Exhibit No. 10.5

CONFIDENTIAL

February 13, 2009

Dr. Craig A Zabala
Chairman of the Board, President & Chief Executive Officer
Blackhawk Capital Group BDC, Inc.
14 Wall Street, Suite 1100B
New York, NY 10005

Dear Dr. Zabala,

This letter (the "Agreement") will confirm the engagement of EquitySmith, Inc.
("ESI"), by Blackhawk Capital Group BDC, Inc., a Delaware corporation and a
business development company registered under the Investment Company Act of
1940, as amended (the "Company"), as placement agent in connection with the
Company's Rule 506 offering (“Offering”) under Regulation D under the Securities
Act of 1933, as amended (the "Securities Act"), of up to $10 million in common
stock ("Securities") to qualified institutional buyers ("QIBs") and "accredited
investors" (as those terms are defined under the Securities Act) (the
"Investors").  The Offering will be pursuant to a Confidential Private Placement
Memorandum and a subscription agreement and purchaser questionnaire
("Subscription Agreement").  This Agreement is separate from the agreement
executed January 16, 2009 (“Other Placement Agreement”) by the Company, ESI and
John W. Loofbourrow Associates, Inc. (“JWL”) pertaining to the Company retaining
JWL and ESI as placement agents for the Offering, and covers incremental
offerings of Securities in the Offering from  $10,000,000 to maximum amount to
be raised in the Offering of $25,000,000.  The Company reserves the right to
increase the maximum at its sole discretion.  The purchase price shall be $5.00
per share.
 

1.
Scope of ESI's Services.  ESI will distribute Offering Materials (as hereinafter
defined) to potential investors, report the status of the Offering to the
Company, and assist in consummating the Offering, including, but not limited to:

 
a.
familiarizing itself to the extent it deems appropriate and feasible with the
business operations, properties, financial condition, and prospects of the
Company,

 
b.
assisting the Company in preparing Offering Materials for distribution by ESI to
potential investors selected by ESI and the Company,

 
c.
screening and contacting prospective investors,

 
d.
assisting in negotiations with prospective investors, and

 
 
 

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e.
advising and assisting the Company in structuring and pricing the Offering.

 
It is understood by both parties that ESI intends to solicit interest from a
limited number of potential Investors (QIBs and accredited investors).  ESI
will, in its sole discretion, determine the reasonableness of its efforts and
will be under no obligation to perform at any level other than what it deems
reasonable.  The Company shall retain control of the Offering and shall have the
right to determine (a) whether to accept and close the sale of the Securities to
a specific Investor, (b) whether to close or terminate the Offering, and (c) the
content of the Offering Materials.
 
2.
Fees.  In return for ESI's services in the placement of Securities, the Company
will pay ESI a cash fee equal to 10% of the gross proceeds (the "Financing Fee")
of any Securities placed by ESI.  Any Financing Fees payable to ESI will be due
at the closing date of the Offering and shall be payable to ESI by the
Company.  ESI shall not (a) receive any Financing Fees for securities purchased
by it or by an affiliate, and (b) receive reimbursement of any expenses from the
Company.

 
3.
Term.  Unless extended or earlier terminated by mutual agreement in writing of
the parties, the term of this Agreement shall commence February 13, 2009 and
terminate on March 2, 2009 (the "Term").  The parties may extend the Term by
mutual agreement.  Upon any termination or expiration of this Agreement, neither
the Company nor any prospective Investor shall have any obligation or liability
to any other party under this Agreement.  For the period up to and including
March 17, 2009 ("Period"), as long as the Other Placement Agreement has been
terminated or expired, ESI shall have the exclusive right on behalf of the
Company to solicit prospective Investors who are QIBs and/or accredited
investors regarding the possible sale to such Investors of shares.  During the
Period, ESI shall not have the right to conduct any other discussions on behalf
of the Company regarding any matter other than the sale of the Shares to the
prospective Investors.  For purposes of clarification, as long as the Other
Placement Agreement has terminated or expired, the Company during the Period
shall deal exclusively with ESI concerning the sale of the shares and
discontinue any discussions with respect to any previously received third party
proposals with respect to the sale of such shares.  If this exclusivity
provision is breached, in addition to any other compensation for damages, ESI
and/or its shareholders, jointly and severally, shall promptly upon demand pay
to the Company an amount equal to all expenses incurred by the Company in
connection with the Offering, including the expenses of the Company's agents,
advisors, bankers, attorneys, accountants and the other representatives.

