Document:

[Letterhead of Barclays Capital]

                                                Barclays Capital
                                                5 The North Colonnade
                                                Canary Wharf
                                                London E14 4BB

                                                Tel +44 (0)20 7623 2323

To:         Wells Fargo Bank, N.A. as master servicer on behalf of the Wells
            Fargo Alternative Loan 2007-PA2 Trust (such trust, the "Issuing
            Entity") created under the Pooling and Servicing Agreement (as
            defined below)

Attn:       Wells Fargo Bank, N.A.
            9062 Old Annapolis Road
            Columbia, Maryland 21045
            Client Manager - Wells Fargo Alternative Loan Trust, Series
            2007-PA2
            Telephone: 410-884-2000
            Facsimile:  410-715-2380

From:       BARCLAYS BANK PLC (LONDON HEAD OFFICE)

Attn:       5 The North Colonnade
            Canary Wharf
            E14 4BB
            Facsimile: 44(20) 77736461
            Phone: 44(20) 77736810

Date:       May 24, 2007

Reference:  1753568B/1753567B

Dear Sir/Madam,

The purpose of this letter agreement is to confirm the terms and conditions of
the transaction entered into between Wells Fargo Bank, N.A. as master servicer
(the "Master Servicer") under the Pooling and Servicing Agreement (as defined
below) on behalf of the Issuing Entity and Barclays Bank PLC (each a "party" and
together "the parties") on the Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" as referred to in the ISDA
Master Agreement specified in paragraph 1 below. In this Confirmation, "Party A"
means Barclays Bank PLC and "Party B" means Wells Fargo Bank, N.A. as Master
Servicer on behalf of the Issuing Entity.

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions"), are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern.

Other capitalized terms used herein (but not otherwise defined) shall have the
meaning specified in that certain Pooling and Servicing Agreement (the "Pooling
and Servicing Agreement"), to be dated as of May 24, 2007, among Wells Fargo
Asset Securities Corporation, as depositor (the "Depositor"), Wells Fargo Bank,
N.A., as Master Servicer and HSBC Bank USA, National Association, as trustee.

1     This Confirmation evidences a complete binding agreement between the
      parties as to the terms of the Transaction to which this Confirmation
      relates. In addition, the parties agree that for the purposes of this
      Transaction, this Confirmation will supplement, form a part of, and be
      subject to an agreement in the form of the 1992 ISDA Master Agreement
      (Multicurrency-Cross Border) as if the parties had executed an agreement
      in such form (but without any Schedule except for the elections noted
      below) on the Trade Date of the Transaction (such agreement, the "Form
      Master Agreement"). In the event of any inconsistency between the
      provisions of the Form Master Agreement and this Confirmation, this
      Confirmation will prevail for the purpose of this Transaction.

      Each party represents to the other party and will be deemed to represent
      to the other party on the date on which it enters into this Transaction
      that (absent a written agreement between the parties that expressly
      imposes affirmative obligations to the contrary for that Transaction):

      (a)   Non-Reliance

            Party A has made its own independent decisions to enter into this
            Transaction and as to whether this Transaction is appropriate or
            proper for it based upon its own judgment and upon advice from such
            advisors as it has deemed necessary. Party B is acting, not
            individually or personally, but as Master Servicer and has been
            directed to enter into this Agreement by, and on behalf of, the
            Issuing Entity; the Issuing Entity has made its own independent
            decisions to enter into this Transaction and as to whether this
            Transaction is appropriate or proper for it based upon its own
            judgment and upon advice from such advisors as it has deemed
            necessary. Each party is not relying on any communication (written
            or oral) of the other party as investment advice or as a
            recommendation to enter into this Transaction; it being understood
            that information and explanations related to the terms and
            conditions of this Transaction shall not be considered investment
            advice or a recommendation to enter into this Transaction. Further,
            such party has not received from the other party any assurance or
            guarantee as to the expected results of this Transaction.

      (b)   Evaluation and Understanding

            It is capable of evaluating and understanding (on its own behalf or
            through independent professional advice), and understands and
            accepts, the terms, conditions and risks of this Transaction. It is
            also capable of assuming, and assumes, the financial and other risks
            of this Transaction.

      (c)   Status of Parties

            The other party is not acting as an agent, fiduciary or advisor for
            it in respect of this Transaction.

2     The  terms of the  particular  Transaction  to which  this  Confirmation
      relates are as follows:

 Notional Amount:                         With respect to any Calculation Period
                                          the amount set forth on Schedule A
                                          attached hereto. Trade Date: May 24,
                                          2007

 Effective Date:                          May 24, 2007

 Termination Date:                        May 25, 2017

 Fixed Amounts:

 Fixed Rate Payer:                        Citigroup Global Markets Inc. on
                                          behalf of Party B

 Fixed Rate Payer Payment Date:           May 24, 2007

 Fixed Amount:                            USD [      ]

 Floating Amounts:

 Floating Rate Payer:                     Party A

 Cap Rate:                                6.07%

 Floating Rate Payer Period
 End Dates:                               The 25th day of each month of each
                                          year, commencing on June 25, 2007,
                                          through and including the Termination
                                          Date, subject to no adjustment.

 Floating Rate Payer Payment Dates:       Early Payment shall be applicable. The
                                          Floating Rate Payer Payment Date shall
                                          be two Business Days prior to each
                                          Floating Rate Payer Period End Date.

 Floating Rate for Initial  Calculation   To be determined.
 Period:

 Floating Rate Option:                    USD-LIBOR-BBA; provided, however, if
                                          the Floating Rate Option for any
                                          Calculation Period is greater than
                                          7.57% then the Floating Rate Option
                                          for such Calculation Period shall be
                                          deemed to be 7.57%.

 Floating Amount:                         To be determined in accordance with
                                          the following formula: the greater of
                                          (i) (Floating Rate Option - Cap Rate)
                                          * Notional Amount * Floating Rate Day
                                          Count Fraction and (ii) zero.

 Designated Maturity:                     1 Month

 Initial Floating Rate:                   TBD

 Spread:                                  None

 Floating Rate Day Count Fraction:        30/360

 Reset Dates:                             The first day of each Calculation
                                          Period.

 Business Days for Payments:              New York

 Calculation Agent:                       Party A; provided, however, that if an
                                          Event of Default occurs with respect
                                          to Party A, then Party B shall be
                                          entitled to appoint a financial
                                          institution which would qualify as a
                                          Reference Market-Maker to act as
                                          Calculation Agent (such financial
                                          institution subject to Party A's
                                          consent); provided further that in no
                                          event shall the Calculation Agent be
                                          Party B.

3     Form Master Agreement

      (a)   "Specified Entity" means, in relation to Party A, for the purpose of
            Section 5(a)(v), Section 5(a)(vi), Section 5(a)(vii) and Section
            5(b)(iv): Not Applicable.

      (b)   "Specified Entity" means, in relation to Party B, for the purpose of
            Section 5(a)(v), Section 5(a)(vi), Section 5(a)(vii) and Section
            5(b)(iv): Not Applicable.

      (c)   "Specified Transaction" is not applicable to Party A or Party B for
            any purpose, and accordingly, Section 5(a)(v) shall not apply to
            Party A or Party B.

      (d)   The "Breach of Agreement" provisions of Section 5(a)(ii) of the
            Agreement will be inapplicable to Party A and Party B.

      (e)   The "Misrepresentation" provisions of Section 5(a)(v) of the
            Agreement will be inapplicable to Party A and Party B.

      (f)   The "Cross Default" provisions of Section 5(a)(vi) will not apply to
            Party A or Party B.

      (g)   The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the
            Form Master Agreement will not apply to Party A or to Party B.

      (h)   The "Automatic Early Termination" provision of Section 6(a) of the
            Form Master Agreement will not apply to Party A or to Party B.

      (i)   The Form Master Agreement will be governed by, and construed in
            accordance with, the laws of the State of New York without reference
            to its conflict of laws provisions (except for Sections 5-1401 and
            5-1402 of the New York General Obligations Law).

      (j)   The phrase "Termination Currency" means United States Dollars.

      (k)   For the purpose of Section 6(e) of the Form Master Agreement, Market
            Quotation and Second Method will apply.

4     Recording of Conversations

      Each party to this Transaction acknowledges and agrees to the tape (and/or
      other electronic) recording of conversations between the parties to this
      Transaction whether by one or other or both of the parties or their
      agents.

5     Credit Support Document

      In relation to Party A:             Credit Support Annex dated the date
                                          hereof and duly executed and delivered
                                          by Party A and Party B.

      In relation to Party B:             Not Applicable.

6     Credit Support Provider

      In relation to Party A:             Not Applicable, unless Party A has a
                                          person guarantee its payment
                                          obligations under this Agreement in
                                          order to remedy a Ratings Event, in
                                          which event such person shall be a
                                          Credit Support Provider.

      In relation to Party B:             Not Applicable.

7     Account Details

      Account for payments to Party A:

            Correspondent: BARCLAYS BANK PLC NEW YORK
            FEED: 026002574
            Beneficiary:  BARCLAYS SWAPS
            Beneficiary Account: 050-01922-8

      Account for payments to Party B:

            Bank: Wells Fargo Bank, N.A.
            ABA#: 121000248
            Account Name: SAS Clearing
            Acct #: 3970771416
            FFC to:  53152301 - Reference WFALT 2007-PA2 Class II- A-1 Reserve
                     Fund

8     Offices

      The Office of Party A for this Transaction is:

            London

      The Office of Party B for this Transaction is:

            Columbia, MD

9     Additional Provisions

      Fully-Paid Transactions

            Notwithstanding the terms of Sections 5 and 6 of the Form Master
            Agreement, if at any time and so long as Party B shall have
            satisfied in full all its payment and delivery obligations under
            Section 2(a)(i) of the Form Master Agreement and shall at the time
            have no future payment or delivery obligations, whether absolute or
            contingent, under such Section, then unless Party A is required
            pursuant to appropriate proceedings to return to Party B or
            otherwise returns to Party B (upon demand of Party B, or otherwise)
            any portion of any such payment or delivery: (i) the occurrence of
            an event described in Section 5(a) of the Form Master Agreement with
            respect to Party B shall not constitute an Event of Default or a
            Potential Event of Default with respect to Party B as the Defaulting
            Party; and (ii) Party A shall be entitled to designate an Early
            Termination Date pursuant to Section 6 of the Form Master Agreement
            only as a result of the occurrence of a Termination Event set forth
            in (i) either Section 5(b)(i) or 5(b)(ii) of the Form Master
            Agreement with respect to Party A as the Affected Party or (ii)
            Section 5(b)(iii) of the Form Master Agreement with respect to Party
            A as the Burdened Party.

10    Compliance with Regulation AB

      (a)   Party A acknowledges that for so long as there are reporting
            obligations with respect to this Transaction under Regulation AB,
            the Depositor, acting on behalf of the Issuing Entity, is required
            under Regulation AB under the Securities Act of 1933, as amended,
            and the Securities Exchange Act of 1934, as amended ("Regulation
            AB"), to disclose certain information set forth in Regulation AB
            regarding Party A or its group of affiliated entities, if
            applicable, depending on the aggregate "significance percentage" of
            this Agreement and any other derivative contracts between Party A or
            its group of affiliated entities, if applicable, and Party B, as
            calculated from time to time in accordance with Item 1115 of
            Regulation AB.

