Document:

MORTGAGE LOAN PURCHASE AGREEMENT

     THIS MORTGAGE LOAN PURCHASE AGREEMENT dated as of September
30, 2003, by and between FIRST HORIZON HOME LOAN CORPORATION, a
Kansas corporation (the "Seller"), and FIRST HORIZON ASSET
SECURITIES INC. (the "Purchaser").

     WHEREAS, the Seller owns certain Mortgage Loans (as
hereinafter defined) which Mortgage Loans are more particularly
listed and described in Schedule A attached hereto and made a
part hereof.

     WHEREAS, the Seller and the Purchaser wish to set forth the
terms pursuant to which the Mortgage Loans, excluding the
servicing rights thereto, are to be sold by the Seller to the
Purchaser.

     WHEREAS, the Seller will simultaneously transfer the
servicing rights for the Mortgage Loans to First Tennessee
Mortgage Services, Inc. ("FTMSI") pursuant to the Servicing
Rights Transfer and Subservicing Agreement (as hereinafter
defined).

     WHEREAS, the Purchaser will engage FTMSI to service the
Mortgage Loans pursuant to the Servicing Agreement (as
hereinafter defined).

     NOW, THEREFORE, in consideration of the foregoing, other
good and valuable consideration, and the mutual terms and
covenants contained herein, the parties hereto agree as follows:

                            ARTICLE I
                           Definitions
                           -----------

     Agreement:  This Mortgage Loan Purchase Agreement, as the
same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms hereof.

     Business Day:  Any day other than (i) a Saturday or a
Sunday, or (ii) a day on which banking institutions in the City
of Dallas, or the State of Texas or New York City is located are
authorized or obligated by law or executive order to be closed.

     Closing Date:  September 30, 2003.

     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.

                               -1-

<PAGE>

     Cooperative Property:  The real property and improvements
owned by the Cooperative Corporation, including the allocation of
individual dwelling units to the holders of the Coop Shares of
the Cooperative Corporation.

     Cooperative Unit:  A single family dwelling located in a
Cooperative Property.

     Custodian:  LaSalle Bank National Association, a national
banking association, and its successors and assigns, as custodian
under the Custodial Agreement dated as of September 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:  September 1, 2003.

     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 applied accounting principals 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.

                               -2-

<PAGE>

     Mortgage:  The mortgage, deed of trust or other instrument
creating a first lien on the property securing a Mortgage Note.

     Mortgage File:  The mortgage documents listed in Section 3.1
pertaining to a particular Mortgage Loan and any additional
documents required to be added to the Mortgage File pursuant to
this Agreement.

     Mortgage Loans:  The mortgage loans transferred, sold and
conveyed by the Seller to the Purchaser, pursuant to this
Agreement.

     Mortgage Loan Purchase Price:  With respect to any Mortgage
Loan required to be purchased by the Seller pursuant to Section
4.1(c) hereof, an amount equal to the sum of (i) 100% of the
unpaid principal balance of the Mortgage Loan on the date of such
purchase, and (ii) accrued interest thereon at the applicable
Mortgage Rate from the date through which interest was last paid
by the Mortgagor to the first day in the month in which the
Mortgage Loan Purchase Price is to be distributed to the
Purchaser or its designees.

     Mortgage Note:  The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under
a Mortgage Loan.

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

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

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

     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:  $303,348,033.85.

     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.

                               -3-

<PAGE>

     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 Mortgage Rate not lower than the
Mortgage Rate of the Deleted Mortgage Loan; (iii) have a maximum
mortgage rate not more than 1% per annum higher or lower than the
maximum mortgage rate of the Deleted Mortgage Loan; (iv) have a
minimum mortgage rate specified in its related Mortgage Note not
more than 1% per annum higher or lower than the minimum mortgage
rate of the Deleted Mortgage Loan; (v) have the same mortgage
index, reset period and periodic rate as the Deleted Mortgage
Loan and a gross margin not more than 1% per annum higher or
lower than that of the Deleted Mortgage Loan (vi) be accruing
interest at a rate no lower than and not more than 1% per annum
higher than, that of the Deleted Mortgage Loan; (iv) have a loan-
to-value ratio no higher than that of the Deleted Mortgage Loan;
(vii) have a remaining term to maturity no greater than (and not
more than one year less than that of) the Deleted Mortgage Loan;
(viii) not be a Cooperative Loan unless the Deleted Mortgage Loan
was a Cooperative Loan and (ix) comply with each representation
and warranty set forth in Schedule B hereto.

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

                               -4-

<PAGE>

                            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 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, 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

                               -5-

<PAGE>

          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).

