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 November
1, 2005
-----------------------------------------------------
FIRST HORIZON ALTERNATIVE MORTGAGE SECURITIES TRUST 2005-FA10
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-FA10
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS.............................................................................................6
ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND
WARRANTIES.........................................40
SECTION 2.1 Conveyance of
Mortgage
Loans......................................................................40
SECTION 2.2 Acceptance by
Trustee of the Mortgage
Loans.......................................................44
SECTION 2.3 Representations
and Warranties of the Master Servicer; Covenants of the
Seller...................47
SECTION 2.4 Representations
and Warranties of the Depositor as to the Mortgage
Loans..........................49
SECTION 2.5 Delivery of
Opinion of Counsel in Connection with
Substitutions...................................49
SECTION 2.6 Execution and
Delivery of
Certificates............................................................50
SECTION 2.7 REMIC
Matters.....................................................................................50
SECTION 2.8 Covenants of the
Master
Servicer..................................................................55
ARTICLE III ADMINISTRATION AND SERVICING OF
MORTGAGE
LOANS.......................................................55
SECTION 3.1 Master Servicer
to Service Mortgage
Loans.........................................................55
SECTION 3.2 Subservicing;
Enforcement of the Obligations of
Servicers.........................................56
SECTION 3.3 Rights of the
Depositor and the Trustee in Respect of the Master
Servicer.........................57
SECTION 3.4 Trustee to Act
as Master
Servicer.................................................................57
SECTION 3.5 Collection of
Mortgage Loan Payments; Certificate Account; Distribution
Account...................58
SECTION 3.6 Collection of
Taxes, Assessments and Similar Items; Escrow
Accounts...............................61
SECTION 3.7 Access to
Certain Documentation and Information Regarding the Mortgage
Loans......................62
SECTION 3.8 Permitted
Withdrawals from the Certificate Account and Distribution
Account.......................62
SECTION 3.9 Maintenance of
Hazard Insurance; Maintenance of Primary Insurance
Policies........................64
SECTION 3.10 Enforcement of
Due-on-Sale Clauses; Assumption
Agreements........................................66
SECTION 3.11 Realization
Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
Loans..................67
SECTION 3.12 Trustee to
Cooperate; Release of Mortgage
Files..................................................69
SECTION 3.13 Documents
Records and Funds in Possession of Master Servicer to be Held for
the Trustee..........70
SECTION 3.14 Master
Servicing
Compensation....................................................................71
SECTION 3.15 Access to
Certain
Documentation..................................................................71
SECTION 3.16 Annual
Statement as to
Compliance................................................................71
SECTION 3.17 Annual
Independent Public Accountants' Servicing Statement; Financial
Statements.................72
SECTION 3.18 Errors and
Omissions Insurance; Fidelity
Bonds...................................................72
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY
THE MASTER
SERVICER.....................................................73
SECTION 4.1
Advances..........................................................................................73
SECTION 4.2 Priorities of
Distribution........................................................................73
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SECTION 4.3 Method of
Distribution............................................................................79
SECTION 4.4 Allocation of
Losses..............................................................................80
SECTION 4.5
Reserved..........................................................................................82
SECTION 4.6 Monthly
Statements to
Certificateholders..........................................................82
SECTION 4.7 Corridor Reserve
Fund.............................................................................84
SECTION 4.8 Separate
Interest
Trust...........................................................................85
SECTION 4.9 Determination of
Pass-Through Rates for LIBOR
Certificates........................................86
ARTICLE V THE
CERTIFICATES.......................................................................................88
SECTION 5.1 The
Certificates..................................................................................88
SECTION 5.2 Certificate
Register; Registration of Transfer and Exchange of
Certificates.......................89
SECTION 5.3 Mutilated,
Destroyed, Lost or Stolen
Certificates.................................................95
SECTION 5.4 Persons Deemed
Owners.............................................................................95
SECTION 5.5 Access to List
of Certificateholders' Names and
Addresses.........................................95
SECTION 5.6 Maintenance of
Office or
Agency...................................................................96
ARTICLE VI THE DEPOSITOR AND THE MASTER
SERVICER.................................................................96
SECTION 6.1 Respective
Liabilities of the Depositor and the Master
Servicer...................................96
SECTION 6.2 Merger or
Consolidation of the Depositor or the Master
Servicer...................................96
SECTION 6.3 Limitation on
Liability of the Depositor, the Master Servicer and
Others..........................96
SECTION 6.4 Limitation on
Resignation of Master
Servicer......................................................97
ARTICLE VII
DEFAULT..............................................................................................97
SECTION 7.1 Events of
Default.................................................................................97
SECTION 7.2 Trustee to Act;
Appointment of
Successor..........................................................99
SECTION 7.3 Notification to
Certificateholders...............................................................101
ARTICLE VIII CONCERNING THE
TRUSTEE.............................................................................101
SECTION 8.1 Duties of
Trustee................................................................................101
SECTION 8.2 Certain Matters
Affecting the
Trustee............................................................103
SECTION 8.3 Trustee Not
Liable for Certificates or Mortgage
Loans............................................104
