MORTGAGE LOAN PURCHASE AGREEMENT

         THIS MORTGAGE LOAN PURCHASE AGREEMENT dated as of November 30, 2004 by
and between FIRST HORIZON HOME LOAN CORPORATION, a Kansas corporation (the
"Seller"), and FIRST HORIZON ASSET SECURITIES INC. (the "Purchaser").

         WHEREAS, the Seller owns certain Mortgage Loans (as hereinafter
defined) which Mortgage Loans are more particularly listed and described in
Schedule A attached hereto and made a part hereof.

         WHEREAS, the Seller and the Purchaser wish to set forth the terms
pursuant to which the Mortgage Loans, excluding the servicing rights thereto,
are to be sold by the Seller to the Purchaser.

         WHEREAS, the Seller will simultaneously transfer the servicing rights
for the Mortgage Loans to First Tennessee Mortgage Services, Inc. ("FTMSI")
pursuant to the Servicing Rights Transfer and Subservicing Agreement (as
hereinafter defined).

         WHEREAS, the Purchaser will engage FTMSI to service the Mortgage Loans
pursuant to the Servicing Agreement (as hereinafter defined).

         NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration, and the mutual terms and covenants contained herein, the
parties hereto agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

         Agreement: This Mortgage Loan Purchase Agreement, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.

         Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the City of Dallas, or the State of Texas
or New York City is located are authorized or obligated by law or executive
order to be closed.

         Closing Date:  November 30, 2004

         Code:  The Internal  Revenue Code of 1986,  including  any successor or
amendatory provisions.

         Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.

         Coop Shares:  Shares issued by a Cooperative Corporation.

         Cooperative  Loan:  Any  Mortgage  Loan  secured  by Coop  Shares and a
Proprietary Lease.
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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: First Tennessee Bank National Association, and its
successors and assigns, as custodian under the Custodial Agreement dated as of
November 30, 2004 by and among The Bank of New York, as trustee, First Horizon
Home Loan Corporation, as master servicer, and the Custodian.

         Cut-Off Date:  November 1, 2004.

         Cut-off Date  Principal  Balance:  As to any Mortgage  Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.

         Debt Service Reduction: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any reduction that results in a permanent forgiveness of principal.

         Deficient Valuation: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then-outstanding indebtedness under the Mortgage Loan, or any reduction
in the amount of principal to be paid in connection with any Scheduled Payment
that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court which is final and non-appealable
in a proceeding under the United States Bankruptcy Reform Act of 1978, as
amended.

         Delay Delivery Mortgage Loans: The Mortgage Loans for which all or a
portion of a related Mortgage File is not delivered to the Trustee or to the
Custodian on its behalf on the Closing Date. The number of Delay Delivery
Mortgage Loans shall not exceed 25% of the aggregate number of Mortgage Loans as
of the Closing Date.

         Deleted Mortgage Loan:  As defined in Section 4.1(c) hereof.

         Determination Date: The earlier of (i) the third Business Day after the
15th day of each month, and (ii) the second Business Day prior to the 25th day
of each month, or if such 25th day is not a Business Day, the next succeeding
Business Day.

         GAAP: Generally applied accounting principals as in effect from time to
time in the United States of America.

         Insurance Proceeds: Proceeds paid by an insurer pursuant to any
insurance policy, including all riders and endorsements thereto in effect,
including any replacement policy or policies, in each case other than any amount
included in such Insurance Proceeds in respect of expenses covered by such
insurance policy.

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         Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property.

         MERS: Mortgage  Electronic  Registration  Systems,  Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

         MERS Mortgage Loan: Any Mortgage Loan  registered with MERS on the MERS
System.

         MERS (R)  System:  The  system  of  recording  transfers  of  mortgages
electronically maintained by MERS.

         MIN:  The Mortgage Identification Number for any MERS Mortgage Loan.

         MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.

         Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on the property securing a Mortgage Note.

         Mortgage File: The mortgage documents listed in Section 3.1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.

         Mortgage Loans: The mortgage loans transferred, sold and conveyed by
the Seller to the Purchaser, pursuant to this Agreement.

         Mortgage Loan Purchase Price: With respect to any Mortgage Loan
required to be purchased by the Seller pursuant to Section 4.1(c) hereof, an
amount equal to the sum of (i) 100% of the unpaid principal balance of the
Mortgage Loan on the date of such purchase, and (ii) accrued interest thereon at
the applicable Mortgage Rate from the date through which interest was last paid
by the Mortgagor to the first day in the month in which the Mortgage Loan
Purchase Price is to be distributed to the Purchaser or its designees.

         Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.

         Mortgaged Property: The underlying property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Coop Shares and
Proprietary Lease.

         Mortgagor:  The obligor(s) on a Mortgage Note.

         Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.

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         Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Coop Shares.

         Purchase Price:  $287,598,495.36.

         Purchaser:  First  Horizon  Asset  Securities  Inc., in its capacity as
purchaser of the Mortgage Loans from the Seller pursuant to this Agreement.

         Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights of such originator in the Cooperative
Property.

         Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on the first day of the month allocable to principal and/or interest on such
Mortgage Loan which, unless otherwise specified herein, shall give effect to any
related Debt Service Reduction and any Deficient Valuation that affects the
amount of the monthly payment due on such Mortgage Loan.

