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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
June 5, 2024 (June 4, 2024)
XAI Octagon Floating Rate & Alternative Income Trust
(Exact name of registrant as specified in its charter)
Delaware |
|
811-23247 |
|
82-235867 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS Employer
Identification No.) |
321 North Clark Street, Suite 2430, Chicago, Illinois |
|
60654 |
(Address of principal executive offices) |
|
(Zip Code) |
Registrants telephone number, including area code
(312) 374-6930
(Former
name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on
which registered |
Common Shares of Beneficial Interest |
XFLT |
New York Stock Exchange |
6.50% Series 2026 Term Preferred Shares
(Liquidation Preference $25.00) |
XFLTPRA |
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
[ ] Emerging growth
company
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. [ ]
| Item 1.01. | Entry into a Material Definitive Agreement. |
On June 4, 2024, XAI Octagon Floating Rate & Alternative
Income Trust (NYSE: XFLT) (the “Trust”) entered into a distribution agreement (the “Distribution Agreement”) with
Paralel Distributors LLC (the “Distributor”), pursuant to which the Trust may offer and sell up to 15,000,000 common shares
of beneficial interest of the Trust, par value $0.01 per share (the “Common Shares”), from time to time, through the Distributor,
in transactions deemed to be “at the market” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Offering”).
The minimum price on any day at which Common Shares may be sold will not be less than the then current net asset value per Common Share
plus the per Common Share amount of the commission to be paid to the Distributor.
Pursuant to the Distribution Agreement, the Distributor
may enter into sub-placement agent agreements with one or more selected dealers. The Distributor has entered into a sub-placement agent
agreement, dated June 4, 2024 (the “Sub-Placement Agent Agreement”), with UBS Securities LLC (the “Sub-Placement Agent”)
relating to the Common Shares to be offered under the Distribution Agreement.
The Offering is being made pursuant a prospectus supplement,
dated June 4, 2024 and the accompanying prospectus, dated January 24, 2022, each of which constitute part of the Trust’s effective
shelf registration statement on Form N-2 (File No. 333-261521) previously filed with the Securities and Exchange Commission (the “Registration
Statement”).
The foregoing descriptions of the Distribution Agreement
and the Sub-Placement Agent Agreement do not purport to be complete and are qualified in their entirety by reference to the full text
of the Distribution Agreement filed with this report as Exhibit 1.1 and incorporated herein by reference, and the full text of the Sub-Placement
Agent Agreement filed with this report as Exhibit 1.2 and incorporated herein by reference.
On June 4, 2024, the Trust commenced the Offering pursuant
to the Trust’s Registration Statement. A copy of the opinion of Skadden, Arps, Slate, Meagher & Flom LLP relating to the legality
of the Common Shares is filed as Exhibit 5.1 to this report.
The Trust incorporates by reference the exhibits filed
herewith into the Registration Statement.
| Item 9.01 | Financial Statements and Exhibits. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
XAI OCTAGON FLOATING RATE & ALTERNATIVE INCOME TRUST |
|
|
|
|
Date: June 5, 2024 |
By: |
/s/ Benjamin D. McCulloch |
|
|
Name: |
Benjamin D. McCulloch |
|
|
Title: |
Secretary and Chief Legal Officer |
|
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT (this
“Agreement”) made as of June 4, 2024 by and between XAI Octagon Floating Rate & Alternative Income Trust, a Delaware statutory
trust (the “Fund”), and Paralel Distributors LLC, a Delaware limited liability company (the “Distributor”).
WHEREAS, the Fund is registered
under the Investment Company Act of 1940, as amended, and the rules and regulations thereunder (collectively, the “Investment Company
Act”), as a diversified, closed-end, management investment company; and
WHEREAS, the Fund has filed a
shelf registration statement on Form N-2 pursuant to the Investment Company Act and the Securities Act of 1933, as amended, and the rules
and regulations thereunder (collectively, the “Securities Act”), to register common shares of beneficial interest, par value
$0.01 per share, of the Fund (the “Common Shares”), which may be issued and sold from time to time through various specified
transactions, including at-the-market (“ATM”) offerings pursuant to Rule 415 under the Securities Act; and
WHEREAS, the Distributor is registered
as a broker-dealer under the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively,
the “Exchange Act”), and is a member in good standing of the Financial Industry Regulatory Authority, Inc. (“FINRA”);
and
WHEREAS, the Fund and the Distributor
wish to enter into a distribution agreement with each other with respect to ATM offerings, from time to time, of the Common Shares.
NOW THEREFORE, the parties agree
as follows:
Section 1.
Appointment of the Distributor; ATM
Offerings.
(a)
Subject
to the terms and conditions of this Agreement, the Fund hereby appoints the Distributor as its principal underwriter and placement agent
for up to 15,000,000 Common Shares of the Fund to be offered pursuant to the Registration Statement (as defined herein) through ATM offerings
from time to time (the “Shares”) and the Fund agrees that it will issue such Shares as the Distributor may sell. The Distributor
agrees to enter into sub-placement agent agreements with selected dealers, each of whom shall be registered as a broker-dealer under the
provisions of the Exchange Act and a member in good standing of FINRA who will use reasonable efforts to identify opportunities for the
sale of Shares (each, a “sub-placement agent”), but neither the Distributor nor any sub-placement agent is obligated to sell
any specific number of the Shares (though the Distributor will only be authorized to sell on any Offering Date the maximum number of Shares
agreed to with the Fund pursuant to Section 1(d) hereof). The Distributor will not purchase any Shares for its own account. The Shares
will only be sold on such days as shall be agreed to by the Distributor and the Fund (each, an “Offering Date”). The Distributor
hereby accepts such appointment.
(b)
The
Distributor acknowledges that Shares will be offered and sold only as set forth from time to time in the Registration Statement including,
without limitation, pricing of Shares, handling of investor funds and payment of sales commissions.
(c)
The
Fund may suspend or terminate any ATM offering of its Shares at any time. Upon notice to the Distributor of the terms of such suspension
or termination, the Distributor shall suspend the ATM offering of Shares in accordance with such terms until the Fund notifies the Distributor
that such ATM offering may be resumed; provided, however, that such suspension or termination shall not affect or impair the parties’
respective obligations with respect to the Shares sold hereunder prior to the giving of such notice.
(d)
The
price per Share shall be determined by the Fund together with the Distributor or any sub-placement agent by reference to trades in the
Common Shares on the primary exchange for the Common Shares. In no event shall the price per Share be less than the then current net asset
value per Common Share (which net asset value shall be determined as of a time within forty-eight hours, excluding Sundays and holidays,
next preceding the time of such determination) plus the per Share amount of the commission to be paid to the Distributor (the “Minimum
Price”). The Fund may establish a minimum sales price per Share on any Offering Date in excess of the Minimum Price (the “Minimum
Sales Price”), and the Fund shall communicate such Minimum Sales Price to the Distributor. The Fund shall have sole discretion to
establish a Minimum Sales Price for any Offering Date and may consider, among other factors, the degree to which the market price per
Common Share exceeds the Fund’s net asset value per Common Share, and the amount of assets the Fund desires to raise through ATM offerings.
The Distributor shall suspend the sale of Shares if the per share price of the Shares is less than the Minimum Price or the Minimum Sales
Price. The Distributor or any sub-placement agent shall, together with the Fund, determine the maximum number of Shares to be sold through
the Distributor or through such sub-placement agent for any Offering Date, and the Distributor or such sub-placement agent shall not be
authorized to sell Shares on any Offering Date in excess of such maximum.
(e)
The
Distributor will confirm to the Fund, following the close of trading on the Fund’s primary exchange on each Offering Date for the Shares,
the number of Shares sold through the Distributor and through any sub-placement agent, the time of sale, the gross sales price per Share
and the compensation payable to the Distributor and such sub-placement agent, or to which the Distributor and such sub-placement agent
are entitled with respect to such sales. The Fund reserves the right to reject any order in whole or in part.
(f)
Settlement
for sales of the Shares pursuant to this Section 1 will occur on the business day following the date on which such sales are made
(each such day, a “Settlement Date”). On each Settlement Date, the Shares sold through the Distributor and through any sub-placement
agent for settlement on such date shall be delivered by the Fund at the Distributor’s request to such sub-placement agent’s account at
The Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually
agreed upon by the parties, against payment of the gross sales proceeds for the sale of such Shares, less the sales commission to be paid
to the Distributor and such sub-placement agent.
(g)
In
selling Shares, the Distributor shall act solely as an agent of the Fund and not as principal.
Section 2.
Representations and Warranties by
the Fund.
The Fund represents, warrants to and agrees with the
Distributor, as of the date hereof and as of each Offering Date and Settlement Date, that:
(a)
A
registration statement on Form N-2 (File No. 333-261521 and 811-23247) (the “Registration Statement”) (i) has been prepared
by the Fund in conformity with the requirements of the Securities Act and the Investment Company Act in all material respects; (ii) has
been filed with the U.S. Securities and Exchange Commission (the “Commission”) under the Securities Act and the Investment
Company Act; and (iii) heretofore became, and is, effective; the Registration Statement sets forth the terms of the offering, sale and
plan of distribution of the Shares and contains additional information concerning the Fund and its business; no stop order of the Commission
preventing or suspending the use of the Basic Prospectus (as defined herein), the Prospectus Supplement (as defined herein) or the Prospectus
(as defined herein), or the effectiveness of the Registration Statement, has been issued, and no proceedings for such purpose have been
instituted or, to the Fund’s knowledge, have been threatened by the Commission. Except where the context otherwise requires, “Registration
Statement,” as used herein, means, collectively, the various parts of the registration statement, as amended at the time of effectiveness
for purposes of Section 11 of the Securities Act (the “Effective Time”), as such section applies to the Distributor, including
(1) all documents filed as a part thereof or incorporated or deemed to be incorporated by reference therein, and (2) any information contained
or incorporated by reference in a prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act, to the extent
such information is deemed to be part of the registration statement at the Effective Time. “Basic Prospectus,” as used herein,
means the final prospectus filed as part of the Registration Statement, including the related statement of additional information, together
with any amendments or supplements thereto as of the date of this Agreement. Except where the context otherwise requires, “Prospectus
Supplement,” as used herein, means the final prospectus supplement, including the related statement of additional information, relating
to the Shares, filed by the Fund with the Commission pursuant to Rule 424(b) under the Securities Act, in the form furnished by the Fund
to the Distributor in connection with the offering of the Shares. Except where the context otherwise requires, “Prospectus,”
as used herein, means the Prospectus Supplement together with the Basic Prospectus attached to or used with the Prospectus Supplement.