     In the event that in connection with any 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,

                               -6-

<PAGE>

if appropriate, by the relevant recording office, but in no event
shall any such delivery of the original Mortgage and each such
interim assignment or a copy thereof, certified, if appropriate,
by the relevant recording office, be made later than one year
following the Closing Date; provided, however, in the event the
Seller is unable to deliver or cause to be delivered by such date
each Mortgage and each such interim assignment by reason of the
fact that any such documents have not been returned by the
appropriate recording office, or, in the case of each such
interim assignment, because the related Mortgage has not been
returned by the appropriate recording office, the Seller shall
deliver or cause to be delivered such documents to the Trustee or
the Custodian on its behalf as promptly as possible upon receipt
thereof and, in any event, within 720 days following the Closing
Date. The Seller shall forward or cause to be forwarded to the
Trustee or the Custodian on its behalf (i) from time to time
additional original documents evidencing an assumption or
modification of a Mortgage Loan and (ii) any other documents
required to be delivered by the Seller to the Trustee. In the
event that the original Mortgage is not delivered and in
connection with the payment in full of the related Mortgage Loan
and the public recording office requires the presentation of a
"lost instruments affidavit and indemnity" or any equivalent
document, because only a copy of the Mortgage can be delivered
with the instrument of satisfaction or reconveyance, the Seller
shall execute and deliver or cause to be executed and delivered
such a document to the 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 such thirty-day period, 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

                               -7-

<PAGE>

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

                               -8-

<PAGE>

          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.

     (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

                               -9-

<PAGE>

     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.

                              -10-

<PAGE>

     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]

                              -11-

<PAGE>

     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 September, 2003.

                              FIRST HORIZON HOME LOAN CORPORATION,
                              as Seller

                              By:_______________________________
                                   Wade Walker
                                   Senior Vice President - Asset
                                      Securitization

                              FIRST HORIZON ASSET SECURITIES INC.,
                              as Purchaser

                              By:_______________________________
                                   Wade Walker
                                   Senior Vice President - Asset
                                     Securitization

Mortgage Loan Purchase Agreement - Signature Page, 2003-9

<PAGE>

                           SCHEDULE A
                           ----------

                      [BEGINS ON NEXT PAGE]

              [Available Upon Request From Trustee]

<PAGE>

                           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
September 30, 2003 (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.

     (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.

     (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.

                               B-1

<PAGE>

     (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.

     (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.

     (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

                               B-2

<PAGE>

          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 Loan 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) At the Cut-off 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.

     (19) If at the time of origination of each Mortgage Loan,
          related the 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.

                               B-3

<PAGE>

     (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 fixed-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 Pools 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 Mortgage Loans may be prepaid at any time by the
          related Mortgagors without penalty.

     (28) Substantially all of the Mortgage Loans 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 Pool I was originated on or after
          May 9, 2003.  Each Mortgage Loan in Pool II was
          originated on or after June 19, 2003.

     (30) The latest stated maturity date of any Mortgage Loan in
          Pool I is October 1, 2033, and the earliest stated
          maturity date of any Mortgage Loan in Pool I is
          August 1, 2023.  The latest stated maturity date of any
          mortgage loan in Pool II is September 1, 2018, and the
          earliest stated maturity date of any mortgage loan in
          Pool II is July 1, 2017.

     (31) No Mortgage Loan was delinquent more than 30 days as of
          the Cut-off Date.

                               B-4

<PAGE>

     (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.

                               B-5EXHIBIT 10.1

                                MAF BANCORP, INC.

                           INCENTIVE COMPENSATION PLAN

         1. Purpose. The purpose of the MAF Bancorp, Inc. Incentive Compensation
Plan is to benefit the Corporation and its Subsidiaries, including the Bank, by
enabling the Corporation to offer certain present and future officers,
employees, and directors of the Corporation and its Subsidiaries stock and
cash-based incentives and other equity interests in the Corporation, thereby
providing them a stake in the growth of the Corporation and encouraging them to
continue in the service of the Corporation and its Subsidiaries.

         2. Definitions.

                  (a) "Award" includes, without limitation, Stock Options
(including Incentive Stock Options), Stock Appreciation Rights, Performance
Share or Unit awards, Dividend or Equivalent Rights, Stock Awards, Restricted
Share or Unit awards, Cash Awards or other awards ("Other Incentive Awards")
that are valued in whole or in part by reference to, or are otherwise based on,
the Corporation's Common Stock or other factors, all on a stand alone,
combination or tandem basis, as described in or granted under this Plan.

                  (b) "Award Agreement" means a writing provided by the
Corporation to each Participant setting forth the terms and conditions of each
Award made under this Plan.

                  (c) "Bank" means Mid America Bank fsb.

                  (d) "Board" means the Board of Directors of the Corporation.

                  (e) "Cash Award" has the meaning specified in Section 6(i).

