EXHIBIT 4.1
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 October 1, 2005
-----------------------------------------------------
FIRST HORIZON ALTERNATIVE MORTGAGE SECURITIES TRUST 2005-AA10
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-AA10
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS.............................................................................................5
ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND
WARRANTIES.........................................34
SECTION 2.1 Conveyance of Mortgage
Loans......................................................................34
SECTION 2.2 Acceptance by
Trustee of the Mortgage
Loans.......................................................38
SECTION 2.3 Representations
and Warranties of the Master Servicer; Covenants of the
Seller...................40
SECTION 2.4 Representations
and Warranties of the Depositor as to the Mortgage
Loans..........................43
SECTION 2.5 Delivery of
Opinion of Counsel in Connection with
Substitutions...................................43
SECTION 2.6 Execution and
Delivery of
Certificates............................................................44
SECTION 2.7 REMIC
Matters.....................................................................................44
SECTION 2.8 Covenants of the
Master
Servicer..................................................................47
ARTICLE III ADMINISTRATION AND SERVICING OF
MORTGAGE
LOANS.......................................................47
SECTION 3.1 Master Servicer
to Service Mortgage
Loans.........................................................47
SECTION 3.2 Subservicing;
Enforcement of the Obligations of
Servicers.........................................48
SECTION 3.3 Rights of the
Depositor and the Trustee in Respect of the Master
Servicer.........................49
SECTION 3.4 Trustee to Act
as Master
Servicer.................................................................49
SECTION 3.5 Collection of
Mortgage Loan Payments; Certificate Account; Distribution
Account...................50
SECTION 3.6 Collection of
Taxes, Assessments and Similar Items; Escrow
Accounts...............................53
SECTION 3.7 Access to
Certain Documentation and Information Regarding the Mortgage
Loans......................54
SECTION 3.8 Permitted
Withdrawals from the Certificate Account and Distribution
Account.......................54
SECTION 3.9 Maintenance of
Hazard Insurance; Maintenance of Primary Insurance
Policies........................56
SECTION 3.10 Enforcement of
Due-on-Sale Clauses; Assumption
Agreements........................................57
SECTION 3.11 Realization
Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
Loans..................59
SECTION 3.12 Trustee to
Cooperate; Release of Mortgage
Files..................................................61
SECTION 3.13 Documents
Records and Funds in Possession of Master Servicer to be Held for
the Trustee..........62
SECTION 3.14 Master
Servicing
Compensation....................................................................62
SECTION 3.15 Access to
Certain
Documentation..................................................................63
SECTION 3.16 Annual
Statement as to
Compliance................................................................63
SECTION 3.17 Annual
Independent Public Accountants' Servicing Statement; Financial
Statements.................63
SECTION 3.18 Errors and
Omissions Insurance; Fidelity
Bonds...................................................64
SECTION 3.19 Notification of
Adjustments......................................................................64
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY
THE MASTER
SERVICER.....................................................65
SECTION 4.1
Advances..........................................................................................65
SECTION 4.2 Priorities of
Distribution........................................................................65
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SECTION 4.3 Method of
Distribution............................................................................69
SECTION 4.4 Allocation of
Losses..............................................................................70
SECTION 4.5
[RESERVED]........................................................................................72
SECTION 4.6 Monthly
Statements to
Certificateholders..........................................................72
ARTICLE V THE
CERTIFICATES.......................................................................................74
SECTION 5.1 The
Certificates..................................................................................74
SECTION 5.2 Certificate
Register; Registration of Transfer and Exchange of
Certificates.......................75
SECTION 5.3 Mutilated,
Destroyed, Lost or Stolen
Certificates.................................................81
SECTION 5.4 Persons Deemed
Owners.............................................................................81
SECTION 5.5 Access to List
of Certificateholders' Names and
Addresses.........................................82
SECTION 5.6 Maintenance of
Office or
Agency...................................................................82
ARTICLE VI THE DEPOSITOR AND THE MASTER
SERVICER.................................................................82
SECTION 6.1 Respective
Liabilities of the Depositor and the Master
Servicer...................................82
SECTION 6.2 Merger or
Consolidation of the Depositor or the Master
Servicer...................................82
SECTION 6.3 Limitation on
Liability of the Depositor, the Master Servicer and
Others..........................83
SECTION 6.4 Limitation on
Resignation of Master
Servicer......................................................83
ARTICLE VII
DEFAULT..............................................................................................84
SECTION 7.1 Events of
Default.................................................................................84
SECTION 7.2 Trustee to Act;
Appointment of
Successor..........................................................86
SECTION 7.3 Notification to
Certificateholders................................................................87
ARTICLE VIII CONCERNING THE
TRUSTEE..............................................................................87
SECTION 8.1 Duties of
Trustee.................................................................................87
SECTION 8.2 Certain Matters
Affecting the
Trustee.............................................................89
SECTION 8.3 Trustee Not
Liable for Certificates or Mortgage
Loans.............................................91
SECTION 8.4 Trustee May Own
Certificates......................................................................91
SECTION 8.5 Trustee's Fees
and
Expenses.......................................................................91
SECTION 8.6 Eligibility
Requirements for
Trustee..............................................................92
SECTION 8.7 Resignation and
Removal of
Trustee................................................................92
SECTION 8.8 Successor
Trustee.................................................................................93
SECTION 8.9 Merger or
Consolidation of
Trustee................................................................93
SECTION 8.10 Appointment of
Co-Trustee or Separate
Trustee....................................................93
SECTION 8.11 Tax
Matters......................................................................................95
SECTION 8.12 Periodic
Filings.................................................................................97
ARTICLE IX
TERMINATION...........................................................................................97
SECTION 9.1 Termination upon
Liquidation or Purchase of all Mortgage
Loans....................................97
SECTION 9.2 Final
Distribution on the
Certificates............................................................98
SECTION 9.3 Additional
Termination
Requirements...............................................................99
ARTICLE X
[RESERVED]............................................................................................100
ARTICLE XI MISCELLANEOUS
PROVISIONS.............................................................................100
SECTION 11.1
Amendment.......................................................................................100
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SECTION 11.2 Recordation of
Agreement;
Counterparts..........................................................101
SECTION 11.3 Governing
Law...................................................................................101
SECTION 11.4 Intention of
Parties............................................................................102
SECTION 11.5
Notices.........................................................................................102
SECTION 11.6 Severability of
Provisions......................................................................103
SECTION 11.7
Assignment......................................................................................103
SECTION 11.8 Limitation on
Rights of
Certificateholders......................................................104
SECTION 11.9 Inspection and
Audit
Rights.....................................................................104
SECTION 11.10 Certificates
Nonassessable and Fully
Paid......................................................105
SECTION 11.11 Limitations on
Actions; No
Proceedings.........................................................105
SECTION 11.12 Acknowledgment
of
Seller.......................................................................105
SCHEDULES
Schedule I:
Mortgage Loan Schedule
S-I-1
Schedule II:
Representations and Warranties of the Master Servicer
S-II-1
Schedule III:
Form of Monthly Master Servicer Report
S-III-1
EXHIBITS
Exhibit A:
Form of Senior Certificate
A-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
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THIS POOLING
AND SERVICING AGREEMENT, dated as of October 1, 2005,
among FIRST HORIZON ASSET SECURITIES INC.,
a Delaware corporation, as depositor
(the "Depositor"), FIRST HORIZON HOME LOAN
CORPORATION, a Kansas corporation, as
master servicer (the "Master Servicer"), and THE BANK OF NEW YORK, a
banking
corporation organized under the laws of the State of New
York, as trustee (the
"Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the
parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal
income
tax purposes will consist of two separate REMICs. The Certificates will
represent the entire beneficial ownership interest in the Trust Fund. The
Regular Certificates will represent
"regular interests" in the Upper REMIC. The
Class I-A-R Certificates will represent the residual interests in the Lower
REMIC and Upper REMIC, as described in Section 2.7. The "latest possible
maturity date" for federal income tax purposes of all REMIC
regular interests
created hereby will be the Latest Possible
Maturity Date.
