1024-00002 · Driftwood Absolute Return Fund Ltd · Transaction Documents

form-of-lp-written-consent.docx DOCUMENT Funds

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CONFIDENTIAL TREATMENT REQUESTED

FORM OF WRITTEN CONSENT OF THE LIMITED PARTNERS OF DRIFTWOOD ABSOLUTE RETURN FUND LTD.

In Lieu of a Meeting, Pursuant to Section 14.01 of the Amended & Restated Limited Partnership Agreement

This Written Consent of the Limited Partners (this "Written Consent") of Driftwood Absolute Return Fund Ltd. (the "Partnership" or "DARF"), a Cayman Islands exempted limited partnership (Registration No. ELP-87234), is executed and delivered with reference to the Amended & Restated Limited Partnership Agreement of Driftwood Absolute Return Fund Ltd., dated as of March 15, 2017 (as the same may have been supplemented by any Side Letter Agreements entered into between the General Partner and certain Limited Partners, the "Partnership Agreement"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Partnership Agreement.

RECITALS

A. The Fund and Governing Documents. Driftwood Absolute Return Fund Ltd. (the "Partnership" or "DARF") is a Cayman Islands exempted limited partnership duly registered under the Exempted Limited Partnership Law (as revised) of the Cayman Islands (Registration No. ELP-87234). The Partnership is governed by the Amended & Restated Limited Partnership Agreement dated as of March 15, 2017 (the "Partnership Agreement"), which, notwithstanding the formation of the Partnership under Cayman Islands law, is governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflict of laws principles thereof. Driftwood Capital Management LLC, a limited liability company duly organized and validly existing under the laws of the State of Delaware ("DCM" or the "General Partner"), serves as the sole general partner of the Partnership and is responsible for the management and conduct of the Partnership's business and affairs in accordance with the terms and conditions set forth in the Partnership Agreement. The General Partner's principal office is located at 680 Lexington Avenue, 31st Floor, New York, NY 10022. The General Partner is registered as an investment adviser with the United States Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended.

B. Key Person Event. Pursuant to Section 8.04(a) of the Partnership Agreement, Marcus J. Whitmore is the sole designated "Key Person" of the Partnership, and, as such, is required to devote substantially all of his business time and attention to the management and conduct of the Partnership's investment activities. Pursuant to Section 8.04(b) of the Partnership Agreement, a "Key Person Event" was deemed to have occurred effective as of June 10, 2024, due to the medical incapacitation of Marcus J. Whitmore, which rendered him unable to discharge his duties as Key Person within the meaning of Section 8.04(b)(ii) of the Partnership Agreement. Pursuant to Section 8.04(c) of the Partnership Agreement, a ninety (90) calendar-day cure period (the "Cure Period") commenced automatically on the date of the Key Person Event and is scheduled to expire on September 8, 2024. During the Cure Period, the General Partner is required to identify and propose one or more Successor Key Persons to the Limited Partners for approval. In accordance with Section 8.04(d) of the Partnership Agreement and Section 11.01 thereof, the General Partner notified all Limited Partners of the Key Person Event by written notice dated June 14, 2024 (the "Key Person Event Notice"), which was delivered via overnight courier and electronic mail to each Limited Partner at the address set forth on the Register of Limited Partners maintained by the Partnership's administrator.

C. Proposed First Amendment. In response to the Key Person Event and pursuant to its obligations under Section 8.04(c) of the Partnership Agreement, the General Partner has prepared and proposed a First Amendment to the Amended & Restated Limited Partnership Agreement (the "Amendment" or the "First Amendment"), a complete and final copy of which is attached hereto as Exhibit A and incorporated herein by reference. The Amendment, among other things, is designed to address the Key Person Event by establishing a successor governance framework for the Partnership, designating Successor Key Persons, creating a new Investment Committee structure, and making certain related adjustments to the carried interest allocation schedule and related economic terms. The Amendment, together with a Successor Key Person Proposal and Consent Solicitation Letter (the "Solicitation Letter"), was circulated to all Limited Partners of record on July 15, 2024, in the manner prescribed by Section 11.01 of the Partnership Agreement.

D. Consent Required. Section 14.01 of the Partnership Agreement provides that the Partnership Agreement may be amended, modified, or supplemented with the prior written consent of the General Partner and Limited Partners holding at least sixty-six and two-thirds percent (66⅔%) of the aggregate Limited Partner capital commitments (excluding, for purposes of such calculation, any co-investment commitments made by the General Partner, any Affiliate of the General Partner, or any principal, member, partner, officer, or employee thereof in their capacity as co-investors alongside the Fund). Additionally, Section 8.04(c) of the Partnership Agreement provides that one or more Successor Key Persons may be designated by the General Partner with the approval of Limited Partners holding at least sixty-six and two-thirds percent (66⅔%) of the aggregate Limited Partner capital commitments (calculated on the same basis as set forth above). As of the date hereof, the 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 the total fund assets under management of Two Billion Eight Hundred Seventy Million Dollars ($2,870,000,000) less the General Partner co-investment commitments of 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, in her capacity as Managing Member of DCM. Accordingly, the required consent threshold for each of the matters set forth herein is One Billion Eight Hundred Sixty-Five Million Five Hundred Thousand Dollars ($1,865,500,000) (being 66⅔% of $2,798,250,000).

