Unassociated Document


    Exhibit
10.2

     

    
      SECURITIES
PURCHASE AGREEMENT

       

      This
Securities Purchase Agreement (this “Agreement”) is dated as of
[     ], 2008, by and among Keating Capital, Inc., a
Maryland corporation (the “Company”), Keating
Investments, LLC, a Delaware limited liability company (the “Adviser”), and the investors
identified on the signature pages hereto (each, an “Investor” and collectively,
the “Investors”).

       

      WHEREAS,
subject to the terms and conditions set forth in this Agreement and the
Transaction Documents (as defined below) and pursuant to exemptions from
registration under the Securities Act (as defined below), the Company desires to
issue and sell to each Investor, and each Investor, severally and not jointly,
desires to purchase from the Company, an aggregate of not less than 500,000
shares and not more than 2,500,000 shares of the Company’s Common Stock (as
defined below)(the “Offering”), as more fully
described in this Agreement and the Transaction Documents.

       

      WHERAS,
the Company and each Investor are executing and delivering this Agreement in
reliance upon the exemption from registration afforded by Section 4(2) of
the Securities Act, Rule 506 of Regulation D promulgated under the
Securities Act (“Regulation
D”), Regulation S
promulgated by the Securities Act (“Regulation S”) and such other
available exemptions from registration under the Securities Act.

       

      WHEREAS,
the Company has not registered with the Commission (as defined below) as an
investment company pursuant to the 1940 Act (as defined below) in reliance on
the exemption contained in Section 3(c)(1) thereunder.

       

      NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company, the Adviser and the Investors agree as
follows:

       

      ARTICLE
1

      DEFINITIONS

      


      1.1.           Definitions.  In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms shall have the meanings indicated in this
Section
1.1:

       

      “Action” means any action,
suit, inquiry, notice of violation, proceeding (including any partial proceeding
such as a deposition) or investigation before or by any court, arbitrator,
governmental or administrative agency, regulatory authority (Federal, state,
county, local or foreign), stock market, stock exchange or trading
facility.

       

       “Advisers Act” means the
Investment Advisers Act of 1940, as amended.

       

      “Agent” means Andrews
Securities, LLC and such other soliciting agents as Andrews Securities, LLC may
have designated as additional selling agents in connection with the offer and
sale of the Common Shares.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Affiliate” means any Person
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a Person, as such terms are used
in and construed under Rule 144.

       

      “Business Day” means any day
except Saturday, Sunday and any day which is a Federal legal holiday or a day on
which banking institutions in the State of New York are authorized or required
by law or other governmental action to close.

       

       “Closing” means each of
the closings of the purchase and sale of the Common Shares pursuant to Article 2
hereof.

       

      “Closing Date” means each of
the dates on which a closing is held as mutually agreed to by the Company and
the Agent, provided all of the conditions set forth in Sections 5.1 and
5.2 hereof are
satisfied on and as of each such date.

       

      “Commission” means the
Securities and Exchange Commission.

       

       “Common Shares” means
the shares of Common Stock being offered and sold to the Investors by the
Company hereunder.

       

       “Common Stock” means the
common stock of the Company, par value $0.001 per share.

       

      “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

       

      “Escrow Agreement" means the
Escrow Agreement, dated as of June [    ], 2008, by and
among the Company, the Placement Agent and the escrow agent (the “Escrow Agent”) identified
therein, as amended from time to time.

       

       “Form 10 Registration
Agreement” means the registration statement on From 10 to be filed with
the Commission as contemplated under Section 4.4
hereof.

       

      “Investment Advisory and
Administrative Services Agreement” means that certain Investment Advisory
and Administrative Services Agreement (in substantially the same form as
included in the offering memorandum delivered to Investors as part of the
Offering) to be entered into by and between the Company and the Adviser,
pursuant to which the Adviser will provide the Company with investment advisory
services and administrative services.

      


       “Investment Amount”
means, with respect to each Investor, the Investment Amount indicated on the
investor questionnaire executed by each such Investor and delivered to the
Company in connection with the Offering and this Agreement (the “Investor
Questionnaire”).

      


       “License Agreement”
means that certain License Agreement to be entered into by and between
the Company and the Adviser, pursuant to which the Adviser will grant to
the Company a non-exclusive, royalty-free license to use the name “Keating
Capital.”

       

      
        
           

        

        
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      “Lien” means any lien, charge,
encumbrance, security interest, right of first refusal, right of participation
or other restrictions of any kind.

       

      “Losses” means any loss,
liability, obligation, claim, contingency, damage, cost or expense, including
all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation related thereto.

       

      “Material Adverse Effect”
means any of (i) a material and adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material and adverse effect
on the results of operations, assets, prospects, business or condition
(financial or otherwise) of the Company or the Adviser, as the case may be, or
(iii) an adverse impairment to the Company’s ability to perform on a timely
basis its obligations under any Transaction Document.

       

      “Outside Date” means the
sixtieth 60th day
following the date of this Agreement.

       

       “Per Share Purchase
Price” equals $10.00.

