POOLING AND SERVICING AGREEMENT

Pooling and Servicing Agreement

You are currently viewing:

This Pooling and Servicing Agreement involves

FIRST HORIZON ASSET SECURITIES INC. | FIRST HORIZON HOME LOAN CORPORATION | THE BANK OF NEW YORK,

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: POOLING AND SERVICING AGREEMENT
Governing Law: New York Date: 4/6/2005

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 March 1, 2005

-----------------------------------------------------

FIRST HORIZON ALTERNATIVE MORTGAGE SECURITIES TRUST 2005-FA3

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-FA3

<PAGE>

TABLE OF CONTENTS

<TABLE>

Page

<S> <C>

ARTICLE I DEFINITIONS.............................................................................................5

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.........................................37

SECTION 2.1 Conveyance of Mortgage Loans......................................................................37

SECTION 2.2 Acceptance by Trustee of the Mortgage Loans.......................................................41

SECTION 2.3 Representations and Warranties of the Master Servicer; Covenants of the Seller...................43

SECTION 2.4 Representations and Warranties of the Depositor as to the Mortgage Loans..........................45

SECTION 2.5 Delivery of Opinion of Counsel in Connection with Substitutions...................................46

SECTION 2.6 Execution and Delivery of Certificates............................................................46

SECTION 2.7 REMIC Matters.....................................................................................46

SECTION 2.8 Covenants of the Master Servicer..................................................................51

ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.......................................................51

SECTION 3.1 Master Servicer to Service Mortgage Loans.........................................................51

SECTION 3.2 Subservicing; Enforcement of the Obligations of Servicers.........................................53

SECTION 3.3 Rights of the Depositor and the Trustee in Respect of the Master Servicer.........................53

SECTION 3.4 Trustee to Act as Master Servicer.................................................................53

SECTION 3.5 Collection of Mortgage Loan Payments; Certificate Account; Distribution Account...................54

SECTION 3.6 Collection of Taxes, Assessments and Similar Items; Escrow Accounts...............................57

SECTION 3.7 Access to Certain Documentation and Information Regarding the Mortgage Loans......................58

SECTION 3.8 Permitted Withdrawals from the Certificate Account and Distribution Account.......................58

SECTION 3.9 Maintenance of Hazard Insurance; Maintenance of Primary Insurance Policies........................60

SECTION 3.10 Enforcement of Due-on-Sale Clauses; Assumption Agreements........................................62

SECTION 3.11 Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage Loans..................63

SECTION 3.12 Trustee to Cooperate; Release of Mortgage Files..................................................65

SECTION 3.13 Documents Records and Funds in Possession of Master Servicer to be Held for the Trustee..........66

SECTION 3.14 Master Servicing Compensation....................................................................67

SECTION 3.15 Access to Certain Documentation..................................................................67

SECTION 3.16 Annual Statement as to Compliance................................................................67

SECTION 3.17 Annual Independent Public Accountants' Servicing Statement; Financial Statements.................68

SECTION 3.18 Errors and Omissions Insurance; Fidelity Bonds...................................................68

</TABLE>

<PAGE>

<TABLE>

<S> <C>

ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER.....................................................69

SECTION 4.1 Advances..........................................................................................69

SECTION 4.2 Priorities of Distribution........................................................................69

SECTION 4.3 Method of Distribution............................................................................74

SECTION 4.4 Allocation of Losses..............................................................................75

SECTION 4.5 Reserved..........................................................................................77

SECTION 4.6 Monthly Statements to Certificateholders..........................................................77

SECTION 4.7 Corridor Reserve Fund.............................................................................79

SECTION 4.8 Separate Interest Trust...........................................................................80

SECTION 4.9 Determination of Pass-Through Rates for LIBOR Certificates........................................81

ARTICLE V THE CERTIFICATES.......................................................................................83

SECTION 5.1 The Certificates..................................................................................83

SECTION 5.2 Certificate Register; Registration of Transfer and Exchange of Certificates.......................83

SECTION 5.3 Mutilated, Destroyed, Lost or Stolen Certificates.................................................89

SECTION 5.4 Persons Deemed Owners.............................................................................89

SECTION 5.5 Access to List of Certificateholders' Names and Addresses.........................................89

SECTION 5.6 Maintenance of Office or Agency...................................................................90

ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER.................................................................90

SECTION 6.1 Respective Liabilities of the Depositor and the Master Servicer...................................90

