EX-10.3 8 we7704191-ex10_3.txt YIELD MAINTENANCE AGREEMENT EXHIBIT 10.3 BEAR STEARNS BEAR STEARNS FINANCIAL PRODUCTS INC. 383 MADISON AVENUE NEW YORK, NEW YORK 10179 212-272-4009 DATE: February 27, 2007 TO: Wells Fargo Bank, N.A., not individually, but solely as Master Servicer on behalf of Wells Fargo Mortgage Backed Securities 2007-2 Trust ATTENTION: Client Manager - WFMBS-2007-2 TELEPHONE: 410-884-2000 FACSIMILE: 410-715-2380 FROM: Derivatives Documentation TELEPHONE: 212-272-2711 FACSIMILE: 212-272-9857 SUBJECT: Fixed Income Derivatives Confirmation and Agreement REFERENCE NUMBER: FXNEC9192 The purpose of this letter agreement ("Agreement") is to confirm the terms and conditions of the Transaction entered into on the Trade Date specified below (the "Transaction") between Bear Stearns Financial Products Inc. ("BSFP") and Wells Fargo Bank, N.A., not individually, but solely as Master Servicer on behalf of Wells Fargo Mortgage Backed Securities 2007-2 Trust (the "Counterparty") formed pursuant to the Pooling and Servicing Agreement dated as of February 27, 2007 among Wells Fargo Asset Securities Corporation, as depositor (the "Depositor"), HSBC Bank USA, National Association, as trustee and Wells Fargo Bank, N.A., as master servicer (the "Pooling and Servicing Agreement"). This Agreement, which evidences a complete and binding agreement between BSFP and Counterparty to enter into the Transaction on the terms set forth below, constitutes a "Confirmation" as referred to in the "ISDA Form Master Agreement" (as defined below), as well as a "Schedule" as referred to in the ISDA Form Master Agreement. 1. This Agreement is subject to and incorporates the 2000 ISDA Definitions (the "Definitions"), as published by the International Swaps and Derivatives Association, Inc. ("ISDA"). BSFP and Counterparty have agreed to enter into this Agreement in lieu of negotiating a Schedule to the 1992 ISDA Master Agreement (Multicurrency--Cross Border) form (the "ISDA Form Master Agreement"). An ISDA Form Master Agreement shall be deemed to have been executed by BSFP and Counterparty on the date we entered into the Transaction. All provisions contained in, or incorporated by reference to, the ISDA Form Master Agreement shall govern the Transaction referenced in this Confirmation except as expressly modified herein. In the event of any inconsistency between the provisions of this Agreement and the Definitions or the ISDA Form Master Agreement, this Agreement shall prevail for purposes of the Transaction. Terms capitalized but not defined herein shall have the meanings attributed to them in the Pooling and Servicing Agreement. 2. The terms of the particular Transaction to which this Confirmation relates are as follows: Type of Transaction: Rate Cap Notional Amount: With respect to any Calculation Period, the lesser of (a) the amount set forth for such period in the Schedule of Notional Amounts attached hereto and (b) the Principal Balance (as defined in the Pooling and Servicing Agreement) of the Class I-A-10 Certificates as of the last day of such period. Trade Date: February 14, 2007 Effective Date: March 25, 2007 Termination Date: August 25, 2011 Fixed Amount (Premium): Fixed Rate Payer: Bear, Stearns & Co. Inc. on behalf of Counterparty. Fixed Rate Payer Payment Date: February 27, 2007 Fixed Amount: USD [_______] Floating Amounts: Floating Rate Payer: BSFP Cap Rate: 5.40000% Floating Rate Payer Period End Dates: The 25th calendar day of each month during the Term of this Transaction, commencing April 25, 2007 and ending on the Termination Date, with No Adjustment. Floating Rate Payer Payment Dates: Early Payment shall be applicable. The Floating Rate Payer Payment Dates shall be two Business Days preceding each Floating Rate Payer Period End Date. Floating Rate Option: USD-LIBOR-BBA, provided, however, that if the Floating Rate determined from such Floating Rate Option for any Calculation Period is greater than 8.90000% then the Floating Rate for such Calculation Period shall be deemed to be 8.90000%. Designated Maturity: One month Floating Rate Day Count Fraction: 30/360 Reset Dates: The first day of each Calculation Period. Compounding: Inapplicable Business Days for payments: New York Business Day Convention: Following 3. Additional Provisions: Each party hereto is hereby advised and acknowledges that the other party has engaged in (or refrained from engaging in) substantial financial transactions and has taken (or refrained from taking) other material actions in reliance upon the entry by the parties into the Transaction being entered into on the terms and conditions set forth herein and in the Confirmation relating to such Transaction, as applicable. This paragraph shall be deemed repeated on the trade date of each Transaction. 