The following table
sets forth
characteristics of the
Certificates,
together with the minimum denominations and
integral multiples in excess thereof
in which such Classes shall be issuable (except that one Certificate of each
Class of Certificates may be issued in a
different amount and, in addition, one
Residual Certificate representing the Tax Matters Person
Certificate
may be
issued in a different amount):
[Remainder of Page Intentionally Left Blank]
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Initial Class
Initial
Integral Multiples
Class Designation
Certificate Balance Pass Through
Rate
Minimum Denomination in Excess Minimum
-------------------------
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Class I-A-1
$
140,430,000.00
5.7775% (1) $
25,000 $
1,000
-------------------------
----------------------- ---------------------
---------------------- ---------------------
Class I-A-2
$
423,000.00
5.7775% (1) $
25,000 $
1,000
-------------------------
----------------------- ---------------------
---------------------- ---------------------
Class I-A-R
$
100.00
5.7775% (1) $
100 $
N/A
-------------------------
----------------------- ---------------------
---------------------- ---------------------
Class II-A-1
$
153,687,000.00
5.8517% (2) $
25,000 $
1,000
-------------------------
----------------------- ---------------------
---------------------- ---------------------
Class B-1
$
9,136,000.00
5.8162% (3) $
100,000 $
1,000
-------------------------
----------------------- ---------------------
---------------------- ---------------------
Class B-2
$
3,780,000.00
5.8162% (3) $
100,000 $
1,000
-------------------------
----------------------- ---------------------
---------------------- ---------------------
Class B-3
$
2,205,000.00
5.8162% (3) $
100,000 $
1,000
-------------------------
----------------------- ---------------------
---------------------- ---------------------
Class B-4
$
2,362,000.00
5.8162% (3) $
100,000 $
1,000
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----------------------- ---------------------
---------------------- ---------------------
Class B-5
$
1,733,000.00
5.8162% (3) $
100,000 $
1,000
-------------------------
----------------------- ---------------------
---------------------- ---------------------
Class B-6
$
1,260,624.75
5.8162% (3) $
100,000 $
1,000
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---------------------- ---------------------
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(1) The Pass-Through Rates for the Class I-A-1,
Class I-A-2 and Class
I-A-R
Certificates for each subsequent Distribution Date will equal the
Weighted
Average
Adjusted Net Mortgage
Rate for Pool I, as of the first day of the
month
immediately
prior to the month in
which the relevant
Distribution
Date
occurs, after taking
into account scheduled payments of principal on
that date
and any Principal Prepayments received on or after such date
and
distributed to Certificateholders on the prior Distribution
Date.
(2) The Pass-Through Rate for the Class II-A-1 Certificates for each
subsequent
Distribution Date will
equal the Weighted Average Adjusted Net
Mortgage
Rate for Pool II, as
of the first day of
the month
immediately
prior to
the month in which the relevant Distribution Date occurs,
after
taking
into account scheduled
payments of principal
on that date and any
Principal
Prepayments
received on or after
such date and
distributed to
Certificateholders on the prior Distribution Date.
(3) The Pass-Through Rates for the Subordinated Certificates for each
subsequent
Distribution
Date will equal the weighted average of the
Weighted
Average Adjusted Net Mortgage Rates for each Mortgage Pool,
weighted
on the basis of the Group Subordinate Amount for each Mortgage
Pool, as
of the first day of the month immediately prior to the month in
which the
relevant Distribution
Date occurs, after taking into account
scheduled
payments of principal on that date and any Principal
Prepayments
received
on or after such date and distributed to Certificateholders on
the prior
Distribution Date.
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Accretion Directed Certificates.......
None.
Accrual Certificates..................
None.
Accrual Components....................
None.
Book-Entry Certificates...............
All
Classes of Certificates other than the Physical Certificates.
Certificate Group.....................
With
respect to Pool I, the Group I Senior Certificates; and with
respect to Pool II, the Group II Senior Certificates. The Subordinated
Certificates correspond to each Mortgage Pool.
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............
None.
Group I Senior Certificates...........
The
Class I-A-1, Class I-A-2 and Class I-A-R Certificates.
Group II Senior Certificates..........
The
Class II-A-1 Certificates.
Insured Retail Certificates...........
None.
Inverse Floating Rate Certificates....
None.
LIBOR Certificates....................
None.
Non-Delay Certificates................
None.
Notional Amount Components............
None.
Notional Amount Certificates..........
None.
Offered Certificates..................
All
Classes of the Certificates other than the Private
Certificates.
Physical Certificates.................
The
Residual Certificates and the Private Certificates.
Planned Principal Classes.............
None.
Principal Only Certificates...........
None.
Private Certificates..................
The
Class B-4, Class B-5 and Class B-6 Certificates.
Rating Agencies.......................
S&P and Moody's; except that, for the purposes of the Class
B-1, Class
B-2, Class B-3,
Class B-4 and Class
B-5 Certificates,
S&P shall be the
sole Rating
Agency. The Class B-6 Certificates will not be
rated.
Regular Certificates..................
All
Classes of Certificates, other than the Residual Certificates.
Residual Certificates.................
The
Class I-A-R Certificates.
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Scheduled Principal Classes...........
None.
Senior Certificates...................
The
Group I Senior Certificates, and the Group II Senior
Certificates,
collectively.
Senior Mezzanine Certificates.........
The
Class I-A-2 Certificates.
Subordinated Certificates.............
The
Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class
B-6
Certificates.
Super Senior Certificates.............
The
Class I-A-1 Certificates.
Support Classes.......................
None.
Targeted Principal Classes............
None.
Underwriters..........................
FTN
Financial Capital Markets, a division of First Tennessee Bank
National Association, and Goldman, Sachs & Co.
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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.
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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
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.
Adjustment Date: A
date specified in each
Mortgage Note as a
date on
which the Mortgage Rate on the related
Mortgage Loan will be adjusted.
Advance: The payment
required to be made by
the Master Servicer
with
respect to any Distribution Date pursuant
to Section 4.1, the amount of any such
payment being equal to the aggregate of
payments of principal and interest (net
of the Master Servicing Fee and net of any net
income in the case of
any REO
Property) on the Mortgage Loans that were due on the related
Due Date and not
received as of the close of business on the
related Determination Date, less the
aggregate amount of any such delinquent payments that the Master Servicer
has
determined would constitute a
Nonrecoverable Advance if advanced.
Aggregate Senior Percentage: For any Distribution Date, the
percentage
equal to (x) the sum of the Class Certificate Balances of the Senior
Certificates of both Certificate Groups, divided by (y) the aggregate Pool
Principal Balance for both Mortgage
Pools on such
Distribution
Date, in each
case prior to giving effect to any
distributions on such Distribution Date.
Aggregate Subordinated
Percentage:
For any Distribution Date, the
percentage equal to (x) the sum of the Class Certificate Balances of the
Subordinated Certificates on such Distribution Date, divided by (y) the
aggregate Pool Principal Balance for both Mortgage Pools on
such Distribution
Date, in each case prior to giving effect to any distributions on such
Distribution Date.
Agreement: This
Pooling and Servicing
Agreement and all amendments or
supplements hereto.
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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 the Subordinated Optimal
Principal Amount for each Mortgage Pool;
provided, that, except as provided in
this Agreement, no Subordinated Certificates (other than the Class of
Subordinated Certificates with the highest priority of
distribution) shall
be
entitled on any Distribution Date to
receive distributions
pursuant to
clauses
(2), (3) and (5) of the definition of Subordinated Optimal Principal Amount
unless the Class Prepayment Distribution
Trigger for such Class is satisfied for
such Distribution Date.
Alternative Title
Product: Any one of the following: (i) Lien
Protection Insurance issued by Integrated Loan Services or ATM Corporation
of
America, (ii) a Mortgage Lien Report issued
by EPN
Solutions/ACRAnet,
(iii) a
Property Plus Report issued by Rapid Refinance Service through
SharperLending.com, or (iv) such other alternative
title insurance product that
the Seller utilizes in connection with its
then current underwriting criteria.
Amount Held for Future
Distribution: As to
any Distribution Date, the
aggregate amount held in the 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:
o all scheduled
installments of
interest, net of the Master Servicing
Fee and the Trustee Fee, and all scheduled installments of
principal
due in respect of the Mortgage Loans in such Mortgage Pool on the
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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;
o 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;
o all Principal
Prepayments received
in respect of the Mortgage Loans
in such Mortgage Pool
during the related
Prepayment Period,
plus
interest received thereon, net of any Prepayment Interest
Excess;
o any Compensating Interest in respect of Principal
Prepayments
in
Full received in
respect of the Mortgage Loans in such Mortgage Pool
during the related
Prepayment Period (or,
in the case of the first
Distribution Date, from the Cut-off Date); and
o 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.
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Blanket Mortgage: The mortgage or mortgages encumbering the
Cooperative
Property.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) a Saturday or a Sunday,
or (ii) a
day on which banking institutions in the City of
Dallas, or the State
of Texas
or the city in which the Corporate Trust Office of the Trustee is located
are
authorized or obligated by law or executive
order to be closed.
Certificate: Any one
of the Certificates
executed by the Trustee in
substantially the forms attached hereto as
exhibits.
Certificate Account:
The separate Eligible Account or Accounts created
and maintained by the Master Servicer
pursuant to Section
3.5 with a depository
institution in the name of the Trustee 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-AA10."
Certificate Group: As
specified in the Preliminary Statement.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
who is the beneficial owner of such
Book-Entry Certificate.
Certificate Principal
Balance: With respect
to any Certificate and as
of any Distribution Date, the Certificate Principal Balance on the date of
the
initial issuance of such Certificate, as
reduced by:
(a) all amounts
distributed
on previous
Distribution
Dates on such
Certificate on account of principal,
(b) the principal
portion of all Realized Losses previously allocated
to such Certificate, and
(c) in the case of a
Subordinated Certificate, such Certificate's pro
rata share, if any,
of the Subordinated Certificate Writedown
Amount for previous Distribution Dates.
