MORTGAGE LOAN PURCHASE AGREEMENT
THIS MORTGAGE LOAN PURCHASE AGREEMENT dated as of November 30, 2004 by
and between FIRST HORIZON HOME LOAN CORPORATION, a Kansas corporation (the
"Seller"), and FIRST HORIZON ASSET SECURITIES INC. (the "Purchaser").
WHEREAS, the Seller owns certain Mortgage Loans (as hereinafter
defined) which Mortgage Loans are more particularly listed and described in
Schedule A attached hereto and made a part hereof.
WHEREAS, the Seller and the Purchaser wish to set forth the terms
pursuant to which the Mortgage Loans, excluding the servicing rights thereto,
are to be sold by the Seller to the Purchaser.
WHEREAS, the Seller will simultaneously transfer the servicing rights
for the Mortgage Loans to First Tennessee Mortgage Services, Inc. ("FTMSI")
pursuant to the Servicing Rights Transfer and Subservicing Agreement (as
hereinafter defined).
WHEREAS, the Purchaser will engage FTMSI to service the Mortgage Loans
pursuant to the Servicing Agreement (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration, and the mutual terms and covenants contained herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Agreement: This Mortgage Loan Purchase Agreement, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.
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 New York City is located are authorized or obligated by law or executive
order to be closed.
Closing Date: November 30, 2004
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
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.
Custodian: First Tennessee Bank National Association, and its
successors and assigns, as custodian under the Custodial Agreement dated as of
November 30, 2004 by and among The Bank of New York, as trustee, First Horizon
Home Loan Corporation, as master servicer, and the Custodian.
Cut-Off Date: November 1, 2004.
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.
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 United States Bankruptcy Reform Act of 1978, as
amended.
Delay Delivery Mortgage Loans: The Mortgage Loans for which all or a
portion of a related Mortgage File is not delivered to the Trustee or to the
Custodian on its behalf 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 4.1(c) hereof.
Determination 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 25th day
of each month, or if such 25th day is not a Business Day, the next succeeding
Business Day.
GAAP: Generally applied accounting principals as in effect from time to
time in the United States of America.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
insurance policy, including all riders and endorsements thereto in effect,
including any replacement policy or policies, in each case other than any amount
included in such Insurance Proceeds in respect of expenses covered by such
insurance policy.
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Liquidation Proceeds: Amounts, including Insurance Proceeds, 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.
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.
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.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on the property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 3.1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Loans: The mortgage loans transferred, sold and conveyed by
the Seller to the Purchaser, pursuant to this Agreement.
Mortgage Loan Purchase Price: With respect to any Mortgage Loan
required to be purchased by the Seller pursuant to Section 4.1(c) hereof, an
amount equal to the sum of (i) 100% of the unpaid principal balance of the
Mortgage Loan on the date of such purchase, and (ii) accrued interest thereon at
the applicable Mortgage Rate from the date through which interest was last paid
by the Mortgagor to the first day in the month in which the Mortgage Loan
Purchase Price is to be distributed to the Purchaser or its designees.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
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.
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.
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Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Coop Shares.
Purchase Price: $287,598,495.36.
Purchaser: First Horizon Asset Securities Inc., in its capacity as
purchaser of the Mortgage Loans from the Seller pursuant to this Agreement.
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.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on the first day of the month 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.
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.
Servicing Agreement: The servicing agreement, dated as of November 26,
2002 by and between First Horizon Asset Securities Inc. and its assigns, as
owner, and First Tennessee Mortgage Services, Inc., as servicer.
Servicing 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.
Stated Principal Balance: As to any Mortgage Loan, the unpaid principal
balance of such Mortgage Loan 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 date and irrespective of any delinquency in
payment by the related Mortgagor.
Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller for
a Deleted Mortgage Loan which must, on the date of such substitution, (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 a Mortgage Rate not lower than the Mortgage Rate 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 Schedule B hereto.
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Trustee: The Bank of New York and its successors and, if a successor
trustee is appointed hereunder, such successor.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase Price. In consideration for the payment to it of
the Purchase Price on the Closing Date, pursuant to written instructions
delivered by the Seller to the Purchaser on the Closing Date, the Seller does
hereby transfer, sell and convey to the Purchaser on the Closing Date, but with
effect from the Cut-off Date, (i) all right, title and interest of the Seller in
the Mortgage Loans, excluding the servicing rights thereto, and all property
securing such Mortgage Loans, including all interest and principal received or
receivable by the Seller with respect to the Mortgage Loans on or after the
Cut-off Date and all interest and principal payments on the Mortgage Loans
received on or prior to the Cut-off Date in respect of installments of interest
and principal due thereafter, but not including payments of principal and
interest due and payable on the Mortgage Loans on or before the Cut-off Date,
and (ii) all proceeds from the foregoing. Items (i) and (ii) in the preceding
sentence are herein referred to collectively as "Mortgage Assets."