SECTION 8.4 Trustee May Own
Certificates.....................................................................105
SECTION 8.5 Trustee's Fees
and
Expenses......................................................................105
SECTION 8.6 Eligibility
Requirements for
Trustee.............................................................105
SECTION 8.7 Resignation and
Removal of
Trustee...............................................................106
SECTION 8.8 Successor
Trustee................................................................................106
SECTION 8.9 Merger or
Consolidation of
Trustee...............................................................107
SECTION 8.10 Appointment of
Co-Trustee or Separate
Trustee...................................................107
SECTION 8.11 Tax
Matters.....................................................................................109
SECTION 8.12 Periodic
Filings................................................................................110
ARTICLE IX
TERMINATION..........................................................................................111
SECTION 9.1 Termination upon
Liquidation or Purchase of all Mortgage
Loans...................................111
SECTION 9.2 Final
Distribution on the
Certificates...........................................................111
SECTION 9.3 Additional
Termination
Requirements..............................................................112
ARTICLE X
[RESERVED]............................................................................................113
ARTICLE XI MISCELLANEOUS
PROVISIONS.............................................................................113
SECTION 11.1
Amendment.......................................................................................113
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SECTION 11.2 Recordation of
Agreement;
Counterparts..........................................................115
SECTION 11.3 Governing
Law...................................................................................115
SECTION 11.4 Intention of
Parties............................................................................115
SECTION 11.5
Notices.........................................................................................116
SECTION 11.6 Severability of
Provisions......................................................................117
SECTION 11.7
Assignment......................................................................................117
SECTION 11.8 Limitation on
Rights of
Certificateholders......................................................117
SECTION 11.9 Inspection and
Audit
Rights.....................................................................118
SECTION 11.10 Certificates
Nonassessable and Fully
Paid......................................................118
SECTION 11.11 Limitations on
Actions; No
Proceedings.........................................................118
SECTION 11.12 Acknowledgment
of
Seller.......................................................................119
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 I-A-PO/Class II-A-PO Certificate
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 November 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 three separate REMICs, each having assets as
provided herein. 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
I-A-R Certificates
will represent the
residual interests in the Lower REMIC, Middle 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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Initial Class
Minimum
Integral Multiples
Class Designation
Certificate Balance
Pass-Through Rate
Denominations in
Excess Minimum
--------------------------------------------------------------------------------------------------------------------
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<C>
Class
I-A-1
$ 64,500,000.00
4.800%(1)
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class
I-A-2
(2)
0.600%(3)
$
500,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class I-A-3A
$ 11,860,000.00
5.500%
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class I-A-3B
$
725,000.00
5.500%
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class I-A-4A
$ 39,610,000.00
5.500%
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class I-A-4B
$ 2,421,000.00
5.500%
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class
I-A-5
$ 103,557,000.00
5.500%
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class
I-A-6
$ 6,328,785.00
5.500%
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class
I-A-7
$ 190,493,215.00
4.900%(4)
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class
I-A-8
(5)
0.100%(6)
$
500,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class I-A-PO
$ 719,897.68
(7)
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class
I-A-R
$
100.00
5.500%
$
100
N/A
--------------------------------------------------------------------------------------------------------------------
Class II-A-1
$ 32,193,000.00
5.250%
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class II-A-PO
$
276,763.57
(7)
$ 25,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class B-1
$ 9,954,000.00
variable(8)
$
100,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class B-2
$ 3,792,000.00
variable(8)
$
100,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class B-3
$ 2,370,000.00
variable(8)
$
100,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class B-4
$ 2,370,000.00
variable(8)
$
100,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class B-5
$ 1,659,000.00
variable(8)
$
100,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
Class B-6
$ 1,185,743.41
variable(8)
$
100,000
$
1,000
--------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Pass-Through Rate with respect to any
Distribution
Date for the Class
I-A-1 Certificates is the per annum rate
equal to (a) 4.800% with respect to the
first Distribution Date, and (b)
thereafter, the lesser of (i) LIBOR plus 0.700%
and (ii) 5.500%, subject to a minimum rate
of 0.700%.
(2) The Class I-A-2 Certificates are notional amount certificates and will
accrue interest during each Interest Accrual Period on a Notional
Amount equal
to the total of the Class Certificate Balances of the Class I-A-1 and Class
I-A-7 Certificates. The initial Notional Amount of the
Class I-A-2 Certificates
will be $254,993,215.
(3) The Pass-Through Rate with respect to any
Distribution
Date for the Class
I-A-2 Certificates is the per annum rate
equal to (a) 0.600% with respect to the
first Distribution Date, and (b) thereafter, the lesser of (i) 4.700% minus
LIBOR and (ii) 4.700%, subject to a minimum
rate of 0.000%.
(4) The Pass-Through Rate with respect to any
Distribution
Date for the Class
I-A-7 Certificates is the per annum rate
equal to (a) 4.900% with respect to the
first Distribution Date, and (b)
thereafter, the lesser of (i) LIBOR plus 0.800%
and (ii) 5.500%, subject to a minimum rate
of 0.800%.
