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EXECUTION VERSION

FIRST AMENDMENT TO THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF DRIFTWOOD ABSOLUTE RETURN FUND LTD.

Effective as of August 26, 2024

By and Among

DRIFTWOOD CAPITAL MANAGEMENT LLC a Delaware limited liability company, as General Partner

and

THE LIMITED PARTNERS of

DRIFTWOOD ABSOLUTE RETURN FUND LTD. a Cayman Islands exempted limited partnership (Registration No. ELP-87234)

FIRST AMENDMENT TO THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF DRIFTWOOD ABSOLUTE RETURN FUND LTD.

This First Amendment (this "Amendment") to the Amended and Restated Limited Partnership Agreement, dated as of March 15, 2017 (as in effect immediately prior to the effectiveness of this Amendment, the "Agreement" or the "A&R LPA"), of Driftwood Absolute Return Fund Ltd., a Cayman Islands exempted limited partnership registered under the Exempted Limited Partnership Law (as revised) of the Cayman Islands under Registration No. ELP-87234 (the "Partnership" or "DARF"), is entered into as of August 26, 2024 (the "Amendment Effective Date"), by and among Driftwood Capital Management LLC, a Delaware limited liability company ("DCM" or the "General Partner"), having its principal office at 680 Lexington Avenue, 31st Floor, New York, New York 10022, and the limited partners of the Partnership (each, a "Limited Partner" and collectively, the "Limited Partners").

The Partnership maintains its registered office at 4th Floor, Harbour Place, 103 South Church Street, George Town, Grand Cayman, KY1-1104, Cayman Islands, and its registered agent is Archipelago Corporate Services Ltd., P.O. Box 2681, George Town, Grand Cayman, KY1-1111, Cayman Islands. The Delaware registered agent of DCM is Capitol Registered Agents, Inc., 1209 Orange Street, Wilmington, Delaware 19801. The employer identification number of DCM is 82-4917653.

RECITALS

WHEREAS, the Partnership was formed as an exempted limited partnership under the laws of the Cayman Islands with an inception date of March 15, 2017, and the parties entered into the A&R LPA on such date, which A&R LPA is governed by the laws of the State of Delaware (Recital A);

WHEREAS, pursuant to Section 8.04(a) of the Agreement, Marcus J. Whitmore was designated as the sole "Key Person" of the Partnership, and the rights, obligations, and protections associated with the Key Person provisions were established in reliance upon Mr. Whitmore's continued active involvement in the management of the Partnership's investment portfolio (Recital B);

WHEREAS, on June 3, 2024, Marcus J. Whitmore suffered a severe hemorrhagic stroke resulting in his medical incapacitation, and, pursuant to Section 8.04(b) of the Agreement, a Key Person Event was deemed to have occurred effective June 10, 2024, as the Key Person was unable to devote substantially all of his professional time to the affairs of the Partnership for a period of seven (7) consecutive calendar days following the date of such medical event (Recital C);

WHEREAS, as a consequence of the Key Person Event, and in accordance with Section 8.04(c) of the Agreement, the Investment Period was immediately suspended, follow-on investments were capped at Twenty-Eight Million Seven Hundred Thousand Dollars ($28,700,000) (representing 1.0% of assets under management as of the most recent net asset value determination), and a ninety (90) calendar day Cure Period commenced on June 10, 2024, such Cure Period being scheduled to expire on September 8, 2024 (Recital D);

WHEREAS, the General Partner notified all forty-seven (47) Limited Partners in writing of the Key Person Event on June 14, 2024, within the five (5) business day deadline prescribed by Section 8.04(c) of the Agreement (such deadline being June 17, 2024), and such notices were delivered by electronic mail and overnight courier in accordance with the notice provisions of the Agreement (Recital E);

WHEREAS, following the Key Person Event, the General Partner proposed the designation of Elaine R. Sato, Deputy Chief Investment Officer and Managing Member (holding a 10% membership interest) of DCM, and Jonathan K. Huang, Head of Credit Strategies of DCM, as Successor Key Persons pursuant to Section 8.04 of the Agreement, and the General Partner circulated this Amendment to all forty-seven (47) Limited Partners on July 15, 2024 for their review and consent (Recital F);

WHEREAS, the Investor Advisory Committee of the Partnership (the "IAC"), established pursuant to Section 9.02 of the Agreement, reviewed the proposed Amendment at its duly convened meeting on July 29, 2024, at which a quorum was present, and the IAC discussed the qualifications of the proposed Successor Key Persons, the terms of the proposed Investment Committee, the proposed modifications to the Key Person provisions, and the proposed reallocation of carried interest (Recital G);

WHEREAS, pursuant to Section 14.01 of the Agreement, amendments to the Agreement require the written consent of Limited Partners holding not less than sixty-six and two-thirds percent (66⅔%) of aggregate Limited Partner capital commitments (excluding the General Partner's co-investment) (Recital H);

WHEREAS, as of the date hereof, aggregate Limited Partner capital commitments for voting purposes equal Two Billion Seven Hundred Ninety-Eight Million Two Hundred Fifty Thousand Dollars ($2,798,250,000), being Two Billion Eight Hundred Seventy Million Dollars ($2,870,000,000) of total net asset value less Fifty-Seven Million Four Hundred Thousand Dollars ($57,400,000) attributable to Marcus J. Whitmore and Fourteen Million Three Hundred Fifty Thousand Dollars ($14,350,000) attributable to Elaine R. Sato, each committed through the General Partner vehicle and therefore excluded from the voting base, and the required consent threshold equals One Billion Eight Hundred Sixty-Five Million Five Hundred Thousand Dollars ($1,865,500,000), representing 66⅔% of $2,798,250,000 (Recital I);

WHEREAS, written consents to this Amendment were received from thirty-eight (38) of forty-seven (47) Limited Partners by August 19, 2024, prior to the consent deadline of August 23, 2024, representing aggregate capital commitments of Two Billion Four Hundred Twelve Million Eight Hundred Thousand Dollars ($2,412,800,000), constituting approximately 86.2% of voting Limited Partner capital commitments, which exceeds the required 66⅔% threshold by a substantial margin (Recital J); and

WHEREAS, the General Partner desires to amend the Agreement to reflect the designation of Successor Key Persons, the establishment of an Investment Committee, the modification of the Key Person provisions, the reallocation of carried interest among the principals of DCM, and the designation of Marcus J. Whitmore as Senior Advisor to the Partnership, all as more fully set forth herein (Recital K).

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I — DEFINITIONS AND INTERPRETATION

Section 1.1 — Defined Terms. Unless otherwise defined herein, capitalized terms used in this Amendment shall have the meanings ascribed to them in the Agreement. The following new or amended defined terms are hereby added to, or shall replace existing definitions in, Article I of the Agreement, as applicable:

(a) "Amendment Effective Date" means August 26, 2024.

(b) "Investment Committee" has the meaning set forth in Section 8.05 of the Agreement, as added by Section 3.1 of this Amendment.

(c) "Key Person" means, as of the Amendment Effective Date, Elaine R. Sato and Jonathan K. Huang, jointly. This definition replaces the prior definition of "Key Person" in its entirety, pursuant to which Marcus J. Whitmore was designated as the sole Key Person.

(d) "Key Person Event" has the meaning set forth in amended Section 8.04(b) of the Agreement, as amended by Section 2.2 of this Amendment.

(e) "Replacement Period" means the one hundred eighty (180) calendar day period described in amended Section 8.04(c)(ii) of the Agreement, as amended by Section 2.3 of this Amendment.

(f) "Senior Advisor" means Marcus J. Whitmore, in the capacity described in Section 8.06 of the Agreement, as added by Section 4.1 of this Amendment.

(g) "Single Key Person Departure" has the meaning set forth in amended Section 8.04(b) of the Agreement, as amended by Section 2.2 of this Amendment.

(h) "Successor Key Person" means each of Elaine R. Sato and Jonathan K. Huang, designated as such pursuant to Section 8.04(a) of the Agreement as amended by this Amendment.

Section 1.2 — Interpretation. References in this Amendment to "Sections" are to Sections of the Agreement as amended by this Amendment, and references to "Schedules" are to Schedules of the Agreement as amended by this Amendment, in each case unless the context otherwise requires. The Agreement, as amended by this Amendment, shall be read and construed as one integrated document. In the event of any conflict between the provisions of this Amendment and the provisions of the Agreement as in effect immediately prior to the Amendment Effective Date, the provisions of this Amendment shall control.

ARTICLE II — AMENDMENT OF SECTION 8.04 (KEY PERSON PROVISIONS)

Section 2.1 — Amendment of Section 8.04(a) — Definition of Key Person. Section 8.04(a) of the Agreement is hereby amended and restated in its entirety to read as follows:

"Section 8.04(a) — Definition of Key Person. 'Key Person' shall mean Elaine R. Sato and Jonathan K. Huang, jointly. Both Successor Key Persons must remain actively engaged in the management of the Partnership's investment portfolio, and each must devote substantially all of his or her respective professional time to the affairs of the Partnership, for the Key Person requirement to be satisfied. For the avoidance of doubt, Marcus J. Whitmore is no longer designated as a Key Person as of the Amendment Effective Date and his designation as Senior Advisor pursuant to Section 8.06 hereof shall not, under any circumstances, be construed as constituting him as a Key Person for any purpose under this Agreement."

