1024-00004 · Client 1024 · Engagement

engagement-letter-driftwood.docx DOCUMENT M&A / Corporate

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PRIVILEGED AND CONFIDENTIAL

CALDERWOOD & HARKNESS LLP Counselors at Law 450 Park Avenue New York, NY 10022 Tel: (212) 555-7400

Fax: (212) 555-7401

www.calderwoodharkness.com

May 15, 2023

Mr. Marcus Sorensen Founder & Chief Investment Officer Driftwood Absolute Return Fund Ltd. 200 Brickell Avenue, Suite 3100 Miami, FL 33131

cc: Ms. Elena Voss, President & Chief Operating Officer Driftwood Absolute Return Fund Ltd. 200 Brickell Avenue, Suite 3100 Miami, FL 33131

Dear Mr. Sorensen:

We are pleased to provide this engagement letter (this "Letter") setting forth the terms and conditions upon which Calderwood & Harkness LLP ("C&H" or the "Firm") will represent Driftwood Absolute Return Fund Ltd. ("Driftwood" or "DARF") in connection with the matter described below. We appreciate the opportunity to work with Driftwood and its affiliates on this important transaction and look forward to a productive and successful engagement. This Letter, once executed by both parties, will constitute the binding agreement governing the Firm's engagement.

1. ENGAGEMENT AND SCOPE OF REPRESENTATION

1.1 Engagement Confirmation

Calderwood & Harkness LLP is pleased to confirm its engagement by Driftwood Absolute Return Fund Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands, in connection with the structuring, documentation, and closing of a broadly syndicated collateralized loan obligation transaction with an anticipated aggregate deal value of Four Hundred Million Dollars ($400,000,000) (the "Transaction").

The Transaction will involve the issuance of multiple tranches of secured notes (including, without limitation, Class A-1, Class A-2, Class B, Class C, Class D, and Class E secured floating rate and/or fixed rate notes) and subordinated notes by a newly formed Cayman Islands special purpose issuer vehicle, Driftwood CLO 2023-I, Ltd. (the "Issuer"), and a newly formed Delaware co-issuer vehicle, Driftwood CLO 2023-I, LLC (the "Co-Issuer" and, together with the Issuer, the "Issuers"). The notes issued by the Issuers will be backed by a managed portfolio of broadly syndicated senior secured leveraged loans and will be structured to achieve credit ratings from at least two nationally or internationally recognized rating agencies.

C&H will serve as issuer's counsel to Driftwood and its affiliates in connection with the Transaction. The Firm's role as issuer's counsel encompasses the preparation, negotiation, and finalization of the principal transaction documents, coordination with other counsel and transaction parties, and the rendering of legal opinions required in connection with the closing of the Transaction, all as more fully described in Section 1.2 below.

1.2 Scope of Services

The Firm's representation in connection with the Transaction will encompass the following work streams:

(a) Indenture Drafting and Negotiation. Preparation, drafting, review, and negotiation of the Indenture (including any Supplemental Indenture) governing the issuance, authentication, terms, conditions, priority of payments, events of default, redemption, and other provisions relating to the CLO notes to be issued by the Issuers, including all exhibits, schedules, annexes, and defined terms incorporated therein by reference. The Firm will negotiate the terms of the Indenture on behalf of Driftwood and the Issuers with placement agent's counsel, Barrington, Locke & Hayes LLP (acting on behalf of Meridian Atlantic Securities LLC and Northbridge Capital Markets Inc.), and with trustee's counsel, Ashworth & Pratt LLP (acting on behalf of Ironclad Trust Company, N.A., as Trustee and, if applicable, as Note Registrar and Paying Agent). The Firm will also coordinate with the parties and their respective counsel on priority of payment waterfalls, coverage test mechanics, reinvestment criteria, and concentration limitations embedded in the Indenture.

(b) Collateral Management Agreement. Drafting, review, and negotiation of the Collateral Management Agreement to be entered into between the Issuer, the Co-Issuer, and Driftwood Credit Management LLC, in its capacity as Collateral Manager. The Collateral Management Agreement will set forth the terms of the Collateral Manager's appointment, its duties and responsibilities with respect to the acquisition, management, and disposition of portfolio assets, collateral eligibility and trading restrictions, collateral management fees, removal and replacement provisions, and related matters. The Firm will work with counsel to the Trustee and the placement agents to negotiate customary representations, covenants, and indemnification provisions applicable to the Collateral Manager.

(c) Co-Issuance and Ancillary Transaction Documents. Preparation, drafting, and negotiation of the Co-Issuance Agreement between the Issuer and the Co-Issuer, setting forth the terms of the Co-Issuer's joint and several obligation with respect to the secured notes. In addition, the Firm will prepare and negotiate the Collateral Administration Agreement (with the Collateral Administrator), the Account Control Agreement(s), the Securities Account Control Agreement(s), and such other ancillary documents and agreements as may be reasonably required in connection with the Transaction, including any side letters, fee letters, and agency agreements.

(d) Warehouse Take-Out. Coordination and documentation of the take-out of the existing warehouse credit facility provided by Havenwood Bank, N.A., which warehouse facility has been utilized to acquire the initial portfolio of leveraged loans in advance of the CLO closing. The Firm's work in connection with the warehouse take-out will include preparation and negotiation of the payoff letter, termination and release agreement, and the assignment and assumption of collateral from the warehouse facility to the CLO Issuer, as well as coordination with Havenwood Bank, N.A.'s outside counsel to ensure the orderly transfer of all warehouse collateral into the CLO structure on the closing date. The Firm will coordinate the mechanics of the warehouse unwind, including the release of any liens or security interests held by the warehouse lender on the portfolio assets.

(e) Rating Agency Process. Assistance with the preparation and review of rating agency presentation materials, including cashflow modeling assumptions, structural summaries, and portfolio stratification tables, for meetings and due diligence calls with Brindoval Analytical Services Inc. and Ridgeline Credit Ratings LLC. The Firm will also review and negotiate, on behalf of the Issuers, the rating agency engagement letters entered into by the Issuer with each rating agency, and will coordinate the rating confirmation process through the pricing and closing of the Transaction, including the receipt of final rating letters for each tranche of rated notes.

(f) Offering Memorandum Review. Review, comment on, and revision of the Preliminary Offering Memorandum and the Final Offering Memorandum to be prepared in connection with the offering and sale of the notes. The notes will be offered pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), to qualified institutional buyers ("QIBs") and in offshore transactions pursuant to Regulation S under the Securities Act. The Firm will focus its review on the accuracy and completeness of the descriptions of the transaction structure, the terms of the notes, risk factors, the Collateral Manager and its investment strategy, tax considerations, ERISA considerations, and legal and regulatory matters, and will coordinate with placement agent's counsel on disclosure matters.

(g) Tax Structuring. Comprehensive analysis and advice with respect to U.S. federal income tax structuring considerations applicable to the Transaction, including, without limitation: (i) the treatment of the Cayman Issuer as not engaged in a U.S. trade or business for purposes of Section 882 of the Internal Revenue Code; (ii) the classification of the Delaware Co-Issuer as a disregarded entity for U.S. federal income tax purposes; (iii) the debt versus equity characterization of each tranche of notes for U.S. federal income tax purposes; (iv) compliance with the Foreign Account Tax Compliance Act ("FATCA") and the Common Reporting Standard ("CRS"), including analysis of withholding obligations and reporting requirements applicable to the Issuer and its intermediaries; and (v) analysis of the eligibility of the notes for purchase by employee benefit plans and other investors subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code, including the availability of ERISA exemptions for "VCOC" or "QPAM" structures or the treatment of the notes under the plan asset regulations promulgated by the U.S. Department of Labor.