2
<PAGE>
(5) The Class I-A-8 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 I-A-1
Certificates.
The initial
Notional Amount of the Class I-A-8
Certificates will be $64,500,000.
(6) The Pass-Through Rate with respect to any
Distribution
Date for the Class
I-A-8 Certificates is the per annum rate
equal to (a) 0.100% with respect to the
first Distribution Date, and (b) thereafter, the lesser of (i) 4.800% minus
LIBOR and (ii) 0.100%, subject to a minimum
rate of 0.000%.
(7) The Class I-A-PO and Class II-A-PO Certificates are Principal Only
Certificates and will not accrue
interest.
(8) The Pass-Through Rate on each Class of
Subordinated Certificates is variable
and will be equal to the weighted average
of the Designated Mortgage Pool Rates,
weighted on the basis of the Group
Subordinate
Amount for each
Mortgage Pool.
The initial Pass-Through Rate on each Class
of Subordinated Certificates for the
first Interest Accrual Period will be
5.482% per annum.
3
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Accretion Directed Certificates.......
None.
Accrual Certificates..................
None.
Accrual Components....................
None.
Book-Entry Certificates............... All
Classes of Certificates other than
the Physical Certificates.
Certificate Group..................... With
respect to Pool I, the Group I
Senior Certificates, and with respect to
Pool II, the Group II Senior
Certificates. The Subordinated
Certificates correspond to both of the
Mortgage Pools.
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 I-A-1 and Class I-A-7
Certificates.
Group I Senior Certificates........... The
Class I-A-1, Class I-A-2, Class
I-A-3A, Class
I-A-3B, Class I-A-4A, Class
I-A-4B, Class I-A-5, Class I-A-6, Class
I-A-7, Class I-A-8, Class I-A-PO and
Class I-A-R Certificates.
Group II Senior Certificates.......... The
Class II-A-1 and Class II-A-PO
Certificates.
Inverse Floating Rate Certificates.... The
Class I-A-2 and Class I-A-8
Certificates.
LIBOR Certificates.................... The
Class I-A-1, Class I-A-2, Class I-A-7
and Class I-A-8 Certificates.
NAS Certificates...................... The
Class I-A-4A and Class I-A-4B
Certificates.
Non-Delay Certificates................ The
LIBOR Certificates.
Notional Amount Certificates.......... The
Class I-A-2 and Class I-A-8
Certificates.
Offered Certificates.................. All
Classes of Certificates other than
the Private Certificates.
Physical Certificates................. The
Private Certificates and the Residual
Certificates.
Planned Principal Classes.............
None.
Principal Only Certificates........... The
Class I-A-PO and Class II-A-PO
Certificates.
Private Certificates.................. The
Class I-A-PO, Class II-A-PO, Class
B-4, Class B-5 and Class B-6
Certificates.
Rating Agencies.......................
S&P and Moody's; except for the purposes
of the Class B-4, Class B-5 and Class B-6
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.
4
<PAGE>
Residual Certificates................. The
Class I-A-R Certificates.
Retail/Lottery Certificates...........
None.
Scheduled Certificates................
None.
Senior Certificates................... The
Group I Senior Certificates and Group
II Senior Certificates, collectively.
Senior Mezzanine Certificates......... The
Class I-A-3B, Class I-A-4B and Class
I-A-6 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 I-A-3A, Class I-A-4A and Class
I-A-5 Certificates.
Support Classes.......................
None.
Targeted Principal Classes............
None.
Underwriters..........................
Citigroup Global Markets Inc. and UBS
Securities LLC
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: Not applicable.
Accretion
Termination Date: Not applicable.
Accrual
Amount: Not applicable.
Accrual
Certificates: Not applicable.
Accrued
Certificate Interest:
For any Class of
Certificates entitled
to
distributions 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.
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.
Aggregate
Senior Percentage:
For any Distribution Date, the percentage
equal to (x) the sum of the Class Certificate Balances of the Senior
Certificates of all Certificate Groups, divided by (y) the aggregate Pool
Principal Balance for both Mortgage
Pools on such
Distribution
Date, in each
case prior to giving effect to any
distributions on such Distribution Date
Agreement:
This Pooling and
Servicing Agreement and all amendments or
supplements hereto.
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
for each Mortgage Pool; provided that,
solely for purposes of this definition, the applicable Subordinated Optimal
Principal Amount for each Mortgage Pool will
be reduced by the amounts required
to be distributed to the related Class PO Certificates in respect of the
applicable Class PO Deferred Amount on such Distribution Date, and any such
reduction in the applicable Subordinate Optimal Principal
Amount for a Mortgage
Pool 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.
6
<PAGE>
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 applicable
subaccount of the Certificate Account at
the close of business on the related Determination Date on account of (i)
Principal Prepayments on the related Mortgage Pool received after the
related
Prepayment Period and Liquidation
Proceeds in respect of
the related
Mortgage
Pool received in the month of such Distribution Date and (ii) all Scheduled
Payments in the related Mortgage Pool due
after the related Due Date.