Section 2.2 — Amendment of Section 8.04(b) — Key Person Event Trigger. Section 8.04(b) of the Agreement is hereby amended and restated in its entirety to read as follows:

"Section 8.04(b) — Key Person Event. A 'Key Person Event' shall be deemed to have occurred if both Elaine R. Sato and Jonathan K. Huang are, at the same time, unable to devote substantially all of their respective professional time to the affairs of the Partnership, by reason of death, permanent disability (as determined in good faith by the General Partner based on medical evidence reasonably available), voluntary or involuntary departure from DCM or the Partnership, termination for cause, or any other cause, for a period of seven (7) consecutive calendar days. If only one of the two Key Persons ceases active involvement in the management of the Partnership's investment portfolio for any reason whatsoever (a 'Single Key Person Departure'), a Key Person Event shall not be deemed to have occurred; provided, however, that the provisions of Section 8.04(c)(ii) (Replacement Period) shall apply in the case of a Single Key Person Departure. The determination of whether a Key Person Event or a Single Key Person Departure has occurred shall be made by the General Partner in good faith, and the General Partner shall promptly notify the Investor Advisory Committee and all Limited Partners of any such determination."

Section 2.3 — Amendment of Section 8.04(c) — Consequences of Key Person Event and Single Key Person Departure. Section 8.04(c) of the Agreement is hereby amended and restated in its entirety to read as follows:

"Section 8.04(c) — Consequences of Key Person Event and Single Key Person Departure.

(i) Full Key Person Event (Both Key Persons). Upon the occurrence of a Key Person Event (i.e., both Key Persons ceasing active involvement simultaneously or within seven (7) consecutive calendar days of each other):

(A) the Investment Period shall be immediately suspended, and no new investments shall be permitted during the period of such suspension;

(B) follow-on investments in existing portfolio positions shall be capped at Fourteen Million Three Hundred Fifty Thousand Dollars ($14,350,000), representing 0.5% of assets under management as of the most recent net asset value determination available at the time of the Key Person Event (for the avoidance of doubt, this cap replaces the prior cap of $28,700,000 representing 1.0% of assets under management that was applicable under the Agreement as in effect prior to the Amendment Effective Date);

(C) the General Partner shall notify all Limited Partners in writing within five (5) business days of the occurrence of the Key Person Event, setting forth in reasonable detail the circumstances giving rise to the Key Person Event and the General Partner's initial assessment of the impact on the Partnership's investment activities;

(D) a Cure Period of ninety (90) calendar days shall commence on the date of the Key Person Event, during which the General Partner may propose one or more replacement Key Persons for approval by the Limited Partners;

(E) approval of any proposed replacement Key Person shall require the written consent of Limited Partners holding not less than sixty-six and two-thirds percent (66⅔%) of aggregate Limited Partner capital commitments (excluding the General Partner's co-investment), such consent to be solicited in writing in accordance with the notice provisions of the Agreement; and

(F) if no replacement Key Person is approved within the Cure Period, Limited Partners holding a majority-in-interest of aggregate Limited Partner capital commitments (excluding the General Partner's co-investment) may elect, by written notice delivered to the General Partner within thirty (30) calendar days following the expiration of the Cure Period, to (x) extend the Cure Period by up to ninety (90) additional calendar days on the same terms set forth in this Section 8.04(c)(i), or (y) direct the General Partner to commence an orderly wind-down of the Partnership in accordance with Section 12.01 of this Agreement.

(ii) Single Key Person Departure (One Key Person). Upon the occurrence of a Single Key Person Departure (i.e., only one of the two Key Persons ceasing active involvement):

(A) the Investment Period shall not be automatically suspended;

(B) a Replacement Period of one hundred eighty (180) calendar days shall commence on the date of the Single Key Person Departure;

(C) during the Replacement Period, the remaining Key Person shall continue to manage the Partnership's investments in the ordinary course, subject to oversight by the Investment Committee established under Section 8.05 of this Agreement, and the remaining Key Person shall not have the authority to make any new investment or commitment in excess of Fifty Million Dollars ($50,000,000) without the prior approval of the Investment Committee;

(D) during the Replacement Period, the General Partner shall use commercially reasonable efforts to identify and propose a replacement for the departed Key Person, and any such proposed replacement shall be subject to approval by Limited Partners holding not less than sixty-six and two-thirds percent (66⅔%) of aggregate Limited Partner capital commitments (excluding the General Partner's co-investment);

(E) follow-on investments during the Replacement Period shall be capped at Fourteen Million Three Hundred Fifty Thousand Dollars ($14,350,000), representing 0.5% of assets under management as of the most recent net asset value determination;

(F) the General Partner shall notify all Limited Partners in writing within five (5) business days of a Single Key Person Departure, setting forth in reasonable detail the circumstances giving rise to the Single Key Person Departure, the identity of the remaining Key Person, and the General Partner's plan for identifying a replacement Key Person; and

(G) if no replacement Key Person is approved prior to the expiration of the Replacement Period, a Key Person Event shall be deemed to have occurred on the date of such expiration, and the provisions of Section 8.04(c)(i) shall thereupon apply as if such Key Person Event had occurred on such date."

ARTICLE III — ADDITION OF SECTION 8.05 (INVESTMENT COMMITTEE)

Section 3.1 — New Section 8.05. A new Section 8.05 is hereby added to the Agreement immediately following Section 8.04 (as amended by Article II of this Amendment), which Section 8.05 shall read in its entirety as follows:

"Section 8.05 — Investment Committee.

(a) Establishment. Effective as of the Amendment Effective Date, the General Partner shall establish an Investment Committee of the Partnership (the 'Investment Committee'). The Investment Committee shall be a standing committee of the Partnership and shall continue in existence for so long as the Partnership continues to conduct investment operations.

(b) Composition. The Investment Committee shall consist of three (3) members, as follows:

(i) Elaine R. Sato, who shall serve as Chair of the Investment Committee and who shall preside over all meetings of the Investment Committee;

(ii) Jonathan K. Huang, who shall serve as a member of the Investment Committee; and

(iii) one independent member (the 'IAC-Designated Member') to be designated by a majority vote of the members of the Investor Advisory Committee established under Section 9.02 of this Agreement, such designation to occur within sixty (60) days of the Amendment Effective Date. The IAC-Designated Member shall be a natural person who is not an employee, officer, member, partner, or affiliate of the General Partner, DCM, or any of their respective affiliates. The IAC-Designated Member shall serve at the pleasure of the Investor Advisory Committee and may be removed and replaced by a majority vote of the IAC members at any time.

Vacancies on the Investment Committee arising by reason of death, resignation, removal, or incapacity of any member shall be filled in the same manner as the original appointment of such member (i.e., vacancies in positions (i) or (ii) above shall be filled by the General Partner, and vacancies in position (iii) shall be filled by a majority vote of the Investor Advisory Committee). Any vacancy shall be filled within thirty (30) calendar days of its occurrence, and pending the filling of any vacancy, the remaining members of the Investment Committee shall continue to exercise the authority and functions of the Investment Committee.

(c) Authority and Functions. The Investment Committee shall oversee the investment activities of the Partnership, including, without limitation, the review and approval of all new investments, all material follow-on investments, all material dispositions of portfolio investments, and all other material portfolio decisions as determined in good faith by the Chair of the Investment Committee. All investment decisions requiring Investment Committee approval shall require the affirmative vote of at least two (2) of the three (3) members of the Investment Committee. In the event of a tie or deadlock, the Chair of the Investment Committee shall not have a casting vote, and the matter shall be tabled for further discussion at the next meeting of the Investment Committee unless the Chair determines, in her reasonable judgment, that the matter requires immediate action to protect the interests of the Partnership, in which case the Chair may take such action as she deems reasonably necessary and shall promptly report such action to the full Investment Committee and the Investor Advisory Committee.

The Investment Committee shall meet not less frequently than monthly, either in person or by telephonic or video conference, and shall keep written minutes of its proceedings, which minutes shall be made available to the Investor Advisory Committee upon request.

(d) Reporting. The Investment Committee shall provide quarterly written reports to the Investor Advisory Committee and to all Limited Partners summarizing the activities and investment decisions of the Investment Committee during the preceding quarter, including a summary of all new investments approved, all investments declined, all material portfolio actions taken, and any other matters the Investment Committee deems relevant to the Limited Partners' understanding of the Partnership's investment activities. Such quarterly reports shall be delivered within thirty (30) calendar days following the end of each calendar quarter."

ARTICLE IV — ADDITION OF SECTION 8.06 (SENIOR ADVISOR)

Section 4.1 — New Section 8.06. A new Section 8.06 is hereby added to the Agreement immediately following Section 8.05 (as added by Article III of this Amendment), which Section 8.06 shall read in its entirety as follows:

"Section 8.06 — Senior Advisor.

(a) Designation. Marcus J. Whitmore is hereby designated as 'Senior Advisor' to the Partnership, effective as of the Amendment Effective Date, in recognition of his foundational role in establishing and building the Partnership and his contributions to the Partnership's investment strategy and performance since inception.

(b) Role and Limitations. The Senior Advisor shall have no governance authority, voting rights, or decision-making power with respect to the Partnership's investments, operations, or other affairs. The Senior Advisor shall not serve as a member of the Investment Committee. The Senior Advisor shall not have the authority to bind the Partnership or the General Partner in any respect, and shall not hold himself out as having any such authority. The Senior Advisor may, at the request of the General Partner (acting through its authorized officers), provide non-binding advisory input on investment strategy, portfolio construction, risk management, or such other matters as the General Partner may reasonably request from time to time, but the Senior Advisor shall have no obligation to provide any such advisory input, and any advisory input provided by the Senior Advisor shall be solely for informational purposes and shall not be binding on the General Partner, the Investment Committee, or the Partnership.