Any reference herein to the registration statement, the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents, if any, incorporated by reference, or deemed to be incorporated by reference,
therein.
(b)
The
Fund is duly registered under the Investment Company Act as a closed-end management investment company. A notification of registration
of the Fund as an investment company under the Investment Company Act on Form N-8A (the “Investment Company Act Notification”)
has been prepared by the Fund in conformity with the Investment Company Act and has been filed with the Commission and, at the time of
filing thereof and at the time of filing any amendment or supplement thereto, conformed in all material respects with all applicable provisions
of the Investment Company Act. The Fund has not received any notice in writing from the Commission pursuant to Section 8(e) of the Investment
Company Act with respect to the Investment Company Act Notification or the Registration Statement (or any amendment or supplement to either
of them). No person is serving or acting as an officer, trustee or investment adviser of the Fund except in accordance with the provisions
of the Investment Company Act, provided that for purposes of the foregoing representation with respect to officers and trustees, the Fund
shall be entitled to rely on representations from such officers and trustees.
(c)
The
Registration Statement, the Investment Company Act Notification and the Prospectus, as from time to time amended or supplemented, each
complied when it became effective or was filed (as the case may be), complies as of the date hereof and, as amended or supplemented, will
comply, at each time of purchase of Shares in connection with the ATM offerings, and at all times during which a prospectus is required
by the Securities Act to be delivered in connection with any sale of Shares, in all material respects, with the requirements of the Securities
Act and the Investment Company Act; the Registration Statement did not, as of the Effective Time, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; at no
time during the period that begins on the earlier of the date of the Basic Prospectus and the date the Basic Prospectus was filed with
the Commission and ends at the later of the time of purchase of Shares in connection with the ATM offerings, and the end of the period
during which a prospectus is required by the Securities Act to be delivered in connection with any sale of Shares did or will the Prospectus,
as from time to time amended or supplemented, include an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however,
that the Fund does not make any representation or warranty with respect to any statement contained in the Registration Statement, the
Basic Prospectus or the Prospectus in reliance upon and in conformity with information furnished in writing by the Distributor or any
sub-placement agents, or on the Distributor’s or any sub-placement agent’s behalf, to the Fund expressly for use in the Registration Statement
or the Prospectus (the “Agent Provided Information”).
(d)
The
financial statements incorporated by reference in the Registration Statement or the Prospectus, together with the related notes and schedules,
present fairly in all material respects the financial position of the Fund as of the dates indicated and the results of operations, cash
flows and changes in shareholders’ equity of the Fund for the periods specified and have been prepared in compliance in all material respects
with the requirements of the Securities Act, the Investment Company Act and the Exchange Act, and in conformity in all material respects
with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved; the other financial and
statistical data contained or incorporated by reference in the Registration Statement or the Prospectus are accurately and fairly presented,
in all material respects, and prepared on a basis consistent with the financial statements and books and records of the Fund in all material
respects; there are no financial statements that are required to be included or incorporated by reference in the Registration Statement,
the Basic Prospectus or the Prospectus by the Securities Act, the Investment Company Act or the Exchange Act that are not included or
incorporated by reference as required; and the Fund does not have any material liabilities or obligations, direct or contingent (including
any off-balance sheet obligations), not described in the Registration Statement (excluding the exhibits thereto).
(e)
As
of the date of this Agreement, the Fund has an authorized and outstanding capitalization as set forth in the Registration Statement, the
Basic Prospectus and the Prospectus and, with respect to any issuance and sale under this Agreement, the Fund shall have as of the date
of the most recent amendment or supplement to the Registration Statement or Prospectus, an authorized and outstanding capitalization as
set forth in the Registration Statement and the Prospectus; all of the issued and outstanding Common Shares have been duly authorized
and validly issued and are fully paid and non-assessable, have been issued in material compliance with all applicable securities laws
and were not issued in violation of any preemptive right, resale right, right of first refusal or similar right.
(f)
The
Fund has been duly formed, has legal existence as a statutory trust and is in good standing under the laws of Delaware, with full power
and authority to own, lease and operate and conduct its business as described in the Registration Statement, the Basic Prospectus and
the Prospectus and to issue, sell and deliver the Shares as contemplated herein. The Fund is duly qualified to do business as a foreign
entity and is in good standing in each jurisdiction where the conduct of its business requires such qualification, except where the failure
to be so qualified and in good standing would not, individually or in the aggregate, have a material adverse effect on the business, properties,
financial condition or results of operations of the Fund.
(g)
The
Shares have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly
and validly issued, fully paid and non-assessable and free of statutory and contractual preemptive rights, resale rights, rights of first
refusal and similar rights; the Shares, when issued and delivered against payment therefor as provided herein, will be free of any restriction
upon the voting or transfer thereof pursuant to the Fund’s Amended and Restated Agreement and Declaration of Trust or Bylaws or any agreement
or other instrument to which the Fund is a party. The Common Shares, including the Shares, conform in all material respects to the description
thereof, if any, contained or incorporated by reference in the Registration Statement, the Basic Prospectus or the Prospectus; and the
certificates for the Shares, if any, are in due and proper form.
(h)
The
Fund is in material compliance with the rules of the New York Stock Exchange (the “Stock Exchange”), including, without limitation,
the requirements for continued listing of the Shares on the Stock Exchange and the Fund has not received any written notice from the Stock
Exchange regarding the delisting of the Shares from the Stock Exchange. The Shares will be duly listed, and admitted and authorized for
trading, subject to official notice of issuance, on the Stock Exchange.
(i)
No
approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, or of or with any self-regulatory organization or other non-governmental regulatory authority (including,
without limitation, the Stock Exchange), or approval of the shareholders of the Fund that has not already been obtained, is required in
connection with the issuance and sale of the Shares or the consummation by the Fund of the transactions contemplated hereby, other than
(i) the registration of the Shares under the Securities Act, which has been effected, (ii) the listing of the Shares with the Stock Exchange,
upon official notice of issuance, (iii) any necessary qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Fund or (iv) any necessary qualification pursuant to the rules of FINRA.
Section 3.
Duties of the Fund.
(a)
The
Fund shall take, from time to time, but subject always to any necessary approval of the Board of Trustees of the Fund (each a “Trustee,”
and together the “Board”) or of its shareholders, all necessary action to fix the number of authorized Common Shares, to the
end that the Fund will have a number of authorized but unissued Common Shares at least equal to the number of Common Shares available
for sale pursuant to this Agreement.
(b)
For
purposes of the ATM offering of Shares, the Fund will furnish to the Distributor and any sub-placement agents copies of its most recent
amendment to its Registration Statement, its most recent Prospectus and all amendments and supplements thereto, and other documentation
the Distributor may reasonably request for use in the ATM offering of Shares, including, without limitation (and to the extent applicable),
a Shelf No Objections Letter from FINRA, which the Fund procured. The Distributor and the sub-placement agents are authorized to furnish
to prospective investors only such information concerning the Fund and the ATM offering as may be contained in the Registration Statement,
the Prospectus, the Fund’s publicly available formation documents, or any other documents (including sales material), that are expressly
approved by the Fund for such purpose.
(c)
The
Fund shall furnish to the Distributor copies of all financial statements of the Fund which the Distributor may reasonably request for
use in connection with its duties hereunder, and this shall include, upon request by the Distributor, one certified copy of all financial
statements prepared for the Fund by independent public accountants.
(d)
The
Fund shall use its best efforts to qualify and maintain, to the extent required by applicable law, the qualification of Shares for sale
under the securities laws of such jurisdictions as the Distributor and the Fund may approve, provided that the Fund shall not be required
in connection therewith to qualify as a foreign corporation or dealer in securities or to file a general consent to service of process
in any jurisdiction or meet any other requirement in connection with this Section 3(d) deemed by the Fund to be unduly burdensome. Any
such qualification may be withheld, terminated or withdrawn by the Fund at any time in its discretion. The expense of qualification and
maintenance of qualification shall be borne by the Fund. The Distributor shall furnish such information and other material relating to
its affairs and activities as may be required by the Fund in connection with such qualification.
(e)
The
Fund will furnish, in reasonable quantities upon request by the Distributor, copies of its annual and semi-annual reports.
(f)
The
Fund will furnish the Distributor with such other documents as it may reasonably require, from time to time, for the purpose of enabling
it to perform its duties as contemplated by this Agreement.
Section 4.
Duties of the Distributor.
(a)
The
Distributor shall devote reasonable time and effort to its duties hereunder. The services of the Distributor to the Fund hereunder are
not to be deemed exclusive and nothing herein contained shall prevent the Distributor from entering into like arrangements with other
investment companies so long as the performance of its obligations with respect to the Fund hereunder is not impaired thereby.
(b)
In
performing its duties hereunder, the Distributor shall comply with the requirements of all applicable laws relating to the sale of securities
in all material respects. Neither the Distributor nor any sub-placement agent having an agreement to offer and sell Shares pursuant to
Section 5 hereof nor any other person is authorized by the Fund to give any information or to make any representations, other than those
contained in its Registration Statement, Prospectus and any sales literature specifically approved for such use by the Fund.
(c)
The
Distributor shall review and file with FINRA as applicable, all sales literature (advertisements, brochures and shareholder communications)
prepared in connection with the ATM offerings for the Fund.