SECTION 6.2 Merger or Consolidation of the Depositor or the Master Servicer...................................90

SECTION 6.3 Limitation on Liability of the Depositor, the Master Servicer and Others..........................90

SECTION 6.4 Limitation on Resignation of Master Servicer......................................................91

ARTICLE VII DEFAULT..............................................................................................91

SECTION 7.1 Events of Default.................................................................................91

SECTION 7.2 Trustee to Act; Appointment of Successor..........................................................93

SECTION 7.3 Notification to Certificateholders................................................................95

ARTICLE VIII CONCERNING THE TRUSTEE..............................................................................95

SECTION 8.1 Duties of Trustee.................................................................................95

SECTION 8.2 Certain Matters Affecting the Trustee.............................................................96

SECTION 8.3 Trustee Not Liable for Certificates or Mortgage Loans.............................................98

SECTION 8.4 Trustee May Own Certificates......................................................................98

SECTION 8.5 Trustee's Fees and Expenses.......................................................................98

SECTION 8.6 Eligibility Requirements for Trustee..............................................................99

SECTION 8.7 Resignation and Removal of Trustee................................................................99

SECTION 8.8 Successor Trustee................................................................................100

SECTION 8.9 Merger or Consolidation of Trustee...............................................................101

SECTION 8.10 Appointment of Co-Trustee or Separate Trustee...................................................101

SECTION 8.11 Tax Matters.....................................................................................102

SECTION 8.12 Periodic Filings................................................................................104

ARTICLE IX TERMINATION..........................................................................................105

SECTION 9.1 Termination upon Liquidation or Purchase of all Mortgage Loans...................................105

SECTION 9.2 Final Distribution on the Certificates...........................................................105

SECTION 9.3 Additional Termination Requirements..............................................................106

ARTICLE X [RESERVED]............................................................................................107

</TABLE>

<PAGE>

<TABLE>

<S> <C>

ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................107

SECTION 11.1 Amendment.......................................................................................107

SECTION 11.2 Recordation of Agreement; Counterparts..........................................................109

SECTION 11.3 Governing Law...................................................................................109

SECTION 11.4 Intention of Parties............................................................................109

SECTION 11.5 Notices.........................................................................................110

SECTION 11.6 Severability of Provisions......................................................................111

SECTION 11.7 Assignment......................................................................................111

SECTION 11.8 Limitation on Rights of Certificateholders......................................................111

SECTION 11.9 Inspection and Audit Rights.....................................................................112

SECTION 11.10 Certificates Nonassessable and Fully Paid......................................................112

SECTION 11.11 Limitations on Actions; No Proceedings.........................................................112

SECTION 11.12 Acknowledgment of Seller.......................................................................113

</TABLE>

SCHEDULES

<TABLE>

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 March 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]

<PAGE>

<TABLE>

------------------------ ----------------------- ----------------------- --------------------- ---------------------

Initial Class Minimum Integral Multiples

Class Designation Certificate Balance Pass-Through Rate Denominations in Excess Minimum

------------------------ ----------------------- ----------------------- --------------------- ---------------------

Class I-A-1 $ 141,162,000.00 variable (3) $ 25,000 $ 1,000

Class I-A-2 $ 41,175,000.00 variable (3) $ 25,000 $ 1,000

Class I-A-3 (4) variable (3) $ 500,000 $ 1,000

Class I-A-4 $ 6,138,000.00 variable (3) $ 25,000 $ 1,000

Class I-A-5 (5) variable (3) $ 500,000 $ 1,000

Class I-A-6 $ 10,090,000.00 5.500% $ 1,000 $ 1,000

Class I-A-PO $ 3,038,564.00 (1) $ 25,000 $ 1,000

Class I-A-R $ 100.00 5.500% $ 100 N/A

Class II-A-1 $ 18,777,000.00 5.000% $ 25,000 $ 1,000

Class II-A-PO $ 430,690.00 (1) $ 25,000 $ 1,000

Class B-1 $ 4,370,000.00 variable(2) $ 100,000 $ 1,000

Class B-2 $ 1,610,000.00 variable(2) $ 100,000 $ 1,000

Class B-3 $ 1,150,000.00 variable(2) $ 100,000 $ 1,000

Class B-4 $ 805,000.00 variable(2) $ 100,000 $ 1,000

Class B-5 $ 690,000.00 variable(2) $ 100,000 $ 1,000

Class B-6 $ 575,886.71 variable(2) $ 100,000 $ 1,000

</TABLE>

(1) The Class I-A-PO and Class II-A-PO Certificates will be Principal Only

Certificates and will not accrue interest.