For the avoidance of doubt, the designation of Marcus J. Whitmore as Senior Advisor does not constitute the Senior Advisor as a Key Person, general partner, managing member, officer, director, or employee of the Partnership or DCM, and shall not give rise to any fiduciary duty or obligation on the part of the Senior Advisor to the Partnership, the General Partner, or any Limited Partner, except to the extent that the Senior Advisor's continued status as a Managing Member of DCM may give rise to obligations under DCM's operating agreement or applicable law.

(c) Compensation and Carried Interest. The Senior Advisor's carried interest entitlement shall be as set forth in amended Schedule A to this Agreement, as amended by Section 5.1 of this Amendment. The Senior Advisor's carried interest shall vest in accordance with the schedule set forth in Section 5.2 of this Amendment. The Senior Advisor shall not be entitled to any management fee, salary, bonus, or other compensation from the Partnership or DCM in respect of his role as Senior Advisor, except for the carried interest allocation described in this Section 8.06(c) and in Schedule A."

ARTICLE V — AMENDMENT OF SCHEDULE A (CARRIED INTEREST ALLOCATION)

Section 5.1 — Amended Schedule A. Schedule A to the Agreement (Carried Interest Allocation) is hereby amended and restated in its entirety, effective as of the Amendment Effective Date, as set forth in Exhibit A attached hereto and incorporated herein by reference. For convenience of reference, the material terms of the amended carried interest allocation are summarized as follows:

The General Partner's aggregate incentive allocation shall remain at twenty percent (20%) of net new profits above the high-water mark, subject to the six percent (6%) annualized hurdle rate with full catch-up, as provided in the Agreement. This Amendment does not modify the aggregate incentive allocation or the hurdle rate and catch-up provisions. The internal allocation of the General Partner's twenty percent (20%) incentive allocation among the principals of DCM shall be as follows, effective as of the Amendment Effective Date:

For the avoidance of doubt, the GP-level total incentive allocation of twenty percent (20%) of net new fund profits above the high-water mark is unchanged by this Amendment. The reallocation set forth in this Section 5.1 affects only the internal allocation of the General Partner's incentive allocation among the individual principals of DCM and does not alter the aggregate economics payable by the Partnership to the General Partner.

Section 5.2 — Whitmore Carried Interest Vesting Schedule. Marcus J. Whitmore's accrued and future carried interest entitlement under amended Schedule A shall vest in accordance with the following schedule:

(a) Immediate Vesting. Fifty percent (50%) of the carried interest accrued to the account of Marcus J. Whitmore as of June 10, 2024 (the date of the Key Person Event) shall vest immediately as of the Amendment Effective Date. For purposes of this Section 5.2(a), the amount of accrued carried interest as of June 10, 2024 shall be determined by the Fund Administrator based on the net asset value of the Partnership as of such date, calculated in accordance with the valuation provisions of the Agreement.

(b) Ratable Vesting. The remaining fifty percent (50%) of such accrued carried interest, together with any carried interest accruing on or after June 10, 2024 attributable to the Senior Advisor's nine percent (9%) allocation under amended Schedule A, shall vest ratably on a monthly basis over a period of thirty-six (36) months commencing on June 10, 2024. Specifically, one thirty-sixth (1/36th) of such carried interest shall vest on the 10th day of each calendar month following June 10, 2024, with the first installment having vested on July 10, 2024 and the final installment vesting on June 10, 2027. For the avoidance of doubt, installments that vested prior to the Amendment Effective Date pursuant to the foregoing schedule shall be deemed to have vested retroactively as of the applicable vesting date.

(c) Acceleration Upon Death. In the event of the Senior Advisor's death during the thirty-six (36) month vesting period described in Section 5.2(b), all unvested carried interest of the Senior Advisor shall immediately vest in full as of the date of the Senior Advisor's death and shall be payable to the Senior Advisor's estate or designated beneficiary in accordance with the distribution provisions of the Agreement.

(d) Payment of Vested Carried Interest. Vested carried interest of the Senior Advisor shall be payable in accordance with the distribution provisions of Section 6.03 of the Agreement, subject to the clawback provisions of Section 6.04 of the Agreement. Unvested carried interest shall not be distributable and shall remain subject to the vesting schedule set forth in this Section 5.2 until vested in accordance with its terms.

Section 5.3 — No Change to Management Fee. For the avoidance of doubt, this Amendment does not modify the management fee of two percent (2.0%) of net asset value per annum, payable quarterly in advance, or any other fee provisions of the Agreement. The management fee shall continue to be calculated and payable in accordance with the terms of the Agreement as in effect immediately prior to the Amendment Effective Date.

ARTICLE VI — AMENDMENT OF SECTION 14.01 (AMENDMENTS)

Section 6.1 — Conforming Amendment to Section 14.01. Section 14.01 of the Agreement is hereby amended to add the following proviso at the end of the first sentence thereof:

"; provided, further, that any future amendment to Section 8.04 (Key Person Provisions), Section 8.05 (Investment Committee), Section 8.06 (Senior Advisor), or Schedule A (Carried Interest Allocation) of this Agreement (each as amended by the First Amendment to this Agreement dated as of August 26, 2024) shall require the written consent of Limited Partners holding not less than sixty-six and two-thirds percent (66⅔%) of aggregate Limited Partner capital commitments (excluding the General Partner's co-investment), and in no event shall any such amendment be effected by the consent of the General Partner alone or by action of the Investment Committee."

ARTICLE VII — CONFIRMATION OF LP CONSENT

Section 7.1 — LP Consent. The General Partner hereby confirms that, in accordance with Section 14.01 of the Agreement, the requisite consent of the Limited Partners to this Amendment has been obtained, as follows:

(a) This Amendment was circulated to all forty-seven (47) Limited Partners on July 15, 2024, together with explanatory materials, a summary of the proposed changes, biographical information regarding the proposed Successor Key Persons, and a form of written consent.

(b) The consent deadline established by the General Partner was August 23, 2024, being forty (40) calendar days from the date of circulation.

(c) Written consents were received from thirty-eight (38) of forty-seven (47) Limited Partners by August 19, 2024, four (4) calendar days prior to the consent deadline.

(d) The consenting Limited Partners represent aggregate capital commitments of Two Billion Four Hundred Twelve Million Eight Hundred Thousand Dollars ($2,412,800,000), constituting approximately 86.2% of voting Limited Partner capital commitments of Two Billion Seven Hundred Ninety-Eight Million Two Hundred Fifty Thousand Dollars ($2,798,250,000).

(e) This percentage exceeds the required threshold of sixty-six and two-thirds percent (66⅔%), which equals One Billion Eight Hundred Sixty-Five Million Five Hundred Thousand Dollars ($1,865,500,000).

(f) Accordingly, the requisite consent has been duly obtained, and this Amendment is effective as of August 26, 2024. Nine (9) Limited Partners did not return written consents by the consent deadline; the failure of such Limited Partners to return written consents shall not affect the validity or enforceability of this Amendment.

Section 7.2 — Investor Advisory Committee Review. The Investor Advisory Committee of the Partnership, consisting of the following members, reviewed and discussed the proposed Amendment at its duly convened meeting on July 29, 2024:

(a) Diana Cortland, Northvale Public Employees' Retirement System (Chair of the IAC);

(b) Richard Oshima, Sycamore Endowment Partners LP;

(d) Thomas Ashworth, Bridlewood Family Office Holdings Ltd.; and

(e) Nadia Al-Rashid, Atlas Sovereign Wealth Advisory LLC.

All five (5) members of the IAC were present at the July 29, 2024 meeting, either in person or by video conference. The IAC reviewed the qualifications and experience of the proposed Successor Key Persons, the terms of the proposed Investment Committee, the proposed modifications to the Key Person provisions (including the new Single Key Person Departure and Replacement Period framework), the proposed reallocation of carried interest, and the proposed designation of Marcus J. Whitmore as Senior Advisor. The IAC did not raise any objection to the proposed Amendment and expressed its support for the General Partner's proposal. The IAC's review was advisory in nature, and the IAC did not have approval rights with respect to this Amendment.

ARTICLE VIII — REPRESENTATIONS AND WARRANTIES OF THE GENERAL PARTNER

Section 8.1 — Authority. DCM represents and warrants that it has full power and authority to execute and deliver this Amendment on behalf of the Partnership. This Amendment has been duly authorized by all necessary action on the part of DCM, including without limitation the approval of the Managing Members of DCM, and the execution, delivery, and performance of this Amendment by DCM do not require any further action, approval, or consent on the part of DCM or any of its members. Elaine R. Sato, the person executing this Amendment on behalf of DCM in her capacity as Deputy Chief Investment Officer and Managing Member, is duly authorized to execute and deliver this Amendment on behalf of DCM and the Partnership.

Section 8.2 — No Conflict. The execution, delivery, and performance of this Amendment by DCM does not and will not (a) conflict with or result in a breach of any term or provision of the Amended and Restated Limited Liability Company Operating Agreement of DCM, dated as of March 15, 2017, or any other organizational document of DCM, (b) conflict with or result in a breach of, or constitute a default under, any agreement, contract, indenture, or other instrument to which DCM or the Partnership is a party or by which DCM, the Partnership, or any of their respective assets is bound, or (c) violate any applicable law, rule, regulation, order, judgment, or decree of any governmental authority having jurisdiction over DCM, the Partnership, or any of their respective assets.

Section 8.3 — Valid and Binding. This Amendment constitutes a valid and binding obligation of DCM and the Partnership, enforceable against DCM and the Partnership in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws affecting creditors' rights generally, (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), and (c) the implied covenant of good faith and fair dealing.