 
For a period up to one year from the termination of this Agreement and if ESI
enters into a selling group of any subsequent securities offerings of the
Company, then ESI shall receive additional financing fees ("Additional Fees") if
the Company sells securities to those Investors previously introduced by ESI
("Protected Investors").  Prior to the termination date, ESI will furnish the
Company with a written list of the Protected Investors.  The Additional Fees
will be equal to any underwriting or placement fees that are listed in any
future offering document or prospectus.
 
 
 

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4.
Company Information.  The Company will furnish ESI such information concerning
the Company as ESI reasonable determines to be appropriate with respect to the
Offering ("Information").  The Company shall afford ESI and its counsel and
representatives full and complete access to its books and records and will use
commercially reasonable efforts to afford ESI with full and complete cooperation
of management to gather the Information on a reasonable basis.  The Company
recognizes and confirms that ESI (a) will use and rely on the Information in
performing the services contemplated by this Agreement, without independently
verifying the accuracy and completeness of the same, (b) does not assume
responsibility for the accuracy or completeness of the Information, and (c) will
not make an appraisal of any assets or liability of the Company.

 
The Company hereby represents to ESI that all solicitation materials prepared by
the Company and used in connection with the Offering, including, without
limitation, the Confidential Private Placement Memorandum (the "Offering
Materials") will not, as of the date of any offer or sale in connection with the
Offering, contain any untrue statement of a material fact or omit a material
fact necessary to make the statements contained therein, not misleading, in
light of the circumstances under which they were made.  If at any time an event
occurs as a result of which the Offering Materials, as then amended or
supplemented, would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made when such Offering Materials are
delivered to a prospective purchaser pursuant hereto, not misleading, the
Company will promptly notify ESI to suspend solicitation of prospective
purchasers in connection with the Offering; and if the Company decides to amend
or supplement the Offering Materials, it will promptly advise ESI by telephone
(with confirmation in writing) and will promptly prepare an amendment or
supplement that will correct such statement or omission.
 
ESI will not violate, or cause the Company to violate, any applicable federal
and state securities laws in connection with the Offering.
 
5.
Confidentiality.  In connection with this engagement, it is contemplated that
ESI will receive from the Company certain information (including certain
business planning, investment, product, marketing, technical, financial, and
other information and materials) the Company considers confidential.  ESI shall
use this confidential information solely for the purpose of providing services
to the Company and will not disclose to any party (other than ESI's officers,
directors, employees, affiliates, and counsel who have a need to know such
information, herein “Representatives”) any such confidential information, except
with the prior written approval of the Company; provided, however, that the
foregoing restrictions shall not apply to any information that: (a) is included
in the Offering Materials and disclosed pursuant to the distribution of the
Offering Materials as permitted by the Company, (b) the Company consents to
having disclosed in connection with the Offering, (c) is publicly available when
provided or thereafter becomes publicly available other than through disclosure
by ESI or its Representatives, or (d) is required to be disclosed by ESI by
judicial or administrative process in connection with any action, suit,
proceeding, or investigation; and provided, further, however, that ESI shall
give the Company notice of any such requirement immediately upon the becoming
aware of same and shall not disclose such information except only to the extent
required after the maximum time permitted.  Information shall be deemed
“publicly available” if it becomes a matter of public knowledge or is contained
in materials available to the public or is obtained by ESI from any source other
than the Company or its representatives, provided that such source was not to
ESI's actual knowledge subject to a confidentiality agreement with the
Company.  ESI will take reasonable steps to assure that the Offering Materials
are not distributed to any persons not permitted to receive them pursuant to the
terms hereof.  ESI will not provide any confidential information to prospective
Investors or any other third party without the express written consent of the
Company unless the prospective Investor has executed a confidentiality agreement
acceptable to the Company.