E. Consent Deadline. The General Partner has established August 23, 2024 (being forty (40) calendar days from the date of circulation of the Amendment and the Solicitation Letter to the Limited Partners) as the deadline for the delivery of this Written Consent (the "Consent Deadline"). Any Written Consent not received by the General Partner or its designated counsel on or before the Consent Deadline shall not be counted toward the required consent threshold described in Recital D above, unless the General Partner, in its sole discretion, elects to extend the Consent Deadline by written notice to all Limited Partners.

RESOLUTIONS AND CONSENT

NOW, THEREFORE, the undersigned Limited Partner of the Partnership, in consideration of the premises and intending to be legally bound hereby, and for the purpose of effecting the matters described below without a meeting of the Limited Partners in accordance with Section 14.01 of the Partnership Agreement, hereby consents to and approves the following resolutions:

Resolution 1 — Approval of Successor Key Persons

RESOLVED, that the undersigned Limited Partner hereby consents to and approves the designation of each of the following individuals as "Successor Key Persons" under Section 8.04 of the Partnership Agreement, as amended by the First Amendment:

(i) Elaine R. Sato, currently serving as Deputy Chief Investment Officer and Managing Member of Driftwood Capital Management LLC; and

(ii) Jonathan K. Huang, currently serving as Head of Credit Strategies, Driftwood Capital Management LLC.

Such designation shall be on a joint basis (and not on a several basis), meaning that each of Ms. Sato and Mr. Huang shall be required to serve simultaneously as a Successor Key Person for the purposes of Section 8.04 of the Partnership Agreement, as amended by the Amendment. The terms and conditions of such designation, including the respective obligations of each Successor Key Person, the consequences of the departure, incapacitation, or removal of either Successor Key Person, and related governance matters, are more fully set forth in the Amendment attached hereto as Exhibit A. The undersigned Limited Partner acknowledges that it has reviewed the professional backgrounds, qualifications, and experience of each proposed Successor Key Person as described in the Solicitation Letter and any supplemental materials provided by the General Partner, and has determined, in its sole judgment, that the designation of Ms. Sato and Mr. Huang as joint Successor Key Persons is in the best interests of the Partnership and the Limited Partners.

Resolution 2 — Approval of the First Amendment to the Partnership Agreement

RESOLVED, that the undersigned Limited Partner hereby consents to and approves the First Amendment to the Amended & Restated Limited Partnership Agreement of Driftwood Absolute Return Fund Ltd. in the form attached hereto as Exhibit A (or as circulated to Limited Partners on July 15, 2024), including, without limitation, the following principal modifications and additions to the Partnership Agreement:

(a) Amendment of Section 8.04 (Key Person Provisions). The amendment of Section 8.04 of the Partnership Agreement to redefine the term "Key Person" to mean Elaine R. Sato and Jonathan K. Huang, jointly, in replacement of Marcus J. Whitmore, effective upon the date on which the Amendment becomes effective (the "Amendment Effective Date"), with all references in the Partnership Agreement to the "Key Person" being deemed to refer to Ms. Sato and Mr. Huang in their joint capacity as Successor Key Persons.

(b) Replacement Period for Loss of One Successor Key Person. The amendment of Section 8.04 to provide that the loss of only one (but not both) of the Successor Key Persons (whether by death, incapacitation, voluntary resignation, removal for Cause, or any other circumstance resulting in the applicable individual ceasing to devote substantially all of his or her business time to the affairs of the Partnership) shall trigger a one hundred eighty (180) calendar-day replacement period (the "Replacement Period"), during which the General Partner shall use commercially reasonable efforts to identify and propose a replacement individual for approval by the Limited Partners, rather than an automatic suspension of the Investment Period. During such Replacement Period, the remaining Successor Key Person shall continue to manage the Partnership's investment activities, subject to the oversight of the Investment Committee established pursuant to new Section 8.05, and the Investment Period shall not be suspended unless and until both Successor Key Persons have ceased to serve in such capacity. For the avoidance of doubt, the simultaneous or near-simultaneous loss of both Successor Key Persons shall constitute a Key Person Event under the Partnership Agreement, as amended, and shall trigger the standard Cure Period provisions of Section 8.04(c).

(c) Addition of New Section 8.05 (Investment Committee). The addition of a new Section 8.05 to the Partnership Agreement, establishing a three-member Investment Committee (the "Investment Committee") to oversee and approve all new portfolio investments and material dispositions made by the Partnership on and after the Amendment Effective Date. The Investment Committee shall be comprised of the following members: (I) Elaine R. Sato, who shall serve as Chair of the Investment Committee; (II) Jonathan K. Huang; and (III) one independent member (the "Independent IC Member") to be designated by the Investor Advisory Committee established under Section 9.03 of the Partnership Agreement, which Independent IC Member shall not be an employee, officer, member, partner, or Affiliate of the General Partner, and shall possess relevant experience in multi-strategy or credit-oriented investment management. All investment decisions of the Investment Committee shall require the affirmative vote of at least two (2) of the three (3) members, provided that at least one of the two affirmative votes must be cast by either Ms. Sato or Mr. Huang. The procedures, authorities, limitations, and other terms applicable to the Investment Committee are more fully described in the Amendment.