         Security   Agreement:   The  security   agreement  with  respect  to  a
Cooperative Loan.

         Seller: First Horizon Home Loan Corporation, a Kansas corporation,  and
its successors and assigns, in its capacity as seller of the Mortgage Loans.

         Servicing Agreement: The servicing agreement,  dated as of November 26,
2002 by and between  First  Horizon Asset  Securities  Inc. and its assigns,  as
owner, and First Tennessee Mortgage Services, Inc., as servicer.

         Servicing  Rights Transfer and  Subservicing  Agreement:  The servicing
rights transfer and subservicing agreement, dated as of November 26, 2002 by and
between First Horizon Home Loan Corporation, as transferor and subservicer,  and
First Tennessee Mortgage Services, Inc., as transferee and servicer.

         Stated Principal Balance: As to any Mortgage Loan, the unpaid principal
balance of such Mortgage Loan as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any moratorium or similar waiver or grace period) after giving effect
to any previous partial Principal Prepayments and Liquidation Proceeds allocable
to principal (other than with respect to any Liquidated Mortgage Loan) and to
the payment of principal due on such date and irrespective of any delinquency in
payment by the related Mortgagor.

         Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller for
a Deleted Mortgage Loan which must, on the date of such substitution, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
more than 10% less than the Stated Principal Balance of the Deleted Mortgage
Loan; (ii) have a Mortgage Rate not lower than the Mortgage Rate of the Deleted
Mortgage Loan; (iii) have a maximum mortgage rate not more than 1% per annum
higher or lower than the maximum mortgage rate of the Deleted Mortgage Loan;
(iv) have a minimum mortgage rate specified in its related Mortgage Note not
more than 1% per annum higher or lower than the minimum mortgage rate of the
Deleted Mortgage Loan; (v) have the same mortgage index, reset period and
periodic rate as the Deleted Mortgage Loan and a gross margin not more than 1%
per annum higher or lower than that of the Deleted Mortgage Loan (vi) be
accruing interest at a rate no lower than and not more than 1% per annum higher
than, that of the Deleted Mortgage Loan; (iv) have a loan-to-value ratio no
higher than that of the Deleted Mortgage Loan; (vii) have a remaining term to
maturity no greater than (and not more than one year less than that of) the
Deleted Mortgage Loan; (viii) not be a Cooperative Loan unless the Deleted
Mortgage Loan was a Cooperative Loan and (ix) comply with each representation
and warranty set forth in Schedule B hereto.

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<PAGE>

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

                                   ARTICLE II
                                PURCHASE AND SALE

         Section 2.1 Purchase Price. In  consideration  for the payment to it of
the  Purchase  Price on the  Closing  Date,  pursuant  to  written  instructions
delivered by the Seller to the  Purchaser on the Closing  Date,  the Seller does
hereby transfer,  sell and convey to the Purchaser on the Closing Date, but with
effect from the Cut-off Date, (i) all right, title and interest of the Seller in
the Mortgage Loans,  excluding the servicing  rights  thereto,  and all property
securing such Mortgage Loans,  including all interest and principal  received or
receivable  by the Seller  with  respect to the  Mortgage  Loans on or after the
Cut-off  Date and all  interest and  principal  payments on the  Mortgage  Loans
received on or prior to the Cut-off Date in respect of  installments of interest
and  principal  due  thereafter,  but not  including  payments of principal  and
interest  due and payable on the Mortgage  Loans on or before the Cut-off  Date,
and (ii) all proceeds  from the  foregoing.  Items (i) and (ii) in the preceding
sentence are herein referred to collectively as "Mortgage Assets."

         Section 2.2 Timing.  The sale of the Mortgage  Assets  hereunder  shall
take place on the Closing Date.

                                  ARTICLE III
                             CONVEYANCE AND DELIVERY

         Section 3.1 Delivery of Mortgage Files. In connection with the transfer
and  assignment  set forth in Section  2.1 above,  the Seller has  delivered  or
caused to be delivered to the Trustee or to the  Custodian on its behalf (or, in
the case of the Delay  Delivery  Mortgage  Loans,  will  deliver  or cause to be
delivered to the Trustee or to the  Custodian on its behalf  within  thirty (30)
days  following the Closing Date) the following  documents or  instruments  with
respect to each Mortgage Loan so assigned (collectively, the "Mortgage Files"):

            (a)   (1) the original Mortgage Note endorsed by manual or facsimile
                  signature in blank in the following form: "Pay to the order of
                  ________________,  without  recourse,"  with  all  intervening
                  endorsements  showing a complete chain of endorsement from the
                  originator  to the Person  endorsing  the Mortgage  Note (each
                  such endorsement being sufficient to transfer all right, title
                  and  interest  of the party so  endorsing,  as  noteholder  or
                  assignee thereof, in and to that Mortgage Note); or

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            (2)   with respect to any Lost Mortgage  Note, a lost note affidavit
                  from the Seller  stating that the original  Mortgage  Note was
                  lost or destroyed, together with a copy of such Mortgage Note;

