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COLLATERAL ADMINISTRATION AGREEMENT

Dated as of August 22, 2023

among

DRIFTWOOD CLO 2023-I, LTD.

as Issuer

DRIFTWOOD CREDIT MANAGEMENT LLC

as Collateral Manager

and

IRONCLAD TRUST COMPANY, N.A.

as Collateral Administrator

Reference is hereby made to the Indenture dated as of August 22, 2023, among Driftwood CLO 2023-I, Ltd., as Issuer, Driftwood CLO 2023-I, LLC, as Co-Issuer, and Ironclad Trust Company, N.A., as Trustee

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PREAMBLE

This COLLATERAL ADMINISTRATION AGREEMENT (this "Agreement") is dated as of August 22, 2023, and entered into among:

DRIFTWOOD CLO 2023-I, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the "Issuer"), having its registered office at PO Box 4927, Windward House, 3rd Floor, George Town, Grand Cayman KY1-1306, Cayman Islands;

DRIFTWOOD CREDIT MANAGEMENT LLC, a Delaware limited liability company (the "Collateral Manager"), having its principal office at 200 Brickell Avenue, Suite 3100, Miami, FL 33131, duly registered with the U.S. Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (CRD #182447); and

IRONCLAD TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America (the "Collateral Administrator"), having its principal corporate trust office at 100 Wall Street, Suite 1650, New York, NY 10005.

Each of the foregoing is sometimes referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS:

A. The Issuer and Driftwood CLO 2023-I, LLC, a Delaware limited liability company (the "Co-Issuer"), with its registered agent at National Registered Agents Inc., 1209 Orange Street, Wilmington, Delaware 19801 (Delaware Secretary of State File No. 7429831), have entered into an Indenture dated as of August 22, 2023 (as supplemented by the First Supplemental Indenture dated September 8, 2023, and as may be further amended, supplemented, restated, or otherwise modified from time to time, the "Indenture") with the Collateral Administrator acting in its capacity as Trustee thereunder, pursuant to which the Issuer and the Co-Issuer have issued Four Hundred Million Dollars ($400,000,000) in aggregate principal amount of secured notes and subordinated notes;

B. The capital structure of the Issuer's secured notes and subordinated notes issued pursuant to the Indenture consists of the following classes: (i) Class A-1 Notes in the aggregate principal amount of $256,000,000; (ii) Class A-2 Notes in the aggregate principal amount of $40,000,000; (iii) Class B Notes in the aggregate principal amount of $28,000,000; (iv) Class C Notes in the aggregate principal amount of $24,000,000; (v) Class D Notes in the aggregate principal amount of $16,000,000; and (vi) Subordinated Notes in the aggregate principal amount of $36,000,000;

C. The Issuer and the Collateral Manager have entered into a Collateral Management Agreement dated as of August 22, 2023 (as may be amended, supplemented, restated, or otherwise modified from time to time, the "Collateral Management Agreement"), pursuant to which the Collateral Manager has agreed to manage the portfolio of collateral obligations on behalf of the Issuer in accordance with the terms and conditions set forth therein and in the Indenture;

D. The Parties wish to set forth the terms and conditions upon which the Collateral Administrator will provide certain collateral administration services in connection with the Indenture and the collateral obligations pledged thereunder, including the preparation of compliance reports, monthly reports, portfolio data maintenance, interest calculations, and payment waterfall calculations; and

E. The collateral portfolio consists primarily of broadly syndicated first-lien senior secured leveraged loans (with obligors predominantly domiciled in the United States), with a target portfolio par amount of Four Hundred Million Dollars ($400,000,000), all as more particularly described in the Indenture.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS AND INTERPRETATION

Section 1.1 — Defined Terms

Capitalized terms used but not otherwise defined in this Agreement shall have the meanings assigned to such terms in the Indenture dated as of August 22, 2023, as supplemented by the First Supplemental Indenture dated September 8, 2023, among the Issuer, the Co-Issuer, and the Collateral Administrator (in its capacity as Trustee). To the extent of any conflict between a defined term set forth in this Agreement and the corresponding defined term set forth in the Indenture, the definition set forth in the Indenture shall control.

In addition to the terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth below:

"Aggregate Collateral Balance" means, as of any date of determination, the aggregate outstanding principal balance (or, in the case of collateral obligations purchased at a discount, the lesser of par amount and the applicable adjusted par amount as determined in accordance with the Indenture) of all collateral obligations included in the collateral portfolio as of such date. The target Aggregate Collateral Balance is $400,000,000.

"CCC Obligations" means collateral obligations that are rated CCC+ or below by either Rating Agency (or the equivalent rating category, as applicable). The maximum CCC bucket shall not exceed 7.5% of the aggregate collateral par amount (i.e., $30,000,000 based on the target Aggregate Collateral Balance of $400,000,000).

"Class A O/C Ratio" means the ratio of the Adjusted Collateral Principal Amount (as defined in the Indenture) to the aggregate outstanding principal amount of the Class A-1 Notes and the Class A-2 Notes, expressed as a percentage, with a minimum trigger level of 128.00%.

"Class B O/C Ratio" means the ratio of the Adjusted Collateral Principal Amount (as defined in the Indenture) to the aggregate outstanding principal amount of the Class A-1 Notes, the Class A-2 Notes, and the Class B Notes, expressed as a percentage, with a minimum trigger level of 118.00%.

"Class C O/C Ratio" means the ratio of the Adjusted Collateral Principal Amount (as defined in the Indenture) to the aggregate outstanding principal amount of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, and the Class C Notes, expressed as a percentage, with a minimum trigger level of 110.00%.

"Class D O/C Ratio" means the ratio of the Adjusted Collateral Principal Amount (as defined in the Indenture) to the aggregate outstanding principal amount of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes, expressed as a percentage, with a minimum trigger level of 105.50%.

"Class A I/C Ratio" means the ratio of the Interest Proceeds Available (as defined in the Indenture) available to pay interest on the Class A-1 Notes and the Class A-2 Notes to the scheduled interest payable on the Class A-1 Notes and the Class A-2 Notes, expressed as a percentage, with a minimum trigger level of 120.00%.

"Class B I/C Ratio" means the ratio of the Interest Proceeds Available (as defined in the Indenture) available to pay interest on the Class A-1 Notes, the Class A-2 Notes, and the Class B Notes to the scheduled interest payable on the Class A-1 Notes, the Class A-2 Notes, and the Class B Notes, expressed as a percentage, with a minimum trigger level of 115.00%.

"Class C I/C Ratio" means the ratio of the Interest Proceeds Available (as defined in the Indenture) available to pay interest on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, and the Class C Notes to the scheduled interest payable on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, and the Class C Notes, expressed as a percentage, with a minimum trigger level of 110.00%.

"Class D I/C Ratio" means the ratio of the Interest Proceeds Available (as defined in the Indenture) available to pay interest on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes to the scheduled interest payable on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes, expressed as a percentage, with a minimum trigger level of 105.00%.

"Closing Date" means September 12, 2023.

"Collateral Quality Tests" means the tests set forth in the Indenture for measuring the quality and composition of the collateral portfolio, including (i) the Minimum Weighted Average Spread Test (minimum: 350 basis points), (ii) the Maximum Weighted Average Life Test (maximum: 7.5 years), (iii) the Minimum Diversity Score Test (minimum: 60), (iv) the Minimum Weighted Average Recovery Rate Test (minimum: 45.0%), and (v) the Minimum Weighted Average Rating Factor Test (minimum: 2,850, calculated per the Brindoval rating factor scale).

"Compliance Report" has the meaning assigned to such term in Section 3.1 of this Agreement.

"Coverage Tests" means, collectively, the Overcollateralization Tests (the Class A O/C Ratio, the Class B O/C Ratio, the Class C O/C Ratio, and the Class D O/C Ratio) and the Interest Coverage Tests (the Class A I/C Ratio, the Class B I/C Ratio, the Class C I/C Ratio, and the Class D I/C Ratio), as defined in the Indenture.

"Determination Date" means, with respect to each Payment Date, the date that is five (5) Business Days prior to such Payment Date.

"Effective Date" means the date on which the Effective Date conditions set forth in the Indenture have been satisfied, which date shall occur no later than December 12, 2023 (the "Effective Date Deadline"), being ninety (90) days after the pricing date of the notes.

"Effective Date Deadline" means December 12, 2023.

"Fixed-Rate Obligations" means collateral obligations that bear interest at a fixed rate of interest. The maximum Fixed-Rate Obligations bucket shall not exceed 10.0% of the aggregate collateral par amount (i.e., $40,000,000 based on the target Aggregate Collateral Balance of $400,000,000).

"Indenture" means the Indenture dated as of August 22, 2023, as supplemented by the First Supplemental Indenture dated September 8, 2023, among the Issuer, the Co-Issuer, and the Collateral Administrator (in its capacity as Trustee), as may be further amended, supplemented, restated, or otherwise modified from time to time.

"Monthly Report" has the meaning assigned to such term in Section 3.2 of this Agreement.

"Payment Date" means the 15th day of January, April, July, and October of each year, commencing January 15, 2024, or, if any such day is not a Business Day, the next succeeding Business Day, subject to the provisions of the Indenture.

"Record Date" means the 15th calendar day preceding each Payment Date (or, if such day is not a Business Day, the immediately preceding Business Day).

"Reference Rate" means Compounded SOFR (the Secured Overnight Financing Rate), as calculated in accordance with the 26253 fallback convention set forth in the Indenture, including any applicable benchmark replacement provisions.

"Reinvestment Period" means the period from and including the Closing Date (September 12, 2023) to and including September 12, 2028.

"Second-Lien Obligations" means collateral obligations that are secured by a second-priority lien on the assets of the underlying obligor. The maximum Second-Lien Obligations bucket shall not exceed 5.0% of the aggregate collateral par amount (i.e., $20,000,000 based on the target Aggregate Collateral Balance of $400,000,000).

"Stated Maturity" means October 15, 2036.

"WARF" means the Weighted Average Rating Factor, calculated in accordance with the methodology and rating factor scale prescribed by Brindoval Analytical Services Inc.

Section 1.2 — Rules of Construction

In this Agreement, unless the context otherwise requires:

(a) Headings and captions are included for convenience of reference only and shall not affect the interpretation or construction of any provision of this Agreement.

(b) The word "including" (and words of similar import, such as "include" and "includes") shall be deemed to be followed by the phrase "without limitation" and shall not be construed to limit any general statement preceding it to the specific or similar items or matters immediately following it.