      (b)   If the Depositor determines, reasonably and in good faith, that the
            significance percentage of this Agreement has increased to eight (8)
            percent or more but less than eighteen (18) percent, then the
            Depositor may request on the date of such determination (or, if such
            date of determination is not a Business Day, the immediately
            following Business Day) from Party A the same information set forth
            in Item 1115(b)(1) of Regulation AB that would have been required if
            the significance percentage had in fact increased to ten (10)
            percent, along with any necessary auditors' consent (such request, a
            "10% Cap Disclosure Request" and such requested information, subject
            to the last sentence of this paragraph, is the "10% Cap Financial
            Disclosure"). Party B (or the Depositor on its behalf) shall provide
            Party A with the calculations and any other information reasonably
            requested by Party A with respect to the Depositor's determination
            that led to the 10% Cap Disclosure Request. The parties hereto
            further agree that the 10% Cap Financial Disclosure provided to meet
            the 10% Cap Disclosure Request may be, solely at Party A's option,
            either the information set forth in Item 1115(b)(1) or Item
            1115(b)(2) of Regulation AB.

      (c)   Upon the occurrence of a 10% Cap Disclosure Request, Party A, at its
            own expense, shall (i) provide the Depositor with the 10% Cap
            Financial Disclosure, (ii) subject to Rating Agency Confirmation,
            secure another entity to replace Party A as party to this Agreement
            on terms substantially similar to this Agreement which entity is
            able to (A) provide the 10% Cap Financial Disclosure and (B) provide
            an indemnity to the Depositor, reasonably satisfactory to the
            Depositor, in relation to the 10% Cap Financial Disclosure or (iii)
            subject to Rating Agency Confirmation, obtain a guaranty of Party
            A's obligations under this Agreement from an affiliate of Party A
            that is able to (A) provide the 10% Cap Financial Disclosure, such
            that disclosure provided in respect of the affiliate will, in the
            judgment of counsel to the Depositor, satisfy any disclosure
            requirements applicable to Party A, and cause such affiliate to
            provide 10% Cap Financial Disclosure and (B) provide an indemnity to
            the Depositor, reasonably satisfactory to the Depositor, in relation
            to the 10% Cap Financial Disclosure. Any such 10% Cap Financial
            Disclosure provided pursuant to this paragraph (c) shall be in a
            form suitable for conversion to the format required for filing by
            the Depositor with the Securities and Exchange Commission via the
            Electronic Data Gathering and Retrieval System (EDGAR). If permitted
            by Regulation AB, any required 10% Cap Financial Disclosure may be
            provided by incorporation by reference from reports filed pursuant
            to the Securities Exchange Act.

      (d)   If the Depositor determines, reasonably and in good faith, that the
            significance percentage of this Agreement has increased to eighteen
            (18) percent or more, then the Depositor may request on the date of
            such determination (or, if such date of determination is not a
            Business Day, the immediately following Business Day) from Party A
            the same information set forth in Item 1115(b)(2) of Regulation AB
            that would have been required if the significance percentage had in
            fact increased to twenty (20) percent, along with any necessary
            auditors consent (such request, a "20% Cap Disclosure Request" and
            such requested information is the "20% Cap Financial Disclosure").
            Party B (or the Depositor on its behalf) shall provide Party A with
            the calculations and any other information reasonably requested by
            Party A with respect to the Depositor's determination that led to
            the 20% Cap Disclosure Request.

      (e)   Upon the occurrence of a 20% Cap Disclosure Request, Party A, at its
            own expense, shall (i) provide the Depositor with the 20% Cap
            Financial Disclosure, (ii) subject to Rating Agency Confirmation,
            secure another entity to replace Party A as party to this Agreement
            on terms substantially similar to this Agreement which entity is
            able to (A) provide the 20% Cap Financial Disclosure and (B) provide
            an indemnity to the Depositor, reasonably satisfactory to the
            Depositor, in relation to the 20% Cap Financial Disclosure or (iii)
            subject to Rating Agency Confirmation, obtain a guaranty of Party
            A's obligations under this Agreement from an affiliate of Party A
            that is able to (A) provide the 20% Cap Financial Disclosure, such
            that disclosure provided in respect of the affiliate will, in the
            judgment of counsel to the Depositor, satisfy any disclosure
            requirements applicable to Party A, and cause such affiliate to
            provide 20% Cap Financial Disclosure and (B) provide an indemnity to
            the Depositor, reasonably satisfactory to the Depositor, in relation
            to the 20% Cap Financial Disclosure. Any such 20% Cap Financial
            Disclosure provided pursuant to this paragraph (e) shall be in a
            form suitable for conversion to the format required for filing by
            the Depositor with the Securities and Exchange Commission via the
            Electronic Data Gathering and Retrieval System (EDGAR). If permitted
            by Regulation AB, any required 20% Cap Financial Disclosure may be
            provided by incorporation by reference from reports filed pursuant
            to the Securities Exchange Act.

11    Additional Termination Events

      The following Additional Termination Events will apply:

      (a)   a Ratings Event has occurred and Party A has not, within thirty (30)
            days, complied with Section 12 below, then an Additional Termination
            Event shall have occurred with respect to Party A and Party A shall
            be the sole Affected Party with respect to such Additional
            Termination Event.

      (b)   If (A) the Depositor still has a reporting obligation with respect
            to this Transaction pursuant to Regulation AB and (B) Party A has
            not, within 30 days after receipt of a 10% Cap Disclosure Request
            complied with the provisions set forth in clauses (b) and (c) of
            Paragraph 10 above (provided that if the significance percentage is
            10% or more and less than 20% when the 10% Cap Disclosure Request is
            made or reaches 10% after a 10% Cap Disclosure Request has been made
            to Party A, Party A must comply with the provisions set forth in
            clauses (b) and (c) of Paragraph 10 above within 3 calendar days of
            Party A being informed of the significance percentage reaching 10%
            or more), then an Additional Termination Event shall have occurred
            with respect to Party A and Party A shall be the sole Affected Party
            with respect to such Additional Termination Event.

      (c)   If (A) the Depositor still has a reporting obligation with respect
            to this Transaction pursuant to Regulation AB and (B) Party A has
            not, within 30 days after receipt of a 20% Cap Disclosure Request
            complied with the provisions set forth in clauses (d) and (e) of
            Paragraph 10 above (provided that if the significance percentage is
            20% or more when the 20% Cap Disclosure Request is made or reaches
            20% after a 20% Cap Disclosure Request has been made to Party A,
            Party A must comply with the provisions set forth in clauses (d) and
            (e) of Paragraph 10 above within 3 calendar days of Party A being
            informed of the significance percentage reaching 20% or more), then
            an Additional Termination Event shall have occurred with respect to
            Party A and Party A shall be the sole Affected Party with respect to
            such Additional Termination Event.

12    Ratings Event

      If a Ratings Event (as defined below) occurs with respect to Party A (or
      any applicable Credit Support Provider), then Party A shall, at its own
      expense, (i) assign this Transaction within thirty (30) days of such
      Ratings Event to a third party that meets or exceeds, or as to which any
      applicable credit support provider meets or exceeds, the Approved Ratings
      Thresholds (as defined below) on terms substantially similar to this
      Confirmation, which party is approved by Party B, which approval shall not
      be unreasonably withheld, (ii) obtain a guaranty of, or a contingent
      agreement of, another person with the Approval Rating Thresholds to honor
      Party A's obligations under this Agreement, provided that such other
      person is approved by Party B, such approval not to be unreasonably
      withheld, (iii) post collateral under the Credit Support Annex, or (iv)
      establish any other arrangement satisfactory to Fitch Ratings ("Fitch"),
      Standard & Poor's, a division of The McGraw Hill Companies ("S&P") and
      Moody's Investor Service, Inc. ("Moody's"), which will be sufficient to
      restore the immediately prior ratings of the Certificates. For purposes of
      this Transaction, a "Ratings Event" shall occur with respect to Party A
      (or any applicable credit support provider) if its short term unsecured
      and unsubordinated debt rating is withdrawn or reduced below "F1" by
      Fitch, its short term unsecured and unsubordinated debt rating is
      withdrawn or reduced below "A-1" by S&P, or its short-term unsecured
      unsubordinated debt rating is withdrawn or reduced below "P-1" by Moody's
      (including in connection with a merger, consolidation or other similar
      transaction by Party A or any applicable credit support provider) such
      ratings being referred to herein as the "Approved Rating Thresholds,"
      unless, within thirty (30) days hereafter, each of Fitch and Moody's has
      reconfirmed the ratings of the Certificates, as applicable, which was in
      effect immediately prior thereto (such confirmation a "Rating Agency
      Confirmation").

13    Waiver of Right to Trial by Jury

      EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY
      WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
      TRANSACTION.

14    Eligible Contract Participant

      Each party represents to the other party that it is an "eligible contract
      participant" as defined in Section 1a(12) of the U.S. Commodity Exchange
      Act, as amended.

15    Multibranch Party

      For purpose of Section 10(c) of the Form Master Agreement: (a) Party A is
      a Multibranch Party; and (b) Party B is not a Multibranch Party.

16    Other provisions

      (d)   Addresses for notices. As set forth on page 1 hereof.

      (e)   For the purpose of Section 13(c) of the Form Master Agreement: (i)
            Party A appoints as its Process Agent, not applicable; and (ii)
            Party B appoints as its Process Agent, not applicable.

      (f)   Section 12(a)(ii) of the Form Master Agreement is deleted in its
            entirety.

      (g)   Documents to be Delivered. For the purpose of Section 4(a) of the
            Form Master Agreement:

<TABLE>
<CAPTION>
Party required       Form/Document/Certificate                            Date by which to be delivered      Covered by Section 3(d)
to deliver document                                                                                          Representation
<S>                  <C>                                                  <C>                                <C>

Party A and Party B  A  certificate of an authorized officer of the       Upon the execution and                  Yes
                     party, as to the incumbency and authority of the     delivery of this Confirmation
                     respective officers of the party signing this
                     Confirmation

Party A              Legal opinion satisfactory in form and               Upon execution and delivery of          No
                     substance to Party B relating to the                 this Confirmation
                     enforceability of Party A's obligations under
                     this Agreement

Party B              The Pooling and Servicing Agreement                  Within 30 days of May 24, 2007          Yes
</TABLE>

(h)   Limitation of Liability

      It is expressly understood and agreed by the parties hereto that (a) this
      letter agreement is executed and delivered by Wells Fargo Bank, N.A., not
      individually or personally but solely as the Master Servicer on behalf of
      the Issuing Entity, in the exercise of the powers and authority conferred
      and vested in it under the Pooling and Servicing Agreement, (b) the
      representations, undertakings and agreements herein are made on the part
      of the Issuing Entity and intended not as personal representations,
      undertakings and agreements by Wells Fargo Bank, N.A. but are made and
      intended for the purpose of binding only the Issuing Entity, (c) nothing
      herein contained shall be construed as creating any liability on Wells
      Fargo Bank, N.A., individually or personally, to perform any covenant
      either expressed or implied contained herein, all such liability, if any,
      being expressly waived by the parties who are signatories to this letter
      agreement and by any person claiming by, through or under such parties,
      and (d) under no circumstances shall Wells Fargo Bank, N.A. in its
      individual capacity be personally liable for the payment of any
      indebtedness or expenses of the Issuing Entity or be personally liable for
      the breach or failure of any obligation, representation, warranty or
      covenant made or undertaken under this letter agreement.