(d)
The
Distributor agrees to supply the following additional services, as requested by the Fund, together with such other services as set forth
throughout this Agreement:
| 1. | handling inquiries from sub-placement agents regarding the Fund; |
| 2. | assisting in the enhancement of communications between sub-placement agents and the Fund; |
| 3. | communicating the Minimum Price or Minimum Sales Price to any sub-placement agents and instructing any
sub-placement agents not to sell Shares if such sales cannot be effected at or above the Minimum Price or the Minimum Sales Price; |
| 4. | communicating the maximum amount of Shares to be sold on any Offering Date to any sub-placement agents; |
| 5. | notifying any sub-placement agents of any suspension or termination of the ATM offering of Shares, together
with any corresponding resumption of the ATM offering of Shares; |
| 6. | coordinating delivery of any Shares sold through sub-placement agents to such sub-placement agents on
the Settlement Date against payment of the gross sales proceeds for the sale of such Shares, less any applicable sub-placement agent selling
commission; |
| 7. | delivering the Fund’s Prospectus to any sub-placement agents; |
| 8. | identifying potential sub-placement agents; |
| 9. | monitoring the performance of sub-placement agents; |
| 10. | providing any necessary reconciliation, accounting and recordkeeping services in respect of the ATM offerings
of Shares, including with respect to the underwriting compensation paid by the Fund to the Distributor in respect thereof; and |
| 11. | providing such other information, assistance and services as may be reasonably requested by the Fund. |
For the avoidance of doubt, the Distributor shall
not sell any shares of the Fund directly to any investors.
(e)
The
Distributor shall report to the Board (or provide such information to Fund management for reporting to the Board) at least quarterly,
or more frequently, as requested by the Board, regarding: (i) the nature of the services provided by the Distributor hereunder; (ii) the
amount of compensation sub-placement agents, if any, are entitled to retain or be paid by the Distributor; and (iii) the aggregate amount
of underwriting compensation paid by the Fund to the Distributor in respect of the ATM offerings of Shares.
(f)
The
Distributor represents and warrants to the Fund that it has all necessary licenses to perform the services contemplated hereunder and
will perform such services in compliance with all applicable rules and regulations.
Section 5.
Agreements with Sub-placement Agents.
(a)
The
Distributor may enter into sub-placement agent agreements or selected dealer agreements, on such terms and conditions as the Distributor
determines are not inconsistent with this Agreement, with sub-placement agents to act as the Distributor’s agents to effect the sale of
the Shares in the ATM offerings. Such sub-placement agents shall sell Shares only at market prices subject to the Minimum Price and the
Minimum Sales Price. This Agreement shall not be construed as authorizing any dealer or other person to accept orders for sale on the
Fund’s behalf or to otherwise act as the Fund’s agent for any purpose. The Distributor shall not be responsible for the acts of other
dealers or agents except as and to the extent that they shall be acting for the Distributor or under the Distributor’s direction or authority.
(b)
The
Distributor shall offer and sell Shares only through such sub-placement agents who are acting as brokers or dealers who are registered
as broker-dealers under the provisions of the Exchange Act and members in good standing of FINRA and who agree to abide by the rules of
FINRA.
(c)
The
Distributor shall obtain assurance, reasonably satisfactory to the Fund, from any sub-placement agents which it engages of the compliance
by such sub-placement agents with the terms of this Agreement, applicable federal and state securities laws and the rules of FINRA.
Section 6.
Sales Commission; Compensation.
(a)
The
Fund shall pay the Distributor an amount equal to 1.00% of the gross sales price per Share of the Shares sold.
(b)
The
Distributor shall pay to the sub-placement agents the sub-placement agent commissions agreed to between the Distributor and such sub-placement
agents, or may authorize such sub-placement agents to retain such sub-placement agent commissions from the gross sales proceeds from the
sale of such Shares, which shall be payable from the commissions payable to the Distributor under Section 6(a) hereof.
(c)
The
Fund hereby represents and warrants to the Distributor that (i) the terms of this Agreement, (ii) the fees and expenses associated with
this Agreement, and (iii) any benefits accruing to the Distributor or to the Fund’s investment adviser or sponsor or another affiliate
of the Fund in connection with this Agreement, which the Fund has agreed to pay, including but not limited to any fee waivers, conversion
cost reimbursements, up-front payments, signing payments or periodic payments relating to this Agreement have been fully disclosed to
the Board and that, if required by applicable law, the Board has approved or will approve the terms of this Agreement, any such fees and
expenses, and any such benefits.
Section 7.
Payment of Expenses.
(a)
The
Fund shall bear all of its own costs and expenses, including fees and disbursements of its counsel and auditors, in connection with the
preparation of its Prospectus, Statement of Additional Information, if any, the preparation and filing of any required registration statements
under the Securities Act and/or the Investment Company Act, and all amendments and supplements thereto, and in connection with any fees
and expenses incurred with respect to any filing requirements of FINRA and preparing and mailing annual and interim reports and proxy
materials to shareholders (including but not limited to the expense of setting in type any such Registration Statement, Prospectus, interim
reports or proxy materials).
(b)
The
Fund shall bear any cost and expenses of qualification of the Shares for sale pursuant to this Agreement.
(c)
The
Distributor shall bear all expenses incurred by it in connection with its duties and activities under this Agreement, including the compensation
of sub-placement agents for sales of the Fund’s Shares, provided that it shall pay such sub-placement agents only for so long as and to
the extent that it receives such compensation from the Fund, and fees and expenses of Distributor’s counsel (except for any FINRA filing
fees or “blue sky” fees paid on behalf of the Fund or the Distributor by such counsel).
Section 8.
Limitation of Liability; Indemnification.
(a)
The
Distributor shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement. The Distributor shall
not be liable for any damages arising out of any action or omission to act by any prior service provider of the Fund or for any failure
to discover any such error or omission (provided that this sentence shall not apply where the Distributor was the prior service provider).
Notwithstanding anything in this Agreement to the contrary, the Distributor shall not be liable for damages occurring directly or indirectly
by reason of circumstances beyond its reasonable control.
(b)
The
Fund agrees that it will indemnify, defend and hold harmless the Distributor, its several officers, and directors, and any person who
controls the Distributor within the meaning of Section 15 of the Securities Act, from and against any losses, claims, damages or liabilities,
joint or several, to which the Distributor, its several officers, and directors, and any person who controls the Distributor within the
meaning of Section 15 of the Securities Act, may become subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) (i) arise out of, or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, the Prospectuses or in any application or other document
executed by or on behalf of the Fund or are based upon information furnished by or on behalf of the Fund filed in any state in order to
qualify the Shares under the securities or blue sky laws thereof (“Blue Sky Application”) or arise out of, or are based upon,
the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein
not misleading; or (ii) arise out of, or are based upon, any breach of the representations, warranties or covenants of the Fund contained
in this Agreement; provided, however, that the Fund shall not be liable in any case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, any untrue statement, alleged untrue statement, or omission or alleged omission made in the Registration
Statement, the Prospectus or any Blue Sky Application with respect to the Fund in reliance upon and in conformity with any Agent Provided
Information, or arising out of the failure of the Distributor or any sub-placement agent to deliver a current Prospectus.
(c)
The
Distributor will indemnify and hold harmless the Fund and its several officers and trustees, and any person who controls the Fund within
the meaning of Section 15 of the Securities Act, from and against any losses, claims, damages or liabilities, joint or several, to which
any of them may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectus or any Blue Sky Application, or arise out of, or are based upon, the omission
or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading,
which statement or omission was made in reliance upon and in conformity with information furnished in writing to the Fund or any of its
several officers by or on behalf of the Distributor specifically for inclusion therein, and will reimburse the Fund and its several officers,
trustees and such controlling persons for any legal or other expenses reasonably incurred by any of them in investigating, defending or
preparing to defend any such action, proceeding or claim.
(d)
An
indemnified person under this Section 8 (the “Indemnified Party”) shall give written notice to the other party (the “Indemnifying
Party”) of any loss, damage, expense, liability or claim in respect of which the Indemnifying Party has a duty to indemnify such
Indemnified Party under Section 8(b) or (c) hereof (a “Claim”), specifying in reasonable detail the nature of the loss, damage,
expense, liability or claim for which indemnification is sought, except that any delay or failure so to notify such Indemnifying Party
shall only relieve such Indemnifying Party of its obligations hereunder to the extent, if at all, that such Indemnifying Party is actually
prejudiced by reason of such delay or failure.
(e)
If
a Claim results from any action, suit or proceeding brought or asserted against an Indemnified Party, the Indemnifying Party shall assume
the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses. The Indemnified Party shall have the right to employ separate counsel in such action, suit or proceeding and participate
in such defense thereof, but the fees and expenses of such separate counsel shall be at the expense of the Indemnified Party unless (i)
the Indemnifying Party has agreed in writing to pay such fees and expenses, (ii) the Indemnifying Party has failed within a reasonable
time to assume the defense and employ counsel or (iii) the named parties to any such action, suit or proceeding (including any impleaded
parties) include both such Indemnified Party and Indemnifying Party and such Indemnified Party shall have been advised by its counsel
that representation of such Indemnified Party and Indemnifying Party by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same counsel has been proposed) due to actual or potential differing
interests between the Indemnifying Party and the Indemnified Party (in which case the Indemnifying Party shall not have the right to assume
the defense of such action, suit or proceeding on behalf of such Indemnified Party). It is understood, however, that the Indemnifying
Party shall, in connection with any one action, suit or proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general allegations or circumstances be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties not having
actual or potential differing interests with the Indemnifying Party or among themselves, which firm shall be designated in writing by
an authorized representative of such parties and that all such fees and expenses shall be reimbursed promptly as they are incurred. The
Indemnifying Party shall not be liable for any settlement of any such action, suit or proceeding effected without its written consent,
but if settled with such written consent or if there be a final judgment for the plaintiff in any such action, suit or proceeding, the
Indemnifying Party agrees to indemnify and hold harmless any Indemnified Party from and against any loss, liability, damage or expense
by reason by such settlement or judgment.
