Contract analysis

I. Introduction and Purpose I write on behalf of Calderwood & Harkness LLP, counsel to Driftwood Capital Management LLC ("DCM" or the "General Partner"), the general partner of Driftwood Absolute Return Fund Ltd. ("DARF" or the "Fund"), in response to the detailed written comments submitted by Wexford Crane & Albright LLP ("WCA"), dated July 31, 2024, on the draft First Amendment (the "First Amendment") to the Amende

II. Successor Key Person Designation — Agreed We are pleased to confirm that, as discussed at the July 29 IAC meeting and reflected in WCA's comment letter, there is no objection from the IAC to the designation of Elaine R. Sato and Jonathan K. Huang as joint Successor Key Persons under the proposed amended Section 8.04(a) of the A&R LPA. Ms. Sato currently serves as Deputy Chief Investment Officer and is a Managing

III. 180-Day Replacement Period Mechanics (Amended Section 8.04) We acknowledge WCA's comments requesting clarification of the mechanics of the 180-day Replacement Period that would be triggered upon the loss of one (but not both) of the Successor Key Persons following the effective date of the First Amendment. We address each sub-comment in turn. A. WCA Comment 1: GP Notice Requirement for Commencement of Replacemen

IV. Investment Committee Structure (New Section 8.05) We acknowledge WCA's comments regarding the scope and authority of the three-member Investment Committee proposed to be established under new Section 8.05 of the A&R LPA. As set forth in the draft First Amendment, the Investment Committee would be composed of Ms. Sato (as Chair), Mr. Huang, and one independent member to be designated by the IAC. A. WCA Comment 5:

V. Follow-On Investment Cap Reduction We acknowledge WCA's comment supporting the proposed reduction of the follow-on investment cap during any future Key Person Event from 1.0% of AUM to 0.5% of AUM. The existing 1.0% cap, which currently limits follow-on investments to $28.7 million during the present Key Person Event, was viewed by several IAC members at the July 29 meeting as unduly generous for periods of govern

VI. Carried Interest Reallocation and Whitmore Vesting Schedule We acknowledge WCA's comments on the revised Schedule A (Carried Interest Allocation) attached to the draft First Amendment and on the proposed modifications to Mr. Whitmore's vesting schedule. A. Carried Interest Reallocation The proposed reallocation of carried interest among the members of the General Partner is as follows: As shown in the table above

VII. Whitmore Senior Advisor Designation WCA Comment 12: Limitations on Senior Advisor Role WCA has requested confirmation that Mr. Whitmore's "Senior Advisor" designation confers no voting rights, no signing authority, no authority to bind the Fund or the General Partner, and no access to proprietary position-level data except on a need-to-know basis as determined by the Investment Committee. GP Response: The Genera

VIII. GP Fiduciary Obligations During Future Key Person Events WCA Comment 13: Express Fiduciary Duty Acknowledgment WCA has requested that the First Amendment include an express acknowledgment that, during any future Key Person Event or Replacement Period, the General Partner's fiduciary duties under applicable Delaware law (including the duties of loyalty and care) are not diminished, suspended, or waived, and that

IX. Summary of Agreed Revisions and Outstanding Points A. Agreed Revisions For ease of reference, we summarize below the revisions that have been agreed between the General Partner and the IAC (through its counsel) and that will be incorporated into the revised draft of the First Amendment:

1. GP Notice for Replacement Period. Five (5)-business-day written notice requirement from the General Partner to all limited partners upon the loss of one Successor Key Person, with the 180-day Replacement Period commencing on the date of such notice.

2. IAC Consultation on Replacement Candidates. Non-binding, good faith consultation with the IAC regarding any proposed replacement Successor Key Person prior to circulation to the limited partners for consent.

3. Single Key Person Period. If no replacement is approved within 180 days, the remaining Successor Key Person continues as sole Key Person, with enhanced quarterly reporting to the IAC, but without automatic Investment Period suspension.

4. Loss of Both Successor Key Persons. Explicit mirroring of original Section 8.04(c) consequences (immediate Investment Period suspension, 90-day Cure Period, and potential wind-down) for the loss of both Successor Key Persons, whether simultaneously or sequentially.

5. Independent Investment Committee Member Consent Right. Affirmative consent right for the IAC-designated independent Investment Committee member on any single new investment or follow-on investment exceeding $50 million in notional exposure.

6. Independent Member Designation and Term. Designation by majority vote of the IAC (headcount), renewable two (2)-year term, removal by majority IAC vote, independence qualification.

7. Investment Committee Minutes. Summary minutes of Investment Committee meetings to be made available to the IAC upon request within fifteen (15) business days, subject to redaction of proprietary trading strategies and position-level detail.

8. Dynamic Follow-On Cap. Follow-on investment cap during any future Key Person Event to be calculated as 0.5% of NAV at the time of the triggering event (based on the most recent monthly valuation by Pinnacle Fund Services (Cayman) Ltd.), rather than a fixed dollar amount.

9. Bad Actor Forfeiture. Forfeiture of all unvested carried interest attributable to Mr. Whitmore's allocation upon willful misconduct, fraud, or gross negligence.

10. Senior Advisor Limitations. Express limitation of the Senior Advisor designation to an advisory/honorary role, with no governance, voting, signing, or binding authority, and with information access at the Investment Committee's discretion.

11. Fiduciary Duty Acknowledgment. Express statement that the General Partner's fiduciary obligations under Delaware law and the A&R LPA are not diminished during a Key Person Event, Replacement Period, or Single Key Person Period.

12. Enhanced Reporting During Key Person Events. Monthly portfolio summary letters to the IAC; prompt notice of material adverse changes exceeding 5% of NAV; disclosure of material prime brokerage disruptions. B. Outstanding Points Based on the discussions to date and the foregoing analysis, only two (2) points remain outstanding:

1. Drafting Language for $50 Million Investment Committee Consent Threshold. The precise drafting language for the independent member's affirmative consent right on investments exceeding $50 million in notional exposure has not yet been circulated. The General Partner will prepare and circulate proposed language to WCA within three (3) business days of this letter.

2. Definition of "Material" for Prime Broker Disruption Disclosure. The parties have agreed on the obligation to disclose material prime broker disruptions but have not yet settled on the precise definition of "material" in this context. This definitional question will be discussed between Stephen Adler of Calderwood & Harkness and David Pineda of Wexford Crane & Albright, with the objective of reaching agreement in

X. Revised Draft Circulation Timeline In light of the foregoing, the General Partner proposes the following timeline for the completion and circulation of the revised draft of the First Amendment: • By August 5, 2024: Calderwood & Harkness to circulate proposed drafting language for the $50 million Investment Committee consent threshold and the "material" prime broker disruption definition to WCA. • By August 7, 2024

XI. Closing We wish to express our sincere gratitude to you and to David Pineda for the constructive, professional, and collaborative manner in which WCA has engaged on behalf of the IAC throughout this process. We also extend our thanks to the IAC members — Diana Cortland, Richard Oshima, Catherine Mercer, Thomas Ashworth, and Nadia Al-Rashid — for their active participation in the July 29 meeting and for the though