MORTGAGE LOAN PURCHASE AGREEMENT
 
THIS MORTGAGE LOAN PURCHASE AGREEMENT dated as of March 30, 2006 by and between
FIRST TENNESSEE BANK NATIONAL ASSOCIATION (the “Seller”), and FIRST HORIZON
ASSET SECURITIES INC., a Delaware corporation (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, First Tennessee Mortgage Services, Inc. (“FTMSI”) owns the servicing
rights to the Mortgage Loans pursuant to the Servicing Rights Transfer and
Subservicing Agreement (as hereinafter defined).
 
WHEREAS, the Seller has engaged 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: Any 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.

Closing Date: March 30, 2006
 
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 March 30, 2006
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, 2006.
 
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.
 
FHHLC: First Horizon Home Loan Corporation, a Kansas corporation, in its
capacity as the seller of the Mortgage Loans pursuant to MLPA I.
 
GAAP: Generally accepted accounting principles as in effect from time to time in
the United States of America.
 
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® System: The system of recording transfers of mortgages electronically
maintained by MERS.
 
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
 
MLPA I: The mortgage loan purchase agreement, dated as of March 30, 2006,
between First Horizon Home Loan Corporation, as seller, and First Tennessee Bank
National Association, as purchaser, as related to the transfer, sale and
conveyance of the Mortgage Loans.
 
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.
 
 
 

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Mortgage Loans: The mortgage loans transferred, sold and conveyed by the Seller
to the Purchaser, pursuant to this Agreement.
 
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.
 
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: $[ ]
 
Purchaser: First Horizon Asset Securities Inc., a Delaware corporation, in its
capacity as purchaser of the Mortgage Loans from the Seller pursuant to this
Agreement.
 
Recognition Agreement: With respect to any Cooperative Loan, an agreement
between the Cooperative Corporation and the originator of such Mortgage Loan
which establishes the rights of such originator in the Cooperative Property.
 
Security Agreement: The security agreement with respect to a Cooperative Loan.
 
Seller: First Tennessee Bank National Association, and its successors and
assigns, in its capacity as seller of the Mortgage Loans pursuant to this
Agreement.
 
Servicing Agreement: The servicing agreement, dated as of November 26, 2002 by
and between First Tennessee Bank National Association, 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.
 
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, without
recourse, (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, (ii) all of the Seller’s rights as
Purchaser under MLPA I including, without limitation, the rights of the Seller
to require FHHLC to cure breaches of representations and warranties with respect
to the Mortgage Loans as provided thereunder, (iii) all right, title and
interest of the Seller in, to and under the Servicing Agreement, and (iv) all
proceeds from the foregoing. Items (i) through (iv) in the preceding sentence
are herein referred to collectively as “Mortgage Assets.” 

 
 

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Section 2.2 Timing»
 
. The sale of the Mortgage Assets hereunder shall take place on the Closing
Date.
 
 
ARTICLE III
Conveyance and Delivery
 
Section 3.1 Delivery of Mortgage Files»
 
. In connection with the transfer and assignment set forth in Section 2.1 above,
the Seller has delivered or caused to be delivered to the Trustee or to the
Custodian on its behalf (or, in the case of the Delay Delivery Mortgage Loans,
will deliver or cause to be delivered to the Trustee or to the Custodian on its
behalf within thirty (30) days following the Closing Date) the following
documents or instruments with respect to each Mortgage Loan so assigned
(collectively, the “Mortgage Files”):
 
(a)  1) the original Mortgage Note endorsed by manual or facsimile signature in
blank in the following form: “Pay to the order of ________________, without
recourse,” with all intervening endorsements showing a complete chain of
endorsement from the originator to the Person endorsing the Mortgage Note (each
such endorsement being sufficient to transfer all right, title and interest of
the party so endorsing, as noteholder or assignee thereof, in and to that
Mortgage Note); or
 
(2) with respect to any Lost Mortgage Note, a lost note affidavit from the
Seller stating that the original Mortgage Note was lost or destroyed, together
with a copy of such Mortgage Note;
 

 
(b)
except as provided below 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 recorded 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 Seller as being a true and complete copy of the
Mortgage;

 
 
 

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(c)
in the case of a Mortgage Loan that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage, or a copy of such assignment certified by the Seller
as being a true and complete copy of the assignment, in blank (which may be
included in a blanket assignment or assignments), together with, except as
provided below, all interim recorded assignments, or copies of such interim
assignments certified by the Seller as being true and complete copies of the
interim 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, or a copy of such title
policy certified by the Seller as being a true and complete copy of the 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 or a copy of such Alternative
Title Product certified by the Seller as being a true and complete copy of the
Alternative Title Product; and