      (b)   except as provided  below and for each  Mortgage  Loan that is not a
            MERS Mortgage Loan, the original recorded Mortgage or a copy of such
            Mortgage  certified by the Seller as being a true and complete  copy
            of the  Mortgage,  and in the case of each MERS Mortgage  Loan,  the
            original  Mortgage,  noting the  presence of the MIN of the Mortgage
            Loans and either language indicating that the Mortgage Loan is a MOM
            Loan if the Mortgage  Loan is a MOM Loan or if the Mortgage Loan was
            not a MOM  Loan  at  origination,  the  original  Mortgage  and  the
            assignment  thereof to MERS,  with  evidence of recording  indicated
            thereon, or a copy of the Mortgage certified by the public recording
            office in which such Mortgage has been recorded;

      (c)   a duly  executed  assignment  of the Mortgage in blank (which may be
            included in a blanket  assignment or  assignments),  together  with,
            except as provided below, all interim  recorded  assignments of such
            mortgage (each such assignment,  when duly and validly completed, to
            be in recordable form and sufficient to effect the assignment of and
            transfer to the  assignee  thereof,  under the Mortgage to which the
            assignment relates);  provided that, if the related Mortgage has not
            been returned from the  applicable  public  recording  office,  such
            assignment  of  the  Mortgage  may  exclude  the  information  to be
            provided by the recording office;

      (d)   the  original or copies of each  assumption,  modification,  written
            assurance or substitution agreement, if any;

      (e)   either the original or duplicate  original  title policy  (including
            all riders thereto) with respect to the related Mortgaged  Property,
            if available,  provided that the title policy  (including all riders
            thereto) will be delivered as soon as it becomes  available,  and if
            the  title  policy  is not  available,  and to the  extent  required
            pursuant to the second  paragraph  below or otherwise in  connection
            with the rating of the Certificates, a written commitment or interim
            binder  or  preliminary  report  of the  title  issued  by the title
            insurance or escrow company with respect to the Mortgaged  Property,
            and

      (f)   in the case of a  Cooperative  Loan,  the originals of the following
            documents or instruments:

            (1)   The Coop Shares, together with a stock power in blank;

            (2)   The executed Security Agreement;

            (3)   The executed Proprietary Lease;

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<PAGE>

            (4)   The executed Recognition Agreement;

            (5)   The  executed  UCC-1  financing  statement  with  evidence  of
                  recording thereon which have been filed in all places required
                  to perfect  the  Seller's  interest in the Coop Shares and the
                  Proprietary Lease; and

            (6)   Executed UCC-3 financing  statements or other  appropriate UCC
                  financing  statements  required  by state  law,  evidencing  a
                  complete and unbroken  line from the  mortgagee to the Trustee
                  with evidence of recording  thereon (or in a form suitable for
                  recordation).

         In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver (i) the original recorded Mortgage
or (ii) all interim recorded assignments satisfying the requirements of clause
(b) or (c) above, respectively, concurrently with the execution and delivery
hereof because such document or documents have not been returned from the
applicable public recording office, the Seller shall promptly deliver or cause
to be delivered to the Trustee or the Custodian on its behalf such original
Mortgage or such interim assignment, as the case may be, with evidence of
recording indicated thereon upon receipt thereof from the public recording
office, or a copy thereof, certified, if appropriate, by the relevant recording
office, but in no event shall any such delivery of the original Mortgage and
each such interim assignment or a copy thereof, certified, if appropriate, by
the relevant recording office, be made later than one year following the Closing
Date; provided, however, in the event the Seller is unable to deliver or cause
to be delivered by such date each Mortgage and each such interim assignment by
reason of the fact that any such documents have not been returned by the
appropriate recording office, or, in the case of each such interim assignment,
because the related Mortgage has not been returned by the appropriate recording
office, the Seller shall deliver or cause to be delivered such documents to the
Trustee or the Custodian on its behalf as promptly as possible upon receipt
thereof and, in any event, within 720 days following the Closing Date. The
Seller shall forward or cause to be forwarded to the Trustee or the Custodian on
its behalf (i) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (ii) any other documents
required to be delivered by the Seller to the Trustee. In the event that the
original Mortgage is not delivered and in connection with the payment in full of
the related Mortgage Loan and the public recording office requires the
presentation of a "lost instruments affidavit and indemnity" or any equivalent
document, because only a copy of the Mortgage can be delivered with the
instrument of satisfaction or reconveyance, the Seller shall execute and deliver
or cause to be executed and delivered such a document to the public recording
office. In the case where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, the Seller shall deliver or cause to be delivered to
the Trustee or the Custodian on its behalf a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the original
recorded Mortgage.

         In addition, in the event that in connection with any Mortgage Loan the
Seller cannot deliver or cause to be delivered the original or duplicate
original lender's title policy (together with all riders thereto), satisfying
the requirements of clause (v) above, concurrently with the execution and
delivery hereof because the related Mortgage has not been returned from the
applicable public recording office, the Seller shall promptly deliver or cause
to be delivered to the Trustee or the Custodian on its behalf such original or
duplicate original lender's title policy (together with all riders thereto) upon
receipt thereof from the applicable title insurer, but in no event shall any

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<PAGE>

such delivery of the original or duplicate original lender's title policy be
made later than one year following the Closing Date; provided, however, in the
event the Seller is unable to deliver or cause to be delivered by such date the
original or duplicate original lender's title policy (together with all riders
thereto) because the related Mortgage has not been returned by the appropriate
recording office, the Seller shall deliver or cause to be delivered such
documents to the Trustee or the Custodian on its behalf as promptly as possible
upon receipt thereof and, in any event, within 720 days following the Closing
Date.

         Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date, the Seller shall either (i) deliver or cause
to be delivered to the Trustee or the Custodian on its behalf the Mortgage File
as required pursuant to this Section 3.1 for each Delay Delivery Mortgage Loan
or (ii) (A) substitute or cause to be substituted a Substitute Mortgage Loan for
the Delay Delivery Mortgage Loan or (B) repurchase or cause to be repurchased
the Delay Delivery Mortgage Loan, which substitution or repurchase shall be
accomplished in the manner and subject to the conditions set forth in Section
4.1 (treating each Delay Delivery Mortgage Loan as a Deleted Mortgage Loan for
purposes of such Section 4.1), provided, however, that if the Seller fails to
deliver a Mortgage File for any Delay Delivery Mortgage Loan within the
thirty-day period provided in the prior sentence, the Seller shall use its best
reasonable efforts to effect or cause to be effected a substitution, rather than
a repurchase of, such Deleted Mortgage Loan and provided further that the cure
period provided for in Section 4.1 hereof shall not apply to the initial
delivery of the Mortgage File for such Delay Delivery Mortgage Loan, but rather
the Seller shall have five (5) Business Days to cure or cause to be cured such
failure to deliver.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

         Section 4.1  Representations  and  Warranties  of the  Seller.  (a) The
Seller  hereby  represents  and  warrants  to the  Purchaser,  as of the date of
execution and delivery hereof, that:

            (1)   The Seller is duly  organized as a Kansas  corporation  and is
                  validly  existing and in good  standing  under the laws of the
                  State  of  Kansas  and is duly  authorized  and  qualified  to
                  transact any and all business  contemplated  by this Agreement
                  to be  conducted  by  the  Seller  in any  state  in  which  a
                  Mortgaged  Property is located or is  otherwise  not  required
                  under applicable law to effect such  qualification and, in any
                  event,  is in compliance  with the doing  business laws of any
                  such state,  to the extent  necessary to ensure its ability to
                  enforce  each  Mortgage  Loan and to perform  any of its other
                  obligations  under this Agreement in accordance with the terms
                  thereof.

            (2)   The Seller has the full corporate  power and authority to sell
                  each Mortgage Loan, and to execute,  deliver and perform,  and
                  to enter into and consummate the transactions  contemplated by
                  this  Agreement  and  has  duly  authorized  by all  necessary
                  corporate  action  on the part of the  Seller  the  execution,
                  delivery  and   performance  of  this   Agreement;   and  this
                  Agreement,  assuming  the  due  authorization,  execution  and
                  delivery thereof by the other parties  thereto,  constitutes a

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<PAGE>

                  legal, valid and binding obligation of the Seller, enforceable
                  against the Seller in accordance  with its terms,  except that
                  (a) the  enforceability  thereof may be limited by bankruptcy,
                  insolvency,  moratorium,  receivership  and other similar laws
                  relating to creditors'  rights generally and (b) the remedy of
                  specific   performance  and  injunctive  and  other  forms  of
                  equitable  relief may be subject to equitable  defenses and to
                  the  discretion  of the  court  before  which  any  proceeding
                  therefor may be brought.

            (3)   The  execution  and delivery of this  Agreement by the Seller,
                  the  sale of the  Mortgage  Loans  by the  Seller  under  this
                  Agreement,  the  consummation of any other of the transactions
                  contemplated  by this  Agreement,  and the  fulfillment  of or
                  compliance  with the terms thereof are in the ordinary  course
                  of  business  of the  Seller  and  will  not (a)  result  in a
                  material  breach of any term or  provision  of the  charter or
                  by-laws of the Seller or (b) materially  conflict with, result
                  in a material breach,  violation or acceleration of, or result
                  in a material  default under,  the terms of any other material
                  agreement or  instrument  to which the Seller is a party or by
                  which it may be bound, or (c) constitute a material  violation
                  of any statute,  order or regulation  applicable to the Seller
                  of  any  court,  regulatory  body,  administrative  agency  or
                  governmental body having jurisdiction over the Seller; and the
                  Seller is not in breach or violation of any material indenture
                  or other material agreement or instrument,  or in violation of
                  any  statute,  order or  regulation  of any court,  regulatory
                  body,   administrative  agency  or  governmental  body  having
                  jurisdiction  over it which breach or violation may materially
                  impair  the  Seller's  ability  to  perform or meet any of its
                  obligations under this Agreement.

            (4)   No  litigation  is  pending  or,  to the best of the  Seller's
                  knowledge,  threatened  against the Seller that would prohibit
                  the  execution  or delivery  of, or  performance  under,  this
                  Agreement by the Seller.

            (5)   The  Seller  is a member  of MERS in good  standing,  and will
                  comply in all material  respects with the rules and procedures
                  of MERS in connection  with the servicing of the MERS Mortgage
                  Loans for as long as such Mortgage Loans are  registered  with
                  MERS.

