Attachment: engagement-letter-driftwood.docx
Marcus,
It is a pleasure to confirm that Calderwood & Harkness LLP is opening the engagement to represent Driftwood Absolute Return Fund Ltd. in connection with the structuring and closing of a $400,000,000 broadly syndicated collateralized loan obligation — "Driftwood CLO 2023-I." We have assigned the matter C&H Matter No. 1024-00004, billing code DARF-CLO-2023I.
Attached for your review and countersignature is our executed engagement letter dated today. The letter sets forth the full scope of our representation, which encompasses indenture drafting and negotiation, warehouse take-out documentation, rating-agency process support, offering memorandum review, tax structuring, Cayman law coordination, and closing. The engagement letter is governed by New York law. Linda Osei will serve as billing partner on the matter, and I will serve as responsible partner.
**Calderwood & Harkness Team**
I want to introduce you to the team that will be working on this transaction day to day:
- **Samuel Eklund** — Responsible Partner. I will provide overall engagement oversight, manage the client relationship, and handle senior-level negotiation across all work streams. - **Linda Osei** — Billing Partner. Linda will oversee billing administration and budget monitoring throughout the engagement. - **Hannah Brinkley** — Lead Associate. Hannah will lead the day-to-day drafting of the indenture and ancillary documents and will serve as our primary point of coordination with counterparty counsel and the trustee. - **Patrick Gallagher** — Working Associate. Patrick will support Hannah on the warehouse take-out documentation, closing mechanics, and due diligence. - **Sylvia Hartwell** — Specialist Partner, Tax. Sylvia will lead the tax structuring work stream, including analysis of the Cayman issuer / Delaware co-issuer structure, disregarded entity treatment, FATCA/CRS compliance, ERISA eligibility, and preparation of the tax opinion to be delivered at closing.
We very much look forward to working with you, Elena, and David on the Driftwood side.
**Proposed Work Stream Timeline**
Set forth below are the key milestones we anticipate for the transaction. These are preliminary and will be subject to adjustment as the deal progresses, but they should give us a solid framework to work against:
| Target Date
By way of brief summary on the structural framework we will be working from:
- **Issuer:** Driftwood CLO 2023-I, Ltd. (Cayman Islands exempted company). **Co-Issuer:** Driftwood CLO 2023-I, LLC (Delaware limited liability company). **Collateral Manager:** Driftwood Credit Management LLC. - **Offering:** Notes to be offered under Rule 144A and Regulation S under the Securities Act of 1933, as amended. - **Capital Structure:** Six tranches — Class A-1, A-2, B, C, and D (rated, secured notes) plus subordinated notes (unrated equity tranche). Total rated notes of $364,000,000 and subordinated notes of $36,000,000. The reference spread for the Class A-2 tranche is currently being targeted at SOFR + 190 bps, subject to final market pricing. - **Trustee / Fiduciary Agents:** Ironclad Trust Company, N.A. will serve as trustee, note registrar, paying agent, and custodian/collateral administrator. - **Placement:** Meridian Atlantic Securities LLC (Jonathan Halevy) engaged as structuring lead and placement agent; Northbridge Capital Markets Inc. as co-placement agent. - **Counterparty Counsel:** - Barrington, Locke & Hayes LLP (Gregory Fontaine) — placement agent's counsel - Ashworth & Pratt LLP (Lillian Marchetti) — trustee's counsel - Kenton & Caldwell LLP (Victor Salazar) — warehouse lender's counsel - **Cayman Counsel:** Applegategate Offshore Services Ltd. (Nigel Pemberton). C&H will coordinate directly with Applegategate on Cayman corporate formation, regulatory filings, and the Cayman legal opinion.
**Immediate Next Steps**
1. **Engagement Letter.** We would ask that you countersign the attached engagement letter and return it to us at your earliest convenience so that we may formally open the file and begin incurring time.
2. **Kick-Off Call.** We will schedule an internal kick-off call with the full Driftwood team — Marcus, Elena, and David — for later this week to discuss the warehouse ramp strategy and initial collateral eligibility parameters. My assistant will circulate availability shortly.
3. **Tax Structuring.** Sylvia will begin work on the tax structuring memorandum immediately to ensure that the Cayman/Delaware structure is locked down before the warehouse facility closes.
4. **Document Checklist and Counterparty Coordination.** Hannah and Patrick will begin assembling the master document checklist and will initiate coordination with all counterparty counsel this week.
5. **Meridian Atlantic Alignment.** I would suggest we schedule a brief introductory call with Jonathan Halevy at Meridian Atlantic to align on the rating agency presentation timeline and the offering memorandum drafting schedule. If you are agreeable, we can set that up for early next week.
Marcus, we are genuinely enthusiastic about this transaction. The Driftwood platform's track record should position this deal extremely well with the rating agencies and the investor base, and I am confident that our team has the depth and experience to execute on the timeline outlined above. Please do not hesitate to call me directly if you have any questions in the meantime.
Best regards,
**Samuel Eklund** Partner Calderwood & Harkness LLP 450 Park Avenue New York, NY 10022 Tel: +1 (212) 554-7100 Email: seklund@calderwoodharkness.com
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