(c) Words in the singular shall include the plural and vice versa, and words denoting any gender shall include all genders.

(d) References to any agreement, instrument, or document shall be deemed to refer to such agreement, instrument, or document as amended, supplemented, restated, or otherwise modified from time to time, unless otherwise expressly stated.

(e) References to any law, statute, regulation, or rule shall be deemed to include any amendments, modifications, re-enactments, or successor provisions thereto and all rules, regulations, and guidance issued thereunder.

(f) References to "Business Day" shall have the meaning set forth in the Indenture.

(g) All references to dollar amounts are to the lawful currency of the United States of America.

(h) The words "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole, and not to any particular article, section, or provision hereof, unless the context otherwise requires.

(i) If any action or obligation is required to be taken or performed on a day that is not a Business Day, such action or obligation shall be taken or performed on the next succeeding Business Day, unless otherwise provided herein or in the Indenture.

Section 1.3 — Incorporation of Indenture Provisions

Except as expressly modified herein, all terms used but not defined in this Agreement shall have the respective meanings given to such terms in the Indenture. In the event of any conflict between a provision of this Agreement and a provision of the Indenture, the provision of the Indenture shall control. The Parties acknowledge and agree that the Indenture is incorporated herein by reference to the extent necessary to give effect to the provisions of this Agreement.

ARTICLE II — APPOINTMENT AND AUTHORITY OF COLLATERAL ADMINISTRATOR

Section 2.1 — Appointment

The Issuer and the Collateral Manager hereby appoint Ironclad Trust Company, N.A. as the Collateral Administrator under this Agreement, and the Collateral Administrator hereby accepts such appointment, effective as of the Closing Date (September 12, 2023). The Collateral Administrator shall provide the collateral administration services described in this Agreement in connection with the collateral obligations pledged under the Indenture and the portfolio of assets held by the Issuer from time to time.

The appointment of the Collateral Administrator hereunder is non-exclusive, and the Issuer reserves the right, with the prior written consent of the Collateral Administrator (such consent not to be unreasonably withheld, conditioned, or delayed), to retain one or more additional service providers to perform administrative, accounting, or similar services in connection with the Issuer, the collateral obligations, or the notes. Any such appointment of additional service providers shall not relieve the Collateral Administrator of its duties and obligations under this Agreement, nor shall it entitle the Collateral Administrator to any reduction in its duties or fees, unless otherwise agreed in writing by the Parties.

Section 2.2 — Authority and Capacity

The Parties acknowledge and agree that the Collateral Administrator acts solely in an administrative and ministerial capacity in performing its duties under this Agreement. The Collateral Administrator does not exercise, and shall not be deemed to exercise, any investment discretion with respect to the acquisition, disposition, or management of the collateral obligations. All investment decisions with respect to the collateral obligations shall be made exclusively by the Collateral Manager in accordance with the Collateral Management Agreement and the Indenture.

The Collateral Administrator is not responsible for, and shall not be deemed to have any duty or obligation to verify, the accuracy, completeness, or timeliness of any data, information, or instructions provided by the Collateral Manager, the Issuer, or any other party in connection with the collateral obligations or the notes. The Collateral Administrator's role is limited to the preparation and delivery of the reports, calculations, and other administrative services expressly set forth in this Agreement, based upon the information provided to it by the Collateral Manager and the Issuer.

The Parties further acknowledge and agree that the Collateral Administrator also serves as the Trustee under the Indenture. In performing the collateral administration services set forth in this Agreement, the Collateral Administrator acts in a separate and distinct capacity from its role as Trustee under the Indenture, and shall not be deemed to be acting in a fiduciary capacity (except to the extent expressly required under the Indenture in its capacity as Trustee). The duties and obligations of the Collateral Administrator hereunder are contractual in nature and shall be interpreted and applied accordingly.

Section 2.3 — Reliance on Collateral Manager Information

The Collateral Administrator may conclusively rely on all information, data, certifications, instructions, directions, and notices received from the Collateral Manager (Driftwood Credit Management LLC) or any authorized officer or representative thereof, including, without limitation, David Hwan (Managing Director, Structured Credit), Marcus Sorensen (Founder & CIO), and Elena Voss (President & COO), without any independent investigation, verification, or audit. The Collateral Administrator shall be entitled to assume the accuracy and completeness of all such information and shall have no obligation to confirm or validate the same.

The Collateral Administrator shall have no liability whatsoever for any errors, omissions, or inaccuracies in reports, calculations, or other work product prepared or delivered by the Collateral Administrator to the extent that such errors, omissions, or inaccuracies are attributable to inaccurate, incomplete, or untimely information provided by the Collateral Manager or any other party. The foregoing limitation shall apply regardless of whether the Collateral Administrator could have discovered such errors through the exercise of reasonable diligence, except to the extent that the Collateral Administrator acted with willful misconduct, bad faith, or gross negligence.

Section 2.4 — Authorized Representatives

The authorized contacts and representatives for each Party for purposes of day-to-day communication and the delivery and receipt of information, data, instructions, and notices under this Agreement shall be as follows, unless and until a Party provides written notice of a change in its authorized representatives to the other Parties:

(a) For the Collateral Administrator:

Catherine Nowak Vice President, Corporate Trust Ironclad Trust Company, N.A. 100 Wall Street, Suite 1650 New York, New York 10005 Telephone: (212) 555-4800

Email: cnowak@ironcladtrust.com

(b) For the Collateral Manager:

David Hwan Managing Director, Structured Credit Driftwood Credit Management LLC 200 Brickell Avenue, Suite 3100 Miami, Florida 33131 Telephone: (305) 555-7200

Email: dhwan@driftwoodcredit.com

As set forth in the Indenture, with notices directed to the registered office of the Issuer at PO Box 4927, Windward House, 3rd Floor, George Town, Grand Cayman KY1-1306, Cayman Islands, and with a copy to the Collateral Manager at 200 Brickell Avenue, Suite 3100, Miami, Florida 33131 (Attention: Marcus Sorensen / David Hwan).

A complete list of all authorized representatives for each Party, together with specimen signatures and contact information, is set forth in Schedule II hereto. Each Party shall promptly notify the other Parties in writing of any changes to its authorized representatives.

ARTICLE III — DUTIES AND RESPONSIBILITIES OF THE COLLATERAL ADMINISTRATOR

Section 3.1 — Compliance Reports (Payment Date Reports)

On or prior to each Determination Date (being the date that is five (5) Business Days prior to each Payment Date), the Collateral Administrator shall prepare and deliver to the Issuer, the Collateral Manager, the Trustee (in its capacity as Trustee under the Indenture, to the extent the Collateral Administrator and the Trustee are the same entity, by internal notation and file), and each Rating Agency (Brindoval Analytical Services Inc. and Ridgeline Credit Ratings LLC) a compliance report (each, a "Compliance Report" or "Payment Date Report"), substantially in the form attached hereto as Exhibit A, setting forth the following information as of the relevant Determination Date:

(a) Overcollateralization Test Calculations. The Collateral Administrator shall calculate and report the following Overcollateralization Ratios, together with a statement as to whether each such ratio satisfies the applicable minimum trigger level:

(i) The Class A O/C Ratio (minimum trigger: 128.00%);

(ii) The Class B O/C Ratio (minimum trigger: 118.00%);

(iii) The Class C O/C Ratio (minimum trigger: 110.00%); and

(iv) The Class D O/C Ratio (minimum trigger: 105.50%).

(b) Interest Coverage Test Calculations. The Collateral Administrator shall calculate and report the following Interest Coverage Ratios, together with a statement as to whether each such ratio satisfies the applicable minimum trigger level:

(i) The Class A I/C Ratio (minimum trigger: 120.00%);

(ii) The Class B I/C Ratio (minimum trigger: 115.00%);

(iii) The Class C I/C Ratio (minimum trigger: 110.00%); and

(iv) The Class D I/C Ratio (minimum trigger: 105.00%).

(c) Collateral Quality Test Results. The Collateral Administrator shall calculate and report the results of each Collateral Quality Test, together with a statement as to whether the collateral portfolio satisfies each such test, including:

(i) Weighted Average Spread (minimum: 350 basis points);

(ii) Weighted Average Life (maximum: 7.5 years);

(iii) Diversity Score (minimum: 60);

(iv) Weighted Average Recovery Rate (minimum: 45.0%); and

(v) Weighted Average Rating Factor (minimum: 2,850, calculated per the Brindoval rating factor scale).

(d) Concentration Limitations Compliance. The Collateral Administrator shall calculate and report whether the collateral portfolio complies with the following concentration limitations:

(i) CCC Bucket: the aggregate principal balance of CCC Obligations does not exceed 7.5% of the aggregate collateral par amount (i.e., $30,000,000 based on the target Aggregate Collateral Balance of $400,000,000);

(ii) Second-Lien Bucket: the aggregate principal balance of Second-Lien Obligations does not exceed 5.0% of the aggregate collateral par amount (i.e., $20,000,000 based on the target Aggregate Collateral Balance of $400,000,000); and

(iii) Fixed-Rate Bucket: the aggregate principal balance of Fixed-Rate Obligations does not exceed 10.0% of the aggregate collateral par amount (i.e., $40,000,000 based on the target Aggregate Collateral Balance of $400,000,000).

(e) Portfolio Summary. A summary of the collateral obligations included in the collateral portfolio, including the aggregate par balance, the number of distinct obligors, and the weighted average characteristics of the portfolio (including weighted average spread, weighted average life, weighted average rating factor, weighted average recovery rate, and diversity score).

(f) Payment Waterfall Calculations. The Collateral Administrator shall calculate and report the amounts distributable to each class of notes and other payees on the upcoming Payment Date, in accordance with the priority of payments waterfall set forth in the Indenture, including:

(i) Taxes and governmental fees;

(ii) Trustee fees and expenses (Trustee Fee: $25,000 per annum; Trustee Expense Cap: $50,000 per Payment Date);

(iii) Collateral Administrator fees (to the extent constituting a separate line item from the Trustee Fee, as applicable);

(iv) Senior Collateral Management Fee (0.15% per annum on the Aggregate Collateral Balance, equivalent to approximately $600,000 per year based on the target Aggregate Collateral Balance);

(v) Class A-1 Note interest;

(vi) Class A-2 Note interest;

(vii) Class B Note interest;

(viii) Class C Note interest;

(ix) Class D Note interest;

(x) Coverage Test cure payments, if applicable;

(xi) Subordinate Collateral Management Fee (0.35% per annum on the Aggregate Collateral Balance, equivalent to approximately $1,400,000 per year based on the target Aggregate Collateral Balance, payable only after Class D interest and senior expenses);

(xii) Incentive Management Fee (as applicable); and

(xiii) Subordinated Note distributions (residual).