(i)   This letter agreement may be executed in several counterparts, each of
      which shall be deemed an original but all of which together shall
      constitute one and the same instrument.

(j)   USA PATRIOT Act Notice. Party A hereby notifies Party B that pursuant to
      the requirements of the USA PATRIOT ACT (Title III of Pub. L. 107-56
      (signed into law October 26, 2001)), as amended (the "Act"), it is
      required to obtain, verify and record information that identifies Party B,
      which information includes the name and address of Party B and other
      information that will allow Party A to identify Party B in accordance with
      the Act.

(k)   Proceedings

      Party A shall not institute against or cause any other person to institute
      against, or join any other person in instituting against, Party B, any
      bankruptcy, reorganization, arrangement, insolvency or liquidation
      proceedings, or other proceedings under any federal or state bankruptcy,
      dissolution or similar law, for a period of one year and one day following
      indefeasible payment in full of the Certificates, provided that nothing
      herein shall preclude, or be deemed to estop Party A from taking any
      action in any case or proceeding voluntarily filed or commenced by or on
      behalf of Party B or in any involuntary case or proceeding after it has
      been commenced.

(l)   Set-off

      Notwithstanding any provision of this Agreement (other than 2(c) and 6(e))
      or any other existing or future agreement, each party irrevocably waives
      any and all rights it may have to set-off, net, recoup or otherwise
      withhold or suspend or condition payment or performance of any obligation
      between it and the other party hereunder against any obligation between it
      and the other party under any other agreements.

(m)   Section 1(c)

      For purposes of Section 1(c) of the Form Master Agreement, this
      Transaction shall be the sole Transaction under the Agreement.

(n)   Transfer and Amendment

      Subject to Part 13 herein, no transfer, amendment, waiver, supplement,
      assignment or other modification of this Transaction shall be permitted by
      either party unless the Rating Agency Condition has been satisfied.

                  [remainder of page intentionally left blank]

<PAGE>

The time of dealing will be confirmed by Barclays upon written request. Barclays
is regulated by the Financial Services Authority. Barclays is acting for its own
account in respect of this Transaction.

Please confirm that the foregoing correctly sets forth all the terms and
conditions of our agreement with respect to the Transaction by responding within
three (3) Business Days by promptly signing in the space provided below and both
(i) faxing the signed copy to Incoming Transaction Documentation, Barclays
Capital Global OTC Transaction Documentation & Management, Global Operations,
Fax +(44) 20-7773-6810/6857, Tel +(44) 20-7773-6901/6904/6965, and (ii) mailing
the signed copy to Barclays Bank PLC, 5 The North Colonnade, Canary Wharf,
London E14 4BB, Attention of Incoming Transaction Documentation, Barclays
Capital Global OTC Transaction Documentation & Management, Global Operation.
Your failure to respond within such period shall not affect the validity or
enforceability of the Transaction against you. This facsimile shall be the only
documentation in respect of the Transaction and accordingly no hard copy
versions of this Confirmation for this Transaction shall be provided unless the
Counterparty requests.

For and on behalf of              For and on behalf of
BARCLAYS BANK PLC                 Wells Fargo Bank, N.A., not individually but
                                  solely as master servicer under the Pooling
                                  and Servicing Agreement on behalf of
                                  Wells Fargo Alternative Loan 2007-PA2 Trust

 /s/ Shain Kalmanowitz            /s/ Amy Doyle
-----------------------------     ---------------------------------------------
Name: Shain Kalmanowitz            Name:Amy Doyle
Title: Authorized Signatory        Title:   Vice President
Date: May 24, 2007                 Date:  May 24, 2007

Barclays Bank PLC and its Affiliates, including Barclays Capital Inc., may share
with each other information, including non-public credit information, concerning
its clients and prospective clients. If you do not want such information to be
shared, you must write to the Director of Compliance, Barclays Bank PLC, 200
Park Avenue, New York, NY 10166.

<PAGE>
Schedule A to the Confirmation dated as of May 24, 2007
Reference: 1753568B/1753567B

    Payment Number            Payment Date            Notional Amount (USD):
           1                    6/25/2007                   314,442,000
           2                    7/25/2007                   311,860,213
           3                    8/25/2007                   308,929,342
           4                    9/25/2007                   305,654,226
           5                   10/25/2007                   302,040,748
           6                   11/25/2007                   298,096,110
           7                   12/25/2007                   293,828,450
           8                    1/25/2008                   289,247,416
           9                    2/25/2008                   284,363,318
          10                    3/25/2008                   279,189,376
          11                    4/25/2008                   273,742,727
          12                    5/25/2008                   268,156,747
          13                    6/25/2008                   262,678,011
          14                    7/25/2008                   257,304,475
          15                    8/25/2008                   252,034,135
          16                    9/25/2008                   246,865,023
          17                   10/25/2008                   241,795,212
          18                   11/25/2008                   236,822,807
          19                   12/25/2008                   231,945,954
          20                    1/25/2009                   227,162,830
          21                    2/25/2009                   222,471,648
          22                    3/25/2009                   217,870,656
          23                    4/25/2009                   213,358,135
          24                    5/25/2009                   208,932,398
          25                    6/25/2009                   204,591,790
          26                    7/25/2009                   200,334,688
          27                    8/25/2009                   196,159,499
          28                    9/25/2009                   192,064,662
          29                   10/25/2009                   188,048,644
          30                   11/25/2009                   184,109,941
          31                   12/25/2009                   180,247,080
          32                    1/25/2010                   176,458,614
          33                    2/25/2010                   172,743,122
          34                    3/25/2010                   169,099,214
          35                    4/25/2010                   165,525,524
          36                    5/25/2010                   162,020,712
          37                    6/25/2010                   158,583,463
          38                    7/25/2010                   155,212,489
          39                    8/25/2010                   151,906,525
          40                    9/25/2010                   148,664,331
          41                   10/25/2010                   145,484,689
          42                   11/25/2010                   142,366,405
          43                   12/25/2010                   139,308,309
          44                    1/25/2011                   136,309,251
          45                    2/25/2011                   133,368,105
          46                    3/25/2011                   130,483,765
          47                    4/25/2011                   127,655,147
          48                    5/25/2011                   124,881,187
          49                    6/25/2011                   122,160,841
          50                    7/25/2011                   119,493,085
          51                    8/25/2011                   116,876,916
          52                    9/25/2011                   114,311,348
          53                   10/25/2011                   111,795,415
          54                   11/25/2011                   109,328,169
          55                   12/25/2011                   106,908,679
          56                    1/25/2012                   104,536,035
          57                    2/25/2012                   102,209,341
          58                    3/25/2012                   99,927,719
          59                    4/25/2012                   97,690,309
          60                    5/25/2012                   95,496,265
          61                    6/25/2012                   93,344,760
          62                    7/25/2012                   91,322,348
          63                    8/25/2012                   89,340,254
          64                    9/25/2012                   87,397,700
          65                   10/25/2012                   85,493,920
          66                   11/25/2012                   83,628,166
          67                   12/25/2012                   81,799,702
          68                    1/25/2013                   80,007,806
          69                    2/25/2013                   78,251,771
          70                    3/25/2013                   76,530,903
          71                    4/25/2013                   74,844,521
          72                    5/25/2013                   73,191,957
          73                    6/25/2013                   71,572,556
          74                    7/25/2013                   70,012,659
          75                    8/25/2013                   68,484,260
          76                    9/25/2013                   66,986,742
          77                   10/25/2013                   65,519,504
          78                   11/25/2013                   64,081,954
          79                   12/25/2013                   62,673,514
          80                    1/25/2014                   61,293,616
          81                    2/25/2014                   59,941,700
          82                    3/25/2014                   58,617,222
          83                    4/25/2014                   57,319,644
          84                    5/25/2014                   56,048,441
          85                    6/25/2014                   54,803,097
          86                    7/25/2014                   53,631,955
          87                    8/25/2014                   52,484,676
          88                    9/25/2014                   51,360,786
          89                   10/25/2014                   50,259,824
          90                   11/25/2014                   49,181,335
          91                   12/25/2014                   48,124,875
          92                    1/25/2015                   47,090,006
          93                    2/25/2015                   46,076,302
          94                    3/25/2015                   45,083,343
          95                    4/25/2015                   44,110,717
          96                    5/25/2015                   43,158,020
          97                    6/25/2015                   42,224,859
          98                    7/25/2015                   41,353,058
          99                    8/25/2015                   40,498,840
          100                   9/25/2015                   39,661,858
          101                  10/25/2015                   38,841,770
          102                  11/25/2015                   38,038,240
          103                  12/25/2015                   37,250,940
          104                   1/25/2016                   36,479,547
          105                   2/25/2016                   35,723,747
          106                   3/25/2016                   34,983,230
          107                   4/25/2016                   34,257,691
          108                   5/25/2016                   33,546,835
          109                   6/25/2016                   32,850,368
          110                   7/25/2016                   32,202,825
          111                   8/25/2016                   31,567,864
          112                   9/25/2016                   30,945,243
          113                  10/25/2016                   30,334,723
          114                  11/25/2016                   29,736,072
          115                  12/25/2016                   29,149,061
          116                   1/25/2017                   28,573,407
          117                   2/25/2017                   28,008,951
          118                   3/25/2017                   27,455,191
          119                   4/25/2017                   26,911,633
          120                   5/25/2017                   26,372,247

<PAGE>

                                    ISDA(R)

            International Swaps and Derivatives Association, Inc.

                             CREDIT SUPPORT ANNEX

                                     to the

                    ISDA Master Agreement deemed entered into
                            dated as of May 24, 2007
                                     between

   BARCLAYS BANK PLC               WELLS FARGO BANK, N.A., not individually but
                                   solely as master servicer under the Pooling
                                   and Servicing Agreement on behalf of Wells
                                   Fargo Alternative Loan 2007-PA2 Trust

----------------------------- and  ---------------------------------------------
         ("Party A")                               ("Party B")

This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.

Paragraph 13.

(a)   Security Interest for "Obligations". The term "Obligations" as used in
      this Annex includes the following additional obligations:

            With respect to Party A: None.

            With respect to Party B: None.

(b)   Credit Support Obligations.

      (i)   Delivery Amount, Return Amount and Credit Support Amount.

            (A)   "Delivery Amount" has the meaning specified in Paragraph 3(a)
                  , except that the words "upon a demand made by the Secured
                  Party on or promptly following a Valuation Date" shall be
                  deleted and replaced with the words "not later than the close
                  of business on the next Local Business Day following a
                  Valuation Date"; and

            (B)   "Return Amount" has the meaning specified in Paragraph 3(b).

            (C)   "Credit Support Amount". shall not have the meaning specified
                  in Paragraph 3(b) and, instead, will have the following
                  meaning:

                  "Credit Support Amount" means, (a) for any Valuation Date
                  on which a Ratings Event (as defined in the Agreement) has
                  occurred and is continuing and Party A has not otherwise
                  complied with Section 12 of this Agreement, the Secured
                  Party's Modified Exposure for that Valuation Date.