ARTICLE IX — GENERAL PROVISIONS

Section 9.1 — Effect of Amendment. Except as expressly amended, modified, or supplemented by this Amendment, all terms, conditions, covenants, representations, warranties, and other provisions of the Agreement shall remain in full force and effect and are hereby ratified and confirmed in all respects. The Agreement, as amended by this Amendment, is hereby ratified and confirmed as the governing document of the Partnership. On and after the Amendment Effective Date, each reference in the Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of similar import shall be deemed to refer to the Agreement as amended by this Amendment, unless the context otherwise requires.

Section 9.2 — Governing Law. This Amendment shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to the conflicts of law principles thereof that would require the application of the laws of any other jurisdiction. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of Delaware and the United States District Court for the District of Delaware for the purposes of any action, suit, or proceeding arising out of or relating to this Amendment, and each party irrevocably waives any objection to the laying of venue of any such action, suit, or proceeding in any such court.

Section 9.3 — Entire Agreement. The Agreement, as amended by this Amendment, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and representations, whether written or oral, with respect to such subject matter. No party has relied on any statement, representation, warranty, or agreement of any other party except for those expressly set forth in the Agreement as amended by this Amendment.

Section 9.4 — Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile, electronic mail (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the Uniform Electronic Transactions Act), or other electronic transmission shall be effective as delivery of an originally executed counterpart.

Section 9.5 — Severability. If any provision of this Amendment (or any portion thereof) is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision (or the remaining portion of the affected provision) of this Amendment, and this Amendment shall be construed as if such invalid, illegal, or unenforceable provision (or portion thereof) had never been contained herein, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.

Section 9.6 — Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted under this Amendment shall be in writing and shall be delivered in accordance with the notice provisions set forth in Section 13.01 of the Agreement. Notices to the General Partner shall be directed to:

Driftwood Capital Management LLC 680 Lexington Avenue, 31st Floor New York, New York 10022

Attention: Elaine R. Sato, Deputy Chief Investment Officer

Email: esato@driftwoodcap.com

With a copy (which shall not constitute notice) to:

Calderwood & Harkness LLP 1585 Broadway, 34th Floor New York, New York 10036

Attention: Graham Sutherland

Email: gsutherland@calderwoodharkness.com

Section 9.7 — Third-Party Beneficiaries. Except as expressly provided in this Section 9.7, this Amendment is not intended to, and shall not, confer upon any person other than the parties hereto any rights or remedies hereunder. Notwithstanding the foregoing, Marcus J. Whitmore is an intended third-party beneficiary of Section 8.06 (Senior Advisor) and Section 5.2 (Whitmore Carried Interest Vesting Schedule) of this Amendment with respect to his rights as Senior Advisor and the vesting of his carried interest, and Marcus J. Whitmore shall be entitled to enforce the provisions of such Sections as if he were a party to this Amendment.

Section 9.8 — Fund Service Providers. The following fund service providers are referenced herein for informational purposes only. The identification of such service providers does not create any rights or obligations on the part of such service providers under this Amendment:

(a) Fund Administrator: Pinnacle Fund Services (Cayman) Ltd., 2nd Floor, Century Yard, Cricket Square, George Town, Grand Cayman, KY1-1205, Cayman Islands.

(b) Auditor: Graystone & Whitfield LLP, 6th Floor, Anderson Square, George Town, Grand Cayman, KY1-1104, Cayman Islands.

(d) Legal Counsel to the Partnership: Calderwood & Harkness LLP, 1585 Broadway, 34th Floor, New York, New York 10036.

(e) Legal Counsel to the Investor Advisory Committee: Wexford Crane & Albright LLP, 51 West 52nd Street, 40th Floor, New York, New York 10019.

[Remainder of page intentionally left blank. Signature page follows.]

SIGNATURE PAGE TO FIRST AMENDMENT TO THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF DRIFTWOOD ABSOLUTE RETURN FUND LTD.

IN WITNESS WHEREOF, the undersigned has executed this First Amendment to the Amended and Restated Limited Partnership Agreement of Driftwood Absolute Return Fund Ltd. as of the date first written above.

GENERAL PARTNER:

DRIFTWOOD CAPITAL MANAGEMENT LLC, as General Partner of DRIFTWOOD ABSOLUTE RETURN FUND LTD.

By: ________

Name: Elaine R. Sato

Title: Deputy Chief Investment Officer and Managing Member

Date: August 26, 2024

ACKNOWLEDGMENT OF LIMITED PARTNER CONSENT:

The Limited Partners of Driftwood Absolute Return Fund Ltd. have consented to this Amendment by written consent in accordance with Section 14.01 of the Agreement. Written consents were received from thirty-eight (38) of forty-seven (47) Limited Partners, representing aggregate capital commitments of $2,412,800,000 (approximately 86.2% of voting Limited Partner capital commitments), which exceeds the required sixty-six and two-thirds percent (66⅔%) threshold. The effectiveness of such consents is confirmed by the GP Certificate of Consent Tabulation, dated as of August 26, 2024, a copy of which has been delivered to the Fund Administrator and is maintained in the records of the Partnership.

EXHIBIT A

AMENDED SCHEDULE A TO THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF DRIFTWOOD ABSOLUTE RETURN FUND LTD.

CARRIED INTEREST ALLOCATION

(As Amended and Restated Effective August 26, 2024)

This Exhibit A sets forth the amended and restated Schedule A to the Amended and Restated Limited Partnership Agreement of Driftwood Absolute Return Fund Ltd. (as amended by the First Amendment dated as of August 26, 2024, the "Agreement"), and replaces the prior Schedule A in its entirety.

1. Fund Economics

The Partnership operates under a 2/20 fee structure, as follows:

(a) Management Fee: Two percent (2.0%) of net asset value per annum, payable quarterly in advance. Based on the Partnership's net asset value of approximately $2,870,000,000 as of May 31, 2024, the quarterly management fee is approximately $14,350,000.

(b) Incentive Allocation: Twenty percent (20%) of net new profits above the high-water mark, determined on a per-unit basis. The per-unit high-water mark as of December 31, 2023 is $142.67.

(c) Hurdle Rate: Six percent (6%) annualized hurdle rate with full catch-up. The General Partner shall not receive any incentive allocation until the Limited Partners have received a preferred return equal to six percent (6%) per annum on their capital accounts, after which the General Partner shall receive one hundred percent (100%) of additional net new profits until the General Partner has received twenty percent (20%) of all cumulative net new profits, and thereafter the General Partner and the Limited Partners shall share net new profits in a ratio of 20/80.

2. Internal Allocation of Incentive Allocation

The General Partner's aggregate incentive allocation of twenty percent (20%) of net new fund profits above the high-water mark shall be allocated internally among the principals of DCM as follows, effective as of the Amendment Effective Date:

For the avoidance of doubt, the total internal allocation equals twenty percent (20%) of the General Partner's twenty percent (20%) incentive allocation, which equals four percent (4.0%) of net new fund profits above the high-water mark. The GP-level total incentive allocation of twenty percent (20%) of net new fund profits is unchanged by the First Amendment.

3. Whitmore Carried Interest Vesting

Marcus J. Whitmore's carried interest allocation of nine percent (9%) of the General Partner's twenty percent (20%) incentive allocation is subject to the vesting schedule set forth in Section 5.2 of the First Amendment to the Agreement, which provides for (a) immediate vesting of fifty percent (50%) of carried interest accrued as of June 10, 2024, and (b) ratable monthly vesting of the remaining fifty percent (50%) of accrued carried interest and all future carried interest over a thirty-six (36) month period commencing June 10, 2024, with acceleration upon death. All unvested carried interest of the Senior Advisor shall be forfeited to the extent not vested as of the termination of the vesting period, except as otherwise provided in Section 5.2 of the First Amendment.

4. Prior Allocation (For Reference Only)

For reference purposes only, the internal allocation of the General Partner's incentive allocation in effect immediately prior to the Amendment Effective Date was as follows:

[End of Exhibit A]

Individual	Role	Pre-Amendment Allocation	Post-Amendment Allocation
Marcus J. Whitmore	Senior Advisor	18% of GP's 20% (= 3.6% of net new fund profits)	9% of GP's 20% (= 1.8% of net new fund profits)
Elaine R. Sato	Key Person, IC Chair	1.5% of GP's 20% (= 0.3% of net new fund profits)	7% of GP's 20% (= 1.4% of net new fund profits)
Jonathan K. Huang	Key Person	0.5% of GP's 20% (= 0.1% of net new fund profits)	4% of GP's 20% (= 0.8% of net new fund profits)
Total	20% of GP's 20%	20% of GP's 20%
Individual	Role	Allocation (as % of GP's 20%)	Effective Allocation (as % of Net New Fund Profits)	Vesting
Marcus J. Whitmore	Senior Advisor	9%	1.8%	Subject to vesting schedule per Section 5.2 of the First Amendment
Elaine R. Sato	Key Person, Investment Committee Chair	7%	1.4%	Fully vested
Jonathan K. Huang	Key Person, Investment Committee Member	4%	0.8%	Fully vested
Total	20%	4.0%
Individual	Prior Allocation (as % of GP's 20%)	Prior Effective Allocation (as % of Net New Fund Profits)
Marcus J. Whitmore	18%	3.6%
Elaine R. Sato	1.5%	0.3%
Jonathan K. Huang	0.5%	0.1%
Total	20%	4.0%

