Exhibit 10.2


 


XAI Octagon Floating Rate & Alternative
Income Term Trust


321 North Clark Street, Suite 2430


Chicago, Illinois 60654


 


September 8, 2021


 


Eagle Point Credit Management LLC


600 Steamboat Road, Suite 202


Greenwich, CT 06830


 


Ladies and Gentlemen:


 


This letter agreement (this “Letter Agreement”)
is being entered into in connection with the Purchase Agreement, dated as of September 8, 2021 (the “Purchase Agreement”),
between XAI Octagon Floating Rate & Alternative Income Term Trust (the “Trust”) and each purchaser party thereto
(each, a “Purchaser”) relating to the purchase of shares of the Trust’s 6.50% Series 2026 Term Preferred Shares,
liquidation preference $25.00 per share (the “2026 Preferred Shares”). Eagle Point Credit Management LLC (“Eagle
Point”) is the investment manager of each Purchaser. The Trust and Eagle Point do hereby agree:


 


1.            Eagle Point will vote or
cause to be voted at any annual or special meeting of shareholders of the Trust all Eagle Point Shares (as defined below) in accordance
with the Voting Condition (as defined below); provided however that:


 


		(a)	Upon written notice to the Trust at least 10 days prior to the date of any annual or special meeting of shareholders of the Trust,
Eagle Point may elect to vote or cause to be voted up to 5% of the Eagle Point Shares in a manner other than in accordance with the Voting
Condition and shall vote or cause to be voted at least 95% of the Eagle Point Shares in accordance with the Voting Condition; and



 


		(b)	During any Voting Period (as defined in Section 2.6(b)(i) of the Trust’s Statement of Preferences of Term Preferred Shares)
and at any time that the Eagle Point Shares represent less than 5% of the then outstanding shares of 2026 Preferred Shares, Eagle Point
shall not be required to vote or cause to be voted any Eagle Point Shares in accordance with the Voting Condition and instead shall be
permitted to vote the Eagle Point Shares in any manner it or the Purchasers determine in their sole discretion to do so.



 


“Eagle Point Shares” shall mean all 2026 Preferred
Shares held by the Purchaser, Eagle Point, any person controlled by Eagle Point Holdings LP, Eagle Point’s immediate parent company
(“Eagle Point Parent”), or any other investment vehicles or accounts sponsored or managed by Eagle Point or any person controlled
by Eagle Point Parent, or which Eagle Point or any person controlled by Eagle Point Parent otherwise has or shares the power to vote,
or to direct the voting of, as of the record date for the applicable annual or special meeting of shareholders of the Trust.


 




     


     


    

 


The “Voting Condition” shall require Eagle Point
to vote or cause to be voted the Eagle Point Shares as follows:


 


		(i)	on any matter for which common shares and preferred shares of the Trust vote together as a single class, in the same proportion as
the vote of all other holders of common shares and preferred shares of the Trust;



 


		(ii)	on any matter for which preferred shares of the Trust vote as a separate class, in the same proportion as the vote of all other holders
of preferred shares of the Trust; and



 


		(iii)	on any matter for which the 2026 Preferred Shares vote as a separate class, in the same proportion as the vote of all other holders
of 2026 Preferred Shares.



 


2.           Upon the request of the
Trust, Eagle Point shall promptly provide to the Trust a written certification listing the number of Eagle Point Shares as of the record
date of such meeting and identifying the intermediary(s), if any, through which such Eagle Point Shares are held. The Trust (or its agent)
shall cooperate with Eagle Point in connection with Eagle Point’s compliance with its obligations hereunder.


 


3.           All notices shall be in
writing and shall be delivered by registered or overnight mail, facsimile, or electronic mail to the address for each party specified
below or to such other person or address as such party may designate for receipt of such notice.


 


If to the Trust:


 


XAI Octagon Floating Rate & Alternative Income
Term Trust


c/o XA Investments LLC


321 North Clark Street, Suite 2430


Chicago, Illinois 60654


Attention: General Counsel


E-mail: bmcculloch@xainvestments.com


 


If to Eagle Point:


 


Eagle Point Credit Management LLC


600 Steamboat Road, Suite 202


Greenwich, CT 06830


 


4.           The execution and delivery
by each of the Trust and Eagle Point of this Letter Agreement and the performance by each of the Trust and Eagle Point of its respective
obligations hereunder have been duly authorized by all necessary action of the Trust and Eagle Point. Each of the Trust and Eagle Point
hereby represents and warrants that this Letter Agreement is enforceable against it in accordance with its terms.


 




    2


     


    

 


5.           Each party hereto hereby
acknowledges and agrees that irreparable harm will occur in the event any of the provisions of this Letter Agreement were not performed
in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties will be entitled to seek
specific performance hereunder, including, without limitation, an injunction or injunctions to prevent and enjoin breaches of the provisions
of this Letter Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they may
be entitled at law or in equity. Any requirements for the securing or posting of any bond with respect to any such remedy are hereby waived.
All rights and remedies under this Letter Agreement are cumulative, not exclusive, and will be in addition to all rights and remedies
available to any party at law or in equity.


 


6.           The parties hereto hereby
irrevocably and unconditionally consent to and submit to the jurisdiction of the state or federal courts in the State of Delaware for
any actions, suits or proceedings arising out of or relating to this Letter Agreement or the transactions contemplated hereby. The parties
irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Letter
Agreement, or the transactions contemplated hereby, in the state or federal courts in the State of Delaware, and hereby further irrevocably
and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum. Each of the Trust and Eagle Point 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 Letter Agreement.


 


7.           This Letter Agreement represents
the entire agreement among the parties with respect to the transactions contemplated herein and supersedes all prior agreements, written
or oral, with respect thereto.


 


8.           The provisions of this
Letter Agreement may be amended or modified only with the prior written consent of the Trust and Eagle Point. The failure of any party
to insist upon strict adherence to any one or more of the covenants and restrictions in this Letter Agreement, on one or more occasion,
shall not be construed as a waiver, nor deprive such party of the right to require strict compliance thereafter with the same. All waivers
must be in writing and signed by the waiving party.


 


9.           This Letter Agreement and
all of the provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted
assigns; provided, however, that neither this Letter Agreement nor any of the rights, interests or obligations hereunder may be assigned
by any party without the prior written consent of each other party.


 


10.         This Letter Agreement
shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to the choice of law
principles thereof.


 


11.         This Letter Agreement
may be executed in counterparts, each of which shall be an original and all of which shall constitute a single agreement. Delivery of
an executed signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually
executed counterpart hereof.


 




    3


     


    

 


12.         The provisions of this
Letter Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability
of the other provisions hereof. If any provision of this Letter Agreement, or the application thereof to any person or entity or any circumstance,
is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may
be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Letter Agreement
and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability,
nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in
any other jurisdiction.


 


[Signature Page Follows]


 




    4


     


    

 


IN WITNESS WHEREOF, the Parties hereto have executed this Letter Agreement
as of the date first above written.


 


	 	XAI OCTAGON FLOATING RATE & ALTERNATIVE INCOME TERM TRUST
	 	 	 
	 	By:	/s/ Kimberly A. Flynn
	 	 	Name: Kimberly A. Flynn
	 	 	Title: Vice President
	 	 	 
	 	EAGLE POINT CREDIT MANAGEMENT LLC
	 	 	 
	 	By:	/s/ Taylor Pine
	 	 	Name: Taylor Pine
	 	 	Title: Director


 




    5