      (ii)  Eligible Credit Support. On any date, the following items will
            qualify as "Eligible Credit Support" for each party:

<TABLE>
<CAPTION>
                                                                                   Valuation
                                                                                   Percentage

<S>   <C>                                                                          <C>
(A)   cash in U.S Dollars                                                          100%

(B)   negotiable debt obligations issued after 18 July 1984 by the U.S. Treasury   98.0%
      Department having a residual maturity on such date of less than 1 year
      (with local and foreign currency issuer ratings of Moody's Aa2 and
      S&P AA or above)

(C)   negotiable debt obligations issued after 18 July 1984 by the U.S. Treasury   To be agreed
      Department having a residual maturity on such date equal to or greater than  between Party A and
      1 year but less than 5 years (with local and ratings of Moody's Aa2 and      Party B with the
        S&P AA or approval of the above)                                           Rating Agencies

(D)   negotiable debt obligations issued after l8 July 1984 by the U.S. Treasury   To be agreed
      Department having a residual maturity on such date equal to or               between Party A and
      greater than 5 years but less than 10 years (with local and                  Party B with the
      foreign currency issuer ratings of Moody's Aa2 and S&P AA or                 approval of the
      above)                                                                       Rating Agencies

(E)   negotiable debt obligations of the Government National Mortgage              To be agreed
      Association, the Federal National Mortgage Association, the Federal          between Party A and
       Home Loan Mortgage Corporation, the Student Loan Marketing Association      Party B with the
      or a Federal Home Loan Bank (all entities ated Moody's Aal and S&P AA+       approval of the
      ror above) with a residual  maturity on such date equal to or greater        Rating Agencies
      than 1 year but less than 3 years.

(F)   negotiable debt obligations of the Government National Mortgage              To be agreed
      Association, the Federal National Mortgage Association, the Federal Home     between Party A and
      Loan Mortgage Corporation, the Student Loan Marketing Association or a       Party B with the
      Federal Home Loan Bank (all entries  rated Moody's Aa 1 and S&P AA+ or       approval of the
      above) with a residual maturity on such date equal to or greater than        Rating Agencies
      3 years but less than 5 years.

(G)   negotiable debt obligations of the Government National Mortgage              To be agreed
      Association, the Federal National Mortgage Association, the Federal Home     between Party A and
      Loan Mortgage Corporation, the Student Loan Marketing Association or a       Party B with the
      Federal Home Loan Bank (all entries rated Moody's Aal and S&P AA+ or above)  approval of the
      with a residual maturity on such date equal to or greater than 5 years but   Rating Agencies
      less than 7 years.

(H)   negotiable debt obligations of the Government National Mortgage              To be agreed
      Association, the Federal National Mortgage Association, the Federal Home     between Party A and
      Loan Mortgage Corporation, the Student Loan Marketing Association or a       Party B with the
      Federal Home Loan Bank (all entries rated Moody's Aal and S&P AA+ or above)  approval of the
      with a residual maturity on such date equal to or greater than 7 years but   Rating Agencies
      less than 10 years.
</TABLE>

For the avoidance of doubt, where negotiable debt obligations are rated by only
one of the above relevant rating agencies, the rating applied will be based on
the rating of that agency. Notwithstanding the foregoing, the Eligible
Collateral referenced above may only be posted if S&P has assigned a rating to
such Eligible Collateral.

Where the ratings of the relevant agencies differ with respect to the same
negotiable debt obligation, the lower of the ratings shall apply.

In addition, upon a Ratings Event, Party A shall agree the Valuation Percentage
in relation to (C) through (H) above with the relevant rating agency, which
shall be S&P, Moody's and Fitch (to the extent such ratings agency has provided
a rating for the underlying Certificates); provided, however, that if Party A is
required to post collateral in accordance with the terms of this Agreement it
shall post only (A) and (B) above until such time as the Valuation Percentages
are agreed.

      (iii) Other Eligible Support. Such Other Eligible Support as the Pledgor
            may designate; provided, at the expense of the Pledgor, the prior
            written consent of the relevant rating agency, which shall be S&P,
            Moody's and Fitch (to the extent such ratings agency has provided a
            rating for the underlying Certificates)), shall have been obtained.
            For the avoidance of doubt there are no items which qualify as Other
            Eligible Support as of the date of this Annex.

      (iv)  Thresholds.

            (A)   "Independent Amount" means zero.

            (B)   "Threshold" means for Party A:

                  1.    infinity, unless (i) a Ratings Event occurs and is
                        continuing and (ii) Party A has not otherwise complied
                        with Section 12 of this Agreement, then its Threshold
                        shall be zero, or

                  2.    in the event that Party A has otherwise complied with
                        Section 12 of this Agreement, its Threshold shall
                        continue to be infinity.

                  "Threshold" means, for Party B: infinity

            (C)   "Minimum Transfer Amount" means USD 100,000, provided,
                  however, with respect to the Secured Party at any time when
                  the Secured Party is a Defaulting Party, "Minimum Transfer
                  Amount" means zero.

            (D)   Rounding: The Delivery Amount and the Return Amount will not
                  be rounded.

(c)   Valuation and Timing.

      (i)   "Valuation Agent" means Party A. The valuation agent's calculations
            shall be made in accordance with market practices using commonly
            accepted third party sources such as Bloomberg or Reuters.

      (ii)  "Valuation Date" means each Local Business Day which, if treated as
            a Valuation Date, would result in a Delivery Amount or Return
            Amount.

      (iii) "Valuation Time" means the close of business in the city of the
            Valuation Agent on the Local Business Day before the Valuation Date
            or date of calculation, as applicable, provided that the
            calculations of Value and Exposure will be made as of approximately
            the same time on the same date.

      (iv)  "Notification Time" means 11:00 a.m., New York time, on a Local
            Business Day.

(d)   Conditions Precedent and Secured Party's Rights and Remedies. The
      following Termination Event will be a "Specified Condition" for the
      party specified (that party being the Affected Party if the Termination
      Event occurs with respect to that party): None.

(e)   Substitution.

      (i)   "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).

      (ii)  Consent. The Pledgor is not required to obtain the Secured Party's
            consent for any substitution purusant to Paragraph 4(d).

(f)   Dispute Resolution.

      (i)   "Resolution Time" means 1:00 p.m. New York time on the Local
            Business Day following the date on which the notice of the dispute
            is given under Paragraph 5.

            Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), on any
            date, the Value of Eligible Credit Support will be calculated as
            follows:

            For Eligible Credit Support comprised of cash, the amount of such
            cash.

            For Eligible Collateral comprising securities; the sum of (a)(x)
            the last bid price on such date for such securities on the
            principal national securities exchange on which such securities
            are listed, multiplied by the applicable Valuation Percentage or
            (y) where any such securities are not listed on a national
            securities exchange, the bid price for such securities quoted as
            at the close of business on such date by any principal market
            maker for such securities chosen by the Valuation Agent,
            multiplied by the applicable Valuation Percentage or (z) if no
            such bid price is listed or quoted for such date, the last bid
            price listed or quoted (as the case may be), as of the day next
            preceding such date on which such prices were available;
            multiplied by the applicable Valuation Percentage; plus (b) the
            accrued interest on such securities (except to the extent that
            such interest shall have been paid to the Pledgor pursuant to
            Paragraph 6(d)(ii) or included in the applicable price referred
            to in subparagraph (a) above) as of such date.

      (ii)  Alternative. The provisions of Paragraph 5 will apply; provided that
            the obligation of the appropriate party to deliver the undisputed
            amount to the other party will not arise prior to the time that
            would otherwise have applied to the Transfer pursuant to, or deemed
            made, under Paragraph 3 if no dispute had arisen.

(g)   Holding and Using Posted Collateral.

      (i)   Eligibility to Hold Posted Collateral; Custodians.

            Party B is not and will not be entitled to hold Posted
            Collateral. Party B's Custodian will be entitled to hold Posted
            Collateral pursuant to Paragraph 6(b); provided that the
            Custodian for Party B shall be the same banking institution that
            acts as Master Servicer for the Certificates (as defined in the
            Pooling and Servicing Agreement) for Party B.

            Initially, the Custodian for Party B is : Wells Fargo Bank, N.A.

      (ii)  Use of Posted Collateral. The provisions of Paragraph 6(c) will not
            apply to Party B; therefore, Party B will not have any of the rights
            specified in Paragraph 6(c)(i) or 6 (c)(ii); provided, however, that
            Party B or its Custodian shall have the right to register any Posted
            Collateral that constitutes a book-entry security in the name of its
            Custodian and provided, further that the Trustee shall invest Cash
            Posted Credit Support in such investments as designated by Party A,
            with losses (net of gains) incurred in respect of such investments
            to be for the account of Party A.

(h)   Distributions and Interest Amount.

      (i)   Interest Rate. The "Interest Rate" will be the rate earned on Cash
            Posted Credit Support pursuant to clause (g)(ii) above.

      (ii)  Transfer of Interest Amount. The Transfer of the Interest Amount
            will be made on each Distribution Date.

      (iii) Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii)
            will not apply.

(i)   Additional Representation(s).

            There are no additional representations by either party.

(j)   Other Eligible Support and Other Posted Support.

      (i)   "Value" with respect to Other Eligible Support and Other Posted
            Support shall have such meaning as the parties shall agree in
            writing from time to time.

      (ii)  "Transfer" with respect to Other Eligible Support and Other Posted
            Support shall have such meaning as the parties shall agree in
            writing from time to time.

(k)   Demands and Notices.

      All demands, specifications and notices under this Annex will be made
      pursuant to the Notices Section of this Agreement, save that any
      demand, specification or notice:

      (i)   shall be given to or made at the following addresses:

      If to Party A:

                 5 The North Colonnade
                 Canary Wharf
                 London E14 4BB, England
                 Attention: Swaps Documentation
                 Facsimile No.: 0207-773-6857/6858
                 Telephone No.: 0207-773-6915/6904

      with a copy to:

                 General Counsel's Office
                 200 Park Avenue
                 New York, N.Y. 10166

      Notices to Party A shall not be deemed effective unless delivered to
      the London address set forth above.

      If to Party B:

            Wells Fargo Bank, N.A.
            9062 Old Annapolis Road
            Columbia, Maryland 21045
            Attn: Client Manager - WFALT 2007-PA2
            Facsimile: 410-715-2380
            Telephone: 410-884-2000

      or at such other address as the relevant party may from time to time
      designate by giving notice (in accordance with the terms of this
      paragraph) to the other party;

      (ii)  shall (unless otherwise stated in this Annex) be deemed to be
            effective at the time such notice is actually received unless such
            notice is received on a day which is not a Local Business Day or
            after the Notification Time on any Local Business Day in which event
            such notice shall be deemed to be effective on the next succeeding
            Local Business Day.

(l)   Address for Transfers.

      Party B: To be notified by Party B to Party A at the time of the
      request for Transfer.

(m)   Other Provisions.

      (i)   Additional Definitions. As used in this Annex:

            "Local Business Day" means: (i) any day on which commercial banks
            are open for business (including dealings in foreign exchange and
            foreign currency deposits) in London, New York and the location
            of the Trustee, and (ii) in relation to a Transfer of Eligible
            Credit Support, a day on which the clearance system agreed
            between the parties for the delivery of Eligible Credit Support
            is open for acceptance and execution of settlement instructions
            (or in the case of a Transfer of Cash or other Eligible Credit
            Support for which delivery is contemplated by other means, a day
            on which commercial banks are open for business (including
            dealings for foreign exchange and foreign deposits) in New York
            and such other places as the parties shall agree).