4. Provisions Deemed Incorporated in a Schedule to the ISDA Form Master Agreement: 1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form Master Agreement will apply to any Transaction. 2) Termination Provisions. For purposes of the ISDA Form Master Agreement: (a) "Specified Entity" is not applicable to BSFP or Counterparty for any purpose. (b) "Specified Transaction" is not applicable to BSFP or Counterparty for any purpose, and, accordingly, Section 5(a)(v) of the ISDA Form Master Agreement shall not apply to BSFP or Counterparty. (c) The "Cross Default" provisions of Section 5(a)(vi) of the ISDA Form Master Agreement will not apply to BSFP or to Counterparty. (d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the ISDA Form Master Agreement will not apply to BSFP or to Counterparty. (e) The "Automatic Early Termination" provision of Section 6(a) of the ISDA Form Master Agreement will not apply to BSFP or to Counterparty. (f) Payments on Early Termination. For the purpose of Section 6(e) of the ISDA Form Master Agreement: (i) Market Quotation will apply. (ii) The Second Method will apply. (g) "Termination Currency" means United States Dollars. 3) Tax Representations. Payer Representations. For the purpose of Section 3(e) of the ISDA Form Master Agreement, BSFP and the Counterparty make the following representations: It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the ISDA Form Master Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on: (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of the ISDA Form Master Agreement; (ii) the satisfaction of the agreement contained in Section 4 (a)(i) or 4(a)(iii) of the ISDA Form Master Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4 (a)(i) or 4(a)(iii) of the ISDA Form Master Agreement; and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of the ISDA Form Master Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) of the ISDA Form Master Agreement by reason of material prejudice of its legal or commercial position. (ii) Payee Representations. For the purpose of Section 3(f) of the ISDA Master Agreement, each of Bear Stearns and the Counterparty make the following representations. The following representation will apply to Bear Stearns: Bear Stearns is a corporation organized under the laws of the State of Delaware and its U.S. taxpayer identification number is 13-3866307. The following representation will apply to the Counterparty: None. 4) Limitation on Events of Default. Notwithstanding the terms of Sections 5 and 6 of the ISDA Form Master Agreement, if at any time and so long as the Counterparty has satisfied in full all its payment obligations under Section 2(a)(i) of the ISDA Form Master Agreement and has at the time no future payment obligations, whether absolute or contingent, under such Section, then unless BSFP is required pursuant to appropriate proceedings to return to the Counterparty or otherwise returns to the Counterparty upon demand of the Counterparty any portion of any such payment, (a) the occurrence of an event described in Section 5(a) of the ISDA Form Master Agreement with respect to the Counterparty shall not constitute an Event of Default or Potential Event of Default with respect to the Counterparty as Defaulting Party and (b) BSFP shall be entitled to designate an Early Termination Date pursuant to Section 6 of the ISDA Form Master Agreement only as a result of the occurrence of a Termination Event set forth in either Section 5(b)(i) or 5(b)(ii) of the ISDA Form Master Agreement with respect to BSFP as the Affected Party or Section 5(b)(iii) of the ISDA Form Master Agreement with respect to BSFP as the Burdened Party. For purposes of the Transaction to which this Agreement relates, Counterparty's only obligation under Section 2(a)(i) of the ISDA Form Master Agreement is to cause the Fixed Amount to be paid on the Fixed Rate Payer Payment Date. 5) Documents to be Delivered. For the purpose of Section 4(a) of the ISDA Form Master Agreement: (1) Tax forms, documents, or certificates to be delivered are: Party required to Form/Document/ Date by which to deliver document Certificate be delivered Bear Stearns An original properly (i) upon execution of this completed and Agreement, (ii) on or before executed United the first payment date under States Internal this