       

      “Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

       

      “Placement Agent” means
Andrews Securities, LLC, a Delaware limited liability company, that has been
appointed the exclusive Placement Agent pursuant to the Placement
Agreement.

       

      “Placement Agreement” means
that certain Placement Agreement, dated as of June
[     ], 2008, between the Company and the Placement
Agent with respect to the offer and sale of Common Shares pursuant to the
Offering.

       

      “Proceeding” means an action,
claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or
threatened.

       

      “Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

       

      “Securities Act” means the
Securities Act of 1933, as amended.

       

      “Subsidiary” means any
“significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X
promulgated by the Commission under the Exchange Act.

       

      “Transaction Documents” means
this Agreement, the Escrow Agreement, Investor Questionnaire and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.

       

      “U. S. GAAP” means U.S.
generally accepted accounting principles.

       

      
        
           

        

        
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      “1940 Act” means the
Investment Company Act of 1940, as amended.

       

      ARTICLE
2.

      PURCHASE
AND SALE

       

      2.1.           Closing.  Subject
to the terms and conditions set forth in this Agreement, at each Closing, the
Company shall issue and sell to each Investor, and each Investor shall,
severally and not jointly, purchase from the Company, the Common Shares
representing such Investor’s Investment Amount.  Each Closing shall
take place at the offices of the Company located at 5251 DTC Parkway, Suite
1000, Greenwood Village, CO 80111 on the Closing Date or at such other location
or time as the parties may agree.

       

      2.2.           Closing
Deliveries.  (a)  At
each Closing, the Company shall deliver or cause to be delivered to each
Investor the following (the “Company Deliverables”): (1) a
certificate evidencing a number of Common Shares equal to such Investor’s
Investment Amount divided by the Per Share Purchase Price, registered in the
name of such Investor; and (2) the Company shall have delivered to such Investor
such other documents relating to the transactions contemplated by this Agreement
as such Investor or its counsel may reasonably request.

       

      (b)           At
each Closing, each Investor shall deliver or cause to be delivered the following
(collectively, the “Investors’
Deliverables”): (i) to the Company, each of the Transaction Documents to
which the Investor is a party, and (ii) to the Escrow Agent for deposit and
disbursement in accordance with the Escrow Agreement, its Investment Amount, in
United States dollars and in immediately available funds, by wire transfer to an
account designated in writing by the Company for such purpose.

       

      ARTICLE
3.

      REPRESENTATIONS
AND WARRANTIES

       

      3.1.           Representations and
Warranties of the Company.  The
Company hereby makes the following representations and warranties to each
Investor with the intention and understanding that such representations and
warranties are made as of each Closing Date:

       

      (a)           Subsidiaries.  The
Company has no direct or indirect Subsidiaries.

       

      (b)           Organization and
Qualification.  The Company is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
with the requisite power and authority to own and use its properties and assets
and to carry on its business as currently conducted.  The Company is
not in violation of any of the provisions of its respective certificate or
articles of incorporation, bylaws or other organizational or charter
documents.  The Company is duly qualified to conduct its respective
businesses and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not, individually or
in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.

       

      
        
           

        

        
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      (c)           Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
thereunder.  The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company in
connection therewith.  Each Transaction Document has been (or upon
delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company , enforceable against the Company in accordance with
its terms, except as (i) such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors’ rights and
remedies or by other equitable principles of general application, or (ii) the
rights to indemnification and contribution may be limited by equitable
principles of general applicability or by Federal or state securities laws or
the policies underlying such laws.

       

      (d)           No Conflicts; Filings,
Consents and Approvals; Regulatory Permits.

       

      (1)           The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated thereby do
not and will not (a) conflict with or violate any provision of the Company’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (b) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any material agreement,
lease, license, indenture, note, bond, permit, concession, franchise or other
instrument (evidencing a Company debt or otherwise) or other understanding to
which the Company is a party or by which any property or asset of the Company is
bound or affected, or (c) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company is subject (including Federal and
state securities laws and regulations), or by which any property or asset of the
Company is bound or affected; except in the case of each of clauses (b) and (c),
such as could not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect.

       

      (2)           The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any United
States court or other Federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than (a) the filing with the
Commission of the Form 10 Registration Statement and BDC Election in accordance
with the requirements of Section 4.4 of this
Agreement, (b) the filings required by state securities laws, (c) the filing of
a Notice of Sale of Securities on Form D with the Commission under Regulation D
of the Securities Act, (d) the filings required in accordance with Section 4.5 hereof,
and (e) those that have been made or obtained prior to the date of this
Agreement.  The Company possesses all certificates, authorizations and
permits issued by the appropriate Federal, state, local or foreign regulatory
authorities necessary to conduct its business, except where the failure to
possess such permits could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, and the Company
has not received any notice of proceedings relating to the revocation or
modification of any such permits.

       

      
        
           

        

        
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      (e)           Issuance of the Common
Shares.  The Common Shares have been duly authorized and, when
issued and paid for in accordance with the Transaction Documents, will be duly
and validly issued, fully paid and nonassessable, free and clear of all
Liens.  The Company has reserved from its duly authorized capital
stock the shares of Common Shares issuable pursuant to this
Agreement.

