicer to the Trustee, substantially in the form of Exhibits L and M, as
appropriate.
Required Coupon:
5.875% per annum.
Required Insurance
Policy: With respect to any Mortgage
Loan, any
insurance policy that is required to be
maintained from time to time under this
Agreement.
Required Recordation
States: The states of Florida, Maryland and
Mississippi.
Residual Certificates:
As specified in the Preliminary Statement.
Responsible Officer:
When used with respect
to the Trustee, any
Vice
President, any Assistant Vice President,
the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee
customarily
performing
functions similar to those performed by any
of the above designated officers and
having direct responsibility for the administration of this
Agreement and also
to whom, with respect to a particular
matter, such matter is referred because of
such officer's knowledge of and familiarity
with the particular subject.
Retail/Lottery Certificates: Not applicable.
Retained Yield: As to each Mortgage Loan and any Distribution Date,
(i)
an amount payable to First Horizon Home Loan Corporation out of each full
payment of interest received on such Mortgage Loan and
equal to one-twelfth
of
the Retained Yield Rate multiplied by the Stated Principal Balance of such
Mortgage Loan as of the Due Date in the
month of such
Distribution Date
(prior
to giving effect to any Scheduled Payments
due on such Mortgage Loan on such Due
Date) and (ii) each prepayment penalty
received, if any.
29
<PAGE>
Retained Yield Rate:
For any Non-Discount
Mortgage Loan, a per
annum
rate equal to the excess of (a) the applicable Mortgage Rate over (b) the
Required Coupon. For any Discount Mortgage
Loan, 0%.
RL Interest: The REMIC
residual interest, within the meaning of the
REMIC Provisions, issued by the Lower REMIC,
which shall be
represented by the
Class A-R Certificate.
RU Interest: The REMIC
residual interest, within the meaning of the
REMIC Provisions, issued by the Upper REMIC,
which shall be
represented by the
Class A-R Certificate.
Scheduled Balances:
Not applicable.
Scheduled Certificates: Not applicable.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due
on any Due Date allocable to principal
and/or interest on such Mortgage Loan
which, unless otherwise specified herein,
shall give effect to
any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage
Loan.
Securities Act: The
Securities Act of 1933, as amended.
Security
Agreement: The
security agreement with respect to a
Cooperative Loan.
Seller: First Horizon Home Loan Corporation, a Kansas corporation,
and
its successors and assigns, in its capacity as seller of the Mortgage
Loans
pursuant to the MLPA.
Senior Certificates:
As specified in the Preliminary Statement.
Senior Final
Distribution
Date: For the Senior Certificates, the
Distribution Date on which the Class
Certificate Balance of each Class of Senior
Certificates has been reduced to zero.
Senior Optimal
Principal Amount: With respect to each Distribution
Date, an amount equal to the sum of:
(1) the Senior
Percentage of the applicable Non-PO Percentage of
Scheduled Payments of principal due on each Mortgage Loan on the first day
of
the month in which the Distribution Date occurs, as specified in the
amortization schedule at the time applicable thereto after adjustment for
previous principal prepayments and the principal portion of Debt Service
Reductions after the Bankruptcy Loss Coverage Amount has been
reduced to zero,
but before any adjustment to such
amortization
schedule by reason of
any other
bankruptcy or similar proceeding or any moratorium or similar waiver or grace
period;
30
<PAGE>
(2) the Senior
Prepayment Percentage
of the applicable
Non-PO
Percentage of the Stated Principal Balance of each Mortgage Loan
which was the
subject of a Principal Prepayment in Full
received by the Master Servicer during
the applicable Prepayment Period;
(3) the Senior
Prepayment Percentage
of the applicable
Non-PO
Percentage of (a) all partial Principal
Prepayments in respect
of each Mortgage
Loan received during the applicable
Prepayment Period and
(b) all Unanticipated