(d) Reduction of Follow-On Investment Cap During Future Key Person Events. The amendment of Section 8.04 to reduce the maximum aggregate amount of follow-on investments (as defined in the Partnership Agreement) that may be made by the Partnership during any future Key Person Event (or during any Cure Period or Replacement Period triggered by a Key Person Event) from Twenty-Eight Million Seven Hundred Thousand Dollars ($28,700,000) (being 1.0% of assets under management as of the date hereof) to Fourteen Million Three Hundred Fifty Thousand Dollars ($14,350,000) (being 0.5% of assets under management as of the date hereof), with such cap to be recalculated on a quarterly basis based on the then-current net asset value of the Partnership as reported by the Partnership's administrator.

(e) Designation of Marcus J. Whitmore as Senior Advisor. The amendment of the Partnership Agreement to designate Marcus J. Whitmore as "Senior Advisor" to the Partnership and the General Partner, effective as of the Amendment Effective Date. In his capacity as Senior Advisor, Mr. Whitmore shall have no governance authority, voting rights, management authority, or decision-making power with respect to the Partnership, the General Partner, or any investment or operational matter relating thereto. The Senior Advisor designation is honorary in nature and is intended to preserve Mr. Whitmore's ongoing advisory relationship with the Partnership during his period of recovery, to the extent his health permits. The terms of Mr. Whitmore's engagement as Senior Advisor, including any compensation, consulting fees, or reimbursement of expenses payable in connection therewith, shall be as set forth in a separate Senior Advisor Agreement to be entered into between Mr. Whitmore and DCM, which agreement shall be provided to the Investor Advisory Committee for review prior to execution.

(f) Amendment of Schedule A (Carried Interest Allocation). The amendment of Schedule A (Carried Interest Allocation) to the Partnership Agreement to reflect the following revised allocation of carried interest ("Carry") among the principals and key professionals of the General Partner, effective as of the Amendment Effective Date:

For the avoidance of doubt, the total GP-level carried interest allocation of twenty percent (20%) of net profits (as calculated in accordance with Article VII of the Partnership Agreement) shall remain unchanged by the Amendment. The reallocation described above reflects the transfer of nine percentage points (9%) of carried interest from Marcus J. Whitmore to Elaine R. Sato (5.5 percentage points) and Jonathan K. Huang (3.5 percentage points), in recognition of their assumption of the Successor Key Person roles and the expanded responsibilities associated therewith. The remaining individual carry allocations among other professionals of the General Partner not listed above shall remain unchanged.

(g) Modified Vesting Schedule for Marcus J. Whitmore's Carried Interest Entitlement. The amendment of Schedule A to provide for a modified vesting schedule for Marcus J. Whitmore's carried interest entitlement (at the revised allocation of 9.0% of net profits), as follows: (I) fifty percent (50%) of such entitlement (i.e., 4.5% of net profits) shall be deemed fully vested as of June 10, 2024 (the date of the Key Person Event); and (II) the remaining fifty percent (50%) of such entitlement (i.e., 4.5% of net profits) shall vest ratably on a monthly basis over a period of thirty-six (36) months commencing on June 10, 2024, such that Mr. Whitmore shall become vested in an additional 0.125% of net profits on each monthly anniversary of June 10, 2024, with full vesting of the remaining portion occurring on June 10, 2027, subject to the terms and conditions set forth in the Amendment (including any forfeiture or clawback provisions applicable in the event of Mr. Whitmore's voluntary termination of his Senior Advisor role or breach of applicable restrictive covenants).

Resolution 3 — Authorization of General Partner Actions

RESOLVED, that the undersigned Limited Partner hereby authorizes the General Partner to execute and deliver the First Amendment on behalf of the Partnership and to take all such further actions and execute, deliver, and file all such further agreements, documents, instruments, certificates, and notices as may be necessary, appropriate, or desirable, in the General Partner's reasonable judgment, to effectuate the foregoing resolutions and to consummate the transactions contemplated by the Amendment, including, without limitation: (i) the execution and filing of any amendments to the Partnership's registration documents with the Registrar of Exempted Limited Partnerships of the Cayman Islands; (ii) the execution of any amendments or supplements to Side Letter Agreements to the extent required to conform such agreements to the Amendment; (iii) the delivery of any notices required to be given under the Partnership Agreement, any credit facility agreement, or any other agreement to which the Partnership is a party; (iv) the engagement of legal counsel, accountants, and other professional advisors in connection with the foregoing; and (v) the performance of any and all other acts that the General Partner deems necessary or advisable in connection with the matters contemplated hereby.

REPRESENTATIONS AND ACKNOWLEDGMENTS

The undersigned Limited Partner hereby makes the following representations, warranties, and acknowledgments in connection with the execution and delivery of this Written Consent:

1. Limited Partner Status. The undersigned represents and warrants that it is a Limited Partner of the Partnership in good standing as of the date hereof, that its interest in the Partnership has not been assigned, transferred, pledged, encumbered, or otherwise disposed of (in whole or in part) except in compliance with the terms of the Partnership Agreement, and that it has full power and authority to execute and deliver this Written Consent and to consent to the matters set forth herein.