Certificate Register:
The register
maintained pursuant to Section 5.2
hereof.
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
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<PAGE>
Depositor) owns 100% of the Percentage Interests evidenced by a Class of
Certificates, such Certificates shall be deemed to be Outstanding
for purposes
of any provision hereof that requires the
consent of the Holders of Certificates
of a particular Class as a condition to the
taking of any action hereunder. The
Trustee is entitled to rely conclusively on a certification of
the Depositor or
any affiliate of the Depositor in
determining which
Certificates are registered
in the name of an affiliate of the
Depositor.
Class: All Certificates bearing the same class designation as set
forth
in the Preliminary Statement.
Class 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 Certificate pursuant to Section
4.2(g).
Class Prepayment
Distribution
Trigger: For a Class of Subordinated
Certificates (other than the Class of
Subordinated Certificates with the highest
priority of distribution), a trigger that is satisfied on any
Distribution Date
on which a fraction (expressed as a percentage),
the numerator of which
is the
aggregate 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 the Mortgage Pools with respect
to such Distribution Date, equals or
exceeds such percentage calculated as of
the Closing Date.
Closing Date: October 28, 2005.
Code: The Internal
Revenue Code of 1986,
including any successor or
amendatory provisions.
COFI: Not
applicable.
COFI Certificates: Not
applicable.
Compensating Interest:
As to any Distribution
Date and any
Principal
Prepayment in respect of a Mortgage Loan
that is received during the period from
the sixteenth day of the month (or, in the
case of the first
Distribution Date,
from the Cut-off Date) prior to the month
of such Distribution
Date through the
last day of such month, an additional
payment to the related
Mortgage Pool made
by the Master Servicer, to the extent funds are available from the Master
Servicing Fee, equal to the amount of
interest at the Adjusted Net Mortgage Rate
for that Mortgage Loan from the date of the
prepayment to the
related Due Date;
provided that the aggregate of all such payments as
to the Mortgage Loans
in a
Mortgage Pool shall not exceed 0.0083% of the Pool Principal Balance of such
Mortgage Pool as of the related
Determination Date, and provided further that if
a partial Principal Prepayment is applied
on or after the first day of the month
following the month of receipt, no additional payment is required for such
Principal Prepayment.
Component: Not
applicable.
Component Balance: Not
applicable.
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<PAGE>
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-AA10), facsimile no. (212) 815-3986, and which is the address to
which
notices to and correspondence with the
Trustee should be directed.
Corresponding Classes:
As to any Lower REMIC
Interest identified in
Section 2.7, the Class or Classes that are identified in Section 2.7 as
corresponding to such Lower REMIC
Interest.
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
October 28,
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: October
1, 2005.
Cut-off Date
Pool Principal Balance: With respect to Pool I,
$150,645,057.41; and with respect to Pool
II, $164,371,667.34.
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.
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<PAGE>
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.
Denomination: With respect to each Certificate, the amount set
forth on
the face thereof as the "Initial
Certificate Balance of this Certificate" or the
Percentage Interest appearing on the face
thereof.
Depositor: First Horizon Asset Securities Inc., a Delaware
corporation,
or its successor in interest.
Depository: The
initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE &
Co., as the registered
Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section
8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository
Participant: A
broker, dealer, bank or other financial
institution or other Person for whom from time to time a
Depository
effects
book-entry transfers and pledges of
securities deposited with the Depository.
Determination Date: As to any Distribution Date, the earlier of (i)
the
third Business Day after the 15th day of each month, and (ii) the second
Business Day prior to the related
Distribution Date.
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-AA10." Funds in the
Distribution Account
shall be held in trust for the Certificateholders for the uses
and purposes set
forth in this Agreement.
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<PAGE>
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 November 2005.
Due Date: With respect to any Distribution Date, the first day of the
month in which the related Distribution
Date occurs.
Eligible Account: Any
of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of
which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any
amounts are held
on
deposit therein, or (ii) an account or accounts in
a depository
institution or
trust company in which such accounts are
insured by the FDIC or the SAIF (to the
limits established by the FDIC or the SAIF, as
applicable)
and the uninsured
deposits in which accounts are otherwise
secured such that, as
evidenced by an
Opinion of Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such
account or a
perfected first priority security interest against any collateral
(which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the
depository
institution
or
trust company in which such account is
maintained,
or (iii) a trust
account or
accounts maintained with (a) the trust department of a federal or state
chartered depository institution or (b) a
trust company, acting in its fiduciary
capacity or (iv) any other account
acceptable to each
Rating Agency.
Eligible
Accounts may bear interest, and may include, if otherwise qualified under
this
definition, accounts maintained with the
Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying
Underwriting: With
respect to any
ERISA-Restricted
Certificate, a best efforts or firm
commitment underwriting or private placement
that meets the requirements of the
Underwriters' Exemption.
ERISA-Restricted
Certificate: As
specified in the Preliminary
Statement.
Escrow Account:
The Eligible Account or Accounts established and
maintained pursuant to Section 3.6(a)
hereof.
Event of Default: As
defined in Section 7.1 hereof.
Excess Loss: The
amount of any (i) Fraud Loss realized after the Fraud
Loss Coverage Termination Date, (ii) Special Hazard Loss realized after the
Special Hazard Coverage Termination Date or (iii)
Deficient Valuation
realized
after the Bankruptcy Coverage Termination
Date.
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<PAGE>
Excess Proceeds:
With respect to any
Liquidated
Mortgage Loan, the
amount, if any, by which the sum of any
Liquidation Proceeds, Insurance Proceeds
and/or Unanticipated Recoveries in respect
of such Mortgage Loan received in the
calendar month in which such Mortgage Loan
became a Liquidated
Mortgage Loan,
net of any amounts previously reimbursed to the Master Servicer as
Nonrecoverable Advance(s) with respect to
such Mortgage Loan pursuant to Section
3.8(a)(iii), exceeds (i) the unpaid principal balance of such Liquidated
Mortgage Loan as of the Due Date in the
month in which such Mortgage Loan became
a Liquidated Mortgage Loan plus (ii) accrued
interest at the Mortgage Rate from
the Due Date as to which interest was last
paid or advanced (and not reimbursed)
to Certificateholders up to the Due Date applicable to
the Distribution
Date
immediately following the calendar month
during which such liquidation occurred.
Expense Fee Rate:
As to each
Mortgage Loan, the sum of the related
Master Servicing Fee Rate and the Trustee
Fee Rate.
FDIC: The Federal
Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The
Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States
created and existing under Title III of the
Emergency Home Finance Act of 1970, as
amended, or any successor thereto.
FIRREA: The Financial
Institutions Reform,
Recovery, and
Enforcement
Act of 1989.
First Horizon:
First
Horizon Home Loan Corporation, a Kansas
corporation and an indirect wholly owned
subsidiary of First
Horizon National
Corporation, a Tennessee corporation.
Fitch: Fitch Ratings
and its successors
and/or assigns.
If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 11.5(b) the address for notices to
Fitch shall be Fitch, Inc., One State
Street Plaza, New York, New York 10004, Attention: Residential Mortgage
Surveillance Group, or such other address as
Fitch may hereafter furnish to the
Depositor and the Master Servicer.
FNMA: The Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act,
or any successor thereto.
Fraud Loan: A
Liquidated
Mortgage Loan as to which a Fraud Loss
has
occurred.
Fraud Loss Coverage Amount: As of the Closing Date, $6,300,334. 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
shall equal $3,150,167 minus the aggregate amount of Fraud Losses that
would
have been allocated to the Subordinated
Certificates in the
absence of the Loss
Allocation Limitation since the Cut-off Date.
As of any Distribution Date on or
after the earlier of the Cross-over Date or
the fifth anniversary of the Cut-off
Date, the Fraud Loss Coverage Amount shall
be zero.
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<PAGE>
Fraud Loss Coverage
Termination Date: The date on which the Fraud Loss
Coverage Amount is reduced to zero.
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.
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.
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: $150,000.
Initial Component Balance: Not applicable.
Insurance Policy:
With respect to any
Mortgage Loan
included in the
Trust Fund, any insurance policy,
including all riders
and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds:
Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than
any amount included in such Insurance
Proceeds in respect of Insured
Expenses.
Insured Expenses:
Expenses covered by an Insurance Policy or any other
insurance policy with respect to the
Mortgage Loans.
Insured Retail Certificates: Not applicable.
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.
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<PAGE>
Interest Determination Date: Not applicable.
Latest Possible
Maturity Date: As to each Class of Subordinated
Certificates, each Class of Senior Certificates and each Lower REMIC
Interest,
the Distribution Date following the third
anniversary of the scheduled maturity
date of the Mortgage Loan having the latest
scheduled maturity date as of the
Cut-off Date.
Lender PMI Mortgage Loan: Not applicable.