(h) Cayman Islands Coordination. Coordination and liaison with Applegategate Offshore Services Ltd. ("Applegategate"), as Cayman Islands counsel, on matters relating to the formation and organization of the Cayman Issuer, including the preparation and filing of the Memorandum and Articles of Association, the appointment of directors, the registration of the Issuer as an exempted company under the Companies Act (as revised) of the Cayman Islands, the delivery of Cayman Islands legal opinions, and compliance with applicable Cayman Islands anti-money laundering, beneficial ownership, and economic substance requirements. The Firm will review and comment on the Cayman Islands legal opinions to be delivered by Applegategate at closing and will coordinate with Applegategate on any Cayman law issues that arise during the course of the Transaction.

(i) Closing. Preparation, organization, and coordination of all closing deliverables in connection with the Transaction, including: (i) the U.S. legal opinion of C&H as issuer's counsel (covering due authorization, enforceability, no-conflict, and other customary opinion topics) and the U.S. federal income tax opinion of C&H (addressing the characterization of the notes and the tax status of the Issuers); (ii) officers' and secretary's certificates of the Issuer, the Co-Issuer, and the Collateral Manager; (iii) board resolutions and written consents of the directors and/or members, as applicable, of each entity; (iv) preparation and maintenance of a comprehensive closing checklist; (v) preparation of the funds flow memorandum setting forth the sources and uses of funds on the closing date, including payment of transaction expenses, acquisition of additional collateral, and initial deposits into reserve accounts; and (vi) management of all closing logistics, including scheduling of pre-closing and closing calls, execution and delivery of documents, and post-closing deliverables such as filings, notices, and recording of security interests.

(j) Corporate Formation. Assistance with the preparation and filing of all formation and organizational documentation for Driftwood CLO 2023-I, LLC (Delaware), including the Certificate of Formation to be filed with the Delaware Secretary of State and the Limited Liability Company Agreement. The Firm will also coordinate with Applegategate on the preparation and filing of the Memorandum and Articles of Association for Driftwood CLO 2023-I, Ltd. (Cayman Islands) and will review and comment on such documents to ensure consistency with the Transaction documents and U.S. legal requirements.

(k) Note Purchase Agreement. Review, drafting (to the extent applicable), and negotiation of the Note Purchase Agreement (also referred to as the Placement Agreement) among the Issuers, the Collateral Manager, and the placement agents, Meridian Atlantic Securities LLC (as lead placement agent) and Northbridge Capital Markets Inc. (as co-placement agent). The Firm will negotiate the representations, warranties, covenants, conditions precedent, and indemnification provisions contained therein on behalf of the Issuers and the Collateral Manager, and will coordinate with Barrington, Locke & Hayes LLP as counsel to the placement agents on the terms of such agreement.

1.3 Limitations on Scope

Notwithstanding the foregoing, the scope of the Firm's engagement is subject to the following limitations:

(a) This engagement does not include the representation of Driftwood or any of its affiliates in any litigation, arbitration, regulatory enforcement proceeding, regulatory examination, investigation, or any form of dispute resolution proceeding, whether arising out of or related to the Transaction or otherwise. Should any such matter arise during the course of the engagement, the parties may discuss a separate engagement for such purposes, subject to a separate engagement letter and fee arrangement.

(b) The Firm is not engaged to provide, and will not provide, legal advice on the laws of the Cayman Islands. All advice with respect to Cayman Islands law will be provided exclusively by Applegategate Offshore Services Ltd. as Cayman Islands counsel. The Firm's coordination with Applegategate, as described in Section 1.2(h) above, is limited to facilitating the efficient exchange of information and the integration of Cayman law advice into the overall transaction process.

(c) The Firm does not represent, and will not represent, any party other than Driftwood and its affiliates as specifically identified in Section 2 below in connection with the Transaction. Without limiting the generality of the foregoing, the Firm does not represent the Trustee, the placement agents, the rating agencies, the warehouse lender, or any investor in the notes.

(d) Unless otherwise agreed in writing, the Firm's engagement will terminate upon the closing of the Transaction and the completion of any post-closing deliverables described in Section 1.2(i) above, subject to the provisions of Section 10 hereof.

2. CLIENT IDENTIFICATION

The Firm's client in this engagement is Driftwood Absolute Return Fund Ltd. In addition, to the extent directed by Driftwood and consistent with the scope of the Transaction, the Firm will also represent the following affiliated entities in connection with the Transaction:

(a) Driftwood Credit Management LLC, a Delaware limited liability company and registered investment adviser under the Investment Advisers Act of 1940, as amended (SEC CRD No. 182447), with its principal office located at 200 Brickell Avenue, Suite 3100, Miami, FL 33131, in its capacity as the Collateral Manager for the Transaction;

(b) Driftwood CLO 2023-I, Ltd., an exempted company to be incorporated with limited liability under the laws of the Cayman Islands (the "Issuer"); and

The foregoing entities are collectively referred to herein as the "Client" or the "Clients." The Firm's representation of the affiliated entities identified above is undertaken at the direction and on behalf of Driftwood and is limited to the scope of the Transaction as described in this Letter.

The Firm does not represent any individual officer, director, manager, member, partner, employee, or agent of Driftwood or any of its affiliates in a personal capacity. To the extent that the interests of any individual diverge from those of Driftwood or its affiliates in connection with the Transaction, the Firm's duty of loyalty runs exclusively to the entity clients identified above, and any such individual should consider retaining independent counsel.

3. STAFFING AND KEY PERSONNEL

3.1 Responsible Partner

Samuel Eklund, Partner, will serve as the Responsible Partner for this engagement. Mr. Eklund will have overall supervisory responsibility for the Firm's work on the Transaction, including ensuring the quality and timeliness of all work product, overseeing the engagement team, and serving as the primary senior contact for Driftwood on strategic and partner-level matters. Mr. Eklund may be reached directly at (212) 555-7412 or at seklund@calderwoodharkness.com.

3.2 Billing Partner

Linda Osei, Partner, will serve as the Billing Partner for this engagement. Ms. Osei will be the primary contact for all fee-related matters, invoicing, billing inquiries, and any questions or concerns regarding the Firm's statements of account. Ms. Osei may be reached directly at (212) 555-7419 or at losei@calderwoodharkness.com.

3.3 Engagement Team

The following attorneys will comprise the core engagement team assigned to the Transaction:

Additional attorneys, paralegals, or other professional staff may be assigned to the engagement from time to time as the scope and pace of the Transaction may require. The Firm will endeavor to notify the Client of any material changes in the composition of the engagement team, including the assignment of any additional partners or senior associates to the matter.

4. MATTER NUMBER AND BILLING CODE

The Firm has assigned the following internal references to this engagement:

C&H Matter No.: 1024-00004

C&H Billing Code: DARF-CLO-2023I

All time entries, disbursement records, invoices, internal memoranda, and external correspondence relating to this engagement should reference the foregoing identifiers. We kindly request that all correspondence and payments from the Client to the Firm also reference the Matter Number and Billing Code set forth above to ensure proper crediting and allocation.

5. FEE ARRANGEMENTS

5.1 Basis of Fees

The Firm will charge for its services in connection with this engagement on an hourly basis, applying the Firm's standard billing rates then in effect for each attorney and professional staff member who performs work on the matter. Time is recorded and billed in increments of one-tenth (0.1) of an hour.

