Lombardi
& Co., Inc.
 29
Broadway @ Trinity Place
 New York,
NY 10006
 (212)
809-3951
 
 
 CONFIDENTIAL
 
 July 27,
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 Lombardi & Co., Inc.
("Placement Agent") 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 under Regulation D under the Securities Act of 1933,
as amended (the "Securities Act"), of up to $250,000,000.00 in common stock
("Securities" or “Shares”) to qualified institutional buyers ("QIBs") and
"accredited investors" (as those terms are defined under the Securities Act)
(the "Investors") (the “Offering”).  The Offering will be pursuant to
a Confidential Private Placement Memorandum dated July 8 2009 (“Memorandum”) and
a subscription agreement and purchase questionnaire ("Subscription
Agreement").  The maximum amount to be raised in the Offering is
$250,000,000.00 (and 50,000,000 Shares have been sold).  There is no
minimum requirement for the sale of Shares by the Company.  Closings
will occur upon receipt of funds as received.  Investors must be
advised that there is no minimum amount of subscriptions that must be raised in
the Offering before the initial closing or any “rolling” closing can take
place.  Funds will be placed into an escrow account prior to any
closing.  The Company reserves the right to lower the minimum or
increase the maximum at its sole discretion.  The purchase price shall
be $5.00 per Share.
  
 1.
                Scope
      of Placement Agent's Services.  Placement Agent will
      assist in the distribution of Offering Materials (as hereinafter defined)
      to potential investors, report to the Company on the status of potential
      investors, assist in consummating the Offering, and perform such other
      services, as necessary and as requested by the Company, including, but not
      limited to:
  (a)
                familiarizing
      itself to the extent it deems appropriate and feasible with the business
      operations, financial condition, and prospects of the
    Company,
  (b)
                screening
      and contacting prospective investors,
and
  (c)
                assisting
      in negotiations with prospective
investors.
  