(2) 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 5.456% per annum.

(3) 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) 3.35% with respect to the

first Distribution Date, and (b) thereafter, the lesser of (i) LIBOR plus 0.50%

and (ii) 5.50%, subject to a minimum rate of 0.50%. 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) 3.35% with respect to the first Distribution Date, and

(b) thereafter, the lesser of (i) LIBOR plus 0.50% and (ii) 5.50%, subject to a

minimum rate of 0.50%. The Pass-Through Rate with respect to any Distribution

Date for the Class I-A-3 Certificates is the per annum rate equal to (a) 2.15%

with respect to the first Distribution Date, and (b) thereafter, the lesser of

(i) 5.00% minus LIBOR and (ii) 5.00%, subject to a minimum rate of 0.00%. The

Pass-Through Rate with respect to any Distribution Date for the Class I-A-4

Certificates is the per annum rate equal to (a) 3.45% with respect to the first

Distribution Date, and (b) thereafter, the lesser of (i) LIBOR plus 0.60% and

(ii) 5.50%, subject to a minimum rate of 0.60%. The Pass-Through Rate with

respect to any Distribution Date for the Class I-A-5 Certificates is the per

annum rate equal to (a) 2.05% with respect to the first Distribution Date, and

(b) thereafter, the lesser of (i) 4.90% minus LIBOR and (ii) 4.90%, subject to a

minimum rate of 0.00%.

(4) The Class I-A-3 Certificates are notional amount certificates and will

accrue interest during each interest accrual period on a notional amount equal

to the sum of the Class Certificate Balances of the Class I-A-1 and Class I-A-2

Certificates. The initial notional amount of the Class I-A-3 Certificates will

be $182,337,000.

(5) The Class I-A-5 Certificates are notional amount certificates and will

accrue interest during each interest accrual period on a notional amount equal

to the Class Certificate Balances of the Class I-A-4 Certificates. The initial

notional amount of the Class I-A-5 Certificates will be $6,138,000.

<PAGE>

<TABLE>

<S> <C>

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 all 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, Class I-A-2 and Class I-A-4 Certificates.

Group I Senior Certificates........... The Class I-A-1, Class I-A-2, Class I-A-3, Class I-A-4, Class I-A-5,

Class I-A-6, 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-3 and Class I-A-5 Certificates.

LIBOR Certificates.................... The Class I-A-1, Class I-A-2, Class I-A-3, Class I-A-4 and Class I-A-5

Certificates.

NAS Certificates...................... None.

Non-Delay Certificates................ The LIBOR Certificates.

Notional Certificates................. The Class I-A-3 and Class I-A-5 Certificates.

Offered Certificates.................. All Classes of Certificates other than the Private Certificates.

Physical Certificates................. The Principal Only Certificates, the Residual Certificates and the

Private Certificates.

Planned Principal Classes............. None.

Principal Only Certificates........... The Class I-A-PO and Class II-A-PO Certificates.

Private Certificates.................. The Class B-4, Class B-5 and Class B-6 Certificates.

Rating Agencies....................... S&P and Fitch; except that, for purposes of the Class B-1, B-2, Class

B-3, Class B-4 and Class B-5 Certificates, S&P shall be the sole

Rating Agency.

Regular Certificates.................. All Classes of Certificates, other than the Residual Certificates.

</TABLE>

<PAGE>

<TABLE>

<S> <C>

Retail/Lottery Certificates........... None.

Residual Certificates................. The Class I-A-R Certificates.

Scheduled Certificates................ None.

Senior Certificates................... The Group I Senior Certificates and Group II Senior Certificates,

collectively.

Senior Support Certificates........... None.

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............. None.

Support Classes....................... None.

Targeted Principal Classes............ None.

Underwriters.......................... Countrywide Securities Corporation and Credit Suisse First Boston LLC.

</TABLE>

With respect to any of the foregoing designations as to which the

corresponding reference is "None," all defined terms and provisions herein

relating solely to such designations shall be of no force or effect, and any

calculations herein incorporating references to such designations shall be

interpreted without reference to such designations and amounts. Defined terms

and provisions herein relating to statistical rating agencies not designated

above as Rating Agencies shall be of no force or effect.