In each case, the amounts distributable shall be calculated in accordance with and subject to the priority of payments and other terms and conditions established in the Indenture.

(g) Test Failures and Diversion Mechanics. Identification of any failure of any Overcollateralization Test or Interest Coverage Test, together with a description of the resulting waterfall diversion mechanics, including any amounts required to be diverted from subordinate distributions to the payment or redemption of senior notes or the replenishment of reserve accounts, all as set forth in the Indenture.

(h) Defaulted and Deferred Interest Obligations. A listing of any collateral obligations that are in default or that have deferred interest payments, together with the aggregate principal balance and accrued interest of such obligations and the impact of such obligations on the Coverage Tests and Collateral Quality Tests.

(i) Trading Activity Summary. A summary of all trading activity (purchases, sales, credit-risk trades, and workout transactions) with respect to collateral obligations since the prior Payment Date, including trade dates, settlement dates, counterparties, and the par amounts and prices of such transactions.

The Compliance Report shall be prepared based on information and data provided to the Collateral Administrator by the Collateral Manager and shall incorporate such additional information as may be available to the Collateral Administrator from its records. The Collateral Administrator shall not be responsible for the accuracy of the Compliance Report to the extent that such report is based on inaccurate or incomplete information provided by the Collateral Manager.

Section 3.2 — Monthly Reports

On or prior to the fifteenth (15th) Business Day of each calendar month, the Collateral Administrator shall prepare and deliver to the Issuer, the Collateral Manager, and each Rating Agency (Brindoval Analytical Services Inc. and Ridgeline Credit Ratings LLC) a monthly report (each, a "Monthly Report"), substantially in the form attached hereto as Exhibit B, containing the following information as of the last day of the preceding calendar month:

(a) Portfolio Composition and Summary Statistics. A summary of the composition and characteristics of the collateral portfolio, including the number of collateral obligations, the aggregate par balance, and key weighted average metrics.

(b) Updated Coverage Test Results. Indicative calculations of each of the Overcollateralization Ratios and Interest Coverage Ratios, based on month-end data, together with a statement as to whether each such ratio would satisfy the applicable minimum trigger level as of such month-end date. Such calculations shall be identified as indicative and shall not be binding for purposes of determining test compliance on any Payment Date.

(c) Updated Collateral Quality Test Results. Indicative calculations of each Collateral Quality Test, based on month-end data, including the Weighted Average Spread, Weighted Average Life, Diversity Score, Weighted Average Recovery Rate, and Weighted Average Rating Factor.

(d) Collateral Obligation Detail. A complete list of all collateral obligations included in the collateral portfolio as of the last day of the preceding calendar month, including, for each such obligation, the obligor name, CUSIP and/or ISIN, par amount, purchase price (if applicable), coupon rate, maturity date, current rating by each Rating Agency (Brindoval and Ridgeline), Moody's industry classification code, and floating/fixed-rate indicator.

(e) Portfolio Changes. Identification of any collateral obligations newly added to, or removed from, the collateral portfolio during the preceding calendar month, together with the relevant trade details (trade date, settlement date, par amount, and price).

(f) Credit Risk Metrics and Watchlist. A summary of credit risk metrics and any watchlist items as identified and reported by the Collateral Manager, including any collateral obligations that have been downgraded, placed on negative watch, or identified by the Collateral Manager as presenting elevated credit risk.

(g) Collections Summary. A summary of all principal and interest collections received by the Issuer during the preceding calendar month, separately identifying scheduled principal payments, prepayments, interest payments, default recoveries, and any other collections.

Section 3.3 — Effective Date Report

Not later than five (5) Business Days after the Effective Date (which must occur no later than December 12, 2023, being the Effective Date Deadline), the Collateral Administrator shall prepare and deliver to the Issuer, the Collateral Manager, the Trustee (in its capacity as Trustee under the Indenture), and each Rating Agency (Brindoval Analytical Services Inc. and Ridgeline Credit Ratings LLC) a report (the "Effective Date Report"), substantially in the form attached hereto as Exhibit C, confirming the following:

(a) That the aggregate principal balance of collateral obligations included in the collateral portfolio equals or exceeds the target portfolio par amount of Four Hundred Million Dollars ($400,000,000);

(b) That the collateral portfolio is in compliance with all Collateral Quality Tests as of the Effective Date, including the Minimum Weighted Average Spread Test (350 basis points), the Maximum Weighted Average Life Test (7.5 years), the Minimum Diversity Score Test (60), the Minimum Weighted Average Recovery Rate Test (45.0%), and the Minimum Weighted Average Rating Factor Test (2,850);

(c) That the collateral portfolio is in compliance with all Coverage Tests as of the Effective Date, including the Class A O/C Ratio (128.00%), the Class B O/C Ratio (118.00%), the Class C O/C Ratio (110.00%), the Class D O/C Ratio (105.50%), the Class A I/C Ratio (120.00%), the Class B I/C Ratio (115.00%), the Class C I/C Ratio (110.00%), and the Class D I/C Ratio (105.00%); and

(d) That the collateral portfolio is in compliance with all Concentration Limitations, including the CCC Bucket (7.5%), the Second-Lien Bucket (5.0%), and the Fixed-Rate Bucket (10.0%).

If the Effective Date conditions set forth in the Indenture have not been satisfied by the Effective Date Deadline of December 12, 2023, the consequences set forth in the Indenture (including, without limitation, the application of Effective Date failure provisions) shall apply. The Collateral Administrator shall promptly notify the Issuer, the Collateral Manager, and each Rating Agency if it becomes aware that the Effective Date conditions have not been or are unlikely to be satisfied by the Effective Date Deadline.

Section 3.4 — Portfolio Data Maintenance

The Collateral Administrator shall maintain a comprehensive database and ongoing records with respect to the collateral portfolio, including the following:

(a) Collateral Obligation Detail. For each collateral obligation, the CUSIP and/or ISIN, obligor name, par amount, purchase price, settlement date, coupon rate (including spread over Reference Rate, if applicable), maturity date, current rating from each Rating Agency (Brindoval Analytical Services Inc. and Ridgeline Credit Ratings LLC), industry classification, lien position (first lien or second lien), and floating/fixed-rate indicator.

(b) Trading Records. All trades (purchases, sales, and credit-risk/workout trades) instructed by the Collateral Manager, including trade date, settlement date, counterparty, par amount, purchase or sale price, and gain or loss on sale.

(c) Cash Collections. All principal payments (scheduled and unscheduled), interest payments, and other collections received with respect to the collateral obligations.

(d) Credit Events. All defaults, credit impairment events, restructurings, forbearance agreements, and recovery amounts with respect to any collateral obligation.

(e) Reinvestment Activity. During the Reinvestment Period (from the Closing Date through September 12, 2028), records of all reinvestment activity undertaken by the Collateral Manager, including the acquisition of additional collateral obligations with principal proceeds.

(f) Post-Reinvestment Period Compliance. Following the expiration of the Reinvestment Period, monitoring and recording of the Collateral Manager's compliance with the post-Reinvestment Period trading constraints set forth in the Indenture, including restrictions on the use of sale proceeds and principal proceeds.

The Collateral Administrator shall make such records and data available to the Collateral Manager and the Issuer upon reasonable request, during normal business hours, and in such format and medium as may be reasonably agreed upon by the Parties. The Collateral Administrator shall retain all records maintained pursuant to this Section 3.4 for a period of not less than seven (7) years following the date of creation of such records, or such longer period as may be required by applicable law or regulation.

Section 3.5 — Interest Calculations

The Collateral Administrator shall calculate the amount of interest due and payable on each class of notes on each Payment Date, based on the following terms and conventions:

(a) Reference Rate. Compounded SOFR (the Secured Overnight Financing Rate), determined in accordance with the 26253 fallback convention set forth in the Indenture. In the event that SOFR is unavailable or has been permanently discontinued, the applicable benchmark replacement rate shall be determined in accordance with the benchmark transition provisions of the Indenture.

(b) Day Count Convention. Actual/360, calculated on the basis of the actual number of days elapsed in the applicable interest accrual period divided by 360.

(i) Class A-1 Notes: SOFR + 155 basis points per annum;

(ii) Class A-2 Notes: SOFR + 190 basis points per annum;

(iii) Class B Notes: SOFR + 230 basis points per annum;

(iv) Class C Notes: SOFR + 310 basis points per annum; and

(v) Class D Notes: SOFR + 625 basis points per annum.

(d) Subordinated Notes. The Subordinated Notes do not bear a stated rate of interest and are entitled only to residual cash flow remaining after all senior obligations (including interest on all classes of rated notes, fees, expenses, and all other amounts ranking senior to the Subordinated Notes in the priority of payments waterfall) have been paid in full in accordance with the Indenture.

The Collateral Administrator shall include all interest calculations in the Compliance Report delivered on each Determination Date and shall reconcile such calculations with the records of the paying agent under the Indenture.

Section 3.6 — Waterfall Calculations

On each Determination Date, the Collateral Administrator shall calculate the priority of payments waterfall in accordance with the terms and conditions of the Indenture and shall determine the amounts distributable to each payee and each class of notes on the related Payment Date. The priority of payments waterfall shall be applied in the following order of priority (as set forth in the Indenture), subject to available Interest Proceeds and Principal Proceeds:

(a) First, to the payment of taxes and governmental fees due and owing by the Issuer;

(b) Second, to the payment of the Trustee Fee ($25,000 per annum, payable quarterly in arrears) and the reimbursement of reasonable, documented out-of-pocket expenses of the Trustee, subject to the Trustee Expense Cap of $50,000 per Payment Date;

(c) Third, to the payment of the Collateral Administrator Fee (to the extent constituting a separate line item from the Trustee Fee, as applicable);

(d) Fourth, to the payment of the Senior Collateral Management Fee (0.15% per annum on the Aggregate Collateral Balance, equivalent to approximately $600,000 per year based on the target Aggregate Collateral Balance of $400,000,000);

(e) Fifth, to the payment of interest on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes, in the order of priority and in accordance with the terms established by the Indenture;

(f) Sixth, to the extent of any failure of any Overcollateralization Test or Interest Coverage Test, to the payment of Coverage Test cure amounts, applied in accordance with the cure mechanics set forth in the Indenture (including, as applicable, the application of Interest Proceeds to the repayment of principal on the most senior outstanding class of notes until the applicable test is restored to compliance);

(g) Seventh, to the payment of the Subordinate Collateral Management Fee (0.35% per annum on the Aggregate Collateral Balance, equivalent to approximately $1,400,000 per year based on the target Aggregate Collateral Balance of $400,000,000), which fee is payable only after all interest on the Class D Notes and all senior expenses have been paid in full;

(h) Eighth, to the payment of the Incentive Management Fee (equal to 20% of excess residual interest proceeds remaining after the holders of the Subordinated Notes have received distributions sufficient to achieve a 12% internal rate of return on their investment); and

(i) Ninth, to the holders of the Subordinated Notes, as a residual distribution.