      (b)   The Seller hereby makes the representations and warranties set forth
            in Schedule B hereto to the Purchaser, as of the Closing Date, or if
            so specified therein, as of the Cut-off Date.

      (c)   Upon  discovery  by  either of the  parties  hereto of a breach of a
            representation  or warranty  made pursuant to Schedule B hereto that
            materially  and adversely  affects the interests of the Purchaser in
            any  Mortgage  Loan,  the party  discovering  such breach shall give
            prompt  notice  thereof  to  the  other  party.  The  Seller  hereby
            covenants that within 90 days of the earlier of its discovery or its
            receipt  of written  notice  from the  Purchaser  of a breach of any
            representation  or warranty made pursuant to Schedule B hereto which
            materially  and adversely  affects the interests of the Purchaser in
            any  Mortgage  Loan,  it shall  cure  such  breach  in all  material
            respects,  and if such  breach is not so cured,  shall,  (i) if such
            90-day period expires prior to the second anniversary of the Closing
            Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the
            pool of mortgages  listed on Schedule B hereto and substitute in its
            place a Substitute  Mortgage  Loan, in the manner and subject to the
            conditions  set  forth  in  this  Section;  or (ii)  repurchase  the
            affected  Mortgage Loan or Mortgage  Loans from the Purchaser at the

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<PAGE>

            Mortgage  Loan  Purchase  Price in the manner set forth below.  With
            respect to the  representations  and  warranties  described  in this
            Section which are made to the best of the Seller's knowledge,  if it
            is  discovered  by  either  the  Seller  or the  Purchaser  that the
            substance of such representation and warranty is inaccurate and such
            inaccuracy materially and adversely affects the value of the related
            Mortgage   Loan  or  the   interests  of  the   Purchaser   therein,
            notwithstanding  the Seller's lack of knowledge  with respect to the
            substance of such representation or warranty,  such inaccuracy shall
            be deemed a breach of the applicable representation or warranty.

                  With respect to any Substitute Mortgage Loan or Loans, the
         Seller shall deliver to the Trustee or to the Custodian on its behalf
         the Mortgage Note, the Mortgage, the related assignment of the
         Mortgage, and such other documents and agreements as are required by
         Section 3.1, with the Mortgage Note endorsed and the Mortgage assigned
         as required by Section 3.1. No substitution is permitted to be made in
         any calendar month after the Determination Date for such month.
         Scheduled Payments due with respect to Substitute Mortgage Loans in the
         month of substitution will be retained by the Seller. Upon such
         substitution, the Substitute Mortgage Loan or Loans shall be subject to
         the terms of this Agreement in all respects, and the Seller shall be
         deemed to have made with respect to such Substitute Mortgage Loan or
         Loans, as of the date of substitution, the representations and
         warranties made pursuant to Schedule B hereto with respect to such
         Mortgage Loan.

                  It is understood and agreed that the obligation under this
         Agreement of the Seller to cure, repurchase or replace any Mortgage
         Loan as to which a breach has occurred and is continuing shall
         constitute the sole remedy against the Seller respecting such breach
         available to the Purchaser on its behalf.

         The representations and warranties contained in this Agreement shall
not be construed as a warranty or guaranty by the Seller as to the future
payments by any Mortgagor.

         It is understood and agreed that the representations and warranties set
forth in this Section 4.1 shall survive the sale of the Mortgage Loans to the
Purchaser hereunder.

                                   ARTICLE V
                                  MISCELLANEOUS

         Section 5.1 Transfer  Intended as Sale. It is the express intent of the
parties  hereto that the  conveyance of the Mortgage  Loans by the Seller to the
Purchaser be, and be construed  as, an absolute sale thereof in accordance  with
GAAP and for  regulatory  purposes.  It is,  further,  not the  intention of the
parties that such  conveyances  be deemed a pledge  thereof by the Seller to the
Purchaser.  However,  in the  event  that,  notwithstanding  the  intent  of the
parties,  the  Mortgage  Loans are held to be the  property of the Seller or the
Purchaser,  respectively,  or if for any other reason this  Agreement is held or
deemed to create a security  interest in such  assets,  then (i) this  Agreement
shall be deemed to be a security  agreement  within the  meaning of the  Uniform
Commercial  Code of the State of Texas and (ii) the  conveyance  of the Mortgage
Loans provided for in this  Agreement  shall be deemed to be an assignment and a
grant by the  Seller  to the  Purchaser  of a  security  interest  in all of the
Mortgage Loans, whether now owned or hereafter acquired.

                                      -10-
<PAGE>

         The Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement. The Seller and the Purchaser shall arrange for filing any
Uniform Commercial Code continuation statements in connection with any security
interest granted hereby.

         Section  5.2  Seller's   Consent  to  Assignment.   The  Seller  hereby
acknowledges  the  Purchaser's  right to assign,  transfer and convey all of the
Purchaser's  rights  under  this  Agreement  to  a  third  party  and  that  the
representations  and warranties made by the Seller to the Purchaser  pursuant to
this Agreement will, in the case of such assignment, transfer and conveyance, be
for the  benefit  of such  third  party.  The  Seller  hereby  consents  to such
assignment, transfer and conveyance.

