Contract analysis

I. Background — The Key Person Event A. The Incapacitation of Marcus J. Whitmore Marcus J. Whitmore is the Founder, Chief Investment Officer, and Managing Member of DCM, holding a ninety percent (90%) membership interest in DCM. Since the Fund's inception in 2017, Mr. Whitmore has served as the sole designated "Key Person" under Section 8.04(a) of the Partnership Agreement. In that capacity, Mr. Whitmore has borne pr

Section 8.04(b) of the Partnership Agreement provides, in relevant part, that a "Key Person Event" shall be deemed to have occurred if the Key Person: "is unable to devote substantially all of his professional time and attention to the affairs of the Partnership for a period of seven (7) consecutive calendar days, unless the Key Person has provided prior written notice to the General Partner of a planned absence (inc

1. Immediate Suspension of the Investment Period. The Investment Period (as defined in Section 1.01(xx) of the Partnership Agreement) was immediately suspended upon the occurrence of the Key Person Event. During the period of suspension, the Fund may not make any new investments, including the acquisition of any new portfolio positions, the entry into any new derivative contracts, or the commitment of capital to any

2. Follow-On Investment Cap. Notwithstanding the suspension of the Investment Period, the Fund may continue to make follow-on investments in existing portfolio positions, provided that the aggregate amount of all such follow-on investments during the suspension period does not exceed one percent (1.0%) of the Fund's net asset value as of the last day of the calendar month immediately preceding the Key Person Event. B

3. Commencement of the Cure Period. A ninety (90) calendar-day cure period (the "Cure Period") commenced on June 10, 2024, the date of the Key Person Event. The Cure Period will expire on September 8, 2024, unless extended as provided below. During the Cure Period, the General Partner may propose one or more Successor Key Persons for approval by the Limited Partners.

4. Limited Partner Consent Requirement. Any Successor Key Person proposed by the General Partner during the Cure Period must be approved by Limited Partners holding not less than sixty-six and two-thirds percent (66⅔%) of the aggregate capital commitments of all Limited Partners (excluding the capital commitment attributable to the General Partner's co-investment), calculated as of the date of the Key Person Event.

5. Remedies Upon Expiration of the Cure Period Without Cure. If no Successor Key Person is approved by the requisite majority of Limited Partners within the Cure Period, then Limited Partners holding a majority-in-interest (as defined in Section 1.01(yy) of the Partnership Agreement) may elect to either: (i) extend the Cure Period by up to ninety (90) additional calendar days, or (ii) direct the General Partner to co

II. The Successor Key Person Proposal A. Designation of Joint Successor Key Persons The General Partner hereby proposes that Elaine R. Sato, Deputy Chief Investment Officer and Managing Member of DCM, and Jonathan K. Huang, Head of Credit Strategies at DCM, be designated as joint Successor Key Persons under a revised Section 8.04 of the Partnership Agreement (the "Successor Key Persons" or, individually, a "Successor

1. Combined Depth of Experience. Ms. Sato and Mr. Huang bring a combined thirty-five (35) years of professional experience across all three of the Fund's core strategy verticals — equity long/short, event-driven, and credit relative value. Their combined experience spans multiple market cycles, including periods of significant volatility and dislocation, and encompasses a broad range of investment approaches and asse

2. Institutional Continuity. Ms. Sato has been with DCM since the Fund's inception in 2017 (seven years), and Mr. Huang has been with DCM since 2019 (five years), for a combined tenure at Driftwood of twelve (12) years. Both individuals possess deep institutional knowledge of the Fund's investment process, portfolio construction methodology, risk management framework, and operational infrastructure. The designation o

3. Demonstrated Track Records. Both Ms. Sato and Mr. Huang have demonstrated strong track records within the Fund's multi-strategy absolute return framework. Ms. Sato's equity long/short and event-driven books have been consistent contributors to the Fund's overall performance, and Mr. Huang's credit relative value portfolio has generated attractive risk-adjusted returns. Their respective strategy-level performance r