Apportioned Principal Balance: For any Class of Subordinated
Certificates
and any Distribution Date, an amount equal to the Class
Certificate Balance
of
such Class immediately prior to that
Distribution Date multiplied by a fraction,
the numerator of which is the applicable Group Subordinate Amount for such
Distribution Date and the denominator of which is the sum of the Group
Subordinate Amounts for such Distribution
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.
7
<PAGE>
Available Funds: For each Mortgage Pool,
with respect to any Distribution
Date, an amount equal to the sum of:
(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 in
such Mortgage
Pool 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 in such
Mortgage Pool 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
in such Mortgage Pool
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 in such Mortgage
Pool
during the related
Prepayment Period (or,
in the case of the first
Distribution Date, from the Cut-off Date); and
(e)
any Substitution Adjustment Amount or the Purchase
Price for any
Deleted Mortgage
Loan in the related
Mortgage Pool or a Mortgage
Loan in the related
Mortgage Pool
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.
8
<PAGE>
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.
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 or Accounts
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-FA10."
Certificate Group: As specified in the Preliminary Statement.
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.
9
<PAGE>
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.
Class: All
Certificates bearing the same class designation as set forth in
the Preliminary Statement.
Class
I-A-1 Corridor Contract: The transaction evidenced by that certain
Confirmation between the Separate Interest Trust and the Corridor Contract
Counterparty with a Trade Date of November
16, 2005 and a
reference number
of
737485.
Class
I-A-1 Corridor Contract Administration Agreement: The Class I-A-1
Corridor Contract Administration
Agreement dated as of
November 30, 2005 by and
among the Separate Interest Trust, the
Corridor Residual Owner and the Trustee.
Class
I-A-1 Corridor
Contract Termination
Date: The Distribution Date
occurring in November 2016.
Class
I-A-1 Yield Supplement Amount: For any Distribution Date on or
prior
to the Class I-A-1 Corridor Contract
Termination date on which the LIBOR exceeds
4.800%, an amount equal to interest for
the related Interest
Accrual Period on
the lesser of (a) the Class Certificate
Balance of the Class
I-A-1 Certificates
immediately prior to such Distribution Date and (b) the Class I-A-1
Corridor
Contract Notional Balance for such Distribution Date at a rate equal to the
excess of (i) the lesser of LIBOR and
8.800% over (ii) 4.800%.
Class
I-A-7 Corridor Contract: The transaction evidenced by that certain
Confirmation between the Separate Interest
Trust and the Corridor Residual Owner
with a Trade Date of November 16, 2005 and
a reference number of 737478.
Class
I-A-7 Corridor Contract Administration Agreement: The Class I-A-7
Corridor Contract Administration
Agreement dated as of
November 30, 2005 by and
among the Separate Interest Trust, the Corridor
Contract Counterparty and the
Trustee.
Class
I-A-7 Corridor
Contract Termination
Date: The Distribution Date
occurring in November 2016.
Class
I-A-7 Yield Supplement Amount: For any Distribution Date on or
prior
to the Class I-A-7 Corridor Contract
Termination date on which the LIBOR exceeds
4.700%, an amount equal to interest for
the related Interest
Accrual Period on
the lesser of (a) the Class Certificate
Balance of the Class
I-A-7 Certificates
immediately prior to such Distribution Date and (b) the Class I-A-7
Corridor
Contract Notional Balance for such Distribution Date at a rate equal to the
excess of (i) the lesser of LIBOR and
8.700% over (ii) 4.700%.
10
<PAGE>
Class
I-A-PO Deferred Amount: With respect to the Class I-A-PO
Certificates and any Distribution Date through the Cross-over Date,
the sum of
(1) the Class I-A-PO Percentage of the
principal portion of Non-Excess Losses on
a Discount Mortgage Loan in Pool I
allocated to the Class I-A-PO Certificates on
such date, and (2) all amounts previously allocated to the Class I-A-PO
Certificates in respect of such losses and not
distributed to the
Class I-A-PO
Certificates on prior Distribution
Dates.
Class
I-A-PO Percentage: (a) With respect to any Discount Mortgage Loan
in
Pool I, the fraction, expressed as a percentage, equal
to (5.50% - Adjusted Net
Mortgage Rate) divided by 5.50%, and (b) with respect to any Non-Discount
Mortgage Loan in Pool I, 0%.
Class
II-A-PO Deferred Amount: With respect to the Class II-A-PO
Certificates and any Distribution Date through the Cross-over Date,
the sum of
(1) the Class II-A-PO Percentage of the principal
portion of Non-Excess
Losses
on a Discount Mortgage Loan in Pool II allocated to the Class II-A-PO
Certificates on such date, and (2) all
amounts previously allocated to the Class
II-A-PO Certificates in respect of such
losses and not distributed to the Class
II-A-PO Certificates on prior Distribution
Dates.
Class
II-A-PO Percentage:
(a) With respect to
any Discount Mortgage Loan
in Pool II, the fraction, expressed as a percentage, equal
to (5.25% - Adjusted
Net Mortgage Rate) divided by 5.25%,
and (b) with respect
to any
Non-Discount
Mortgage Loan in Pool II, 0%.