                  (f) "Change of Control" shall be deemed to have occurred upon
the happening of any of the following events:

                           (i) a change in control which would be required to be
         reported in response to Item 1 of the current report on Form 8-K, as in
         effect on the date hereof, pursuant to Section 13 or 15(d) of the
         Securities Exchange Act of 1934 (the "Exchange Act"); or

                           (ii) a change in control of the Corporation or the
         Bank within the meaning of the Home Owners Loan Act of 1933, as
         amended, and the Rules and Regulations promulgated by the Office of
         Thrift Supervision (or its predecessor agency), as in effect on the
         date hereof, including Section 574 of such regulations; or

                           (iii) any "person" (as the term is used in Sections
         13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
         owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
         indirectly, of securities, or makes an offer to purchase and completes
         the purchase of securities, of the Bank or Corporation representing 20%
         or

<PAGE>

         more of the Bank's or Corporation's outstanding securities ordinarily
         having the right to vote at the election of directors ("Voting Stock")
         except for (A) any securities purchased by the employee stock ownership
         plan and trust of the Corporation or a subsidiary or (B) any securities
         of the Bank owned by the Corporation; or

                           (iv) individuals who constitute either the
         Corporation's Board of Directors on the date hereof (the "Incumbent
         Board"), or the Bank's Board of Directors on the date hereof (the "Bank
         Incumbent Board"), cease for any reason to constitute at least a
         majority thereof, provided that any person becoming a director
         subsequent to the date hereof whose election was approved by a vote of
         at least three-quarters of the directors comprising the Incumbent
         Board, or whose nomination for election by the stockholders was
         approved by the Nominating Committee serving under the Incumbent Board
         or the Bank Incumbent Board, shall be, for purposes of this clause
         (iv), considered as though such individual was a member of the
         Incumbent Board or the Bank Incumbent Board, as the case may be; or

                           (v) consummation of a reorganization, merger,
         consolidation, sale of all or substantially all the assets of the Bank
         or Corporation or similar transaction occurs (each a "Business
         Combination") that results in a change of control. A Business
         Combination will not be deemed to result in a change of control if: (1)
         all or substantially all of the individuals and entities who were the
         beneficial owners, respectively, of the Voting Stock immediately prior
         to such Business Combination beneficially own, directly or indirectly,
         more than 50% of the total voting power represented by the voting
         securities entitled to vote generally in the election of directors of
         the resulting entity from the Business Combination (including, without
         limitation, an entity which as a result of such transaction owns the
         Bank or Corporation or all or substantially all of the Bank's or
         Corporation's assets either directly or through one or more
         subsidiaries) in substantially the same proportions of such voting
         power as their ownership of the Voting Stock immediately prior to the
         Business Combination, and (2) at least a majority of the members of
         the board of directors of the resulting entity from the Business
         Combination were members of the Incumbent Board or Bank Incumbent
         Board, respectively, at the time of the execution of the initial
         agreement, or action of the Incumbent Board or Bank Incumbent Board,
         providing for such Business Combination; or

                           (vi) a proxy statement shall be distributed
         soliciting proxies from stockholders of the Corporation, by someone
         other than the current management of the Corporation, seeking
         stockholder approval of a plan of reorganization, merger or
         consolidation of the Corporation or Bank or similar transaction with
         one or more corporations as a result of which the outstanding shares of
         the class of securities then subject to such plan or transaction are
         exchanged for or converted into cash or property or securities not
         issued by the Corporation and such proxy statement proposal is approved
         by the shareholders of the Corporation; or

                           (vii) a tender offer is made and completed for 20% or
         more of the outstanding securities of the Corporation.

         However, notwithstanding anything contained in this section to the
contrary, a Change in Control shall not be deemed to have occurred as a result
of an event described in (i), (ii), (iii), (v) or (vii) above which resulted
from an acquisition or proposed acquisition of stock of the

                                      -2-
<PAGE>

Company by a person, as defined in the OTS' Acquisition of Control Regulations
(12 C.F.R. ss. 574) (the "Control Regulations"), who was an executive officer of
the Corporation on the date hereof and who has continued to serve as an
executive officer of the Corporation as of the date of the event described in
(i), (ii), (iii), (v) or (vii) above (an "incumbent officer"). In the event a
group of individuals acting in concert satisfies the definition of "person"
under the Control Regulations, the requirements of the preceding sentence shall
be satisfied and thus a change in control shall not be deemed to have occurred
if at least one individual in the group is an incumbent officer.

                  (g) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.

                  (h) "Committee" means the Administrative/Compensation
Committee of the Board or such other committee of the Board as may be designated
by the Board from time to time to administer this Plan.

                  (i) "Common Stock" means the Common Stock, no par value, of
the Corporation.

                  (j) "Corporation" means MAF Bancorp, Inc., a Delaware
corporation.