The Firm's current standard hourly billing rates for personnel of the types expected to work on this engagement are as follows:

The Firm's hourly rates are subject to periodic adjustment, typically on an annual basis effective January 1 of each calendar year. The Firm will provide the Client with advance notice of any adjustments to hourly rates applicable to this engagement and will furnish a current rate schedule upon request. A complete current rate schedule is enclosed as Attachment A to this Letter.

5.2 Estimated Fee Range

Based on the anticipated scope of work described in Section 1.2 above, and taking into account the Firm's experience with broadly syndicated CLO transactions of comparable size, structure, and complexity, the Firm estimates that total legal fees for this engagement will fall within the range of approximately $850,000 to $1,200,000. This estimate reflects the Firm's current understanding of the scope of the Transaction, the anticipated level of negotiation with counterparty counsel and transaction parties, and the number and nature of work streams to be undertaken.

This estimate is provided solely for the Client's planning and budgeting purposes and does not constitute a fee cap, a fixed fee, a maximum fee, or a guaranteed fee. Actual fees may vary above or below the estimated range depending on a number of factors, including, without limitation: (i) the ultimate scope and complexity of the Transaction and the work required; (ii) the extent and duration of negotiations with counsel to the placement agents, the Trustee, and other transaction parties; (iii) the number, nature, and complexity of legal, tax, or structural issues that arise during the course of the engagement; (iv) changes in the Transaction structure, timeline, or deal size; (v) the responsiveness and efficiency of third-party counsel and other transaction participants; and (vi) any additional work streams requested by the Client that are not contemplated as of the date of this Letter.

The Firm will endeavor to keep the Client informed on an ongoing basis regarding the status of fees, and will promptly notify the Client if, in the Firm's reasonable judgment, fees are trending materially above the initial estimate or the originally anticipated scope of the engagement.

5.3 Disbursements and Expenses

In addition to professional fees for attorney and staff time, the Firm will charge the Client for reasonable out-of-pocket disbursements and expenses incurred in connection with the representation. Such disbursements may include, without limitation:

(a) Filing fees, registration fees, and governmental charges;

(b) Messenger, courier, and overnight delivery charges;

(c) Travel expenses (airfare, ground transportation, lodging, and meals) incurred in connection with the Transaction, including travel for rating agency presentations, closing meetings, and other Transaction-related events;

(d) Outside copying, printing, scanning, and binding costs;

(e) Electronic database research charges (e.g., Westmark Data Systems, Sundial Solutions, Cascade Services Inc., and similar services);

(f) Long-distance telephone and videoconference charges, to the extent separately billed by third-party providers;

(g) Court reporter, transcript, and notarization fees; and

(h) Other similar out-of-pocket costs reasonably incurred in furtherance of the engagement.

For the avoidance of doubt, third-party costs such as the fees and expenses of Cayman Islands counsel (Applegategate Offshore Services Ltd.), the fees and expenses of the Trustee and its counsel, and the fees and expenses of rating agencies are not included in the Firm's professional fees or disbursements and will be billed directly by the respective third-party service providers to the Client (or to the Issuer, as applicable) unless the Client otherwise instructs the Firm in writing to assume responsibility for the payment of any such third-party costs.

5.4 Billing and Payment Terms

Invoices for professional fees and disbursements will be rendered monthly, generally within fifteen (15) business days following the end of each calendar month. Each invoice will set forth, in reasonable detail, the professional fees incurred (including a description of services rendered, the identity of each timekeeper, and the hours worked), together with itemized disbursements.

All invoices are due and payable within thirty (30) calendar days of the date of the invoice. Invoices will be directed to the attention of the Billing Partner, Linda Osei, and sent to Driftwood Absolute Return Fund Ltd. at 200 Brickell Avenue, Suite 3100, Miami, FL 33131, or to such other mailing address, email address, or electronic billing platform as the Client may designate in writing from time to time.

The Firm reserves the right to charge interest on any amounts that remain unpaid after the thirty (30) day payment period at a rate of one percent (1.0%) per month (twelve percent (12.0%) per annum), or, if lower, the maximum rate of interest permitted by applicable law. The Client agrees that the Firm may apply any payments received to the oldest outstanding invoice balance first, unless the Client designates a specific invoice to which a payment should be applied.

In the event that fees and disbursements remain unpaid for a period in excess of sixty (60) days, the Firm reserves the right, upon reasonable written notice to the Client, to suspend work on the engagement until such outstanding amounts are brought current, subject to the Firm's professional and ethical obligations.

6. CONFIDENTIALITY

The Firm will maintain the confidentiality of all information received from the Client in connection with this engagement, including all confidential, proprietary, non-public, and trade secret information relating to the Client's business, operations, financial condition, investment strategies, portfolio holdings, and the Transaction. The Firm's obligations with respect to confidential information are governed by, and will be discharged in accordance with, the Firm's professional and ethical obligations under the New York Rules of Professional Conduct, including Rule 1.6 (Confidentiality of Information), and any other applicable rules of professional conduct or legal ethics in jurisdictions where members of the engagement team are admitted to practice.

The Firm's confidentiality obligations are subject to any applicable legal, regulatory, or judicial requirements that may compel disclosure, including, without limitation, lawful subpoenas, court orders, or requests from regulatory authorities. In the event the Firm receives a request or demand for disclosure of confidential client information, the Firm will, to the extent permitted by law, provide the Client with prompt notice of such request or demand and will cooperate with the Client in seeking to limit or prevent such disclosure through appropriate legal means.

Nothing in this Section 6 shall restrict the Firm from disclosing information (i) that is or becomes publicly available through no fault of the Firm, (ii) that is independently known to or developed by the Firm without reference to confidential client information, or (iii) to the extent necessary for the Firm to enforce its rights under this Letter, including the right to collect fees and disbursements.

7. CONFLICTS OF INTEREST

The Firm has conducted a comprehensive conflicts of interest review in accordance with its standard conflicts clearance procedures and, based on the information currently available to the Firm, including the identities of the Client entities, the transaction parties, the placement agents, the Trustee, the rating agencies, and the warehouse lender, the Firm has identified no conflicts of interest that would prevent the Firm from undertaking this engagement or that would require the Client's informed written consent to waive.

The Client acknowledges and agrees that C&H is a large, diversified law firm that represents numerous other clients across a wide range of industries, asset classes, and practice areas. Such representations include representations of other collateralized loan obligation sponsors, collateral managers, investors, placement agents, trustees, and financial institutions in matters that are unrelated to this engagement and that do not involve directly adverse positions to the Client. The Client agrees that such representations do not constitute a conflict of interest with respect to this engagement and consents to the Firm's continued representation of such other clients in unrelated matters, provided that the Firm does not represent any such client in a matter that is directly adverse to the Client in connection with the Transaction without obtaining the Client's prior informed written consent.

If an actual or potential conflict of interest arises during the course of this engagement, the Firm will promptly notify the Client of the conflict, provide such information as may reasonably be disclosed consistent with the Firm's professional obligations to other clients, and work cooperatively with the Client to resolve the conflict in accordance with applicable rules of professional responsibility, including, where appropriate, by seeking informed written consent to continued representation or by withdrawing from the engagement or the conflicting matter.

8. COMMUNICATION AND CLIENT CONTACTS

Effective communication between the Firm and the Client is essential to the successful and efficient completion of the Transaction. The Firm's primary day-to-day contacts for the engagement will be as follows:

Firm Contacts:

• Hannah Brinkley, Lead Associate — Primary contact for all document drafting, negotiation, and transactional matters, including day-to-day coordination with counterparty counsel, the Trustee, and the rating agencies. Ms. Brinkley may be reached at (212) 555-7438 or at hbrinkley@calderwoodharkness.com.