2. Accuracy of Capital Commitment. The undersigned confirms that its capital commitment to the Partnership, as set forth in the signature block below, is true, correct, and complete as of the date hereof and has been funded in accordance with the applicable capital call notices issued by the General Partner.

3. Receipt and Review of Materials. The undersigned acknowledges that it has received, reviewed, and had adequate opportunity to evaluate (and, to the extent deemed necessary or appropriate, to discuss with its own legal, financial, and tax advisors) each of the following documents and materials: (i) the General Partner's Notice of Key Person Event, dated June 14, 2024; (ii) the Successor Key Person Proposal and Consent Solicitation Letter, dated July 15, 2024; and (iii) the form of First Amendment to the Amended & Restated Limited Partnership Agreement attached hereto as Exhibit A. The undersigned further acknowledges that it has had the opportunity to ask questions of, and receive answers from, representatives of the General Partner and its counsel concerning the Amendment and the matters described herein.

4. Governing Law. The undersigned acknowledges that the Partnership Agreement is governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of laws rules or provisions that would cause the application of the laws of any other jurisdiction, and that this Written Consent shall be governed by and construed in accordance with the laws of the State of Delaware on the same basis.

5. Irrevocability. The undersigned acknowledges and agrees that this Written Consent, once executed and delivered to the General Partner or its designated counsel, shall be irrevocable and may not be withdrawn, modified, or rescinded by the undersigned for any reason; provided, however, that this Written Consent shall automatically be null and void and of no further force or effect if the Amendment does not become effective on or before the expiration of the Cure Period on September 8, 2024, in which case the provisions of Section 8.04(e) of the Partnership Agreement (relating to the consequences of a failure to cure a Key Person Event within the Cure Period) shall apply in accordance with their terms.

SIGNATURE

IN WITNESS WHEREOF, the undersigned Limited Partner has caused this Written Consent to be duly executed as of the date set forth below.

Limited Partner Information:

Full Legal Name of Limited Partner: ________

Jurisdiction of Organization / Domicile: ________

Capital Commitment to the Partnership: $________

Authorized Signatory:

________________________________________

Print Name: ________

Title: ________

Date: ________

Contact Information (for confirmation and administrative purposes only):

Address: ________

________________________________________

Email: ________

Telephone: ________

DELIVERY INSTRUCTIONS

This Written Consent must be executed and delivered on or before the Consent Deadline of August 23, 2024. Any Written Consent received after the Consent Deadline will not be counted toward the required consent threshold, unless the General Partner has elected, in its sole discretion, to extend the Consent Deadline by written notice delivered to all Limited Partners.

Completed and executed Written Consents should be delivered to the following designated counsel for the General Partner:

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

Attention: Stephen Adler, Esq.

The following methods of delivery are accepted:

(i) Original by Hand or Overnight Courier. Delivery of the original executed Written Consent by hand or by nationally recognized overnight courier service (e.g., Severin Partners LLC, Halcyon Partners LLC, Tarrant & Co.) to Calderwood & Harkness LLP at the address set forth above;

(ii) Email Transmission. Delivery of a PDF copy of the fully executed Written Consent by electronic mail to:

sadler@calderwoodharkness.com

and

darf-consent@calderwoodharkness.com

(iii) Facsimile Transmission. Delivery of the fully executed Written Consent by facsimile transmission to:

+1 (212) 558-4037

Attention: Stephen Adler, Esq.

Re: Driftwood Absolute Return Fund Ltd. — LP Consent

Please note that delivery of this Written Consent by email or facsimile transmission shall be deemed effective upon receipt by Calderwood & Harkness LLP; provided, however, that the original executed Written Consent must be delivered to Calderwood & Harkness LLP by hand or overnight courier within five (5) business days following such email or facsimile delivery. Failure to deliver the original within such five (5) business day period shall not, by itself, invalidate the Written Consent, but the General Partner reserves the right to request delivery of the original at any time.

All questions regarding this Written Consent, including questions regarding the Amendment, the consent process, the Consent Deadline, or the manner of delivery, should be directed to:

Stephen Adler, Esq. Calderwood & Harkness LLP Telephone: +1 (212) 558-3900

Email: sadler@calderwoodharkness.com

EXHIBIT A

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

[Attached hereto: First Amendment to the Amended & Restated Limited Partnership Agreement of Driftwood Absolute Return Fund Ltd., dated as of March 15, 2017, in the form circulated to Limited Partners on July 15, 2024]

Cross-reference: draft-first-amendment-ar-lpa.docx

This page intentionally reserved for Exhibit A. The complete text of the First Amendment, as circulated to all Limited Partners on July 15, 2024, is incorporated herein by reference and should be reviewed in its entirety in connection with the execution and delivery of the foregoing Written Consent.