      (ii)  Holding Collateral. The Secured Party shall cause any Custodian
            appointed hereunder to open and maintain a segregated account and to
            hold, record and identify all the Posted Collateral in such
            segregated account and, subject to Paragraph 8(a), such Posted
            Collateral shall at all times be and remain the property of the
            Pledgor and shall at no time constitute the property of, or be
            commingled with the property of, the Secured Party or the Custodian.

      (iii) Agreement as to Single Secured Party and Pledgor. Party A and Party
            B agree that, notwithstanding anything to the contrary in this
            Annex, (a) the term "Secured Party" as used in this Annex means only
            Party B, (b) the term "Pledgor" as used in this Annex means only
            Party A, (c) only Party A makes the pledge and grant in Paragraph 2,
            the acknowledgement in the final sentence of Paragraph 8(a) and the
            representations in Paragraph 9 and (d) Party A shall have no
            obligations under this Annex other than during a Collateral
            Requirement Period.

      (iv)  Form of Annex. The parties hereby agree that the text of the body of
            this Annex is intended to be the printed form of ISDA Credit Support
            Annex (Bilateral Form - ISDA Agreements Subject to New York Law
            version) as published and copyrighted by the International Swaps and
            Derivatives Association, Inc.

      (v)   Exposure. The Parties agree that in the event of a Ratings Event
            relating to an action taken by S&P, the Valuation Agent shall
            internally verify its calculation of the Secured Party's Exposure by
            reporting its calculation thereof to S&P on a weekly basis. In
            addition, in the case where the long term unubordinated and
            unsecured debt of Party A ceases to be rated at least BBB+ by S&P,
            the Valuation Agent shall externally verify its calculation of the
            Secured Party's Exposure by seeking two quotations from Reference
            Market-makers at the end of each month (such quotations being for
            amounts payable as described in the definition of "Market
            Quotations" in the Agreement where the date on which such quotations
            are sought is the Early Termination Date and the Transaction entered
            into pursuant to the Agreement is the only Termination Transaction).
            In the case where external verification of the Exposure calculation
            is required, the Valuation Agent must (i) obtain at least two such
            quotations (ii) may not obtain the quotations referred to above from
            the same Reference Market-maker in excess of four times during any
            12 month period. Furthermore, the Exposure valuations should reflect
            the higher of two bids from Reference Market-makers that would be
            eligible and willing to provide the market quotation in the absence
            of the current provider and (iii) must submit to S&P the two bids
            provided by external parties. The collateral requirement should be
            based on the greater of the internal and external verifications. In
            the event the verification procedures set forth above indicate that
            there is a deficiency in the amount of Eligible Collateral that has
            been posted to the Secured Party, the Pledgor shall post the amount
            of Eligible Collateral necessary to cure such deficiency to the
            Secured Party within three Local Business Days.

      (vi)  Expenses. Notwithstanding Paragraph 10, the Pledgor will be
            responsible for, and will reimburse the Secured Party for, all
            transfer and other taxes and other costs involved in the transfer of
            Eligible Collateral.

      (vii) Additional Definitions. As used in this Annex:

            "Ratings Event" means a "Ratings Event" (as defined in the
            Agreement).

            "Modified Exposure" means, for any Valuation Date, an amount
            equal to the greater of (a) the sum of Secured Party's Exposure
            for that Valuation Date plus the Notional Volatility Buffer and
            (b) zero.

            "Notional Volatility Buffer" as determined by the Valuation Agent
            for any date, means the outstanding Notional Amount of the
            Transaction on such date multiplied by the relevant percentage for
            such date as set out in the table below on such date.

                                            Less than or   Less than or equal to
                                            equal to 5     10 years but greater
                                            years to       than 5 years to
                                            Termination    Termination Date of
                                            Date of the    the Transaction
            Party A S&P Rating on           Transaction
            such date

            Short Term Rating of A-2      3.25%             4.00%

            Short Term Rating of A-3      4.00%             5.00%

            Long Term Rating of BB+ or    4.50%             5.75%
            lower

<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Annex by their duly
authorized representatives as of the date of the Agreement.

         BARCLAYS BANK PLC          WELLS FARGO BANK, N.A., not individually
                                    but solely as master servicer under the
                                    Pooling and Servicing Agreement on behalf of
                                    Wells Fargo Alternative Loan 2007-PA2 Trust

By: /s/ Tim Moran                   By: /s/ Amy Doyle
   -----------------------------       ----------------------------------
    Name: Tim Moran                    Name: Amy Doyle
    Title: Director                    Title: Vice President
    Date: May 24, 2007                 Date: May 24, 2007EXHIBIT 10.01

                              MANAGEMENT AGREEMENT

            THIS AGREEMENT, made as of the 5th day of June, 2007, among MORGAN
STANLEY PORTFOLIO STRATEGY FUND L.P., a Delaware limited partnership (the
"Partnership"), DEMETER MANAGEMENT CORPORATION, a Delaware corporation (the
"General Partner"), and HYMAN BECK & COMPANY, INC., a Delaware corporation (the
"Trading Advisor").

                              W I T N E S S E T H:

            WHEREAS, the Partnership has been organized pursuant to the Amended
and Restated Limited Partnership Agreement, dated as of May 12, 1997, as may be
amended from time to time, (the "Limited Partnership Agreement"), to trade, buy,
sell, spread, or otherwise acquire, hold, or dispose of commodities (including,
but not limited to, foreign currencies, mortgage-backed securities, money market
instruments, financial instruments, and any other securities or items which are
now, or may hereafter be, the subject of futures contract trading), domestic and
foreign futures contracts, commodity forward contracts, foreign exchange
commitments, options on physical commodities and on futures contracts, spot
(cash) commodities and currencies, and any rights pertaining thereto
(collectively as "futures interests") and securities (such as United States
Treasury securities) approved by the Commodity Futures Trading Commission (the
"CFTC") for investment of customer funds and to engage in all other activities
incident thereto;

            WHEREAS, the Partnership previously offered and sold units of
limited partnership interest ("Units") to investors pursuant to a Registration
Statement on Form S-1 (No. 333-24109) (the "Registration Statement") filed under
the Securities Act of 1933, as amended (the "Securities Act"), and a final
Prospectus dated May 12, 1997, constituting a part thereof (as amended and
supplemented, the "Prospectus");

            WHEREAS, the principals of the Trading Advisor have extensive
experience trading in futures interests and the Trading Advisor is willing to
provide certain services and undertake certain obligations as set forth herein;

            WHEREAS, the Partnership and the General Partner desire the Trading
Advisor to act as trading advisor for the Partnership and to make investment
decisions with respect to futures interests for the Partnership's Net Assets (as
defined in Section 7(d)(1) of the Limited Partnership Agreement) and the Trading
Advisor desires so to act; and

            WHEREAS, the Partnership, the General Partner and the Trading
Advisor wish to enter into this Management Agreement which, among other things,
sets forth certain terms and conditions upon which the Trading Advisor will
conduct futures interests trading for the Partnership;

            NOW THEREFORE, the parties hereto hereby agree as follows:

            1.    Undertakings of the Trading Advisor.

            The Trading Advisor agrees to make all disclosures regarding itself,
its principals and affiliates, its trading performance, its trading programs,
systems, methods, and strategies (subject to the need, in the reasonable
discretion of the Trading Advisor, to preserve the confidentiality of
proprietary information concerning such programs, systems, methods, and
strategies), any client accounts over which it has discretionary trading
authority (other than the names of any such clients), and otherwise, as the
General Partner may reasonably require to fulfill its due diligence obligations,
to provide any necessary disclosures to investors and to comply with any
applicable federal or state law or rule or regulation, including those of the
Securities and Exchange Commission, the CFTC, the National Futures Association
(the "NFA"), the National Association of Securities Dealers, Inc. or any other
regulatory body, exchange, or board. As used herein, the term "principal" shall
have the meaning as defined in Rule 3.1(a) of the CFTC's Regulations and the
term "affiliate" shall mean any individual or entity that directly or indirectly
controls, is controlled by, or is under common control with, the Trading
Advisor.

            2.    Duties of the Trading Advisor.

            (a) The Trading Advisor hereby agrees to act as Trading Advisor for
the Partnership and, as such, shall have sole authority and responsibility,
commencing July 1, 2007, for directing the investment and reinvestment of the
Net Assets of the Partnership, which initially shall be traded pursuant to its
trading program, the Global Portfolio, as described in the Trading Advisor's
Disclosure Document dated November 27, 2006 (as amended or supplemented, the
"Disclosure Document"), and may be subsequently traded pursuant to such other of
the Trading Advisor's programs described in the Disclosure Document, as the
General Partner may agree (with such changes and additions to such trading
programs as the Trading Advisor, from time to time, incorporates into its
trading program(s) for accounts the size of the Partnership), (collectively, the
"Trading Program") on the terms and conditions and in accordance with the
prohibitions and trading policies set forth in Exhibit A hereto, the Limited
Partnership Agreement and as otherwise provided in writing to the Trading
Advisor; provided, however, that the General Partner may override the
instructions of the Trading Advisor to the extent necessary (i) to comply with
the trading policies of the Partnership, as described in this Agreement, the
Limited Partnership Agreement and as otherwise provided in writing to the
Trading Advisor, and with applicable speculative position limits, (ii) to pay
the Partnership's expenses, (iii) to the extent the General Partner believes
doing so is necessary for the protection of the Partnership, (iv) to terminate
the futures interests trading of the Partnership, or (v) to comply with any
applicable law or regulation. The General Partner agrees not to override any
such instructions for the reasons specified in clause (ii) of the preceding
sentence unless the Trading Advisor fails to comply with a request of the
General Partner to make the necessary amount of funds available to the
Partnership within five calendar days of such request. Except as otherwise
provided herein, the Trading Advisor shall not be liable for the consequences of
any decision by the General Partner to override instructions of the Trading
Advisor. In performing services for the Partnership, the Trading Advisor may not
materially alter or change the Trading Program without the prior written consent
of the General Partner (and shall not effect such alteration or change on behalf
of the Partnership without the General Partner's consent), and it being
understood that changes in the futures interests traded, provided that such
futures interests are listed in Exhibit B hereto, shall not be deemed an
alteration in the Trading Program.

            (b) The Trading Advisor shall:

            (i) Exercise good faith and due care in trading futures interests
      for the account of the Partnership in accordance with the prohibitions and
      trading policies of the Partnership described in Exhibit A hereto, the
      Limited Partnership Agreement and as otherwise provided in writing to the
      Trading Advisor. The Trading Advisor shall trade the Partnership's Net
      Assets pursuant to the Trading Program.

            (ii) Subject to reasonable assurances of confidentiality by the
      General Partner and the Partnership, provide the General Partner, within
      30 calendar days of a request therefor by the General Partner, with
      information comparing the performance of the Partnership's account and the
      performance of all other client accounts directed by the Trading Advisor
      using the Trading Program over a specified period of time. In providing
      such information, the Trading Advisor may take such steps as are necessary
      to assure the confidentiality of the Trading Advisor's clients'
      identities. The Trading Advisor shall, upon the General Partner's request,
      consult with the General Partner concerning any discrepancies between the
      performance of such other accounts and the Partnership's account. The
      Trading Advisor shall promptly inform the General Partner of any material
      discrepancies of which the Trading Advisor becomes aware. The General
      Partner acknowledges that different trading programs, strategies or
      implementation methods may be utilized for different accounts, accounts
      with different trading policies, accounts experiencing differing inflows
      or outflows of equity, accounts that commence trading at different times,
      accounts which have different portfolios or different fiscal years and
      that such differences may cause divergent trading results.