EXECUTION VERSION
FIRST AMENDMENT TO THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF DRIFTWOOD ABSOLUTE RETURN FUND LTD.
Effective as of August 26, 2024
By and Among
DRIFTWOOD CAPITAL MANAGEMENT LLC a Delaware limited liability company, as General Partner
and
THE LIMITED PARTNERS of
DRIFTWOOD ABSOLUTE RETURN FUND LTD. a Cayman Islands exempted limited partnership (Registration No. ELP-87234)
FIRST AMENDMENT TO THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF DRIFTWOOD ABSOLUTE RETURN FUND LTD.
This First Amendment (this "Amendment") to the Amended and Restated Limited Partnership Agreement, dated as of March 15, 2017 (as in effect immediately prior to the effectiveness of this Amendment, the "Agreement" or the "A&R LPA"), of Driftwood Absolute Return Fund Ltd., a Cayman Islands exempted limited partnership registered under the Exempted Limited Partnership Law (as revised) of the Cayman Islands under Registration No. ELP-87234 (the "Partnership" or "DARF"), is entered into as of August 26, 2024 (the "Amendment Effective Date"), by and among Driftwood Capital Management LLC, a Delaware limited liability company ("DCM" or the "General Partner"), having its principal office at 680 Lexington Avenue, 31st Floor, New York, New York 10022, and the limited partners of the Partnership (each, a "Limited Partner" and collectively, the "Limited Partners").
The Partnership maintains its registered office at 4th Floor, Harbour Place, 103 South Church Street, George Town, Grand Cayman, KY1-1104, Cayman Islands, and its registered agent is Archipelago Corporate Services Ltd., P.O. Box 2681, George Town, Grand Cayman, KY1-1111, Cayman Islands. The Delaware registered agent of DCM is Capitol Registered Agents, Inc., 1209 Orange Street, Wilmington, Delaware 19801. The employer identification number of DCM is 82-4917653.
RECITALS
WHEREAS, the Partnership was formed as an exempted limited partnership under the laws of the Cayman Islands with an inception date of March 15, 2017, and the parties entered into the A&R LPA on such date, which A&R LPA is governed by the laws of the State of Delaware (Recital A);
WHEREAS, pursuant to Section 8.04(a) of the Agreement, Marcus J. Whitmore was designated as the sole "Key Person" of the Partnership, and the rights, obligations, and protections associated with the Key Person provisions were established in reliance upon Mr. Whitmore's continued active involvement in the management of the Partnership's investment portfolio (Recital B);
WHEREAS, on June 3, 2024, Marcus J. Whitmore suffered a severe hemorrhagic stroke resulting in his medical incapacitation, and, pursuant to Section 8.04(b) of the Agreement, a Key Person Event was deemed to have occurred effective June 10, 2024, as the Key Person was unable to devote substantially all of his professional time to the affairs of the Partnership for a period of seven (7) consecutive calendar days following the date of such medical event (Recital C);
WHEREAS, as a consequence of the Key Person Event, and in accordance with Section 8.04(c) of the Agreement, the Investment Period was immediately suspended, follow-on investments were capped at Twenty-Eight Million Seven Hundred Thousand Dollars ($28,700,000) (representing 1.0% of assets under management as of the most recent net asset value determination), and a ninety (90) calendar day Cure Period commenced on June 10, 2024, such Cure Period being scheduled to expire on September 8, 2024 (Recital D);
WHEREAS, the General Partner notified all forty-seven (47) Limited Partners in writing of the Key Person Event on June 14, 2024, within the five (5) business day deadline prescribed by Section 8.04(c) of the Agreement (such deadline being June 17, 2024), and such notices were delivered by electronic mail and overnight courier in accordance with the notice provisions of the Agreement (Recital E);
WHEREAS, following the Key Person Event, the General Partner proposed the designation of Elaine R. Sato, Deputy Chief Investment Officer and Managing Member (holding a 10% membership interest) of DCM, and Jonathan K. Huang, Head of Credit Strategies of DCM, as Successor Key Persons pursuant to Section 8.04 of the Agreement, and the General Partner circulated this Amendment to all forty-seven (47) Limited Partners on July 15, 2024 for their review and consent (Recital F);
WHEREAS, the Investor Advisory Committee of the Partnership (the "IAC"), established pursuant to Section 9.02 of the Agreement, reviewed the proposed Amendment at its duly convened meeting on July 29, 2024, at which a quorum was present, and the IAC discussed the qualifications of the proposed Successor Key Persons, the terms of the proposed Investment Committee, the proposed modifications to the Key Person provisions, and the proposed reallocation of carried interest (Recital G);
WHEREAS, pursuant to Section 14.01 of the Agreement, amendments to the Agreement require the written consent of Limited Partners holding not less than sixty-six and two-thirds percent (66⅔%) of aggregate Limited Partner capital commitments (excluding the General Partner's co-investment) (Recital H);
WHEREAS, as of the date hereof, aggregate Limited Partner capital commitments for voting purposes equal Two Billion Seven Hundred Ninety-Eight Million Two Hundred Fifty Thousand Dollars ($2,798,250,000), being Two Billion Eight Hundred Seventy Million Dollars ($2,870,000,000) of total net asset value less Fifty-Seven Million Four Hundred Thousand Dollars ($57,400,000) attributable to Marcus J. Whitmore and Fourteen Million Three Hundred Fifty Thousand Dollars ($14,350,000) attributable to Elaine R. Sato, each committed through the General Partner vehicle and therefore excluded from the voting base, and the required consent threshold equals One Billion Eight Hundred Sixty-Five Million Five Hundred Thousand Dollars ($1,865,500,000), representing 66⅔% of $2,798,250,000 (Recital I);
WHEREAS, written consents to this Amendment were received from thirty-eight (38) of forty-seven (47) Limited Partners by August 19, 2024, prior to the consent deadline of August 23, 2024, representing aggregate capital commitments of Two Billion Four Hundred Twelve Million Eight Hundred Thousand Dollars ($2,412,800,000), constituting approximately 86.2% of voting Limited Partner capital commitments, which exceeds the required 66⅔% threshold by a substantial margin (Recital J); and
WHEREAS, the General Partner desires to amend the Agreement to reflect the designation of Successor Key Persons, the establishment of an Investment Committee, the modification of the Key Person provisions, the reallocation of carried interest among the principals of DCM, and the designation of Marcus J. Whitmore as Senior Advisor to the Partnership, all as more fully set forth herein (Recital K).
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.1 — Defined Terms. Unless otherwise defined herein, capitalized terms used in this Amendment shall have the meanings ascribed to them in the Agreement. The following new or amended defined terms are hereby added to, or shall replace existing definitions in, Article I of the Agreement, as applicable:
(a) "Amendment Effective Date" means August 26, 2024.
(b) "Investment Committee" has the meaning set forth in Section 8.05 of the Agreement, as added by Section 3.1 of this Amendment.
(c) "Key Person" means, as of the Amendment Effective Date, Elaine R. Sato and Jonathan K. Huang, jointly. This definition replaces the prior definition of "Key Person" in its entirety, pursuant to which Marcus J. Whitmore was designated as the sole Key Person.
(d) "Key Person Event" has the meaning set forth in amended Section 8.04(b) of the Agreement, as amended by Section 2.2 of this Amendment.
(e) "Replacement Period" means the one hundred eighty (180) calendar day period described in amended Section 8.04(c)(ii) of the Agreement, as amended by Section 2.3 of this Amendment.
(f) "Senior Advisor" means Marcus J. Whitmore, in the capacity described in Section 8.06 of the Agreement, as added by Section 4.1 of this Amendment.
(g) "Single Key Person Departure" has the meaning set forth in amended Section 8.04(b) of the Agreement, as amended by Section 2.2 of this Amendment.
(h) "Successor Key Person" means each of Elaine R. Sato and Jonathan K. Huang, designated as such pursuant to Section 8.04(a) of the Agreement as amended by this Amendment.
Section 1.2 — Interpretation. References in this Amendment to "Sections" are to Sections of the Agreement as amended by this Amendment, and references to "Schedules" are to Schedules of the Agreement as amended by this Amendment, in each case unless the context otherwise requires. The Agreement, as amended by this Amendment, shall be read and construed as one integrated document. In the event of any conflict between the provisions of this Amendment and the provisions of the Agreement as in effect immediately prior to the Amendment Effective Date, the provisions of this Amendment shall control.
ARTICLE II — AMENDMENT OF SECTION 8.04 (KEY PERSON PROVISIONS)
Section 2.1 — Amendment of Section 8.04(a) — Definition of Key Person. Section 8.04(a) of the Agreement is hereby amended and restated in its entirety to read as follows:
"Section 8.04(a) — Definition of Key Person. 'Key Person' shall mean Elaine R. Sato and Jonathan K. Huang, jointly. Both Successor Key Persons must remain actively engaged in the management of the Partnership's investment portfolio, and each must devote substantially all of his or her respective professional time to the affairs of the Partnership, for the Key Person requirement to be satisfied. For the avoidance of doubt, Marcus J. Whitmore is no longer designated as a Key Person as of the Amendment Effective Date and his designation as Senior Advisor pursuant to Section 8.06 hereof shall not, under any circumstances, be construed as constituting him as a Key Person for any purpose under this Agreement."
Section 2.2 — Amendment of Section 8.04(b) — Key Person Event Trigger. Section 8.04(b) of the Agreement is hereby amended and restated in its entirety to read as follows:
"Section 8.04(b) — Key Person Event. A 'Key Person Event' shall be deemed to have occurred if both Elaine R. Sato and Jonathan K. Huang are, at the same time, unable to devote substantially all of their respective professional time to the affairs of the Partnership, by reason of death, permanent disability (as determined in good faith by the General Partner based on medical evidence reasonably available), voluntary or involuntary departure from DCM or the Partnership, termination for cause, or any other cause, for a period of seven (7) consecutive calendar days. If only one of the two Key Persons ceases active involvement in the management of the Partnership's investment portfolio for any reason whatsoever (a 'Single Key Person Departure'), a Key Person Event shall not be deemed to have occurred; provided, however, that the provisions of Section 8.04(c)(ii) (Replacement Period) shall apply in the case of a Single Key Person Departure. The determination of whether a Key Person Event or a Single Key Person Departure has occurred shall be made by the General Partner in good faith, and the General Partner shall promptly notify the Investor Advisory Committee and all Limited Partners of any such determination."