(f)
With
respect to any Claim not within Section 8(e) hereof, the Indemnifying Party shall have twenty (20) days from receipt of notice from the
Indemnified Party of such Claim within which to respond thereto. If the Indemnifying Party does not respond within such twenty-day period,
it shall be deemed to have accepted responsibility to make payment and shall have no further right to contest the validity of such Claim.
If the Indemnifying Party notifies the Indemnified Party within such twenty-day period that it rejects such Claim in whole or in part,
the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party under applicable law.
(g)
If
the indemnification provided for in this Section 8 is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless in respect of any losses, damages, expenses, liabilities or claims referred to therein, then each applicable Indemnifying Party
shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, damages, expenses, liabilities or
claims in such proportion as is appropriate to reflect (i) the relative benefits received by the Indemnified Party, on the one hand, and
the Indemnifying Party, on the other hand, from the offering of the Shares; or (ii) if, but only if, the allocation provided for in clause
(i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in
clause (i) but also the relative fault of the Indemnified Party, on the one hand, and of the Indemnifying Party, on the other, in connection
with any statements or omissions or other matters which resulted in such losses, damages, expenses, liabilities or claims, as well as
any other relevant equitable considerations. The relative fault of the parties hereto shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information
supplied by such party, on one hand, or by the other party, on the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party hereto as a result
of the losses, damages, expenses, liabilities and claims referred to in this subsection shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with investigating, preparing to defend or defending any proceeding.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section
8(g). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation.
(h)
Notwithstanding
any other provisions in this Section 8, no party shall be entitled to indemnification or contribution under this Agreement against any
loss, claim, liability, expense or damage arising by reason of such person’s willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder or by reason of such person’s reckless disregard of such person’s obligations and duties thereunder.
(i)
The
indemnity and contribution agreements contained in this Section 8 and the covenants, warranties and representations of the parties contained
in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Fund, its, trustees
or officers or any person (including each officer or trustee of such person) who controls the Fund within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, or by or on behalf of the Distributor, its directors or officers or any person who
controls the Distributor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares.
(j)
IN
NO EVENT WILL ANY PARTY TO THIS AGREEMENT BE LIABLE TO ANY OTHER PERSON OR ANY THIRD PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL
OR INDIRECT DAMAGES (INCLUDING BUT NOT LIMITED TO LOST PROFITS), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES.
Section 9.
Duration and Termination of this
Agreement.
(a)
This
Agreement may be terminated at any time, without the payment of any penalty, by the Fund or by the Distributor, on sixty days’ written
notice to the other party.
(b)
Unless
earlier terminated pursuant to Section 9(a) hereof, this Agreement shall automatically terminate upon the issuance and sale of all of
the Shares through the Distributor or any sub-placement agents on the terms and subject to the conditions set forth herein.
(c)
This
Agreement shall remain in full force and effect unless terminated pursuant to Sections 9(a) or 9(b) hereof.
(d)
Any
termination of this Agreement shall be effective on the date specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such notice by the other party. If such termination shall occur
prior to the Settlement Date for any sale of Shares, such Shares shall settle in accordance with the provisions of this Agreement.
Section 10.
Amendments of this Agreement.
This Agreement may be amended by the parties only
pursuant to a written instrument executed by the Fund and the Distributor.
Section 11.
Governing Law.
This Agreement and any claim, counterclaim or dispute
of any kind or nature whatsoever arising out of or in any way relating to this Agreement, directly or indirectly, shall be governed by,
and construed in accordance with, the internal laws of the State of New York. To the extent that the applicable law of the State of New
York, or any of the provisions herein, conflict with the applicable provisions of the Investment Company Act, the latter shall control.
Section 12.
Waiver of Jury Trial.
EACH OF THE FUND (ON ITS BEHALF AND, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS AFFILIATES) AND THE DISTRIBUTOR (ON ITS BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ON BEHALF OF ITS MEMBERS AND AFFILIATES) WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATING TO THIS AGREEMENT.
Section 13.
Miscellaneous.
(a)
The
captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
(b)
This
Agreement constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written
and oral, among the parties hereto with regard to the subject matter hereof. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
(c)
This
Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns
and the officers, and directors, trustees, and controlling persons referred to in Section 8 hereof. Neither party may assign its rights
or obligations under this Agreement without the prior written consent of the other party.
(d)
The
parties acknowledge and agree that all share related numbers contained in this Agreement shall be adjusted to take into account any stock
split, stock dividend or similar event effected with respect to the Shares.
(e)
The
terms “affiliated person” and “interested person,” when used in this Agreement, shall have the respective meanings
specified in the Investment Company Act.
Section 14.
Proprietary and Confidential Information.
(a)
The
Distributor agrees on behalf of itself and its employees to treat confidentially and as proprietary information of the Fund all records
and other information relative to the Fund and prior, present or potential shareholders, and not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder, except after prior notification to and approval in writing
by the Fund, which approval shall not be unreasonably withheld and shall not be required where the Distributor may be exposed to civil
or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or
when so requested by the Fund. The provisions of this Section 14 shall survive termination of this Agreement.
(b)
Notwithstanding
anything in this Agreement to the contrary, each party hereto agrees that: (i) any Nonpublic Personal Information, as defined under Section
248.3(t) of Regulation S-P (“Regulation S-P”), promulgated under the Gramm-Leach-Bliley Act (the “Act”), disclosed
by a party hereunder is for the specific purpose of permitting the other party to perform the services set forth in this Agreement, and
(ii) with respect to such information, each party will comply with Regulation S-P and the Act and will not disclose any Nonpublic Personal
Information received in connection with this Agreement to any other party, except to the extent as necessary to carry out the services
set forth in this Agreement or as otherwise permitted by Regulation S-P or the Act.
Section 15.
Notices. All communications hereunder
will be in writing and effective only on receipt, and will be mailed, delivered or emailed and confirmed to:
If to the Distributor:
Paralel Distributors LLC
1700 Broadway, Suite 1850
Denver, Colorado 80290
Attention: General Counsel
Email: legalnotice@paralel.com
For all operational notices or communications:
Email: brad@paralel.com
If to the Fund:
XAI Octagon Floating Rate & Alternative Income Trust
c/o XA Investments, LLC
Chicago, Illinois 60654
Attention: Benjamin D. McCulloch
Email: bmcculloch@XAInvestments.com
[The remainder of this page is intentionally left
blank]
IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the day and year first above written. This Agreement may be executed by the parties hereto in
any number of counterparts, all of which shall constitute one and the same instrument.
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XAI OCTAGON FLOATING RATE & ALTERNATIVE INCOME TRUST |
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By: |
/s/ Benjamin D. McCulloch |
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Name: |
Benjamin D. McCulloch |
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Title |
Chief Legal Officer and Secretary |
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PARALEL DISTRIBUTORS LLC |
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By: |
/s/ Bradley Swenson |
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Name: |
Bradley Swenson |
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Title: |
President |
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SUB-PLACEMENT AGENT AGREEMENT
Paralel Distributors LLC
1700 Broadway, Suite 1850
Denver, Colorado 80290
June 4, 2024
UBS Securities LLC
1285 Avenue of the Americas
New York, New York 10019
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RE: |
At-the-Market Offerings by XAI Octagon Floating Rate & Alternative Income Trust |
Ladies and Gentlemen:
From time-to-time Paralel Distributors
LLC (the “Distributor”, “we” or “us”) will act as manager of registered at-the-market
offerings by XAI Octagon Floating Rate & Alternative Income Trust, a Delaware statutory trust (the “Fund”), of up
to 15,000,000 shares (the “Shares”) of beneficial interest, par value $0.01 per share, of the Fund (the “Common
Shares”). In the case of such offerings, the Fund has agreed with the Distributor to issue and sell through the Distributor,
as sales agent, the Shares (the “Distribution Agreement”).
We hereby agree to retain UBS
Securities LLC (the “Agent” or “you”) as a sub-placement agent with respect to the offerings of the
Shares to be issued and sold by the Fund (the “Offerings”) as the Fund and the Distributor may indicate from time to
time, and you agree to act in such capacity, all upon, and subject to, the terms and conditions set forth below:
SECTION 1. Description of Offerings.
(a) The Shares are to be
sold on a daily basis or otherwise as shall be determined by the Fund together with the Distributor or the Agent on any day (each, an
“Offering Date”) that is a trading day for the exchange on which the Fund’s Shares are listed and primarily trade (the
“Stock Exchange”) (other than a day on which the Stock Exchange is scheduled to close prior to its regular weekday closing
time). Promptly after the Fund together with the Distributor or the Agent have determined the maximum amount of the Shares to be distributed
by the Distributor for any Offering Date, which shall not in any event exceed the amount available for issuance under the currently effective
Registration Statement (as defined herein) (the “Maximum Daily Amount”), and the minimum price per Share below which
the Shares may not be sold by the Agent on any Offering Date (the “Minimum Daily Price”), the Distributor shall, as instructed
by the Fund, advise the Agent of the Maximum Daily Amount and the Minimum Daily Price. Subject to the terms and conditions hereof, the
Agent shall use its reasonable best efforts to sell all of the Shares designated in accordance with the plan of distribution set forth
in the Prospectus Supplement (as defined herein); provided, however, that in no event shall the Agent sell Shares in excess of the Maximum
Daily Amount or for a price per Share below the Minimum Daily Price. The gross sales price of the Shares sold under this Section 1(a)
shall be the market price at which the Agent sells such Shares.