Agreement, including any Revenue Service Form Credit Support Document, (iii) W-9 (or any successor promptly upon the reasonable thereto) with respect demand by Counterparty, (iv) to any payments prior to the expiration or received or to be obsolescence of any previously received by Bear delivered form, and (v) Stearns, that promptly upon the information eliminates U.S. on any such previously federal withholding delivered form becoming and backup inaccurate or incorrect. withholding Tax on payments to Bear Stearns under this Agreement. Counterparty Upon the execution (i) Before the first scheduled and delivery of this payment; (ii) promptly upon Agreement, reasonable demand by BSFP; and Counterparty shall (iii) promptly upon learning (a) apply for the that any Form W-9 or other employer applicable form (or any identification number successor thereto) previously of the Trust promptly provided by Counterparty has upon entering into become obsolete or incorrect. this Agreement and deliver the related correct, complete and duly executed IRS Form W-9 promptly upon receipt to eliminate U.S. federal withholding and backup withholding tax on payments to Counterparty under this Agreement; and, in any event, no later than the first Payment Date of this transaction; (b) in the case of a W-8ECI, W-8IMY and W-8BEN that does not include a U.S. taxpayer identification number in line 6, deliver before December 31 of each third succeeding calendar year; (c) deliver promptly upon reasonable demand by BSFP; and, (d) deliver promptly upon learning that any such Form previously provided by Counterparty has become obsolete or incorrect. (2) Other documents to be delivered are: Party required Form/Document/ Date by which to Covered by Section 3(d) to deliver Certificate to be delivered Representation document BSFP and the Any documents Upon the Yes Counterparty required by the execution and receiving party to delivery of this evidence the Agreement and authority of the such delivering party or Confirmation; its Credit Support and, in the case Provider, if any, of the for it to execute Counterparty, and deliver this within 30 days Agreement, any after the date of Confirmation, and this Agreement any Credit Support Documents to which it is a party, and to evidence the authority of the delivering party or its Credit Support Provider to perform its obligations under this Agreement, such Confirmation and/or Credit Support Document, as the case may be BSFP and the A certificate of an Upon the Yes Counterparty authorized officer execution and of the party, as to delivery of this the incumbency and Agreement and authority of the such Confirmation respective officers of the party signing this Agreement, any relevant Credit Support Document, or any Confirmation, as the case may be Counterparty An executed copy of Within 30 days No the Pooling and after the date of Servicing Agreement. this Agreement. 6) Miscellaneous. Miscellaneous (a) Address for Notices: For the purposes of Section 12(a) of the ISDA Form Master Agreement: Address for notices or communications to BSFP: Address: 383 Madison Avenue, New York, New York 10179 Attention: DPC Manager Facsimile: (212) 272-5823 with a copy to: Address: One Metrotech Center North, Brooklyn, New York 11201 Attention: Derivative Operations - 7th Floor Facsimile: (212) 272-1634 (For all purposes) Address for notices or communications to the Counterparty: Address: 9062 Old Annapolis Road Columbia, MD 21045 Attention: Client Manager - Wells Fargo Mortgage Backed Securities 2007-2 Trust Facsimile: 410-884-2000 Phone: 410-715-2380 (b) Process Agent. For the purpose of Section 13(c) of the ISDA Form Master Agreement: BSFP appoints as its Process Agent: Not Applicable The Counterparty appoints as its Process Agent: Not Applicable (c) Offices. The provisions of Section 10(a) of the ISDA Form Master Agreement will not apply to this Agreement; neither BSFP nor the Counterparty have any Offices other than as set forth in the Notices Section and BSFP agrees that, for purposes of Section 6(b) of the ISDA Form Master Agreement, it shall not in future have any Office other than one in the United States. (d) Multibranch Party. For the purpose of Section 10(c) of the ISDA Form Master Agreement: BSFP is not a Multibranch Party. The Counterparty is not a Multibranch Party. (e) Calculation Agent. The Calculation Agent is BSFP; provided, however, that if an Event of Default occurs with respect to BSFP, then the Counterparty shall be entitled to appoint a financial institution which would qualify as a Reference