Individual	Prior Allocation	Revised Allocation
Marcus J. Whitmore	18.0%	9.0%
Elaine R. Sato	1.5%	7.0%
Jonathan K. Huang	0.5%	4.0%
Total GP-Level Carry (unchanged)	20.0%	20.0%

CONFIDENTIAL TREATMENT REQUESTED
FORM OF WRITTEN CONSENT OF THE LIMITED PARTNERS OF DRIFTWOOD ABSOLUTE RETURN FUND LTD.
In Lieu of a Meeting, Pursuant to Section 14.01 of the Amended & Restated Limited Partnership Agreement
This Written Consent of the Limited Partners (this "Written Consent") of Driftwood Absolute Return Fund Ltd. (the "Partnership" or "DARF"), a Cayman Islands exempted limited partnership (Registration No. ELP-87234), is executed and delivered with reference to the Amended & Restated Limited Partnership Agreement of Driftwood Absolute Return Fund Ltd., dated as of March 15, 2017 (as the same may have been supplemented by any Side Letter Agreements entered into between the General Partner and certain Limited Partners, the "Partnership Agreement"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Partnership Agreement.
RECITALS
A. The Fund and Governing Documents. Driftwood Absolute Return Fund Ltd. (the "Partnership" or "DARF") is a Cayman Islands exempted limited partnership duly registered under the Exempted Limited Partnership Law (as revised) of the Cayman Islands (Registration No. ELP-87234). The Partnership is governed by the Amended & Restated Limited Partnership Agreement dated as of March 15, 2017 (the "Partnership Agreement"), which, notwithstanding the formation of the Partnership under Cayman Islands law, is governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflict of laws principles thereof. Driftwood Capital Management LLC, a limited liability company duly organized and validly existing under the laws of the State of Delaware ("DCM" or the "General Partner"), serves as the sole general partner of the Partnership and is responsible for the management and conduct of the Partnership's business and affairs in accordance with the terms and conditions set forth in the Partnership Agreement. The General Partner's principal office is located at 680 Lexington Avenue, 31st Floor, New York, NY 10022. The General Partner is registered as an investment adviser with the United States Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended.
B. Key Person Event. Pursuant to Section 8.04(a) of the Partnership Agreement, Marcus J. Whitmore is the sole designated "Key Person" of the Partnership, and, as such, is required to devote substantially all of his business time and attention to the management and conduct of the Partnership's investment activities. Pursuant to Section 8.04(b) of the Partnership Agreement, a "Key Person Event" was deemed to have occurred effective as of June 10, 2024, due to the medical incapacitation of Marcus J. Whitmore, which rendered him unable to discharge his duties as Key Person within the meaning of Section 8.04(b)(ii) of the Partnership Agreement. Pursuant to Section 8.04(c) of the Partnership Agreement, a ninety (90) calendar-day cure period (the "Cure Period") commenced automatically on the date of the Key Person Event and is scheduled to expire on September 8, 2024. During the Cure Period, the General Partner is required to identify and propose one or more Successor Key Persons to the Limited Partners for approval. In accordance with Section 8.04(d) of the Partnership Agreement and Section 11.01 thereof, the General Partner notified all Limited Partners of the Key Person Event by written notice dated June 14, 2024 (the "Key Person Event Notice"), which was delivered via overnight courier and electronic mail to each Limited Partner at the address set forth on the Register of Limited Partners maintained by the Partnership's administrator.
C. Proposed First Amendment. In response to the Key Person Event and pursuant to its obligations under Section 8.04(c) of the Partnership Agreement, the General Partner has prepared and proposed a First Amendment to the Amended & Restated Limited Partnership Agreement (the "Amendment" or the "First Amendment"), a complete and final copy of which is attached hereto as Exhibit A and incorporated herein by reference. The Amendment, among other things, is designed to address the Key Person Event by establishing a successor governance framework for the Partnership, designating Successor Key Persons, creating a new Investment Committee structure, and making certain related adjustments to the carried interest allocation schedule and related economic terms. The Amendment, together with a Successor Key Person Proposal and Consent Solicitation Letter (the "Solicitation Letter"), was circulated to all Limited Partners of record on July 15, 2024, in the manner prescribed by Section 11.01 of the Partnership Agreement.
D. Consent Required. Section 14.01 of the Partnership Agreement provides that the Partnership Agreement may be amended, modified, or supplemented with the prior written consent of the General Partner and Limited Partners holding at least sixty-six and two-thirds percent (66⅔%) of the aggregate Limited Partner capital commitments (excluding, for purposes of such calculation, any co-investment commitments made by the General Partner, any Affiliate of the General Partner, or any principal, member, partner, officer, or employee thereof in their capacity as co-investors alongside the Fund). Additionally, Section 8.04(c) of the Partnership Agreement provides that one or more Successor Key Persons may be designated by the General Partner with the approval of Limited Partners holding at least sixty-six and two-thirds percent (66⅔%) of the aggregate Limited Partner capital commitments (calculated on the same basis as set forth above). As of the date hereof, the 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 the total fund assets under management of Two Billion Eight Hundred Seventy Million Dollars ($2,870,000,000) less the General Partner co-investment commitments of 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, in her capacity as Managing Member of DCM. Accordingly, the required consent threshold for each of the matters set forth herein is One Billion Eight Hundred Sixty-Five Million Five Hundred Thousand Dollars ($1,865,500,000) (being 66⅔% of $2,798,250,000).
