MORTGAGE
      LOAN PURCHASE AGREEMENT

     

    THIS
      MORTGAGE LOAN PURCHASE AGREEMENT dated as of May 30, 2006 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:
      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.

    


    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:
      May 30,
      2006

     

    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.

     

    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 May 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:
      May 1,
      2006.

     

    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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    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®
      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.

     

    Mortgage
      Rate:
      The
      annual rate of interest borne by a Mortgage Note from time to time, net of
      any
      insurance premium charged by the mortgagee to obtain or maintain any primary
      insurance policy.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

    Purchase
      Price:
      $402,368,040.36

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

    ARTICLE
      II

    Purchase
      and Sale

     

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

     

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

     

    ARTICLE
      III

    Conveyance
      and Delivery

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

          


     

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

     

    	(b)  	
            except
              as provided below 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:

          


     

    (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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (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.

          


     

    	(c)  	
             Upon
              discovery by either of the parties hereto of a breach of a representation
              or warranty made pursuant to Schedule
              B
              hereto that materially and adversely affects the interests of the
              Purchaser in any Mortgage Loan, the party discovering such breach shall
              give prompt notice thereof to the other party. The Seller hereby covenants
              that within 90 days of the earlier of its discovery or its receipt
              of
              written notice from the Purchaser of a breach of any representation
              or
              warranty made pursuant to Schedule
              B
              hereto which materially and adversely affects the interests of the
              Purchaser in any Mortgage Loan, it shall cure such breach in all material
              respects, and if such breach is not so cured, shall, (i) if such 90-day
              period expires prior to the second anniversary of the Closing Date,
              remove
              such Mortgage Loan (a “Deleted Mortgage Loan”) from the pool of mortgages
              listed on Schedule
              B
              hereto and substitute in its place a Substitute Mortgage Loan, in the
              manner and subject to the conditions set forth in this Section; or
              (ii)
              repurchase the affected Mortgage Loan or Mortgage Loans from the Purchaser
              at the Mortgage Loan Purchase Price in the manner set forth below.
              With
              respect to the representations and warranties described in this Section
              which are made to the best of the Seller’s knowledge, if it is discovered
              by either the Seller or the Purchaser that the substance of such
              representation and warranty is inaccurate and such inaccuracy materially
              and adversely affects the value of the related Mortgage Loan or the
              interests of the Purchaser therein, notwithstanding the Seller’s lack of
              knowledge with respect to the substance of such representation or
              warranty, such inaccuracy shall be deemed a breach of the applicable
              representation or warranty.

          


     

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

     

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

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

    ARTICLE
      V

    Miscellaneous

     

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

     

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

     

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

     

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

     

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

     

    If
      to

    the
      Purchaser:                
4000
      Horizon Way

    Irving,
      Texas 75063

    Attn:
      Larry P. Cole

    


    If
      to the
      Seller:               
4000
      Horizon Way

    Irving,
      Texas 75063

    Attn:
      Larry P. Cole

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    Section
      5.5  Choice
      of Law.
      This
      Agreement shall be construed in accordance with and governed by the substantive
      laws of the State of Texas applicable to agreements made and to be performed
      in
      the State of Texas and the obligations, rights and remedies of the parties
      hereto shall be determined in accordance with such laws. 

     

    


    [remainder
      of page intentionally left blank]

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    



    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 May, 2006.

     

    
      	 	 	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

            


    

     

    


    Mortgage
      Loan Purchase Agreement - 2006-AA3 Signature Page 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    SCHEDULE
      A

     

    [Available
      Upon Request From Trustee]

    


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    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 May 30, 2006
      (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 May 1, 2006, 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

        
          

        

      

      
         

      

    

     

    	(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

        
          

        

      

      
         

      

    

     

    	(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

        
          

        

      

      
         

      

    

     

    	(19)  	
            If
              at the time of origination of each Mortgage Loan, the related 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 the Mortgage
              Pool
              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
              Mortgagors may prepay all of the Mortgage Loans at any time without
              penalty.

          


     

    
      
         

      

      
        B-4

        
          

        

      

      
         

      

    

     

    	(28)  	
            Approximately
              19.28% of the Mortgage Loans in the Mortgage Pool 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 the Mortgage Pool was originated on or after October
              22,
              2004.

          


     

    	(30)  	
            The
              latest stated maturity date of any Mortgage Loan in the Mortgage Pool
              is
              May 1, 2036, and the earliest is March 1, 2035.


          


     

    	(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
              local, state or federal 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
              LEVELSâ
              Glossary which is now Version 5.6(d) 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