                  (k) "Director" means a director of the Corporation or a
Subsidiary.

                  (l) "Dividend or Equivalent Rights" has the meaning specified
in Section 6(f).

                  (m) "Effective Date" has the meaning specified in Section 15.

                  (n) "Employee" means an employee of the Corporation or a
Subsidiary.

                  (o) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

                  (p) "Fair Market Value" means the average of the highest and
the lowest quoted selling prices on the NASDAQ Stock Market on the relevant
valuation date or, if there were no sales on the valuation date, on the next
preceding date on which such selling prices were recorded; provided, however,
that the Committee may modify the definition of Fair Market Value with respect
to any particular Award.

                  (q) "Incentive Stock Option" has the meaning specified in
Section 6(b).

                  (r) "Other Incentive Award" has the meaning specified in
Section 2(a).

                  (s) "Participant" means an Employee or Director who has been
granted an Award under the Plan, including the Predecessor Plan.

                  (t) "Performance-Based Award" has the meaning specified in
Section 7.

                  (u) "Performance Criteria" has the meaning specified in
Section 7.

                                      -3-
<PAGE>

                  (v) "Performance Share" has the meaning specified in Section
6(d).

                  (w) "Performance Unit" has the meaning specified in Section
6(e).

                  (x) "Plan" means this MAF Bancorp, Inc. Incentive Compensation
Plan, which includes the Predecessor Plan.

                  (y) "Plan Year" means a twelve-month period beginning with
January 1 of each year.

                  (z) "Predecessor Plan" means the Corporation's 2000 Stock
Option Plan.

                  (aa) "Previously-Acquired Shares" means shares of Common Stock
acquired by the Participant or any beneficiary of Participant other than
pursuant to an Award under this Plan, the Predecessor Plan or any similar plan
maintained by the Corporation, or if so acquired under this Plan, the
Predecessor Plan or such other plan, such shares of Common Stock have been held
for a period of not less than six months or such shorter period as the Committee
may permit.

                  (bb) "Restriction Period" means a period of time beginning as
of the date upon which an Award subject to restrictions or forfeiture provisions
is made pursuant to this Plan and ending as of the date upon which the Common
Stock subject to such Award is no longer restricted or subject to forfeiture
provisions.

                  (cc) "Restricted Share" has the meaning specified in Section
6(d).

                  (dd) "Restricted Unit" has the meaning specified in Section
6(e).

                  (ee) "Stock Appreciation Right" has the meaning specified in
Section 6(c).

                  (ff) "Stock Award" has the meaning specified in Section 6(g).

                  (gg) "Stock Option" has the meaning specified in Section 6(a).

                  (hh) "Subsidiary" means any corporation or other entity,
whether domestic or foreign, in which the Corporation has or obtains, directly
or indirectly, a proprietary interest of at least 50% by reason of stock
ownership or otherwise.

         3. Eligibility. Any Employee or Director selected by the Committee is
eligible to receive an Award.

         4.  Plan Administration.

                  (a) Except as otherwise determined by the Board, the Plan
shall be administered by the Committee. The Committee shall make determinations
with respect to the participation of Employees and Directors in the Plan and,
except as otherwise required by law or this Plan, the terms of Awards, including
vesting schedules, price, length of relevant performance, Restriction Period,
option period, dividend rights, post-retirement and termination

                                      -4-
<PAGE>

rights, payment alternatives such as cash, stock, contingent awards or other
means of payment consistent with the purposes of this Plan, and such other terms
and conditions as the Committee deems appropriate; provided, however, the
Committee shall not reprice or otherwise decrease the exercise price applicable
to any outstanding Stock Option, except in connection with an adjustment
contemplated by Section 11.

                  (b) The Committee, by majority action thereof (whether taken
during a meeting or by written consent), shall have authority to interpret and
construe the provisions of the Plan and the Award Agreements, to decide all
questions of fact arising in its application and to make all other
determinations pursuant to any Plan provision or Award Agreement which shall be
final and binding on all persons. To the extent deemed necessary or advisable
for purposes of Section 16 of the Exchange Act or Section 162(m) of the Code, a
member or members of the Committee may recuse himself or themselves from any
action, in which case action taken by the majority of the remaining members
shall constitute action by the Committee. No member of the Committee shall be
liable for any action or determination made in good faith, and the members of
the Committee shall be entitled to indemnification and reimbursement in the
manner provided in the Corporation's Certificate of Incorporation, By-Laws, by
agreement or otherwise as may be amended from time to time.