<PAGE>

ARTICLE I

DEFINITIONS

Whenever used in this Agreement, the following words and phrases,

unless the context otherwise requires, shall have the following meanings:

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 of such Class of Certificates immediately prior to

such Distribution Date, less such Class' share of any Net Interest Shortfall,

allocable among the outstanding Classes of Senior Certificates of the related

Certificate Group based on the Accrued Certificate Interest otherwise

distributable thereto, and allocable to the Subordinated Certificates based on

interest accrued on their related Apportioned Principal Balances.

Adjusted Mortgage Rate: As to each Mortgage Loan, and at any time, the

per annum rate equal to the Mortgage Rate less the Master Servicing Fee Rate.

Adjusted Net Mortgage Rate: As to each Mortgage Loan, and at any time,

the per annum rate equal to the Mortgage Rate less the related Expense Fee Rate.

Advance: The payment required to be made by the Master Servicer with

respect to any Distribution Date pursuant to Section 4.1, the amount of any such

payment being equal to the aggregate of payments of principal and interest (net

of the Master Servicing Fee and net of any net income in the case of any REO

Property) on the Mortgage Loans that were due on the related Due Date and not

received as of the close of business on the related Determination Date, less the

aggregate amount of any such delinquent payments that the Master Servicer has

determined would constitute a Nonrecoverable Advance if advanced.

Agreement: This Pooling and Servicing Agreement and all amendments or

supplements hereto.

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 each

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.

<PAGE>

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 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.

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;

<PAGE>

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; 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.

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.

<PAGE>

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-FA3."

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

pro rata share, if any, of the Subordinated Certificate

Writedown Amount for previous Distribution Dates.

Certificate Register: The register maintained pursuant to Section 5.2

hereof.

Certificateholder or Holder: The person in whose name a Certificate is

registered in the Certificate Register, except that, solely for the purpose of

giving any consent pursuant to this Agreement, any Certificate registered in the

name of the Depositor or the Seller or any affiliate or agent of the Depositor

or the Seller shall be deemed not to be Outstanding and the Percentage Interest

evidenced thereby shall not be taken into account in determining whether the

requisite amount of Percentage Interests necessary to effect such consent has

been obtained; provided, however, that if any such Person (including the

Depositor) owns 100% of the Percentage Interests evidenced by a Class of

Certificates, such Certificates shall be deemed to be Outstanding for purposes

of any provision hereof that requires the consent of the Holders of Certificates

of a particular Class as a condition to the taking of any action hereunder. The

Trustee is entitled to rely conclusively on a certification of the Depositor or

any affiliate of the Depositor in determining which Certificates are registered

in the name of an affiliate of the Depositor.

CHL: Countrywide Home Loans, Inc. and its successors and permitted

assigns.

Class: All Certificates bearing the same class designation as set forth

in the Preliminary Statement.

<PAGE>

Class I-A-1/Class I-A-2 Corridor Contract: The interest rate cap

agreement dated March 18, 2005 with respect to the Class I-A-1 Certificates and

the Class I-A-2 Certificates, by and between the Corridor Contract Counterparty

and CHL, including the ISDA Master Agreement between the Corridor Contract

Counterparty and CHL, the schedule thereto and the related confirmation (Ref.

No. 2000005056130 and 2000005056131), each dated as of March 18, 2005.

Class I-A-1/Class I-A-2 Corridor Contract Notional Balance: For any

Distribution Date, the amount specified as such in the Class I-A-1/Class I-A-2

Corridor Contract.

Class I-A-1/Class I-A-2 Yield Supplement Amount: For any Distribution

Date on or prior to the Corridor Contract Termination date on which the LIBOR

exceeds 5.00%, an amount equal to interest for the related Interest Accrual

Period on the lesser of (a) the aggregate Class Certificate Balance of the Class

I-A-1 and Class I-A-2 Certificates immediately prior to such Distribution Date

or (b) the Class I-A-1/Class I-A-2 Corridor Contract Notional Balance for such

Distribution Date at a rate equal to the excess of (i) the lesser of LIBOR and

9.00% over (ii) 5.00%.