E. Consent Deadline. The General Partner has established August 23, 2024 (being forty (40) calendar days from the date of circulation of the Amendment and the Solicitation Letter to the Limited Partners) as the deadline for the delivery of this Written Consent (the "Consent Deadline"). Any Written Consent not received by the General Partner or its designated counsel on or before the Consent Deadline shall not be counted toward the required consent threshold described in Recital D above, unless the General Partner, in its sole discretion, elects to extend the Consent Deadline by written notice to all Limited Partners.
RESOLUTIONS AND CONSENT
NOW, THEREFORE, the undersigned Limited Partner of the Partnership, in consideration of the premises and intending to be legally bound hereby, and for the purpose of effecting the matters described below without a meeting of the Limited Partners in accordance with Section 14.01 of the Partnership Agreement, hereby consents to and approves the following resolutions:
Resolution 1 — Approval of Successor Key Persons
RESOLVED, that the undersigned Limited Partner hereby consents to and approves the designation of each of the following individuals as "Successor Key Persons" under Section 8.04 of the Partnership Agreement, as amended by the First Amendment:
(i) Elaine R. Sato, currently serving as Deputy Chief Investment Officer and Managing Member of Driftwood Capital Management LLC; and
(ii) Jonathan K. Huang, currently serving as Head of Credit Strategies, Driftwood Capital Management LLC.
Such designation shall be on a joint basis (and not on a several basis), meaning that each of Ms. Sato and Mr. Huang shall be required to serve simultaneously as a Successor Key Person for the purposes of Section 8.04 of the Partnership Agreement, as amended by the Amendment. The terms and conditions of such designation, including the respective obligations of each Successor Key Person, the consequences of the departure, incapacitation, or removal of either Successor Key Person, and related governance matters, are more fully set forth in the Amendment attached hereto as Exhibit A. The undersigned Limited Partner acknowledges that it has reviewed the professional backgrounds, qualifications, and experience of each proposed Successor Key Person as described in the Solicitation Letter and any supplemental materials provided by the General Partner, and has determined, in its sole judgment, that the designation of Ms. Sato and Mr. Huang as joint Successor Key Persons is in the best interests of the Partnership and the Limited Partners.
Resolution 2 — Approval of the First Amendment to the Partnership Agreement
RESOLVED, that the undersigned Limited Partner hereby consents to and approves the First Amendment to the Amended & Restated Limited Partnership Agreement of Driftwood Absolute Return Fund Ltd. in the form attached hereto as Exhibit A (or as circulated to Limited Partners on July 15, 2024), including, without limitation, the following principal modifications and additions to the Partnership Agreement:
(a) Amendment of Section 8.04 (Key Person Provisions). The amendment of Section 8.04 of the Partnership Agreement to redefine the term "Key Person" to mean Elaine R. Sato and Jonathan K. Huang, jointly, in replacement of Marcus J. Whitmore, effective upon the date on which the Amendment becomes effective (the "Amendment Effective Date"), with all references in the Partnership Agreement to the "Key Person" being deemed to refer to Ms. Sato and Mr. Huang in their joint capacity as Successor Key Persons.
(b) Replacement Period for Loss of One Successor Key Person. The amendment of Section 8.04 to provide that the loss of only one (but not both) of the Successor Key Persons (whether by death, incapacitation, voluntary resignation, removal for Cause, or any other circumstance resulting in the applicable individual ceasing to devote substantially all of his or her business time to the affairs of the Partnership) shall trigger a one hundred eighty (180) calendar-day replacement period (the "Replacement Period"), during which the General Partner shall use commercially reasonable efforts to identify and propose a replacement individual for approval by the Limited Partners, rather than an automatic suspension of the Investment Period. During such Replacement Period, the remaining Successor Key Person shall continue to manage the Partnership's investment activities, subject to the oversight of the Investment Committee established pursuant to new Section 8.05, and the Investment Period shall not be suspended unless and until both Successor Key Persons have ceased to serve in such capacity. For the avoidance of doubt, the simultaneous or near-simultaneous loss of both Successor Key Persons shall constitute a Key Person Event under the Partnership Agreement, as amended, and shall trigger the standard Cure Period provisions of Section 8.04(c).
(c) Addition of New Section 8.05 (Investment Committee). The addition of a new Section 8.05 to the Partnership Agreement, establishing a three-member Investment Committee (the "Investment Committee") to oversee and approve all new portfolio investments and material dispositions made by the Partnership on and after the Amendment Effective Date. The Investment Committee shall be comprised of the following members: (I) Elaine R. Sato, who shall serve as Chair of the Investment Committee; (II) Jonathan K. Huang; and (III) one independent member (the "Independent IC Member") to be designated by the Investor Advisory Committee established under Section 9.03 of the Partnership Agreement, which Independent IC Member shall not be an employee, officer, member, partner, or Affiliate of the General Partner, and shall possess relevant experience in multi-strategy or credit-oriented investment management. All investment decisions of the Investment Committee shall require the affirmative vote of at least two (2) of the three (3) members, provided that at least one of the two affirmative votes must be cast by either Ms. Sato or Mr. Huang. The procedures, authorities, limitations, and other terms applicable to the Investment Committee are more fully described in the Amendment.
