Execution Version

UNITED STATES DEPARTMENT OF THE TREASURY

January 4, 2010

c/o TCW Asset Management Company

865 S. Figueroa Street

Los Angeles, CA 90017

Winding-Up and Liquidation Agreement (this “Agreement”)

Ladies and Gentlemen:

Reference is made to (i) the Amended and Restated Limited Partnership Agreement of UST/TCW 

Senior Mortgage Securities Fund, L.P., dated as of September 30, 2009 (as the same may be amended, 

modified or supplemented from time to time, the “Partnership Agreement”) and (ii) the Loan Agreement, 

dated as of the date set forth on Schedule A thereto, by and among UST/TCW Senior Mortgage Securities 

Fund, L.P., as Borrower, The Bank of New York Mellon, as Administrative Agent and Collateral Agent, 

and The United States Department of the Treasury, as Lender (as the same may be amended, modified or 

supplemented from time to time, the “Loan Agreement”). Capitalized terms used but not defined herein 

have the meanings set forth in the Partnership Agreement or the Loan Agreement, as applicable. 

The parties hereto wish to enter into this Agreement to amend certain provisions of the 

Partnership Agreement and Loan Agreement, including to provide for the dissolution and winding up of 

the Partnership, the cancellation of the Investment Period and UST Management Fee, the release of each 

Limited Partner from its obligations with respect to its Capital Commitment, the priority of distributions 

in connection with the Final Distribution and the payment by the General Partner of certain expenses 

incurred by UST. The parties hereto also wish to provide for the General Partner to backstop a certain 

amount of the aggregate losses incurred by UST.

Notwithstanding anything to the contrary in the Partnership Agreement or in the Loan 

Agreement, the parties hereto agree as follows:

1. Winding-up. The parties hereto agree that there shall be deemed to be an Event of 

Dissolution and the Partnership shall be wound up and liquidated pursuant to the 

Winding-Up and Liquidation Plan (as defined below). The General Partner shall proceed 

with the Dissolution Sale and the Final Distribution. In the Dissolution Sale, the General 

Partner shall use its reasonable best efforts to reduce to Cash and Temporary Investments 

such assets of the Partnership as the General Partner shall deem it advisable to sell, 

subject to obtaining fair value for such assets. 

2. Winding-Up and Liquidation Plan. The General Partner has provided to UST a windingup and liquidation plan (the “Winding-Up and Liquidation Plan”) attached hereto as 

Annex A that (i) describes in detail the steps expected to be taken and the expected 

timeframe to liquidate the Partnership’s portfolio and (ii) includes a budget of Partnership 

Expenses expected to be incurred during the winding-up and liquidation. Any 
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amendment or supplement to the Winding-Up and Liquidation Plan shall require the prior 

written consent of UST.

3. Capital Commitments/Termination of Investment Period. The General Partner hereby 

agrees that the Investment Period is hereby terminated and each Limited Partner is hereby 

released from any future obligation with respect to its Capital Commitment. The General 

Partner may not admit any additional Limited Partner or permit any existing Partner to 

increase its Capital Commitment.

4. Capital Contributions. No Limited Partner shall be required to make any Capital 

Contribution to the Partnership on or after the date hereof.

5. Working Capital Reserve Account. The General Partner hereby represents that (i) 

Column 1 in Schedule A attached hereto accurately sets forth the amount held in each 

Partner’s Working Capital Reserve Account as of the date of this Agreement and (ii) 

Column 2 in Schedule A accurately sets forth the amounts held in each Partner’s 

Working Capital Reserve Account that are required to satisfy the existing legally binding 

obligations of the Partnership pursuant to clause (D) of Section 3.2(b) of the Partnership 

Agreement. The parties agree that (i) the amounts set forth in Column 3 in Schedule A

may be retained by the Partnership and used for Partnership Expenses (the amount set 

forth in the third row under Column 3 in Schedule A being the “Expense Cap”) and (ii) 

except as described in Section 11 of this Agreement, the Limited Partners shall not be 

liable for any Partnership Expenses in excess of the Expense Cap. For the avoidance of 

doubt, the Partnership shall also be permitted to retain Investment Proceeds and 

Temporary Investment Income for payment of Partnership Expenses up to the Expense 

Cap. The General Partner hereby agrees that the amounts set forth in Column 4 in 

Schedule A for UST and the Private Partner shall be refunded to such Partner within two 

(2) Business Days of the date of this Agreement. The General Partner shall promptly 

refund any unused amounts retained for Partnership Expenses upon the earlier to occur of 

(i) notice of its removal as general partner of the Partnership and (ii) the Final 

Distribution. 