Section 2.3 — Amendment of Section 8.04(c) — Consequences of Key Person Event and Single Key Person Departure. Section 8.04(c) of the Agreement is hereby amended and restated in its entirety to read as follows:
"Section 8.04(c) — Consequences of Key Person Event and Single Key Person Departure.
(i) Full Key Person Event (Both Key Persons). Upon the occurrence of a Key Person Event (i.e., both Key Persons ceasing active involvement simultaneously or within seven (7) consecutive calendar days of each other):
(A) the Investment Period shall be immediately suspended, and no new investments shall be permitted during the period of such suspension;
(B) follow-on investments in existing portfolio positions shall be capped at Fourteen Million Three Hundred Fifty Thousand Dollars ($14,350,000), representing 0.5% of assets under management as of the most recent net asset value determination available at the time of the Key Person Event (for the avoidance of doubt, this cap replaces the prior cap of $28,700,000 representing 1.0% of assets under management that was applicable under the Agreement as in effect prior to the Amendment Effective Date);
(C) the General Partner shall notify all Limited Partners in writing within five (5) business days of the occurrence of the Key Person Event, setting forth in reasonable detail the circumstances giving rise to the Key Person Event and the General Partner's initial assessment of the impact on the Partnership's investment activities;
(D) a Cure Period of ninety (90) calendar days shall commence on the date of the Key Person Event, during which the General Partner may propose one or more replacement Key Persons for approval by the Limited Partners;
(E) approval of any proposed replacement Key Person shall require the written consent of Limited Partners holding not less than sixty-six and two-thirds percent (66⅔%) of aggregate Limited Partner capital commitments (excluding the General Partner's co-investment), such consent to be solicited in writing in accordance with the notice provisions of the Agreement; and
(F) if no replacement Key Person is approved within the Cure Period, Limited Partners holding a majority-in-interest of aggregate Limited Partner capital commitments (excluding the General Partner's co-investment) may elect, by written notice delivered to the General Partner within thirty (30) calendar days following the expiration of the Cure Period, to (x) extend the Cure Period by up to ninety (90) additional calendar days on the same terms set forth in this Section 8.04(c)(i), or (y) direct the General Partner to commence an orderly wind-down of the Partnership in accordance with Section 12.01 of this Agreement.
(ii) Single Key Person Departure (One Key Person). Upon the occurrence of a Single Key Person Departure (i.e., only one of the two Key Persons ceasing active involvement):
(A) the Investment Period shall not be automatically suspended;
(B) a Replacement Period of one hundred eighty (180) calendar days shall commence on the date of the Single Key Person Departure;
(C) during the Replacement Period, the remaining Key Person shall continue to manage the Partnership's investments in the ordinary course, subject to oversight by the Investment Committee established under Section 8.05 of this Agreement, and the remaining Key Person shall not have the authority to make any new investment or commitment in excess of Fifty Million Dollars ($50,000,000) without the prior approval of the Investment Committee;
(D) during the Replacement Period, the General Partner shall use commercially reasonable efforts to identify and propose a replacement for the departed Key Person, and any such proposed replacement shall be subject to approval by Limited Partners holding not less than sixty-six and two-thirds percent (66⅔%) of aggregate Limited Partner capital commitments (excluding the General Partner's co-investment);
(E) follow-on investments during the Replacement Period shall be capped at Fourteen Million Three Hundred Fifty Thousand Dollars ($14,350,000), representing 0.5% of assets under management as of the most recent net asset value determination;
(F) the General Partner shall notify all Limited Partners in writing within five (5) business days of a Single Key Person Departure, setting forth in reasonable detail the circumstances giving rise to the Single Key Person Departure, the identity of the remaining Key Person, and the General Partner's plan for identifying a replacement Key Person; and
(G) if no replacement Key Person is approved prior to the expiration of the Replacement Period, a Key Person Event shall be deemed to have occurred on the date of such expiration, and the provisions of Section 8.04(c)(i) shall thereupon apply as if such Key Person Event had occurred on such date."
ARTICLE III — ADDITION OF SECTION 8.05 (INVESTMENT COMMITTEE)
Section 3.1 — New Section 8.05. A new Section 8.05 is hereby added to the Agreement immediately following Section 8.04 (as amended by Article II of this Amendment), which Section 8.05 shall read in its entirety as follows:
"Section 8.05 — Investment Committee.
(a) Establishment. Effective as of the Amendment Effective Date, the General Partner shall establish an Investment Committee of the Partnership (the 'Investment Committee'). The Investment Committee shall be a standing committee of the Partnership and shall continue in existence for so long as the Partnership continues to conduct investment operations.
(b) Composition. The Investment Committee shall consist of three (3) members, as follows:
(i) Elaine R. Sato, who shall serve as Chair of the Investment Committee and who shall preside over all meetings of the Investment Committee;
(ii) Jonathan K. Huang, who shall serve as a member of the Investment Committee; and
(iii) one independent member (the 'IAC-Designated Member') to be designated by a majority vote of the members of the Investor Advisory Committee established under Section 9.02 of this Agreement, such designation to occur within sixty (60) days of the Amendment Effective Date. The IAC-Designated Member shall be a natural person who is not an employee, officer, member, partner, or affiliate of the General Partner, DCM, or any of their respective affiliates. The IAC-Designated Member shall serve at the pleasure of the Investor Advisory Committee and may be removed and replaced by a majority vote of the IAC members at any time.
Vacancies on the Investment Committee arising by reason of death, resignation, removal, or incapacity of any member shall be filled in the same manner as the original appointment of such member (i.e., vacancies in positions (i) or (ii) above shall be filled by the General Partner, and vacancies in position (iii) shall be filled by a majority vote of the Investor Advisory Committee). Any vacancy shall be filled within thirty (30) calendar days of its occurrence, and pending the filling of any vacancy, the remaining members of the Investment Committee shall continue to exercise the authority and functions of the Investment Committee.
(c) Authority and Functions. The Investment Committee shall oversee the investment activities of the Partnership, including, without limitation, the review and approval of all new investments, all material follow-on investments, all material dispositions of portfolio investments, and all other material portfolio decisions as determined in good faith by the Chair of the Investment Committee. All investment decisions requiring Investment Committee approval shall require the affirmative vote of at least two (2) of the three (3) members of the Investment Committee. In the event of a tie or deadlock, the Chair of the Investment Committee shall not have a casting vote, and the matter shall be tabled for further discussion at the next meeting of the Investment Committee unless the Chair determines, in her reasonable judgment, that the matter requires immediate action to protect the interests of the Partnership, in which case the Chair may take such action as she deems reasonably necessary and shall promptly report such action to the full Investment Committee and the Investor Advisory Committee.
The Investment Committee shall meet not less frequently than monthly, either in person or by telephonic or video conference, and shall keep written minutes of its proceedings, which minutes shall be made available to the Investor Advisory Committee upon request.
(d) Reporting. The Investment Committee shall provide quarterly written reports to the Investor Advisory Committee and to all Limited Partners summarizing the activities and investment decisions of the Investment Committee during the preceding quarter, including a summary of all new investments approved, all investments declined, all material portfolio actions taken, and any other matters the Investment Committee deems relevant to the Limited Partners' understanding of the Partnership's investment activities. Such quarterly reports shall be delivered within thirty (30) calendar days following the end of each calendar quarter."
ARTICLE IV — ADDITION OF SECTION 8.06 (SENIOR ADVISOR)
Section 4.1 — New Section 8.06. A new Section 8.06 is hereby added to the Agreement immediately following Section 8.05 (as added by Article III of this Amendment), which Section 8.06 shall read in its entirety as follows:
"Section 8.06 — Senior Advisor.
(a) Designation. Marcus J. Whitmore is hereby designated as 'Senior Advisor' to the Partnership, effective as of the Amendment Effective Date, in recognition of his foundational role in establishing and building the Partnership and his contributions to the Partnership's investment strategy and performance since inception.
(b) Role and Limitations. The Senior Advisor shall have no governance authority, voting rights, or decision-making power with respect to the Partnership's investments, operations, or other affairs. The Senior Advisor shall not serve as a member of the Investment Committee. The Senior Advisor shall not have the authority to bind the Partnership or the General Partner in any respect, and shall not hold himself out as having any such authority. The Senior Advisor may, at the request of the General Partner (acting through its authorized officers), provide non-binding advisory input on investment strategy, portfolio construction, risk management, or such other matters as the General Partner may reasonably request from time to time, but the Senior Advisor shall have no obligation to provide any such advisory input, and any advisory input provided by the Senior Advisor shall be solely for informational purposes and shall not be binding on the General Partner, the Investment Committee, or the Partnership.