• Samuel Eklund, Responsible Partner — Primary contact for partner-level matters, strategic decisions, and any issues requiring senior Firm involvement. Mr. Eklund may be reached at (212) 555-7412 or at seklund@calderwoodharkness.com.

The Client's primary contacts for the engagement will be as follows:

Client Contacts:

• Marcus Sorensen, Founder & Chief Investment Officer — Overall client authority; strategic direction and approval of major transaction terms.

• Elena Voss, President & Chief Operating Officer — Day-to-day operational matters; administrative and organizational matters relating to the Transaction.

• David Hwan, Managing Director, Structured Credit — Primary contact for collateral management matters, portfolio-related issues, collateral eligibility criteria, and operational aspects of the Collateral Manager's role in the Transaction.

Either party may update its designated contacts upon written notice to the other. The Firm will use commercially reasonable efforts to respond to Client communications promptly, and the Client will use commercially reasonable efforts to provide information, approvals, and instructions to the Firm in a timely manner so as to facilitate the orderly progress of the Transaction.

9. DOCUMENT RETENTION

Upon conclusion of the engagement, whether by closing of the Transaction, termination, or otherwise, the Firm will retain all files and work product relating to this engagement in accordance with the Firm's document retention policy then in effect. The Firm's current document retention policy provides for the retention of closed matter files for a period of not less than seven (7) years following the conclusion of the engagement, after which the Firm may, in its discretion, dispose of such files in accordance with applicable retention schedules and professional guidelines.

Prior to any disposal of files, the Firm will provide the Client with reasonable advance written notice and an opportunity to request the return or transfer of any files or documents. Original documents provided by the Client to the Firm during the course of the engagement will be returned to the Client upon written request at any time, whether during or after the engagement, at the Client's expense for any shipping or delivery costs.

The Client acknowledges that the Firm's document retention policy is subject to change from time to time in the Firm's discretion, consistent with applicable professional and regulatory requirements. The Firm will make its then-current document retention policy available to the Client upon request.

10. TERMINATION OF ENGAGEMENT

Either party may terminate this engagement at any time, with or without cause, upon written notice to the other party. Termination by the Client shall be effective upon receipt of written notice by the Firm. Termination by the Firm shall be effective upon reasonable written notice to the Client, taking into account the Firm's professional obligations to avoid prejudice to the Client and to comply with applicable rules of professional conduct governing withdrawal from representation.

Upon termination of the engagement:

(a) The Client will remain responsible for, and shall promptly pay, all professional fees and disbursements incurred by the Firm through the effective date of termination, in accordance with the terms set forth in Section 5 of this Letter.

(b) The Firm will provide reasonable cooperation to the Client in connection with the transition of the matter to successor counsel, including the prompt transfer of files and work product (subject to the Client's satisfaction of all outstanding payment obligations), and will take such steps as are reasonably necessary to protect the Client's interests during the transition period.

(c) The Firm's obligations of confidentiality set forth in Section 6 of this Letter shall survive the termination of the engagement.

Nothing in this Section 10 shall relieve the Client of its obligation to pay for services rendered and disbursements incurred prior to the effective date of termination.

11. GOVERNING LAW AND DISPUTE RESOLUTION

This engagement letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflict of laws that would require or permit the application of the laws of any other jurisdiction.

Any dispute, controversy, or claim arising out of or relating to this engagement letter or the Firm's representation of the Client, including any claim relating to the quality of the Firm's services, the amount of fees or disbursements charged, or the Firm's professional responsibilities, shall be resolved in accordance with the laws of the State of New York. The parties consent to the exclusive jurisdiction of the state and federal courts located in the County of New York, State of New York, for the resolution of any such dispute, and each party hereby waives any objection to venue or jurisdiction in such courts.

Nothing in this Section 11 shall be construed to limit the Client's right to file a complaint with the appropriate attorney disciplinary authority in the event of a dispute concerning the Firm's professional conduct.

12. ENTIRE AGREEMENT

This Letter constitutes the entire agreement between the Firm and the Client with respect to the terms and conditions of the Firm's engagement in connection with the Transaction and supersedes all prior or contemporaneous proposals, discussions, negotiations, agreements, or understandings, whether written or oral, relating to the subject matter hereof.

No amendment, modification, supplement, or waiver of any provision of this Letter shall be effective unless set forth in a written instrument duly executed by both the Firm and the Client. No failure or delay by either party in exercising any right, power, or remedy under this Letter shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy.

If any provision of this Letter is held to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect to the extent permitted by law.

We are delighted to represent Driftwood and its affiliates in connection with this Transaction and look forward to working closely with you and your team. If the foregoing terms are acceptable, please indicate your agreement by countersigning this Letter in the space provided below and returning one fully executed copy to the undersigned. This Letter will become effective upon execution by both parties.

Please do not hesitate to contact Samuel Eklund or Hannah Brinkley if you have any questions regarding the terms of this engagement.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Samuel Eklund

Title: Partner; Responsible Partner

Date: May 15, 2023

ACKNOWLEDGMENT AND ACCEPTANCE

By signing below, the undersigned hereby confirms that he has read and understood the terms and conditions set forth in this engagement letter, that he has the authority to bind Driftwood Absolute Return Fund Ltd. to the terms hereof, and that Driftwood Absolute Return Fund Ltd. accepts and agrees to be bound by the terms and conditions of this engagement letter as of the date set forth below.

DRIFTWOOD ABSOLUTE RETURN FUND LTD.

By: ________

Name: Marcus Sorensen

Title: Founder & Chief Investment Officer

Date: ________

Enclosures:

Attachment A: Current Standard Rate Schedule (2023)

cc:

Elena Voss, President & Chief Operating Officer, Driftwood Absolute Return Fund Ltd. 200 Brickell Avenue, Suite 3100, Miami, FL 33131

Linda Osei, Partner (Billing Partner), Calderwood & Harkness LLP 450 Park Avenue, New York, NY 10022

Sylvia Hartwell, Specialist Partner, Tax, Calderwood & Harkness LLP 450 Park Avenue, New York, NY 10022

NY\12488703.4

Name	Role	Primary Responsibilities
Samuel Eklund	Responsible Partner	Overall supervisory responsibility; strategic direction; partner-level negotiations
Linda Osei	Billing Partner	Fee arrangements; invoicing; billing inquiries; matter administration
Hannah Brinkley	Lead Associate	Day-to-day management of document drafting, negotiation, and closing coordination; primary drafting attorney for the Indenture, Collateral Management Agreement, and closing deliverables
Patrick Gallagher	Working Associate	Supporting associate for document preparation, due diligence, corporate formation matters, closing mechanics, and research
Sylvia Hartwell	Specialist Partner, Tax	Responsible for all tax structuring analysis, preparation of the U.S. federal income tax opinion, and advisory on ERISA, FATCA, and CRS compliance matters
Timekeeper Category	Hourly Rate Range
Partners	$1,150 – $1,475
Specialist Partners (Tax)	$1,250 – $1,550
Senior Associates (6th year and above)	$850 – $1,050
Mid-Level Associates (3rd–5th year)	$700 – $850
Junior Associates (1st–2nd year)	$525 – $700
Paralegals and Professional Staff	$275 – $425