The Collateral Administrator shall apply Interest Proceeds and Principal Proceeds separately in accordance with the Indenture and shall not commingle such proceeds except as expressly permitted by the Indenture. All waterfall calculations shall be included in the Compliance Report delivered on the applicable Determination Date.

Section 3.7 — Rating Agency Notifications and Information Sharing

The Collateral Administrator shall provide copies of all Compliance Reports (Payment Date Reports), Monthly Reports, and the Effective Date Report to each Rating Agency at the following addresses and contacts:

(a) Brindoval Analytical Services Inc.

Attention: Anita Delgado, Senior Director

55 Water Street, 40th Floor New York, New York 10041

Email: adelgado@crestviewratings.com

(b) Ridgeline Credit Ratings LLC

Attention: Kenji Matsuda, Director

7 World Trade Center, 30th Floor New York, New York 10007

Email: kmatsuda@ridgelinecreditratings.com

In addition, upon the reasonable request of either Rating Agency, the Collateral Administrator shall provide additional portfolio-level data, which may be in anonymized or loan-level form as required by the applicable Rating Agency's methodology and surveillance requirements. The Collateral Administrator shall coordinate with the Collateral Manager in responding to such requests and shall not provide information beyond that which is reasonably available to it in its records or which has been provided to it by the Collateral Manager, without the prior written consent of the Collateral Manager.

Section 3.8 — DTC Coordination

The Collateral Administrator, acting in its capacity as Trustee and note registrar under the Indenture, shall coordinate with The Depository Trust Company ("DTC") for purposes of:

(a) DTC Eligibility. Maintaining the DTC eligibility of the notes and the Collateral Administrator's DTC participant status (DTC Participant No. 2176);

(b) Payment Date Distributions. Processing and effecting all Payment Date distributions to holders of the notes through the facilities of DTC, in accordance with DTC's rules and procedures;

(c) Transfer and Exchange. Facilitating the transfer and exchange of the notes through DTC, including the processing of transfers between 144A and Regulation S positions, as applicable.