  It is
understood by both parties that Placement Agent intends to solicit interest from
a limited number of potential Investors (QIBs and accredited
investors).  Placement Agent will, in its sole discretion, determine
the reasonableness of their efforts and are under no obligation to perform at
any level other than what each 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. The Company shall retain control of the Offering and shall have the
right to determine (a) whether to accept and close the sale of any Securities to
a specific Investor, (b) whether to close or terminate the Offering, (c) whether
to change any of the terms of the Offering, and (d) the content of the Offering
Materials.
  2.
                Fees.In return
      for Placement Agent's services in the placement of Securities, the Company
      will pay Placement Agent a cash fee equal to five percent (5%) of the
      gross proceeds (the "Financing Fee") of any Securities placed by Placement
      Agent.  Any Financing Fees payable to Placement Agent will be
      due at the respective closing date(s) of the Offering and shall be payable
      to Placement Agent by the Company.  Placement Agent shall not be
      entitled to receive the 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 July 27, 2009 and
      terminate on the earliest to occur of:  (i) ten (10) calendar
      days after written notice given to the Company by Placement Agent of a
      potential Investor purchasing at least 50,000,000 Shares that will close
      on the purchase of Shares within five (5) calendar days of the date of
      such written notice; (ii) 180 calendar days from July 27, 2009; (iii) the
      date of closing and funding by any Investor of a Subscription Agreement
      for a minimum of 50,000,000 Shares (the "Term"); or (iv) ten (10) calendar
      days after written notice given to Placement Agent by the Company that the
      Offering will be closed at the sole discretion of the
      Company.  Upon any termination or expiration of this Agreement,
      neither the Company nor a potential Placement Investor shall have any
      obligation or liability to any other party under this
      Agreement.  For a period of 180 calendar days from July 27, 2009
      ("Period"), Placement Agent shall have the non-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, Placement Agent 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, the Company during
      the Period shall deal on a non-exclusive basis with Placement Agent
      concerning the sale of the Shares.
  For a
period up to one year from the termination of this Agreement and if Placement
Agent enters into a selling group of any subsequent securities offerings of the
Company, then Placement Agent shall receive additional financing fees
("Additional Fees") if the Company sells securities to those Investors
previously introduced by Placement Agent ("Protected
Investors").  Prior to the termination date, Placement Agent 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 circular or
prospectus.
  4.
                Company
      Information.  The Company
      will furnish Placement Agent such information concerning the Company as
      Placement Agent reasonably determines to be appropriate with respect to
      the Offering ("Information").  The Company shall afford
      Placement Agent and its counsel and representatives full and complete
      access to its books and records and will use commercially reasonable
      efforts to afford Placement Agent with full and complete cooperation of
      management to gather the Information on a reasonable basis.  The
      Company recognizes and confirms that Placement Agent (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.
  2
  The
Company hereby represents to Placement Agent 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 Placement Agent 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
Placement Agent by telephone (with confirmation in writing) and will promptly
prepare an amendment or supplement that will correct such statement or
omission.
  Placement
Agent 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 Placement Agent
      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.  Placement Agent shall use this confidential
      information solely for the purpose of providing services to the Company
      and will not disclose to any party (other than Placement Agent'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 Placement Agent or its
      Representatives, or (d) is required to be disclosed by Placement Agent by
      judicial or administrative process in connection with any action, suit,
      proceeding, or investigation; and provided, further, however, that
      Placement Agent 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 Placement Agent from any source
      other than the Company or its representatives, provided that such source
      was not to Placement Agent's actual knowledge subject to a confidentiality
      agreement with the Company.  Placement Agent 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.  Placement Agent 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.
  3
  6.
                Representations
      and Warranties of Placement Agent. The Placement Agent represents
      and warrants to the Company as follows:  (a) it is a licensed
      broker-dealer registered with the SEC, FINRA and State securities laws and
      regulations and is licensed under FINRA and State securities laws
      regulations to sell Securities to QIBS and accredited investors; (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 Placement Agent will be acting on behalf of the Company
      and will require indemnification by the Company.  The Company
      further acknowledges that Placement Agent'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 Placement Agent respecting
Securities purchased by Company-Introduced Investors pursuant to Section 2
above.
  The
Company agrees that, following the closing of the Offering, Placement Agent and
shall have the right to place advertisements in financial and other newspapers
and journals at their own expense describing its services to the Company
hereunder, provided that Placement Agent 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.
  The
parties agree that their relationship under this Agreement is an advisory
relationship only, and nothing herein shall cause the Placement Agent 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.
  4
  If this
Agreement reflects our mutual understanding, please execute two copies in the
space indicated below and return one to us.
  Very
truly yours,
 
 LOMBARDI
& CO., INC.
 
 
 /s/ Kenneth A. FinnenKenneth
      A. FinnenChief
      Compliance Officer
  
 BLACKHAWK
CAPITAL GROUP BDC, INC.
 
 
 /s/ Craig A. ZabalaDr.
      Craig A ZabalaChairman
      of the Board, President & Chief Executive
  Officer
  5
  Exhibit
A
 
 Indemnification
 
 The
Company agrees to indemnify and hold harmless the Placement Agent together with
its affiliates, directors, officers, agents, and employees (Placement Agent 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 Placement Agent's performance of its engagement by
the Company under the letter agreement dated as of July 27, 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 Placement Agent's
services under the Agreement; provided, however, such indemnification 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: Placement Agent, its affiliated entities, directors, officers,
employees, agents, legal counsel and controlling persons of Placement Agent
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
Placement Agent, or Indemnified Persons, in these Indemnification Provisions
shall be understood to include any and all of the foregoing indemnified persons
or entities.
 
 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.  Placement Agent will have
the right to retain counsel of its own choice to represent them; however, such
firm shall be acceptable to the Company, which acceptance shall not be
unreasonably withheld, and unless the Company assumes Placement Agent'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 Placement Agent.  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.
  6
  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 Placement Agent, on the other
hand, and also the relative fault of the Company, on the one hand, and Placement
Agent, 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, Placement Agent
shall not be obligated to contribute any amount hereunder that exceeds the
amount of fees received by Placement Agent 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 Placement Agent 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.
 
 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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