XA Investments LLC Chicago, IL 60654
Exhibit (k)(vi)
XA Investments LLC
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Chicago, IL 60654
November 11, 2024
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Chicago, Illinois 60654
Ladies and Gentlemen:
Reference is made to (i) the Investment Advisory Agreement between Octagon XAI CLO Income Fund (the “Trust”) and XA Investments, LLC (“XAI” or the “Adviser”), dated as of January 17, 2024 (such agreement or the most recent successor agreement between such parties relating to advisory services to the Trust is referred to herein as the “Advisory Agreement”) and (ii) the Amended and Restated Investment Sub-Advisory Agreement, among the Trust, XAI and Octagon Credit Investors, LLC (“Octagon” or the “Sub-Adviser”), dated as of May 16, 2024 (such agreement or the most recent successor agreement between such parties relating to sub-advisory services to the Trust is referred to herein as the “Sub-Advisory Agreement”). This letter agreement (the “Agreement”) confirms the contractual expense reimbursement agreement by Adviser and the Sub-Adviser. Except as otherwise set forth herein, capitalized terms used but not defined herein have the meanings ascribed to them in the Advisory Agreement.
1. Expense Cap.
(a) The Adviser and the Sub-Advisor hereby agree to waive a portion of their advisory or sub-advisory fees, as applicable, or reimburse the Trust for certain operating expenses so that the annual operating expenses of the Trust (exclusive of any Excluded Expenses (as defined below) do not exceed 0.68% of the Trust’s Managed Assets (the “Operating Expense Limitation”).
(b) “Excluded Expenses” are (i) investment advisory fees, (ii) investor support and secondary market services fees, (iii) taxes, (iv) expenses incurred directly or indirectly by the Trust as a result of an investment in a permitted investment (including, without limitation, acquired fund fees and expenses), (v) expenses associated with the acquisition or disposition of portfolio investments (including, without limitation, brokerage commissions and other trading or transaction expenses), (vi) leverage expenses (including, without limitation, costs associated with the issuance or incurrence of leverage, commitment fees, interest expense or dividends on preferred shares), (vii) distribution and/or shareholder servicing (12b-1) fees, (viii) dividends on short sales, if any, (ix) securities lending costs, if any, (x) expenses of holding, and soliciting proxies for, meetings of shareholders of the Trust (except to the extent relating to routine items such as the election of trustees), (xi) expenses of a reorganization, restructuring, redomiciling or merger of the Trust or the acquisition of all or substantially all of the assets of another fund, or (xii) any extraordinary expenses not incurred in the ordinary course of the Trust’s business (including, without limitation, expenses related to litigation, derivative actions, demands related to litigation, regulatory or other government investigations and proceeding).
(c) Any waived fees and/or reimbursed expenses shall be allocated between the Adviser and the Sub-Adviser in the same proportion as the Specified Percentage (as defined in the Sub-Advisory Agreement) as calculated at the time of such waiver or reimbursement.
2. Recoupment.
(a) In consideration of the agreement by the Adviser and the Sub-Adviser to limit the Trust’s expenses, the Adviser and the Sub-Adviser may recoup amounts reimbursed pursuant to this Agreement for a period not to exceed three years following the date of such waiver or reimbursement. Recoupment will be made only to the extent it does not cause the Trust’s operating expenses to exceed (a) the Operating Expense Limitation in effect at the time the expense was paid or absorbed, and (b) the Operating Expense Limitation in effect at the time of such recoupment.
(b) Any recoupment shall be allocated between the Adviser and the Sub-Adviser in the same proportion as the allocation of waived fees and/or reimbursed expenses being recouped (i.e. in the same proportion as the Specified Percentage as (defined in the Sub-Advisory Agreement) as calculated at the time of the applicable waiver or reimbursement).
3. Term and Termination; Amendment.
(a) The Operating Expense Limitation contemplated by this Agreement shall become effective upon the commencement of operations by the Trust. This Agreement will remain in effect until March 31, 2026, unless sooner terminated with the written consent of the Board of Trustees of the Trust. This Agreement will terminate automatically upon the termination of the Advisory Agreement or the Sub-Advisory Agreement unless a new Advisory Agreement with the Adviser (or an affiliate of the Adviser) or new Sub-Advisory Agreement with the Sub-Adviser (or an affiliated of the Sub-Adviser), as applicable, to replace the terminated agreement becomes effective upon such termination.
(b) No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.
4. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware for contracts to be performed entirely therein without reference to choice of law principles thereof and in accordance with the applicable provisions of the 1940 Act.
5. Miscellaneous.
(a) This Agreement constitutes the entire agreement of the parties with respect to its subject matter.
(b) 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.
(c) 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.
(d) This Agreement shall be binding on, and shall inure to the benefit of the parties hereto and their respective successors.
(e) This Agreement may be executed in counterparts by the parties hereto, each of which shall constitute an original counterpart, and all of which, together, shall constitute one Agreement.
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| Very truly yours, | ||
| XA INVESTMENTS LLC | ||
| /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | ||
| Name: | ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
| Title: | Managing Director & General Counsel | |
| OCTAGON CREDIT INVESTORS, LLC | ||
| /s/ Lauren Law | ||
| Name: | ▇▇▇▇▇▇ ▇▇▇ | |
| Title: | Senior Portfolio Manager | |
| Accepted and Agreed: | ||
| OCTAGON XAI CLO INCOME FUND | ||
| /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | ||
| Name: | ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
| Title: | Secretary & Chief Legal Officer | |
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