Recoveries in respect of each Mortgage Loan
received during the
calendar month
preceding such Distribution Date;
(4) the lesser of:
(a) the
Senior Prepayment Percentage of the sum of (x) the
applicable Non-PO
Percentage of the Liquidation Proceeds
allocable to principal on each Mortgage Loan which became
a Liquidated Mortgage
Loan during the related Prepayment
Period, other than Mortgage Loans described in clause (y),
and (y) the applicable
Non-PO Percentage of the Stated
Principal Balance of each Mortgage Loan that was purchased
by a private mortgage insurer during the related
Prepayment Period
as an alternative to paying a claim
under the related Insurance Policy; and
(b)(i) the Senior
Percentage
of the sum of (x) the
applicable
Non-PO Percentage of
the Stated Principal Balance of each
Mortgage Loan which
became a Liquidated Mortgage Loan
during the related Prepayment Period, other than Mortgage
Loans described
in clause (y), and (y) the applicable
Non-PO Percentage of
the Stated Principal Balance of each
Mortgage Loan that was
purchased by a private mortgage
insurer during
the related Prepayment Period as an
alternative to paying a claim under the related Insurance
Policy minus (ii) the applicable Non-PO Percentage of the
Senior
Percentage
of Excess Losses (other than Debt
Service Reductions)
during the related Prepayment Period;
and
(5) the Senior Prepayment Percentage of the sum of (a) the
applicable Non-PO Percentage of the Stated Principal
Balance of each
Mortgage
Loan which was repurchased by the seller in
connection with such
Distribution
Date and (b) the difference, if any,
between the applicable Non-PO Percentage of
the Stated Principal Balance of each
Mortgage Loan that has been replaced by the
seller with a Substitute Mortgage Loan pursuant to this
Agreement in connection
with such Distribution Date and the Stated
Principal Balance of such Substitute
Mortgage Loan.
Senior Percentage: On any Distribution Date, the lesser of 100% and
the
percentage (carried to six places rounded
up) obtained by dividing the aggregate
Class Certificate Balances of all Classes
of Senior Certificates (other than the
Notional Amount Certificates and the Class A-PO Certificates) immediately
preceding such Distribution Date by the Pool Principal
Balance (excluding the
aggregate of the applicable PO Percentage of the principal balance of each
Discount Mortgage Loan) for the immediately
preceding Distribution Date.
31
<PAGE>
Senior Prepayment Percentage: On any Distribution Date occurring
during
the periods set forth below, the Senior
Prepayment Percentages described below:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Period (Dates Inclusive)
Senior Prepayment Percentage
<S>
<C>
-----------------------------------------------------------------------------------------------------------
August 2005 - July 2010
100%
-----------------------------------------------------------------------------------------------------------
August 2010 - July 2011
the Senior Percentage plus 70% of the Subordinated Percentage
-----------------------------------------------------------------------------------------------------------
August 2011 - July 2012
the Senior Percentage plus 60% of the Subordinated Percentage
-----------------------------------------------------------------------------------------------------------
August 2012 - July 2013
the Senior Percentage plus 40% of the Subordinated Percentage
-----------------------------------------------------------------------------------------------------------
August 2013 - July 2014
the Senior Percentage plus 20% of the Subordinated Percentage
-----------------------------------------------------------------------------------------------------------
August 2014 and thereafter
the Senior Percentage
-----------------------------------------------------------------------------------------------------------
</TABLE>
Notwithstanding the
foregoing,
if the Senior Percentage on any
Distribution Date exceeds the initial
Senior Percentage,
the Senior
Prepayment
Percentage for that Distribution Date will
equal 100%.