            (iii) Upon the request of the General Partner and subject to
      reasonable assurances of confidentiality by the General Partner and the
      Partnership, provide the General Partner with all material information
      concerning the Trading Advisor other than proprietary information
      (including, without limitation, information relating to changes in
      control, personnel, trading approach, or financial condition). The General
      Partner acknowledges that all trading instructions made by the Trading
      Advisor will be held in confidence by the General Partner, except to the
      extent necessary to conduct the business of the Partnership or as required
      by law.

            (iv) Inform the General Partner when the Trading Advisor's open
      positions maintained by the Trading Advisor exceed the Trading Advisor's
      applicable speculative position limits.

            (c) All purchases and sales of futures interests pursuant to this
Agreement shall be for the account, and at the risk, of the Partnership and not
for the account, or at the risk, of the Trading Advisor or any of its
stockholders, directors, officers, or employees, or any other person, if any,
who controls the Trading Advisor. All brokerage fees, including give-up fees at
rates approved by Morgan Stanley & Co. Incorporated, an affiliate of the General
Partner ("MS&Co."), arising from trading by the Trading Advisor shall be for the
account of the Partnership. The Trading Advisor makes no representations as to
whether its trading will produce profits or avoid losses.

            (d) Notwithstanding anything in this Agreement to the contrary, the
Trading Advisor shall assume financial responsibility for any errors committed
or caused by it in transmitting orders for the purchase or sale of futures
interests for the Partnership's account, including, but not limited to, payment
of the floor brokerage commissions, exchange and NFA fees, and other transaction
charges and give-up charges incurred on such trades. The Trading Advisor's
errors shall include, but not be limited to, inputting improper trading signals
or communicating incorrect orders for execution. The Trading Advisor shall not
be responsible for errors committed or caused by MS&Co. or any other floor
broker or futures commission merchant executing trades. The Trading Advisor
shall have an affirmative obligation promptly to notify the General Partner of
its own errors, and the Trading Advisor shall use its best efforts to identify
and promptly notify the General Partner of any order or trade that the Trading
Advisor reasonably believes was not executed in accordance with its
instructions.

            (e) Prior to the commencement of trading, the General Partner on
behalf of the Partnership shall deliver to the Trading Advisor a trading
authorization, in the form attached as Exhibit C hereto, appointing the Trading
Advisor the Partnership's attorney-in-fact for such purpose.

            3.    Designation of Additional or Replacement Trading Advisors and
                  Reallocation of Net Assets.

            If the General Partner at any time deems it to be in the best
interests of the Partnership, the General Partner may designate an additional or
replacement trading advisor or advisors for the Partnership and may apportion to
such additional or replacement trading advisor(s) the management of such amounts
of Net Assets as the General Partner shall determine in its absolute discretion.
The designation of an additional trading advisor or advisors or replacement of
any trading advisor for the Partnership by the General Partner shall not require
any approval of the Trading Advisor. The designation and retention of an
additional or replacement trading advisor(s) and the apportionment of Net Assets
to any such trading advisor(s) pursuant to this Section 3 shall neither
terminate this Agreement nor modify in any regard the respective rights and
obligations of the Partnership, the General Partner and the Trading Advisor
hereunder. In the event that an additional trading advisor is so designated, the
Trading Advisor shall thereafter receive management and incentive fees based,
respectively, on that portion of the Net Assets managed by the Trading Advisor
and that portion of the Trading Profits (as defined in Section 6(c) hereof)
properly attributable to the trading done by the Trading Advisor.

            4.    Trading Advisor Independent.

            For all purposes of this Agreement, the Trading Advisor shall be
deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized, have no authority to act for or represent the
Partnership in any way or otherwise be deemed an agent of the Partnership or the
General Partner. Nothing contained herein shall be deemed to require the
Partnership or the General Partner to take any action contrary to the Limited
Partnership Agreement, the Certificate of Limited Partnership of the Partnership
as from time to time in effect (the "Certificate of Limited Partnership"), or
any applicable law or rule or regulation of any regulatory body, exchange, or
board. Nothing herein contained shall constitute the Trading Advisor or the
General Partner as a member of any partnership, joint venture, association,
syndicate or other entity with the Partnership or the General Partner, or be
deemed to confer on any of them any express, implied, or apparent authority to
incur any obligation or liability on behalf of any other. It is expressly agreed
that the Trading Advisor is neither a promoter, sponsor, nor issuer with respect
to the Partnership.

            5.    Commodity Brokers.

            The Trading Advisor shall effect all transactions in futures
interests for the Partnership through, and shall maintain a separate account
with, such commodity broker or brokers as the General Partner shall direct. At
the present time, MS&Co. shall act as the commodity broker for the Partnership,
with the exception of trades on the London Metal Exchange which will be cleared
by Morgan Stanley & Co. International Limited plc, an affiliate of the General
Partner ("MSIL"). In addition, MS&Co. will act as the counterparty on all of the
foreign currency forward trades for the Partnership. The General Partner shall
provide the Trading Advisor with copies of brokerage statements. Notwithstanding
that MS&Co. and MSIL shall act as the commodity brokers for the Partnership, the
Trading Advisor may execute trades through floor brokers other than those
employed by MS&Co. and MSIL so long as arrangements are made for such floor
brokers to "give-up" or transfer the positions to MS&Co. and MSIL and provided
that the rates charged by such floor brokers have been approved in writing by
MS&Co. Except as provided in Exhibit A, the Trading Advisor will not be
responsible for paying give-up fees at rates approved by MS&Co.

            6.    Fees.

            (a) For the services to be rendered to the Partnership by the
Trading Advisor under this Agreement, the Partnership shall pay the Trading
Advisor the following fees:

            (i) A monthly management fee, without regard to the profitability of
      the Trading Advisor's trading for the Partnership's account, equal to 1/12
      of 2.00% (a 2.00% annual rate) of the Partnership's Net Assets as of the
      opening of business on the first day of each calendar month, commencing
      with the month in which the Partnership begins to receive trading advice
      from the Trading Advisor pursuant to this Agreement.

            (ii) A quarterly incentive fee equal to 20% of the "Trading Profits"
      (as defined in Section 6(c) hereof) experienced by the Partnership as of
      the end of each calendar quarter.

            (b) If this Agreement is terminated on a date other than the last
day of a calendar quarter, the incentive fee described above shall be determined
as if such date were the end of a calendar quarter. Any accrued incentive fees
with respect to Units redeemed at the end of a month which is not the end of a
calendar quarter will be deducted and paid to the Trading Advisor at the time of
redemption, and "Trading Profits" with respect to such Units will not be
included for purposes of determining incentive fees thereafter. If this
Agreement is terminated on a date other than the end of a calendar month, the
management fee described above shall be prorated based on the ratio of the
number of trading days in the month through the date of termination to the total
number of trading days in the month. If, during any month after the Partnership
commences trading operations, the Partnership does not conduct business
operations, or suspends trading for the account of the Partnership managed by
the Trading Advisor, or, as a result of an act or material failure to act by the
Trading Advisor, is otherwise unable to utilize the trading advice of the
Trading Advisor on any of the trading days of that period for any reason, the
management fee described above shall be prorated based on the ratio of the
number of trading days in the month that the Partnership account managed by the
Trading Advisor engaged in trading operations or utilized the trading advice of
the Trading Advisor to the total number of trading days in the month.

            (c) As used herein, the term "Trading Profits" shall mean net
futures interests trading profits (realized and unrealized) earned on the
Partnership's Net Assets, decreased by the monthly management fees, brokerage
commissions, floor brokerage fees, "give up" of transfer fees, NFA fees, other
transaction fees and costs, administrative expenses and other fees and expenses
(excluding incentive fees payable) with such Trading Profits and items of
decrease determined from the end of the last calendar quarter in which an
incentive fee was earned by the Trading Advisor or, if no incentive fee has been
earned previously by the Trading Advisor, from the date that the Partnership
begins to receive trading advice from the Trading Advisor pursuant to this
Agreement to the end of the calendar quarter as of which such incentive fee
calculation is being made. Extraordinary expenses of the Partnership, if any,
will not be deducted in determining Trading Profits. No incentive fee will be
paid on interest income earned by the Partnership.

            (d) If any payment of incentive fees is made to the Trading Advisor
on account of Trading Profits and the Trading Advisor thereafter fails to earn
Trading Profits or experiences losses for any subsequent incentive period, the
Trading Advisor shall be entitled to retain such amounts of incentive fees
previously paid to the Trading Advisor in respect of such Trading Profits.
However, no subsequent incentive fees shall be payable to the Trading Advisor
until the Partnership has again earned Trading Profits; provided, however, that
if the Partnership's Net Assets are reduced because of redemptions that occur at
the end of, or subsequent to, an incentive period in which the Trading Advisor
experiences a futures interests trading loss, the trading loss that must be
recovered before the Trading Advisor will be deemed to experience Trading
Profits will be equal to (i) the amount of the unrecovered trading loss
multiplied by (ii) a fraction the numerator of which shall be Net Assets
immediately after such redemptions, and the denominator of which shall be Net
Assets immediately before such redemptions.

            7.    Term.

            (a) This Agreement shall continue in effect until May 31, 2008 (the
"Initial Termination Date"). If this Agreement is not terminated on the Initial
Termination Date, as provided for herein, then, this Agreement shall
automatically renew for an additional one-year period and shall continue to
renew for additional one-year periods until this Agreement is otherwise
terminated, as provided for herein. At least 30 calendar days prior to the
expiration of the Initial Termination Date or any subsequent one-year period, as
the case may be, the Trading Advisor may terminate this Agreement at the end of
the current period by providing written notice to the Partnership indicating
that the Trading Advisor desires to terminate this Agreement at the end of such
period. This Agreement shall also terminate if the Partnership terminates.

            (b) The Partnership shall have the right to terminate this Agreement
at its discretion (i) at any month-end upon 5 calendar days' prior written
notice to the Trading Advisor or (ii) at any time upon written notice to the
Trading Advisor upon the occurrence of any of the following events: (a) if any
person described as a "principal" of the Trading Advisor in the Disclosure
Document ceases for any reason to be an active executive officer of the Trading
Advisor; (b) if the Trading Advisor becomes bankrupt or insolvent; (c) if the
Trading Advisor is unable to use its Trading Program as in effect on the date
hereof and as refined and modified in the future for the benefit of the
Partnership; (d) if the registration, as a commodity trading advisor, of the
Trading Advisor with the CFTC or its membership in the NFA is revoked,
suspended, terminated, or not renewed, or limited or qualified in any respect;
(e) if the Trading Advisor merges or consolidates with, or sells or otherwise
transfers its advisory business, or all or a substantial portion of its assets,
any portion of its futures interests trading programs, systems or methods, or
its goodwill, to any individual or entity; (f) if the Net Asset value of a Unit,
after adjusting for distributions, if any, shall be less than $500.00; (g) if,
at any time, the Trading Advisor violates any trading or administrative policy
described in this Agreement or the Limited Partnership Agreement or otherwise
provided in writing to the Trading Advisor by the General Partner, except with
the prior express written consent of the General Partner; or (h) if the Trading
Advisor fails in a material manner to perform any of its obligations under this
Agreement.