Class I-A-4 Corridor Contract: The interest rate cap agreement dated

March 18, 2005 with respect to the Class I-A-4 Certificates, by and between the

Corridor Contract Counterparty and CHL, including the ISDA Master Agreement

between the Corridor Contract Counterparty and CHL, the schedule thereto and the

related confirmation (Ref. No. 2000005056132 and 2000005056133), each dated as

of March 18, 2005.

Class I-A-4 Corridor Contract Notional Balance: For any Distribution

Date, the amount specified as such in the Class I-A-4 Corridor Contract.

Class I-A-4 Yield Supplement Amount: For any Distribution Date on or

prior to the Corridor Contract Termination date on which the LIBOR exceeds

4.90%, 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-4 Certificates

immediately prior to such Distribution Date or (b) the Class I-A-4 Corridor

Contract Notional Balance for such Distribution Date at a rate equal to the

excess of (i) the lesser of LIBOR and 8.90% over (ii) 4.90%.

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.

<PAGE>

Class II-A-PO Percentage: (a) With respect to any Discount Mortgage

Loan in Pool II, the fraction, expressed as a percentage, equal to (5.00% -

Adjusted Net Mortgage Rate) divided by 5.00%, 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:

(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 (i) all partial

prepayments of principal for each Mortgage Loan in the related Mortgage

Pool received by the Master Servicer during the related Prepayment

Period and (ii) all Unanticipated Recoveries for each Mortgage Loan in

the related Mortgage Pool received by the Master Servicer during the

calendar month preceding such Distribution Date;

<PAGE>

(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 as applicable, 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 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 all the Mortgage Pools with respect to such Distribution Date,

equals or exceeds such percentage calculated as of the Closing Date.

Closing Date: March 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.

<PAGE>

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-FA3), facsimile no. (212) 815-3986, and which is the address to which

notices to and correspondence with the Trustee should be directed.

Corresponding Classes: As to any 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/Class I-A-2 Corridor Contract or the

Class I-A-4 Corridor Contract, as the context may require.

Corridor Contract Counterparty: JPMorgan Chase Bank, N.A. and its

successors and permitted assigns.

Corridor Contract Termination Date: The Distribution Date occurring in

February 2015.

<PAGE>

Corridor Reserve Fund: A fund created as part of the Trust Fund

pursuant to Section 4.7(a) of this Agreement, but which is not an asset of any

REMIC created hereunder.

Cross-over Date: The Distribution Date on which the respective Class

Certificate Balances of each Class of Subordinated Certificates have been

reduced to zero.

Custodial Agreement: The Custodial Agreement dated as of March 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: March 1, 2005.

Cut-off Date Pool Principal Balance: With respect to Pool I,

$210,003,531.89, and with respect to Pool II, $20,008,708.82.

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 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.

<PAGE>

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.

Designated Mortgage Pool Rates: With respect to Pool I, 5.50%, and with

respect to Pool II, 5.00%.

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 a Net Mortgage

Rate of less than 5.50% and any Mortgage Loan in Pool II with a Net Mortgage

Rate of less than 5.00%.

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-FA3." 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 April 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

<PAGE>

trust company in which such accounts are insured by the FDIC or the SAIF (to the

limits established by the FDIC or the SAIF, as applicable) and the uninsured

deposits in which accounts are otherwise secured such that, as evidenced by an

Opinion of Counsel delivered to the Trustee and to each Rating Agency, the

Certificateholders have a claim with respect to the funds in such account or a

perfected first priority security interest against any collateral (which shall

be limited to Permitted Investments) securing such funds that is superior to

claims of any other depositors or creditors of the depository institution or

trust company in which such account is maintained, or (iii) a trust account or

accounts maintained with (a) the trust department of a federal or state

chartered depository institution or (b) a trust company, acting in its fiduciary

capacity or (iv) any other account acceptable to each Rating Agency. Eligible

Accounts may bear interest, and may include, if otherwise qualified under this

definition, accounts maintained with the Trustee.

ERISA: The Employee Retirement Income Security Act of 1974, as amended.

ERISA-Qualifying Underwriting: With respect to any ERISA-Restricted

Certificate, a best efforts or firm commitment underwriting or private placement

that meets the requirements of the Underwriters' Exemption.

ERISA-Restricted Certificate: As specified in the Preliminary

Statement.

Escrow Account: The Eligible Account or Accounts established and

maintained pursuant to Section 3.6(a) hereof.

Event of Default: As defined in Section 7.1 hereof.

