MORTGAGE LOAN PURCHASE AGREEMENT

 

                        MORTGAGE LOAN PURCHASE AGREEMENT

 

         THIS MORTGAGE LOAN PURCHASE AGREEMENT dated as of March 30, 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.

 

         Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a

day on which banking institutions in the City of Dallas, or the State of Texas

or New York City is located are authorized or obligated by law or executive

order to be closed.

 

         Closing Date:   March 30, 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.

 

         Coop Shares:   Shares issued by a Cooperative Corporation.

 

         Cooperative Loan:   Any Mortgage Loan secured by Coop Shares and a

Proprietary Lease.

<PAGE>

 

         Cooperative Property: The real property and improvements owned by the

Cooperative Corporation, including the allocation of individual dwelling units

to the holders of the Coop Shares of the Cooperative Corporation.

 

         Cooperative Unit:   A single family dwelling located in a Cooperative

Property.

 

         Custodian: First Tennessee Bank National Association, and its

successors and assigns, as custodian under the Custodial Agreement dated as of

March 30, 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:   March 1, 2005.

 

         Cut-off Date Principal   Balance:   As to any Mortgage Loan, the Stated P

rincipal 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.

 

         Insurance Proceeds: Proceeds paid by an insurer pursuant to any

insurance policy, including all riders and endorsements thereto in effect,

including any replacement policy or policies, in each case other than any amount

included in such Insurance Proceeds in respect of expenses covered by such

insurance policy.

 

                                      -2-

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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.

 

                                       -3-

<PAGE>

 

         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:   $283,746,975.68

 

         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"):

 

         (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

 

                                       -5-

<PAGE>

 

              (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;

 

                                      -6-

<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 pub