PRIVILEGED AND CONFIDENTIAL
CALDERWOOD & HARKNESS LLP Counselors at Law 450 Park Avenue New York, NY 10022 Tel: (212) 555-7400
Fax: (212) 555-7401
www.calderwoodharkness.com
May 15, 2023
Mr. Marcus Sorensen Founder & Chief Investment Officer Driftwood Absolute Return Fund Ltd. 200 Brickell Avenue, Suite 3100 Miami, FL 33131
cc: Ms. Elena Voss, President & Chief Operating Officer Driftwood Absolute Return Fund Ltd. 200 Brickell Avenue, Suite 3100 Miami, FL 33131
Dear Mr. Sorensen:
We are pleased to provide this engagement letter (this "Letter") setting forth the terms and conditions upon which Calderwood & Harkness LLP ("C&H" or the "Firm") will represent Driftwood Absolute Return Fund Ltd. ("Driftwood" or "DARF") in connection with the matter described below. We appreciate the opportunity to work with Driftwood and its affiliates on this important transaction and look forward to a productive and successful engagement. This Letter, once executed by both parties, will constitute the binding agreement governing the Firm's engagement.
1. ENGAGEMENT AND SCOPE OF REPRESENTATION
1.1 Engagement Confirmation
Calderwood & Harkness LLP is pleased to confirm its engagement by Driftwood Absolute Return Fund Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands, in connection with the structuring, documentation, and closing of a broadly syndicated collateralized loan obligation transaction with an anticipated aggregate deal value of Four Hundred Million Dollars ($400,000,000) (the "Transaction").
The Transaction will involve the issuance of multiple tranches of secured notes (including, without limitation, Class A-1, Class A-2, Class B, Class C, Class D, and Class E secured floating rate and/or fixed rate notes) and subordinated notes by a newly formed Cayman Islands special purpose issuer vehicle, Driftwood CLO 2023-I, Ltd. (the "Issuer"), and a newly formed Delaware co-issuer vehicle, Driftwood CLO 2023-I, LLC (the "Co-Issuer" and, together with the Issuer, the "Issuers"). The notes issued by the Issuers will be backed by a managed portfolio of broadly syndicated senior secured leveraged loans and will be structured to achieve credit ratings from at least two nationally or internationally recognized rating agencies.
C&H will serve as issuer's counsel to Driftwood and its affiliates in connection with the Transaction. The Firm's role as issuer's counsel encompasses the preparation, negotiation, and finalization of the principal transaction documents, coordination with other counsel and transaction parties, and the rendering of legal opinions required in connection with the closing of the Transaction, all as more fully described in Section 1.2 below.
1.2 Scope of Services
The Firm's representation in connection with the Transaction will encompass the following work streams:
(a) Indenture Drafting and Negotiation. Preparation, drafting, review, and negotiation of the Indenture (including any Supplemental Indenture) governing the issuance, authentication, terms, conditions, priority of payments, events of default, redemption, and other provisions relating to the CLO notes to be issued by the Issuers, including all exhibits, schedules, annexes, and defined terms incorporated therein by reference. The Firm will negotiate the terms of the Indenture on behalf of Driftwood and the Issuers with placement agent's counsel, Barrington, Locke & Hayes LLP (acting on behalf of Meridian Atlantic Securities LLC and Northbridge Capital Markets Inc.), and with trustee's counsel, Ashworth & Pratt LLP (acting on behalf of Ironclad Trust Company, N.A., as Trustee and, if applicable, as Note Registrar and Paying Agent). The Firm will also coordinate with the parties and their respective counsel on priority of payment waterfalls, coverage test mechanics, reinvestment criteria, and concentration limitations embedded in the Indenture.
(b) Collateral Management Agreement. Drafting, review, and negotiation of the Collateral Management Agreement to be entered into between the Issuer, the Co-Issuer, and Driftwood Credit Management LLC, in its capacity as Collateral Manager. The Collateral Management Agreement will set forth the terms of the Collateral Manager's appointment, its duties and responsibilities with respect to the acquisition, management, and disposition of portfolio assets, collateral eligibility and trading restrictions, collateral management fees, removal and replacement provisions, and related matters. The Firm will work with counsel to the Trustee and the placement agents to negotiate customary representations, covenants, and indemnification provisions applicable to the Collateral Manager.
(c) Co-Issuance and Ancillary Transaction Documents. Preparation, drafting, and negotiation of the Co-Issuance Agreement between the Issuer and the Co-Issuer, setting forth the terms of the Co-Issuer's joint and several obligation with respect to the secured notes. In addition, the Firm will prepare and negotiate the Collateral Administration Agreement (with the Collateral Administrator), the Account Control Agreement(s), the Securities Account Control Agreement(s), and such other ancillary documents and agreements as may be reasonably required in connection with the Transaction, including any side letters, fee letters, and agency agreements.
(d) Warehouse Take-Out. Coordination and documentation of the take-out of the existing warehouse credit facility provided by Havenwood Bank, N.A., which warehouse facility has been utilized to acquire the initial portfolio of leveraged loans in advance of the CLO closing. The Firm's work in connection with the warehouse take-out will include preparation and negotiation of the payoff letter, termination and release agreement, and the assignment and assumption of collateral from the warehouse facility to the CLO Issuer, as well as coordination with Havenwood Bank, N.A.'s outside counsel to ensure the orderly transfer of all warehouse collateral into the CLO structure on the closing date. The Firm will coordinate the mechanics of the warehouse unwind, including the release of any liens or security interests held by the warehouse lender on the portfolio assets.
(e) Rating Agency Process. Assistance with the preparation and review of rating agency presentation materials, including cashflow modeling assumptions, structural summaries, and portfolio stratification tables, for meetings and due diligence calls with Brindoval Analytical Services Inc. and Ridgeline Credit Ratings LLC. The Firm will also review and negotiate, on behalf of the Issuers, the rating agency engagement letters entered into by the Issuer with each rating agency, and will coordinate the rating confirmation process through the pricing and closing of the Transaction, including the receipt of final rating letters for each tranche of rated notes.
(f) Offering Memorandum Review. Review, comment on, and revision of the Preliminary Offering Memorandum and the Final Offering Memorandum to be prepared in connection with the offering and sale of the notes. The notes will be offered pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), to qualified institutional buyers ("QIBs") and in offshore transactions pursuant to Regulation S under the Securities Act. The Firm will focus its review on the accuracy and completeness of the descriptions of the transaction structure, the terms of the notes, risk factors, the Collateral Manager and its investment strategy, tax considerations, ERISA considerations, and legal and regulatory matters, and will coordinate with placement agent's counsel on disclosure matters.
(g) Tax Structuring. Comprehensive analysis and advice with respect to U.S. federal income tax structuring considerations applicable to the Transaction, including, without limitation: (i) the treatment of the Cayman Issuer as not engaged in a U.S. trade or business for purposes of Section 882 of the Internal Revenue Code; (ii) the classification of the Delaware Co-Issuer as a disregarded entity for U.S. federal income tax purposes; (iii) the debt versus equity characterization of each tranche of notes for U.S. federal income tax purposes; (iv) compliance with the Foreign Account Tax Compliance Act ("FATCA") and the Common Reporting Standard ("CRS"), including analysis of withholding obligations and reporting requirements applicable to the Issuer and its intermediaries; and (v) analysis of the eligibility of the notes for purchase by employee benefit plans and other investors subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code, including the availability of ERISA exemptions for "VCOC" or "QPAM" structures or the treatment of the notes under the plan asset regulations promulgated by the U.S. Department of Labor.