In addition, no reduction of the Senior Prepayment Percentage below
the
level in effect for the most recent
prior period specified in the table above
shall be effective on any Distribution Date unless both of the following
step-down conditions are satisfied as of the last day of
the month
preceding
such Distribution Date:
(1) the aggregate Stated Principal Balance of Mortgage Loans
delinquent 60 days or more (including for this purpose any Mortgage
Loans in
foreclosure or subject to bankruptcy
proceedings and Mortgage Loans with respect
to which the related Mortgaged Property, including REO Property, has been
acquired by the Trust) does not exceed 50%
of the aggregate
Class Certificate
Balances of the Subordinated Certificates
as of such date; and
(2) cumulative Realized Losses do not exceed:
(a) 30% of the
Original Subordinated
Principal
Balance if such
Distribution
Date occurs
between
and including
August 2010 and
July
2011;
(b) 35% of the
Original Subordinated
Principal
Balance if such
Distribution
Date occurs
between and including
August 2011 and
July
2012;
(c) 40% of the
Original Subordinated
Principal
Balance if such
Distribution
Date occurs
between and including
August 2012 and
July
2013;
32
<PAGE>
(d) 45% of the
Original Subordinated
Principal
Balance if such
Distribution
Date occurs
between and including
August 2013 and
July
2014; and
(e) 50% of the
Original Subordinated
Principal
Balance if such
Distribution
Date occurs
during or after July 2014.
Senior Mezzanine
Certificates:
As specified in the Preliminary
Statement.
Separate Interest
Trust: A trust created pursuant to Section 4.8(a) of
this Agreement which is not an asset of any
REMIC created hereunder.
Servicing Advances:
All customary, reasonable and necessary "out
of
pocket" costs and expenses incurred in the
performance by the Master Servicer of
its servicing obligations, including, but not limited to, the cost of
(i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Master
Servicer pursuant to Section 3.11 and
any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv)
compliance
with the
obligations under Section 3.9.
Servicing Agreement: The servicing agreement, dated as of November 26,
2002 by and between First Horizon Asset Securities Inc. and its assigns, as
owner, and First Tennessee Mortgage
Services, Inc., as servicer.
Servicing Officer:
Any officer of the
Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose
name and facsimile signature appear on a
list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to
time be amended.
Servicing Rights
Transfer and
Subservicing
Agreement: The
servicing
rights transfer and subservicing agreement, dated as of November 26, 2002,
by
and between First Horizon Home Loan
Corporation, as
transferor and subservicer,
and First Tennessee Mortgage Services,
Inc., as transferee and servicer.
Special Hazard Coverage Termination Date: The date on which the
Special
Hazard Loss Coverage Amount is reduced to
zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged
Property
on account of direct physical loss but not including (i) any loss of a type
covered by a hazard insurance policy or a flood
insurance policy required to be
maintained with respect to such Mortgaged
Property pursuant to Section 3.9 to
the extent of the amount of such loss
covered thereby,
or (ii) any loss
caused
by or resulting from:
(1) normal wear and tear;
(2) fraud, conversion
or other dishonest act
on the part of the
Trustee, the Master Servicer or any of
their agents or employees (without regard
to any portion of the loss not covered by
any errors and omissions policy);
33
<PAGE>
(3) errors in design,
faulty workmanship
or faulty materials,
unless the collapse of the property or a part thereof
ensues and then only
for
the ensuing loss;
(4) nuclear
or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled,
and whether such loss be direct or
indirect, proximate or
remote or be in whole
or in part caused by, contributed to or aggravated by a peril covered by the
definition of the term "Special Hazard
Loss";
(5) hostile or warlike action in time of peace and war,
including
action in hindering, combating or defending against an actual, impending or
expected attack:
(i) by any
government or sovereign power, de jure or de facto,
or by any authority
maintaining or using military, naval
or air forces;
(ii) by
military, naval or air forces;
(iii) by an agent of
any such government,
power, authority or
forces; or
(6) any weapon of war employing nuclear fission, fusion or other
radioactive force, whether in time of peace
or war; or
(7) insurrection, rebellion, revolution, civil war, usurped
power
or action taken by governmental
authority in
hindering, combating
or defending
against such an occurrence, seizure or destruction
under quarantine or
customs
regulations, confiscation by order of any government or public authority or
risks of contraband or illegal
transportation or trade.