Excess Loss: With respect to a Mortgage Pool, 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.

<PAGE>

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 or any successor thereto. If Fitch is designated

as a Rating Agency in the Preliminary Statement, for purposes of Section 11.5(b)

the address for notices to Fitch shall be Fitch, Inc., One State Street Plaza,

New York, New York 10004, Attention: Residential Mortgage Surveillance Group, or

such other address as Fitch may hereafter furnish to the Depositor and the

Master Servicer.

FNMA: The Federal National Mortgage Association, a federally chartered

and privately owned corporation organized and existing under the Federal

National Mortgage Association Charter Act, or any successor thereto.

Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has

occurred.

Fraud Losses: Realized Losses on Mortgage Loans as to which a loss is

sustained by reason of a default arising from fraud, dishonesty or

misrepresentation in connection with the related Mortgage Loan, including a loss

by reason of the denial of coverage under any related Primary Insurance Policy

because of such fraud, dishonesty or misrepresentation.

Fraud Loss Coverage Amount: As of the Closing Date, $4,600,245. As of

any Distribution Date from the first anniversary of the Cut-off Date and prior

to the fifth anniversary of the Cut-off Date, the Fraud Loss Coverage Amount

will equal $2,300,122 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.

<PAGE>

Index: Not applicable.

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: $100,000.

Initial Component Balance: Not applicable.

Initial LIBOR Rate: 2.83%

Insurance Policy: With respect to any Mortgage Loan included in the

Trust Fund, any insurance policy, including all riders and endorsements thereto

in effect, including any replacement policy or policies for any Insurance

Policies.

Insurance Proceeds: Proceeds paid by an insurer pursuant to any

Insurance Policy, in each case other than any amount included in such Insurance

Proceeds in respect of Insured Expenses.

Insured Expenses: Expenses covered by an Insurance Policy or any other

insurance policy with respect to the Mortgage Loans.

Interest Accrual Period: With respect to each Class of Delay

Certificates and any Distribution Date, the calendar month prior to the month of

such Distribution Date. With respect to any Non-Delay Certificates and any

Distribution Date, the one month period commencing on the 25th day of the month

preceding the month in which such Distribution Date occurs and ending on the

24th day of the month in which such Distribution Date occurs.

Latest Possible Maturity Date: As to 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.

<PAGE>

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.

Loan-to-Value Ratio: With respect to any Mortgage Loan and as to 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(e).

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, the Corridor

Reserve Fund, the Separate Interest Trust and the Corridor Contracts.

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.

<PAGE>

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.

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 March 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., or any successor thereto. 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 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.

<PAGE>

Mortgage Loan Schedule: The list of Mortgage Loans (as from time to

time amended by the Master Servicer to reflect the addition of Substitute

Mortgage Loans and the deletion of Deleted Mortgage Loans pursuant to the

provisions of this Agreement) transferred to the Trustee as part of the Trust

Fund and from time to time subject to this Agreement, attached hereto as

Schedule I, setting forth the following information with respect to each

Mortgage Loan:

(1) the loan number;

(2) the Mortgagor's name and the street address of the Mortgaged

Property, including the zip code;

(3) the maturity date;

(4) the original principal balance;

(5) the Cut-off Date Principal Balance;

(6) the first payment date of the Mortgage Loan;

(7) the Scheduled Payment in effect as of the Cut-off Date;

(8) the Loan-to-Value Ratio at origination;

(9) a code indicating whether the residential dwelling at the time

of origination was represented to be owner-occupied;

(10) a code indicating whether the residential dwelling is either

(a) a detached single family dwelling (b) a dwelling in a de

minimis PUD, (c) a condominium unit or PUD (other than a de

minimis PUD), (d) a two-to-four unit residential property or

(e) a Cooperative Unit;

(11) the Mortgage Rate;

(12) the purpose for the Mortgage Loan;

(13) the type of documentation program pursuant to which the

Mortgage Loan was originated;

(14) the Master Servicing Fee for the Mortgage Loan; and

(15) a code indicating whether the Mortgage Loan is a MERS Mortgage

Loan.

Such schedule shall also set forth the total of the amounts described

under (4) and (5) above for all of the Mortgage Loans.

<PAGE>

Mortgage Loans: Such of the mortgage loans transferred and assigned to

the Trustee pursuant to the provisions hereof as from time to time are held as a

part of the Trust Fund (including any REO Property), the mortgage loans so held

being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or

other acquisition of title of the related Mortgaged Property.

