FHAMS 2005-AA7

                        MORTGAGE LOAN PURCHASE AGREEMENT

         THIS MORTGAGE LOAN PURCHASE  AGREEMENT dated as of July 29, 2005 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.

         Alternative  Title  Product:  Means  one of  the  following:  (i)  Lien
Protection  Insurance  issued by Integrated  Loan Services or ATM Corporation of
America,  (ii) a Mortgage Lien Report issued by EPN  Solutions/ACRAnet,  (iii) a
Property   Plus   Report   issued   by   Rapid    Refinance    Service   through
SharperLending.com,  or (iv) such other alternative title insurance product that
the Seller utilizes in connection with its then current underwriting criteria.

         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:  July 29, 2005

         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.
<PAGE>

         Coop Shares:  Shares issued by a Cooperative Corporation.

         Cooperative  Loan:  Any  Mortgage  Loan  secured  by Coop  Shares and a
Proprietary Lease.

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

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

         Custodian:   First  Tennessee  Bank  National   Association,   and  its
successors and assigns,  as custodian under the Custodial  Agreement dated as of
July 29, 2005 by and among The Bank of New York, as trustee,  First Horizon Home
Loan Corporation, as master servicer, and the Custodian.

         Cut-Off Date:  July 1, 2005.

         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 accepted accounting  principles as in effect from time
to time in the United States of America.

                                      -2-
<PAGE>

         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.

         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.

                                      -3-
<PAGE>

         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:  $608,680,365.78

         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.

                                      -4-
<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"):

                                      -5-
<PAGE>

         (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 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,  or, in lieu thereof,  an  Alternative
              Title Product, and

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

                                      -6-
<PAGE>

                  (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 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; provided,
further,  however,  that the Seller shall not be required to provide an original
or duplicate  lender's title policy  (together  with all riders  thereto) if the
Seller delivers an Alternative  Title Product in lieu thereof.  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.

                                      -7-
<PAGE>

         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 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.

                                      -8-
<PAGE>

                  (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 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.

                                      -9-
<PAGE>

         (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 pools 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  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.

                                      -10-
<PAGE>

                                    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.

         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

                                      -11-
<PAGE>

         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]


                                      -12-
<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 29th day of July, 2005.

                                        FIRST HORIZON HOME LOAN CORPORATION,
                                        as Seller


                                        By:
                                           -------------------------------------
                                             Terry McCoy
                                             Executive Vice President

                                        FIRST HORIZON ASSET SECURITIES INC.,
                                        as Purchaser


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

<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 July 29, 2005 (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  or  the  Pooling  and  Servicing
Agreement,  dated as of July 1, 2005,  between First  Horizon  Asset  Securities
Inc., as depositor, First Horizon Home Loan Corporation, as master servicer, and
The Bank of New York, as trustee.

         (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.

                                      B-1
<PAGE>

         (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.

         (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, or, in lieu thereof, an Alternative Title Product.

                                      B-2
<PAGE>

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

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

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

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

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

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

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

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

                                      B-4
<PAGE>

         (28) Some of the  Mortgage  Loans are jumbo  mortgage  loans  that have
              Stated  Principal  Balances  at  origination  that exceed the then
              applicable limitations for purchase by Fannie Mae and Freddie Mac.

         (29) Each  Mortgage  Loan in Pool I and  Pool II was  originated  on or
              after January 3, 2005 and December 13, 2004, respectively.

         (30) The latest stated  maturity date of any Mortgage Loan in Pool I is
              August 1,  2035,  and the  earliest  is July 1,  2030.  The latest
              stated  maturity date of any Mortgage Loan in Pool II is August 1,
              2035, and the earliest is July 1, 2025.

         (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 5.6b  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) 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-5