LIBOR: Not
applicable.
LIBOR Certificates:
Not applicable.
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(g).
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 Lower REMIC Interests,
the RL Interest and the RU Interest.
Lower REMIC Interests: The REMIC regular interests, within the meaning
of the REMIC Provisions, issued by the
Lower REMIC as set forth in Section 2.7.
Maintenance: With respect to any Cooperative Unit, the rent paid by
the
Mortgagor to the Cooperative Corporation
pursuant to the Proprietary Lease.
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Majority in
Interest: As to any Class of Regular
Certificates,
the
Holders of Certificates of such Class
evidencing, in the aggregate, at least 51%
of the Percentage Interests evidenced by
all Certificates of such Class.
Master Servicer:
First Horizon Home Loan Corporation, a Kansas
corporation, and its successors and assigns, in
its capacity as master servicer
hereunder.
Master Servicer
Advance Date: As to any Distribution Date, 1:30 p.m.
Central time on the Business Day
immediately preceding such Distribution Date.
Master Servicing
Fee: As to each
Mortgage Loan and any
Distribution
Date, an amount payable out of each full payment
of interest received
on such
Mortgage Loan and equal to one-twelfth of the Master Servicing Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as
of the Due
Date in the month of such Distribution Date (prior to giving effect to any
Scheduled Payments due on such Mortgage Loan on such Due Date), subject to
reduction as provided in Section 3.14.
Master Servicing Fee Rate: A per annum rate equal to
0.369%.
MERS: Mortgage
Electronic
Registration Systems,
Inc., a
corporation
organized and existing under the laws of
the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS
System.
MERS(R) System:
The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage
Identification Number for any MERS Mortgage Loan.
MLPA I: The Mortgage
Loan Purchase
Agreement dated as of
October 28,
2005, by and between First Horizon Home
Loan Corporation, as
seller, and First
Tennessee Bank National Association,
as purchaser,
as related to the
transfer,
sale and conveyance of the Mortgage
Loans.
MLPA II: The Mortgage Loan Purchase Agreement dated as of October 28,
2005, by and between First Tennessee Bank
National Association,
as seller, and
First Horizon Asset Securities Inc., as purchaser, as related to the transfer,
sale and conveyance of the Mortgage
Loans.
MOM Loan: Any Mortgage
Loan as to which MERS
is acting as
mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Statement: The
statement delivered to
the
Certificateholders
pursuant to Section 4.6.
Moody's: Moody's
Investors Service, Inc., and its successors
and/or
assigns. If Moody's is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 11.5(b) the address for notices to
Moody's
shall be Moody's Investors Service, Inc., 99 Church Street, New York,
New York
10007, Attention: Residential Pass-Through
Monitoring, or such other address as
Moody's may hereafter furnish to the
Depositor or the Master Servicer.
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Mortgage: The
mortgage, deed of
trust or other instrument creating a
first lien on an estate in fee simple or
leasehold interest in real property
securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.1(b)
hereof
pertaining to a particular Mortgage Loan
and any additional
documents delivered
to the Trustee to be added to the Mortgage
File pursuant to this Agreement.
Mortgage Loan
Schedule: The list of Mortgage Loans (as from time to
time amended by the Master Servicer to reflect the addition of Substitute
Mortgage Loans and the deletion of Deleted Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the
Trust
Fund and from time to time subject to this Agreement, attached hereto as
Schedule I, setting forth the following information with respect to each
Mortgage Loan:
(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;
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<PAGE>
(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.
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: Either
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-Delay Certificates: As specified in the Preliminary
Statement.
Non-Excess Loss: Any
Realized Loss other than an Excess Loss.
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<PAGE>
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: Not
applicable.
Notional Amount Component: Not applicable.
Notional Amount Certificates: Not applicable.
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
Subordinated
Principal
Balance: The
aggregate Class
Certificate Balance of the Subordinated
Certificates as of the Closing Date.
Original Mortgage Loan: The Mortgage Loan refinanced in connection
with
the origination of a Refinancing Mortgage
Loan.
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:
-19-
<PAGE>
(i) Certificates
theretofore canceled by the Trustee
or delivered to the Trustee for cancellation; and
(ii) 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 Class of
Certificates, the per
annum rate
set forth or calculated in the manner
described in the Preliminary Statement.
Percentage Interest:
As to any Certificate,
the percentage
interest
evidenced thereby in distributions required to be made on the related
Class,
such percentage interest being set forth on the face
thereof or equal to
the
percentage obtained by dividing the
Denomination
of such Certificate by the
aggregate of the Denominations of all
Certificates of the same Class.
Permitted Investments:
At any time,
any one or more of the
following
obligations and securities:
(i) obligations
of the United
States or any
agency
thereof, provided
such obligations are backed by the full
faith and credit of the United States;
(ii) general obligations of or obligations guaranteed
by any state of the United States or the District of
Columbia
receiving the
highest long-term debt rating of each Rating
Agency;
(iii)
commercial
or finance
company paper which
is
then receiving the highest commercial or finance company paper
rating of each Rating Agency;
(iv)
certificates of
deposit, demand or time
deposits, or bankers'
acceptances
issued by any
depository
institution or trust
company incorporated
under the laws of
the United
States or of any state
thereof and subject to
supervision and
examination
by federal and/or
state banking
authorities, provided
that the commercial
paper and/or long
term unsecured debt obligations of such depository institution
or
trust company (or in the case of the principal depository
institution in a holding company system, the commercial paper
or long-term
unsecured debt obligations of such holding
company, but only if
Moody's is not a Rating Agency) are then
rated one of the two
highest long-term
and/or the highest
short-term ratings of each Rating Agency for such securities;
-20-
<PAGE>
(v) demand
or time deposits or certificates of
deposit issued
by any bank or trust company or savings
institution to the extent that such deposits are fully insured
by the FDIC and receiving the highest short-term debt rating
of each Rating Agency;
(vi) guaranteed reinvestment agreements issued by any
bank, insurance company or other corporation and receiving the
highest short-term
debt rating of each Rating Agency and
containing, at the
time of the issuance
of such
agreements,
such terms
and conditions as will not result in the
downgrading or
withdrawal of the
rating then assigned to the
Certificates by either Rating Agency;
(vii) repurchase
obligations
with respect to any
security described
in clauses (i) and
(ii) above, in
either
case entered
into with a depository institution or trust
company (acting as principal) described in clause (iv) above;
(viii) securities (other than stripped bonds,
stripped coupons or
instruments
sold at a purchase
price in
excess of 115% of the face amount thereof) bearing interest or
sold at a discount
issued by any corporation incorporated
under the laws of the
United States or any state thereof
which, at the
time of such
investment,
have one of the
two
highest ratings of
each Rating Agency
(except if the
Rating
Agency is Moody's or S&P, such rating shall be the highest
commercial paper rating of Moody's or S&P, as applicable,
for
any such securities);
(ix) units of a taxable money-market portfolio having
the highest rating
assigned by each
Rating Agency (except if
Fitch is a Rating Agency and has not rated the portfolio,
the
highest rating
assigned
by Moody's) and restricted to
obligations issued
or guaranteed by the United States of
America or entities whose obligations are backed by the full
faith and credit of the United States of America and
repurchase agreements collateralized by such obligations; and
(x) such other
investments bearing
interest or sold
at a discount
acceptable to each
Rating Agency as will not
result in the
downgrading or
withdrawal
of the rating then
assigned to the
Certificates
by either Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency;
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
-21-
<PAGE>
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.
Pool I: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool
I.
Pool II: The aggregate of the Mortgage Loans identified on the
Mortgage
Loan Schedule as being included in Pool
II.
Pool Principal
Balance: For a Mortgage Pool, with respect to any
Distribution Date, the aggregate of the Stated Principal Balances of the
Mortgage Loans in such Mortgage Pool which
were Outstanding
Mortgage Loans on
the Due Date in the month preceding the
month of such Distribution Date, and for
the first Distribution Date, as of the Closing Date, less any Principal
Prepayments received on or after such Due Date and distributed to
Certificateholders on the prior
Distribution Date.
-22-
<PAGE>
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 Prepayment:
Any payment of
principal by a Mortgagor on a
Mortgage Loan that is received in advance
of its scheduled Due
Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by
the Master Servicer in accordance with
the terms of the related Mortgage Note.
Principal Prepayment
in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance
of a Mortgage Loan.
Private 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
-23-
<PAGE>
Servicer) from the date through which
interest was last paid by the Mortgagor to
the Due Date in the month in which the
Purchase Price is to
be distributed
to
Certificateholders, and (iii) any costs and
damages incurred by the Trust in
connection with the noncompliance of such Mortgage Loan with any
specifically
applicable predatory or abusive lending
law.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified
as such under the laws of the state of its
principal place of
business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states
and to write the
insurance provided by the insurance policy issued by it, approved as a
FNMA-approved mortgage insurer and having a claims paying
ability rating of at
least "AA" or equivalent rating by a
nationally recognized
statistical
rating
organization. Any replacement insurer with
respect to a Mortgage Loan must have
at least as high a claims paying
ability rating as the insurer it replaces
had
on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary
Statement. If any such organization or a successor is no longer in
existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the
Depositor,
notice of which designation shall be given
to the Trustee.