6. Partnership Obligations. Neither the General Partner nor any of its Affiliates shall cause 

the Partnership to (i) incur or enter into any agreement to incur any additional 

Indebtedness, (ii) acquire (except as permitted pursuant to clause (D) of Section 3.2(b) of 

the Partnership Agreement), or enter into any agreement to acquire, any Investment or 

(iii) incur any other obligation (other than obligations that are reasonably necessary or 

incidental to the disposition of assets and other wind-down activities of the Partnership 

pursuant to the Winding-Up and Liquidation Plan). 

7. Management Fee. No UST Management Fee shall be payable by UST, including any 

UST Management Fee that has accrued to date, and any such fee is hereby extinguished. 

Any UST Management Fee previously received by the Fee Recipient shall be refunded to 

UST within two (2) Business Days of the date of this Agreement. Neither the Partnership 

nor the Fee Recipient may withhold Investment Proceeds or Temporary Investment 

Income otherwise distributable to satisfy any amount in respect of the UST Management 

Fee. 

8. Expenses. Within two (2) Business Days of the date hereof, the General Partner shall pay 

for and reimburse UST in Cash for all documented legal expenses incurred by UST as of 

the date hereof in connection with the matters contemplated hereby, including in 
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connection with its capacity as Limited Partner and Lender (“Legal Expenses”). As of 

the date hereof, UST’s Legal Expenses equal the amount set forth on Schedule B attached 

hereto. The General Partner shall provide UST with written notice at least ten (10) 

Business Days prior to the Final Distribution. Not less than five (5) Business Days prior 

to the Final Distribution, UST shall provide the General Partner with the amount of Legal 

Expenses incurred from and after the date hereof including any additional amounts 

estimated in connection with the Winding-Up and Liquidation Plan (“Subsequent 

Expenses”). The General Partner shall pay for and reimburse UST in Cash the amount of 

the Subsequent Expenses no later than two (2) Business Days following the Final 

Distribution.

9. Loss Backstop. To the extent that, after giving effect to the Final Distribution, aggregate 

distributions from the Partnership to UST in its capacity as Limited Partner and Lender 

(excluding, for the avoidance of doubt, any amounts returned to UST pursuant to Section 

3.2 of the Partnership Agreement and Section 5 of this Agreement) are less than the sum 

of (i) aggregate Capital Contributions to the Partnership by UST in its capacity as 

Limited Partner, (ii) the aggregate principal amount of Loans and (iii) all accrued and

unpaid interest incurred pursuant to the Loan Agreement (such sum, the “Aggregate 

Exposure”), the General Partner shall, within two (2) Business Days of the Final 

Distribution, pay to UST in Cash an amount equal to such shortfall. 

The above notwithstanding, in the event that UST removes the General Partner in 

accordance with Section 12 of this Agreement or suspends the disposition of Investments 

of the Partnership in accordance with Section 13 of this Agreement (the date the General 

Partner receives notice of either such event being referred to as the “Determination 

Date”), the General Partner shall (upon the election of UST in the case of a suspension in 

accordance with Section 13 of this Agreement), within five (5) Business Days of the 

Determination Date:

(a) pay UST in Cash an amount equal to the product of:

(i) the positive sum, if any, equal to (x) the aggregate Total Cost (defined below) of 

all Investments that were sold prior to the Determination Date (such Investments, 

including Investments for which sell orders are executed prior to the 

Determination Date and settled after such date, the “Realized Investments” and 

all Investments that have not been sold prior to the Determination Date being the 