Section 2.2 Timing. The sale of the Mortgage Assets hereunder shall
take place on the Closing Date.
ARTICLE III
CONVEYANCE AND DELIVERY
Section 3.1 Delivery of Mortgage Files. In connection with the transfer
and assignment set forth in Section 2.1 above, the Seller has delivered or
caused to be delivered to the Trustee or to 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 to the Custodian on its behalf within thirty (30)
days following the Closing Date) the following documents or instruments with
respect to each Mortgage Loan so assigned (collectively, the "Mortgage Files"):
(a) (1) the original Mortgage Note endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
________________, without recourse," with all intervening
endorsements showing a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each
such endorsement being sufficient to transfer all right, title
and interest of the party so endorsing, as noteholder or
assignee thereof, in and to that Mortgage Note); or
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(2) 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;
(b) 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 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 public recording
office in which such Mortgage has been recorded;
(c) a duly executed assignment of the Mortgage in blank (which may be
included in a blanket assignment or assignments), together with,
except as provided below, all interim recorded 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;
(d) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any;
(e) either the original or duplicate original 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,
and
(f) in the case of a Cooperative Loan, the originals of the following
documents or instruments:
(1) The Coop Shares, together with a stock power in blank;
(2) The executed Security Agreement;
(3) The executed Proprietary Lease;
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(4) The executed Recognition Agreement;
(5) 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
(6) 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 Seller cannot deliver (i) the original recorded Mortgage
or (ii) all interim recorded assignments satisfying the requirements of clause
(b) or (c) 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 Seller 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 Seller 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 Seller 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
Seller shall forward or cause to be forwarded to the Trustee or the Custodian on
its behalf (i) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (ii) any other documents
required to be delivered by the Seller 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 copy of the Mortgage can be delivered with the
instrument of satisfaction or reconveyance, the Seller 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 Seller 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
Seller 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 Seller 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
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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 Seller 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 Seller 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.
Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date, the Seller 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 3.1 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
4.1 (treating each Delay Delivery Mortgage Loan as a Deleted Mortgage Loan for
purposes of such Section 4.1), provided, however, that if the Seller fails to
deliver a Mortgage File for any Delay Delivery Mortgage Loan within the
thirty-day period provided in the prior sentence, the Seller 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 4.1 hereof shall not apply to the initial
delivery of the Mortgage File for such Delay Delivery Mortgage Loan, but rather
the Seller shall have five (5) Business Days to cure or cause to be cured such
failure to deliver.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of the Seller. (a) The
Seller hereby represents and warrants to the Purchaser, as of the date of
execution and delivery hereof, that:
(1) The Seller is duly organized as a Kansas corporation and is
validly existing and in good standing under the laws of the
State of Kansas and is duly authorized and qualified to
transact any and all business contemplated by this Agreement
to be conducted by the Seller in any state in which a
Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any
such state, to the extent necessary to ensure its ability to
enforce each Mortgage Loan and to perform any of its other
obligations under this Agreement in accordance with the terms
thereof.
(2) The Seller has the full corporate power and authority to sell
each Mortgage Loan, and to execute, deliver and perform, and
to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized by all necessary
corporate action on the part of the Seller the execution,
delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a
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legal, valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, except that
(a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding
therefor may be brought.
(3) The execution and delivery of this Agreement by the Seller,
the sale of the Mortgage Loans by the Seller under this
Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or
compliance with the terms thereof are in the ordinary course
of business of the Seller and will not (a) result in a
material breach of any term or provision of the charter or
by-laws of the Seller or (b) materially conflict with, result
in a material breach, violation or acceleration of, or result
in a material default under, the terms of any other material
agreement or instrument to which the Seller is a party or by
which it may be bound, or (c) constitute a material violation
of any statute, order or regulation applicable to the Seller
of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Seller; and the
Seller is not in breach or violation of any material indenture
or other material agreement or instrument, or in violation of
any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially
impair the Seller's ability to perform or meet any of its
obligations under this Agreement.