Mortgage Note: The original executed note or other evidence of

indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.

Mortgage Pool: 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.

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 or 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 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 Net

Mortgage Rate divided by 5.00%, 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 a Net

Mortgage Rate that is equal to or greater than 5.50% per annum and any mortgage

loan in Pool II with a Net Mortgage Rate that is equal to or greater than 5.00%

per annum.

<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 Certificates: As specified in the Preliminary Statement.

Novation Agreement: The Novation Agreement dated as of March 30, 2005

by and among JPMorgan Chase Bank, National Association, Countrywide Home Loans,

Inc. and The Bank of New York, not in its individual capacity, but solely as

trustee of the Separate Interest Trust.

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 Cut-off Date.

<PAGE>

Original Mortgage Loan: The Mortgage Loan refinanced in connection with

the origination of a Refinancing Mortgage Loan.

Original Subordinated Principal Balance: The aggregate of the Class

Certificate Balances of the Subordinated Certificates as of the Closing Date.

OTS: The Office of Thrift Supervision.

Outside Reference Date: Not applicable.

Outstanding: With respect to the Certificates as of any date of

determination, all Certificates theretofore executed and authenticated under

this Agreement except:

(a) Certificates theretofore canceled by the Trustee or delivered

to the Trustee for cancellation; and

(b) Certificates in exchange for which or in lieu of which other

Certificates have been executed and delivered by the Trustee

pursuant to this Agreement.

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;

<PAGE>

(iv) certificates of deposit, demand or time deposits, or bankers'

acceptances issued by any depository institution or trust

company incorporated under the laws of the United States or of

any state thereof and subject to supervision and examination

by federal and/or state banking authorities, provided that the

commercial paper and/or long term unsecured debt obligations

of such depository institution or trust company (or in the

case of the principal depository institution in a holding

company system, the commercial paper or long-term unsecured

debt obligations of such holding company, but only if Moody's

is not a Rating Agency) are then rated one of the two highest

long-term and/or the highest short-term ratings of each Rating

Agency for such securities;

(v) demand or time deposits or certificates of deposit issued by

any bank or trust company or savings institution to the extent

that such deposits are fully insured by the FDIC and receiving

the highest short-term debt rating of each Rating Agency;

(vi) guaranteed reinvestment agreements issued by any bank,

insurance company or other corporation and receiving the

highest short-term debt rating of each Rating Agency and

containing, at the time of the issuance of such agreements,

such terms and conditions as will not result in the

downgrading or withdrawal of the rating then assigned to the

Certificates by either Rating Agency;

(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;

<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 Certificate: As specified in the Preliminary Statement.

Planned Balance: Not applicable.

Planned Principal Classes: Not applicable.

<PAGE>

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.

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 each Mortgage Pool, with respect to any

Distribution Date, the aggregate of the Stated Principal Balances of the

Mortgage Loans which were Outstanding Mortgage Loans on the Due Date in the

month preceding the month of such Distribution Date, and for the first

Distribution Date, as of the Closing Date, less any Principal Prepayments

received on or after such Due Date and distributed to Certificateholders on the

prior Distribution Date.

Prepayment Interest Excess: As to any Principal Prepayment received by

the Master Servicer from the first day through the fifteenth day of any calendar

month (other than the calendar month in which the Cut-off Date occurs), all

amounts paid by the related Mortgagor in respect of interest on such Principal

Prepayment. All Prepayment Interest Excess shall be paid to the Master Servicer

as additional master servicing compensation.

Prepayment Interest Shortfall: As to any Distribution Date, Mortgage

Loan and Principal Prepayment received (a) during the period from the sixteenth

day of the month preceding the month of such Distribution Date (or, in the case

of the first Distribution Date, from the Cut-off Date) through the last day of

such month, in the case of a Principal Prepayment in Full, or (b) during the

month preceding the month of such Distribution Date, in the case of a partial

Principal Prepayment, the amount, if any, by which one month's interest at the

related Adjusted Mortgage Rate on such Principal Prepayment exceeds the amount

of interest actually paid by the Mortgagor in connection with such Principal

Prepayment.

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.

<PAGE>

Principal Prepayment in Full: Any Principal Prepayment made by a

Mortgagor of the entire principal balance of a Mortgage Loan.