                  (c) To the extent permitted under the corporate law of the
Corporation's jurisdiction of incorporation, the Committee may, by a resolution
adopted by the Committee, authorize one or more officers of the Corporation to
do one or more of the following: (i) designate officers and employees of the
Corporation or any of its Subsidiaries to be recipients of an Award under this
Plan, (ii) determine the amount, terms, conditions, and form of any such Awards
and (iv) take such other actions which the Committee is authorized to take under
this Plan; provided, however, that the resolution so authorizing such officer or
officers shall specify the total number of shares of Common Stock or cash
payable under such Awards which such officer or officers may so award; provided,
further, however, that the Committee may not delegate to any person the
authority to grant Awards to, or take other action with respect to, Participants
who at the time of such Awards or action are subject to Section 16 of the
Exchange Act or are "covered employees" as defined in Section 162(m) of the
Code. Further, the Committee may not authorize an officer to designate himself
or herself as a recipient of any such Awards. To the extent deemed necessary or
advisable for purposes of Section 16 of the Exchange Act or otherwise, the Board
may act as the Committee hereunder.

         5. Stock Subject to the Provisions of the Plan.

                  (a) The stock subject to the provisions of this Plan may be
shares of authorized but unissued Common Stock, treasury shares held by the
Corporation or any Subsidiary, or shares acquired by the Corporation through
open market purchases or otherwise. Subject to adjustment in accordance with the
provisions of Section 11, the total number of shares of Common Stock which may
be issued under the Plan shall not exceed 800,000 shares, plus the number of
shares heretofore authorized and available (or which become available) for
issuance under the Predecessor Plan which are not issued after the Effective
Date. To the extent that shares of Common Stock subject to an outstanding Award
or an award under the Predecessor Plan are not issued by reason of the
forfeiture, termination, surrender, cancellation or expiration while unexercised
of such award, by reason of the tendering or withholding of shares (by either

                                      -5-
<PAGE>

actual delivery or by attestation) to pay all or a portion of the purchase price
or to satisfy all or a portion of the tax withholding obligations relating to an
award, by reason of being settled in cash in lieu of Common Stock or settled in
a manner such that some or all of the shares covered by the Award are not issued
to a Participant, or being exchanged for a grant under this Plan that does not
involve Common Stock, then such shares shall immediately again be available for
issuance under this Plan.

                  (b) The Committee may from time to time adopt and observe such
procedures concerning the counting of shares against the Plan maximum as it may
deem appropriate.

                  (c) Shares of Common Stock issued in connection with awards
that are assumed, converted or substituted pursuant to a merger, acquisition or
similar transaction entered into by the Corporation or any of its Subsidiaries
shall not reduce the number of shares of Common Stock available under this Plan.

                  (d) Subject to Section 11, the following limitations shall
apply to Awards under the Plan:

                           (i) All of the shares of Common Stock that may be
         issued under this Plan may be issued pursuant to Stock Options, all of
         which may be Incentive Stock Options.

                           (ii) The maximum number of shares of Common Stock
         that may be covered by Awards granted under this Plan to any single
         Participant shall be 125,000 shares during any one Plan Year. If an
         Award is granted in tandem with a Stock Appreciation Right, such that
         the exercise of the Award right or Stock Appreciation Right with
         respect to a share of Common Stock cancels the tandem Stock
         Appreciation Right or Award right, respectively, with respect to such
         share, the tandem Award right and Stock Appreciation Right with respect
         to each share of Common Stock shall be counted as covering but one
         share of Common Stock for purposes of applying the limitations of this
         paragraph (ii).

                           (iii) Not more than 25% of the total number of shares
         of Common Stock that may be issued under this Plan may be issued
         pursuant to Awards of Restricted Shares or Restricted Share Units.

                           (iv) The maximum dollar amount for a Cash Award that
         may be earned under the Plan with respect to any Plan Year shall be
         $1,500,000. Any amount earned with respect to a Cash Award with respect
         to which performance is measured over a period greater than one Plan
         Year shall be deemed to be earned ratably over the number of full and
         partial Plan Years in the period.

         6. Awards under this Plan. As the Board or Committee may determine, the
following types of Awards may be granted under this Plan on a stand alone,
combination or tandem basis:

                  (a) Stock Option. A right to buy a specified number of shares
of Common Stock at a fixed exercise price during a specified time, all as the
Committee may determine;

                                      -6-
<PAGE>

provided that the exercise price of any Stock Option shall not be less than 100%
of the Fair Market Value of the Common Stock on the date of grant of such Award,
and, provided, further, that in no event shall the term of any Stock Option
extend to a date which is more than ten years after the date of grant of such
Award.

                  (b) Incentive Stock Option. An Award in the form of a Stock
Option which shall comply with the requirements of Section 422 of the Code or
any successor Section of the Code as it may be amended from time to time.

                  (c) Stock Appreciation Right. A right to receive the excess

of the Fair Market Value of a share of Common Stock on the date the Stock
Appreciation Right is exercised over the Fair Market Value of a share of Common
Stock on the date the Stock Appreciation Right was granted.