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 PO
Certificates: The Class I-A-PO and Class II-A-PO Certificates.
Class
PO Deferred Amount: (a) With respect to the Class I-A-PO
Certificates, the Class I-A-PO Deferred Amount; and (b) with respect to the
Class II-A-PO Certificates, the Class
II-A-PO Deferred Amount.
Class PO
Deferred Payment Writedown Amount: For any Distribution Date and
any Class of Principal Only Certificates, the amount, if any, distributed on
such date in respect of the related Class
PO Deferred Amount pursuant to Section
4.2(a)(iv) herein. The Subordinated
Certificate
Writedown Amount and
the Class
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 PO
Principal Distribution
Amount: With respect to each Distribution
Date and any Class of Principal
Only Certificates, an amount equal to the sum
of:
11
<PAGE>
(1) the applicable
PO Percentage of all Scheduled Payments of
principal
due on each Mortgage
Loan in the related
Mortgage Pool 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 in the related Mortgage Pool 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 (a) all partial
Principal
Prepayments for each
Mortgage Loan in the related Mortgage Pool
received
by the Master Servicer during the related Prepayment Period and
(b) all
Unanticipated
Recoveries in respect
of each Mortgage Loan in the
related
Mortgage Pool received
by the Master Servicer during the calendar
month
preceding such Distribution Date;
(4) the applicable PO Percentage of the sum of (a) the net
Liquidation Proceeds
allocable to principal
on each Mortgage Loan in the
related
Mortgage Pool 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 in the
related
Mortgage
Pool 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 in the related Mortgage Pool
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 in the related
Mortgage Pool 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.
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 aggregate Pool
Principal Balance for both Mortgage Pools with respect to such Distribution
Date, equals or exceeds such percentage
calculated as of the Closing Date.
12
<PAGE>
Closing
Date: November 30, 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 related
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
in a
Mortgage Pool shall not exceed 0.0083% of the Pool Principal Balance of such
Mortgage Pool 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.
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-FA10),
facsimile no. (212) 815-3986, and which is the address to which
notices to and
correspondence with the Trustee should be
directed.
13
<PAGE>
Corresponding Classes:
As to any Middle
REMIC Interest identified in
Section 2.7, the Class or Classes that are identified in Section 2.7 as
corresponding to such Middle REMIC
interest.
Corresponding Classes
of Middle REMIC
Interests:
As to any Lower
REMIC
Interest identified in Section 2.7, the Middle REMIC
Interest or Middle
REMIC
Interests that are identified in Section
2.7 corresponding
to such Lower
REMIC
Interest.
Corridor
Contract: The Class I-A-1 Corridor
Contract or the Class
I-A-7
Corridor Contract, as the context may
require.
Corridor
Contract Account: Has the meaning specified in the applicable
Corridor Contract Administration
Agreement.
Corridor
Contract
Administrator: The
Bank of New York and its successors
and permitted assigns under the applicable Corridor Contract Administration
Agreement.
Corridor
Contract Administration Agreement: The Class I-A-1 Corridor
Contract Administration Agreement or the Class I-A-7 Corridor Contract
Administration Agreement, as the context
may require.
Corridor
Contract Counterparty:
Swiss Re Financial
Products
Corporation
and its successors and permitted
assigns.
Corridor
Contract Notional Balance: With respect to a Corridor
Contract,
the "Notional Amount" specified in such
Corridor Contract.
Corridor
Contract Termination Date: The Class I-A-1 Corridor Contract
Termination Date or the Class I-A-7
Corridor Contract
Termination Date, as
the
context may require.
Corridor
Reserve Fund: A fund created as part of the Separate
Interest
Trust pursuant to Section 4.7(a) of this
Agreement.
Corridor
Residual Owner: As defined in Section 4.7(b).
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 November 30,
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: November 1, 2005.
14
<PAGE>
Cut-off
Date
Pool Principal Balance: With respect to Pool I,
$440,014,985.79, and with respect to Pool
II, $34,000,518.87.
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.
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.
15
<PAGE>
Designated
Mortgage Pool Rates:
With respect to Pool
I, 5.50%, and with
respect to Pool II, 5.25%.
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.
Discount
Mortgage Loan: Any Mortgage Loan in Pool I
with an Adjusted Net
Mortgage Rate of less than 5.50% and any Mortgage Loan in Pool II with an
Adjusted Net Mortgage Rate of less than
5.25%.
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-FA10." 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
December 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.
16
<PAGE>
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.
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.
17
<PAGE>
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.
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, $9,480,310. 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 $4,740,155 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, 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.
FTBNA:
First Tennessee Bank National Association, a national banking
association.
Group I
Senior Certificates: As specified in the Preliminary Statement.
Group II
Senior Certificates: As specified in the Preliminary Statement.
Group
Subordinate Amount:
For a Mortgage Pool
and any Distribution Date,
the excess of (a) the Pool
Principal Balance of such Mortgage Pool for the
immediately preceding Distribution Date, over (b) the aggregate Class
Certificate Balance of the Senior Certificates
of the related Certificate Group
immediately prior to that Distribution
Date.
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.
