FIRST HORIZON ASSET SECURITIES INC
MORTGAGE LOAN PURCHASE AGREEMENT II
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<TYPE>EX-10.2
<SEQUENCE>5
<FILENAME>dex102.txt
<DESCRIPTION>MORTGAGE LOAN PURCHASE AGREEMENT II
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                                                                    Exhibit 10.2

                        MORTGAGE LOAN PURCHASE AGREEMENT

         THIS MORTGAGE LOAN PURCHASE AGREEMENT dated as of January 30, 2003 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 are to be sold by the Seller to the
Purchaser.

         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.

         Closing Date:  January 30, 2003.

         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: LaSalle Bank National Association, a national banking
association, and its successors and assigns, as custodian under the Custodial
Agreement dated as of January 30, 2003 by and among The Bank of New York, as
trustee, First Horizon Home Loan Corporation, as master servicer, and the
Custodian.

         Cut-Off Date:  January 1, 2003.

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         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 applied accounting principals as in effect from time to
time in the United States of America.

         MLPA I: The mortgage loan purchase agreement, dated as of January 30,
2003, 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.

         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 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:  $449,109,429.00.

         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.

                                      -2-

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         Seller: First Tennessee Bank National Association, and its successors
and assigns, in its capacity as seller of the Mortgage Loans pursuant to this
Agreement.

         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 for
the Mortgage Loans 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, and (iii) all proceeds from the
foregoing. Items (i) through (iii) 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

                                      -3-

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                    (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, the original recorded Mortgage or a
               copy of such Mortgage certified by the Seller as being a true and
               complete copy of the Mortgage;

         (c)   a duly executed assignment of the Mortgage in blank (which may be
               included in a blanket assignment or assignments), together with,
               except as provided below, all interim recorded assignments of
               such mortgage (each such assignment, when duly and validly
               completed, to be in recordable form and sufficient to effect the
               assignment of and transfer to the assignee thereof, under the
               Mortgage to which the assignment relates); provided that, if the
               related Mortgage has not been returned from the applicable public
               recording office, such assignment of the Mortgage may exclude the
               information to be provided by the recording office;

         (d)   the original or copies of each assumption, modification, written
               assurance or substitution agreement, if any;

         (e)   either the original or duplicate original title policy (including
               all riders thereto) with respect to the related Mortgaged
               Property, if available, provided that the title policy (including
               all riders thereto) will be delivered as soon as it becomes
               available, and if the title policy is not available, and to the
               extent required pursuant to the second paragraph below or
               otherwise in connection with the rating of the Certificates, a
               written commitment or interim binder or preliminary report of the
               title issued by the title insurance or escrow company with
               respect to the Mortgaged Property, and

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

                    (1)  The Coop Shares, together with a stock power in blank;

                    (2)  The executed Security Agreement;

                    (3)  The executed Proprietary Lease;

                    (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).

                                      -4-

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                                   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 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; 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

                                      -5-

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               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.

               (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 against FHHLC
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.

                                      -6-

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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 Purchaser:     4000 Horizon Way
                                               Irving, Texas 75063
                                               Attn: Larry P. Cole

                      If to the Seller:        165 Madison Avenue
                                               Memphis, Tennessee 38103
                                               Attn: Clyde A. Billings, Jr.

          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.

                  [remainder of page intentionally left blank]

                                      -7-

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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 January, 2003.

                                           FIRST TENNESSEE BANK NATIONAL
                                           ASSOCIATION, as Seller

                                           By:__________________________________
                                                  Wade Walker
                                                  Senior Vice President

                                           FIRST HORIZON ASSET SECURITIES INC.,
                                           as Purchaser


                                           By:__________________________________
                                                  Wade Walker
                                                  Senior Vice President - Asset
                                                  Securitization

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:  ________________________________________________
         Wade Walker
         Senior Vice President - Asset Securitization




















Mortgage Loan Purchase Agreement II-2003-1, Signature Page

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                                   SCHEDULE A

                              [BEGINS ON NEXT PAGE]

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