(b) Notwithstanding the foregoing,
the Distributor or the Fund may instruct the Agent by telephone (confirmed promptly by e-mail or other electronic means) of a revised
Minimum Daily Price and/or a revised Maximum Daily Amount and the Agent shall not sell Shares for a price per Share below such revised
Minimum Daily Price, or in a quantity in excess of such revised Maximum Daily Amount, after the giving of such notice. In addition, the
Distributor or the Fund may, upon notice to the Agent by telephone (confirmed promptly by e-mail or other electronic means), suspend the
offering of the Shares at any time; provided, however, that such suspension or termination shall not affect or impair the parties’ respective
obligations with respect to the Shares sold hereunder prior to the giving of such notice.
(c) The Agent agrees not
to make any sales of the Shares pursuant to this Section 1, other than through transactions for which compliance with Rule 153 under the
Securities Act of 1933, as amended (the “Securities Act”), will satisfy the prospectus delivery requirements of Section
5(b)(2) of the Securities Act.
(d) The compensation to the
Agent, as a sub-placement agent for each sale of the Shares pursuant to this Section 1, shall be the Applicable Selling Agent Commission
(as set forth on the Addendum hereto) with respect to the Shares sold, multiplied by the Gross Sales Proceeds (the “Agent Compensation”),
as further described in the Addendum to this Sub-Placement Agent Agreement (the “Agreement”). The Agent shall not be
responsible for any fees imposed by any governmental or self-regulatory organization on the Fund or the Distributor in respect of such
sales. The Distributor may pay the Agent Compensation to the Agent, or may authorize the Agent to retain the Agent Compensation from the
Gross Sales Proceeds. The Agent Compensation shall be payable solely out of the compensation the Distributor receives from the Fund pursuant
to the Distribution Agreement (the “Related Compensation”). Notwithstanding anything to the contrary in any other provision
of this Agreement (or, for the avoidance of doubt, in the Addendum hereto), the Distributor shall have no obligation to pay any portion
of the Agent Compensation to the Agent, or authorize the retention by the Agent of any portion of the Agent Compensation from the Gross
Sales Proceeds, until the Distributor receives at least an equivalent amount of Related Compensation, and the Distributor’s obligation
to the Agent for the Agent Compensation is limited solely to amounts payable out of the Related Compensation.
(e) The Agent shall provide
written confirmation to the Distributor following the close of trading on the Stock Exchange on each Offering Date setting forth for each
sale the number of Shares sold, the time of sale, the Gross Sales Price per Share, and the compensation that the Agent is owed with respect
to such sales.
(f) Settlement for sales
of the Shares pursuant to this Section 1 will occur on the business day following the date on which such sales are made (each such
day, a “Settlement Date”). On each Settlement Date, the Shares sold through the Agent for settlement on such date shall
be delivered by the Fund at the request of the Distributor to the Agent against payment of (i) the Gross Sales Proceeds for the sale of
such Shares or (ii) to the extent authorized by the Distributor, the Gross Sales Proceeds, less the Related Compensation. If the Agent
is authorized by the Distributor to retain the Agent Compensation from the Gross Sales Proceeds for the sale of the Shares, then the Agent
shall (i) pay to the Distributor an amount equal to the Related Compensation minus the Agent Compensation in same day funds delivered
to the account(s) designated by the Distributor and (ii) remit to the Fund the Gross Sales Proceeds, less the Related Compensation. If
the Distributor shall default on its obligation to deliver the Shares on any Settlement Date, subject to the terms of Section 5 herein,
the Distributor shall (A) hold the Agent harmless against any reasonable loss, claim or damage arising from or as a result of such default
by the Distributor and (B) pay the Agent any commission to which it would otherwise be entitled absent such default. If the Agent breaches
this Agreement by failing to deliver proceeds on any Settlement Date for the Shares delivered by the Distributor, subject to the terms
of Section 5 herein, the Agent shall (A) hold the Distributor harmless against any reasonable loss, claim or damage arising from or as
a result of such default by the Agent, (B) deliver such proceeds to the Distributor as soon as practicable and (C) pay the Distributor
interest based on the effective overnight Federal Funds rate.
(g) In connection with this
Agreement and the Offerings, the Distributor shall, no more than once per calendar quarter in which the Fund and the Distributor have
requested, or anticipate requesting, that the Agent sell Shares pursuant to an Offering, provide to the Agent such certificates and other
documents, in any case, as the Agent may reasonably request upon reasonable notice (but in no event upon notice of less than five business
days) relating to authorization, capacity, enforceability and compliance matters. Any such certifications shall be made as of the end
of the calendar quarter immediately preceding the calendar quarter in which such request by the Agent is made.
(h) In connection with this
Agreement and the Offerings, the Agent will promptly notify the Distributor of any material non-confidential claim or complaint, any material
enforcement action or other material proceeding by a regulatory authority with respect to the Fund, the Shares or the Offerings against
or directed at or to the Agent or its principals, affiliates, officers, directors, employees or agents, or any person who controls the
Agent, within the meaning of Section 15 of the Securities Act.
(i) In connection with this
Agreement and the Offerings, the Agent will promptly notify the Distributor of any examination by any regulatory agency or self-regulatory
organization that has resulted in a material compliance deficiency in connection with the Offerings.
SECTION 2. Representations
and Warranties by the Distributor. The Distributor represents, warrants to and agrees with the Agent, as of the date hereof and as
of each Offering Date and Settlement Date, that:
(a) Based upon the representations
made by the Fund to the Distributor in the Distribution Agreement, a registration statement on Form N-2 (File No. 333-261521 and 811-23247)
(the “Registration Statement”) (i) has been prepared by the Fund in conformity with the requirements of the Securities Act
and the rules and regulations thereunder and the Investment Company Act of 1940, as amended, and the rules and regulations thereunder
(collectively, the “1940 Act”) in all material respects; (ii) has been filed with the U.S. Securities and Exchange Commission
(the “Commission”) under the Securities Act and the 1940 Act; and (iii) heretofore became, and is, effective; the Registration
Statement sets forth the terms of the offering, sale and plan of distribution of the Shares and contains additional information concerning
the Fund and its business; no stop order of the Commission preventing or suspending the use of the Basic Prospectus (as defined herein),
the Prospectus Supplement (as defined herein) or the Prospectus (as defined herein), or the effectiveness of the Registration Statement,
has been issued, and no proceedings for such purpose have been instituted or, to the Fund’s knowledge, have been threatened by the
Commission. Except where the context otherwise requires, “Registration Statement,” as used herein, means, collectively, the
various parts of the registration statement, as amended at the time of effectiveness for purposes of Section 11 of the Securities Act
(the “Effective Time”), as such section applies to the Distributor, including (1) all documents filed as a part thereof or
incorporated or deemed to be incorporated by reference therein, and (2) any information contained or incorporated by reference in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Securities Act, to the extent such information is deemed to be part of the
registration statement at the Effective Time. “Basic Prospectus,” as used herein, means the final prospectus filed as part
of the Registration Statement, including the related statement of additional information, together with any amendments or supplements
thereto as of the date of the Agreement. Except where the context otherwise requires, “Prospectus Supplement,” as used herein,
means the final prospectus supplement, including the related statement of additional information, relating to the Shares, filed by the
Fund with the Commission pursuant to Rule 424(b) under the Securities Act, in the form furnished by the Fund to the Distributor in connection
with the offering of the Shares. Except where the context otherwise requires, “Prospectus,” as used herein, means the Prospectus
Supplement together with the Basic Prospectus attached to or used with the Prospectus Supplement. Any reference herein to the Registration
Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to refer to and include the documents, if
any, incorporated by reference, or deemed to be incorporated by reference, therein.
(b) Based upon the representations
made by the Fund to the Distributor in the Distribution Agreement, (i) the Fund is duly registered under the 1940 Act as a closed-end
management investment company; (ii) a notification of registration of the Fund as an investment company under the 1940 Act on Form N-8A
(the “1940 Act Notification”) has been prepared by the Fund in conformity with the 1940 Act and has been filed with the
Commission and, at the time of filing thereof and at the time of filing any amendment or supplement thereto, conformed in all material
respects with all applicable provisions of the 1940 Act; (iii) the Fund has not received any notice in writing from the Commission pursuant
to Section 8(e) of the 1940 Act with respect to the 1940 Act Notification or the Registration Statement (or any amendment or supplement
to either of them); and (iv) no person is serving or acting as an officer, trustee or investment adviser of the Fund except in accordance
with the provisions of the 1940 Act, provided that for purposes of the foregoing representation with respect to officers and trustees
of the Fund, the Fund shall be entitled to rely on representations from such officers and trustees.
(c) Based upon the representations
made by the Fund to the Distributor in the Distribution Agreement, the Registration Statement, the 1940 Act Notification and the Prospectus,
as from time to time amended or supplemented, each complied when it became effective or was filed (as the case may be), complies as of
the date hereof and, as amended or supplemented, will comply, at each time of purchase of Shares in connection with each Offering, and
at all times during which a prospectus is required by the Securities Act to be delivered in connection with any sale of Shares, in all
material respects, with the requirements of the Securities Act and the 1940 Act; the Registration Statement did not, as of the Effective
Time, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; at no time during the period that begins on the earlier of the date of the Basic Prospectus and
the date the Basic Prospectus was filed with the Commission and ends at the later of each time of purchase of Shares in connection with
each Offering, and the end of the period during which a prospectus is required by the Securities Act to be delivered in connection with
any sale of Shares, did or will the Prospectus, as from time to time amended or supplemented, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Distributor does not make any representation or warranty with respect to any
statement contained in the Registration Statement, the Basic Prospectus or the Prospectus in reliance upon and in conformity with information
furnished in writing by the Agent or on the Agent’s behalf to the Distributor or the Fund expressly for use in the Registration Statement
or the Prospectus (the “Agent Provided Information”). The Agent confirms that (i) the Agent’s name on the front cover
and under the headings “Prospectus Supplement Summary” and “Plan of Distribution” in the Prospectus Supplement and
(ii) the relevant paragraphs under the heading “Plan of Distribution” in the Prospectus Supplement was the only information
furnished in writing to the Distributor or the Fund by or on behalf of the Agent expressly for use in the Registration Statement or Prospectus.