COLLATERAL ADMINISTRATION AGREEMENT
Dated as of August 22, 2023
among
DRIFTWOOD CLO 2023-I, LTD.
as Issuer
DRIFTWOOD CREDIT MANAGEMENT LLC
as Collateral Manager
and
IRONCLAD TRUST COMPANY, N.A.
as Collateral Administrator
Reference is hereby made to the Indenture dated as of August 22, 2023, among Driftwood CLO 2023-I, Ltd., as Issuer, Driftwood CLO 2023-I, LLC, as Co-Issuer, and Ironclad Trust Company, N.A., as Trustee
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PREAMBLE
This COLLATERAL ADMINISTRATION AGREEMENT (this "Agreement") is dated as of August 22, 2023, and entered into among:
DRIFTWOOD CLO 2023-I, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the "Issuer"), having its registered office at PO Box 4927, Windward House, 3rd Floor, George Town, Grand Cayman KY1-1306, Cayman Islands;
DRIFTWOOD CREDIT MANAGEMENT LLC, a Delaware limited liability company (the "Collateral Manager"), having its principal office at 200 Brickell Avenue, Suite 3100, Miami, FL 33131, duly registered with the U.S. Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (CRD #182447); and
IRONCLAD TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America (the "Collateral Administrator"), having its principal corporate trust office at 100 Wall Street, Suite 1650, New York, NY 10005.
Each of the foregoing is sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS:
A. The Issuer and Driftwood CLO 2023-I, LLC, a Delaware limited liability company (the "Co-Issuer"), with its registered agent at National Registered Agents Inc., 1209 Orange Street, Wilmington, Delaware 19801 (Delaware Secretary of State File No. 7429831), have entered into an Indenture dated as of August 22, 2023 (as supplemented by the First Supplemental Indenture dated September 8, 2023, and as may be further amended, supplemented, restated, or otherwise modified from time to time, the "Indenture") with the Collateral Administrator acting in its capacity as Trustee thereunder, pursuant to which the Issuer and the Co-Issuer have issued Four Hundred Million Dollars ($400,000,000) in aggregate principal amount of secured notes and subordinated notes;
B. The capital structure of the Issuer's secured notes and subordinated notes issued pursuant to the Indenture consists of the following classes: (i) Class A-1 Notes in the aggregate principal amount of $256,000,000; (ii) Class A-2 Notes in the aggregate principal amount of $40,000,000; (iii) Class B Notes in the aggregate principal amount of $28,000,000; (iv) Class C Notes in the aggregate principal amount of $24,000,000; (v) Class D Notes in the aggregate principal amount of $16,000,000; and (vi) Subordinated Notes in the aggregate principal amount of $36,000,000;
C. The Issuer and the Collateral Manager have entered into a Collateral Management Agreement dated as of August 22, 2023 (as may be amended, supplemented, restated, or otherwise modified from time to time, the "Collateral Management Agreement"), pursuant to which the Collateral Manager has agreed to manage the portfolio of collateral obligations on behalf of the Issuer in accordance with the terms and conditions set forth therein and in the Indenture;
D. The Parties wish to set forth the terms and conditions upon which the Collateral Administrator will provide certain collateral administration services in connection with the Indenture and the collateral obligations pledged thereunder, including the preparation of compliance reports, monthly reports, portfolio data maintenance, interest calculations, and payment waterfall calculations; and
E. The collateral portfolio consists primarily of broadly syndicated first-lien senior secured leveraged loans (with obligors predominantly domiciled in the United States), with a target portfolio par amount of Four Hundred Million Dollars ($400,000,000), all as more particularly described in the Indenture.
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.1 — Defined Terms
Capitalized terms used but not otherwise defined in this Agreement shall have the meanings assigned to such terms in the Indenture dated as of August 22, 2023, as supplemented by the First Supplemental Indenture dated September 8, 2023, among the Issuer, the Co-Issuer, and the Collateral Administrator (in its capacity as Trustee). To the extent of any conflict between a defined term set forth in this Agreement and the corresponding defined term set forth in the Indenture, the definition set forth in the Indenture shall control.
In addition to the terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth below:
"Aggregate Collateral Balance" means, as of any date of determination, the aggregate outstanding principal balance (or, in the case of collateral obligations purchased at a discount, the lesser of par amount and the applicable adjusted par amount as determined in accordance with the Indenture) of all collateral obligations included in the collateral portfolio as of such date. The target Aggregate Collateral Balance is $400,000,000.
"CCC Obligations" means collateral obligations that are rated CCC+ or below by either Rating Agency (or the equivalent rating category, as applicable). The maximum CCC bucket shall not exceed 7.5% of the aggregate collateral par amount (i.e., $30,000,000 based on the target Aggregate Collateral Balance of $400,000,000).
"Class A O/C Ratio" means the ratio of the Adjusted Collateral Principal Amount (as defined in the Indenture) to the aggregate outstanding principal amount of the Class A-1 Notes and the Class A-2 Notes, expressed as a percentage, with a minimum trigger level of 128.00%.
"Class B O/C Ratio" means the ratio of the Adjusted Collateral Principal Amount (as defined in the Indenture) to the aggregate outstanding principal amount of the Class A-1 Notes, the Class A-2 Notes, and the Class B Notes, expressed as a percentage, with a minimum trigger level of 118.00%.
"Class C O/C Ratio" means the ratio of the Adjusted Collateral Principal Amount (as defined in the Indenture) to the aggregate outstanding principal amount of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, and the Class C Notes, expressed as a percentage, with a minimum trigger level of 110.00%.
"Class D O/C Ratio" means the ratio of the Adjusted Collateral Principal Amount (as defined in the Indenture) to the aggregate outstanding principal amount of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes, expressed as a percentage, with a minimum trigger level of 105.50%.
"Class A I/C Ratio" means the ratio of the Interest Proceeds Available (as defined in the Indenture) available to pay interest on the Class A-1 Notes and the Class A-2 Notes to the scheduled interest payable on the Class A-1 Notes and the Class A-2 Notes, expressed as a percentage, with a minimum trigger level of 120.00%.
"Class B I/C Ratio" means the ratio of the Interest Proceeds Available (as defined in the Indenture) available to pay interest on the Class A-1 Notes, the Class A-2 Notes, and the Class B Notes to the scheduled interest payable on the Class A-1 Notes, the Class A-2 Notes, and the Class B Notes, expressed as a percentage, with a minimum trigger level of 115.00%.
"Class C I/C Ratio" means the ratio of the Interest Proceeds Available (as defined in the Indenture) available to pay interest on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, and the Class C Notes to the scheduled interest payable on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, and the Class C Notes, expressed as a percentage, with a minimum trigger level of 110.00%.
"Class D I/C Ratio" means the ratio of the Interest Proceeds Available (as defined in the Indenture) available to pay interest on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes to the scheduled interest payable on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes, expressed as a percentage, with a minimum trigger level of 105.00%.
"Closing Date" means September 12, 2023.
"Collateral Quality Tests" means the tests set forth in the Indenture for measuring the quality and composition of the collateral portfolio, including (i) the Minimum Weighted Average Spread Test (minimum: 350 basis points), (ii) the Maximum Weighted Average Life Test (maximum: 7.5 years), (iii) the Minimum Diversity Score Test (minimum: 60), (iv) the Minimum Weighted Average Recovery Rate Test (minimum: 45.0%), and (v) the Minimum Weighted Average Rating Factor Test (minimum: 2,850, calculated per the Brindoval rating factor scale).
"Compliance Report" has the meaning assigned to such term in Section 3.1 of this Agreement.
"Coverage Tests" means, collectively, the Overcollateralization Tests (the Class A O/C Ratio, the Class B O/C Ratio, the Class C O/C Ratio, and the Class D O/C Ratio) and the Interest Coverage Tests (the Class A I/C Ratio, the Class B I/C Ratio, the Class C I/C Ratio, and the Class D I/C Ratio), as defined in the Indenture.
"Determination Date" means, with respect to each Payment Date, the date that is five (5) Business Days prior to such Payment Date.
"Effective Date" means the date on which the Effective Date conditions set forth in the Indenture have been satisfied, which date shall occur no later than December 12, 2023 (the "Effective Date Deadline"), being ninety (90) days after the pricing date of the notes.
"Effective Date Deadline" means December 12, 2023.
"Fixed-Rate Obligations" means collateral obligations that bear interest at a fixed rate of interest. The maximum Fixed-Rate Obligations bucket shall not exceed 10.0% of the aggregate collateral par amount (i.e., $40,000,000 based on the target Aggregate Collateral Balance of $400,000,000).
"Indenture" means the Indenture dated as of August 22, 2023, as supplemented by the First Supplemental Indenture dated September 8, 2023, among the Issuer, the Co-Issuer, and the Collateral Administrator (in its capacity as Trustee), as may be further amended, supplemented, restated, or otherwise modified from time to time.
"Monthly Report" has the meaning assigned to such term in Section 3.2 of this Agreement.
"Payment Date" means the 15th day of January, April, July, and October of each year, commencing January 15, 2024, or, if any such day is not a Business Day, the next succeeding Business Day, subject to the provisions of the Indenture.
"Record Date" means the 15th calendar day preceding each Payment Date (or, if such day is not a Business Day, the immediately preceding Business Day).
"Reference Rate" means Compounded SOFR (the Secured Overnight Financing Rate), as calculated in accordance with the 26253 fallback convention set forth in the Indenture, including any applicable benchmark replacement provisions.
"Reinvestment Period" means the period from and including the Closing Date (September 12, 2023) to and including September 12, 2028.
"Second-Lien Obligations" means collateral obligations that are secured by a second-priority lien on the assets of the underlying obligor. The maximum Second-Lien Obligations bucket shall not exceed 5.0% of the aggregate collateral par amount (i.e., $20,000,000 based on the target Aggregate Collateral Balance of $400,000,000).
"Stated Maturity" means October 15, 2036.
"WARF" means the Weighted Average Rating Factor, calculated in accordance with the methodology and rating factor scale prescribed by Brindoval Analytical Services Inc.
Section 1.2 — Rules of Construction
In this Agreement, unless the context otherwise requires:
(a) Headings and captions are included for convenience of reference only and shall not affect the interpretation or construction of any provision of this Agreement.
(b) The word "including" (and words of similar import, such as "include" and "includes") shall be deemed to be followed by the phrase "without limitation" and shall not be construed to limit any general statement preceding it to the specific or similar items or matters immediately following it.
(c) Words in the singular shall include the plural and vice versa, and words denoting any gender shall include all genders.
(d) References to any agreement, instrument, or document shall be deemed to refer to such agreement, instrument, or document as amended, supplemented, restated, or otherwise modified from time to time, unless otherwise expressly stated.
(e) References to any law, statute, regulation, or rule shall be deemed to include any amendments, modifications, re-enactments, or successor provisions thereto and all rules, regulations, and guidance issued thereunder.
(f) References to "Business Day" shall have the meaning set forth in the Indenture.
(g) All references to dollar amounts are to the lawful currency of the United States of America.
(h) The words "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole, and not to any particular article, section, or provision hereof, unless the context otherwise requires.
(i) If any action or obligation is required to be taken or performed on a day that is not a Business Day, such action or obligation shall be taken or performed on the next succeeding Business Day, unless otherwise provided herein or in the Indenture.
Section 1.3 — Incorporation of Indenture Provisions
Except as expressly modified herein, all terms used but not defined in this Agreement shall have the respective meanings given to such terms in the Indenture. In the event of any conflict between a provision of this Agreement and a provision of the Indenture, the provision of the Indenture shall control. The Parties acknowledge and agree that the Indenture is incorporated herein by reference to the extent necessary to give effect to the provisions of this Agreement.
ARTICLE II — APPOINTMENT AND AUTHORITY OF COLLATERAL ADMINISTRATOR
Section 2.1 — Appointment
The Issuer and the Collateral Manager hereby appoint Ironclad Trust Company, N.A. as the Collateral Administrator under this Agreement, and the Collateral Administrator hereby accepts such appointment, effective as of the Closing Date (September 12, 2023). The Collateral Administrator shall provide the collateral administration services described in this Agreement in connection with the collateral obligations pledged under the Indenture and the portfolio of assets held by the Issuer from time to time.
The appointment of the Collateral Administrator hereunder is non-exclusive, and the Issuer reserves the right, with the prior written consent of the Collateral Administrator (such consent not to be unreasonably withheld, conditioned, or delayed), to retain one or more additional service providers to perform administrative, accounting, or similar services in connection with the Issuer, the collateral obligations, or the notes. Any such appointment of additional service providers shall not relieve the Collateral Administrator of its duties and obligations under this Agreement, nor shall it entitle the Collateral Administrator to any reduction in its duties or fees, unless otherwise agreed in writing by the Parties.