Special Hazard Loss Coverage Amount: Upon the initial issuance of
the
Certificates, $2,700,000. As of any Distribution Date, the
Special Hazard Loss
Coverage Amount will equal the greater
of
(a) 1.00% (or if greater than 1.00%, the highest percentage of
Mortgage Loans by principal balance secured by Mortgaged Properties in any
single California zip code) of the outstanding principal balance of all the
Mortgage Loans as of the related
Determination Date; and
(b) twice the outstanding principal balance of the Mortgage
Loan
which has the largest outstanding principal balance as of the related
Determination Date,
less, in each case, the aggregate amount of Special Hazard Losses that would
have been previously allocated to the Subordinated
Certificates in the
absence
of the Loss Allocation Limitation. As of any Distribution Date on or
after the
Cross-over Date, the Special Hazard Loss
Coverage Amount will be zero.
Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which a
Special Hazard Loss has occurred.
34
<PAGE>
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.,
and its successors and/or assigns. If S&P is designated as a
Rating Agency in
the Preliminary Statement, for purposes of Section 11.5(b) the address for
notices to S&P shall be Standard &
Poor's, 55 Water
Street, 41st Floor, New
York, New York 10041, Attention: Mortgage
Surveillance Monitoring, or such other
address as S&P may hereafter furnish to
the Depositor and the Master Servicer.
Startup Day: The
Closing Date.
Stated Principal
Balance: As to any Mortgage Loan and Due
Date, the
unpaid principal balance of such Mortgage Loan as
of such Due Date as specified
in the amortization schedule at the time
relating thereto (before any adjustment
to such amortization schedule by reason of any
moratorium or similar waiver or
grace period) after giving effect to any
previous partial Principal Prepayments
and Liquidation Proceeds allocable to principal
(other than with respect to any
Liquidated Mortgage Loan) and to the payment of
principal due on such Due Date
and irrespective of any delinquency in
payment by the related Mortgagor.
Streamlined
Documentation Mortgage
Loan: Any Mortgage Loan originated
pursuant to the Seller's Streamlined Loan
Documentation Program then in effect.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordinated Certificate Writedown Amount: As of any Distribution
Date,
the amount by which (a) the sum of the
Class Certificate
Balances of all of the
Certificates, after giving effect to the distribution of principal and the
allocation of Realized Losses in reduction
of the Class Certificate Balances of
all of the Certificates on such Distribution Date, exceeds (b) the Pool
Principal Balance on the first day of the
month of such
Distribution Date less
any Deficient Valuations occurring before the Bankruptcy Loss
Coverage Amount
has been reduced to zero.
Subordinated
Optimal
Principal
Amount: With
respect
to each
Distribution Date, an amount equal to the sum
of the following (but in no event
greater than the aggregate Class Certificate Balances of the Subordinated
Certificates immediately prior to such
Distribution Date):
(1) the Subordinated Percentage of the applicable Non-PO
Percentage of all Scheduled Payments of principal due on each outstanding
Mortgage Loan on the first day of the month in which the Distribution Date
occurs, as specified in the amortization schedule at the time applicable
thereto, after adjustment for previous
principal prepayments
and the principal
portion of Debt Service Reductions after
the Bankruptcy Loss Coverage Amount has
been reduced to zero, but before any
adjustment to such amortization schedule by
reason of any other bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period;
(2) the Subordinated
Prepayment Percentage
of the applicable
Non-PO Percentage of the Stated
Principal Balance of each Mortgage Loan
which
was the subject of a Principal Prepayment in Full received by the Master
Servicer during the related Prepayment
Period;
(3)