(d) Based upon the representations
made by the Fund to the Distributor in the Distribution Agreement, the financial statements incorporated by reference in the Registration
Statement or the Prospectus, together with the related notes and schedules, present fairly in all materials respects the financial position
of the Fund as of the dates indicated and the results of operations, cash flows and changes in shareholders’ equity of the Fund for the
periods specified and have been prepared in compliance in all material respects with the requirements of the Securities Act, the 1940
Act and the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange
Act”), and in conformity in all material respects with U.S. generally accepted accounting principles applied on a consistent
basis during the periods involved; the other financial and statistical data contained or incorporated by reference in the Registration
Statement or the Prospectus are accurately and fairly presented, in all material respects, and prepared on a basis consistent with the
financial statements and books and records of the Fund in all material respects; there are no financial statements that are required to
be included or incorporated by reference in the Registration Statement, the Basic Prospectus or the Prospectus by the Securities Act,
the 1940 Act or the Exchange Act that are not included or incorporated by reference as required; and the Fund does not have any material
liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Registration Statement
(excluding the exhibits thereto).
(e) Based upon the representations
made by the Fund to the Distributor in the Distribution Agreement, as of the date of this Agreement, the Fund has an authorized and outstanding
capitalization as set forth in the Registration Statement, the Basic Prospectus and the Prospectus and, with respect to any issuance and
sale under this Agreement, the Fund shall have as of the date of the most recent amendment or supplement to the Registration Statement
or Prospectus, an authorized and outstanding capitalization as set forth in the Registration Statement and the Prospectus; all of the
issued and outstanding shares of beneficial interest of the Fund have been duly authorized and validly issued and are fully paid and non-assessable,
have been issued in material compliance with all applicable securities laws and were not issued in violation of any preemptive right,
resale right, right of first refusal or similar right
(f) Based upon the representations
made by the Fund to the Distributor in the Distribution Agreement, (i) the Fund has been duly formed, has legal existence as a statutory
trust and is in good standing under the laws of Delaware, with full power and authority to own, lease and operate and conduct its business
as described in the Registration Statement, the Basic Prospectus and the Prospectus and to issue, sell and deliver the Shares as contemplated
herein; and (ii) the Fund is duly qualified to do business as a foreign entity and is in good standing in each jurisdiction where the
conduct of its business requires such qualification, except where the failure to be so qualified and in good standing would not, individually
or in the aggregate, have a material adverse effect on the business, properties, financial condition or results of operations of the Fund.
(g) Based upon the representations
made by the Fund to the Distributor in the Distribution Agreement, (i) the Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and validly issued, fully paid and non-assessable and free of
statutory and contractual preemptive rights, resale rights, rights of first refusal and similar rights; (ii) the Shares, when issued and
delivered against payment therefor as provided herein, will be free of any restriction upon the voting or transfer thereof pursuant to
the Fund’s Amended and Restated Agreement and Declaration of Trust or Bylaws or any agreement or other instrument to which the Fund is
a party; (iii) the Common Shares, including the Shares, conform in all material respects to the description thereof, if any, contained
or incorporated by reference in the Registration Statement, the Basic Prospectus or the Prospectus; (iv) the certificates for the Shares,
if any, are in due and proper form; (v) the Fund is in material compliance with the rules of the Stock Exchange, including, without limitation,
the requirements for continued listing of the Common Shares on the Stock Exchange and the Fund has not received any written notice from
the Stock Exchange regarding the delisting of the Common Shares from the Stock Exchange; and (vi) the Shares will be duly listed, and
admitted and authorized for trading, subject to official notice of issuance, on the Stock Exchange.
(h) The Distributor has full
corporate power and authority to enter into this Agreement and the transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Distributor. Assuming due authorization, execution and delivery of this Agreement by the Agent, this Agreement
constitutes a valid and binding agreement of the Distributor and is enforceable against the Distributor in accordance with its terms,
except as the enforceability hereof and thereof may be limited by applicable bankruptcy, insolvency, reorganization and similar laws affecting
creditors’ rights generally and moratorium laws in effect from time to time and by equitable principles restricting the availability of
equitable remedies.
(i) Based upon the representations
made by the Fund to the Distributor in the Distribution Agreement, no approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, or of or with any self-regulatory
organization or other non-governmental regulatory authority (including, without limitation, the Stock Exchange), or approval of the shareholders
of the Fund that has not already been obtained, is required in connection with the issuance and sale of the Shares or the consummation
by the Fund of the transactions contemplated hereby, other than (i) the registration of the Shares under the Securities Act, which has
been effected, (ii) the listing of the Shares with the Stock Exchange, upon official notice of issuance, (iii) any necessary qualification
under the securities or blue sky laws of the various jurisdictions in which the Shares are being offered through the Agent or (iv) any
necessary qualification pursuant to the rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
SECTION 3. Representations
and Warranties by the Agent. The Agent represents, warrants to and agrees with the Distributor, as of the date hereof and as of each
Offering Date and Settlement Date, that:
(a) The Agent has full corporate
power and authority to enter into this Agreement and the transactions contemplated hereby. This Agreement has been duly authorized, executed
and delivered by the Agent. Assuming due authorization, execution and delivery by the Distributor, this Agreement constitutes a valid
and binding agreement of the Agent and is enforceable against the Agent in accordance with its terms, except as the enforceability hereof
and thereof may be limited by applicable bankruptcy, insolvency, reorganization and similar laws affecting creditors’ rights generally
and moratorium laws in effect from time to time and by equitable principles restricting the availability of equitable remedies.
(b) The Agent Provided Information
is or will be complete and accurate in all material respects and does not or will not, as from time to time amended or supplemented, include
an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
(c) The Agent has adopted
and implemented written policies and procedures reasonably designed to prevent violation of federal and state securities laws, including
policies and procedures that provide oversight of compliance by each registered representative of the Agent.
SECTION 4. Additional Covenants.
(a) The Agent hereby confirms
that it is actually engaged in the investment banking and securities business and is a member in good standing with FINRA and hereby agrees
that it will undertake to comply with all applicable FINRA rules (as amended from time to time, including without limitation, any successor
provision) in connection with acting as sub-placement agent for the sale of the Shares. The Agent further agrees that in acting as sub-placement
agent for the sale of the Shares, it will comply with all applicable laws, rules and regulations, including the applicable provisions
of the Securities Act and the Exchange Act, the applicable rules and regulations of the Commission thereunder, and the applicable rules
and regulations of any state or any securities exchange or self-regulatory organization having jurisdiction over the relevant Offering.
(b) The Agent hereby agrees
that in acting as sub-placement agent for the sale of the Shares, it will not use, authorize use of, refer to, or participate in the planning
for use of any written communication (as defined in Rule 405 under the Securities Act) concerning any Offering, other than the Prospectus.
The Agent further agrees that in acting as sub-placement agent for the sale of the Shares, it is not authorized by the Distributor or
the Fund or any other seller of the Shares offered pursuant to the Prospectus to give any information or to make any representation not
contained in the Prospectus in connection with the sale of such Shares.
(c) The Distributor shall
not be under any obligation to the Agent except for obligations assumed hereunder or in writing by the Distributor in connection with
any Offering. Nothing contained herein or in any communication in writing from us shall constitute the Distributor and the Agent an association
or partners with one another. If such parties should be deemed to constitute a partnership for Federal income tax purposes, then the Agent
elects to be excluded from the application of Subchapter K, Chapter 1, Subtitle A of the Internal Revenue Code of 1986 and agrees not
to take any position inconsistent with that election. The Agent authorizes the Distributor, in its discretion, to execute and file on
its behalf such evidence of that election as may be required by the Internal Revenue Service. In connection with any Offering, each party
shall be liable for its proportionate amount of any tax, claim, demand or liability that may be asserted against it alone, based upon
the claim that either of them constitutes an association, an unincorporated business or other entity, including, in each case, its proportionate
amount of any expense incurred in defending against any such tax, claim, demand or liability.
(d) The parties acknowledge
and agree that all share related numbers contained in this Agreement shall be adjusted to take into account any stock split effected with
respect to the Shares.
(e) The Agent shall at all
times comply with the offering requirements as set forth herein and under the heading “Plan of Distribution” in the Prospectus.
SECTION 5. Indemnification
and Contribution.
(a) The Distributor agrees
to indemnify, defend and hold harmless the Agent, its partners, directors and officers, and any person who controls the Agent within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing
persons, from and against any reasonable loss, damage, expense, liability or claim (including the reasonable cost of investigation) which
the Agent or any such person may incur under the Securities Act, the 1940 Act, the Exchange Act, the common law or otherwise, insofar
as such loss, damage, expense, liability or claim (or any actions or proceedings in respect thereof) arises out of or is based upon (i)
any material breach of any representation, warranty, covenant or agreement of the Distributor contained in this Agreement, (ii) any material
violation by the Distributor of any law, rule or regulation (including any rule of any self-regulatory organization) applicable to the
Offerings, or (iii) any untrue statement or alleged untrue statement of a material fact appearing in the Registration Statement or Prospectus
or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading, except to the extent such statements were included in the Registration
Statement or Prospectus in reliance upon and in conformity with the Agent Provided Information.
(b) The Agent agrees to indemnify,
defend and hold harmless the Distributor, the Fund, their partners, trustees, directors and officers, and any person who controls the
Distributor or the Fund within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons, from and against any loss, damage, expense, liability or claim (including the reasonable cost
of investigation) which the Distributor, the Fund or any such other person may incur under the Securities Act, the 1940 Act, the Exchange
Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim (or any actions or proceedings in respect
thereof) arises out of or is based upon (i) any material breach of any representation, warranty, covenant or agreement of the Agent contained
in this Agreement or (ii) any material violation by the Agent of any law, rule or regulation (including any rule of any self-regulatory
organization), or (iii) any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement
or the Prospectus in reliance upon and in conformity with the Agent Provided Information.