“Unrealized Investments”) minus (y) the aggregate proceeds actually deposited 

into the Custodial Account of the Partnership from such Realized Investments 

minus (z) all Partnership Expenses incurred prior to the Determination Date; 

multiplied by

(ii) UST’s Percentage Interest (as defined on Schedule B); and

(b) place into an escrow account at the same financial institution as the Custodial 

Account administered by the Custodian (the “Backstop Account”) an amount (the 

amount placed into the Backstop Account pursuant to this clause (b) being referred to 

as the “Escrow Payment”) equal to:

(i) the positive sum, if any, if clause (1) below is greater than clause (2), of

1. the aggregate Total Cost of all Unrealized Investments minus
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2. the aggregate Fair Market Value of all Unrealized Investments as of the 

Determination Date minus

3. the amount, if any, by which the aggregate proceeds actually deposited into 

the Custodial Account of the Partnership from Realized Investments 

exceeded the sum of (x) aggregate Total Cost of all Realized Investments and 

(y) all Partnership Expenses incurred prior to the Determination Date; 

multiplied by

(ii) UST’s Percentage Interest.

(c) In the event that, after giving effect to the Final Distribution, the aggregate Total Cost 

of all Unrealized Investments is greater than:

(i) the aggregate proceeds actually deposited into the Custodial Account of the 

Partnership from Unrealized Investments minus

(ii) the aggregate Partnership Expenses incurred following the Determination Date 

(such difference being the “Net Unrealized Proceeds”);

(such excess being the “Ultimate Unrealized Shortfall”), the General Partner shall 

cause to be distributed to UST from the Backstop Account an amount equal to the 

lesser of:

(x) an amount equal to (I) the Escrow Payment plus (II) the sum of (x) all 

management or other fees and expenses paid by UST to the replacement general 

partner and (y) all out-of-pocket expenses incurred by UST in connection with the 

removal and replacement of the general partner (the amount in this clause (II) being 

the “UST Fees and Expenses”) and

(y) an amount equal to (I) the Ultimate Unrealized Shortfall multiplied by (II) UST’s 

Percentage Interest plus (III) UST Fees and Expenses.

For the avoidance of doubt, any amount remaining in the Backstop Account after the 

distribution, if any, made under this Section 9(c) shall be released to the General 

Partner.

(d) In the event that, after giving effect to the Final Distribution, Net Unrealized 

Proceeds is greater than the aggregate Total Cost of all Unrealized Investments (such 

difference being, the “Ultimate Unrealized Gain”), then

(i) if the amount equal to (I) the Ultimate Unrealized Gain multiplied by (II) UST’s 

Percentage Interest minus (III) the UST Fees and Expenses (such amount, the 

“Final Calculation”) is greater than zero, the full Escrow Payment shall be 

released to the General Partner; and

(ii) if the Final Calculation is less than zero, the General Partner shall cause to be 

distributed to UST from the Backstop Account an amount equal to the lesser of 

the Escrow Payment and the absolute value of the Final Calculation.
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“Total Cost” shall mean the total cost of each Investment as set forth in Column J on 

Schedule C attached hereto.

Notwithstanding anything set forth herein to the contrary, the aggregate liability of the 

General Partner pursuant to this Section 9 shall not exceed the Maximum Exposure as 

defined on Schedule B.

10. Repayment of Indebtedness. Notwithstanding anything in the Loan Agreement to the 

contrary, other than amounts payable on each Loan Payment Date for Permitted 

Borrower Administrative Expenses (excluding Partnership Expenses) as permitted 

pursuant to Section 2.07(b) of the Loan Agreement and only Partnership Expenses 

permitted by this Agreement, any amounts on deposit from time to time in the Custodial 

Account and the Interest Reserve Account and any other amounts shall be immediately 

paid to the Lender for the payment of the aggregate principal amount of the Loans and all 

accrued and unpaid interest on the Loans and other amounts owing under the Loan 

Agreement to the Lender in its capacity as such until all such amounts have been repaid 

in full, in each case whether or not then due. The Lender hereby agrees that, 

notwithstanding any Event of Default under the Loan Agreement that may occur as a 

result of the Key Person Event for which notice was provided to the Lender on December 

4, 2009, until such time that the Lender notifies the Borrower otherwise, interest payable 

on any Loan under the Loan Agreement will not bear interest at the Default Rate as a 

result of such Event of Default.