                  (d) Restricted and Performance Shares. A transfer of Common
Stock to a Participant, subject to such restrictions on transfer or other
incidents of ownership, and/or in the case of Performance Shares subject to
performance standards established pursuant to Section 7 below, for such periods
of time as the Committee may determine.

                  (e) Restricted and Performance Share Unit. A fixed or variable
share or dollar denominated unit subject to such conditions of vesting, and time
of payment, and/or in the case of Performance Share Units, performance standards
established pursuant to Section 7 below, as the Committee may determine, which
are valued at the Committee's discretion in whole or in part by reference to, or
otherwise based on, the Fair Market Value of Common Stock and which may be paid
in Common Stock, cash or a combination of both.

                  (f) Dividend or Equivalent Right. A right to receive dividends
or their equivalent in value in Common Stock, cash or in a combination of both
with respect to any new or previously existing Award.

                  (g) Stock Award. An unrestricted transfer of ownership of
Common Stock.

                  (h) Awards under Deferred Compensation or Similar Plans. The
right to receive Common Stock or a fixed or variable share denominated unit
granted under this Plan or any deferred compensation or similar plan established
from time to time by the Corporation.

                  (i) Cash Award. An award denominated in cash that may be
earned pursuant to the achievement of Performance Criteria set forth in Section
7 during a performance cycle period equal to one Plan Year or such other period
of time as determined by the Committee or that may be earned under the
Corporation's annual bonus, multi-year bonus or other incentive or bonus plans.

                  (j) Other Incentive Awards. Other Incentive Awards which are
related to or serve a similar function to those Awards set forth in this Section
6, including, but not limited to, Other Incentive Awards related to the
establishment or acquisition by the Corporation or any Subsidiary of a new or
start-up business or facility.

                                      -7-
<PAGE>

         7. Performance-Based Awards. The Committee may from time to time,
establish Performance Criteria with respect to an Award (a "Performance-Based
Award"). The Performance Criteria or standards for an Award shall be determined
by the Committee in writing, shall be measured for achievement or satisfaction
during the period in which the Committee permitted such Participant to satisfy
or achieve such Performance Criteria and may be absolute in their terms or
measured against or in relationship to other companies comparably, similarly or
otherwise situated or other external or internal measure and may be based on or
adjusted for any other objective goals, events, or occurrences established by
the Committee, provided that such criteria or standards relate to one or more of
the following: earnings, earnings per share, revenues, expenses, market share,
charge-offs, loan loss reserves, non-performing assets, return on assets, return
on equity, assets, deposits, loans, asset quality levels, interest-sensitivity
gap levels, Fair Market Value of the Common Stock or assets, investments,
regulatory compliance, satisfactory internal or external audits, improvement of
financial ratings, achievement of balance sheet or income statement objectives,
or other financial, accounting or quantitative objective established by the
Committee. Performance Criteria may include or exclude extraordinary charges,
losses from discontinued operations, restatements and accounting changes and
other unplanned special charges such as restructuring expenses, acquisitions,
acquisition expenses, including expenses related to goodwill and other
intangible assets, stock offerings, stock repurchases and strategic loan loss
provisions. Such Performance Criteria may be particular to a line of business,
Subsidiary or other unit or the Corporation generally, and may, but need not be,
based upon a change or an increase or positive result. In interpreting Plan
provisions applicable to Performance Criteria and to Performance-Based Awards to
Participants who are "covered employees" under Section 162(m) of the Code, it is
the intent of the Plan to conform with the standards of Section 162(m) of the
Code and the regulations thereunder. The Committee in establishing Performance
Criteria applicable to such Performance-Based Awards, and in interpreting the
Plan, shall be guided by such standards, including, but not limited to providing
that the Performance-Based Award shall be paid, vested or otherwise delivered
solely as a function of attainment of objective Performance Criteria based on
one or more of the specific factors set forth in this Section 7 established by
the Committee not later than 90 days after the period of service applicable to
the Award has commenced (or, if such period of service is less than one year,
not later than the date on which 25% of such period has elapsed). Prior to the
payment of any compensation based on achievement of Performance Criteria to any
such "covered employee," the Committee must certify in writing the extent to
which the applicable Performance Criteria were, in fact, achieved and the
amounts to be paid, vested or delivered as a result thereof, provided the
Committee may reduce, but not increase, such amount.

         8. Award Agreements. Each Award under the Plan shall be evidenced by an
Award Agreement. Delivery of an Award Agreement to each Participant shall
constitute an agreement, subject to Section 9 hereof, between the Corporation
and the Participant as to the terms and conditions of the Award.