(d) Reduction of Follow-On Investment Cap During Future Key Person Events. The amendment of Section 8.04 to reduce the maximum aggregate amount of follow-on investments (as defined in the Partnership Agreement) that may be made by the Partnership during any future Key Person Event (or during any Cure Period or Replacement Period triggered by a Key Person Event) from Twenty-Eight Million Seven Hundred Thousand Dollars ($28,700,000) (being 1.0% of assets under management as of the date hereof) to Fourteen Million Three Hundred Fifty Thousand Dollars ($14,350,000) (being 0.5% of assets under management as of the date hereof), with such cap to be recalculated on a quarterly basis based on the then-current net asset value of the Partnership as reported by the Partnership's administrator.
(e) Designation of Marcus J. Whitmore as Senior Advisor. The amendment of the Partnership Agreement to designate Marcus J. Whitmore as "Senior Advisor" to the Partnership and the General Partner, effective as of the Amendment Effective Date. In his capacity as Senior Advisor, Mr. Whitmore shall have no governance authority, voting rights, management authority, or decision-making power with respect to the Partnership, the General Partner, or any investment or operational matter relating thereto. The Senior Advisor designation is honorary in nature and is intended to preserve Mr. Whitmore's ongoing advisory relationship with the Partnership during his period of recovery, to the extent his health permits. The terms of Mr. Whitmore's engagement as Senior Advisor, including any compensation, consulting fees, or reimbursement of expenses payable in connection therewith, shall be as set forth in a separate Senior Advisor Agreement to be entered into between Mr. Whitmore and DCM, which agreement shall be provided to the Investor Advisory Committee for review prior to execution.
(f) Amendment of Schedule A (Carried Interest Allocation). The amendment of Schedule A (Carried Interest Allocation) to the Partnership Agreement to reflect the following revised allocation of carried interest ("Carry") among the principals and key professionals of the General Partner, effective as of the Amendment Effective Date:
For the avoidance of doubt, the total GP-level carried interest allocation of twenty percent (20%) of net profits (as calculated in accordance with Article VII of the Partnership Agreement) shall remain unchanged by the Amendment. The reallocation described above reflects the transfer of nine percentage points (9%) of carried interest from Marcus J. Whitmore to Elaine R. Sato (5.5 percentage points) and Jonathan K. Huang (3.5 percentage points), in recognition of their assumption of the Successor Key Person roles and the expanded responsibilities associated therewith. The remaining individual carry allocations among other professionals of the General Partner not listed above shall remain unchanged.
(g) Modified Vesting Schedule for Marcus J. Whitmore's Carried Interest Entitlement. The amendment of Schedule A to provide for a modified vesting schedule for Marcus J. Whitmore's carried interest entitlement (at the revised allocation of 9.0% of net profits), as follows: (I) fifty percent (50%) of such entitlement (i.e., 4.5% of net profits) shall be deemed fully vested as of June 10, 2024 (the date of the Key Person Event); and (II) the remaining fifty percent (50%) of such entitlement (i.e., 4.5% of net profits) shall vest ratably on a monthly basis over a period of thirty-six (36) months commencing on June 10, 2024, such that Mr. Whitmore shall become vested in an additional 0.125% of net profits on each monthly anniversary of June 10, 2024, with full vesting of the remaining portion occurring on June 10, 2027, subject to the terms and conditions set forth in the Amendment (including any forfeiture or clawback provisions applicable in the event of Mr. Whitmore's voluntary termination of his Senior Advisor role or breach of applicable restrictive covenants).
Resolution 3 — Authorization of General Partner Actions
RESOLVED, that the undersigned Limited Partner hereby authorizes the General Partner to execute and deliver the First Amendment on behalf of the Partnership and to take all such further actions and execute, deliver, and file all such further agreements, documents, instruments, certificates, and notices as may be necessary, appropriate, or desirable, in the General Partner's reasonable judgment, to effectuate the foregoing resolutions and to consummate the transactions contemplated by the Amendment, including, without limitation: (i) the execution and filing of any amendments to the Partnership's registration documents with the Registrar of Exempted Limited Partnerships of the Cayman Islands; (ii) the execution of any amendments or supplements to Side Letter Agreements to the extent required to conform such agreements to the Amendment; (iii) the delivery of any notices required to be given under the Partnership Agreement, any credit facility agreement, or any other agreement to which the Partnership is a party; (iv) the engagement of legal counsel, accountants, and other professional advisors in connection with the foregoing; and (v) the performance of any and all other acts that the General Partner deems necessary or advisable in connection with the matters contemplated hereby.
REPRESENTATIONS AND ACKNOWLEDGMENTS
The undersigned Limited Partner hereby makes the following representations, warranties, and acknowledgments in connection with the execution and delivery of this Written Consent:
1.  Limited Partner Status. The undersigned represents and warrants that it is a Limited Partner of the Partnership in good standing as of the date hereof, that its interest in the Partnership has not been assigned, transferred, pledged, encumbered, or otherwise disposed of (in whole or in part) except in compliance with the terms of the Partnership Agreement, and that it has full power and authority to execute and deliver this Written Consent and to consent to the matters set forth herein.