(h) Cayman Islands Coordination. Coordination and liaison with Applegategate Offshore Services Ltd. ("Applegategate"), as Cayman Islands counsel, on matters relating to the formation and organization of the Cayman Issuer, including the preparation and filing of the Memorandum and Articles of Association, the appointment of directors, the registration of the Issuer as an exempted company under the Companies Act (as revised) of the Cayman Islands, the delivery of Cayman Islands legal opinions, and compliance with applicable Cayman Islands anti-money laundering, beneficial ownership, and economic substance requirements. The Firm will review and comment on the Cayman Islands legal opinions to be delivered by Applegategate at closing and will coordinate with Applegategate on any Cayman law issues that arise during the course of the Transaction.
(i) Closing. Preparation, organization, and coordination of all closing deliverables in connection with the Transaction, including: (i) the U.S. legal opinion of C&H as issuer's counsel (covering due authorization, enforceability, no-conflict, and other customary opinion topics) and the U.S. federal income tax opinion of C&H (addressing the characterization of the notes and the tax status of the Issuers); (ii) officers' and secretary's certificates of the Issuer, the Co-Issuer, and the Collateral Manager; (iii) board resolutions and written consents of the directors and/or members, as applicable, of each entity; (iv) preparation and maintenance of a comprehensive closing checklist; (v) preparation of the funds flow memorandum setting forth the sources and uses of funds on the closing date, including payment of transaction expenses, acquisition of additional collateral, and initial deposits into reserve accounts; and (vi) management of all closing logistics, including scheduling of pre-closing and closing calls, execution and delivery of documents, and post-closing deliverables such as filings, notices, and recording of security interests.
(j) Corporate Formation. Assistance with the preparation and filing of all formation and organizational documentation for Driftwood CLO 2023-I, LLC (Delaware), including the Certificate of Formation to be filed with the Delaware Secretary of State and the Limited Liability Company Agreement. The Firm will also coordinate with Applegategate on the preparation and filing of the Memorandum and Articles of Association for Driftwood CLO 2023-I, Ltd. (Cayman Islands) and will review and comment on such documents to ensure consistency with the Transaction documents and U.S. legal requirements.
(k) Note Purchase Agreement. Review, drafting (to the extent applicable), and negotiation of the Note Purchase Agreement (also referred to as the Placement Agreement) among the Issuers, the Collateral Manager, and the placement agents, Meridian Atlantic Securities LLC (as lead placement agent) and Northbridge Capital Markets Inc. (as co-placement agent). The Firm will negotiate the representations, warranties, covenants, conditions precedent, and indemnification provisions contained therein on behalf of the Issuers and the Collateral Manager, and will coordinate with Barrington, Locke & Hayes LLP as counsel to the placement agents on the terms of such agreement.
1.3 Limitations on Scope
Notwithstanding the foregoing, the scope of the Firm's engagement is subject to the following limitations:
(a) This engagement does not include the representation of Driftwood or any of its affiliates in any litigation, arbitration, regulatory enforcement proceeding, regulatory examination, investigation, or any form of dispute resolution proceeding, whether arising out of or related to the Transaction or otherwise. Should any such matter arise during the course of the engagement, the parties may discuss a separate engagement for such purposes, subject to a separate engagement letter and fee arrangement.
(b) The Firm is not engaged to provide, and will not provide, legal advice on the laws of the Cayman Islands. All advice with respect to Cayman Islands law will be provided exclusively by Applegategate Offshore Services Ltd. as Cayman Islands counsel. The Firm's coordination with Applegategate, as described in Section 1.2(h) above, is limited to facilitating the efficient exchange of information and the integration of Cayman law advice into the overall transaction process.
(c) The Firm does not represent, and will not represent, any party other than Driftwood and its affiliates as specifically identified in Section 2 below in connection with the Transaction. Without limiting the generality of the foregoing, the Firm does not represent the Trustee, the placement agents, the rating agencies, the warehouse lender, or any investor in the notes.
(d) Unless otherwise agreed in writing, the Firm's engagement will terminate upon the closing of the Transaction and the completion of any post-closing deliverables described in Section 1.2(i) above, subject to the provisions of Section 10 hereof.
2. CLIENT IDENTIFICATION
The Firm's client in this engagement is Driftwood Absolute Return Fund Ltd. In addition, to the extent directed by Driftwood and consistent with the scope of the Transaction, the Firm will also represent the following affiliated entities in connection with the Transaction:
(a) Driftwood Credit Management LLC, a Delaware limited liability company and registered investment adviser under the Investment Advisers Act of 1940, as amended (SEC CRD No. 182447), with its principal office located at 200 Brickell Avenue, Suite 3100, Miami, FL 33131, in its capacity as the Collateral Manager for the Transaction;
(b) Driftwood CLO 2023-I, Ltd., an exempted company to be incorporated with limited liability under the laws of the Cayman Islands (the "Issuer"); and
(c) Driftwood CLO 2023-I, LLC, a Delaware limited liability company to be formed (the "Co-Issuer").
The foregoing entities are collectively referred to herein as the "Client" or the "Clients." The Firm's representation of the affiliated entities identified above is undertaken at the direction and on behalf of Driftwood and is limited to the scope of the Transaction as described in this Letter.
The Firm does not represent any individual officer, director, manager, member, partner, employee, or agent of Driftwood or any of its affiliates in a personal capacity. To the extent that the interests of any individual diverge from those of Driftwood or its affiliates in connection with the Transaction, the Firm's duty of loyalty runs exclusively to the entity clients identified above, and any such individual should consider retaining independent counsel.
3. STAFFING AND KEY PERSONNEL
3.1 Responsible Partner
Samuel Eklund, Partner, will serve as the Responsible Partner for this engagement. Mr. Eklund will have overall supervisory responsibility for the Firm's work on the Transaction, including ensuring the quality and timeliness of all work product, overseeing the engagement team, and serving as the primary senior contact for Driftwood on strategic and partner-level matters. Mr. Eklund may be reached directly at (212) 555-7412 or at seklund@calderwoodharkness.com.
3.2 Billing Partner
Linda Osei, Partner, will serve as the Billing Partner for this engagement. Ms. Osei will be the primary contact for all fee-related matters, invoicing, billing inquiries, and any questions or concerns regarding the Firm's statements of account. Ms. Osei may be reached directly at (212) 555-7419 or at losei@calderwoodharkness.com.
3.3 Engagement Team
The following attorneys will comprise the core engagement team assigned to the Transaction:
Additional attorneys, paralegals, or other professional staff may be assigned to the engagement from time to time as the scope and pace of the Transaction may require. The Firm will endeavor to notify the Client of any material changes in the composition of the engagement team, including the assignment of any additional partners or senior associates to the matter.
4. MATTER NUMBER AND BILLING CODE
The Firm has assigned the following internal references to this engagement:
C&H Matter No.: 1024-00004
C&H Billing Code: DARF-CLO-2023I
All time entries, disbursement records, invoices, internal memoranda, and external correspondence relating to this engagement should reference the foregoing identifiers. We kindly request that all correspondence and payments from the Client to the Firm also reference the Matter Number and Billing Code set forth above to ensure proper crediting and allocation.
5. FEE ARRANGEMENTS
5.1 Basis of Fees
The Firm will charge for its services in connection with this engagement on an hourly basis, applying the Firm's standard billing rates then in effect for each attorney and professional staff member who performs work on the matter. Time is recorded and billed in increments of one-tenth (0.1) of an hour.
The Firm's current standard hourly billing rates for personnel of the types expected to work on this engagement are as follows:
The Firm's hourly rates are subject to periodic adjustment, typically on an annual basis effective January 1 of each calendar year. The Firm will provide the Client with advance notice of any adjustments to hourly rates applicable to this engagement and will furnish a current rate schedule upon request. A complete current rate schedule is enclosed as Attachment A to this Letter.
5.2 Estimated Fee Range
