**CONFIDENTIAL**

| **1.  ** | **Scope                of SMH’s Services**.                SMH will assist the Company in placing the Securities with terms                substantially like those described in the Term Sheet (Exhibit A).                To that                extent, SMH 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: |
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| a.   | familiarizing                  itself to the extent it deems appropriate and feasible with the                  business                  operations, properties, financial condition, and prospects of the                  Company, |
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| b.   | assisting                the Company in preparing Offering Materials for distribution by SMH                to                potential investors selected by SMH and the                Company, |
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| c.   | screening                and contacting prospective                investors, |
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| d.   | assisting                in negotiations with prospective investors,                and |
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| e.   | advising                and assisting the Company in structuring and pricing the                Offering. |
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| **2.  ** | **Fees                and Exclusivity****.**In                return for SMH’s services in the placement of Securities, the Company will                pay SMH a cash fee equal to 9.00% of                the gross proceeds of any Securities placed by SMH (consisting of                a 2.0%                advisory fee and 7.00% placement agent                fee). |
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| **3.  ** | **Expenses****.**                In                addition to the foregoing, the Company will, upon request, reimburse                SMH                for all reasonable out of pocket costs and expenses incurred by SMH                in                performing its obligations under this Agreement, which costs and                expenses                shall include, but not be limited to, travel expenses, expenses incurred                in performing due diligence in connection with transactions, legal                expenses, and all other expenses reasonably incurred by SMH in performing                its obligations under this Agreement; provided, however, that SMH                shall                obtain the prior approval of the Company for any single expenditure                in                excess of $10,000. In seeking reimbursement for expenses, SMH shall                provide to the Company a written statement or statements detailing                expenses for which reimbursement is sought and, upon request by the                Company, shall provide copies of invoices and other documentation                supporting such expenses. Reimbursable expenses shall be payable                by the                Company within 10 days of receipt by the Company of such written                statement                or, if requested by the Company, copies of supporting                documentation. |
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| **4.  ** | **Term****.**                The term of this Agreement shall begin on the date hereof and shall                terminate 12 months thereafter. At the end of the 12 months, SMH                and the                Company may agree in writing to extend the 12 month period on an                annual                basis ("Residual Period"). SMH reserves the right to terminate its                engagement on 30 days notice in writing during the initial 12 months                and                Residual Period, but will not terminate its engagement if such termination                would jeopardize the closing of the                Offering. |
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| **5.  ** | **Company                Information****.**                The Company will furnish SMH such information concerning the Company                as                SMH reasonable determines to be appropriate with respect to the Offering                (“Information”). The Company shall afford SMH and its counsel and                representatives full and complete access to its books and records                and will                use commercially reasonable efforts to afford SMH will full and complete                cooperation of management to gather the Information. The Company                recognizes and confirms that SMH (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. |
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| **6.  ** | **Confidentiality****.**In                connection with this engagement, it is contemplated that SMH will                receive                from the Company certain information (including certain business                planning,                product, marketing, technical, financial, and other information and                materials) the Company considers confidential. SMH shall use this                confidential information solely for the purpose of providing services                to                the Company and will not disclose to any party (other than SMH’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 SMH or its Representatives,                or                (d) is required to be disclosed by SMH by judicial or administrative                process in connection with any action, suit, proceeding, or investigation;                and provided, further, however, that SMH 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 SMH from any source other                than                the Company or its representatives, provided that such source was                not to                SMH’s actual knowledge subject to a confidentiality agreement with the                Company. SMH 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. Prospective investors in the Offering                must                execute a confidentiality agreement before being provided Offering                materials. |
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| **7.  ** | **Indemnification****.**                The Company acknowledges that SMH will be acting on behalf of the                Company                and will require indemnification by the Company. The Company further                acknowledges that SMH’s indemnification provisions attached hereto as                Exhibit B are incorporated by reference herein or are made a part                hereof                for all purposes as though set forth entirely                herein. |
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| **8.  ** | **Miscellaneous****.**                The Offering will be completed in accordance with Regulation E under                the                Securities Act of 1933, as amended, which is the private placement                offering exemption applicable to business development companies registered                under the Investment Company Act of 1940, as amended ("Investment                Company                Act"), and all applicable state or other jurisdictional securities                laws                (i.e. “blue sky” laws). All investors in the Transaction will be persons                who qualify as accredited investors under all applicable federal                and state                securities laws. |
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**SANDERS      MORRIS HARRIS INC.**

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*Richard      J. Kelly*

*Managing      Director—Financial Services*

**BLACKHAWK      CAPITAL GROUP BDC, INC.**

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**Dr.      Craig A Zabala**

**Chairman      of the Board, President & Chief Executive Officer**

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**Blackhawk      Capital Group BDC, Inc.**

| **Issuer**                                   |   | Blackhawk                Capital Group BDC, Inc. (the “Company”).                                                                                                                                                                                                                                                                                                                                                                   |
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|                                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Use                of Proceeds**           |   | General                corporate purposes and potential acquisitions of similar companies                in the                United States.                                                                                                                                                                                                                                                                                                   |
|                                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Amount**                                   |   | $5,000,000                (Minimum at $3,500,000)                                                                                                                                                                                                                                                                                                                                                                                               |
|                                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Securities**                               |   | 5,000,000                shares of common stock (minimum at 3,500,000 shares) of the Company                (the                “Securities”), which will be unregistered upon issuance but will be                subsequently registered by the Company.                                                                                                                                                                          |
|                                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Purchase                Price**            |   | The                purchase price of the Securities per share will be                $1.00.                                                                                                                                                                                                                                                                                                                                                     |
|                                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Funding                / Registration**    |   | Upon                execution of purchase agreements and related documentation, the Investors                will fund into escrow. Share certificates will be subsequently delivered                to the Investors; however the Securities would not yet be registered.                The                Company will commit to file a registration statement for the Securities                with the SEC within 90 days of the closing. |
|                                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Exclusive                Placement Agent** |   | Sanders                Morris Harris, Inc. (“SMH”).                                                                                                                                                                                                                                                                                                                                                                                 |
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| **Plan                of Distribution**      |   | SMH                will market the Securities into both the institutional investment                community as well as high net-worth accredited investors. In addition,                SMH                will market the Securities within its own managed investment management                operations.                                                                                                                                 |

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**Exhibit      B**

*Indemnification*

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