Section 2.2 — Authority and Capacity
The Parties acknowledge and agree that the Collateral Administrator acts solely in an administrative and ministerial capacity in performing its duties under this Agreement. The Collateral Administrator does not exercise, and shall not be deemed to exercise, any investment discretion with respect to the acquisition, disposition, or management of the collateral obligations. All investment decisions with respect to the collateral obligations shall be made exclusively by the Collateral Manager in accordance with the Collateral Management Agreement and the Indenture.
The Collateral Administrator is not responsible for, and shall not be deemed to have any duty or obligation to verify, the accuracy, completeness, or timeliness of any data, information, or instructions provided by the Collateral Manager, the Issuer, or any other party in connection with the collateral obligations or the notes. The Collateral Administrator's role is limited to the preparation and delivery of the reports, calculations, and other administrative services expressly set forth in this Agreement, based upon the information provided to it by the Collateral Manager and the Issuer.
The Parties further acknowledge and agree that the Collateral Administrator also serves as the Trustee under the Indenture. In performing the collateral administration services set forth in this Agreement, the Collateral Administrator acts in a separate and distinct capacity from its role as Trustee under the Indenture, and shall not be deemed to be acting in a fiduciary capacity (except to the extent expressly required under the Indenture in its capacity as Trustee). The duties and obligations of the Collateral Administrator hereunder are contractual in nature and shall be interpreted and applied accordingly.
Section 2.3 — Reliance on Collateral Manager Information
The Collateral Administrator may conclusively rely on all information, data, certifications, instructions, directions, and notices received from the Collateral Manager (Driftwood Credit Management LLC) or any authorized officer or representative thereof, including, without limitation, David Hwan (Managing Director, Structured Credit), Marcus Sorensen (Founder & CIO), and Elena Voss (President & COO), without any independent investigation, verification, or audit. The Collateral Administrator shall be entitled to assume the accuracy and completeness of all such information and shall have no obligation to confirm or validate the same.
The Collateral Administrator shall have no liability whatsoever for any errors, omissions, or inaccuracies in reports, calculations, or other work product prepared or delivered by the Collateral Administrator to the extent that such errors, omissions, or inaccuracies are attributable to inaccurate, incomplete, or untimely information provided by the Collateral Manager or any other party. The foregoing limitation shall apply regardless of whether the Collateral Administrator could have discovered such errors through the exercise of reasonable diligence, except to the extent that the Collateral Administrator acted with willful misconduct, bad faith, or gross negligence.
Section 2.4 — Authorized Representatives
The authorized contacts and representatives for each Party for purposes of day-to-day communication and the delivery and receipt of information, data, instructions, and notices under this Agreement shall be as follows, unless and until a Party provides written notice of a change in its authorized representatives to the other Parties:
(a) For the Collateral Administrator:
Catherine Nowak Vice President, Corporate Trust Ironclad Trust Company, N.A. 100 Wall Street, Suite 1650 New York, New York 10005 Telephone: (212) 555-4800
Email: cnowak@ironcladtrust.com
(b) For the Collateral Manager:
David Hwan Managing Director, Structured Credit Driftwood Credit Management LLC 200 Brickell Avenue, Suite 3100 Miami, Florida 33131 Telephone: (305) 555-7200
Email: dhwan@driftwoodcredit.com
(c) For the Issuer:
As set forth in the Indenture, with notices directed to the registered office of the Issuer at PO Box 4927, Windward House, 3rd Floor, George Town, Grand Cayman KY1-1306, Cayman Islands, and with a copy to the Collateral Manager at 200 Brickell Avenue, Suite 3100, Miami, Florida 33131 (Attention: Marcus Sorensen / David Hwan).
A complete list of all authorized representatives for each Party, together with specimen signatures and contact information, is set forth in Schedule II hereto. Each Party shall promptly notify the other Parties in writing of any changes to its authorized representatives.
ARTICLE III — DUTIES AND RESPONSIBILITIES OF THE COLLATERAL ADMINISTRATOR
Section 3.1 — Compliance Reports (Payment Date Reports)
On or prior to each Determination Date (being the date that is five (5) Business Days prior to each Payment Date), the Collateral Administrator shall prepare and deliver to the Issuer, the Collateral Manager, the Trustee (in its capacity as Trustee under the Indenture, to the extent the Collateral Administrator and the Trustee are the same entity, by internal notation and file), and each Rating Agency (Brindoval Analytical Services Inc. and Ridgeline Credit Ratings LLC) a compliance report (each, a "Compliance Report" or "Payment Date Report"), substantially in the form attached hereto as Exhibit A, setting forth the following information as of the relevant Determination Date:
(a) Overcollateralization Test Calculations. The Collateral Administrator shall calculate and report the following Overcollateralization Ratios, together with a statement as to whether each such ratio satisfies the applicable minimum trigger level:
(i) The Class A O/C Ratio (minimum trigger: 128.00%);
(ii) The Class B O/C Ratio (minimum trigger: 118.00%);
(iii) The Class C O/C Ratio (minimum trigger: 110.00%); and
(iv) The Class D O/C Ratio (minimum trigger: 105.50%).
(b) Interest Coverage Test Calculations. The Collateral Administrator shall calculate and report the following Interest Coverage Ratios, together with a statement as to whether each such ratio satisfies the applicable minimum trigger level:
(i) The Class A I/C Ratio (minimum trigger: 120.00%);
(ii) The Class B I/C Ratio (minimum trigger: 115.00%);
(iii) The Class C I/C Ratio (minimum trigger: 110.00%); and
(iv) The Class D I/C Ratio (minimum trigger: 105.00%).
(c) Collateral Quality Test Results. The Collateral Administrator shall calculate and report the results of each Collateral Quality Test, together with a statement as to whether the collateral portfolio satisfies each such test, including:
(i) Weighted Average Spread (minimum: 350 basis points);
(ii) Weighted Average Life (maximum: 7.5 years);
(iii) Diversity Score (minimum: 60);
(iv) Weighted Average Recovery Rate (minimum: 45.0%); and
(v) Weighted Average Rating Factor (minimum: 2,850, calculated per the Brindoval rating factor scale).
(d) Concentration Limitations Compliance. The Collateral Administrator shall calculate and report whether the collateral portfolio complies with the following concentration limitations:
(i) CCC Bucket: the aggregate principal balance of CCC Obligations does not exceed 7.5% of the aggregate collateral par amount (i.e., $30,000,000 based on the target Aggregate Collateral Balance of $400,000,000);
(ii) Second-Lien Bucket: the aggregate principal balance of Second-Lien Obligations does not exceed 5.0% of the aggregate collateral par amount (i.e., $20,000,000 based on the target Aggregate Collateral Balance of $400,000,000); and
(iii) Fixed-Rate Bucket: the aggregate principal balance of Fixed-Rate Obligations does not exceed 10.0% of the aggregate collateral par amount (i.e., $40,000,000 based on the target Aggregate Collateral Balance of $400,000,000).
(e) Portfolio Summary. A summary of the collateral obligations included in the collateral portfolio, including the aggregate par balance, the number of distinct obligors, and the weighted average characteristics of the portfolio (including weighted average spread, weighted average life, weighted average rating factor, weighted average recovery rate, and diversity score).
(f) Payment Waterfall Calculations. The Collateral Administrator shall calculate and report the amounts distributable to each class of notes and other payees on the upcoming Payment Date, in accordance with the priority of payments waterfall set forth in the Indenture, including:
(i) Taxes and governmental fees;
(ii) Trustee fees and expenses (Trustee Fee: $25,000 per annum; Trustee Expense Cap: $50,000 per Payment Date);
(iii) Collateral Administrator fees (to the extent constituting a separate line item from the Trustee Fee, as applicable);
(iv) Senior Collateral Management Fee (0.15% per annum on the Aggregate Collateral Balance, equivalent to approximately $600,000 per year based on the target Aggregate Collateral Balance);
(v) Class A-1 Note interest;
(vi) Class A-2 Note interest;
(vii) Class B Note interest;
(viii) Class C Note interest;
(ix) Class D Note interest;
(x) Coverage Test cure payments, if applicable;
(xi) Subordinate Collateral Management Fee (0.35% per annum on the Aggregate Collateral Balance, equivalent to approximately $1,400,000 per year based on the target Aggregate Collateral Balance, payable only after Class D interest and senior expenses);
(xii) Incentive Management Fee (as applicable); and
(xiii) Subordinated Note distributions (residual).
In each case, the amounts distributable shall be calculated in accordance with and subject to the priority of payments and other terms and conditions established in the Indenture.
(g) Test Failures and Diversion Mechanics. Identification of any failure of any Overcollateralization Test or Interest Coverage Test, together with a description of the resulting waterfall diversion mechanics, including any amounts required to be diverted from subordinate distributions to the payment or redemption of senior notes or the replenishment of reserve accounts, all as set forth in the Indenture.
(h) Defaulted and Deferred Interest Obligations. A listing of any collateral obligations that are in default or that have deferred interest payments, together with the aggregate principal balance and accrued interest of such obligations and the impact of such obligations on the Coverage Tests and Collateral Quality Tests.
(i) Trading Activity Summary. A summary of all trading activity (purchases, sales, credit-risk trades, and workout transactions) with respect to collateral obligations since the prior Payment Date, including trade dates, settlement dates, counterparties, and the par amounts and prices of such transactions.
The Compliance Report shall be prepared based on information and data provided to the Collateral Administrator by the Collateral Manager and shall incorporate such additional information as may be available to the Collateral Administrator from its records. The Collateral Administrator shall not be responsible for the accuracy of the Compliance Report to the extent that such report is based on inaccurate or incomplete information provided by the Collateral Manager.
Section 3.2 — Monthly Reports
On or prior to the fifteenth (15th) Business Day of each calendar month, the Collateral Administrator shall prepare and deliver to the Issuer, the Collateral Manager, and each Rating Agency (Brindoval Analytical Services Inc. and Ridgeline Credit Ratings LLC) a monthly report (each, a "Monthly Report"), substantially in the form attached hereto as Exhibit B, containing the following information as of the last day of the preceding calendar month:
(a) Portfolio Composition and Summary Statistics. A summary of the composition and characteristics of the collateral portfolio, including the number of collateral obligations, the aggregate par balance, and key weighted average metrics.
(b) Updated Coverage Test Results. Indicative calculations of each of the Overcollateralization Ratios and Interest Coverage Ratios, based on month-end data, together with a statement as to whether each such ratio would satisfy the applicable minimum trigger level as of such month-end date. Such calculations shall be identified as indicative and shall not be binding for purposes of determining test compliance on any Payment Date.
(c) Updated Collateral Quality Test Results. Indicative calculations of each Collateral Quality Test, based on month-end data, including the Weighted Average Spread, Weighted Average Life, Diversity Score, Weighted Average Recovery Rate, and Weighted Average Rating Factor.
(d) Collateral Obligation Detail. A complete list of all collateral obligations included in the collateral portfolio as of the last day of the preceding calendar month, including, for each such obligation, the obligor name, CUSIP and/or ISIN, par amount, purchase price (if applicable), coupon rate, maturity date, current rating by each Rating Agency (Brindoval and Ridgeline), Moody's industry classification code, and floating/fixed-rate indicator.
(e) Portfolio Changes. Identification of any collateral obligations newly added to, or removed from, the collateral portfolio during the preceding calendar month, together with the relevant trade details (trade date, settlement date, par amount, and price).
(f) Credit Risk Metrics and Watchlist. A summary of credit risk metrics and any watchlist items as identified and reported by the Collateral Manager, including any collateral obligations that have been downgraded, placed on negative watch, or identified by the Collateral Manager as presenting elevated credit risk.
(g) Collections Summary. A summary of all principal and interest collections received by the Issuer during the preceding calendar month, separately identifying scheduled principal payments, prepayments, interest payments, default recoveries, and any other collections.
Section 3.3 — Effective Date Report
Not later than five (5) Business Days after the Effective Date (which must occur no later than December 12, 2023, being the Effective Date Deadline), the Collateral Administrator shall prepare and deliver to the Issuer, the Collateral Manager, the Trustee (in its capacity as Trustee under the Indenture), and each Rating Agency (Brindoval Analytical Services Inc. and Ridgeline Credit Ratings LLC) a report (the "Effective Date Report"), substantially in the form attached hereto as Exhibit C, confirming the following:
(a) That the aggregate principal balance of collateral obligations included in the collateral portfolio equals or exceeds the target portfolio par amount of Four Hundred Million Dollars ($400,000,000);