Market-maker to act as Calculation Agent. (f) Credit Support Document. Not applicable for either BSFP or the Counterparty. (g) Credit Support Provider. BSFP: Not Applicable The Counterparty: Not Applicable (h) Governing Law. The parties to this Agreement hereby agree that the law of the State of New York shall govern their rights and duties in whole, without regard to conflict of law provisions thereof other than New York General Obligations Law Sections 5-1401 and 5-1402. (i) Severability. If any term, provision, covenant, or condition of this Agreement, or the application thereof to any party or circumstance, shall be held to be invalid or unenforceable (in whole or in part) for any reason, the remaining terms, provisions, covenants, and conditions hereof shall continue in full force and effect as if this Agreement had been executed with the invalid or unenforceable portion eliminated, so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter of this Agreement and the deletion of such portion of this Agreement will not substantially impair the respective benefits or expectations of the parties. The parties shall endeavor to engage in good faith negotiations to replace any invalid or unenforceable term, provision, covenant or condition with a valid or enforceable term, provision, covenant or condition, the economic effect of which comes as close as possible to that of the invalid or unenforceable term, provision, covenant or condition. (j) Consent to Recording. Each party hereto consents to the monitoring or recording, at any time and from time to time, by the other party of any and all communications between officers or employees of the parties, waives any further notice of such monitoring or recording, and agrees to notify its officers and employees of such monitoring or recording. (k) Waiver of Jury Trial. Each party waives any right it may have to a trial by jury in respect of any Proceedings relating to this Agreement or any Credit Support Document. (l) Non-Recourse. Notwithstanding any provision herein or in the ISDA Form Master Agreement to the contrary, the obligations of Counterparty hereunder are limited recourse obligations of Counterparty, payable solely from the Trust Estate (as defined in the Pooling and Servicing Agreement) and the proceeds thereof to satisfy Counterparty's obligations hereunder. In the event that the Trust Estate and proceeds thereof should be insufficient to satisfy all claims outstanding and following the realization of the Trust Estate and the distribution of the proceeds thereof in accordance with the Pooling and Servicing Agreement, any claims against or obligations of Counterparty under the ISDA Form Master Agreement or any other confirmation thereunder, still outstanding shall be extinguished and thereafter not revive. (m) Transfer, Amendment and Assignment. No transfer, amendment, waiver, supplement, assignment or other modification of this Transaction (other than the pledge of this Transaction to the trustee pursuant to the Pooling and Servicing Agreement) shall be permitted by either party unless each of Fitch Ratings ("Fitch"), Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P") and Moody's Investor Service, Inc. ("Moody's"), has been provided notice of the same and confirms in writing (including by facsimile transmission) within five Business Days after such notice is given that it will not downgrade, qualify, withdraw or otherwise modify its then-current rating of the Certificates (as defined in the Pooling and Servicing Agreement). (n) Proceedings. BSFP shall not institute against or cause any other person to institute against, or join any other person in instituting against the Counterparty, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any of the laws of the United States, or any other jurisdiction for a period of one year and one day (or, if longer, the applicable preference period) following indefeasible payment in full of the Certificates. (o) The ISDA Form Master Agreement is hereby amended as follows: The word "third" shall be replaced by the word "second" in the third line of Section 5(a)(i) of the ISDA Form Master Agreement. (p) Master Servicer Capacity. It is expressly understood and agreed by the parties hereto that insofar as this Confirmation is executed by the Master Servicer (i) this Confirmation is executed and delivered by Wells Fargo Bank, N.A., not in its individual capacity but solely as Master Servicer pursuant to the Pooling and Servicing Agreement in the exercise of the powers and authority conferred