(c) An indemnified person
under Section 5 of this Agreement (the “Indemnified Party”) shall give written notice to the other party (the “Indemnifying
Party”) of any loss, damage, expense, liability or claim in respect of which the Indemnifying Party has a duty to indemnify such
Indemnified Party under Section 5(a) or (b) of this Agreement (a “Claim”), specifying in reasonable detail the nature
of the loss, damage, expense, liability or claim for which indemnification is sought, except that any delay or failure so to notify such
Indemnifying Party shall only relieve such Indemnifying Party of its obligations hereunder to the extent, if at all, that such Indemnifying
Party is actually prejudiced by reason of such delay or failure.
(d) If a Claim results from
any action, suit or proceeding brought or asserted against an Indemnified Party, the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses. The Indemnified
Party shall have the right to employ separate counsel in such action, suit or proceeding and participate in such defense thereof, but
the fees and expenses of such separate counsel shall be at the expense of the Indemnified Party unless (i) the Indemnifying Party has
agreed in writing to pay such fees and expenses, (ii) the Indemnifying Party has failed within a reasonable time to assume the defense
and employ counsel or (iii) the named parties to any such action, suit or proceeding (including any impleaded parties) include both such
Indemnified Party and Indemnifying Party and such Indemnified Party shall have been advised by its counsel that representation of such
Indemnified Party and Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been proposed) due to actual or potential differing interests between the
Indemnifying Party and the Indemnified Party (in which case the Indemnifying Party shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Indemnified Party). It is understood, however, that the Indemnifying Party shall, in connection
with any one action, suit or proceeding or separate but substantially similar or related actions, suits or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances be liable for the reasonable fees and expenses of only one separate firm
of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties not having actual or potential differing
interests with the Indemnifying Party or among themselves, which firm shall be designated in writing by an authorized representative of
such parties and that all such fees and expenses shall be reimbursed promptly as they are incurred. The Indemnifying Party shall not be
liable for any settlement of any such action, suit or proceeding effected without its written consent, but if settled with such written
consent or if there be a final judgment for the plaintiff in any such action, suit or proceeding, the Indemnifying Party agrees to indemnify
and hold harmless any Indemnified Party from and against any loss, liability, damage or expense by reason by such settlement or judgment.
(e) With respect to any Claim
not within Paragraph (d) of Section 5 hereof, the Indemnifying Party shall have 20 days from receipt of notice from the Indemnified Party
of such Claim within which to respond thereto. If the Indemnifying Party does not respond within such twenty-day period, it shall be deemed
to have accepted responsibility to make payment and shall have no further right to contest the validity of such Claim. If the Indemnifying
Party notifies the Indemnified Party within such twenty-day period that it rejects such Claim in whole or in part, the Indemnified Party
shall be free to pursue such remedies as may be available to the Indemnified Party under applicable law.
(f) If the indemnification
provided for in this Section 5 is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless in respect
of any losses, damages, expenses, liabilities or claims referred to therein, then each applicable Indemnifying Party shall contribute
to the amount paid or payable by such Indemnified Party as a result of such losses, damages, expenses, liabilities or claims in such proportion
as is appropriate to reflect (i) the relative benefits received by the Indemnified Party, on the one hand, and the Indemnifying Party,
on the other hand, from the offering of the Shares; or (ii) if, but only if, the allocation provided for in clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the
relative fault of the Indemnified Party, on the one hand, and of the Indemnifying Party, on the other, in connection with any statements
or omissions or other matters which resulted in such losses, damages, expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Distributor, on the one hand, and the Agent, on the other, shall be deemed to be
in the same respective proportions as the total compensation received by the Distributor from sales of the Shares bears to the total compensation
received by the Agent from sales of the Shares. The relative fault of the parties hereto shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information
supplied by such party, on one hand, or by the other party, on the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party hereto as a result
of the losses, damages, expenses, liabilities and claims referred to in this subsection shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with investigating, preparing to defend or defending any proceeding.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this subsection
(f). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the foregoing provisions of this
subsection (f), the Agent shall not be required to contribute any amount in excess of the commissions received by it under this Agreement.
(g) The indemnity and contribution
agreements contained in this Section 5 and the covenants, warranties and representations of the parties contained in this Agreement shall
remain in full force and effect regardless of any investigation made by or on behalf of the Agent, its partners, directors or officers
or any person (including each partner, officer or director of such person) who controls the Agent within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, or by or on behalf of the Distributor, its directors or officers or any person who
controls the Distributor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares.
(h) IN NO EVENT WILL ANY
PARTY TO THIS AGREEMENT BE LIABLE TO ANY OTHER PERSON OR ANY THIRD PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES
(INCLUDING BUT NOT LIMITED TO LOST PROFITS), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES.
SECTION 6. Termination.
(a) This Agreement shall
continue in full force and effect until terminated by either party, including by written instruction by the Fund to the Distributor, by
five days’ written notice to the other party; provided, that if this Agreement has become effective with respect to any Offering pursuant
to this Agreement, this Agreement may not be terminated by either party with respect to such Offering.
(b) This Agreement shall
remain in full force and effect unless terminated pursuant to Section 6(a) hereof or otherwise by mutual agreement of the parties; provided
that any such termination by mutual agreement shall in all cases be deemed to provide that Section 5 shall remain in full force and effect.
(c) Any termination of this
Agreement shall be effective on the date specified in such notice of termination; provided that in any event such termination shall not
be effective until any earlier than the close of business on the fifth day after receipt of such notice by the Distributor or the Agent,
as the case may be. If such termination shall occur prior to the Settlement Date for any sale of the Shares, such sale shall settle in
accordance with the provisions of Section 1 of this Agreement.
SECTION 7. Notices. Except
as otherwise herein provided, all statements, requests, notices and agreements under this Agreement shall be in and delivered by hand,
overnight courier, mail or email and shall be sufficient in all respects if delivered or sent to:
If to the Distributor:
Paralel Distributors LLC
1700 Broadway, Suite 1850
Denver, Colorado 80290
Attention: General Counsel
Email: legalnotice@paralel.com;
If to the Agent:
UBS Securities LLC
1285 Avenue of the Americas
New York, New York 10019
Attention: Saawan Pathange
Email: saawan.pathange@ubs.com
Each party to this Agreement may
change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.
SECTION 8. Parties in Interest.
The Agreement herein set forth has been and is made solely for the benefit of the Distributor, the Fund and the Agent and, to the extent
provided in Section 5 of this Agreement, the partners, trustees, directors, officers and controlling persons (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) referred to in such section, and their respective successors and assigns.
No other person, partnership, association or corporation (including a purchaser, as such purchaser, from the Distributor) shall acquire
have any right under or by virtue of this Agreement.
SECTION 9. No Fiduciary Relationship.
The Distributor hereby acknowledges that the Agent is acting solely as sub-placement agent in connection with the sale of the Shares and
that the Agent is acting pursuant to a contractual relationship created solely by this Agreement entered into on an arm’s length
basis, and in no event do the parties intend that the Agent act or be responsible as a fiduciary to the Distributor or the Fund, their
respective management, shareholders or creditors, or any other person in connection with any activity that the Agent may undertake or
have undertaken in furtherance of the sale of the Shares, either before or after the date hereof.
SECTION 10. Entire Agreement.
This Agreement constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written
and oral, among the parties hereto with regard to the subject matter hereof.
SECTION 11. Counterparts; Heading.
This Agreement may be signed by the parties in one or more counterparts which together shall constitute one and the same agreement among
the parties. The Section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this
Agreement.
SECTION 12. Law; Construction.
This Agreement and any claim, counterclaim or dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement
(“Dispute”), directly or indirectly, shall be governed by, and construed in accordance with, the internal laws of the
State of New York.
SECTION 13. Submission to Jurisdiction.
Except as set forth below, no Dispute may be commenced, prosecuted or continued in any court other than the courts of the State of New
York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and each party hereto consents to the jurisdiction of such courts and personal
service with respect thereto. Each party hereto hereby consents to personal jurisdiction, service and venue in any court in which any
Dispute arising out of or in any way relating to this Agreement is brought by any third party against any Indemnified Party. Each party
hereto (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) waives all right to
trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. Each party hereto agrees that a final judgment in any such action, proceeding or counterclaim brought in any
such court shall be conclusive and binding upon such party and may be enforced in any other courts of the jurisdiction of which such party
is or may be subject, by suit upon such judgment.
SECTION 14. Successors and
Assigns. This Agreement shall be binding upon the Distributor and the Agent and their successors and permitted assigns and any successor
or permitted assign of any substantial portion of the Distributor’s or the Agent’s respective businesses and/or assets.
This Agreement may not be transferred
or assigned without the consent of the non-transferring or non-assigning party; provided, however, that no such consent shall be required
to transfer or assign this Agreement to an entity controlling, controlled by or under common control with, the transferring or assigning
party.
SECTION 15. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law. If, however, any provision of this Agreement is held, under applicable law, to be invalid, illegal or unenforceable in any respect,
such provision shall be ineffective only to the extent of such invalidity, and the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be affected or impaired in any way and shall be interpreted to give effect to the intent of the
parties manifested thereby.
SECTION 16. Investigations
and Proceedings. The parties to this Agreement agree to cooperate fully in any securities regulatory investigation or proceeding or
any judicial proceeding with respect to each party’s activities under this Agreement and promptly to notify the other party of any such
investigation or proceeding.
SECTION 17. Modification, Waiver
and Amendment. No modification, alteration or amendment of this Agreement will be valid or binding unless in writing and signed by
all parties. No waiver of any term or condition of this Agreement will be construed as a waiver of any other term or condition; nor will
any waiver of any default or breach under this Agreement be construed as a waiver of any other default or breach. No waiver will be binding
unless in writing and signed by the party waiving the term, condition, default or breach. Any failure or delay by any party to enforce
any of its rights under this Agreement will not be deemed a continuing waiver or modification hereof and such party, within the time provided
by law, may commence appropriate legal proceedings to enforce any or all of such right.