            (c) The Trading Advisor may terminate this Agreement at any time,
upon written notice to the Partnership, in the event: (i) that the General
Partner imposes additional trading limitation(s) in the form of one or more
trading policies or administrative policies that the Trading Advisor does not
agree to follow in its management of the Partnership's Net Assets; (ii) the
General Partner objects to the Trading Advisor implementing a proposed material
change in the Trading Advisor's Trading Program used by the Partnership and
Trading Advisor certifies to the General Partner in writing that it believes
such change is in the best interests of the Partnership; (iii) the General
Partner overrides a trading instruction of the Trading Advisor for reasons
unrelated to those set forth in Section 2 hereof and a determination by the
General Partner that the Trading Advisor has violated the Partnership's trading
policies and the Trading Advisor certifies to the General Partner in writing
that as a result the Trading Advisor believes the performance results of the
Trading Advisor relating to the Partnership will be materially adversely
affected; or (iv) the Partnership materially breaches this Agreement and does
not correct the breach within 10 business days of receipt of a written notice of
such breach from the Trading Advisor.

            The indemnities set forth in Section 8 hereof shall survive any
termination of this Agreement.

            8.    Standard of Liability; Indemnifications.

            (a) Limitation of Trading Advisor Liability. In respect of the
Trading Advisor's role in the futures interests trading of the Partnership's
assets, none of the Trading Advisor, or its controlling persons, its affiliates,
and their respective directors, officers, shareholders, employees or controlling
persons shall be liable to the Partnership or the General Partner or their
partners, officers, shareholders, directors or controlling persons except that
the Trading Advisor shall be liable for acts or omissions of any such person
provided that such act or omission constitutes a breach of this Agreement or a
representation, warranty or covenant herein, willful misconduct or negligence or
is the result of any such person not having acted in good faith and in the
reasonable belief that such actions or omissions were in, or not opposed to, the
best interests of the Partnership.

            (b) Trading Advisor Indemnity. The Trading Advisor shall indemnify,
defend and hold harmless the Partnership and the General Partner, their
controlling persons, their affiliates and their respective directors, officers,
shareholders, employees, and controlling persons from and against any and all
losses, claims, damages, liabilities (joint and several), costs, and expenses
(including any reasonable investigatory, legal, and other expenses incurred in
connection with, and any amounts paid in, any settlement; provided that the
Trading Advisor shall have approved such settlement) incurred as a result of any
action or omission involving the Partnership; provided that such liability
arises from an act or omission of the Trading Advisor, or any of its controlling
persons or affiliates or their respective directors, officers, partners,
shareholders, or employees which is found by a court of competent jurisdiction
upon entry of a final judgment (or, if no final judgment is entered, by an
opinion rendered by counsel who is approved by the Partnership and the Trading
Advisor, such approval not to be unreasonably withheld) to be a breach of this
Agreement or a representation, warranty or covenant herein, or the result of
willful misconduct or negligence or conduct not done in good faith in the
reasonable belief that it was in, or not opposed to, the best interests of the
Partnership.

            (c) Partnership Indemnity. The Partnership shall indemnify, defend,
and hold harmless the Trading Advisor, its controlling persons, their affiliates
and their respective directors, officers, shareholders, employees, and
controlling persons, from and against any and all losses, claims, damages,
liabilities (joint and several), costs, and expenses (including any reasonable
investigatory, legal, and other expenses incurred in connection with, and any
amounts paid in, any settlement; provided that the Partnership shall have
approved such settlement) resulting from a demand, claim, lawsuit, action, or
proceeding (other than those incurred as a result of claims brought by or in the
right of an indemnified party) relating to the services provided by and the
obligations undertaken by the Trading Advisor in connection with the
Partnership; provided that a court of competent jurisdiction upon entry of a
final judgment finds (or, if no final judgment is entered, an opinion is
rendered to the Partnership by independent counsel reasonably acceptable to both
parties) to the effect that the action or inaction of such indemnified party
that was the subject of the demand, claim, lawsuit, action, or proceeding did
not constitute negligence, willful misconduct, or a breach of this Agreement by
the Trading Advisor or such indemnified party or a representation, warranty or
covenant of the Trading Advisor herein and was done in good faith and in a
manner such indemnified party reasonably believed to be in, or not opposed to,
the best interests of the Partnership.

            (d) The foregoing agreements of indemnity shall be in addition to,
and shall in no respect limit or restrict, any other remedies which may be
available to an indemnified person.

            (e) Promptly after receipt by an indemnified person of notice of the
commencement of any action, claim, or proceeding to which any of the indemnities
may apply, the indemnified person will notify the indemnifying party in writing
of the commencement thereof if a claim in respect thereof is to be made against
the indemnifying party hereunder; but the omission so to notify the indemnifying
party will not relieve the indemnifying party from any liability which the
indemnifying party may have to the indemnified person hereunder, except where
such omission has materially prejudiced the indemnifying party. In case any
action, claim, or proceeding is brought against an indemnified person and the
indemnified person notifies the indemnifying party of the commencement thereof
as provided above, the indemnifying party will be entitled to participate
therein and, to the extent that the indemnifying party desires, to assume the
defense thereof with counsel selected by the indemnifying party and not
unreasonably disapproved by the indemnified person. After notice from the
indemnifying party to the indemnified person of the indemnifying party's
election so to assume the defense thereof as provided above, the indemnifying
party will not be liable to the indemnified person under the indemnity
provisions hereof for any legal and other expenses subsequently incurred by the
indemnified person in connection with the defense thereof, other than reasonable
costs of investigation.

            Notwithstanding the preceding paragraph, if, in any action, claim,
or proceeding as to which indemnification is or may be available hereunder, an
indemnified person reasonably determines that its interests are or may be
adverse, in whole or in part, to the indemnifying party's interests or that
there may be legal defenses available to the indemnified person which are
different from, in addition to, or inconsistent with the defenses available to
the indemnifying party, the indemnified person may retain its own counsel in
connection with such action, claim, or proceeding and will be indemnified by the
indemnifying party for any legal and other expenses reasonably incurred in
connection with investigating or defending such action, claim, or proceeding.

            In no event will the indemnifying party be liable for the fees and
expenses of more than one counsel for all indemnified persons in connection with
any one action, claim, or proceeding or in connection with separate but similar
or related actions, claims, or proceedings in the same jurisdiction arising out
of the same general allegations. The indemnifying party will not be liable for
any settlement of any action, claim, or proceeding effected without the
indemnifying party's express written consent, but if any action, claim, or
proceeding is settled with the indemnifying party's express written consent, the
indemnifying party will indemnify, defend, and hold harmless an indemnified
person as provided in this Section 8.

            9.    Right to Advise Others and Uniformity of Acts and Practices.

            (a) The Trading Advisor is engaged in the business of advising
investors as to the purchase and sale of futures interests. During the term of
this Agreement, the Trading Advisor, its principals and affiliates, will be
advising other investors (including affiliates and the stockholders, officers,
directors, and employees of the Trading Advisor and its affiliates and their
families) and trading for their own accounts. However, under no circumstances
shall the Trading Advisor or any of its principals or affiliates by any act or
omission favor any account advised or managed by the Trading Advisor or any of
its principals or affiliates over the account of the Partnership in any way or
manner (other than by charging different management and/or incentive fees). The
Trading Advisor and its principals and affiliates agree to treat the Partnership
in a fiduciary capacity to the extent recognized by applicable law, but, subject
to that standard, the Trading Advisor or any of its principals or affiliates
shall be free to advise and manage accounts for other investors and shall be
free to trade on the basis of the same Trading Program employed by the Trading
Advisor for the account of the Partnership, or trading programs, systems,
methods, or strategies that are entirely independent of, or materially different
from, those employed for the account of the Partnership, and shall be free to
compete for the same futures interests as the Partnership or to take positions
opposite to the Partnership, where such actions do not knowingly or deliberately
prefer any of such accounts over the account of the Partnership. At the request
of the General Partner, the Trading Advisor shall use its best efforts to make
available for inspection and copying by the General Partner copies of the normal
monthly, quarterly, and annual (as the case may be) reports sent to participants
in commodity pools (without identifying such participants) for which the Trading
Advisor or any of its principals or affiliates acts as a commodity trading
advisor and similar information with respect to any other accounts of theirs
with respect to which such reports are not required to be delivered. At the
request of the General Partner, the Trading Advisor and its principals and
affiliates shall provide the General Partner with a written explanation,
acceptable to the General Partner, of material differences in performance
between the Partnership's account and such other accounts.

            (b) The Trading Advisor and its principals and affiliates shall not
be restricted as to the number or nature of its clients, except that: (i) so
long as the Trading Advisor acts as a trading advisor for the Partnership,
neither the Trading Advisor nor any of its principals or affiliates shall hold
knowingly any position or control any other account that would cause the
Partnership, the Trading Advisor, or the principals or affiliates of the Trading
Advisor to be in violation of the Commodity Exchange Act, as amended, and any
regulations promulgated thereunder (the "CEAct"), any applicable rule or
regulation of any other regulatory body, exchange, or board; and (ii) neither
the Trading Advisor nor any of its principals or affiliates shall render futures
interests trading advice to any other individual or entity or otherwise engage
in activity which shall knowingly cause positions in futures interests to be
attributed to the Trading Advisor under the rules or regulations of the CFTC or
any other regulatory body, exchange, or board so as to require the significant
modification of positions taken or intended for the account of the Partnership;
provided that the Trading Advisor may modify its Trading Program to accommodate
the trading of additional funds or accounts. If applicable speculative position
limits are exceeded by the Trading Advisor in the opinion of (i) independent
counsel (who shall be other than counsel to the Partnership), (ii) the CFTC, or
(iii) any other regulatory body, exchange, or board, the Trading Advisor and its
principals and affiliates shall promptly liquidate positions in all of their
accounts, including the Partnership's account, as to which positions are
attributed to the Trading Advisor as nearly as possible in proportion to the
accounts' respective amounts available for trading (taking into account
different degrees of leverage and "notional" equity) to the extent necessary to
comply with the applicable position limits.

            10.   Representations, Warranties, and Covenants of the Trading
                  Advisor.

            (a) Representations, Warranties, and Agreements of the Trading
Advisor. The Trading Advisor with respect to itself and each of its principals
represents and warrants to and agrees with the General Partner and the
Partnership as follows:

            (i) It will exercise good faith and due care in using the Trading
      Program on behalf of the Partnership.

            (ii) The Trading Advisor shall follow, at all times, the trading
      policies of the Partnership (as described in the Limited Partnership
      Agreement and as set forth in Exhibit A hereto) and as amended in writing
      and furnished to the Trading Advisor from time to time.

            (iii) The Trading Advisor shall trade: (A) the Partnership's Net
      Assets pursuant to the Trading Program; and (B) only in futures and option
      contracts traded on U.S. contract markets, foreign currency forward
      contracts traded with MS&Co. (which may include forward contracts
      initially executed with financial institutions other than MS&Co.), and
      such other futures interests that are approved in writing by the General
      Partner and have been approved by the CFTC for U.S. persons.