the Subordinated
Prepayment Percentage
of the applicable
Non-PO Percentage of the sum of (a) all
partial Principal
Prepayments
received
in respect of each Mortgage Loan during the
related Prepayment
Period, (b) all
Unanticipated Recoveries received in respect of each
Mortgage Loan during
the
calendar month prior to such Distribution Date, and (c) on the Senior Final
Distribution Date, 100% of any related
Senior Optimal Principal Amount remaining
undistributed on such date;
35
<PAGE>
(4) the amount, if any, by which the sum of (a) the applicable
Non-PO Percentage of the net Liquidation Proceeds allocable to principal
received during the related Prepayment Period in respect of each
Liquidated
Mortgage Loan, other than Mortgage Loans described in clause (b), and (b)
the
applicable Non-PO Percentage of the Stated Principal
Balance of each
Mortgage
Loan that was purchased by a private mortgage insurer during the related
Prepayment Period as an alternative to paying a claim under the related
Insurance Policy exceeds (c) the sum of the
amounts distributable
to the Senior
Certificateholders (other than the holders
of the Class A-PO Certificates) under
clause (4) of the definition of Senior Optimal Principal Amount on such
Distribution Date; and
(5) the Subordinated
Prepayment Percentage
of the sum of (a)
the applicable Non-PO Percentage of the Stated Principal Balance of each
Mortgage Loan which was repurchased by the seller in connection with such
Distribution Date and (b) the difference,
if any, between the
applicable Non-PO
Percentage of the Stated Principal Balance of each Mortgage Loan that
has been
replaced by the seller with a Substitute Mortgage Loan pursuant to this
Agreement in connection with such Distribution Date and the Stated Principal
Balance of each such Substitute Mortgage
Loan.
Subordinated
Percentage: For any
Distribution
Date, 100% minus the
Senior Percentage.
Subordinated
Prepayment Percentage:
For any Distribution
Date, 100%
minus the Senior Prepayment Percentage.
Subservicer: Any
person to whom the Master Servicer has contracted for
the servicing of all or a portion of the
Mortgage Loans
pursuant to Section 3.2
hereof.
Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller
for
a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for Release,
substantially in the
form of Exhibit L, (i)
have a Stated Principal Balance, after
deduction of the principal portion of the
Scheduled Payment due in the month of
substitution,
not in excess of, and
not
more than 10% less than the Stated
Principal Balance of the Deleted Mortgage
Loan; (ii) have an Adjusted Net
Mortgage Rate not lower than the lower of
(a)
the Adjusted Net Mortgage Rate of the Deleted Mortgage Loan or (b) 5.50%,
provided that the Master Servicing Fee for
the Substitute Mortgage Loan shall be
equal to or greater than that of the
Deleted Mortgage
Loan; (iii) be accruing
interest at a rate no lower than and not more than 1% per
annum higher
than,
that of the Deleted Mortgage Loan; (iv) have a Loan-to-Value Ratio no higher
than that of the Deleted Mortgage Loan; (v)
have a remaining term to maturity no
greater than (and not more than one year
less than that of) the Deleted Mortgage
Loan; (vi) not be a Cooperative Loan unless the Deleted
Mortgage Loan was a
Cooperative Loan and (vii) comply with each representation and warranty set
forth in Section 2.3 hereof.
Substitution
Adjustment Amount:
The meaning ascribed to such term
pursuant to Section 2.3.
36
<PAGE>
Super Senior Certificates: As specified in the Preliminary
Statement.
Support Classes: Not
Applicable.
Targeted Principal Classes: Not applicable.
Tax Matters Person:
The person
designated as "tax
matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and Treasury
regulation ss. 301.6231(a)(7)-1.
Initially, the Tax
Matters Person shall be the
Trustee.
Tax Matters
Person Certificate: The Class A-R Certificates with a
Denomination of $0.01.
Transfer: Any direct
or indirect
transfer or sale of any Ownership
Interest in a Residual Certificate.