4. Reduced Concentration Risk. The joint designation of two Successor Key Persons, coupled with the 180-day Replacement Period for the loss of a single Successor Key Person, represents a significant structural improvement over the prior single-person Key Person framework. The new structure reduces the risk that the departure or incapacitation of any single individual will trigger an immediate disruption to the Fund's

5. Alignment of Interest. Ms. Sato and Mr. Huang maintain combined personal capital commitments to the Fund of $22.96 million ($14.35 million and $8.61 million, respectively), demonstrating meaningful "skin in the game" and alignment of their economic interests with those of the Limited Partners. The proposed carried interest reallocation described in Section III.F below further strengthens this alignment by increasi

III. Summary of the Proposed First Amendment to the Partnership Agreement The General Partner has prepared a draft First Amendment to the Partnership Agreement (the "Amendment"), a copy of which is attached hereto as Exhibit A. The Amendment would effect the following changes to the Partnership Agreement. The summary set forth below is qualified in its entirety by reference to the full text of the Amendment attached

Section 8.04(a) of the Partnership Agreement currently defines "Key Person" as Marcus J. Whitmore. The Amendment would redefine the term "Key Person" to mean Elaine R. Sato and Jonathan K. Huang, jointly. Accordingly, the term "Key Person" would refer to both individuals acting together, rather than to any single individual. Under the amended provision, a Key Person Event would be deemed to have occurred only if both

1. Elaine R. Sato, serving as Chair of the Investment Committee;

3. One independent member, to be designated by the Investor Advisory Committee (the "IAC") pursuant to Section 9.02 of the Partnership Agreement, as amended. The Investment Committee would be responsible for the review and approval of all new investment positions exceeding a specified materiality threshold (to be set forth in the Amendment), the monitoring and management of portfolio-level risk, and the oversight of

IV. Consent Solicitation Mechanics A. Required Consent Threshold Approval of the Amendment and the designation of the Successor Key Persons requires the written consent of Limited Partners holding not less than sixty-six and two-thirds percent (66⅔%) of the aggregate capital commitments of all Limited Partners, excluding the capital commitment attributable to the General Partner's co-investment (the "Requisite Consen

V. Role of the Investor Advisory Committee The Investor Advisory Committee (the "IAC"), established under Section 9.02 of the Partnership Agreement, consists of five (5) members representing the Fund's largest institutional investors. The current composition of the IAC is as follows: The IAC has been briefed on the Successor Proposal and the proposed terms of the Amendment in a series of preliminary communications an

VI. Advisors The following advisors have been engaged or notified in connection with the Key Person Event, the Successor Proposal, and the consent solicitation process: Counsel to the General Partner: Calderwood & Harkness LLP 1585 Broadway, 34th Floor New York, NY 10036 • Graham Sutherland, Responsible Partner, Funds & Asset Management • Pamela Cross, Billing Partner, Funds & Asset Management • Stephen Adler, Lead A

VII. Enclosed Documents The following documents are enclosed with this letter and should be reviewed carefully by each Limited Partner in connection with the Successor Proposal and the consent solicitation: Exhibit A: Draft First Amendment to the Amended & Restated Limited Partnership Agreement of Driftwood Absolute Return Fund Ltd., dated as of March 15, 2017 Exhibit B: Form of Written Consent of Limited Partners —

VIII. Contact Information and Questions Limited Partners with questions regarding the Successor Proposal, the terms of the Amendment, or the consent solicitation process are encouraged to direct their inquiries to either of the following contacts: Elaine R. Sato Deputy Chief Investment Officer Driftwood Capital Management LLC 680 Lexington Avenue, 31st Floor New York, NY 10022 Telephone: +1 (212) 555-0283 Email: esat

IX. Governing Law The Partnership Agreement is governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflict of laws principles thereof. The proposed Amendment, the consent solicitation, this letter, and all matters arising under or in connection therewith shall likewise be governed by and construed in accordance with the laws of the State of Delaware. Closing The Genera