For the avoidance of doubt, the designation of Marcus J. Whitmore as Senior Advisor does not constitute the Senior Advisor as a Key Person, general partner, managing member, officer, director, or employee of the Partnership or DCM, and shall not give rise to any fiduciary duty or obligation on the part of the Senior Advisor to the Partnership, the General Partner, or any Limited Partner, except to the extent that the Senior Advisor's continued status as a Managing Member of DCM may give rise to obligations under DCM's operating agreement or applicable law.
(c) Compensation and Carried Interest. The Senior Advisor's carried interest entitlement shall be as set forth in amended Schedule A to this Agreement, as amended by Section 5.1 of this Amendment. The Senior Advisor's carried interest shall vest in accordance with the schedule set forth in Section 5.2 of this Amendment. The Senior Advisor shall not be entitled to any management fee, salary, bonus, or other compensation from the Partnership or DCM in respect of his role as Senior Advisor, except for the carried interest allocation described in this Section 8.06(c) and in Schedule A."
ARTICLE V — AMENDMENT OF SCHEDULE A (CARRIED INTEREST ALLOCATION)
Section 5.1 — Amended Schedule A. Schedule A to the Agreement (Carried Interest Allocation) is hereby amended and restated in its entirety, effective as of the Amendment Effective Date, as set forth in Exhibit A attached hereto and incorporated herein by reference. For convenience of reference, the material terms of the amended carried interest allocation are summarized as follows:
The General Partner's aggregate incentive allocation shall remain at twenty percent (20%) of net new profits above the high-water mark, subject to the six percent (6%) annualized hurdle rate with full catch-up, as provided in the Agreement. This Amendment does not modify the aggregate incentive allocation or the hurdle rate and catch-up provisions. The internal allocation of the General Partner's twenty percent (20%) incentive allocation among the principals of DCM shall be as follows, effective as of the Amendment Effective Date:
For the avoidance of doubt, the GP-level total incentive allocation of twenty percent (20%) of net new fund profits above the high-water mark is unchanged by this Amendment. The reallocation set forth in this Section 5.1 affects only the internal allocation of the General Partner's incentive allocation among the individual principals of DCM and does not alter the aggregate economics payable by the Partnership to the General Partner.
Section 5.2 — Whitmore Carried Interest Vesting Schedule. Marcus J. Whitmore's accrued and future carried interest entitlement under amended Schedule A shall vest in accordance with the following schedule:
(a) Immediate Vesting. Fifty percent (50%) of the carried interest accrued to the account of Marcus J. Whitmore as of June 10, 2024 (the date of the Key Person Event) shall vest immediately as of the Amendment Effective Date. For purposes of this Section 5.2(a), the amount of accrued carried interest as of June 10, 2024 shall be determined by the Fund Administrator based on the net asset value of the Partnership as of such date, calculated in accordance with the valuation provisions of the Agreement.
(b) Ratable Vesting. The remaining fifty percent (50%) of such accrued carried interest, together with any carried interest accruing on or after June 10, 2024 attributable to the Senior Advisor's nine percent (9%) allocation under amended Schedule A, shall vest ratably on a monthly basis over a period of thirty-six (36) months commencing on June 10, 2024. Specifically, one thirty-sixth (1/36th) of such carried interest shall vest on the 10th day of each calendar month following June 10, 2024, with the first installment having vested on July 10, 2024 and the final installment vesting on June 10, 2027. For the avoidance of doubt, installments that vested prior to the Amendment Effective Date pursuant to the foregoing schedule shall be deemed to have vested retroactively as of the applicable vesting date.
(c) Acceleration Upon Death. In the event of the Senior Advisor's death during the thirty-six (36) month vesting period described in Section 5.2(b), all unvested carried interest of the Senior Advisor shall immediately vest in full as of the date of the Senior Advisor's death and shall be payable to the Senior Advisor's estate or designated beneficiary in accordance with the distribution provisions of the Agreement.
(d) Payment of Vested Carried Interest. Vested carried interest of the Senior Advisor shall be payable in accordance with the distribution provisions of Section 6.03 of the Agreement, subject to the clawback provisions of Section 6.04 of the Agreement. Unvested carried interest shall not be distributable and shall remain subject to the vesting schedule set forth in this Section 5.2 until vested in accordance with its terms.
Section 5.3 — No Change to Management Fee. For the avoidance of doubt, this Amendment does not modify the management fee of two percent (2.0%) of net asset value per annum, payable quarterly in advance, or any other fee provisions of the Agreement. The management fee shall continue to be calculated and payable in accordance with the terms of the Agreement as in effect immediately prior to the Amendment Effective Date.
ARTICLE VI — AMENDMENT OF SECTION 14.01 (AMENDMENTS)
Section 6.1 — Conforming Amendment to Section 14.01. Section 14.01 of the Agreement is hereby amended to add the following proviso at the end of the first sentence thereof:
"; provided, further, that any future amendment to Section 8.04 (Key Person Provisions), Section 8.05 (Investment Committee), Section 8.06 (Senior Advisor), or Schedule A (Carried Interest Allocation) of this Agreement (each as amended by the First Amendment to this Agreement dated as of August 26, 2024) shall require the written consent of Limited Partners holding not less than sixty-six and two-thirds percent (66⅔%) of aggregate Limited Partner capital commitments (excluding the General Partner's co-investment), and in no event shall any such amendment be effected by the consent of the General Partner alone or by action of the Investment Committee."
ARTICLE VII — CONFIRMATION OF LP CONSENT
Section 7.1 — LP Consent. The General Partner hereby confirms that, in accordance with Section 14.01 of the Agreement, the requisite consent of the Limited Partners to this Amendment has been obtained, as follows:
(a) This Amendment was circulated to all forty-seven (47) Limited Partners on July 15, 2024, together with explanatory materials, a summary of the proposed changes, biographical information regarding the proposed Successor Key Persons, and a form of written consent.
(b) The consent deadline established by the General Partner was August 23, 2024, being forty (40) calendar days from the date of circulation.
(c) Written consents were received from thirty-eight (38) of forty-seven (47) Limited Partners by August 19, 2024, four (4) calendar days prior to the consent deadline.
(d) The consenting Limited Partners represent aggregate capital commitments of Two Billion Four Hundred Twelve Million Eight Hundred Thousand Dollars ($2,412,800,000), constituting approximately 86.2% of voting Limited Partner capital commitments of Two Billion Seven Hundred Ninety-Eight Million Two Hundred Fifty Thousand Dollars ($2,798,250,000).
(e) This percentage exceeds the required threshold of sixty-six and two-thirds percent (66⅔%), which equals One Billion Eight Hundred Sixty-Five Million Five Hundred Thousand Dollars ($1,865,500,000).
(f) Accordingly, the requisite consent has been duly obtained, and this Amendment is effective as of August 26, 2024. Nine (9) Limited Partners did not return written consents by the consent deadline; the failure of such Limited Partners to return written consents shall not affect the validity or enforceability of this Amendment.
Section 7.2 — Investor Advisory Committee Review. The Investor Advisory Committee of the Partnership, consisting of the following members, reviewed and discussed the proposed Amendment at its duly convened meeting on July 29, 2024:
(a) Diana Cortland, Northvale Public Employees' Retirement System (Chair of the IAC);
(b) Richard Oshima, Sycamore Endowment Partners LP;
(c) Catherine Mercer, Velthorn Institutional Fund of Funds III, L.P.;
(d) Thomas Ashworth, Bridlewood Family Office Holdings Ltd.; and
(e) Nadia Al-Rashid, Atlas Sovereign Wealth Advisory LLC.
All five (5) members of the IAC were present at the July 29, 2024 meeting, either in person or by video conference. The IAC reviewed the qualifications and experience of the proposed Successor Key Persons, the terms of the proposed Investment Committee, the proposed modifications to the Key Person provisions (including the new Single Key Person Departure and Replacement Period framework), the proposed reallocation of carried interest, and the proposed designation of Marcus J. Whitmore as Senior Advisor. The IAC did not raise any objection to the proposed Amendment and expressed its support for the General Partner's proposal. The IAC's review was advisory in nature, and the IAC did not have approval rights with respect to this Amendment.
ARTICLE VIII — REPRESENTATIONS AND WARRANTIES OF THE GENERAL PARTNER
Section 8.1 — Authority. DCM represents and warrants that it has full power and authority to execute and deliver this Amendment on behalf of the Partnership. This Amendment has been duly authorized by all necessary action on the part of DCM, including without limitation the approval of the Managing Members of DCM, and the execution, delivery, and performance of this Amendment by DCM do not require any further action, approval, or consent on the part of DCM or any of its members. Elaine R. Sato, the person executing this Amendment on behalf of DCM in her capacity as Deputy Chief Investment Officer and Managing Member, is duly authorized to execute and deliver this Amendment on behalf of DCM and the Partnership.
Section 8.2 — No Conflict. The execution, delivery, and performance of this Amendment by DCM does not and will not (a) conflict with or result in a breach of any term or provision of the Amended and Restated Limited Liability Company Operating Agreement of DCM, dated as of March 15, 2017, or any other organizational document of DCM, (b) conflict with or result in a breach of, or constitute a default under, any agreement, contract, indenture, or other instrument to which DCM or the Partnership is a party or by which DCM, the Partnership, or any of their respective assets is bound, or (c) violate any applicable law, rule, regulation, order, judgment, or decree of any governmental authority having jurisdiction over DCM, the Partnership, or any of their respective assets.