 

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

 
(1) The Coop Shares, together with a stock power in blank;
 
(2) The executed Security Agreement;
 
(3) The executed Proprietary Lease;
 
(4) The executed Recognition Agreement;
 
(5) The executed UCC-1 financing statement with evidence of recording thereon
which have been filed in all places required to perfect the Seller’s interest in
the Coop Shares and the Proprietary Lease; and
 
(6) Executed UCC-3 financing statements or other appropriate UCC financing
statements required by state law, evidencing a complete and unbroken line from
the mortgagee to the Trustee with evidence of recording thereon (or in a form
suitable for recordation).
 
 
 
 

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ARTICLE IV
Representations and Warranties
 
Section 4.1 Representations and Warranties of the Seller»
 

 
(a)
. (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 national banking association and is
validly existing under the laws of the United States of America 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 requisite 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 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 or
of creditors of depository institutions, the accounts of which are insured by
the FDIC, 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, other than such conflicts, breaches, violations,
accelerations or defaults which, individually or on a cumulative basis, would
not have a material adverse effect on the Seller and its subsidiaries, taken as
a whole, or the consummation of the transactions contemplated by this Agreement;
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.
 
 
 

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

 
(b)
The Seller hereby assigns, transfers and conveys to the Purchaser all of its
rights with respect to the Mortgage Loans including, without limitation, the
representations and warranties of FHHLC made pursuant to MLPA I, together with
all rights of the Seller to require FHHLC to cure any breach thereof or to
repurchase or substitute for any affected Mortgage Loan in accordance with MLPA
I.

 
It is understood and agreed that the obligation under MLPA I of FHHLC to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedy, which may be enforced solely
against FHHLC and not the Seller, respecting such breach available to the
Purchaser on its behalf.
 
The representations and warranties contained in this Agreement shall not be
construed as a warranty or guaranty by the Seller as to the future payments by
any Mortgagor.
 
It is understood and agreed that the representations and warranties set forth in
this Section 4.1 shall survive the sale of the Mortgage Loans to the Purchaser
hereunder.
 
 
ARTICLE V
Miscellaneous
 
Section 5.1 Transfer Intended as Sale»
 
. It is the express intent of the parties hereto that the conveyance of the
Mortgage Loans by the Seller to the Purchaser be, and be construed as, an
absolute sale thereof in accordance with GAAP and for regulatory purposes. It
is, further, not the intention of the parties that such conveyances be deemed a
pledge thereof by the Seller to the Purchaser. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held to be the
property of the Seller or the Purchaser, respectively, or if for any other
reason this Agreement is held or deemed to create a security interest in such
assets, then (i) this Agreement shall be deemed to be a security agreement
within the meaning of the Uniform Commercial Code of the State of Texas and (ii)
the conveyance of the Mortgage Loans provided for in this Agreement shall be
deemed to be an assignment and a grant by the Seller to the Purchaser of a
security interest in all of the Mortgage Loans, whether now owned or hereafter
acquired.
 
The Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement. The Seller and the Purchaser shall arrange for filing any
Uniform Commercial Code continuation statements in connection with any security
interest granted hereby.
 
 
 

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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 FHHLC to the Seller pursuant to
MLPA I 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 Seller:              165 Madison Avenue
Memphis, Tennessee 38103
Attn: Clyde A. Billings, Jr.

If to the Purchaser:     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.
 
Section 5.6 Acknowledgment of FHHLC. FHHLC hereby acknowledges the provisions of
this Agreement, including the duties of FHHLC created hereunder and the
assignment of the representations and warranties made by FHHLC to the Seller
pursuant to MLPA I.
 

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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 March, 2006.
 
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION, as Seller

By:       
Wade Walker
Senior Vice President

FIRST HORIZON ASSET SECURITIES INC., as Purchaser

By:       
Alfred Chang
Vice President

The foregoing agreement is hereby 
 
acknowledged and accepted as of the  
 
date first above written. 
 
FIRST HORIZON HOME LOAN CORPORATION, 
 
in its capacity as the seller pursuant to MLPA I 
 

 
By: ___________________________________ 
Terry McCoy  
Executive Vice President

 
Mortgage Loan Purchase Agreement II- 2006-1 Signature Page
 
 

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SCHEDULE A
 
[Available Upon Request From Trustee]
 

 
 

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