         9. Other Terms and Conditions.

                  (a) No Assignment; Limited Transferability of Stock Options.
Except as provided below, no Award granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution.
Notwithstanding the foregoing, the Committee may, in its discretion, authorize
all

                                      -8-
<PAGE>

or a portion of the Stock Options (other than Incentive Stock Options)
granted to a Participant to be on terms which permit transfer by such
Participant to:

                           (i) the spouse, children or grandchildren of the
         Participant ("Immediate Family Members");

                           (ii)     a trust or trusts for the exclusive  benefit
         of such Immediate  Family Members; or

                           (iii) a partnership in which such Immediate Family
         Members are the only partners,

provided that:

                                    (A) there may be no consideration for any
                  such transfer;

                                    (B) the Award Agreement pursuant to which
                  such Stock Options are granted expressly provides for
                  transferability in a manner consistent with this Section 9(a);
                  and

                                    (C) subsequent transfers of transferred
                  Stock Options shall be prohibited except those in accordance
                  with this Section 9(a).

         Following transfer, any such options shall continue to be subject to
the same terms and conditions as were applicable immediately prior to transfer,
provided that for purposes of this Section 9(a) hereof the term "Participant"
shall be deemed to refer to the transferee. The provisions of the Stock Option
relating to the period of exercisability and expiration of the Stock Option
shall continue to be applied with respect to the original Participant, and the
Stock Options shall be exercisable or received by the transferee only to the
extent, and for the periods, set forth in said Stock Option.

                  (b) Beneficiary Designation. Each Participant under the Plan
may name, from time to time, any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in case of his death before he receives any or all of such benefit. Each
designation will revoke all prior designations by the same Participant, shall be
in a form prescribed by the Committee, and will be effective only when filed by
the Participant in writing with the Committee during his lifetime. In the
absence of any such designation, benefits remaining unpaid at the Participant's
death shall be paid to his estate.

                  (c) Termination of Employment. The disposition of the grant of
each Award in the event of the retirement, disability, death or other
termination of a Participant's employment shall be as determined by the
Committee and set forth in the Award Agreement. Unless expressly provided
otherwise by the Committee, references to the "Plan" set forth in any agreement
representing an award granted under the Predecessor Plan prior to the Effective
Date shall refer to the terms of such Predecessor Plan as in effect immediately
prior to the Effective Date.

                                      -9-
<PAGE>

                  (d) Rights as a Shareholder. A Participant shall have no
rights as a stockholder with respect to shares covered by an Award until the
date the Participant or his nominee, guardian or legal representative is the
holder of record; provided, however, that Participants holding Restricted Shares
may exercise full voting rights with respect to those shares during the
Restriction Period.

                  (e) Dividends and Dividend Equivalents. Rights to dividends
and Dividend Equivalents may be extended to and made a part of any Award,
subject to such terms, conditions and restrictions as the Committee may
establish. The Committee may also establish rules and procedures for the
crediting of Dividend Equivalents for Awards.

                  (f) Payments by Participants. The Committee may determine
that Awards for which a payment is due from a Participant may be payable: (i) in
cash by personal check, bank draft or money order payable to the order of the
Corporation, by money transfers or direct account debits; (ii) through the
delivery or deemed delivery based on attestation to the ownership of Previously
Acquired Shares of Common Stock with a Fair Market Value equal to the total
payment due from the Participant; (iii) by a combination of the methods
described in (i) and (ii) above; or (iv) by such other methods as the Committee
may deem appropriate. Notwithstanding the foregoing, the price payable with
respect to the exercise of any Stock Options by a Participant who has a deferral
election in effect under the MAF Bancorp, Inc. Stock Option Gain Deferral Plan
(the "Gain Deferral Plan") shall be made solely by tendering Previously-Acquired
Shares in accordance with clause (ii) above. In such an instance, as soon as
practicable after receipt of notice of exercise and payment, the Corporation
shall deliver to the trustee of the trust established under the Gain Deferral
Plan, a certificate or certificates representing such number of shares of Common
Stock determined by dividing (i) the excess of (A) the Fair Market Value of the
shares of Common Stock purchased pursuant to such Stock Option exercise, over
(B) the aggregate exercise price of the shares of Common Stock purchased, by
(ii) the Fair Market Value of one share of Common Stock. In addition, as soon as
practicable after receipt of such notice and payment of the Stock Option price
(other than payment by affirmation of ownership), the Corporation shall deliver
to the Participant a certificate or certificates representing shares with a Fair
Market Value equal to the aggregate exercise price paid, net of tax withholding.
For purposes of the foregoing, Fair Market Value shall be determined on the date
of Stock Option exercise.

