MORTGAGE LOAN PURCHASE AGREEMENT

MORTGAGE LOAN PURCHASE AGREEMENT, dated as of November 21, 2006 (this “Agreement”), between First Tennessee Bank National Association (the “Seller”) and First Horizon Asset Securities Inc. (the “Purchaser”).

WHEREAS, the Seller is the owner of the notes or other evidence of indebtedness (the “Mortgage Notes”) indicated on Schedule I hereto (the “Mortgage Loan Schedule”), and the Related Documents (as defined in Section 2.03 below, and together with the Mortgage Notes, the “Mortgage Loans”);

WHEREAS, the Seller, as of the date hereof, owns the mortgages (the “Mortgages”) on the properties (the “Mortgaged Properties”) securing the Mortgage Loans, including rights to (a) any property acquired by foreclosure or deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance policies covering the Mortgage Loans or the Mortgaged Properties or the obligors on the Mortgage Loans;

WHEREAS, the parties hereto desire that the Seller sell the Mortgage Loans to the Purchaser pursuant to the terms of this Agreement; and

WHEREAS, pursuant to the terms of a Sale and Servicing Agreement dated as of November 1, 2006 (the “Sale and Servicing Agreement”) among the Seller, as seller and as servicer, the Purchaser, as depositor, The Bank of New York, as indenture trustee (the “Indenture Trustee”) and First Horizon ABS Trust 2006-HE2 (the “Trust”), the Purchaser will convey the Mortgage Loans to the Trust.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

Section 1.01   Definitions . All capitalized terms used but not defined herein shall have the meanings assigned thereto in the Sale and Servicing Agreement.

Section 2.01   Sale of Mortgage Loans . The Seller, concurrently with the execution and delivery of this Agreement, does hereby sell, assign, set over, and otherwise convey to the Purchaser, without recourse, all of its right, title and interest in and to (i) each Mortgage Loan and the related Mortgage File, including its Cut-Off Date Principal Balance (including all Additional Balances resulting from Draws made pursuant to the related Mortgage Note prior to the termination of the Trust; provided, however, that the Purchaser does not assume any obligation under any Mortgage Note to fund any such future Draws, and the Purchaser will not be obligated or permitted to fund any such future Draws) and all collections in respect of interest and principal received after the related Cut-Off Date; (ii) property that secured a Mortgage Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its rights under any insurance policies maintained in respect of the Mortgage Loans (including any insurance proceeds); and (iv) any and all proceeds of the foregoing.

Section 2.02   Reserved .

Section 2.03   Obligations of Seller Upon Sale . In connection with any transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its own expense, on or prior to the Closing Date, (a) to indicate in its books and records that the Mortgage Loans have been sold to the Purchaser or to the Owner Trustee as assignee of the Purchaser, as applicable, pursuant to this Agreement and (b) to deliver to the Purchaser or at the direction of the Purchaser, to the Indenture Trustee, as applicable, a computer file containing a true and complete list of all such Mortgage Loans specifying, among other things, for each such Mortgage Loan, as of the Cut-Off Date, (1) its account number and (2) the Cut-Off Date Principal Balance. Such file, which forms a part of Exhibit A to the Sale and Servicing Agreement, shall also be marked as Schedule I to this Agreement and is hereby incorporated into and made a part of this Agreement.

In connection with such transfer by the Seller, the Seller agrees to:

(A)    the original Mortgage Note, endorsed in blank, or a copy of such original Mortgage Note with an accompanying Lost Note Affidavit;

(B)   the original Assignment of Mortgage from the Seller to “The Bank of New York, as Indenture Trustee for First Horizon ABS Trust 2006-HE2”, which assignment shall be in form and substance acceptable for recording;

(C)the original recorded Mortgage or a copy of such recorded Mortgage, certified by the Seller as being a true and complete copy thereof; provided that if the original Mortgage has been delivered for recording to the appropriate public recording office of the jurisdiction in which the Mortgaged Property is located but has not yet been returned to the Seller by such recording office, the Seller shall deliver to the Custodian a copy of such original Mortgage, certified by the Seller as being a true and complete copy thereof and certifying that such original Mortgage has been so delivered to such recording office; in all such instances, the Seller shall deliver or cause to be delivered to the Custodian the original recorded Mortgage, or a copy thereof, certified by the Seller as being a true and complete copy thereof, promptly upon its receipt thereof;

(D)   (i) if the Credit Limit for such Mortgage Loan is greater than $500,000, the original attorney’s opinion of title or the original policy of title insurance, or a copy of the original attorney’s opinion of title or the original policy of title insurance, certified by the Seller as being a true and complete copy thereof; or (ii) if the Credit Limit for such Mortgage Loan is equal to or less than $500,000, the Seller may deliver to the Custodian an original lender’s policy of title insurance or a copy of the original lender’s policy of title insurance, certified by the Seller as being a true and complete copy thereof, or, if the Mortgage Loan is insured by alternative title protection evidenced by a certificate of lien protection policy, the Seller may deliver to the Custodian an original lien protection certificate or copy of the original lien protection certificate, certified by the Seller as being a true and complete copy thereof; or (iii) if the Mortgage Loan is a “combo loan” pursuant to which the Seller has also originated the related Senior Lien, the Seller may deliver to the Custodian a copy of the original attorney’s opinion of title or the original policy of title insurance for the first lien mortgage loan;