References herein to
a given rating category of a Rating Agency shall mean such rating category
without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount
(not less than zero or more than the Stated
Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of the Liquidated Mortgage Loan as
of the date of such liquidation, plus
(ii) interest at the Adjusted
Net Mortgage
Rate from the Due Date
as to which
interest was last paid or advanced (and not
reimbursed) to Certificateholders up
to the Due Date in the month in which
Liquidation
Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Mortgage Loan
from time to time, minus (iii) any Liquidation Proceeds, Insurance Proceeds
and/or Unanticipated Recoveries received during the month in which such
liquidation occurred (or during the calendar month preceding the related
Distribution Date, as applicable), to the extent applied as recoveries of
interest at the Adjusted Net Mortgage Rate and to principal of the
Liquidated
Mortgage Loan. With respect to each Mortgage Loan
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: Not
applicable.
-24-
<PAGE>
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 the
Lower REMIC or the Upper REMIC.
REMIC Provisions:
Provisions of the federal income tax law relating to
real estate mortgage investment conduits,
which appear at
sections 860A through
860G of Subchapter M of Chapter 1 of the Code,
and related provisions, and
regulations promulgated thereunder,
as the foregoing may
be in effect from time
to time as well as provisions of applicable
state laws.
REO Property: A
Mortgaged Property
acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Request for Release:
The Request for
Release submitted by
the Master
Servicer to the Trustee, substantially in the form of Exhibits L and M, as
appropriate.
Required 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.
-25-
<PAGE>
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.
RU Interest: The REMIC
residual interest, within the meaning of the
REMIC Provisions, issued by the Upper REMIC,
which shall be
represented by the
Class I-A-R Certificate.
Scheduled Balances:
Not applicable.
Scheduled Certificates: Not applicable.
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.
Scheduled Principal Classes: Not applicable.
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 MLPA I.
Senior Certificates:
As specified in the Preliminary Statement.
Senior Final
Distribution
Date: For each Certificate Group, the
Distribution Date on which the Class Certificate Balance of each Class of
related Senior Certificates has been
reduced to zero.
Senior Mezzanine
Certificates:
As specified in the Preliminary
Statement.
Senior Optimal Principal Amount: As to a Mortgage Pool and with
respect
to each Distribution Date, an amount equal
to the sum of:
(1) the related Senior Percentage of all Scheduled Payments of
principal due on each Mortgage Loan in such Mortgage Pool on the
first day of
the month in which the Distribution Date occurs, as specified in the
amortization schedule at the time applicable thereto after adjustment for
previous principal prepayments and the principal portion of Debt Service
Reductions after the Bankruptcy Loss Coverage Amount has been
reduced to zero,
but before any adjustment to such
amortization
schedule by reason of
any other
bankruptcy or similar proceeding or any moratorium or similar waiver or grace
period;
(2) the related Senior
Prepayment
Percentage
of the 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;
-26-
<PAGE>
(3) the related Senior Prepayment Percentage of the sum of (a)
all partial Principal Prepayments in respect of each Mortgage Loan in such
Mortgage Pool received during the applicable Prepayment Period and (b) all
Unanticipated Recoveries received in respect of each Mortgage Loan in the
related Mortgage Pool during the calendar
month prior to such Distribution Date;
(4) the lesser of:
(a) the related Senior
Prepayment Percentage
of the
sum of (x) 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
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 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 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 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 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 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 immediately preceding such
Distribution Date by the Pool Principal
Balance of 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:
<TABLE>
<CAPTION>
---------------------------------------
----------------------------------------------------------------------
PERIOD (DATES INCLUSIVE)
SENIOR PREPAYMENT PERCENTAGE
---------------------------------------
----------------------------------------------------------------------
PERIOD (DATES INCLUSIVE)
SENIOR PREPAYMENT PERCENTAGE
---------------------------------------
----------------------------------------------------------------------
<S>
<C>
November 2005 - October 2012
100%
---------------------------------------
----------------------------------------------------------------------
</TABLE>
-27-
<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
---------------------------------------
----------------------------------------------------------------------
The related Senior Percentage plus 70% of the related
Subordinated
November 2012 - October 2013
Percentage.
---------------------------------------
----------------------------------------------------------------------
The related Senior Percentage plus 60% of the related
Subordinated
November 2013 - October 2014
Percentage.
---------------------------------------
----------------------------------------------------------------------
The related Senior Percentage plus 40% of the related
Subordinated
November 2014 - October 2015
Percentage.
---------------------------------------
----------------------------------------------------------------------
The related Senior Percentage plus 20% of the related
Subordinated
November 2015 - October 2016
Percentage.
---------------------------------------
----------------------------------------------------------------------
November 2016 and thereafter
The related Senior Percentage.
---------------------------------------
----------------------------------------------------------------------
</TABLE>
provided however, (i) if on any Distribution Date, the Aggregate Senior
Percentage exceeds such percentage
calculated as of the Closing Date, the Senior
Prepayment Percentage for both Certificate
Groups for such
Distribution
Date
will equal 100%, (ii) if on any Distribution Date prior to the November
2008
Distribution Date, the Aggregate Subordinated Percentage is greater than or
equal to twice such percentage calculated as of the Closing Date, then the
Senior Prepayment Percentage for each Certificate
Group for such
Distribution
Date will equal the Senior Percentage for
such Certificate Group plus 50% of the
Subordinated Percentage for such Certificate
Group and (iii) if on or after the
November 2008 Distribution Date, the Aggregate Subordinated Percentage is
greater than or equal to twice such
percentage
calculated
as of the Closing
Date, then the Senior Prepayment
Percentage for each
Certificate Group for such
Distribution Date will equal the Senior
Percentage for such Certificate Group.
The reductions in the Senior Prepayment Percentage for each
Certificate
Group described above will not occur,
and the Senior
Prepayment
Percentage or
each Certificate Group for such prior period will
be calculated without
regard
to clause (ii) or (iii) of the paragraph above, unless both of the following
step-down conditions are satisfied with
respect to each Mortgage Pool as of the
last day of the month preceding the
Distribution Date:
(1) the
aggregate Stated
Principal Balance of Mortgage Loans in
both Mortgage Pools
delinquent 60 days or more (including for
this purpose any Mortgage Loans in foreclosure or subject to
bankruptcy proceedings
and Mortgage Loans with respect to
which the related Mortgaged Property, including REO Property,
has been acquired
by the Trust
Fund) does not exceed
50% of
the aggregate Class
Certificate Balances
of the Subordinated
Certificates as of that date; and
(2) cumulative
Realized Losses on the Mortgage Loans in both
Mortgage Pools do not exceed:
(a) 20% of the Original Subordinated Principal Balance if such
Distribution Date
occurs between and including November 2005
and October 2008; and
(b) 30% of the Original Subordinated Principal Balance if such
Distribution Date occurs on or after November 2008.
-28-
<PAGE>
Servicing Advances:
All customary, reasonable and necessary "out
of
pocket" costs and expenses incurred in the
performance by the Master Servicer of
its servicing obligations, including, but not limited to, the cost of
(i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Master
Servicer pursuant to Section 3.11 and
any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv)
compliance
with the
obligations under Section 3.9.
Servicing Agreement: The servicing agreement, dated as of November 26,
2002 by and between FTBNA and its assigns, as owner, and First Tennessee
Mortgage Services, Inc., as servicer.
Servicing Officer:
Any officer of the
Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose
name and facsimile signature appear on a
list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to
time be amended.
Servicing Rights
Transfer and
Subservicing
Agreement: The
servicing
rights transfer and subservicing agreement, dated as of November 26, 2002,
by
and between First Horizon Home Loan
Corporation, as
transferor and subservicer,
and First Tennessee Mortgage Services,
Inc., as transferee and servicer.
Special Hazard Coverage Termination Date: The date on which the
Special
Hazard Loss Coverage Amount is reduced to
zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged
Property
on account of direct physical loss but not including (i) any loss of a type
covered by a hazard insurance policy or a flood
insurance policy required to be
maintained with respect to such Mortgaged
Property pursuant to Section 3.9 to
the extent of the amount of such loss
covered thereby,
or (ii) any loss
caused
by or resulting from:
(1) normal wear and tear;
(2) fraud, conversion
or other dishonest act on the part of
the Trustee, the Master Servicer or any of their agents or
employees (without
regard to any portion of the loss not covered by any errors and omissions
policy);
(3) errors in design,
faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof
ensues and then only
for
the ensuing loss;
(4) nuclear or
chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled,
and whether such loss be direct or
indirect, proximate or
remote or be in whole
or in part caused by, contributed to or aggravated by a peril covered by the
definition of the term "Special Hazard
Loss";
(5) hostile
or warlike action in time of peace and war,
including action in hindering, combating or defending against an actual,
impending or expected attack:
-29-
<PAGE>
(i) by any government or sovereign power, de jure or
de facto, or by any
authority maintaining
or using military,
naval or air forces;
(ii) by military, naval or air forces;
(iii) by an agent
of any such government, power,
authority or forces; or
(6) any weapon of war
employing nuclear
fission, fusion or
other radioactive force, whether in time of
peace or war; or
(7) insurrection,
rebellion, revolution,
civil war, usurped
power or action taken by governmental authority in hindering, combating or
defending against such an occurrence,
seizure or destruction under quarantine or
customs regulations, confiscation by order
of any government or public authority
or risks of contraband or illegal
transportation or trade.