            (iv) The Trading Advisor is duly organized, validly existing and in
      good standing as a corporation under the laws of the jurisdiction of its
      incorporation and is qualified to do business as a foreign corporation and
      in good standing in each other jurisdiction in which the nature or conduct
      of its business requires such qualification and the failure to so qualify
      would materially adversely affect the Trading Advisor's ability to perform
      its duties under this Agreement. The Trading Advisor has full corporate
      power and authority to perform its obligations under this Agreement. The
      only principals (as defined in Rule 4.10(e) under the CEAct) of the
      Trading Advisor are those set forth in the Disclosure Document (the
      "Trading Advisor Principals").

            (v) All information furnished in writing to the General Partner by
      the Trading Advisor relating to the Trading Advisor and each Trading
      Advisor Principal, the Trading Advisor's Trading Program, any other
      trading programs, approaches and systems and Trading Advisor performance,
      including the Disclosure Document, is or will be materially accurate and
      complete in all material respects and does not and will not contain any
      misleading or untrue statement of a material fact or omit to state a
      material fact which is required to be stated therein or necessary to make
      the statements therein not misleading.

            (vi) This Agreement has been duly and validly authorized, executed
      and delivered on behalf of the Trading Advisor and is a valid and binding
      agreement of the Trading Advisor enforceable in accordance with its terms.

            (vii) Each of the Trading Advisor and each "principal" of the
      Trading Advisor, as defined in Rule 4.10(e) under the CEAct, has all
      federal and state governmental, regulatory and exchange licenses,
      registrations and approvals and has effected all filings with federal and
      state governmental and regulatory agencies required to conduct its or his
      business and to act as required to perform its or his obligations under
      this Agreement. The Trading Advisor is registered as a commodity trading
      advisor under the CEAct and is a member of the NFA in such capacity.

            (viii) The execution and delivery of this Agreement, the incurrence
      of the obligations set forth herein, the consummation of the transactions
      contemplated herein and in the Limited Partnership Agreement and the
      payment of the fees hereunder will not violate, or constitute a breach of,
      or default under, the certificate of incorporation or bylaws of the
      Trading Advisor or any other agreement or instrument by which it is bound
      or of any order, rule, law or regulation binding on it of any court or any
      federal, state, municipal or other governmental body or administrative
      agency or panel or self-regulatory organization having jurisdiction over
      it.

            (ix) Since the date of the Disclosure Document, there has not been
      any material adverse change in the condition, financial or otherwise,
      business or prospects of the Trading Advisor or any Trading Advisor
      Principal.

            (x) Except as set forth in writing to the General Partner, there has
      not been in the five years preceding the date of this Agreement and there
      is not pending, or to the best of the Trading Advisor's knowledge
      threatened, any action, suit or proceeding at law or in equity before or
      by any court or by any federal, state, municipal or other governmental
      body or any administrative, self-regulatory or commodity exchange
      organization to which the Trading Advisor or any Trading Advisor Principal
      is or was a party, or to which any of the assets of the Trading Advisor or
      any Trading Advisor Principal is or was subject and which resulted in or
      might reasonably be expected to result in any material adverse change in
      the condition, financial or otherwise, of the Trading Advisor. Neither the
      Trading Advisor nor any Trading Advisor Principal has received any notice
      of an investigation by the NFA or the CFTC regarding noncompliance by the
      Trading Advisor or any of the Trading Advisor Principals with the CEAct.

            (xi) Neither the Trading Advisor nor any Trading Advisor Principal
      has received, or is entitled to receive, directly or indirectly, any
      commission, finder's fee, similar fee, or rebate from any person in
      connection with the operation of the Partnership.

            (b) Covenants of the Trading Advisor. The Trading Advisor covenants
and agrees that:

            (i) The Trading Advisor shall use its best efforts to maintain all
      registrations and memberships necessary for the Trading Advisor and the
      Trading Advisor Principals to continue to act as described herein and to
      at all times comply in all material respects with all applicable laws,
      rules, and regulations, to the extent that the failure to so comply would
      have a materially adverse effect on the Trading Advisor's ability to act
      as described herein.

            (ii) The Trading Advisor shall inform the General Partner
      immediately as soon as the Trading Advisor or Trading Advisor Principals
      becomes the subject of any investigation, claim or proceeding of any
      regulatory authority having jurisdiction over such person or becomes a
      named party to any litigation materially affecting the condition,
      financial or otherwise, business or prospects of the Trading Advisor. The
      Trading Advisor shall also inform the General Partner immediately if the
      Trading Advisor or any of its officers become aware of any breach of this
      Agreement by the Trading Advisor.

            11.   Representations and Warranties of the Partnership and the
                  General Partner.

            The General Partner and the Partnership represent and warrant to the
Trading Advisor, as follows:

            (a) The Partnership has provided to the Trading Advisor a copy of
the Prospectus.

            (b) The Partnership is a limited partnership duly organized pursuant
to the Certificate of Limited Partnership, the Limited Partnership Agreement and
the Delaware Revised Uniform Limited Partnership Act ("DRULPA") and is validly
existing under the laws of the State of Delaware with full power and authority
to engage in the trading of futures interests and to engage in its other
contemplated activities as described in the Prospectus; the Partnership has
received a certificate of authority to do business in the State of New York as
provided by Article 8-A of the New York Revised Limited Partnership Act and is
qualified to do business in each jurisdiction in which the nature or conduct of
its business requires such qualification and where failure to be so qualified
could materially adversely affect the Partnership's ability to perform its
obligations hereunder.

            (c) The General Partner is duly organized and validly existing and
in good standing as a corporation under the laws of the State of Delaware and in
good standing and qualified to do business as a foreign corporation under the
laws of the State of New York and is qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature or
conduct of its business requires such qualification and where the failure to be
so qualified could materially adversely affect the General Partner's ability to
perform its obligations hereunder.

            (d) The Partnership and the General Partner have full partnership or
corporate power and authority under applicable law to conduct their business and
to perform their respective obligations under this Agreement.

            (e) This Agreement has been duly and validly authorized, executed
and delivered by the General Partner for itself and on behalf of the Partnership
and constitutes a valid, binding and enforceable agreement of the Partnership
and the General Partner in accordance with its terms.

            (f) The execution and delivery of this Agreement, the incurrence of
the obligations set forth herein and the consummation of the transactions
contemplated herein and in the Limited Partnership Agreement will not violate,
or constitute a breach of, or default under, the General Partner's certificate
of incorporation or bylaws, the Certificate of Limited Partnership, the Limited
Partnership Agreement, or any agreement or instrument by which either the
General Partner or the Partnership, as the case may be, is bound or any order,
rule, law or regulation applicable to the General Partner or the Partnership of
any court or any governmental body or administrative agency or panel or
self-regulatory organization having jurisdiction over the General Partner or the
Partnership.

            (g) The General Partner and each principal of the General Partner,
as defined in Rule 3.1 under the CEAct, have all federal and state governmental,
regulatory and exchange approvals, registrations, and licenses, and have
effected all filings with federal and state governmental agencies and regulatory
agencies required to conduct their business and to act as required to perform
their obligations under this Agreement (including, without limitation,
registration as a commodity pool operator under the CEAct and membership in the
NFA as a commodity pool operator) and will maintain all such required approvals,
licenses, filings and registrations for the term of this Agreement.

            12.   Complete Agreement.

            This Agreement constitutes the entire agreement between the parties
with respect to the matters referred to herein, and no other agreement, verbal
or otherwise, shall be binding as between the parties unless in writing and
signed by the party against whom enforcement is sought.

            13.   Assignment.

            This Agreement may not be assigned by any party hereto without the
express written consent of the other parties hereto.

            14.   Amendment.

            This Agreement may not be amended except by the written consent of
the parties hereto.

            15.   Severability.

            The invalidity or unenforceability of any provision of this
Agreement or any covenant herein contained shall not affect the validity or
enforceability of any other provision or covenant hereof or herein contained and
any such invalid provision or covenant shall be deemed to be severable.

            16.   Disclosure Document.

            During the term of this Agreement, the Trading Advisor shall furnish
to the General Partner promptly copies of all disclosure documents or similar
documents used by the Trading Advisor. The General Partner acknowledges receipt
of the Trading Advisor's Disclosure Document.

            17.   Notices.

            All notices required to be delivered under this Agreement shall be
in writing and shall be effective when delivered personally or by telecopy on
the day delivered, or when given by registered or certified mail, postage
prepaid, return receipt requested, on the day actually received, addressed as
follows (or to such other address as the party entitled to notice shall
hereafter designate in accordance with the terms hereof):

            if to the Partnership:

            Morgan Stanley Portfolio Strategy Fund L.P.
            c/o Demeter Management Corporation
            330 Madison Avenue
            8th Floor
            New York, New York  10017
            Attn: Walter Davis, President

            if to the General Partner:

            Demeter Management Corporation
            330 Madison Avenue
            8th Floor
            New York, New York  10017
            Attn: Walter Davis, President

            if to the Trading Advisor:

            Hyman Beck & Company, Inc.
            100 Campus Drive
            Florham Park, New Jersey 07932
            Attn: Alexander Hyman

            18.   Survival.

            The provisions of this Agreement shall survive the termination of
this Agreement with respect to any matter arising while this Agreement was in
effect.

            19.   GOVERNING LAW.

            THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK. IF ANY ACTION OR PROCEEDING SHALL BE
BROUGHT BY A PARTY TO THIS AGREEMENT OR TO ENFORCE ANY RIGHT OR REMEDY UNDER
THIS AGREEMENT, EACH PARTY HERETO HEREBY CONSENTS AND WILL SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING
IN THE COUNTY, CITY AND STATE OF NEW YORK. ANY ACTION OR PROCEEDING BROUGHT BY
ANY PARTY TO THIS AGREEMENT TO ENFORCE ANY RIGHT, ASSERT ANY CLAIM OR OBTAIN ANY
RELIEF WHATSOEVER IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT BY SUCH
PARTY EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT
SITTING IN THE COUNTY, CITY AND STATE OF NEW YORK.

            20.   Remedies.

            In any action or proceeding arising out of any of the provisions of
this Agreement, the Trading Advisor agrees not to seek any prejudgment equitable
or ancillary relief. The Trading Advisor agrees that its sole remedy in any such
action or proceeding shall be to seek actual monetary damages for any breach of
this Agreement.

            21.   Headings.

            Headings to sections herein are for the convenience of the parties
only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.

            22.   Counterparts.

            This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute the
same agreement.

<PAGE>

            IN WITNESS WHEREOF, this Agreement has been executed for and on
behalf of the undersigned as of the day and year first above written.

                  MORGAN STANLEY PORTFOLIO STRATEGY FUND L.P.
                     by Demeter Management Corporation,
                     General Partner

                  By  /s/ Walter Davis
                     ------------------------------------------------
                     Name: Walter Davis
                     Title: President

                  DEMETER MANAGEMENT CORPORATION

                  By  /s/ Walter Davis
                     ------------------------------------------------
                     Name: Walter Davis
                     Title: President

                  HYMAN BECK & COMPANY, INC.

                  By  /s/ Alexander Hyman
                     ------------------------------------------------
                     Name: Alexander Hyman
                     Title: Principal

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