                  (g) Withholding. Except as otherwise provided by the Committee
in the Award Agreement or otherwise (i) the deduction of withholding and any
other taxes required by law will be made from all amounts paid in cash, and (ii)
in the case of the exercise of Stock Options or payments of Awards in shares of
Common Stock, the Participant shall be required to pay the amount of any taxes
required to be withheld in cash prior to receipt of such stock, or
alternatively, to elect to have a number of shares the Fair Market Value of
which equals the amount required be withheld deducted from the shares to be
received upon such exercise or payment or deliver such number of
Previously-Acquired Shares of Common Stock. In no event shall such withholding
amount exceed the minimum amount required by law to be withheld, provided,
however, that in the event a deferral election is in effect with respect to the
shares of Common Stock deliverable upon exercise of a Stock Option, then the
Participant may only elect to have such minimum withholding made in cash or from
the Common Stock tendered to exercise such Stock Option.

                                      -10-
<PAGE>

                  (h) Deferral. Upon approval of the Committee, the receipt of
payment of cash or delivery of shares of Common Stock that would otherwise be
due to a Participant upon the exercise of any Stock Option or under any other
Award may be deferred pursuant to an applicable deferral plan established by the
Corporation or a Subsidiary. The Committee shall establish rules and procedures
relating to any such deferrals and the payment of any tax withholding with
respect thereto.

                  (i) Other Restrictions. The Committee shall impose such other
restrictions on any Awards granted pursuant to the Plan as it may deem
advisable, including, without limitation, restrictions under applicable Federal
or state securities laws, post-vesting or exercise holding periods, or
requirements to comply with restrictive covenants, and may legend the
certificates issued in connection with an Award to give appropriate notice of
any such restrictions.

         10. Amendments, Modification and Termination. The Board may at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part, subject to any requirement of shareholder approval imposed by
applicable law, rule or regulation. No termination, amendment, or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award.

         11. Adjustment. The aggregate number of shares of Common Stock as to
which Awards may be granted to Participants, the number of shares of Common
Stock set forth in the limitations in Section 5(d), the number of shares of
Common Stock covered by each outstanding Award, and the price per share of
Common Stock in each such Award, shall all be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a subdivision, consolidation or split of shares or other capital
adjustment, or the payment of a stock dividend or other increase or decrease in
such shares, effected without receipt of consideration by the Corporation, or
other change in corporate or capital structure; provided, however, that any
fractional shares resulting from any such adjustment shall be eliminated. The
Committee may also make the foregoing changes and any other changes, including
changes in the classes of securities available, to the extent it is deemed
necessary or desirable to preserve the intended benefits of the Plan for the
Corporation and the Participants in the event of any other reorganization,
recapitalization, merger, consolidation, spinoff, extraordinary dividend or
other distribution or similar transaction.

         12. Rights as Employees or Directors. No person shall have any claim or
right to be granted an Award, and the grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of or as a
Director of the Corporation or a Subsidiary. Further, the Corporation and each
Subsidiary expressly reserve the right at any time to dismiss a Participant free
from any liability, or any claim under the Plan, except as provided herein or in
any Award Agreement issued hereunder.

         13. Change of Control. Notwithstanding anything contained in this Plan
or any Award Agreement to the contrary, in the event of a Change of Control, the
following shall occur with respect to any and all Awards outstanding as of such
Change of Control:

                                      -11
<PAGE>

                  (a) Any and all Stock Options and Stock Appreciation Rights
granted hereunder shall become immediately exercisable, and shall remain
exercisable throughout their entire term;

                  (b) Any restrictions imposed on Restricted Shares and
Restricted Units shall lapse; and

                  (c) Unless otherwise specified in a Participant's Award
Agreement at time of grant, the maximum payout opportunities attainable under
all outstanding Awards of Performance Units, Performance Shares and Other
Incentive Awards shall be deemed to have been fully earned for the entire
performance period(s) as of the effective date of the Change of Control. The
vesting of all such Awards shall be accelerated as of the effective date of the
Change of Control, and in full settlement of such Awards, there shall be paid
out in cash, or in the sole discretion of the Committee, shares of Common Stock
with a Fair Market Value equal to the amount of such cash, to Participants
within thirty (30) days following the effective date of the Change of Control
the maximum of payout opportunities associated with such outstanding Awards.

         14. Governing Law. To the extent that federal laws do not otherwise
control, the Plan and all Award Agreements hereunder shall be construed in
accordance with and governed by the law of the State of Delaware, provided,
however, that in the event the Corporation's state of incorporation shall be
changed, then the law of the new state of incorporation shall govern.

         15. Effective Date and Term. The effective date of this Plan is July
22, 2003 (the "Effective Date"), the date the Plan was adopted by the Board,
subject to ratification by the shareholders of the Corporation. The Plan shall
remain in effect until terminated by the Board, provided, however, that no
Incentive Stock Option shall be granted under this Plan on or after the tenth
anniversary of the Effective Date.

                                      -12-

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