(E)   all original intervening recorded assignments, or copies of such intervening assignments certified by the Seller as being true and complete copies of the interim assignments (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 related Mortgage); 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; and

(F)   originals of all assumption and modification agreements, if any, or copies thereof, certified by the Seller as being true and complete copies thereof,

provided, however, that as to any Mortgage Loan, if as evidenced by an Opinion of Counsel delivered to and in form and substance satisfactory to the Owner Trustee, the Indenture Trustee, the Insurer and the Rating Agencies, (x) an optical image or other representation of the related documents specified in clause (ii)(C) above is enforceable in the relevant jurisdictions to the same extent as the original of such document and (y) such optical image or other representation does not impair the ability of an owner of such Mortgage Loan to transfer or perfect its interest in such Mortgage Loan, such optical image or other representation may be delivered as required in clause (ii) above.

The Seller hereby confirms to the Purchaser that it has made the appropriate entries in its general accounting records, to indicate clearly and unambiguously that such Mortgage Loans have been sold to the Purchaser by the Seller, sold by the Purchaser to the Trust and pledged by the Trust to the Indenture Trustee and constitute part of the Trust in accordance with the terms of the Sale and Servicing Agreement.

The Purchaser hereby acknowledges its acceptance of all right, title and interest to the Mortgage Loans and other property, now existing and hereafter created, conveyed to it pursuant to Section 2.01 above.

The Seller hereby acknowledges that, within 90 days following the occurrence of an Assignment Event specified in clause (i) of the definition thereof, the Seller shall (i) segregate (a) the Related Documents from documents and instruments relating to mortgage loans that are not Mortgage Loans and (b) the Mortgage Note from the Related Documents for each Mortgage Loan and shall assemble and maintain the Mortgage Notes together (separate and apart from the Related Documents) and (ii) prepare an Assignment of Mortgage for each Mortgage Loan. The Assignments of Mortgage will be held by the Seller pursuant to Section 2.01(b) of the Sale and Servicing Agreement.

The Seller acknowledges that the Indenture Trustee is required to review the Mortgage Notes and Related Documents in the case of any delivery required upon the occurrence of an Assignment Event pursuant to Sections 2.01(d) and (e) of the Sale and Servicing Agreement and if the Indenture Trustee finds any document or documents not to have been properly executed, or to be missing or to be defective in any material respect, the Indenture Trustee is required to notify the Seller. If the Seller does not within the time period specified in Section 2.02(b) of the Sale and Servicing Agreement correct or cure such omission or document deficiency, the Seller shall either repurchase such relevant Mortgage Loan directly from the Trust or substitute an Eligible Substitute Mortgage Loan for such Mortgage Loan, in either case, within the time frame and in the manner specified in Section 2.02(b) of the Sale and Servicing Agreement.

Without limiting the generality of the foregoing, the Seller hereby agrees to take such actions described in Section 2.01(a) of the Sale and Servicing Agreement as are necessary to complete and file any UCC Financing Statements and any continuation statements required to perfect and protect the Purchaser's interest in the Mortgage Loans.

Section 2.04   Payment of Purchase Price for the Mortgage Loans . (a) In consideration of the sale of the Mortgage Loans from the Seller to the Purchaser on or before the Closing Date, the Purchaser agrees to pay to the Seller on the Closing Date by transfer of immediately available funds, an amount equal to the sum of $353,935,000 in respect of the Mortgage Loans (the “Purchase Price”). The Purchaser shall pay all expenses it incurs in connection with the Trust's issuance of the Notes, including, without limitation, printing fees incurred in connection with the prospectus relating to the Notes, blue sky registration fees and expenses, fees and expenses of Purchaser's counsel, fees of the rating agencies requested to rate the Notes, accountant's fees and expenses and the fees of the Insurer as set forth in the Insurance and Indemnity Agreement.

(b)   Each Mortgage Note permits the related Mortgagor to make Draws against its Mortgage Loan. Such Draws will create Additional Balances, which Additional Balances the Seller shall sell to the Purchaser or its assignee from time to time. In consideration of the sale of Additional Balances by the Seller to the Purchaser from time to time, the Purchaser agrees to pay the Seller on the date any such Additional Balance is delivered an amount equal to the outstanding principal balance of such Additional Balance. Payment will be made, (i) during the Managed Amortization Period, (A) from Principal Collections, to the extent that Principal Collections exceed Draws, and/or (B) by increasing the value of the Transferor Interest, to the extent that Draws exceed Principal Collections, and (ii) during the Rapid Amortization Period, by increasing the value of the Transferor Interest. Any increase in the value of the Transferor Interest, which shall initially be held by the Seller, will result in a corresponding increase in the value of the Seller's interest in the Trust.

(c)   The Se