Initial
LIBOR Rate: With respect to the calculation of the initial
Pass-Through Rate for the LIBOR
Certificates, 4.10% per annum.
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.
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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 the Group I Senior Certificates,
each
Class of Subordinated Certificates, and each Lower REMIC Interest and each
Middle REMIC Interest, the Distribution Date following
the third anniversary of
the scheduled maturity date of the Mortgage Loan in Pool I having the
latest
scheduled maturity date as of the Cut-off Date. As to the Group II Senior
Certificates, the Distribution Date following the third anniversary of the
scheduled maturity date of the Mortgage Loan in Pool II 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.
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 each LIBOR Certificate.
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.
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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 Middle REMIC
Interests,
the Lower REMIC
Interests, the RL Interest, the RM Interest, the RU Interest and the
Separate
Interest Trust.
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.
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.
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Middle
REMIC: The segregated pool of assets consisting of the Lower REMIC
Interests.
Middle
REMIC Interests: The REMIC regular interests, within the meaning
of
the REMIC Provisions, issued by the Middle
REMIC as set forth in Section 2.7.
MIN: The
Mortgage Identification Number for any MERS Mortgage Loan.
MLPA: The
Mortgage Loan Purchase
Agreement dated as of November 30, 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.
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:
(A) the loan
number;
(B) the
Mortgagor's
name and the street
address of the Mortgaged
Property, including the zip code;
(C) the maturity
date;
(D) the original
principal balance;
(E) the Cut-off
Date Principal Balance;
(F) the first
payment date of the Mortgage Loan;
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(G) the
Scheduled Payment in effect as of the Cut-off Date;
(H) the
Loan-to-Value Ratio at origination;
(I) a code
indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(J) 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;
(K) the Mortgage
Rate;
(L) the purpose
for the Mortgage Loan;
(M) the
type of documentation program pursuant to which the
Mortgage Loan was originated;
(N) the Master
Servicing Fee for the Mortgage Loan; and
(O) 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.
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: Any of Pool I or Pool II.
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.
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<PAGE>
NAS
Distribution Percentage: 0% through the Distribution Date
in November
2010; 30% of the applicable NAS Percentage
thereafter
through the
Distribution
Date in November 2011; 40% of the
applicable NAS Percentage thereafter through
the Distribution Date in November 2012; 60% of the applicable NAS
Percentage
thereafter through the Distribution Date in
November 2013; 80% of the applicable
NAS Percentage thereafter through the Distribution
Date in November 2014;
and
100% of the applicable NAS Percentage
thereafter.
NAS
Percentage: 0% through the Distribution Date in November 2010, and
for
any Distribution Date thereafter,
the lesser of (x) 100%
and (y) the percentage
obtained by dividing (1) the aggregate Class Certificate Balances of the NAS
Certificates immediately preceding such Distribution Date
by (2) the aggregate
Class Certificate Balances of all Classes
of Senior Certificates related to Pool
I (other than the Notional Amount Certificates and the Class I-A-PO
Certificates) immediately preceding such
Distribution Date.
NAS
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 Pool I for such date multiplied by the NAS
Distribution Percentage for such date.
National
Cost of Funds Index:
The National Monthly
Median Cost of
Funds
Ratio to SAIF-Insured Institutions published by the Office of Thrift
Supervision.
Net
Interest Shortfall:
For any Distribution Date and each Mortgage Pool,
the sum of (a) the amount of interest
which would
otherwise have been
received
for any Mortgage Loan in such Mortgage Pool
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 in respect of such
Mortgage Pool.
Net
Prepayment Interest
Shortfalls: As to any
Distribution Date and each
Mortgage Pool, the amount by which the aggregate of Prepayment Interest
Shortfalls in respect of the Mortgage
Loans in such
Mortgage Pool during the
related Prepayment Period exceeds an
amount equal to the Compensating Interest
paid in respect of such Mortgage Loans, if
any, for such Distribution Date.
Non-Class
I-A-PO Percentage: (a)
With respect to a Discount Mortgage Loan
in Pool I, the fraction, expressed as a percentage, equal to the Adjusted Net
Mortgage Rate divided by 5.50%, and (b) with respect to each Non-Discount
Mortgage Loan in Pool I, 100%.
Non-Class
II-A-PO Percentage: (a) With respect to a Discount Mortgage
Loan
in Pool II, the fraction, expressed as a percentage,
equal to the Adjusted
Net
Mortgage Rate divided by 5.25%, and (b) with respect to each Non-Discount
Mortgage Loan in Pool II, 100%.
Non-Delay
Certificates: As specified in the Preliminary Statement.
Non-Discount Mortgage
Loan: Any Mortgage
Loan in Pool I with an Adjusted
Net Mortgage Rate that is equal to or greater than 5.50% per annum and any
Mortgage Loan in Pool II with an Adjusted
Net Mortgage Rate that is equal to or
greater than 5.25% per annum.
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<PAGE>
Non-Excess
Loss: Any Realized Loss other than an Excess Loss.
Non-PO
Percentage:
(a) With respect to Pool I, the Non-Class I-A-PO
Percentage, and (b) with respect to Pool
II, the Non-Class II-A-PO Percentage.