Trust Fund: The corpus of the trust created hereunder consisting of
(i)
the Mortgage Loans and all interest and
principal received on or with respect
thereto after the Cut-off Date to the extent not
applied in computing the
Cut-off Date Principal Balance thereof; (ii) all of the Depositor's
rights as
purchaser under the MLPA; (iii) the Certificate Account and the Distribution
Account and all amounts deposited therein
pursuant to the applicable provisions
of this Agreement; (iv) property that secured a Mortgage Loan and has been
acquired by foreclosure, deed-in-lieu of foreclosure or
otherwise; and (v)
all
proceeds of the conversion, voluntary or involuntary,
of any of the
foregoing;
provided that the Trust Fund shall exclude
the Retained Yield.
Trustee: The Bank of
New York and its
successors and, if a
successor
trustee is appointed hereunder, such
successor.
Trustee Fee:
As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate
multiplied by the Pool
Principal Balance
with respect to such Distribution Date.
Trustee Fee Rate: With
respect to each
Mortgage Loan,
the per annum
rate agreed upon in writing on or prior to the
Closing Date by the
Trustee and
the Depositor.
Unanticipated Recovery: As defined in Section 4.2(g).
Underwriters: As
specified in the Preliminary Statement.
Underwriters' Exemption: An individual administrative exemption
granted
by the U.S. Department of Labor to the
Underwriter
providing exceptions from
some of the prohibited transaction rules of ERISA with respect to the
initial
purchase, the holding and the subsequent resale by employee benefit plans in
certificates in pass-through trusts having assets and meeting conditions
described therein, as amended by Prohibited
Transaction
Exemption 2000-58
(65
Fed. Reg. 67765, November 13, 2000), as amended, and Prohibited Transaction
Exemption 2002-41 (67 Fed. Reg. 54487, August 22, 2002), as amended (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of
Labor.
37
<PAGE>
Upper REMIC: The
segregated
pool of assets
consisting
of the Lower
REMIC Interests.
Voting Rights:
The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 97% of all Voting Rights will
be allocated among all Holders
of the Certificates, other than the Class A-2, Class A-9 and Class A-R
Certificates, in proportion to their then
outstanding Class Certificate Balance;
and (b) 2.0% of all Voting Rights will be allocated among the Holders of the
Class A-2 and Class A-9 Certificates, in
proportion to their respective Notional
Amounts; and (c) 1.0% of all Voting
Rights will be
allocated to the Class
A-R
Certificates (such Voting Rights to be allocated among the Holders of
Certificates of such Class in accordance with their respective Percentage
Interests).
Yield Supplement
Amount: The Class A-1
Yield Supplement Amount or the
Class A-8 Yield Supplement Amount, as the
context may require.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 Conveyance
of Mortgage Loans.
(a) The
Depositor,
concurrently
with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and
otherwise
conveys to the Trustee for the benefit of the
Certificateholders,
without recourse,
all the right, title and interest of the
Depositor in
and to the Trust Fund together with (i) the
Depositor's right to (A) require the Seller to cure any breach
of
a representation
or warranty made by
the Seller pursuant to the
MLPA, or (B) repurchase or substitute for any affected Mortgage
Loan in accordance
herewith, and (ii) all right, title and
interest of
the Depositor in, to and under the Servicing
Agreement, which
right has been assigned to the Depositor
pursuant to the MLPA.