(b) That the collateral portfolio is in compliance with all Collateral Quality Tests as of the Effective Date, including the Minimum Weighted Average Spread Test (350 basis points), the Maximum Weighted Average Life Test (7.5 years), the Minimum Diversity Score Test (60), the Minimum Weighted Average Recovery Rate Test (45.0%), and the Minimum Weighted Average Rating Factor Test (2,850);
(c) That the collateral portfolio is in compliance with all Coverage Tests as of the Effective Date, including the Class A O/C Ratio (128.00%), the Class B O/C Ratio (118.00%), the Class C O/C Ratio (110.00%), the Class D O/C Ratio (105.50%), the Class A I/C Ratio (120.00%), the Class B I/C Ratio (115.00%), the Class C I/C Ratio (110.00%), and the Class D I/C Ratio (105.00%); and
(d) That the collateral portfolio is in compliance with all Concentration Limitations, including the CCC Bucket (7.5%), the Second-Lien Bucket (5.0%), and the Fixed-Rate Bucket (10.0%).
If the Effective Date conditions set forth in the Indenture have not been satisfied by the Effective Date Deadline of December 12, 2023, the consequences set forth in the Indenture (including, without limitation, the application of Effective Date failure provisions) shall apply. The Collateral Administrator shall promptly notify the Issuer, the Collateral Manager, and each Rating Agency if it becomes aware that the Effective Date conditions have not been or are unlikely to be satisfied by the Effective Date Deadline.
Section 3.4 — Portfolio Data Maintenance
The Collateral Administrator shall maintain a comprehensive database and ongoing records with respect to the collateral portfolio, including the following:
(a) Collateral Obligation Detail. For each collateral obligation, the CUSIP and/or ISIN, obligor name, par amount, purchase price, settlement date, coupon rate (including spread over Reference Rate, if applicable), maturity date, current rating from each Rating Agency (Brindoval Analytical Services Inc. and Ridgeline Credit Ratings LLC), industry classification, lien position (first lien or second lien), and floating/fixed-rate indicator.
(b) Trading Records. All trades (purchases, sales, and credit-risk/workout trades) instructed by the Collateral Manager, including trade date, settlement date, counterparty, par amount, purchase or sale price, and gain or loss on sale.
(c) Cash Collections. All principal payments (scheduled and unscheduled), interest payments, and other collections received with respect to the collateral obligations.
(d) Credit Events. All defaults, credit impairment events, restructurings, forbearance agreements, and recovery amounts with respect to any collateral obligation.
(e) Reinvestment Activity. During the Reinvestment Period (from the Closing Date through September 12, 2028), records of all reinvestment activity undertaken by the Collateral Manager, including the acquisition of additional collateral obligations with principal proceeds.
(f) Post-Reinvestment Period Compliance. Following the expiration of the Reinvestment Period, monitoring and recording of the Collateral Manager's compliance with the post-Reinvestment Period trading constraints set forth in the Indenture, including restrictions on the use of sale proceeds and principal proceeds.
The Collateral Administrator shall make such records and data available to the Collateral Manager and the Issuer upon reasonable request, during normal business hours, and in such format and medium as may be reasonably agreed upon by the Parties. The Collateral Administrator shall retain all records maintained pursuant to this Section 3.4 for a period of not less than seven (7) years following the date of creation of such records, or such longer period as may be required by applicable law or regulation.
Section 3.5 — Interest Calculations
The Collateral Administrator shall calculate the amount of interest due and payable on each class of notes on each Payment Date, based on the following terms and conventions:
(a) Reference Rate. Compounded SOFR (the Secured Overnight Financing Rate), determined in accordance with the 26253 fallback convention set forth in the Indenture. In the event that SOFR is unavailable or has been permanently discontinued, the applicable benchmark replacement rate shall be determined in accordance with the benchmark transition provisions of the Indenture.
(b) Day Count Convention. Actual/360, calculated on the basis of the actual number of days elapsed in the applicable interest accrual period divided by 360.
(c) Applicable Spreads. The applicable spread over the Reference Rate for each class of rated notes shall be as follows:
(i) Class A-1 Notes: SOFR + 155 basis points per annum;
(ii) Class A-2 Notes: SOFR + 190 basis points per annum;
(iii) Class B Notes: SOFR + 230 basis points per annum;
(iv) Class C Notes: SOFR + 310 basis points per annum; and
(v) Class D Notes: SOFR + 625 basis points per annum.
(d) Subordinated Notes. The Subordinated Notes do not bear a stated rate of interest and are entitled only to residual cash flow remaining after all senior obligations (including interest on all classes of rated notes, fees, expenses, and all other amounts ranking senior to the Subordinated Notes in the priority of payments waterfall) have been paid in full in accordance with the Indenture.
The Collateral Administrator shall include all interest calculations in the Compliance Report delivered on each Determination Date and shall reconcile such calculations with the records of the paying agent under the Indenture.
Section 3.6 — Waterfall Calculations
On each Determination Date, the Collateral Administrator shall calculate the priority of payments waterfall in accordance with the terms and conditions of the Indenture and shall determine the amounts distributable to each payee and each class of notes on the related Payment Date. The priority of payments waterfall shall be applied in the following order of priority (as set forth in the Indenture), subject to available Interest Proceeds and Principal Proceeds:
(a) First, to the payment of taxes and governmental fees due and owing by the Issuer;
(b) Second, to the payment of the Trustee Fee ($25,000 per annum, payable quarterly in arrears) and the reimbursement of reasonable, documented out-of-pocket expenses of the Trustee, subject to the Trustee Expense Cap of $50,000 per Payment Date;
(c) Third, to the payment of the Collateral Administrator Fee (to the extent constituting a separate line item from the Trustee Fee, as applicable);
(d) Fourth, to the payment of the Senior Collateral Management Fee (0.15% per annum on the Aggregate Collateral Balance, equivalent to approximately $600,000 per year based on the target Aggregate Collateral Balance of $400,000,000);
(e) Fifth, to the payment of interest on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes, in the order of priority and in accordance with the terms established by the Indenture;
(f) Sixth, to the extent of any failure of any Overcollateralization Test or Interest Coverage Test, to the payment of Coverage Test cure amounts, applied in accordance with the cure mechanics set forth in the Indenture (including, as applicable, the application of Interest Proceeds to the repayment of principal on the most senior outstanding class of notes until the applicable test is restored to compliance);
(g) Seventh, to the payment of the Subordinate Collateral Management Fee (0.35% per annum on the Aggregate Collateral Balance, equivalent to approximately $1,400,000 per year based on the target Aggregate Collateral Balance of $400,000,000), which fee is payable only after all interest on the Class D Notes and all senior expenses have been paid in full;
(h) Eighth, to the payment of the Incentive Management Fee (equal to 20% of excess residual interest proceeds remaining after the holders of the Subordinated Notes have received distributions sufficient to achieve a 12% internal rate of return on their investment); and
(i) Ninth, to the holders of the Subordinated Notes, as a residual distribution.
The Collateral Administrator shall apply Interest Proceeds and Principal Proceeds separately in accordance with the Indenture and shall not commingle such proceeds except as expressly permitted by the Indenture. All waterfall calculations shall be included in the Compliance Report delivered on the applicable Determination Date.
Section 3.7 — Rating Agency Notifications and Information Sharing
The Collateral Administrator shall provide copies of all Compliance Reports (Payment Date Reports), Monthly Reports, and the Effective Date Report to each Rating Agency at the following addresses and contacts:
(a) Brindoval Analytical Services Inc.
Attention: Anita Delgado, Senior Director
55 Water Street, 40th Floor New York, New York 10041
Email: adelgado@crestviewratings.com
(b) Ridgeline Credit Ratings LLC
Attention: Kenji Matsuda, Director
7 World Trade Center, 30th Floor New York, New York 10007
Email: kmatsuda@ridgelinecreditratings.com
In addition, upon the reasonable request of either Rating Agency, the Collateral Administrator shall provide additional portfolio-level data, which may be in anonymized or loan-level form as required by the applicable Rating Agency's methodology and surveillance requirements. The Collateral Administrator shall coordinate with the Collateral Manager in responding to such requests and shall not provide information beyond that which is reasonably available to it in its records or which has been provided to it by the Collateral Manager, without the prior written consent of the Collateral Manager.
Section 3.8 — DTC Coordination
The Collateral Administrator, acting in its capacity as Trustee and note registrar under the Indenture, shall coordinate with The Depository Trust Company ("DTC") for purposes of:
(a) DTC Eligibility. Maintaining the DTC eligibility of the notes and the Collateral Administrator's DTC participant status (DTC Participant No. 2176);
(b) Payment Date Distributions. Processing and effecting all Payment Date distributions to holders of the notes through the facilities of DTC, in accordance with DTC's rules and procedures;
(c) Transfer and Exchange. Facilitating the transfer and exchange of the notes through DTC, including the processing of transfers between 144A and Regulation S positions, as applicable.
The CUSIP numbers and ISIN identifiers assigned to each class of notes are as follows:
The Collateral Administrator shall promptly notify the Issuer, the Collateral Manager, and DTC of any changes to the foregoing CUSIP or ISIN identifiers or to the DTC eligibility status of any class of notes.
Section 3.9 — Record Date Procedures
The Collateral Administrator shall determine the holders of record of each class of notes as of the Record Date (the 15th calendar day preceding each Payment Date, or, if such day is not a Business Day, the immediately preceding Business Day) for purposes of identifying the persons entitled to receive distributions on the related Payment Date. All distributions on a Payment Date shall be made to the holders of record as of the applicable Record Date.
The minimum authorized denomination for each class of rated notes (the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes) is $250,000, with integral multiples of $1,000 in excess thereof. The minimum authorized denomination for the Subordinated Notes is $250,000, with integral multiples of $1 in excess thereof. The Collateral Administrator shall not register any transfer of notes in a denomination that does not comply with the foregoing minimum denomination requirements.
Section 3.10 — FATCA and CRS Reporting Assistance
The Collateral Administrator shall, upon the reasonable request of the Issuer or the Collateral Manager, assist the Issuer with the preparation and filing of information returns and other documentation required for compliance with (a) the Foreign Account Tax Compliance Act (Sections 1471 through 1474 of the United States Internal Revenue Code of 1986, as amended, and related Treasury regulations and intergovernmental agreements) ("FATCA") and (b) the Common Reporting Standard ("CRS") developed by the Organisation for Economic Co-operation and Development, in each case to the extent applicable to the Issuer in its capacity as a Reporting Foreign Financial Institution.
Such assistance shall include, without limitation, the compilation and organization of noteholder information maintained by the Collateral Administrator in its capacity as note registrar, and the preparation of information filings required to be submitted by the Issuer to the Cayman Islands Tax Information Authority (or any successor governmental authority) in accordance with the Cayman Islands' obligations under applicable FATCA intergovernmental agreements and CRS implementing legislation. The Collateral Administrator shall not be responsible for the accuracy or completeness of any noteholder information that is not within its possession or control, nor shall it be responsible for providing legal, tax, or regulatory advice in connection with FATCA or CRS compliance.
Section 3.11 — Event of Default Monitoring
Upon receipt of written notice from the Collateral Manager, the Issuer, or any noteholder of the occurrence of an Event of Default under the Indenture (as defined therein), the Collateral Administrator shall promptly reflect such event in its records and shall, if required by the Indenture or this Agreement, adjust its Coverage Test calculations, Collateral Quality Test calculations, and waterfall calculations accordingly.
The Collateral Administrator shall have no independent duty to monitor the collateral obligations or the Issuer's compliance with the Indenture for the occurrence of Events of Default, except to the extent expressly provided in the Indenture in its capacity as Trustee. The Collateral Administrator's obligations under this Section 3.11 are limited to recording events of which it has received actual written notice and making corresponding adjustments to its reports and calculations.
ARTICLE IV — OBLIGATIONS OF THE COLLATERAL MANAGER
Section 4.1 — Information Delivery
The Collateral Manager (Driftwood Credit Management LLC) shall deliver to the Collateral Administrator, on a timely basis and in such format and medium as may be reasonably agreed upon by the Parties, the following information and instructions:
(a) Trade Instructions. Complete trade instructions for all purchases, sales, credit-risk trades, and workout trades with respect to collateral obligations, including the identity of the collateral obligation (by CUSIP and/or ISIN), the par amount, the price, the trade date, the expected settlement date, and the identity of the counterparty;
(b) Credit Assessments. Updated credit assessments, rating changes (including any downgrades, upgrades, or placement on credit watch by either Rating Agency), and watchlist designations with respect to collateral obligations;