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.
Notional
Amount Certificates: As specified in the Preliminary Statement.
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
Group Subordinate
Amount: With respect to a Mortgage Pool,
the
related Group Subordinate Amount as of the
Closing Date.
Original
Mortgage Loan: The
Mortgage Loan
refinanced in connection with
the origination of a Refinancing Mortgage
Loan.
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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.
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;
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<PAGE>
(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;
(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;
26
<PAGE>
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.
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
Pool I, the Class I-A-PO Percentage,
and (b) with respect to Pool II, the Class
II-A-PO Percentage.
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Pool I:
The aggregate of the
Mortgage Loans
identified
on the Mortgage
Loan Schedule as being included in Pool
I.
Pool II:
The aggregate of the
Mortgage Loans
identified on the
Mortgage
Loan Schedule as being included in Pool
II.
Pool
Principal Balance: For a Mortgage Pool, with respect to any
Distribution Date, the aggregate of the Stated Principal Balances of the
Mortgage Loans in such Mortgage Pool 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.
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
Balance Schedules: Not applicable.
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.
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<PAGE>
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.
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.
29
<PAGE>
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.
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, Middle REMIC or 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.
30
<PAGE>
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: With respect to Pool I, 5.875% per annum, and with
respect to Pool II, 5.625% 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.
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
I-A-R Certificate.
RM
Interest: The REMIC residual interest, within the meaning of the
REMIC
Provisions, issued by the Middle REMIC, which
shall be represented by the Class
I-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
I-A-R Certificate.
Scheduled
Balances: Not applicable.
Scheduled
Certificates: Not applicable.
31
<PAGE>
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 each Certificate Group, the
Distribution Date on which the Class Certificate Balance of each Class of
related Senior Certificates has been
reduced to zero.
Senior
Mezzanine Certificates: As specified in the Preliminary
Statement.
Senior
Optimal Principal Amount: As to a Mortgage Pool and with respect
to
each Distribution Date, an amount equal to
the sum of:
(1) the related Senior Percentage of the applicable Non-PO
Percentage of all Scheduled Payments of principal due on each
Mortgage Loan in
such Mortgage Pool 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 related
Senior Prepayment Percentage of the applicable
Non-PO Percentage of the Stated Principal
Balance of each Mortgage Loan in such
Mortgage Pool which was the subject of a
Principal Prepayment
in Full received
by the Master Servicer during the
applicable Prepayment Period;
(3) the related
Senior Prepayment Percentage of the applicable
Non-PO Percentage of the sum of (a) all
partial Principal Prepayments in respect
of each Mortgage Loan in such Mortgage Pool received during the applicable
Prepayment Period and (b) all Unanticipated Recoveries in respect of each
Mortgage Loan in such Mortgage Pool
received during the calendar month preceding
such Distribution Date;
(4) the lesser of:
(a) the related
Senior Prepayment Percentage of the sum of (x) the
applicable Non-PO
Percentage
of the Liquidation Proceeds
allocable to principal on each Mortgage Loan in such Mortgage
Pool 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 in such
Mortgage Pool 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
32
<PAGE>
(b)(i) the
related Senior Percentage of the sum of (x) the
applicable Non-PO
Percentage of the
Stated Principal Balance
of each Mortgage
Loan in such
Mortgage Pool 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 in such Mortgage Pool 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 related Senior
Percentage of the principal portion of
the related Senior
Percentage
of the principal portion of
Excess Losses (other
than Debt Service
Reductions) for
such
Mortgage Pool during the related Prepayment Period; and
(5) the related Senior
Prepayment Percentage
of the sum of (a) the
applicable Non-PO Percentage of the Stated Principal
Balance of each
Mortgage
Loan in such Mortgage Pool 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 in such Mortgage Pool 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 for a Certificate Group, 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 of such Certificate Group (other than the Notional Amount
Certificates and the Class PO Certificates) immediately preceding such
Distribution Date by the Pool Principal Balance of the related
Mortgage Pool
(excluding the aggregate of the applicable PO Percentage of the principal
balance of each Discount Mortgage Loan in the related
Mortgage Pool) for the
immediately preceding Distribution
Date.
Senior
Prepayment
Percentage:
On any Distribution
Date occurring during
the periods set forth below, and as to each Certificate Group, the Senior
Prepayment Percentages described below:
33
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Period (Dates Inclusive)
Senior Prepayment Percentage
-----------------------------------------------------------------------------------------------------------
<S>
<C>
December 2005 - November 2010
100%
-----------------------------------------------------------------------------------------------------------
The related Senior Percentage plus 70% of the related
December 2010 - November 2011
Subordinated Percentage.
-----------------------------------------------------------------------------------------------------------
The related Senior Percentage plus 60% of the related
December 2011 - November 2012
Subordinated Percentage.
-----------------------------------------------------------------------------------------------------------
The related Senior Percentage plus 40% of the related
December 2012 - November 2013
Subordinated Percentage.
-----------------------------------------------------------------------------------------------------------
December 2013 - November 2014
The related Senior Percentage plus 20% of the related
Subordinated Percentage.