(b) In
connection
with the transfer and assignment set forth in
clause (a) above, the
Depositor has delivered or caused to be
delivered to the
Trustee or the
Custodian on its behalf (or, in
the case of the Delay Delivery Mortgage Loans, will deliver or
cause to be delivered
to the Trustee or the Custodian on its
behalf within
thirty (30) days
following the Closing
Date) for
the benefit of the
Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) (A)
the original
Mortgage Note endorsed by manual or
facsimile signature in
blank in the following
form: "Pay
to the order of ________________, without recourse," with
all intervening
endorsements showing a
complete chain of
endorsement from the
originator to the
Person endorsing
the Mortgage Note (each such endorsement being sufficient
to transfer all right,
title and interest of the party so
endorsing,
as noteholder or
assignee thereof,
in and to
that Mortgage Note); or
38
<PAGE>
(B) with respect to
any Lost Mortgage
Note, a lost note
affidavit from
the Seller stating that the original
Mortgage Note was lost or destroyed, together with a copy
of such Mortgage Note;
(ii) except as
provided below and for
each Mortgage Loan,
the
original recorded
Mortgage or a copy of such Mortgage
certified by the Seller as being a true and complete copy
of the Mortgage,
and in the case of
each MERS Mortgage
Loan, the presence of
the MIN of the
Mortgage Loans and
either language indicating that the Mortgage Loan is a MOM
Loan if the Mortgage Loan is a MOM Loan or if the Mortgage
Loan was not a MOM
Loan at origination, the original
Mortgage and the assignment thereof to MERS, with evidence
of recording indicated thereon;
(iii) in the
case of each Mortgage Loan, a duly executed
assignment of the Mortgage, or a copy of such assignment
certified by the Seller as being a true and complete copy
of the assignment,
in blank (which may be included in a
blanket assignment or assignments), together with, except
as provided below, all
interim recorded
assignments, or
copies of such interim assignments certified by the Seller
as being true and complete copies of the interim
assignments, of such
Mortgage (each such assignment, when
duly and validly
completed, to be in
recordable form and
sufficient to effect the assignment of and transfer to the
assignee
thereof, under
the Mortgage to which the
assignment
relates);
provided that,
if the related
Mortgage
has not been returned from the applicable public
recording office,
such assignment of the Mortgage may
exclude the
information to be
provided by the
recording
office;
(iv) the
original or copies of each assumption, modification,
written assurance or substitution agreement, if any;
(v) either
the original or duplicate original title policy, or
a copy of
such title
policy certified by the Seller as
being a true
and complete copy of the title policy,
(including all riders thereto) with respect to the related
Mortgaged Property, if available, provided that the title
policy (including all riders thereto) will be delivered as
soon as it becomes
available, and if the
title policy is
not available, and to
the extent required pursuant to the
second paragraph below or otherwise in connection with the
rating of the Certificates, a written commitment or
interim binder or
preliminary report of
the title issued
by the title insurance
or escrow company with
respect to
the Mortgaged Property, or in lieu thereof, an Alternative
Title Product or a copy of such Alternative Title Product
certified by the Seller as being a true and complete copy
of the Alternative Title Product, and
(vi) in the case
of a Cooperative
Loan, the originals of the
following documents or instruments:
(A) The Coop Shares, together with a stock power in blank;
39
<PAGE>
(B) The executed Security Agreement;
(C) The executed Proprietary Lease;
(D) The executed Recognition Agreement;
(E) The executed UCC-1
financing statement
with evidence
of recording
thereon which have been filed in all
places required to
perfect the Seller's
interest in
the Coop Shares and the Proprietary Lease; and
(F) Executed
UCC-3 financing
statements
or other
appropriate UCC financing statements required by state
law, evidencing a
complete and unbroken line from the
mortgagee to the
Trustee with
evidence of
recording
thereon (or in a form suitable for recordation).
In the event that in
connection with any
Mortgage Loan that is
not a
MERS Mortgage Loan the Depositor cannot deliver (a) the original recorded
Mortgage or (b) all interim recorded
assignments satisfying
the requirements of
clause (ii) or (iii) above, respectively, concurrently with the execution and
delivery hereof because such document or documents
have not been returned from
the applicable public recording office,
the Depositor shall
promptly deliver or
cause to be delivered to the Trustee or the Custodian on its behalf such
original Mortgage or such interim
assignment, as the
case may be, with evidence
of recording indicated thereon upon receipt thereof from
the public
recording
office, or a copy thereof, certified, if appropriate, by the
relevant recording
office, but in no event shall any such
delivery of the
original Mortgage and
each such interim assignment or a copy
thereof, certified,
if appropriate,
by
the relevant recording office, be made
later than one year following the Closing
Date; provided, however, in the event the Depositor is unable to deliver or
cause to be delivered by such date each Mortgage and each such interim
assignment by reason of the fact that any
such