 
 
 

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6.
Representations and Warranties of ESI.  ESI represents and warrants to the
Company as follows:  (a) it is a licensed broker-dealer registered with the SEC,
FINRA and each State securities commission in any State in which it solicits
customers or securities’ purchasers; (b) there are no judgments, orders,
decrees, or like actions, or any proceedings pending, before the SEC, FINRA, any
State, or any court or arbitration panel that prohibit or effect it from
carrying out its obligations under this Agreement; and (c) this Agreement has
been duly authorized and approved by it, does not contravene its organizational
documents or any agreement or order to which it is a party, and is a legal and
valid obligation binding on it.

 
7.
Indemnification.  The Company acknowledges that ESI will be acting on behalf of
the Company and will require indemnification by the Company.  The Company
further acknowledges that ESI's indemnification provisions attached hereto as
Exhibit A are incorporated by reference herein or are made a part hereof for all
purposes as though set forth entirely herein.

 
8.
Miscellaneous.  The Offering will be completed in accordance with Rule 506 under
Regulation D under the Securities Act and all applicable state or other
jurisdictional securities laws (i.e. "blue sky" laws).  All prospective
Investors will be persons who qualify as QIBs and/or accredited investors under
all applicable federal and state securities laws and who execute a Subscription
Agreement.

 
The Company shall have the right to identify Investors with which it has
affiliations who would be suitable QIBs and/or accredited investors for the
Offering ("Company-Introduced Investors"). In the event that the Company decides
that these Investors are suitable for the Offering and these Investors purchase
Securities in the Offering, no fees shall be due to ESI respecting Securities
purchased by Company-Introduced Investors pursuant to Section 2 above.
 
The Company agrees that, following the closing of the Offering, ESI shall have
the right to place advertisements in financial and other newspapers and journals
at its own expense describing its services to the Company hereunder, provided
that ESI will submit a copy of any such advertisement to the Company for its
approval, which approval shall not be unreasonably withheld or delayed, and that
such action is not in violation of Rule 506 under Regulation D or other federal
and state securities laws.
 
 
 

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The parties agree that their relationship under this Agreement is an independent
contractor relationship only, and nothing herein shall cause ESI to be partners,
agents or fiduciaries of, or joint venture partners with, the Company or with
each other.
 
This Agreement may not be amended or modified except in writing and shall be
governed by, and construed in accordance with the laws of the State of New York.
 
 
 

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If this Agreement reflects our mutual understanding, please execute two copies
in the space indicated below and return one to us.
 
 
Very truly yours,

EQUITYSMITH, INC.

/s/ Hugo A. Delgado, Jr.
_____________________________
Hugo A. Delgado, Jr.
President

Accepted and agreed to as of February 13, 2009:

BLACKHAWK CAPITAL GROUP BDC, INC.

/s/ Craig A. Zabala
____________________________________
Dr. Craig A Zabala
Chairman of the Board, President & Chief Executive Officer

 
 

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Exhibit A
 
Indemnification
 
Blackhawk Capital Group BDC, Inc., a Delaware corporation (the "Company") agrees
to indemnify and hold harmless EquitySmith, Inc. ("ESI"), together with its
affiliates, directors, officers, agents, and employees (ESI and each such entity
or person, an "Indemnified Person"), from and against any and all losses,
claims, damages, judgments, and liabilities, expenses, or costs (and all actions
in respect thereof and any legal or other expenses in giving testimony or
furnishing documents in response to a subpoena or otherwise), including the cost
of investigating, preparing for, or defending any such action or claim, whether
or not in connection with litigation in which an Indemnified Person is a party,
as and when incurred, directly or indirectly caused by, relating to, based upon,
or arising out of ESI's performance of its engagement by the Company under the
letter agreement dated as of February 13, 2009, as it may be amended from time
to time (the "Agreement"), or otherwise arising out of or in connection with
advice or services provided or to be provided by Indemnified Persons pursuant to
the Agreement, the transactions contemplated thereby, or any Indemnified
Person’s actions or inactions in connection with any such advice, services, or
transactions, including any indemnified person's sole or contributory
negligence, if such activities were performed (i) in good faith and (ii) in such
manner reasonably believed by such Indemnified Person to be within the scope of
the authority conferred by the Agreement or by law and to be on behalf of the
Company or in furtherance of the performance of ESI's services under the
Agreement; provided, however, such indemnity agreement shall not apply to any
such loss, claim, damage, liability, or cost incurred by any Indemnified Person
to the extent it is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted primarily and
directly from the gross negligence or willful misconduct or bad faith of such
Indemnified Person.  The Company also agrees that no Indemnified Person shall
have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with the any advice or services
provided by any Indemnified Persons in connection with the Agreement, the
transactions contemplated by the Agreement, or any Indemnified Persons’ actions
or inactions in connection with any such advice, services, or transactions
except for any such liability for losses, claims, damages, liabilities, or costs
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) to have resulted primarily and directly from such Indemnified
Person’s gross negligence or willful misconduct or bad faith in connection with
such advice, actions, inactions, or services.