2.  Accuracy of Capital Commitment. The undersigned confirms that its capital commitment to the Partnership, as set forth in the signature block below, is true, correct, and complete as of the date hereof and has been funded in accordance with the applicable capital call notices issued by the General Partner.
3.  Receipt and Review of Materials. The undersigned acknowledges that it has received, reviewed, and had adequate opportunity to evaluate (and, to the extent deemed necessary or appropriate, to discuss with its own legal, financial, and tax advisors) each of the following documents and materials: (i) the General Partner's Notice of Key Person Event, dated June 14, 2024; (ii) the Successor Key Person Proposal and Consent Solicitation Letter, dated July 15, 2024; and (iii) the form of First Amendment to the Amended & Restated Limited Partnership Agreement attached hereto as Exhibit A. The undersigned further acknowledges that it has had the opportunity to ask questions of, and receive answers from, representatives of the General Partner and its counsel concerning the Amendment and the matters described herein.
4.  Governing Law. The undersigned acknowledges that the Partnership Agreement is governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of laws rules or provisions that would cause the application of the laws of any other jurisdiction, and that this Written Consent shall be governed by and construed in accordance with the laws of the State of Delaware on the same basis.
5.  Irrevocability. The undersigned acknowledges and agrees that this Written Consent, once executed and delivered to the General Partner or its designated counsel, shall be irrevocable and may not be withdrawn, modified, or rescinded by the undersigned for any reason; provided, however, that this Written Consent shall automatically be null and void and of no further force or effect if the Amendment does not become effective on or before the expiration of the Cure Period on September 8, 2024, in which case the provisions of Section 8.04(e) of the Partnership Agreement (relating to the consequences of a failure to cure a Key Person Event within the Cure Period) shall apply in accordance with their terms.
SIGNATURE
IN WITNESS WHEREOF, the undersigned Limited Partner has caused this Written Consent to be duly executed as of the date set forth below.
Limited Partner Information:
Full Legal Name of Limited Partner: ________
Jurisdiction of Organization / Domicile: ________
Capital Commitment to the Partnership: $________
Authorized Signatory:
________________________________________
Print Name: ________
Title: ________
Date: ________
Contact Information (for confirmation and administrative purposes only):
Address: ________
________________________________________
________________________________________
Email: ________
Telephone: ________
DELIVERY INSTRUCTIONS
This Written Consent must be executed and delivered on or before the Consent Deadline of August 23, 2024. Any Written Consent received after the Consent Deadline will not be counted toward the required consent threshold, unless the General Partner has elected, in its sole discretion, to extend the Consent Deadline by written notice delivered to all Limited Partners.
Completed and executed Written Consents should be delivered to the following designated counsel for the General Partner:
Calderwood & Harkness LLP 1585 Broadway, 34th Floor New York, NY 10036
Attention: Stephen Adler, Esq.
The following methods of delivery are accepted:
(i) Original by Hand or Overnight Courier. Delivery of the original executed Written Consent by hand or by nationally recognized overnight courier service (e.g., Severin Partners LLC, Halcyon Partners LLC, Tarrant & Co.) to Calderwood & Harkness LLP at the address set forth above;
(ii) Email Transmission. Delivery of a PDF copy of the fully executed Written Consent by electronic mail to:
sadler@calderwoodharkness.com
and
darf-consent@calderwoodharkness.com
(iii) Facsimile Transmission. Delivery of the fully executed Written Consent by facsimile transmission to:
+1 (212) 558-4037
Attention: Stephen Adler, Esq.
Re: Driftwood Absolute Return Fund Ltd. — LP Consent
Please note that delivery of this Written Consent by email or facsimile transmission shall be deemed effective upon receipt by Calderwood & Harkness LLP; provided, however, that the original executed Written Consent must be delivered to Calderwood & Harkness LLP by hand or overnight courier within five (5) business days following such email or facsimile delivery. Failure to deliver the original within such five (5) business day period shall not, by itself, invalidate the Written Consent, but the General Partner reserves the right to request delivery of the original at any time.
All questions regarding this Written Consent, including questions regarding the Amendment, the consent process, the Consent Deadline, or the manner of delivery, should be directed to:
Stephen Adler, Esq. Calderwood & Harkness LLP Telephone: +1 (212) 558-3900
Email: sadler@calderwoodharkness.com
EXHIBIT A
FORM OF FIRST AMENDMENT TO THE AMENDED & RESTATED LIMITED PARTNERSHIP AGREEMENT OF DRIFTWOOD ABSOLUTE RETURN FUND LTD.
[Attached hereto: First Amendment to the Amended & Restated Limited Partnership Agreement of Driftwood Absolute Return Fund Ltd., dated as of March 15, 2017, in the form circulated to Limited Partners on July 15, 2024]
Cross-reference: draft-first-amendment-ar-lpa.docx
This page intentionally reserved for Exhibit A. The complete text of the First Amendment, as circulated to all Limited Partners on July 15, 2024, is incorporated herein by reference and should be reviewed in its entirety in connection with the execution and delivery of the foregoing Written Consent.
Individual | Prior Allocation | Revised Allocation
Marcus J. Whitmore | 18.0% | 9.0%
Elaine R. Sato | 1.5% | 7.0%
Jonathan K. Huang | 0.5% | 4.0%
Total GP-Level Carry (unchanged) | 20.0% | 20.0%

CONFIDENTIAL TREATMENT REQUESTED

RECITALS

RESOLUTIONS AND CONSENT

REPRESENTATIONS AND ACKNOWLEDGMENTS

SIGNATURE

DELIVERY INSTRUCTIONS

EXHIBIT A

Record

Parties

Dates

Amounts