and vested in it thereunder (ii) each of the representations, undertakings and agreements herein made on behalf of the Wells Fargo Mortgage Backed Securities 2007-2 Trust (the "Trust") is made and intended not as personal representations, undertakings and agreements of the Master Servicer but is made and intended for the purpose of binding only the Trust, and (iii) under no circumstances will Wells Fargo Bank, N.A. in its individual capacity be personally liable for the payment of any indebtedness or expenses or be personally liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by it on behalf of the Trust under this Confirmation. (q) BSFP will not unreasonably withhold or delay its consent to an assignment of this Agreement to any other third party. (r) Set-off. Notwithstanding any provision of this Agreement 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. The last sentence of the first paragraph of Section 6(e) of the ISDA Form Master Agreement shall not apply for purposes of this Transaction. (s) Additional Termination Events. Additional Termination Events will apply. (i) If a Ratings Event has occurred and BSFP has not, within 30 days, complied with Section 6(t) below, then an Additional Termination Event shall have occurred with respect to BSFP and BSFP shall be the sole Affected Party with respect to such an Additional Termination Event. (ii) Cap Disclosure Event. If, upon the occurrence of a Cap Disclosure Event (as defined in Paragraph 6(u)(ii) below), BSFP has not, within the greater of (5) five calendar days or (3) three Business Days after such Cap Disclosure Event complied with any of the provisions set forth in Paragraph 6(u)(iii) below, then an Additional Termination Event shall have occurred with respect to BSFP and BSFP shall be the sole Affected Party with respect to such Additional Termination Event. (t) Ratings Downgrade. (a) If BSFP fails to satisfy the Required Ratings (a "Ratings Event"), then BSFP shall, at its own expense and subject to the Rating Agency Condition, either (i) assign this Transaction to an entity that satisfies (or whose credit support provider satisfies) the Required Ratings; (ii) deliver collateral, and an executed ISDA Credit Support Annex; (iii) obtain a guaranty of an entity that satisfies the Required Rating to guaranty BSFP's obligations under this Transaction; or (iv) take any other action that satisfies the Rating Agency Condition; provided that the failure by BSFP to take any action specified in (i)-(iv) above on or prior to the 30th calendar day after such Ratings Event shall constitute an Additional Termination Event under the ISDA Form Master Agreement with respect to which BSFP shall be the sole Affected Party and this Transaction shall be the sole Affected Transaction. (b) If BSFP fails to satisfy the Replacement Ratings (a "Replacement Event"), then BSFP shall, at its own expense and subject to the Rating Agency Condition, either: (i) assign this Transaction to an entity that satisfies (or whose credit support provider satisfies) the Required Ratings; (ii) obtain a guaranty of an entity that satisfies the Required Rating to guaranty BSFP's obligations under this Transaction; or (iii) take any other action that satisfies the Rating Agency Condition; provided that the failure by BSFP to take any action specified in (i)-(iii) above on or prior to the 10th Local Business Days after such Replacement Event shall constitute an Additional Termination Event under the ISDA Form Master Agreement with respect to which BSFP shall be the sole Affected Party and this Transaction shall be the sole Affected Transaction. As used herein, "Moody's" means Moody's Investors Service, Inc. "Rating Agency" means, each of S&P and Moody's "Rating Agency Condition" means with respect to any proposed act or omission to act hereunder, a condition that is satisfied if each Rating Agency then providing a rating of the Certificates confirms in writing that the proposed action or inaction would not cause a downgrade or withdrawal of the then-current rating of the Certificates. "Replacement Ratings" means, with respect to any entity, the rating of the long-term senior unsecured and unsubordinated obligations of such entity is at least "BBB-" by S&P or "A3" by Moody's. "Required Ratings" means, with respect to any entity, the rating of the long-term senior unsecured and unsubordinated obligations of such entity is at least "AA-" by S&P and "Aa3" by Moody's. "S&P" means Standard and Poor's Ratings Services, Inc. (u) Compliance with Regulation AB. (i) BSFP agrees