Private Certificate: 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

<PAGE>

liquidation occurred (or during the calendar month preceding the related

Distribution Date, as applicable), to the extent applied as recoveries of

interest at the Adjusted Net Mortgage Rate and to principal of the Liquidated

Mortgage Loan. With respect to each Mortgage Loan, other than a Liquidated

Mortgage Loan, which has become the subject of a Deficient Valuation, if the

principal amount due under the related Mortgage Note has been reduced, the

difference between the principal balance of the Mortgage Loan outstanding

immediately prior to such Deficient Valuation and the principal balance of the

Mortgage Loan as reduced by the Deficient Valuation.

Recognition Agreement: With respect to any Cooperative Loan, an

agreement between the Cooperative Corporation and the originator of such

Mortgage Loan which establishes the rights of such originator in the Cooperative

Property.

Record Date: With respect to any Distribution Date, the close of

business on the last Business Day of the month preceding the month in which such

Distribution Date occurs.

Reference Bank: A leading bank with an established place of business in

London engaged in transactions in Eurodollar deposits in the international

Eurocurrency market, not controlled by, or under the common control with, the

Trustee.

Refinancing Mortgage Loan: Any Mortgage Loan originated in connection

with the refinancing of an existing mortgage loan.

Regular Certificates: As specified in the Preliminary Statement.

Relief Act: The Servicemembers Civil Relief Act or any similar state or

local legislation or regulations.

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.

<PAGE>

REO Property: A Mortgaged Property acquired by the Trust Fund through

foreclosure or deed-in-lieu of foreclosure in connection with a defaulted

Mortgage Loan.

Request for Release: The Request for Release submitted by the Master

Servicer to the Trustee, substantially in the form of Exhibits L and M, as

appropriate.

Required Coupon: With respect to Pool I, 5.875% per annum, and with

respect to Pool II, 5.375% 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.

<PAGE>

Scheduled Certificates: Not applicable.

Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due

on any Due Date allocable to principal and/or interest on such Mortgage Loan

which, unless otherwise specified herein, shall give effect to any related Debt

Service Reduction and any Deficient Valuation that affects the amount of the

monthly payment due on such Mortgage Loan.

Securities Act: The Securities Act of 1933, as amended.

Security Agreement: The security agreement with respect to a

Cooperative Loan.

Seller: First Horizon Home Loan Corporation, a Kansas corporation, and

its successors and assigns, in its capacity as seller of the Mortgage Loans

pursuant to the MLPA.

Senior Certificates: As specified in the Preliminary Statement.

Senior Final Distribution Date: For 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 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 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 (i) all partial Principal Prepayments in respect of each Mortgage

Loan in such Mortgage Pool received during the applicable Prepayment Period and

(ii) all Unanticipated Recoveries in respect of each Mortgage Loan in such

Mortgage Pool received during the calendar month preceding such Distribution

Date;

<PAGE>

(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

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

(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 a 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:

<PAGE>

<TABLE>

Period (Dates Inclusive) Senior Prepayment Percentage

------------------------ ----------------------------

<S> <C>

April 2005 - March 2010 100%

April 2010 - March 2011 the related Senior Percentage plus 70% of the related

Subordinated Percentage

April 2011 - March 2012 the related Senior Percentage plus 60% of the related

Subordinated Percentage

April 2012 - March 2013 the related Senior Percentage plus 40% of the related

Subordinated Percentage

April 2013 - March 2014 the related Senior Percentage plus 20% of the related

Subordinated Percentage

April 2014 and thereafter the related Senior Percentage

</TABLE>

Notwithstanding the foregoing, if the Senior Percentage for a

Certificate Group on any Distribution Date exceeds the initial Senior Percentage

for that Certificate Group, the Senior Prepayment Percentage for the Certificate

Groups for such Distribution Date will equal 100%.

In addition, no reduction of the Senior Prepayment Percentage for a

Certificate Group below the level in effect for the most recent prior period

specified in the table above shall be effective on any Distribution Date unless

both of the following conditions are satisfied with respect to each Mortgage

Pool as of the last day of the month preceding such Distribution Date:

(1) the aggregate Stated Principal Balance of Mortgage Loans

in a Mortgage Pool 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 related

Group Subordinate Amount as of such date; and

(2) cumulative Realized Losses on the Mortgage Loans in each

Mortgage Pool do not exceed:

(a) 30% of the related Original Group