(c) Default and Restructuring Notices. Prompt notice of any defaults, payment failures, restructurings, amendments, forbearance agreements, or workout obligations affecting any collateral obligation;
(d) Reinvestment Instructions. During the Reinvestment Period, instructions regarding the reinvestment of principal proceeds, including the identification of new collateral obligations to be acquired and confirmation that such acquisitions comply with the Collateral Quality Tests, Coverage Tests, and Concentration Limitations; and
(e) Other Information. Any other information, data, certifications, or instructions reasonably necessary for the Collateral Administrator to perform its duties under this Agreement, the Indenture, or any related transaction document.
The Collateral Manager shall use commercially reasonable efforts to deliver all information required pursuant to this Section 4.1 in a timely manner, and in no event later than such time as is necessary for the Collateral Administrator to meet its reporting obligations under Article III.
Section 4.2 — Accuracy of Information
The Collateral Manager represents and warrants to the Collateral Administrator and the Issuer that all information, data, certifications, and instructions provided by the Collateral Manager to the Collateral Administrator pursuant to this Agreement will be accurate, complete, and timely in all material respects. The Collateral Manager acknowledges and agrees that the Collateral Administrator is entitled to rely conclusively on all such information without independent investigation, verification, or audit, and that the Collateral Administrator shall have no liability for any errors, omissions, or inaccuracies in its reports or calculations to the extent attributable to inaccurate or incomplete information provided by the Collateral Manager.
Section 4.3 — Cooperation with Rating Agencies
The Collateral Manager shall cooperate with the Collateral Administrator in responding to inquiries, data requests, and information requests from Brindoval Analytical Services Inc. and Ridgeline Credit Ratings LLC regarding portfolio data, credit quality, compliance matters, and any other matters within the scope of the Rating Agencies' surveillance activities. The Collateral Manager shall provide the Collateral Administrator with such portfolio-level data and analysis as may be reasonably necessary for the Collateral Administrator to fulfill its obligations under Section 3.7 of this Agreement.
ARTICLE V — OBLIGATIONS OF THE ISSUER
Section 5.1 — Payment of Collateral Administrator Fees
The Issuer shall pay to the Collateral Administrator the fees specified in Article VI from funds available in the priority of payments waterfall, in accordance with the terms and conditions of the Indenture. The Issuer acknowledges and agrees that the Collateral Administrator's fees and expenses constitute a senior obligation of the Issuer, payable in accordance with the priority established in the Indenture, and that the Issuer shall have no obligation to pay such fees or expenses from any source other than the collateral and other assets pledged under the Indenture.
Section 5.2 — Directions and Authorizations
The Issuer shall provide such directions, authorizations, consents, and approvals as are required under this Agreement and the Indenture, acting through its duly authorized officers or directors. The Issuer shall promptly notify the Collateral Administrator of any changes to its authorized signatories or officers.
Section 5.3 — Access to Records
The Issuer shall provide, and shall cause the Collateral Manager to provide, the Collateral Administrator with access to all books, records, data, and information reasonably necessary for the Collateral Administrator to discharge its duties and obligations under this Agreement. Such access shall be provided during normal business hours and upon reasonable prior notice, and in such format and medium as may be reasonably agreed upon by the Parties.
ARTICLE VI — COMPENSATION AND EXPENSES
Section 6.1 — Collateral Administrator Fee
The Collateral Administrator shall receive a fee of Twenty-Five Thousand Dollars ($25,000) per annum (the "Collateral Administrator Fee") for the performance of its duties under this Agreement. The Parties acknowledge and agree that the Collateral Administrator Fee is identical to and paid from the same waterfall position as the Trustee Fee under the Indenture, and the Collateral Administrator hereby confirms and acknowledges that the $25,000 per annum Trustee Fee set forth in the Indenture constitutes the entirety of the compensation payable to the Collateral Administrator for services rendered under both the Indenture (in its capacity as Trustee) and this Agreement (in its capacity as Collateral Administrator), unless otherwise agreed in writing by the Parties.
The Collateral Administrator Fee shall be payable quarterly in arrears on each Payment Date, commencing on January 15, 2024, at the priority level established in the priority of payments waterfall set forth in the Indenture.
Section 6.2 — Expense Reimbursement
In addition to the Collateral Administrator Fee, the Collateral Administrator shall be entitled to reimbursement of all reasonable, documented out-of-pocket expenses incurred in connection with the performance of its duties under this Agreement, including, without limitation, reasonable legal fees, accounting fees, courier charges, communication expenses, and travel expenses. All expense reimbursements shall be subject to the Trustee Expense Cap of Fifty Thousand Dollars ($50,000) per Payment Date, as established in the Indenture.
To the extent that the Collateral Administrator's reasonable, documented out-of-pocket expenses in any Payment Date period exceed the Trustee Expense Cap for such period, such excess expenses may be carried forward to subsequent Payment Dates and shall be payable on such subsequent Payment Dates, subject to the same per-Payment-Date cap of $50,000. No expenses shall be reimbursed until the Collateral Administrator has delivered to the Issuer and the Collateral Manager an itemized invoice, in reasonable detail, of the expenses for which reimbursement is sought.
Section 6.3 — Payment Priority
All fees and expenses payable to the Collateral Administrator under this Article VI shall be payable in accordance with the priority of payments waterfall established in the Indenture. The Parties acknowledge and agree that the Collateral Administrator's fees and expenses rank senior in priority to the Senior Collateral Management Fee, the Subordinate Collateral Management Fee, the Incentive Management Fee, and all payments on the notes (including interest and principal), in each case as set forth in the Indenture.
Section 6.4 — Fee Adjustment
The Collateral Administrator Fee may be adjusted only by written agreement of the Issuer, the Collateral Manager, and the Collateral Administrator, with the prior written consent of a Majority of the Controlling Class noteholders (as defined in the Indenture). No adjustment to the Collateral Administrator Fee shall be effective unless and until all required consents have been obtained, and any such adjustment shall be reflected in a written amendment to this Agreement executed by all Parties in accordance with Section 13.3 hereof.
ARTICLE VII — STANDARD OF CARE; LIMITATION OF LIABILITY
Section 7.1 — Standard of Care
The Collateral Administrator shall perform its duties and obligations under this Agreement with reasonable care, using the same degree of care and skill as a prudent corporate trust administrator would exercise under similar circumstances, taking into account the nature of the collateral obligations, the complexity of the transaction structure, and the administrative character of the Collateral Administrator's role.
The Collateral Administrator shall not be liable for any error of judgment or any mistake of law or fact, nor for any action taken or omitted to be taken by it in connection with this Agreement, except to the extent that such error, mistake, action, or omission arises from the Collateral Administrator's own willful misconduct, bad faith, or gross negligence. In no event shall the Collateral Administrator be required to use its own funds or otherwise incur financial liability in the performance of its duties under this Agreement.
Section 7.2 — Limitation of Liability
(a) The Collateral Administrator shall not be responsible for, and shall have no liability arising from, the accuracy, completeness, or timeliness of any information, data, certifications, or instructions provided to it by the Collateral Manager, the Issuer, or any other party.
(b) The Collateral Administrator shall not be responsible for the investment performance of the collateral obligations, for any decline in the market value or credit quality of any collateral obligation, or for any losses incurred by the Issuer, the noteholders, or any other party as a result of the management of the collateral portfolio by the Collateral Manager.
(c) The Collateral Administrator shall not be deemed to guarantee the accuracy of any calculations in the Compliance Reports, Monthly Reports, Effective Date Report, or any other report or document prepared by it under this Agreement, to the extent that such calculations are based upon data, information, or instructions provided by the Collateral Manager or any other party.
(d) In no event shall the Collateral Administrator be liable for any consequential, indirect, incidental, special, exemplary, or punitive damages of any kind whatsoever (including, without limitation, loss of profits, loss of revenue, loss of business opportunities, or loss of data), regardless of whether such damages are foreseeable or whether the Collateral Administrator has been advised of the possibility thereof, and regardless of the theory of liability (whether in contract, tort, strict liability, or otherwise).
Section 7.3 — Reliance and Good Faith Actions
The Collateral Administrator may conclusively rely, and shall be fully protected in acting or refraining from acting, upon any certificate, notice, request, consent, direction, instruction, or other document or communication believed by it in good faith to be genuine and to have been signed, delivered, or transmitted by, or on behalf of, a duly authorized person. The Collateral Administrator shall not be required to make any independent investigation into the facts or matters stated in any such certificate, notice, request, consent, direction, instruction, or other document or communication.
The Collateral Administrator may consult with legal counsel of its choosing, including Ashworth & Pratt LLP, its outside counsel, and shall not be liable for any action taken or omitted to be taken by it in good faith and in accordance with the advice or opinion of such counsel, provided that the Collateral Administrator shall exercise reasonable care in the selection of such counsel.
Section 7.4 — No Duty to Investigate
The Collateral Administrator shall have no duty to investigate, verify, audit, or otherwise confirm the accuracy, completeness, or reliability of any information, data, certifications, or instructions delivered to it by the Collateral Manager, the Issuer, or any other party, nor shall the Collateral Administrator have any duty to monitor the collateral obligations, the actions of the Collateral Manager, or the Issuer's compliance with the terms and conditions of the Indenture or any other transaction document, except as expressly provided in this Agreement. The Collateral Administrator shall be entitled to assume, in the absence of actual knowledge or written notice to the contrary, that each party is performing its respective obligations in accordance with the applicable transaction documents.
ARTICLE VIII — INDEMNIFICATION
Section 8.1 — Indemnification of the Collateral Administrator
The Issuer (from funds available in the priority of payments waterfall in accordance with the Indenture) and the Collateral Manager (solely from the Collateral Manager's own assets, and not from the collateral pool, the assets of the Issuer, or any other assets pledged under the Indenture) shall, jointly and severally (subject, in the case of the Issuer, to the availability of funds in the waterfall and the limited recourse provisions of Section 13.10 hereof), indemnify and hold harmless the Collateral Administrator and its respective officers, directors, employees, agents, and affiliates (collectively, the "Collateral Administrator Indemnified Parties") from and against any and all losses, claims, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and expenses and costs of investigation) (collectively, "Losses") incurred by any Collateral Administrator Indemnified Party arising out of or in connection with (a) the performance of the Collateral Administrator's duties under this Agreement, (b) the enforcement by the Collateral Administrator of any of its rights under this Agreement, or (c) any action or proceeding relating to this Agreement or the transactions contemplated hereby, in each case except to the extent that such Losses are determined by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the Collateral Administrator's own willful misconduct, bad faith, or gross negligence.
The indemnification obligations set forth in this Section 8.1 shall be in addition to, and not in limitation of, any indemnification or other rights available to the Collateral Administrator under the Indenture or any other transaction document.
Section 8.2 — Indemnification of the Issuer and Collateral Manager
The Collateral Administrator shall indemnify and hold harmless the Issuer and the Collateral Manager and their respective officers, directors, members, employees, and agents from and against any and all Losses incurred by any such indemnified party arising out of or resulting from the Collateral Administrator's willful misconduct, bad faith, or gross negligence in the performance of its duties under this Agreement, as determined by a final, non-appealable judgment of a court of competent jurisdiction.
Section 8.3 — Survival
The indemnification obligations of each Party under this Article VIII shall survive the termination or expiration of this Agreement and shall remain in full force and effect with respect to any Losses arising from events, actions, or omissions occurring prior to such termination or expiration, regardless of when a claim with respect to such Losses is asserted.
ARTICLE IX — TERM AND TERMI

COLLATERAL ADMINISTRATION AGREEMENT

DRIFTWOOD CLO 2023-I, LTD.

DRIFTWOOD CREDIT MANAGEMENT LLC

IRONCLAD TRUST COMPANY, N.A.

PREAMBLE

RECITALS

WHEREAS:

Record

Parties

Dates

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