         Section 5.3 Specific  Performance.  Either party or its  assignees  may
enforce specific performance of this Agreement.

         Section 5.4  Notices.  All notices,  demands and  requests  that may be
given or that are required to be given  hereunder shall be sent by United States
certified mail,  postage prepaid,  return receipt  requested,  to the parties at
their respective addresses as follows:

                           If to
                           the Purchaser:            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 November, 2004.

                            FIRST HORIZON HOME LOAN CORPORATION, as Seller


                            By:
                               -------------------------------------------------
                               Terry McCoy
                               Senior Vice President

                            FIRST HORIZON ASSET SECURITIES INC., as Purchaser


                            By:
                               -------------------------------------------------
                               Alfred Chang
                               Vice President


                                      -12-
<PAGE>


                                   SCHEDULE A

                              [BEGINS ON NEXT PAGE]

                      [Available Upon Request From Trustee]





<PAGE>



                                       B-5
                                   SCHEDULE B

             REPRESENTATIONS AND WARRANTIES AS TO THE MORTGAGE LOANS

         First Horizon Home Loan Corporation (the "Seller") hereby makes the
representations and warranties set forth in this Schedule B on which First
Horizon Asset Securities Inc. (the "Purchaser") relies in accepting the Mortgage
Loans. Such representations and warranties speak as of the execution and
delivery of the Mortgage Loan Purchase Agreement, dated as of November 30, 2004
(the "MLPA"), between First Horizon Home Loan Corporation, as seller, and the
Purchaser and as of the Closing Date, or if so specified herein, as of the
Cut-off Date or date of origination of the Mortgage Loans, but shall survive the
sale, transfer, and assignment of the Mortgage Loans to the Purchaser and any
subsequent sale, transfer and assignment by the Purchaser to a third party.
Capitalized terms used but not otherwise defined in this Schedule B shall have
the meanings ascribed thereto in the MLPA.

      (1)   The information set forth on Schedule A to the MLPA, with respect to
            each Mortgage  Loan is true and correct in all material  respects as
            of the Closing Date.

      (2)   Each Mortgage is a valid and enforceable first lien on the Mortgaged
            Property subject only to (a) the lien of nondelinquent  current real
            property taxes and assessments and liens or interests  arising under
            or as a result of any  federal,  state or local law,  regulation  or
            ordinance relating to hazardous wastes or hazardous  substances and,
            if the related Mortgaged Property is a unit in a condominium project
            or Planned Unit  Development,  any lien for common charges permitted
            by statute or homeowner association fees, (b) covenants,  conditions
            and  restrictions,  rights of way,  easements  and other  matters of
            public  record as of the date of  recording of such  Mortgage,  such
            exceptions   appearing  of  record  being  generally  acceptable  to
            mortgage  lending  institutions  in the  area  wherein  the  related
            Mortgaged  Property  is located  or  specifically  reflected  in the
            appraisal  made in connection  with the  origination  of the related
            Mortgage  Loan,  and (c) other matters to which like  properties are
            commonly subject which do not materially interfere with the benefits
            of the security intended to be provided by such Mortgage.

      (3)   Immediately  prior to the  assignment  of the Mortgage  Loans to the
            Purchaser,  the Seller had good title to, and was the sole owner of,
            each Mortgage Loan free and clear of any pledge,  lien,  encumbrance
            or security interest and had full right and authority, subject to no
            interest or participation of, or agreement with, any other party, to
            sell and assign the same pursuant to this Agreement.

      (4)   As of the date of origination  of each Mortgage  Loan,  there was no
            delinquent  tax or  assessment  lien  against the related  Mortgaged
            Property.

      (5)   There is no valid offset,  defense or  counterclaim  to any Mortgage
            Note or Mortgage,  including the  obligation of the Mortgagor to pay
            the unpaid principal of or interest on such Mortgage Note.

                                      B-1
<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.  With respect to the  representations  and warranties
            contained within this item (7) that are made to the knowledge or the
            best  knowledge  of the  Seller  or as to which  the  Seller  has no
            knowledge,  if it is  discovered  that  the  substance  of any  such
            representation   and  warranty  is  inaccurate  and  the  inaccuracy
            materially and adversely  affects the value of the related  Mortgage
            Loan, or the interest therein of the Purchaser, then notwithstanding
            the Seller's lack of knowledge with respect to the substance of such
            representation  and  warranty  being  inaccurate  at  the  time  the
            representation  and  warranty  was made,  such  inaccuracy  shall be
            deemed a breach of the  applicable  representation  and warranty and
            the Seller  shall take such action  described  in Section  4.1(c) of
            this Agreement in respect of such Mortgage Loan.

      (8)   Each Mortgage Loan at origination  complied in all material respects
            with applicable local,  state and federal laws,  including,  without
            limitation,  usury, equal credit opportunity, real estate settlement
            procedures,  truth-in-lending  and disclosure laws and  specifically
            applicable  predatory and abusive lending laws, or any noncompliance
            does not have a material  adverse effect on the value of the related
            Mortgage Loan.

      (9)   No  Mortgage  Loan is a "high cost loan" as defined by the  specific
            applicable predatory and abusive lending laws.