Section 8.3 — Valid and Binding. This Amendment constitutes a valid and binding obligation of DCM and the Partnership, enforceable against DCM and the Partnership in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws affecting creditors' rights generally, (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), and (c) the implied covenant of good faith and fair dealing.
ARTICLE IX — GENERAL PROVISIONS
Section 9.1 — Effect of Amendment. Except as expressly amended, modified, or supplemented by this Amendment, all terms, conditions, covenants, representations, warranties, and other provisions of the Agreement shall remain in full force and effect and are hereby ratified and confirmed in all respects. The Agreement, as amended by this Amendment, is hereby ratified and confirmed as the governing document of the Partnership. On and after the Amendment Effective Date, each reference in the Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of similar import shall be deemed to refer to the Agreement as amended by this Amendment, unless the context otherwise requires.
Section 9.2 — Governing Law. This Amendment shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to the conflicts of law principles thereof that would require the application of the laws of any other jurisdiction. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of Delaware and the United States District Court for the District of Delaware for the purposes of any action, suit, or proceeding arising out of or relating to this Amendment, and each party irrevocably waives any objection to the laying of venue of any such action, suit, or proceeding in any such court.
Section 9.3 — Entire Agreement. The Agreement, as amended by this Amendment, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and representations, whether written or oral, with respect to such subject matter. No party has relied on any statement, representation, warranty, or agreement of any other party except for those expressly set forth in the Agreement as amended by this Amendment.
Section 9.4 — Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile, electronic mail (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the Uniform Electronic Transactions Act), or other electronic transmission shall be effective as delivery of an originally executed counterpart.
Section 9.5 — Severability. If any provision of this Amendment (or any portion thereof) is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision (or the remaining portion of the affected provision) of this Amendment, and this Amendment shall be construed as if such invalid, illegal, or unenforceable provision (or portion thereof) had never been contained herein, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.
Section 9.6 — Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted under this Amendment shall be in writing and shall be delivered in accordance with the notice provisions set forth in Section 13.01 of the Agreement. Notices to the General Partner shall be directed to:
Driftwood Capital Management LLC 680 Lexington Avenue, 31st Floor New York, New York 10022
Attention: Elaine R. Sato, Deputy Chief Investment Officer
Email: esato@driftwoodcap.com
With a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 1585 Broadway, 34th Floor New York, New York 10036
Attention: Graham Sutherland
Email: gsutherland@calderwoodharkness.com
Section 9.7 — Third-Party Beneficiaries. Except as expressly provided in this Section 9.7, this Amendment is not intended to, and shall not, confer upon any person other than the parties hereto any rights or remedies hereunder. Notwithstanding the foregoing, Marcus J. Whitmore is an intended third-party beneficiary of Section 8.06 (Senior Advisor) and Section 5.2 (Whitmore Carried Interest Vesting Schedule) of this Amendment with respect to his rights as Senior Advisor and the vesting of his carried interest, and Marcus J. Whitmore shall be entitled to enforce the provisions of such Sections as if he were a party to this Amendment.
Section 9.8 — Fund Service Providers. The following fund service providers are referenced herein for informational purposes only. The identification of such service providers does not create any rights or obligations on the part of such service providers under this Amendment:
(a) Fund Administrator: Pinnacle Fund Services (Cayman) Ltd., 2nd Floor, Century Yard, Cricket Square, George Town, Grand Cayman, KY1-1205, Cayman Islands.
(b) Auditor: Graystone & Whitfield LLP, 6th Floor, Anderson Square, George Town, Grand Cayman, KY1-1104, Cayman Islands.
(c) Prime Broker: Halcyon Securities International Ltd., 25 Cabot Square, Canary Wharf, London E14 4QA, United Kingdom.
(d) Legal Counsel to the Partnership: Calderwood & Harkness LLP, 1585 Broadway, 34th Floor, New York, New York 10036.
(e) Legal Counsel to the Investor Advisory Committee: Wexford Crane & Albright LLP, 51 West 52nd Street, 40th Floor, New York, New York 10019.
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SIGNATURE PAGE TO FIRST AMENDMENT TO THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF DRIFTWOOD ABSOLUTE RETURN FUND LTD.
IN WITNESS WHEREOF, the undersigned has executed this First Amendment to the Amended and Restated Limited Partnership Agreement of Driftwood Absolute Return Fund Ltd. as of the date first written above.
GENERAL PARTNER:
DRIFTWOOD CAPITAL MANAGEMENT LLC, as General Partner of DRIFTWOOD ABSOLUTE RETURN FUND LTD.
By: ________
Name: Elaine R. Sato
Title: Deputy Chief Investment Officer and Managing Member
Date: August 26, 2024
ACKNOWLEDGMENT OF LIMITED PARTNER CONSENT:
The Limited Partners of Driftwood Absolute Return Fund Ltd. have consented to this Amendment by written consent in accordance with Section 14.01 of the Agreement. Written consents were received from thirty-eight (38) of forty-seven (47) Limited Partners, representing aggregate capital commitments of $2,412,800,000 (approximately 86.2% of voting Limited Partner capital commitments), which exceeds the required sixty-six and two-thirds percent (66⅔%) threshold. The effectiveness of such consents is confirmed by the GP Certificate of Consent Tabulation, dated as of August 26, 2024, a copy of which has been delivered to the Fund Administrator and is maintained in the records of the Partnership.
EXHIBIT A
AMENDED SCHEDULE A TO THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF DRIFTWOOD ABSOLUTE RETURN FUND LTD.
CARRIED INTEREST ALLOCATION
(As Amended and Restated Effective August 26, 2024)
This Exhibit A sets forth the amended and restated Schedule A to the Amended and Restated Limited Partnership Agreement of Driftwood Absolute Return Fund Ltd. (as amended by the First Amendment dated as of August 26, 2024, the "Agreement"), and replaces the prior Schedule A in its entirety.
1. Fund Economics
The Partnership operates under a 2/20 fee structure, as follows:
(a) Management Fee: Two percent (2.0%) of net asset value per annum, payable quarterly in advance. Based on the Partnership's net asset value of approximately $2,870,000,000 as of May 31, 2024, the quarterly management fee is approximately $14,350,000.
(b) Incentive Allocation: Twenty percent (20%) of net new profits above the high-water mark, determined on a per-unit basis. The per-unit high-water mark as of December 31, 2023 is $142.67.
(c) Hurdle Rate: Six percent (6%) annualized hurdle rate with full catch-up. The General Partner shall not receive any incentive allocation until the Limited Partners have received a preferred return equal to six percent (6%) per annum on their capital accounts, after which the General Partner shall receive one hundred percent (100%) of additional net new profits until the General Partner has received twenty percent (20%) of all cumulative net new profits, and thereafter the General Partner and the Limited Partners shall share net new profits in a ratio of 20/80.
2. Internal Allocation of Incentive Allocation
The General Partner's aggregate incentive allocation of twenty percent (20%) of net new fund profits above the high-water mark shall be allocated internally among the principals of DCM as follows, effective as of the Amendment Effective Date:
For the avoidance of doubt, the total internal allocation equals twenty percent (20%) of the General Partner's twenty percent (20%) incentive allocation, which equals four percent (4.0%) of net new fund profits above the high-water mark. The GP-level total incentive allocation of twenty percent (20%) of net new fund profits is unchanged by the First Amendment.
3. Whitmore Carried Interest Vesting
Marcus J. Whitmore's carried interest allocation of nine percent (9%) of the General Partner's twenty percent (20%) incentive allocation is subject to the vesting schedule set forth in Section 5.2 of the First Amendment to the Agreement, which provides for (a) immediate vesting of fifty percent (50%) of carried interest accrued as of June 10, 2024, and (b) ratable monthly vesting of the remaining fifty percent (50%) of accrued carried interest and all future carried interest over a thirty-six (36) month period commencing June 10, 2024, with acceleration upon death. All unvested carried interest of the Senior Advisor shall be forfeited to the extent not vested as of the termination of the vesting period, except as otherwise provided in Section 5.2 of the First Amendment.
4. Prior Allocation (For Reference Only)
For reference purposes only, the internal allocation of the General Partner's incentive allocation in effect immediately prior to the Amendment Effective Date was as follows:
[End of Exhibit A]
Individual | Role | Pre-Amendment Allocation | Post-Amendment Allocation
Marcus J. Whitmore | Senior Advisor | 18% of GP's 20% (= 3.6% of net new fund profits) | 9% of GP's 20% (= 1.8% of net new fund profits)
Elaine R. Sato | Key Person, IC Chair | 1.5% of GP's 20% (= 0.3% of net new fund profits) | 7% of GP's 20% (= 1.4% of net new fund profits)
Jonathan K. Huang | Key Person | 0.5% of GP's 20% (= 0.1% of net new fund profits) | 4% of GP's 20% (= 0.8% of net new fund profits)
Total | 20% of GP's 20% | 20% of GP's 20%
Individual | Role | Allocation (as % of GP's 20%) | Effective Allocation (as % of Net New Fund Profits) | Vesting
Marcus J. Whitmore | Senior Advisor | 9% | 1.8% | Subject to vesting schedule per Section 5.2 of the First Amendment
Elaine R. Sato | Key Person, Investment Committee Chair | 7% | 1.4% | Fully vested
Jonathan K. Huang | Key Person, Investment Committee Member | 4% | 0.8% | Fully vested
Total | 20% | 4.0%
Individual | Prior Allocation (as % of GP's 20%) | Prior Effective Allocation (as % of Net New Fund Profits)
Marcus J. Whitmore | 18% | 3.6%
Elaine R. Sato | 1.5% | 0.3%
Jonathan K. Huang | 0.5% | 0.1%
Total | 20% | 4.0%

EXECUTION VERSION

RECITALS

GENERAL PARTNER:

ACKNOWLEDGMENT OF LIMITED PARTNER CONSENT:

EXHIBIT A

CARRIED INTEREST ALLOCATION

Record

Parties

Dates

Amounts