-----------------------------------------------------------------------------------------------------------
December 2014 and thereafter
The related Senior Percentage.
-----------------------------------------------------------------------------------------------------------
</TABLE>
provided,
however, if on any distribution date, the Aggregate Senior
Percentage exceeds such percentage
calculated as of the
Closing Date, then the
Senior Prepayment Percentage for both Certificate
Groups for such
Distribution
Date will equal 100%.
The
reductions in the Senior Prepayment Percentage for each Certificate
Group described above will not occur and
will remain at the level in effect for
the most recent prior period specified in the table above,
unless both of the
following step-down conditions are
satisfied with respect to each Mortgage Pool,
as of the last day of the month preceding
the Distribution Date:
(1) the aggregate Stated Principal Balance of Mortgage Loans in
both
Mortgage Pools 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 that date; and
(2) cumulative Realized Losses in both Mortgage Pools do not
exceed:
(a) 30% of the
Original Subordinated
Principal Balance if
such Distribution
Date occurs
between and including
December 2010 and November 2011;
(b) 35% of the
Original Subordinated
Principal Balance if
such Distribution
Date occurs
between and including
December 2011 and November 2012;
(c) 40% of the
Original Subordinated
Principal Balance if
such Distribution
Date occurs
between and including
December 2012 and November 2013;
34
<PAGE>
(d) 45% of the
Original Subordinated
Principal Balance if
such Distribution
Date occurs
between and including
December 2013 and November 2014; and
(e) 50%
of the related Original Subordinated Principal
Balance if such Distribution Date occurs during or after
December 2014.
Senior
Support Mezzanine Certificates: Not Applicable.
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);
35
<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; or
(iii) by an agent
of any such government, power, authority or
forces;
(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, $4,740,155. 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.
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.
36
<PAGE>
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 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 aggregate of
the Pool Principal Balances of both
Mortgage Pools 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 Mortgage Pool
and 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 related
Subordinated
Percentage of the
applicable Non-PO
Percentage of all Scheduled Payments of principal due on each outstanding
Mortgage Loan in the related Mortgage Pool 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 related Subordinated Prepayment Percentage of the
applicable
Non-PO Percentage of the Stated Principal
Balance of each
Mortgage Loan in the
related Mortgage Pool which was the subject of a
Principal Prepayment
in Full
received by the Master Servicer during the
related Prepayment Period;
37
<PAGE>
(3) the related 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 in the
related Mortgage Pool during the related
Prepayment Period, (b) all Unanticipated
Recoveries received in
respect of each
Mortgage Loan in the related Mortgage Pool 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;
(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 in the related Mortgage Pool, other than Mortgage
Loans described
in clause (b), and (b) the applicable
Non-PO Percentage of
the Stated Principal
Balance of each Mortgage Loan in the
related Mortgage Pool 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 PO Certificates)
under clause (4) of
the definition of
applicable Senior Optimal Principal Amount
on such Distribution Date; and
(5) the related Subordinated Prepayment Percentage of the sum of
(a)
the applicable Non-PO Percentage of the Stated Principal Balance of each
Mortgage Loan in the related Mortgage Pool 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 in the related Mortgage Pool 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 and
each Certificate
Group, 100% minus the related 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% in the
case of a Deleted Mortgage Loan from Pool I, or 5.25% in the
case of a Deleted
Mortgage Loan from Pool II, 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.
38
<PAGE>
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant
to Section 2.3.
Super
Senior Certificates: As specified in the Preliminary Statement.
Support
Classes: Not applicable.
Targeted
Balance: 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 I-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 and
a Mortgage Pool, an
amount
equal to one-twelfth of the Trustee Fee
Rate multiplied by the
applicable 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).
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Undercollateralization Distribution: As defined in Section
4.2(h).
Undercollateralized
Group: With respect to
any Distribution
Date, the
Senior Certificates of any Certificate Group (other than the Principal
Only
Certificates) as to which the aggregate
Certificate
Principal Balance
thereof,
after giving effect to distributions
pursuant to Section 4.2(a) on such date, is
greater than the applicable Non-PO Percentage of the Pool Principal
Balance of
the related Mortgage Pool for such
Distribution Date.
Underwriters: As specified in the Preliminary Statement.
Underwriters' Exemption: An individual administrative exemption
granted by
the U.S. Department of Labor to the
Underwriters 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.
Upper
REMIC: The segregated pool of assets consisting of the Middle 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 Notional Amount Certificates
and the Class I-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 Notional
Amount
Certificates, in proportion to their respective
Notional Amounts; and
(c) 1.0%
of all Voting Rights will be allocated to the Class I-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 I-A-1 Yield
Supplement Amount or
the
Class I-A-7 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.
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(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
(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 that is
not a MERS 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 original recorded Mortgage, noting 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, or
a copy of the Mortgage certified by the
Seller as being a true and complete copy of the Mortgage;
(iii) in the case of a
Mortgage Loan
that is not a MERS
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;
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(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:
1. The
Coop Shares, together with a stock power in blank;