Based on the anticipated scope of work described in Section 1.2 above, and taking into account the Firm's experience with broadly syndicated CLO transactions of comparable size, structure, and complexity, the Firm estimates that total legal fees for this engagement will fall within the range of approximately $850,000 to $1,200,000. This estimate reflects the Firm's current understanding of the scope of the Transaction, the anticipated level of negotiation with counterparty counsel and transaction parties, and the number and nature of work streams to be undertaken.
This estimate is provided solely for the Client's planning and budgeting purposes and does not constitute a fee cap, a fixed fee, a maximum fee, or a guaranteed fee. Actual fees may vary above or below the estimated range depending on a number of factors, including, without limitation: (i) the ultimate scope and complexity of the Transaction and the work required; (ii) the extent and duration of negotiations with counsel to the placement agents, the Trustee, and other transaction parties; (iii) the number, nature, and complexity of legal, tax, or structural issues that arise during the course of the engagement; (iv) changes in the Transaction structure, timeline, or deal size; (v) the responsiveness and efficiency of third-party counsel and other transaction participants; and (vi) any additional work streams requested by the Client that are not contemplated as of the date of this Letter.
The Firm will endeavor to keep the Client informed on an ongoing basis regarding the status of fees, and will promptly notify the Client if, in the Firm's reasonable judgment, fees are trending materially above the initial estimate or the originally anticipated scope of the engagement.
5.3 Disbursements and Expenses
In addition to professional fees for attorney and staff time, the Firm will charge the Client for reasonable out-of-pocket disbursements and expenses incurred in connection with the representation. Such disbursements may include, without limitation:
(a) Filing fees, registration fees, and governmental charges;
(b) Messenger, courier, and overnight delivery charges;
(c) Travel expenses (airfare, ground transportation, lodging, and meals) incurred in connection with the Transaction, including travel for rating agency presentations, closing meetings, and other Transaction-related events;
(d) Outside copying, printing, scanning, and binding costs;
(e) Electronic database research charges (e.g., Westmark Data Systems, Sundial Solutions, Cascade Services Inc., and similar services);
(f) Long-distance telephone and videoconference charges, to the extent separately billed by third-party providers;
(g) Court reporter, transcript, and notarization fees; and
(h) Other similar out-of-pocket costs reasonably incurred in furtherance of the engagement.
For the avoidance of doubt, third-party costs such as the fees and expenses of Cayman Islands counsel (Applegategate Offshore Services Ltd.), the fees and expenses of the Trustee and its counsel, and the fees and expenses of rating agencies are not included in the Firm's professional fees or disbursements and will be billed directly by the respective third-party service providers to the Client (or to the Issuer, as applicable) unless the Client otherwise instructs the Firm in writing to assume responsibility for the payment of any such third-party costs.
5.4 Billing and Payment Terms
Invoices for professional fees and disbursements will be rendered monthly, generally within fifteen (15) business days following the end of each calendar month. Each invoice will set forth, in reasonable detail, the professional fees incurred (including a description of services rendered, the identity of each timekeeper, and the hours worked), together with itemized disbursements.
All invoices are due and payable within thirty (30) calendar days of the date of the invoice. Invoices will be directed to the attention of the Billing Partner, Linda Osei, and sent to Driftwood Absolute Return Fund Ltd. at 200 Brickell Avenue, Suite 3100, Miami, FL 33131, or to such other mailing address, email address, or electronic billing platform as the Client may designate in writing from time to time.
The Firm reserves the right to charge interest on any amounts that remain unpaid after the thirty (30) day payment period at a rate of one percent (1.0%) per month (twelve percent (12.0%) per annum), or, if lower, the maximum rate of interest permitted by applicable law. The Client agrees that the Firm may apply any payments received to the oldest outstanding invoice balance first, unless the Client designates a specific invoice to which a payment should be applied.
In the event that fees and disbursements remain unpaid for a period in excess of sixty (60) days, the Firm reserves the right, upon reasonable written notice to the Client, to suspend work on the engagement until such outstanding amounts are brought current, subject to the Firm's professional and ethical obligations.
6. CONFIDENTIALITY
The Firm will maintain the confidentiality of all information received from the Client in connection with this engagement, including all confidential, proprietary, non-public, and trade secret information relating to the Client's business, operations, financial condition, investment strategies, portfolio holdings, and the Transaction. The Firm's obligations with respect to confidential information are governed by, and will be discharged in accordance with, the Firm's professional and ethical obligations under the New York Rules of Professional Conduct, including Rule 1.6 (Confidentiality of Information), and any other applicable rules of professional conduct or legal ethics in jurisdictions where members of the engagement team are admitted to practice.
The Firm's confidentiality obligations are subject to any applicable legal, regulatory, or judicial requirements that may compel disclosure, including, without limitation, lawful subpoenas, court orders, or requests from regulatory authorities. In the event the Firm receives a request or demand for disclosure of confidential client information, the Firm will, to the extent permitted by law, provide the Client with prompt notice of such request or demand and will cooperate with the Client in seeking to limit or prevent such disclosure through appropriate legal means.
Nothing in this Section 6 shall restrict the Firm from disclosing information (i) that is or becomes publicly available through no fault of the Firm, (ii) that is independently known to or developed by the Firm without reference to confidential client information, or (iii) to the extent necessary for the Firm to enforce its rights under this Letter, including the right to collect fees and disbursements.
7. CONFLICTS OF INTEREST
The Firm has conducted a comprehensive conflicts of interest review in accordance with its standard conflicts clearance procedures and, based on the information currently available to the Firm, including the identities of the Client entities, the transaction parties, the placement agents, the Trustee, the rating agencies, and the warehouse lender, the Firm has identified no conflicts of interest that would prevent the Firm from undertaking this engagement or that would require the Client's informed written consent to waive.
The Client acknowledges and agrees that C&H is a large, diversified law firm that represents numerous other clients across a wide range of industries, asset classes, and practice areas. Such representations include representations of other collateralized loan obligation sponsors, collateral managers, investors, placement agents, trustees, and financial institutions in matters that are unrelated to this engagement and that do not involve directly adverse positions to the Client. The Client agrees that such representations do not constitute a conflict of interest with respect to this engagement and consents to the Firm's continued representation of such other clients in unrelated matters, provided that the Firm does not represent any such client in a matter that is directly adverse to the Client in connection with the Transaction without obtaining the Client's prior informed written consent.
If an actual or potential conflict of interest arises during the course of this engagement, the Firm will promptly notify the Client of the conflict, provide such information as may reasonably be disclosed consistent with the Firm's professional obligations to other clients, and work cooperatively with the Client to resolve the conflict in accordance with applicable rules of professional responsibility, including, where appropriate, by seeking informed written consent to continued representation or by withdrawing from the engagement or the conflicting matter.
8. COMMUNICATION AND CLIENT CONTACTS
Effective communication between the Firm and the Client is essential to the successful and efficient completion of the Transaction. The Firm's primary day-to-day contacts for the engagement will be as follows:
Firm Contacts:
•  Hannah Brinkley, Lead Associate — Primary contact for all document drafting, negotiation, and transactional matters, including day-to-day coordination with counterparty counsel, the Trustee, and the rating agencies. Ms. Brinkley may be reached at (212) 555-7438 or at hbrinkley@calderwoodharkness.com.
•  Samuel Eklund, Responsible Partner — Primary contact for partner-level matters, strategic decisions, and any issues requiring senior Firm involvement. Mr. Eklund may be reached at (212) 555-7412 or at seklund@calderwoodharkness.com.
The Client's primary contacts for the engagement will be as follows:
Client Contacts:
•  Marcus Sorensen, Founder & Chief Investment Officer — Overall client authority; strategic direction and approval of major transaction terms.
•  Elena Voss, President & Chief Operating Officer — Day-to-day operational matters; administrative and organizational matters relating to the Transaction.
•  David Hwan, Managing Director, Structured Credit — Primary contact for collateral management matters, portfolio-related issues, collateral eligibility criteria, and operational aspects of the Collateral Manager's role in the Transaction.
Either party may update its designated contacts upon written notice to the other. The Firm will use commercially reasonable efforts to respond to Client communications promptly, and the Client will use commercially reasonable efforts to provide information, approvals, and instructions to the Firm in a timely manner so as to facilitate the orderly progress of the Transaction.
9. DOCUMENT RETENTION
Upon conclusion of the engagement, whether by closing of the Transaction, termination, or otherwise, the Firm will retain all files and work product relating to this engagement in accordance with the Firm's document retention policy then in effect. The Firm's current document retention policy provides for the retention of closed matter files for a period of not less than seven (7) years following the conclusion of the engagement, after which the Firm may, in its discretion, dispose of such files in accordance with applicable retention schedules and professional guidelines.
Prior to any disposal of files, the Firm will provide the Client with reasonable advance written notice and an opportunity to request the return or transfer of any files or documents. Original documents provided by the Client to the Firm during the course of the engagement will be returned to the Client upon written request at any time, whether during or after the engagement, at the Client's expense for any shipping or delivery costs.
The Client acknowledges that the Firm's document retention policy is subject to change from time to time in the Firm's discretion, consistent with applicable professional and regulatory requirements. The Firm will make its then-current document retention policy available to the Client upon request.
10. TERMINATION OF ENGAGEMENT
Either party may terminate this engagement at any time, with or without cause, upon written notice to the other party. Termination by the Client shall be effective upon receipt of written notice by the Firm. Termination by the Firm shall be effective upon reasonable written notice to the Client, taking into account the Firm's professional obligations to avoid prejudice to the Client and to comply with applicable rules of professional conduct governing withdrawal from representation.
Upon termination of the engagement:
(a) The Client will remain responsible for, and shall promptly pay, all professional fees and disbursements incurred by the Firm through the effective date of termination, in accordance with the terms set forth in Section 5 of this Letter.
(b) The Firm will provide reasonable cooperation to the Client in connection with the transition of the matter to successor counsel, including the prompt transfer of files and work product (subject to the Client's satisfaction of all outstanding payment obligations), and will take such steps as are reasonably necessary to protect the Client's interests during the transition period.
(c) The Firm's obligations of confidentiality set forth in Section 6 of this Letter shall survive the termination of the engagement.
Nothing in this Section 10 shall relieve the Client of its obligation to pay for services rendered and disbursements incurred prior to the effective date of termination.
11. GOVERNING LAW AND DISPUTE RESOLUTION
This engagement letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflict of laws that would require or permit the application of the laws of any other jurisdiction.
Any dispute, controversy, or claim arising out of or relating to this engagement letter or the Firm's representation of the Client, including any claim relating to the quality of the Firm's services, the amount of fees or disbursements charged, or the Firm's professional responsibilities, shall be resolved in accordance with the laws of the State of New York. The parties consent to the exclusive jurisdiction of the state and federal courts located in the County of New York, State of New York, for the resolution of any such dispute, and each party hereby waives any objection to venue or jurisdiction in such courts.
Nothing in this Section 11 shall be construed to limit the Client's right to file a complaint with the appropriate attorney disciplinary authority in the event of a dispute concerning the Firm's professional conduct.
12. ENTIRE AGREEMENT
This Letter constitutes the entire agreement between the Firm and the Client with respect to the terms and conditions of the Firm's engagement in connection with the Transaction and supersedes all prior or contemporaneous proposals, discussions, negotiations, agreements, or understandings, whether written or oral, relating to the subject matter hereof.
No amendment, modification, supplement, or waiver of any provision of this Letter shall be effective unless set forth in a written instrument duly executed by both the Firm and the Client. No failure or delay by either party in exercising any right, power, or remedy under this Letter shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy.
If any provision of this Letter is held to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect to the extent permitted by law.
We are delighted to represent Driftwood and its affiliates in connection with this Transaction and look forward to working closely with you and your team. If the foregoing terms are acceptable, please indicate your agreement by countersigning this Letter in the space provided below and returning one fully executed copy to the undersigned. This Letter will become effective upon execution by both parties.
Please do not hesitate to contact Samuel Eklund or Hannah Brinkley if you have any questions regarding the terms of this engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Samuel Eklund
Title: Partner; Responsible Partner
Date: May 15, 2023
ACKNOWLEDGMENT AND ACCEPTANCE
By signing below, the undersigned hereby confirms that he has read and understood the terms and conditions set forth in this engagement letter, that he has the authority to bind Driftwood Absolute Return Fund Ltd. to the terms hereof, and that Driftwood Absolute Return Fund Ltd. accepts and agrees to be bound by the terms and conditions of this engagement letter as of the date set forth below.
DRIFTWOOD ABSOLUTE RETURN FUND LTD.
By: ________
Name: Marcus Sorensen
Title: Founder & Chief Investment Officer
Date: ________
Enclosures:
Attachment A: Current Standard Rate Schedule (2023)
cc:
Elena Voss, President & Chief Operating Officer, Driftwood Absolute Return Fund Ltd. 200 Brickell Avenue, Suite 3100, Miami, FL 33131
Linda Osei, Partner (Billing Partner), Calderwood & Harkness LLP 450 Park Avenue, New York, NY 10022
Sylvia Hartwell, Specialist Partner, Tax, Calderwood & Harkness LLP 450 Park Avenue, New York, NY 10022
NY\12488703.4
Name | Role | Primary Responsibilities
Samuel Eklund | Responsible Partner | Overall supervisory responsibility; strategic direction; partner-level negotiations
Linda Osei | Billing Partner | Fee arrangements; invoicing; billing inquiries; matter administration
Hannah Brinkley | Lead Associate | Day-to-day management of document drafting, negotiation, and closing coordination; primary drafting attorney for the Indenture, Collateral Management Agreement, and closing deliverables
Patrick Gallagher | Working Associate | Supporting associate for document preparation, due diligence, corporate formation matters, closing mechanics, and research
Sylvia Hartwell | Specialist Partner, Tax | Responsible for all tax structuring analysis, preparation of the U.S. federal income tax opinion, and advisory on ERISA, FATCA, and CRS compliance matters
Timekeeper Category | Hourly Rate Range
Partners | $1,150 – $1,475
Specialist Partners (Tax) | $1,250 – $1,550
Senior Associates (6th year and above) | $850 – $1,050
Mid-Level Associates (3rd–5th year) | $700 – $850
Junior Associates (1st–2nd year) | $525 – $700
Paralegals and Professional Staff | $275 – $425

PRIVILEGED AND CONFIDENTIAL

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGMENT AND ACCEPTANCE

DRIFTWOOD ABSOLUTE RETURN FUND LTD.

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