These indemnification provisions shall be in addition to any liability that the
Company may otherwise have to any Indemnified Person and shall extend to the
following: ESI, its affiliated entities, directors, officers, employees, agents,
legal counsel and controlling persons of ESI within the meaning of the federal
securities laws, and the respective successors, assigns, heirs, beneficiaries,
and legal representatives of each of the foregoing indemnified persons or
entities.  All references to ESI or Indemnified Persons in these Indemnification
Provisions shall be understood to include any and all of the foregoing
indemnified persons or entities.
 
 
 

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If any action, proceeding, or investigation is commenced, as to which an
Indemnified Person proposes to demand such indemnification, it will notify the
Company with reasonable promptness; provided, however, that any failure by an
Indemnified Person to notify the Company will not relieve the Company from
its obligations hereunder except if and only to the extent that the Company’s
defense of such action, proceeding or investigation is actually prejudiced by
the Indemnified Person’s failure so to notify the Company.  ESI will have the
right to retain counsel of its own choice to represent it; however, such firm
shall be acceptable to the Company, which acceptance shall not be unreasonably
withheld, and unless the Company assumes ESI's defense as provided below, the
Company will pay the reasonable fees and expenses of such counsel, and such
counsel shall to the fullest extent consistent with its professional
responsibilities cooperate with the Company and any counsel designated by
it.  The Company will be entitled to participate at its own expense in the
defense, or if it so elects, to assume and control the defense of any action,
proceeding, or investigation, but if the Company elects to assume the defense,
such defense shall be conducted by counsel reasonably acceptable to ESI.  Any
Indemnified Person may retain additional counsel of its own choice to represent
it but shall bear the fees and expenses of such counsel unless the Company shall
have specifically authorized the retaining of such counsel.  The Company will
not be liable for any settlement of any claim against an Indemnified Person made
without its written consent.

In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then the Company, on the one hand, and any Indemnified Person, on the other
hand, shall contribute to the losses, claims, damages, liabilities, or costs to
which the Indemnified Persons may be subject in accordance with the relative
benefits received by the Company, on the one hand, and ESI, on the other hand,
and also the relative fault of the Company, on the one hand, and ESI, on the
other hand, in connection with the statements, acts or omissions that resulted
in such losses, claims, damages, liabilities, or costs, and the relevant
equitable considerations shall also be considered.  No person found liable for a
fraudulent misrepresentation shall be entitled to contribution from any person
who is not also found liable for such misrepresentation.  Notwithstanding the
foregoing, neither ESI shall be obligated to contribute any amount hereunder
that exceeds the amount of fees received by ESI pursuant to the Agreement.

The liability of the Company under the indemnification provisions set forth in
this Exhibit A shall be limited to $25,000.

Neither termination nor completion of the engagement of ESI or any Indemnified
Person under the Agreement shall affect the provisions of these Indemnification
Provisions, which shall then remain operative and in full force and effect for
one year.
 
 
 

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If any provision contained in this Exhibit A is held by a court of competent
jurisdiction or other authority to be invalid, void, unenforceable, or against
its regulatory policy, the remainder of the provisions contained in this Exhibit
A shall remain in full force and effect and shall in no way be affected,
impaired, or invalidated.  These Indemnification Provisions may not be amended
or modified in any way, except by subsequent agreement executed in writing.
 
 
 

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