(4) No litigation is pending or, to the best of the Seller's
knowledge, threatened against the Seller that would prohibit
the execution or delivery of, or performance under, this
Agreement by the Seller.
(5) The Seller is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures
of MERS in connection with the servicing of the MERS Mortgage
Loans for as long as such Mortgage Loans are registered with
MERS.
(b) The Seller hereby makes the representations and warranties set forth
in Schedule B hereto to the Purchaser, as of the Closing Date, or if
so specified therein, as of the Cut-off Date.
(c) Upon discovery by either of the parties hereto of a breach of a
representation or warranty made pursuant to Schedule B hereto that
materially and adversely affects the interests of the Purchaser in
any Mortgage Loan, the party discovering such breach shall give
prompt notice thereof to the other party. The Seller hereby
covenants that within 90 days of the earlier of its discovery or its
receipt of written notice from the Purchaser of a breach of any
representation or warranty made pursuant to Schedule B hereto which
materially and adversely affects the interests of the Purchaser in
any Mortgage Loan, it shall cure such breach in all material
respects, and if such breach is not so cured, shall, (i) if such
90-day period expires prior to the second anniversary of the Closing
Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the
pool of mortgages listed on Schedule B hereto and substitute in its
place a Substitute Mortgage Loan, in the manner and subject to the
conditions set forth in this Section; or (ii) repurchase the
affected Mortgage Loan or Mortgage Loans from the Purchaser at the
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Mortgage Loan Purchase Price in the manner set forth below. With
respect to the representations and warranties described in this
Section which are made to the best of the Seller's knowledge, if it
is discovered by either the Seller or the Purchaser that the
substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related
Mortgage Loan or the interests of the Purchaser therein,
notwithstanding the Seller's lack of knowledge with respect to the
substance of such representation or warranty, such inaccuracy shall
be deemed a breach of the applicable representation or warranty.
With respect to any Substitute Mortgage Loan or Loans, the
Seller shall deliver to the Trustee or to the Custodian on its behalf
the Mortgage Note, the Mortgage, the related assignment of the
Mortgage, and such other documents and agreements as are required by
Section 3.1, with the Mortgage Note endorsed and the Mortgage assigned
as required by Section 3.1. No substitution is permitted to be made in
any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Substitute Mortgage Loans in the
month of substitution will be retained by the Seller. Upon such
substitution, the Substitute Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the Seller shall be
deemed to have made with respect to such Substitute Mortgage Loan or
Loans, as of the date of substitution, the representations and
warranties made pursuant to Schedule B hereto with respect to such
Mortgage Loan.
It is understood and agreed that the obligation under this
Agreement of the Seller to cure, repurchase or replace any Mortgage
Loan as to which a breach has occurred and is continuing shall
constitute the sole remedy against the Seller respecting such breach
available to the Purchaser on its behalf.
The representations and warranties contained in this Agreement shall
not be construed as a warranty or guaranty by the Seller as to the future
payments by any Mortgagor.
It is understood and agreed that the representations and warranties set
forth in this Section 4.1 shall survive the sale of the Mortgage Loans to the
Purchaser hereunder.
ARTICLE V
MISCELLANEOUS
Section 5.1 Transfer Intended as Sale. It is the express intent of the
parties hereto that the conveyance of the Mortgage Loans by the Seller to the
Purchaser be, and be construed as, an absolute sale thereof in accordance with
GAAP and for regulatory purposes. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof by the Seller to the
Purchaser. However, in the event that, notwithstanding the intent of the
parties, the Mortgage Loans are held to be the property of the Seller or the
Purchaser, respectively, or if for any other reason this Agreement is held or
deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of Texas and (ii) the conveyance of the Mortgage
Loans provided for in this Agreement shall be deemed to be an assignment and a
grant by the Seller to the Purchaser of a security interest in all of the
Mortgage Loans, whether now owned or hereafter acquired.
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The Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement. The Seller and the Purchaser shall arrange for filing any
Uniform Commercial Code continuation statements in connection with any security
interest granted hereby.
Section 5.2 Seller's Consent to Assignment. The Seller hereby
acknowledges the Purchaser's right to assign, transfer and convey all of the
Purchaser's rights under this Agreement to a third party and that the
representations and warranties made by the Seller to the Purchaser pursuant to
this Agreement will, in the case of such assignment, transfer and conveyance, be
for the benefit of such third party. The Seller hereby consents to such
assignment, transfer and conveyance.
Section 5.3 Specific Performance. Either party or its assignees may
enforce specific performance of this Agreement.