      (10)  Except as reflected in a written  document  contained in the related
            Mortgage  File,  the Seller has not  modified  the  Mortgage  in any
            material respect; satisfied, cancelled or subordinated such Mortgage
            in whole or in part;  released  the  related  Mortgaged  Property in
            whole or in part from the lien of such  Mortgage;  or  executed  any
            instrument of release,  cancellation,  modification  or satisfaction
            with respect thereto.

      (11)  A lender's  policy of title  insurance  together  with a condominium
            endorsement and extended coverage endorsement,  if applicable, in an
            amount at least equal to the Cut-off Date Principal  Balance of each
            such  Mortgage  Loan or a commitment  (binder) to issue the same was
            effective on the date of the origination of each Mortgage Loan, each
            such policy is valid and remains in full force and effect.

      (12)  To the best of the Seller's knowledge, all of the improvements which
            were included for the purpose of determining  the appraised value of
            the Mortgaged Property lie wholly within the boundaries and building
            restriction lines of such property, and no improvements on adjoining
            properties encroach upon the Mortgaged Property, unless such failure
            to be wholly within such  boundaries and  restriction  lines or such
            encroachment, as the case may be, does not have a material effect on
            the value of such Mortgaged Property.

                                      B-2
<PAGE>

      (13)  To the best of the Seller's knowledge, as of the date of origination
            of each Mortgage  Loan, no  improvement  located on or being part of
            the Mortgaged  Property is in violation of any applicable zoning law
            or  regulation  unless  such  violation  would  not have a  material
            adverse effect on the value of the related  Mortgaged  Property.  To
            the best of the Seller's  knowledge,  all inspections,  licenses and
            certificates  required  to be made or  issued  with  respect  to all
            occupied portions of the Mortgaged Property and, with respect to the
            use  and  occupancy  of the  same,  including  but  not  limited  to
            certificates of occupancy and fire underwriting  certificates,  have
            been made or obtained from the appropriate  authorities,  unless the
            lack thereof would not have a material  adverse  effect on the value
            of such Mortgaged Property.

      (14)  The Mortgage Notes and the related  Mortgages are genuine,  and each
            is the legal,  valid and binding  obligation  of the maker  thereof,
            enforceable in accordance with its terms and under applicable law.

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

      (16)  The related Mortgage contains  customary and enforceable  provisions
            which render the rights and remedies of the holder thereof  adequate
            for the realization  against the Mortgaged  Property of the benefits
            of the security, including, (i) in the case of a Mortgage designated
            as a deed of  trust,  by  trustee's  sale,  and  (ii)  otherwise  by
            judicial foreclosure.

      (17)  With  respect  to each  Mortgage  constituting  a deed of  trust,  a
            trustee,  duly qualified under  applicable law to serve as such, has
            been  properly  designated  and  currently so serves and is named in
            such Mortgage, and no fees or expenses are or will become payable by
            the holder of the  Mortgage to the trustee  under the deed of trust,
            except in  connection  with a  trustee's  sale after  default by the
            Mortgagor.

      (18)  As of  the  Closing  Date,  the  improvements  upon  each  Mortgaged
            Property are covered by a valid and existing hazard insurance policy
            with a  generally  acceptable  carrier  that  provides  for fire and
            extended  coverage  and  coverage  for  such  other  hazards  as are
            customarily required by institutional single family mortgage lenders
            in the area where the Mortgaged Property is located,  and the Seller
            has  received no notice that any  premiums  due and payable  thereon
            have not been paid; the Mortgage obligates the Mortgagor  thereunder
            to maintain  all such  insurance  including  flood  insurance at the
            Mortgagor's cost and expense.  Anything to the contrary in this item
            (18) notwithstanding, no breach of this item (18) shall be deemed to
            give  rise  to  any  obligation  of  the  Seller  to  repurchase  or
            substitute  for such affected  Mortgage Loan or Loans so long as the
            Seller maintains a blanket policy.

                                      B-3
<PAGE>

      (19)  If at the time of  origination  of each Mortgage  Loan,  related the
            Mortgaged  Property  was in an area then  identified  in the Federal
            Register  by the  Federal  Emergency  Management  Agency  as  having
            special flood hazards,  a flood  insurance  policy in a form meeting
            the then-current  requirements of the Flood Insurance Administration
            is in  effect  with  respect  to  such  Mortgaged  Property  with  a
            generally acceptable carrier.

      (20)  To the  best  of the  Seller's  knowledge,  there  is no  proceeding
            pending or threatened for the total or partial  condemnation  of any
            Mortgaged Property, nor is such a proceeding currently occurring.

      (21)  To best of the Seller's knowledge, there is no material event which,
            with the  passage of time or with notice and the  expiration  of any
            grace or cure  period,  would  constitute  a  material  non-monetary
            default,  breach,  violation  or event  of  acceleration  under  the
            Mortgage or the related Mortgage Note; and the Seller has not waived
            any material  non-monetary  default,  breach,  violation or event of
            acceleration.

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

      (23)  Each  Mortgage   Loan  was  selected  from  among  the   outstanding
            fixed-rate  one-to  four-family   mortgage  loans  in  the  Seller's
            portfolio  at the Closing Date as to which the  representations  and
            warranties made with respect to the Mortgage Loans set forth in this
            Schedule  B can be  made.  No such  selection  was  made in a manner
            intended    to    adversely    affect   the    interests    of   the
            Certificateholders.