Special Hazard Loss Coverage Amount: Upon the initial issuance of
the
Certificates, $3,150,167. As of any Distribution Date, the
Special Hazard Loss
Coverage Amount shall equal the greater
of
(a) 1.00% (or if greater than 1.00%, the highest percentage of
Mortgage Loans by principal balance secured by Mortgaged Properties in any
single California zip code) of the outstanding principal balance of all the
Mortgage Loans as of the related
Determination Date; and
(b) twice the
outstanding principal
balance of the
Mortgage
Loan which has the largest outstanding principal balance as of the related
Determination Date,
less, in each case, the aggregate amount of Special Hazard Losses that would
have been previously allocated to the Subordinated
Certificates in the
absence
of the Loss Allocation Limitation. As of any Distribution Date on or
after the
Cross-over Date, the Special Hazard Loss
Coverage Amount shall be zero.
Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which a
Special Hazard Loss has occurred.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.,
and its successors and/or assigns. If S&P is designated as a
Rating Agency in
the Preliminary Statement, for purposes of Section 11.5(b) the address for
notices to S&P shall be Standard &
Poor's, 55 Water
Street, 41st Floor, New
York, New York 10041, Attention: Mortgage
Surveillance Monitoring, or such other
address as S&P may hereafter furnish to
the Depositor and the Master Servicer.
Startup Day: The
Closing Date.
Stated Principal
Balance: As to any Mortgage Loan and Due
Date, the
unpaid principal balance of such Mortgage Loan as
of such Due Date as specified
in the amortization schedule at the time
relating thereto (before any adjustment
to such amortization schedule by reason of any
moratorium or similar waiver or
grace period) after giving effect to any
previous partial Principal Prepayments
and Liquidation Proceeds allocable to principal
(other than with respect to any
Liquidated Mortgage Loan) and to the payment of
principal due on such Due Date
and irrespective of any delinquency in
payment by the related Mortgagor.
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Streamlined
Documentation Mortgage
Loan: Any Mortgage Loan originated
pursuant to the Seller's Streamlined Loan
Documentation Program then in effect.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordinated Certificate Writedown Amount: As of any Distribution
Date,
the amount by which (a) the sum of the
Class Certificate
Balances of all of the
Certificates, after giving effect to the distribution of principal and the
allocation of Realized Losses in reduction
of the Class Certificate Balances of
all of the Certificates on such
Distribution Date,
exceeds (b) the aggregate of
the Pool Principal Balances for each
Mortgage Pool on the first day of the month
of such Distribution Date, less any Deficient
Valuations
occurring before
the
Bankruptcy Loss Coverage Amount has been
reduced to zero.
Subordinated Optimal
Principal Amount:
With respect to each
Mortgage
Pool and each Distribution Date, an amount equal to the sum of the
following
(but in no event greater than the aggregate
Class Certificate Balances of the
Subordinated Certificates immediately prior
to such Distribution Date):
(1) the related Subordinated Percentage of all Scheduled
Payments of principal due on each outstanding Mortgage Loan in the related
Mortgage Pool on the first day of the month in which the Distribution Date
occurs, as specified in the amortization schedule at the time applicable
thereto, after adjustment for previous
principal prepayments
and the principal
portion of Debt Service Reductions after
the Bankruptcy Loss Coverage Amount has
been reduced to zero, but before any
adjustment to such amortization schedule by
reason of any other bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period;
(2) the related
Subordinated
Prepayment
Percentage
of the
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 related Subordinated Prepayment Percentage of the
sum
of (a) all partial Principal Prepayments received in respect of each
Mortgage
Loan in the related Mortgage Pool during
the related Prepayment
Period, (b) all
Unanticipated Recoveries received in respect of each Mortgage Loan in the
related Mortgage Pool during the calendar
month prior to such Distribution Date,
and (c) on the Senior Final Distribution Date, 100% of any related Senior
Optimal Principal Amount remaining
undistributed on such date;
(4) the amount, if any, by which the sum of (a) the net
Liquidation Proceeds allocable to principal received during the related
Prepayment Period in respect of each
Liquidated
Mortgage Loan in the related
Mortgage Pool, other than Mortgage Loans described in clause (b), and (b)
the
principal balance of each Mortgage
Loan in the related
Mortgage Pool that
was
purchased by a private mortgage insurer
during the related
Prepayment Period as
an alternative to paying a claim under the
related Insurance
Policy exceeds (c)
the sum of the amounts distributable to the Senior Certificateholders under
clause (4) of the definition of applicable
Senior Optimal
Principal Amount on
such Distribution Date; and
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(5) the related Subordinated Prepayment Percentage of the
sum
of (a) the Stated Principal Balance of each Mortgage Loan in the related
Mortgage Pool which was repurchased by the seller in connection with such
Distribution Date and (b) the difference,
if any, between the
Stated Principal
Balance of each Mortgage Loan in the related Mortgage Pool that has been
replaced by the seller with a Substitute Mortgage Loan pursuant to this
Agreement in connection with such Distribution Date and the Stated Principal
Balance of each such Substitute Mortgage
Loan.
Subordinated Percentage: For any Distribution Date and each
Certificate
Group, 100% minus the related Senior
Percentage.
Subordinated
Prepayment Percentage:
For any Distribution
Date, 100%
minus the Senior Prepayment Percentage.
Subservicer: Any
person to whom the Master Servicer has contracted for
the servicing of all or a portion of the
Mortgage Loans
pursuant to Section 3.2
hereof.
Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller
for
a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for Release,
substantially in the
form of Exhibit L, (i)
have a Stated Principal Balance, after
deduction of the principal portion of the
Scheduled Payment due in the month of
substitution,
not in excess of, and
not
more than 10% less than the Stated
Principal Balance of the Deleted Mortgage
Loan; (ii) have an Adjusted Net
Mortgage Rate not lower than the Adjusted
Net
Mortgage Rate of the Deleted Mortgage Loan, provided that the Master
Servicing
Fee for the Substitute Mortgage Loan shall be equal to or
greater than that of
the Deleted Mortgage Loan; (iii) have a maximum mortgage rate
not more than 1%
per annum higher or lower than the maximum
mortgage rate of the Deleted Mortgage
Loan; (iv) have a minimum mortgage rate specified in its
related Mortgage
Note
not more than 1% per annum higher or lower
than the minimum mortgage rate of the
Deleted Mortgage Loan; (v) have the same mortgage index, reset period and
periodic rate as the Deleted Mortgage Loan and a gross margin
not more than 1%
per annum higher or lower than that of the Deleted Mortgage Loan (vi) be
accruing interest at a rate no lower than
and not more than 1% per annum higher
than, that of the Deleted Mortgage Loan; (iv) have a Loan-to-Value Ratio no
higher than that of the Deleted
Mortgage Loan; (vii) have a remaining term to
maturity no greater than (and not more than one year less than that of)
the
Deleted Mortgage Loan; (viii) not be a Cooperative Loan unless the Deleted
Mortgage Loan was a Cooperative
Loan and (ix) comply
with each
representation
and warranty set forth in Section 2.3
hereof.
Substitution
Adjustment Amount:
The meaning ascribed to such term
pursuant to Section 2.3.
Super Senior Certificates: As specified in the Preliminary
Statement.
Super Senior Support Certificates: Not applicable.
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Support Classes: Not
applicable.
Targeted Balances: Not
applicable.
Targeted Principal Classes: Not applicable.
Tax Matters Person:
The person
designated as "tax
matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and Treasury
regulation ss. 301.6231(a)(7)-1.
Initially, the Tax
Matters Person shall be the
Trustee.
Tax Matters Person
Certificate: The Class
I-A-R Certificates
with a
Denomination of $0.01.
Transfer: Any direct
or indirect
transfer or sale of any Ownership
Interest in a Residual Certificate.
Trust Fund: The corpus of the trust created hereunder consisting of
(i)
the Mortgage Loans and all interest and
principal received on or with respect
thereto after the Cut-off Date to the extent not
applied in computing the
Cut-off Date Principal Balance thereof; (ii) all of the Depositor's
rights as
purchaser under MLPA II; (iii) the Certificate Account and the Distribution
Account and all amounts deposited therein
pursuant to the applicable provisions
of this Agreement; (iv) property that secured a Mortgage Loan and has been
acquired by foreclosure, deed-in-lieu of foreclosure or
otherwise; and (v)
all
proceeds of the conversion, voluntary or
involuntary, of any of the foregoing.