and acknowledges that the Depositor is required under Regulation AB under the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act") ("Regulation AB"), to disclose certain financial information regarding BSFP or its group of affiliated entities, if applicable, depending on the aggregate "significance percentage" of this Agreement and any other derivative contracts between BSFP or its group of affiliated entities, if applicable, and Counterparty, as calculated from time to time in accordance with Item 1115 of Regulation AB. (ii) It shall be cap disclosure event ("Cap Disclosure Event") if, on any Business Day after the date hereof, the Depositor or the Counterparty requests from BSFP the applicable financial information described in Item 1115 of Regulation AB (such request to be based on a reasonable determination by Depositor, in good faith, that such information is required under Regulation AB) (the "Cap Financial Disclosure"). (iii) Upon the occurrence of a Cap Disclosure Event, BSFP, at its own expense, shall (a) provide to the Depositor and Counterparty the Cap Financial Disclosure, (b) secure another entity to replace BSFP as party to this Agreement on terms substantially similar to this Agreement and subject to prior notification to the Swap Rating Agencies, which entity (or a guarantor therefor) meets or exceeds the Approved Rating Thresholds (or which satisfies the Rating Agency Condition) and which entity (i) is able to comply with the requirements of Item 1115 of Regulation AB and (ii) provides indemnity to the Depositor, reasonably satisfactory to the Depositor, in relation to financial information delivered to comply with the requirements of Regulation AB or (c) obtain a guaranty of the BSFP's obligations under this Agreement from an affiliate of the BSFP that is able to comply with the financial information disclosure requirements of Item 1115 of Regulation AB, such that disclosure provided in respect of the affiliate will satisfy any disclosure requirements applicable to the Cap Provider, and cause such affiliate to provide Cap Financial Disclosure. If permitted by Regulation AB, any required Cap Financial Disclosure may be provided by incorporation by reference from reports filed pursuant to the Exchange Act. Any such Cap Financial Disclosure provided pursuant to this paragraph 6(u) shall be in a form suitable for conversion to the format required for filing by the Depositor or the Counterparty with the Securities and Exchange Commission via the Electronic Data Gathering Retrieval System (EDGAR). (v) Third Party Beneficiary. Depositor shall be a third party beneficiary of this Agreement. 7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form Master Agreement, provided that BSFP shall not be deemed to have any Affiliates for purposes of this Agreement, including for purposes of Section 6(b)(ii) of the ISDA Form Master Agreement. 8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at the end thereof the following subsection (g): "(g) Relationship Between Parties. Each party represents to the other party on each date when it enters into a Transaction that:-- (1) Nonreliance. It is not relying on any statement or representation of the other party regarding the Transaction (whether written or oral), other than the representations expressly made in this Agreement or the Confirmation in respect of that Transaction. (2) Evaluation and Understanding. (i) BSFP is acting for its own account and Counterparty is acting solely as Master Servicer and has been directed to enter into this Agreement by, and on behalf of, the Trust, and both BSFP and the Trust each have the capacity to evaluate (internally or through independent professional advice) the Transaction and has made its own decision to enter into the Transaction; it is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into such transaction; it being understood that information and explanations related to the terms and conditions of such transaction shall not be considered investment advice or a recommendation to enter into such transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of the transaction; and (ii) It understands the terms, conditions and risks (and does in fact assume) of the Transaction and is willing and able to accept those terms and conditions and to assume those risks, financially and otherwise. (3) Purpose. It is entering into the Transaction for the purposes of managing its borrowings or investments, hedging its underlying assets or liabilities or in connection with a line of business. (4) Principal. It