Section 5.4 Notices. All notices, demands and requests that may be
given or that are required to be given hereunder shall be sent by United States
certified mail, postage prepaid, return receipt requested, to the parties at
their respective addresses as follows:
If to
the Purchaser: 0000 Xxxxxxx Xxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxx
If to the Seller:4000 Horizon Way
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxx
Section 5.5 Choice of Law. This Agreement shall be construed in
accordance with and governed by the substantive laws of the State of Texas
applicable to agreements made and to be performed in the State of Texas and the
obligations, rights and remedies of the parties hereto shall be determined in
accordance with such laws.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Purchaser and the Seller have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the 30th day of November, 2004.
FIRST HORIZON HOME LOAN CORPORATION, as Seller
By:
-------------------------------------------------
Xxxxx XxXxx
Senior Vice President
FIRST HORIZON ASSET SECURITIES INC., as Purchaser
By:
-------------------------------------------------
Xxxxxx Xxxxx
Vice President
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SCHEDULE A
[BEGINS ON NEXT PAGE]
[Available Upon Request From Trustee]
B-5
SCHEDULE B
REPRESENTATIONS AND WARRANTIES AS TO THE MORTGAGE LOANS
First Horizon Home Loan Corporation (the "Seller") hereby makes the
representations and warranties set forth in this Schedule B on which First
Horizon Asset Securities Inc. (the "Purchaser") relies in accepting the Mortgage
Loans. Such representations and warranties speak as of the execution and
delivery of the Mortgage Loan Purchase Agreement, dated as of November 30, 2004
(the "MLPA"), between First Horizon Home Loan Corporation, as seller, and the
Purchaser and as of the Closing Date, or if so specified herein, as of the
Cut-off Date or date of origination of the Mortgage Loans, but shall survive the
sale, transfer, and assignment of the Mortgage Loans to the Purchaser and any
subsequent sale, transfer and assignment by the Purchaser to a third party.
Capitalized terms used but not otherwise defined in this Schedule B shall have
the meanings ascribed thereto in the MLPA.
(1) The information set forth on Schedule A to the MLPA, with respect to
each Mortgage Loan is true and correct in all material respects as
of the Closing Date.
(2) Each Mortgage is a valid and enforceable first lien on the Mortgaged
Property subject only to (a) the lien of nondelinquent current real
property taxes and assessments and liens or interests arising under
or as a result of any federal, state or local law, regulation or
ordinance relating to hazardous wastes or hazardous substances and,
if the related Mortgaged Property is a unit in a condominium project
or Planned Unit Development, any lien for common charges permitted
by statute or homeowner association fees, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such
exceptions appearing of record being generally acceptable to
mortgage lending institutions in the area wherein the related
Mortgaged Property is located or specifically reflected in the
appraisal made in connection with the origination of the related
Mortgage Loan, and (c) other matters to which like properties are
commonly subject which do not materially interfere with the benefits
of the security intended to be provided by such Mortgage.
(3) Immediately prior to the assignment of the Mortgage Loans to the
Purchaser, the Seller had good title to, and was the sole owner of,
each Mortgage Loan free and clear of any pledge, lien, encumbrance
or security interest and had full right and authority, subject to no
interest or participation of, or agreement with, any other party, to
sell and assign the same pursuant to this Agreement.
(4) As of the date of origination of each Mortgage Loan, there was no
delinquent tax or assessment lien against the related Mortgaged
Property.
(5) There is no valid offset, defense or counterclaim to any Mortgage
Note or Mortgage, including the obligation of the Mortgagor to pay
the unpaid principal of or interest on such Mortgage Note.
B-1
(6) There are no mechanics' liens or claims for work, labor or material
affecting any Mortgaged Property which are or may be a lien prior
to, or equal with, the lien of such Mortgage, except those which are
insured against by the title insurance policy referred to in item
(11) below.
(7) To the best of the Seller's knowledge, no Mortgaged Property has
been materially damaged by water, fire, earthquake, windstorm,
flood, tornado or similar casualty (excluding casualty from the
presence of hazardous wastes or hazardous substances, as to which
the Seller makes no representation) so as to affect adversely the
value of the related Mortgaged Property as security for such
Mortgage Loan. With respect to the representations and warranties
contained within this item (7) that are made to the knowledge or the
best knowledge of the Seller or as to which the Seller has no
knowledge, if it is discovered that the substance of any such
representation and warranty is inaccurate and the inaccuracy
materially and adversely affects the value of the related Mortgage
Loan, or the interest therein of the Purchaser, then notwithstanding
the Seller's lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the
representation and warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation and warranty and
the Seller shall take such action described in Section 4.1(c) of
this Agreement in respect of such Mortgage Loan.