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

      (25)  At origination,  substantially all of the Mortgage Loans in the Pool
            I and Pool  III had  stated  terms  to  maturity  of 30  years,  and
            substantially  all of the  Mortgage  Loans in the Pool II had stated
            terms to maturity of 15 years.

      (26)  Scheduled  monthly  payments made by the  Mortgagors on the Mortgage
            Loans  either  earlier or later than their Due Dates will not affect
            the  amortization  schedule  or  the  relative  application  of  the
            payments to principal and interest.

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

      (28)  18% of the Mortgage  Loans in Pool II and  substantially  all of the
            Mortgage Loans in Pool III are jumbo mortgage loans that have Stated
            Principal  Balances at origination  that exceed the then  applicable
            limitations for purchase by Fannie Mae and Freddie Mac.

                                      B-4
<PAGE>

      (29)  Each Mortgage Loan in Pool I, Pool II and Pool III was originated on
            or  after  March  5,  2004,   July  7,  2004  and  March  12,  2004,
            respectively.

      (30)  The latest  stated  maturity date of any Mortgage Loan in Pool I and
            Pool III is December 1, 2034, and the earliest  stated maturity date
            of any Mortgage Loan is April 1, 2034.  The latest  stated  maturity
            date of any  Mortgage  Loan in Pool II is November 1, 2019,  and the
            earliest  stated  maturity date of any Mortgage Loan is September 1,
            2014.

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

      (32)  No Mortgage Loan had a  Loan-to-Value  Ratio at  origination of more
            than 95%.  Generally,  each Mortgage Loan with a Loan-to-Value Ratio
            at origination of greater than 80% is covered by a Primary Insurance
            Policy issued by a mortgage  insurance company that is acceptable to
            Fannie Mae or Freddie Mac.

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

      (34)  No  Mortgage  Loan is a "high cost loan" as defined by the  specific
            applicable  predatory  and abusive  lending  laws.  In addition,  no
            Mortgage  Loan  is a  "High  Cost  Loan"  or a  "Covered  Loan",  as
            applicable (as such terms are defined in the then current Standard &
            Poor's LEVELS(R) Glossary which is now Version 5.6 Revised, Appendix
            E) and no  Mortgage  Loan  originated  on or after  October  1, 2002
            through March 7, 2003 is governed by the Georgia Fair Lending Act.

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

      (36)  No Mortgage  Loan  originated on or after October 1, 2002 and before
            March  7,  2003 is  secured  by  property  located  in the  State of
            Georgia.  No Mortgage Loan originated on or after March 7, 2003 is a
            "high-cost home loan" as defined under the Georgia Fair Lending Act.

      (37)  No Mortgage Loan is a "high cost home,"  "covered"  (excluding  home
            loans  defined  as  "covered  home  loans"  in the New  Jersey  Home
            Ownership  Security  Act of 2002),  "high risk home" or  "predatory"
            loan  under  any  applicable  state,  federal  or  local  law  (or a
            similarly  classified loan using different  terminology  under a law
            imposing   heightened   regulatory   scrutiny  or  additional  legal
            liability for residential mortgage loans having high interest rates,
            points and/or fees.

      (38)  An appraisal of the type indicated on the Mortgage Loan Schedule has
            been performed for each Mortgage Loan.

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

                                      B-5
<PAGE>

      (40)  The servicer for each  Mortgage  Loan has fully  furnished  and will
            fully furnish,  in accordance with the Fair Credit Reporting Act and
            its  implementing  regulations,  accurate and  complete  information
            (i.e.  favorable and  unfavorable) on its Mortgagor  credit files to
            Equifax,  Experian,  and Trans Union Credit Information Company on a
            monthly basis.

      (41)  With respect to any Mortgage  Loan  originated on or after August 1,
            2004,  neither the related  Mortgage nor the related  Mortgage  Note
            requires  the  borrower  to submit to  arbitration  to  resolve  any
            dispute  arising out of or relating in any way to the Mortgage  Loan
            transaction.

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

      (43)  No Mortgage  Loan  imposes  prepayment  penalties  in excess of five
            years.


      (44)  Appraisal  form 1004 or form 2055 with an  interior  inspection  for
            first  lien  mortgage  loans  has  been  obtained  for  all  related
            mortgaged   properties,   other   than   condominiums,    investment
            properties,  two to four unit properties and exempt properties,  for
            which appraisal form 1004 or form 2055 has not been obtained.

            Appraisal  form 704, 2065 or 2055 with an exterior  only  inspection
            for  junior  lien  mortgages  combined  with  first  lien  mortgages
            (including  home equity  lines of credit) has been  obtained for all
            related mortgaged  properties,  other than condominiums,  investment
            properties,  two to four unit properties and exempt properties,  for
            which  appraisal  form  1004 or form  2055  has not  been  obtained.
            Appraisal  form 704, 2065 or 2055 with an exterior  only  inspection
            for all  other  junior  lien  mortgages  has been  obtained  for all
            related  mortgaged  properties,  other than those related  mortgaged
            properties that qualify for an Automated Valuation Model.



                                      B-6