Trustee: The Bank of
New York and its
successors and, if a
successor
trustee is appointed hereunder, such
successor.
Trustee Fee: As to any Distribution Date and a Mortgage Pool, an
amount
equal to one-twelfth of the Trustee Fee
Rate multiplied by the
applicable Pool
Principal Balance with respect to such
Distribution Date.
Trustee Fee Rate: With
respect to each
Mortgage Loan,
the per annum
rate agreed upon in writing on or prior to the
Closing Date by the
Trustee and
the Depositor.
Unanticipated Recovery: As defined in Section 4.2(g).
Undercollateralization Distribution: As defined in Section 4.2(h).
Undercollateralized
Group: With respect to any Distribution Date, the
Senior Certificates of either Certificate Group as to which the aggregate
Certificate Principal Balance thereof, after giving effect to
distributions
pursuant to Section 4.2(a) on such date, is greater than the Pool Principal
Balance of the related Mortgage Pool for
such Distribution Date.
Underwriter: As
specified in the Preliminary Statement.
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Underwriters' Exemption: An individual administrative exemption
granted
by the U.S. Department of Labor to the
Underwriter
providing exceptions from
some of the prohibited transaction rules of ERISA with respect to the
initial
purchase, the holding and the subsequent resale by employee benefit plans in
certificates in pass-through trusts having assets and meeting conditions
described therein, as amended by Prohibited
Transaction
Exemption 2000-58
(65
Fed. Reg. 67765, November 13, 2000), as amended, and Prohibited Transaction
Exemption 2002-41 (67 Fed. Reg. 54487, August 22, 2002), as amended (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of
Labor.
Upper REMIC: The
segregated
pool of assets
consisting
of the Lower
REMIC Interests.
Voting Rights:
The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 99.0% of all Voting Rights will be allocated among all
Holders of the Certificates, other than the Class I-A-R Certificates, in
proportion to their then outstanding Class
Certificate Balance;
and (b) 1.0% of
all Voting Rights will be allocated to the Holders of the Class I-A-R
Certificates (such Voting Rights to be allocated among the Holders of
Certificates of each such Class in
accordance with their
respective
Percentage
Interests).
Weighted Average
Adjusted Net Mortgage
Rate: For a Mortgage Pool, the
average of the Adjusted Net Mortgage
Rates of the Mortgage
Loans in the related
Loan Group, weighted on the basis of the
Stated Principal Balances thereof.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 Conveyance of Mortgage Loans.
(a) The
Depositor,
concurrently
with the execution and
delivery
hereof, hereby
sells, transfers, assigns, sets over and
otherwise conveys
to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and
interest of the
Depositor in and to
the Trust Fund
together
with (i) the
Depositor's right to
(A) require the Seller
to
cure any breach of a
representation or
warranty made by
the
Seller pursuant to MLPA I, or (B) repurchase or substitute for
any affected Mortgage
Loan in accordance
herewith, and (ii)
all right, title and
interest of the Depositor in, to and
under the Servicing
Agreement, which right
has been assigned
to the Depositor pursuant to MLPA II.
(b) In
connection with the
transfer and
assignment set forth
in
clause (a) above, the
Depositor has delivered or caused to be
delivered to the
Trustee or the
Custodian on its behalf (or,
in the case of the Delay Delivery Mortgage Loans, will deliver
or cause to be
delivered to the
Trustee or the
Custodian on
its behalf within thirty (30) days following the Closing Date)
for the benefit of the Certificateholders the following
documents or
instruments with respect to each Mortgage Loan so
assigned:
(i) (A) the
original Mortgage Note
endorsed by manual or
facsimile signature in
blank in the following
form:
"Pay to the order of ________________, without
recourse," with all intervening endorsements showing
a complete chain of
endorsement from the
originator
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to the Person
endorsing the Mortgage Note (each such
endorsement being
sufficient to transfer
all right,
title and interest of the party so endorsing, as
noteholder or
assignee thereof, in and to that
Mortgage Note); or
(B) with respect to
any Lost Mortgage
Note, a lost
note
affidavit from the Seller stating that the
original
Mortgage Note
was lost or destroyed,
together with a copy of such Mortgage Note;
(ii)
except as provided
below and for each
Mortgage Loan
that is not a MERS Mortgage Loan, the original
recorded
Mortgage or
a copy of such Mortgage
certified by the
Seller as being a true and complete
copy of the Mortgage,
and in the case of
each MERS
Mortgage Loan, the original recorded Mortgage, noting
the presence
of the MIN of the
Mortgage Loans and
either language
indicating that the Mortgage Loan is
a MOM Loan if the
Mortgage Loan is a MOM
Loan or if
the Mortgage Loan was not a MOM Loan at origination,
the original Mortgage
and the assignment
thereof to
MERS, with evidence of recording indicated thereon,
or a copy of the Mortgage certified by the Seller as
being a true and complete copy of the Mortgage;
(iii) in
the case of a
Mortgage Loan that is not a MERS
Mortgage Loan,
a duly executed assignment of the
Mortgage, or a copy of
such assignment
certified by
the Seller as being a true and complete copy of the
assignment, in blank
(which may be included in a
blanket assignment or
assignments),
together with,
except as provided below, all interim recorded
assignments, or copies
of such interim
assignments
certified by the
Seller as being true
and complete
copies of the interim
assignments, of such
Mortgage
(each such
assignment,
when
duly and validly
completed, to be in recordable form and sufficient to
effect the assignment of and transfer to the assignee
thereof, under the
Mortgage to which the
assignment
relates); provided
that, if the related Mortgage has
not been returned from the applicable public
recording office, such assignment of the Mortgage may
exclude the
information
to be provided by the
recording office;
(iv)
the original
or copies of each assumption,
modification,
written
assurance or
substitution
agreement, if any;
(v) either
the original or duplicate original title
policy, or a copy of
such title policy
certified by
the Seller as being a true and complete copy of the
title policy
(including all riders
thereto), with
respect to
the related Mortgaged Property, if
available, provided
that the title policy (including
all riders thereto)
will be delivered as
soon as it
becomes available,
and if the
title policy is not
available, and to the extent required pursuant to the
second paragraph
below or otherwise
in connection
with the rating of the Certificates, a written
commitment or interim binder or preliminary report of
the title issued by
the title insurance or escrow
company with respect to the Mortgaged Property, or in
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<PAGE>
lieu thereof, an
Alternative Title Product or a copy
of such Alternative
Title Product
certified by the
Seller as being a true and complete copy of the
Alternative Title Product; and
(vi)
in the case of a Cooperative Loan, the originals of
the following documents or instruments:
(A) The Coop
Shares, together with a stock power
in blank;
(B) The
executed Security Agreement;
(C) The
executed Proprietary Lease;
(D) The
executed Recognition Agreement;
(E) The
executed UCC-1 financing statement with
evidence of
recording thereon which have
been filed in all places required to perfect
the Seller's interest in the Coop Shares and
the Proprietary Lease; and
(F) Executed
UCC-3 financing statements or other
appropriate UCC financing statements
required by state law, evidencing a complete
and unbroken line from
the mortgagee to the
Trustee with evidence
of recording
thereon
(or in a form suitable for recordation).
In the event that in
connection with any
Mortgage Loan that is
not a
MERS Mortgage Loan the Depositor cannot deliver (a) the original recorded
Mortgage or (b) all interim recorded
assignments satisfying
the requirements of
clause (ii) or (iii) above, respectively, concurrently with the execution and
delivery hereof because such document or documents
have not been returned from
the applicable public recording office,
the Depositor shall
promptly deliver or
cause to be delivered to the Trustee or the Custodian on its behalf such
original Mortgage or such interim
assignment, as the
case may be, with evidence
of recording indicated thereon upon receipt thereof from
the public
recording
office, or a copy thereof, certified, if appropriate, by the
relevant recording
office, but in no event shall any such
delivery of the
original Mortgage and
each such interim assignment or a copy
thereof, certified,
if appropriate,
by
the relevant recording office, be made
later than one year following the Closing
Date; provided, however, in the event the Depositor is unable to deliver or
cause to be delivered by such date each Mortgage and each such interim
assignment by reason of the fact that any
such documents have
not been returned
by the appropriate recording office, or, in the case of each such interim
assignment, because the related Mortgage has not been returned by the
appropriate recording office, the Depositor shall deliver or cause to be
delivered such documents to the Trustee or the Custodian on its behalf as
promptly as possible upon receipt thereof and, in any event, within 720 days
following the Closing Date. The Depositor
shall forward or cause to be forwarded
to the Trustee or the Custodian on its behalf (a) from
time to time
additional
original documents evidencing an assumption or
modification of a Mortgage Loan
and (b) any other documents required to be delivered
by the Depositor or the
Master Servicer to the Trustee.