11. Distributions. Notwithstanding Section 3.4(f) of the Partnership Agreement and subject 

to Section 10 of this Agreement, Investment Proceeds and Temporary Investment Income 

may not be retained by the Partnership for any purpose, other than for payment of any 

other Partnership Expenses permitted by this Agreement. Following distribution by the 

Partnership to UST of an amount equal to the Aggregate Exposure and before any other 

distributions under this Agreement or the Partnership Agreement, the Partnership may 

apply the Partnership Expenses Percentage (as defined on Schedule B) of any Investment 

Proceeds and Temporary Investment Income to the payment of any Partnership Expenses 

that exceed the Expense Cap; provided that the aggregate amount of Partnership 

Expenses payable pursuant to this sentence shall not exceed the Maximum Amount (as 

defined on Schedule B). For the avoidance of doubt, the Remaining Percentage (as 

defined on Schedule B) of Investment Proceeds and Temporary Investment Income not 

applied in accordance with the preceding sentence shall be distributed to the Partners in 

accordance with Section 3.5 of the Partnership Agreement. Subject to the foregoing, all 

distributions shall be made in accordance with Section 8.3 of the Partnership Agreement.

12. No Fault Removal of the General Partner. UST at any time may require the removal, 

effective immediately upon notice to the General Partner of such removal, of the General 

Partner from the Partnership (a “No Fault Removal”) and the appointment of another 

Person as general partner or liquidator of the Partnership (which liquidator or general 

partner, as applicable, shall be approved by UST and a Majority in Interest of the Private 

Investors). 

13. Suspension. UST at any time may require the suspension, effective immediately upon 

notice to the General Partner, of any direct or indirect dispositions of any Investments by 

the Partnership except to the extent the General Partner determines in good faith that a 

disposition is necessary to avoid a material loss to the Partnership. 
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14. Key Person Event. The General Partner shall provide prompt notice of any Key Person 

Event as defined on Schedule B.

15. Guarantee. TCW (the “Guarantor”) hereby unconditionally and irrevocably guarantees, 

for the benefit of UST, the payment in Cash and performance when due of the General 

Partner’s obligations to UST pursuant to Sections 8 and 9 of this Agreement (the 

“Giveback Obligation”), and to the extent that for any reason the General Partner shall 

fail to fully and punctually to pay and perform the Giveback Obligation, the Guarantor 

shall pay to UST such amount in Cash. 

16. MFN. For the avoidance of doubt, the provisions of Section 11.2 of the Partnertship 

Agreement shall apply with respect to any agreement entered into by the General Partner 

or any of its Affiliates with any Private Vehicle, Feeder Vehicle or Private Investor in 

connection with any of the matters contemplated herein.

This Agreement is subject to and without waiver of all of UST’s rights in law and equity, 

including, without limitation its rights to pursue claims for damages and other relief against the General 

Partner and any of its Affiliates arising out of UST’s investment in the Partnership, as a Limited Partner 

and/or its role as Lender under the Loan Agreement, it being understood that the General Partner has 

entered into this Agreement with UST without any impairment of any other rights it may have. This 

Agreement constitutes a valid and binding agreement of the General Partner, on its own behalf and on 

behalf of the Partnership. In the event of any inconsistency between the terms and provisions of this 

Agreement and the terms and provisions of the Partnership Agreement or the Loan Documents, the terms 

and provisions of this Agreement shall supersede and control the terms and provisions of the Partnership 

Agreement and the Loan Documents. 

This Agreement shall be governed by and construed in accordance with the laws of the 

State of New York and may be executed in any number of counterparts, any one of which need not 

contain the signatures of more than one party, but all of such counterparts together shall constitute one 

agreement.