(8) Each Mortgage Loan at origination complied in all material respects
with applicable local, state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws and specifically
applicable predatory and abusive lending laws, or any noncompliance
does not have a material adverse effect on the value of the related
Mortgage Loan.
(9) No Mortgage Loan is a "high cost loan" as defined by the specific
applicable predatory and abusive lending laws.
(10) Except as reflected in a written document contained in the related
Mortgage File, the Seller has not modified the Mortgage in any
material respect; satisfied, cancelled or subordinated such Mortgage
in whole or in part; released the related Mortgaged Property in
whole or in part from the lien of such Mortgage; or executed any
instrument of release, cancellation, modification or satisfaction
with respect thereto.
(11) A lender's policy of title insurance together with a condominium
endorsement and extended coverage endorsement, if applicable, in an
amount at least equal to the Cut-off Date Principal Balance of each
such Mortgage Loan or a commitment (binder) to issue the same was
effective on the date of the origination of each Mortgage Loan, each
such policy is valid and remains in full force and effect.
(12) To the best of the Seller's knowledge, all of the improvements which
were included for the purpose of determining the appraised value of
the Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon the Mortgaged Property, unless such failure
to be wholly within such boundaries and restriction lines or such
encroachment, as the case may be, does not have a material effect on
the value of such Mortgaged Property.
B-2
(13) To the best of the Seller's knowledge, as of the date of origination
of each Mortgage Loan, no improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law
or regulation unless such violation would not have a material
adverse effect on the value of the related Mortgaged Property. To
the best of the Seller's knowledge, all inspections, licenses and
certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the
use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities, unless the
lack thereof would not have a material adverse effect on the value
of such Mortgaged Property.
(14) The Mortgage Notes and the related Mortgages are genuine, and each
is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law.
(15) The proceeds of the Mortgage Loans have been fully disbursed and
there is no requirement for future advances thereunder.
(16) The related Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits
of the security, including, (i) in the case of a Mortgage designated
as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure.
(17) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in
such Mortgage, and no fees or expenses are or will become payable by
the holder of the Mortgage to the trustee under the deed of trust,
except in connection with a trustee's sale after default by the
Mortgagor.
(18) As of the Closing Date, the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and
extended coverage and coverage for such other hazards as are
customarily required by institutional single family mortgage lenders
in the area where the Mortgaged Property is located, and the Seller
has received no notice that any premiums due and payable thereon
have not been paid; the Mortgage obligates the Mortgagor thereunder
to maintain all such insurance including flood insurance at the
Mortgagor's cost and expense. Anything to the contrary in this item
(18) notwithstanding, no breach of this item (18) shall be deemed to
give rise to any obligation of the Seller to repurchase or
substitute for such affected Mortgage Loan or Loans so long as the
Seller maintains a blanket policy.
B-3
(19) If at the time of origination of each Mortgage Loan, related the
Mortgaged Property was in an area then identified in the Federal
Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting
the then-current requirements of the Flood Insurance Administration
is in effect with respect to such Mortgaged Property with a
generally acceptable carrier.
(20) To the best of the Seller's knowledge, there is no proceeding
pending or threatened for the total or partial condemnation of any
Mortgaged Property, nor is such a proceeding currently occurring.
(21) To best of the Seller's knowledge, there is no material event which,
with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a material non-monetary
default, breach, violation or event of acceleration under the
Mortgage or the related Mortgage Note; and the Seller has not waived
any material non-monetary default, breach, violation or event of
acceleration.
(22) Any leasehold estate securing a Mortgage Loan has a stated term at
least as long as the term of the related Mortgage Loan.
(23) Each Mortgage Loan was selected from among the outstanding
fixed-rate one-to four-family mortgage loans in the Seller's
portfolio at the Closing Date as to which the representations and
warranties made with respect to the Mortgage Loans set forth in this
Schedule B can be made. No such selection was made in a manner
intended to adversely affect the interests of the
Certificateholders.
(24) The Mortgage Loans provide for the full amortization of the amount
financed over a series of monthly payments.
(25) At origination, substantially all of the Mortgage Loans in the Pool
I and Pool III had stated terms to maturity of 30 years, and
substantially all of the Mortgage Loans in the Pool II had stated
terms to maturity of 15 years.
