<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

     THIS MORTGAGE LOAN PURCHASE AGREEMENT dated as of March 28, 2003, 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: March 28, 2003.

     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.

<PAGE>

     Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, including the allocation of individual dwelling units
to the holders of the Coop Shares of the Cooperative Corporation.

     Cooperative Unit: A single family dwelling located in a Cooperative
Property.

     Custodian: LaSalle Bank National Association, a national banking
association, and its successors and assigns, as custodian under the Custodial
Agreement dated as of March 28, 2003 by and among The Bank of New York, as
trustee, First Horizon Home Loan Corporation, as master servicer, and the
Custodian.

     Cut-Off Date: March 1, 2003.

     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 principal 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.

                                      -2-

<PAGE>

     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.

     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.

     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: $397,032,026.35.

     Purchaser: First Horizon Asset Securities Inc., a Delaware corporation, 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.

                                      -3-

<PAGE>

     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 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.

     Trustee: The Bank of New York and its successors and, if a successor
trustee is appointed hereunder, such successor.

                                      -4-

<PAGE>

                                   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

               (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, the original recorded Mortgage or a copy of
          such Mortgage certified by the Seller as being a true and complete
          copy of the Mortgage;

     (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

                                      -5-

<PAGE>

          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;

               (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 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,

                                      -6-

<PAGE>

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
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

                                      -7-

<PAGE>

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 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

                                      -8-

<PAGE>

          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.

     (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 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

                                      -9-

<PAGE>

     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, 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.

     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.

                                      -10-

<PAGE>

     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:       4000 Horizon Way
                                    Irving, Texas 75063
                                    Attn: Larry P. Cole

               If to the Seller:    4000 Horizon Way
                                    Irving, Texas 75063
                                    Attn: Larry P. Cole

     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]

                                      -11-

<PAGE>

     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 20th day of March, 2003.

                               FIRST HORIZON HOME LOAN CORPORATION,
                               as Seller


                               By:
                                  ----------------------------------------------
                                    Wade Walker
                                    Senior Vice President - Asset Securitization


                               FIRST HORIZON ASSET SECURITIES INC.,
                               as Purchaser


                               By:
                                  ----------------------------------------------
                                    Wade Walker
                                    Senior Vice President - Asset Securitization

<PAGE>

                                   SCHEDULE A

                              [BEGINS ON NEXT PAGE]

<PAGE>

                                   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 March 28, 2003 (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

<PAGE>

     (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 (10)
          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.

     (8)  Each Mortgage Loan at origination complied in all material respects
          with applicable state and federal laws, including, without limitation,
          usury, equal credit opportunity, real estate settlement procedures,
          truth-in-lending and disclosure 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 Home Loan" or "Covered Loan" within
          the meaning of the Georgia Fair Lending Act.

     (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.

     (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,

                                      B-2

<PAGE>

          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 Note and the related Mortgage 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 Loan 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) At the Cut-off 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 (17) notwithstanding,
          no breach of this item (17) 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.

     (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.

                                      B-3

<PAGE>

     (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
          adjustable-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
          Mortgage Pools had stated terms to maturity of 30 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) Substantially all of the Mortgage Loans are jumbo mortgage loans that
          have Stated Principal Balances at origination that exceed the then
          applicable limitations for purchase by Fannie Mae and Freddie Mac.

     (29) Each Mortgage Loan in Pool I was originated on or after February 27,
          2002. Each Mortgage Loan in Pool II was originated on or after October
          31, 2002.

     (30) The latest stated maturity date of any Mortgage Loan in Pool I is
          April 1, 2033, and the earliest stated maturity date of any Mortgage
          Loan in Pool I is February 1, 2023. The latest stated maturity date of
          any Mortgage Loan in Pool II is April 4, 2018, and the earliest stated
          maturity date of any Mortgage Loan in Pool II is March 1, 2013.

     (31) No Mortgage Loan was delinquent more than 30 days as of the Cut-off
          Date.

                                      B-4

<PAGE>

     (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
          Fannie Mae or Freddie Mac.

     (33) Each Mortgage Loan constitutes a "qualified mortgage" within the
          meaning of Section 860G(a)(3) of the Code.

                                      B-5