In the event that the
original Mortgage is
not
delivered and in connection with the payment in full of the
related Mortgage
Loan and the public recording office requires the presentation of a "lost
instruments affidavit and indemnity" or any
equivalent document,
because only a
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copy of the Mortgage can be delivered
with the instrument of satisfaction or
reconveyance, the Master Servicer shall execute and deliver or cause to be
executed and delivered such a document to
the public recording
office. In the
case where a public recording office
retains the original
recorded Mortgage
or
in the case where a Mortgage is lost after recordation in a public recording
office, the Depositor shall deliver or cause to be
delivered to the Trustee or
the Custodian on its behalf a copy of such
Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage.
In addition, in the event that in connection with any Mortgage Loan
the
Depositor cannot deliver or cause to be
delivered the original or duplicate
original lender's title policy (together
with all riders
thereto),
satisfying
the requirements of clause (v) above, concurrently with the execution and
delivery hereof because the related Mortgage has not been returned from the
applicable public recording office, the Depositor shall promptly
deliver or
cause to be delivered to the Trustee or the Custodian on its behalf such
original or duplicate original lender's title policy (together
with all riders
thereto) upon receipt thereof from the
applicable title insurer, but in no event
shall any such delivery of the original or
duplicate original
lender's title
policy be made later than one year following the Closing Date; provided,
however, in the event the Depositor is unable to deliver or cause to be
delivered by such date the original or
duplicate original
lender's title policy
(together with all riders thereto) because the related Mortgage has not been
returned by the appropriate recording office, the Depositor shall deliver or
cause to be delivered such documents to the Trustee or the Custodian on its
behalf as promptly as possible upon receipt thereof and, in any event,
within
720 days following the Closing Date; provided further, however, that the
Depositor shall not be required to deliver
an original or
duplicate lender's
title policy (together with all riders thereto) if the Depositor
delivers an
Alternative Title Product in lieu thereof.
Notwithstanding
the preceding,
in
connection with any Mortgage Loan for which either the original or
duplicate
original title policy has not been
delivered to the Trust, if at any time during
the term of this Agreement the parent
company of the Seller does not have a long
term senior debt rating of A- or higher
from S&P and A- or higher from Fitch (if
rated by Fitch), then the Depositor shall within 30
days deliver or cause to be
delivered to the Trustee or the Custodian on its behalf (if it has not
previously done so) a written commitment or
interim binder or preliminary report
of the title issued by the title insurance
or escrow company with respect to the
Mortgaged Property.
Subject to
the immediately following sentence, as promptly as
practicable subsequent to such transfer and
assignment, and in any event, within
thirty (30) days thereafter, the Master Servicer shall (i) complete each
assignment of Mortgage, as follows: "First Horizon Mortgage Pass-Through
Certificates, Series 2005-AA10, The Bank of
New York, as trustee for the holders
of the Certificates", (ii) cause such assignment to be in proper form for
recording in the appropriate public office for real property
records and (iii)
cause to be delivered for recording in the appropriate public office for real
property records the assignments of the
Mortgages to the Trustee, except that,
with respect to any assignments of Mortgage as to
which the Master Servicer has
not received the information required to prepare such
assignment in recordable
form, the Master Servicer's obligation to
do so and to deliver the same for such
recording shall be as soon as practicable
after receipt of such
information and
in any event within thirty (30) days after
receipt thereof.
Notwithstanding the
foregoing, the Master Servicer need not cause to be recorded
any assignment
which relates to a Mortgage Loan in any state other than the Required
Recordation States.
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In the case of Mortgage Loans that have been prepaid in
full as of the
Closing Date, the Depositor, in lieu of delivering the above
documents to the
Trustee or the Custodian on its behalf,
will deposit in the
Certificate Account
the portion of such payment that is
required to be deposited in the Certificate
Account pursuant to Section 3.8 hereof.
Notwithstanding
anything to the
contrary in this
Agreement,
within
thirty days after the Closing Date,
the Depositor shall either (i) deliver or
cause to be delivered to the Trustee or the
Custodian on its behalf the Mortgage
File as required pursuant to this Section 2.1 for
each Delay Delivery
Mortgage
Loan or (ii) (A) substitute or cause to be
substituted
a Substitute
Mortgage
Loan for the Delay Delivery Mortgage Loan or (B) repurchase or cause to be
repurchased the Delay Delivery Mortgage Loan, which substitution or repurchase
shall be accomplished in the manner and subject to the
conditions set forth in
Section 2.3 (treating each Delay Delivery Mortgage Loan as a Deleted
Mortgage
Loan for purposes of such Section 2.3),
provided, however, that if the Depositor
fails to deliver a Mortgage File for any
Delay Delivery Mortgage Loan within the
thirty-day period provided in the prior
sentence, the Depositor shall use its
best reasonable efforts to effect or cause
to be effected a substitution, rather
than a repurchase of, such Deleted
Mortgage Loan and
provided further that
the
cure period provided for in Section 2.2 or
in Section 2.3 shall not apply to the
initial delivery of the Mortgage File for
such Delay Delivery Mortgage Loan, but
rather the Depositor shall have five (5) Business
Days to cure or cause
to be
cured such failure to deliver. At the end
of such thirty-day period, the Trustee
or the Custodian, on its behalf shall send a Delay
Delivery Certification
for
the Delay Delivery Mortgage Loans delivered
during such
thirty-day
period in
accordance with the provisions of Section
2.2. Notwithstanding
anything to the
contrary contained in this Agreement, none of the Mortgage Loans in the
Trust
Fund is or will be Delay Delivery Mortgage
Loans.
SECTION 2.2 Acceptance by Trustee of the Mortgage Loans.
The Trustee or the
Custodian, on behalf
of the Trustee,
acknowledges
receipt of the documents identified in the Initial
Certification
in the form
annexed hereto as Exhibit E and declares
that it or the Custodian holds and will
hold such documents and the other documents
delivered to it or the Custodian, as
applicable, constituting the Mortgage Files,
and that it or the
Custodian, as
applicable, holds or will hold such other
assets as are
included in the
Trust
Fund, in trust for the exclusive use and benefit of all present and future
Certificateholders. The Trustee acknowledges that the Custodian will
maintain
possession of the Mortgage Notes in the State of Texas, unless otherwise
permitted by the Rating Agencies.
The Trustee agrees to
execute and deliver or to cause the Custodian to
execute and deliver on the Closing Date to
the Depositor and the Master Servicer
an Initial Certification in the form annexed hereto as
Exhibit E. Based on its
or the Custodian's review and examination, and only as to the documents
identified in such Initial Certification, the Custodian, on behalf of the
Trustee, acknowledges that such documents appear regular on their face and
relate to such Mortgage Loan. Neither the Trustee nor the
Custodian shall be
under any duty or obligation to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate
for the represented purpose or that they
have actually been recorded in the real estate
records or that they
are other
than what they purport to be on their
face.
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On or about the
thirtieth (30th) day after the Closing Date, the
Trustee shall deliver or shall cause the
Custodian to deliver to the Depositor
and the Master Servicer a Delay Delivery Certification in the form annexed
hereto as Exhibit F, with any applicable exceptions noted thereon.
Notwithstanding anything to the contrary
contained in this
Agreement, none of
the Mortgage Loans in the Trust Fund is or will be Delay
Delivery Mortgage
Loans.
Not later than 90 days
after the Closing Date, the Trustee shall
deliver or shall cause the Custodian to deliver to the
Depositor and the Master
Servicer a Subsequent Certification in the form annexed hereto as Exhibit G,
with any applicable exceptions noted
thereon.
If, in the course of such review, the Trustee or the Custodian, on
behalf of the Trustee, finds any document
constituting a part of a Mortgage File
which does not meet the requirements of Section 2.1, the Trustee shall
list or
shall cause the Custodian to list such as an exception in the Subsequent
Certification; provided, however that neither the Trustee nor the
Custodian
shall make any determination as to whether (i)
any endorsement is sufficient to
transfer all right, title and interest of
the party so endorsing, as noteholder
or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in
recordable form or is sufficient to effect
the assignment of and transfer to the
assignee thereof under the mortgage to
which the assignment relates. The Seller
shall promptly correct or cure such defect within
90 days from the date it was
so notified of such defect and, if the Seller does not correct or
cure such
defect within such period, the Seller shall either (a) substitute for the
related Mortgage Loan a Substitute
Mortgage Loan, which
substitution
shall be
accomplished in the manner and subject to the
conditions
set forth in
Section
2.3, or (b) purchase such Mortgage Loan
from the Trustee within 90 days from the
date the Seller was notified of such defect
in writing at the Purchase Price of
such Mortgage Loan; provided, however, that in no event shall
such substitution
or purchase occur more than 540 days from the
Closing Date, except
that if the
substitution or purchase of a Mortgage
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