is entering into the Transaction as principal, and not as agent or in any other capacity, fiduciary or otherwise. (5) Eligible Contract Participant. (A) It is an "eligible contract participant" within the meaning of Section 1a(12) of the Commodity Exchange Act, as amended; (B) this Agreement and each Transaction is subject to individual negotiation by such party; and (C) neither this Agreement nor any Transaction will be executed or traded on a "trading facility" within the meaning of Section 1a(33) of the Commodity Exchange Act, as amended." NEITHER THE BEAR STEARNS COMPANIES INC. NOR ANY SUBSIDIARY OR AFFILIATE OF THE BEAR STEARNS COMPANIES INC. OTHER THAN BSFP IS AN OBLIGOR OR A CREDIT SUPPORT PROVIDER ON THIS AGREEMENT. 5. Account Details and Settlement Information: Payments to BSFP: Citibank, N.A., New York ABA Number: 021-0000-89, for the account of Bear, Stearns Securities Corp. Account Number: 0925-3186, for further credit to Bear Stearns Financial Products Inc. Sub-account Number: 102-04654-1-3 Attention: Derivatives Department Payments to Counterparty: Bank: Wells Fargo Bank, N.A. ABA#: 121000248 For credit to: SAS Clearing Acct. #: 3970771416 For further credit to: WFMBS 2007-2 Reserve Acct. #: 50985301 - Reference WFMBS 2007-2 Reserve Fund This 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. Counterparty hereby agrees to check this Confirmation and to confirm that the foregoing correctly sets forth the terms of the Transaction by signing in the space provided below and returning to BSFP a facsimile of the fully-executed Confirmation to 212-272-9857. For inquiries regarding U.S. Transactions, please contact Derivatives Documentation by telephone at 212-272-2711. For all other inquiries please contact Derivatives Documentation by telephone at 353-1-402-6233. Originals will be provided for your execution upon your request. We are very pleased to have executed this Transaction with you and we look forward to completing other transactions with you in the near future. Very truly yours, BEAR STEARNS FINANCIAL PRODUCTS INC. By: /s/ Annie Manevitz -------------------------------- Name: Annie Manevitz Title: Authorized Signatory Counterparty, acting through its duly authorized signatory, hereby agrees to, accepts and confirms the terms of the foregoing as of the Trade Date. WELLS FARGO BANK, N.A., NOT INDIVIDUALLY, BUT SOLELY AS MASTER SERVICER ON BEHALF OF WELLS FARGO MORTGAGE BACKED SECURITIES 2007-2 TRUST By: /s/ Carla S. Walker ------------------------------ Name: Carla S. Walker Title: Vice President lm SCHEDULE OF NOTIONAL AMOUNTS Notional Amount From and including To but excluding (USD) --------------------- ---------------- --------------- Effective Date 4/25/2007 148,561,498.15 4/25/2007 5/25/2007 147,999,167.26 5/25/2007 6/25/2007 147,248,810.15 6/25/2007 7/25/2007 146,310,730.85 7/25/2007 8/25/2007 145,185,684.96 8/25/2007 9/25/2007 143,874,882.82 9/25/2007 10/25/2007 142,379,991.25 10/25/2007 11/25/2007 140,703,133.88 11/25/2007 12/25/2007 138,846,890.01 12/25/2007 1/25/2008 136,814,292.04 1/25/2008 2/25/2008 134,608,821.29 2/25/2008 3/25/2008 132,234,402.46 3/25/2008 4/25/2008 129,695,396.48 4/25/2008 5/25/2008 126,996,591.90 5/25/2008 6/25/2008 124,143,194.78 6/25/2008 7/25/2008 121,140,817.15 7/25/2008 8/25/2008 117,995,463.97 8/25/2008 9/25/2008 114,713,518.71 9/25/2008 10/25/2008 111,301,727.52 10/25/2008 11/25/2008 107,767,182.09 11/25/2008 12/25/2008 104,117,301.23 12/25/2008 1/25/2009 100,359,811.22 1/25/2009 2/25/2009 96,502,724.96 2/25/2009 3/25/2009 92,554,320.06 3/25/2009 4/25/2009 88,523,115.91 4/25/2009 5/25/2009 84,417,849.77 5/25/2009 6/25/2009 80,247,664.45 6/25/2009 7/25/2009 76,021,641.08 7/25/2009 8/25/2009 71,749,002.35 8/25/2009 9/25/2009 67,603,684.00 9/25/2009 10/25/2009 63,582,889.30 10/25/2009 11/25/2009 59,683,878.36 11/25/2009 12/25/2009 55,903,967.04 12/25/2009 1/25/2010 52,240,525.86 1/25/2010 2/25/2010 48,690,978.87 2/25/2010 3/25/2010 45,252,802.61 3/25/2010 4/25/2010 41,923,525.10 4/25/2010 5/25/2010 38,700,724.77 5/25/2010 6/25/2010 35,582,029.46 6/25/2010 7/25/2010 32,565,115.48 7/25/2010 8/25/2010 29,647,706.62 8/25/2010 9/25/2010 26,827,573.21 9/25/2010 10/25/2010 24,102,531.19 10/25/2010 11/25/2010 21,470,441.21 11/25/2010 12/25/2010 18,929,207.75 12/25/2010 1/25/2011 16,476,778.22 1/25/2011 2/25/2011 14,111,142.15 2/25/2011 3/25/2011 11,830,330.31 3/25/2011 4/25/2011 9,632,413.91 4/25/2011 5/25/2011 7,515,503.79 5/25/2011 6/25/2011 5,477,749.64 6/25/2011 7/25/2011 3,517,339.22 7/25/2011 Termination Date 1,632,497.60