(26) Scheduled monthly payments made by the Mortgagors on the Mortgage
Loans either earlier or later than their Due Dates will not affect
the amortization schedule or the relative application of the
payments to principal and interest.
(27) The Mortgage Loans may be prepaid at any time by the related
Mortgagors without penalty.
(28) 18% of the Mortgage Loans in Pool II and substantially all of the
Mortgage Loans in Pool III are jumbo mortgage loans that have Stated
Principal Balances at origination that exceed the then applicable
limitations for purchase by Xxxxxx Xxx and Xxxxxxx Mac.
B-4
(29) Each Mortgage Loan in Pool I, Pool II and Pool III was originated on
or after March 5, 2004, July 7, 2004 and March 12, 2004,
respectively.
(30) The latest stated maturity date of any Mortgage Loan in Pool I and
Pool III is December 1, 2034, and the earliest stated maturity date
of any Mortgage Loan is April 1, 2034. The latest stated maturity
date of any Mortgage Loan in Pool II is November 1, 2019, and the
earliest stated maturity date of any Mortgage Loan is September 1,
2014.
(31) No Mortgage Loan was delinquent more than 30 days as of the Cut-off
Date.
(32) No Mortgage Loan had a Loan-to-Value Ratio at origination of more
than 95%. Generally, each Mortgage Loan with a Loan-to-Value Ratio
at origination of greater than 80% is covered by a Primary Insurance
Policy issued by a mortgage insurance company that is acceptable to
Xxxxxx Mae or Xxxxxxx Mac.
(33) Each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code.
(34) No Mortgage Loan is a "high cost loan" as defined by the specific
applicable predatory and abusive lending laws. In addition, no
Mortgage Loan is a "High Cost Loan" or a "Covered Loan", as
applicable (as such terms are defined in the then current Standard &
Poor's LEVELS(R) Glossary which is now Version 5.6 Revised, Appendix
E) and no Mortgage Loan originated on or after October 1, 2002
through March 7, 2003 is governed by the Georgia Fair Lending Act.
(35) No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 ("HOEPA").
(36) No Mortgage Loan originated on or after October 1, 2002 and before
March 7, 2003 is secured by property located in the State of
Georgia. No Mortgage Loan originated on or after March 7, 2003 is a
"high-cost home loan" as defined under the Georgia Fair Lending Act.
(37) No Mortgage Loan is a "high cost home," "covered" (excluding home
loans defined as "covered home loans" in the New Jersey Home
Ownership Security Act of 2002), "high risk home" or "predatory"
loan under any applicable state, federal or local law (or a
similarly classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal
liability for residential mortgage loans having high interest rates,
points and/or fees.
(38) An appraisal of the type indicated on the Mortgage Loan Schedule has
been performed for each Mortgage Loan.
(39) No proceeds from any Mortgage Loan were used to finance
single-premium credit insurance policies.
B-5
(40) The servicer for each Mortgage Loan has fully furnished and will
fully furnish, in accordance with the Fair Credit Reporting Act and
its implementing regulations, accurate and complete information
(i.e. favorable and unfavorable) on its Mortgagor credit files to
Equifax, Experian, and Trans Union Credit Information Company on a
monthly basis.
(41) With respect to any Mortgage Loan originated on or after August 1,
2004, neither the related Mortgage nor the related Mortgage Note
requires the borrower to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan
transaction.
(42) The original principal balance of each Mortgage Loan in Pool I is
within Xxxxxxx Mac's dollar amount limits for conforming one- to
four-family mortgage loans.
(43) No Mortgage Loan imposes prepayment penalties in excess of five
years.
(44) Appraisal form 1004 or form 2055 with an interior inspection for
first lien mortgage loans has been obtained for all related
mortgaged properties, other than condominiums, investment
properties, two to four unit properties and exempt properties, for
which appraisal form 1004 or form 2055 has not been obtained.
Appraisal form 704, 2065 or 2055 with an exterior only inspection
for junior lien mortgages combined with first lien mortgages
(including home equity lines of credit) has been obtained for all
related mortgaged properties, other than condominiums, investment
properties, two to four unit properties and exempt properties, for
which appraisal form 1004 or form 2055 has not been obtained.
Appraisal form 704, 2065 or 2055 with an exterior only inspection
for all other junior lien mortgages has been obtained for all
related mortgaged properties, other than those related mortgaged
properties that qualify for an Automated Valuation Model.
B-6