[The remainder of this page is intentionally left
blank]
If the foregoing correctly sets
forth the understanding between the Distributor and the Agent, please so indicate in the space provided below for that purpose, whereupon
this Agreement and your acceptance shall constitute a binding agreement between the Distributor and the Agent. Alternatively, the execution
of this Agreement by the Distributor and the acceptance by or on behalf of the Agent may be evidenced by an exchange of telegraphic or
other written communications.
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Very truly yours, |
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PARALEL DISTRIBUTORS LLC |
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By: |
/s/ Bradley Swenson |
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Name: |
Bradley Swenson |
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Title: |
President |
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ACCEPTED as of the date |
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first above written |
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UBS SECURITIES LLC |
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(as sub-placement agent) |
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By: |
/s/ Saawan Pathange |
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Name: |
Saawan Pathange |
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Title |
Managing Director |
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By: |
/s/ YiLin Anderson |
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Name: |
YiLin Anderson |
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Title |
Executive Director |
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ADDENDUM
TO
SUB-PLACEMENT AGENT AGREEMENT
BETWEEN
PARALEL DISTRIBUTORS LLC
AND
UBS SECURITIES LLC
Compensation payable to the Agent for acting as a sub-placement agent with
respect to a specified sale of Shares pursuant to this Agreement shall be determined by multiplying the Gross Sales Proceeds by the Applicable
Selling Agent Commission as set forth below:
Applicable Selling Agent Commission |
0.80% |
Where:
“Gross Sales Proceeds”
with respect to each sale of Shares shall be the Gross Sales Price multiplied by the number of Shares sold;
“Gross Sales Price”
with respect to each sale of Shares sold pursuant to this Agreement shall be the gross sales price per share of such Shares.
|
Skadden, Arps,
Slate, Meagher & Flom llp
320 South Canal Street
Chicago, Illinois
60606-5707
TEL: (312) 407-0700
FAX: (312) 407-0411
www.skadden.com
|
FIRM/AFFILIATE
OFFICES
BOSTON
HOUSTON
LOS ANGELES
NEW YORK
PALO ALTO
WASHINGTON, D.C.
WILMINGTON
BEIJING
BRUSSELS
FRANKFURT
HONG KONG
LONDON
MUNICH
PARIS
SÃO PAULO
SEOUL
SHANGHAI
SINGAPORE
TOKYO
TORONTO |
June 4, 2024
XAI Octagon Floating Rate & Alternative Income Trust
321 North Clark Street, Suite 2430
Chicago, Illinois 60654
|
Re: |
XAI Octagon Floating Rate & Alternative Income Trust — |
|
|
|
Offering of Common Shares |
|
Ladies and Gentlemen:
We have acted as special counsel
to XAI Octagon Floating Rate & Alternative Income Trust, a statutory trust (the “Trust”) created under the Delaware Statutory
Trust Act (the “DSTA”), in connection with the issuance and sale by the Trust of up to 15,000,000 shares (the “Shares”)
of the Trust’s common shares of beneficial interest, par value $0.01 per share (the “Common Shares”), pursuant
to the Distribution Agreement, dated June 4, 2024 (the “Distribution Agreement”), between the Trust and Paralel Distributors
LLC.
This opinion is being furnished in accordance with the
requirements of sub-paragraph (l) of item 25.2 of part C of Form N-2 under the Securities Act of 1933, as amended (the “Securities
Act”), and the Investment Company Act of 1940, as amended (the “1940 Act”).
In rendering the opinions stated herein, we have examined
and relied upon the following:
(i) the notification
of registration on Form N-8A (File No. 811-23247) of the Trust filed with the Securities and Exchange Commission (the “Commission”)
under the 1940 Act on April 7, 2017;
(ii) the registration
statement on Form N-2 (File Nos. 333-261521 and 811-23247) of the Trust, filed with the Commission on December 7, 2021 under the Securities
Act and the 1940 Act, allowing for delayed offerings pursuant to Rule 415 of the General Rules and Regulations under the Securities Act
(the “Securities Act Rules and Regulations”), Pre-Effective Amendment No. 1 thereto, including information deemed to
be a part of the registration statement pursuant to Rule 430B of the Securities Act Rules and Regulations, and the Notice of Effectiveness
of the Commission posted on its website declaring such registration statement effective on January 24, 2022 (such registration statement,
as so amended, being hereinafter referred to as the “Registration Statement”);
XAI Octagon Floating Rate & Alternative Income Trust
June 4, 2024
Page 2
(iii) the prospectus
and Statement of Additional Information of the Trust, each dated January 24, 2022, in the form filed with the Commission on June 4, 2024
pursuant to Rule 424(b) of the Securities Act Rules and Regulations;
(iv) the prospectus
supplement of the Trust, dated June 4, 2024, relating to the offering of the Shares, in the form filed with the Commission on June 4,
2024 pursuant to Rule 424(b) of the Securities Act Rules and Regulations;
(v) an executed
copy of a certificate of Benjamin D. McCulloch, Secretary of the Trust, dated the date hereof (the “Secretary’s Certificate”);
(vi) a copy
of the Trust’s Certificate of Trust, dated April 4, 2017, as amended by Certificates of Amendment dated July 14, 2017, August 31,
2017 and January 25, 2024 (as so amended, the “Certificate of Trust”), certified by the Secretary of State of the State
of Delaware as of June 4, 2024 and certified pursuant to the Secretary’s Certificate;
(vii) a copy
of the Trust’s Second Amended and Restated Agreement and Declaration of Trust, by the trustees of the Trust, dated July 13, 2017,
as amended by the Certificate of Amendment to the Trust’s Second Amended and Restated Agreement and Declaration of Trust, dated
August 31, 2017, by the trustees of the Trust, and by the Second Amendment to the Trust’s Second Amended and Restated Agreement
and Declaration of Trust, dated February 1, 2024, by the trustees of the Trust and as supplemented by the Statement of Preferences, dated
March 23, 2021, as amended on September 8, 2021, June 28, 2022 and October 6, 2023, establishing and fixing the rights and preferences
of the term preferred shares of the Trust (as so amended and supplemented, the “Declaration of Trust”), certified pursuant
to the Secretary’s Certificate;
(viii) a copy
of the Trust’s Amended and Restated By-Laws, as amended and in effect as of November 16, 2021 and as amended by the Second Amendment
to the Amended and Restated By-Laws of the Trust, effective as of February 1, 2024 (as so amended, the “By-Laws”),
certified pursuant to the Secretary’s Certificate;
(ix) copies
of certain resolutions of the Board of Trustees of the Trust (the “Board of Trustees”), adopted on November 16, 2021
and May 7, 2024, certified pursuant to the Secretary’s Certificate;
(x) copies of
certain resolutions of the Offering Committee of the Board of Trustees, adopted on May 21, 2024, certified pursuant to the Secretary’s
Certificate;
(xi) a copy
of a certificate, dated the date hereof, from the Secretary of State of the State of Delaware with respect to the Trust’s existence
and good standing in the State of Delaware; and
XAI Octagon Floating Rate & Alternative Income Trust
June 4, 2024
Page 3
(xii) an executed
copy of the Distribution Agreement.
We have also examined originals or copies, certified
or otherwise identified to our satisfaction, of such records of the Trust and such agreements, certificates and receipts of public officials,
certificates of officers or other representatives of the Trust and others, and such other documents as we have deemed necessary or appropriate
as a basis for the opinions stated below.
In our examination, we have assumed the genuineness of
all signatures, including electronic signatures, the legal capacity and competency of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified
or photocopied copies, and the authenticity of the originals of such copies. As to any facts relevant to the opinions stated herein that
we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives
of the Trust and others and of public officials, including the factual representations and warranties contained in the Distribution Agreement.
We do not express any opinion with respect to the laws
of any jurisdiction other than the DSTA. The Shares may be issued from time to time on a delayed or continuous basis, and this opinion
is limited to the laws, including the rules and regulations, as in effect on the date hereof, which laws are subject to change with possible
retroactive effect.
Based upon the foregoing and subject to the qualifications
and assumptions stated herein, we are of the opinion that the Shares have been duly authorized by all requisite statutory trust action
on the part of the Trust under the DSTA and, when the Shares are issued and sold in accordance with the provisions of the Distribution
Agreement upon payment of the consideration therefor determined by the Board of Trustees, the Shares will be validly issued and fully
paid, and under the DSTA, the holders of the Shares will have no obligation to make further payments for the purchase of such Shares or
contributions to the Trust solely by reason of their ownership of such Shares except for their obligation to repay any funds wrongfully
distributed to them.
In rendering the foregoing opinions we have assumed that:
(a) the Certificate
of Trust, Declaration of Trust and the By-Laws constitute the only governing instruments, as defined in the DSTA, of the Trust; and
(b) any Shares
issued and sold pursuant to the Distribution Agreement are sold at a price that is not below either (i) the par value per Common Share
or (ii) the then current net asset value per Common Share, exclusive of any distributing commission or discount, which net asset value
shall be determined as of a time within forty-eight hours, excluding Sundays and holidays, next preceding the time of such determination.
* * * * *
XAI Octagon Floating Rate & Alternative Income Trust
June 4, 2024
Page 4
We hereby consent to the filing of this opinion with
the Commission as an exhibit to the Registration Statement. We also hereby consent to the reference to our firm under the heading “Legal
Matters” in the prospectus forming part of the Registration Statement. In giving this consent, we do not thereby admit that we are
within the category of persons whose consent is required under Section 7 of the Securities Act or the Securities Act Rules and Regulations.
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Very truly yours, |
|
|
|
/s/ Skadden, Arps, Slate, Meagher & Flom LLP |
KTH
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