MORTGAGE LOAN PURCHASE AGREEMENT

     THIS MORTGAGE LOAN PURCHASE AGREEMENT dated as of June 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:  June 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.

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     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 June 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: June 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.

     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:  $237,367,920.91.

     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.

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     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.

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

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                           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 interim recorded assignments of such mortgage (each
          such assignment, when duly

                               -5-

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          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, if appropriate,
by the relevant recording office, be made later than one year
following the

                               -6-

<PAGE>

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 Mortgage Loan and provided further
that the cure period provided for in Section 4.1 hereof shall

                               -7-

<PAGE>

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
          material indenture or other material agreement or
          instrument, or in violation of

                               -8-

<PAGE>

          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, 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.

     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.

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<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 30th day of June, 2004.

                              FIRST HORIZON HOME LOAN
                              CORPORATION, as Seller


                              By:  /s/  WADE WALKER
                                 ----------------------------
                                   Wade Walker
                                   Senior Vice President -
                                     Asset Securitization

                              FIRST HORIZON ASSET SECURITIES
                              INC., as Purchaser


                              By:  /s/  WADE WALKER
                                 ----------------------------
                                   Wade Walker
                                   Senior Vice President -
                                     Asset Securitization




Mortgage Loan Purchase Agreement - 2004-AA2, Signature Page

<PAGE>


                           SCHEDULE A
                           ----------

                      [BEGINS ON NEXT PAGE]

              [Available Upon Request From Trustee]






<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
June 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

<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 (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.

     (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 anti-predatory and abusive
          lending laws, or any noncompliance does not have a
          material adverse effect on the value of the related
          Mortgage Loan.

     (9)  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.

     (10) 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.

     (11) 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.

     (12) 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

                               B-2

<PAGE>

          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.

     (13) 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.

     (14) The proceeds of the Mortgage Loan have been fully
          disbursed and there is no requirement for future
          advances thereunder.

     (15) 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.

     (16) 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.

     (17) 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 (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.

     (18) 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.

     (19) 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.

                               B-3

<PAGE>

     (20) 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.

     (21) Any leasehold estate securing a Mortgage Loan has a
          stated term at least as long as the term of the related
          Mortgage Loan.

     (22) 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.

     (23) The Mortgage Loans provide for the full amortization of
          the amount financed over a series of monthly payments.

     (24) At origination, substantially all of the Mortgage Loans
          in the Mortgage Pools had stated terms to maturity of
          30 years.

     (25) 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.

     (26) The Mortgage Loans may be prepaid at any time by the
          related Mortgagors without penalty.

     (27) 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.

     (28) Each Mortgage Loan in Pool I and Pool II was originated
          on or after January 15, 2004 or December 18, 2003,
          respectively.

     (29) The latest stated maturity date of any Mortgage Loan in
          Pool I is July 1, 2034, and the earliest stated
          maturity date of any Mortgage Loan in Pool I is June 1,
          2024. The latest stated maturity date of any Mortgage
          Loan in Pool II is July 1, 2034 and the earliest stated
          maturity date of any Mortgage Loan in Pool II is
          January 1, 2034.

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

     (31) 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.

                               B-4

<PAGE>

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

     (33) No Mortgage Loan is covered by the Home Ownership and
          Equity Protection Act of 1994 ("HOEPA").

     (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 Glossary which is now Version 5.6 Revised,
          Appendix E) and no Mortgage Loan originated on or after
          October 1, 2002 through March 6, 2003 is governed by
          the Georgia Fair Lending Act.

     (35) 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.

     (36) No Mortgage Loan is a "high cost home," "covered"
          (excluding home loans defined as "covered home loans"
          pursuant to clause (1) of the definition of that term
          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.

     (37) No proceeds from any Mortgage Loan were used to finance
          single-premium credit insurance policies.

     (38) 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.

     (39) The original principal balance of each Mortgage Loan in
          Pool I is within Freddie Mac's dollar amount limits for
          conforming one- to four-family mortgage loans.








                               B-5