       

      (f)           Capitalization.  As
of the date hereof, the authorized capital stock of the Company consists of
200,000,000 shares of Common Stock, and there are 100 shares of Common
Stock outstanding, all of which are held by the Adviser.  Under the
articles of incorporation of the Company, the board of directors is authorized
to classify and reclassify any unissued shares of stock into other classes or
series of stock without obtaining stockholder approval. As permitted by the
Maryland General Corporation Law (“MGCL”), the articles of
incorporation of the Company provides that the board of directors, without any
action by the stockholders, may amend the articles of incorporation from time to
time to increase or decrease the aggregate number of shares of stock or the
number of shares of stock of any class or series that we have authority to
issue.  The Common Stock of the Company is not currently quoted or
listed on an exchange, a quotation system or the OTC Bulletin
Board.  There are no outstanding options or warrants to purchase the
stock of the Company, and no stock has been authorized for issuance under any
equity compensation plans of the Company. Except as contemplated by this
Agreement, (i) there is no commitment by the Company to issue any shares of
capital stock, subscriptions, warrants, options, convertible securities, or
other similar rights to purchase or receive the Company securities or to
distribute to the holders of any of its equity securities any evidence of
indebtedness, cash, or other assets, (ii) the Company is under no obligation
(contingent or otherwise) to purchase, redeem, or otherwise acquire any of its
equity or debt securities or any interest therein, and (iii) to the Company’s
knowledge, there are no voting trusts or similar agreements, stockholders'
agreements, pledge agreements, buy-sell agreements, rights of first refusal,
preemptive rights, or proxies relating to any securities of the
Company.  All outstanding securities of the Company were issued in
compliance with applicable Federal and state securities laws.

       

      (g)           Form 10 Registration
Statement; Financial Statements. When filed pursuant to Section 4.4 hereof,
the Form 10 Registration Statement will not contain any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  The
financial statements of the Company included in the Form 10 Registration
Statement comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing.  Such financial statements
have been prepared in accordance with U.S. GAAP applied on a consistent basis
during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto, and fairly present in all material
respects the financial position of the Company as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.

       

      (h)           Material
Changes.  Except for the Offering and the transactions
contemplated by this Agreement and the Transaction Documents, since May 31,
2008, (i) there has been no event, occurrence or development that has had or
that could reasonably be expected to result in a Material Adverse Effect, (ii)
the Company has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables, accrued expenses and other liabilities incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
U.S. GAAP or required to be disclosed in filings made with the Commission, (iii)
the Company has not altered its method of accounting or the identity of its
auditors, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) the
Company has not issued any equity securities to any officer, director or
Affiliate.  

       

      
        
           

        

        
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      (i)           Litigation.  There
is no Action pending, or threatened in writing, against or affecting the Company
or its properties or adversely affecting or challenging the legality, validity
or enforceability of any of the Transaction Documents or the Common Shares,
which, if there were an unfavorable decision, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse
Effect.  Neither the Company nor any director or officer thereof (in
his or her capacity as such), is or has been the subject of any Action involving
a claim of violation of or liability under Federal or state securities laws or a
claim of breach of fiduciary duty.  There has not been, and to the
knowledge of the Company, there is not pending any investigation by the
Commission involving the Company or any current or former director or officer of
the Company (in his or her capacity as such).

       

      (j)           Compliance with Applicable
Laws.  The Company (i) is not in default under or in violation
of (and no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company under), nor has
the Company received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is not in
violation of any order of any court, arbitrator or governmental body, or (iii)
is not or has not been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, Federal, state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except
in each case as could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.

       

      (k)          Title to
Assets.  The Company does not own any real or personal
property

       

      (l)           Employees.  As
of the date hereof, the Company has no employees.

       

      (m)         Intellectual
Property.  The Company has no patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
licenses and other similar rights that are necessary or material for use in
connection with its businesses and which the failure to so have could taken as a
whole have or reasonably be expected to result in a Material Adverse Effect,
except for the License Agreement.

       

      (n)          Insurance.  The
Company is not insured by any insurers against losses and risks arising out of
related to its business.

       

      
        
           

        

        
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      (o)           Transactions With Affiliates
and Employees.  Except for the Placement Agreement, the
Investment Advisory and Administrative Services Agreement, the Director
Indemnity Agreements and the License Agreement, or except as disclosed in the
offering memorandum delivered to Investors in connection with the Offering, or
except as otherwise contemplated by this Agreement or the transactions
contemplated hereunder, none of the officers or directors of the Company or
members of the immediate families of such officers or directors, is presently a
party to any transaction with the Company (other than for services as officers
and directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
officer or director or,  to the knowledge of the Company, any entity
in which any officer or director has a substantial interest or is an officer,
director, trustee or partner.

       

      (p)           Internal Accounting
Controls.  The Company intends to develop and maintain a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with U.S. GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.

       

      (q)           Certain
Fees.  Except as described in Placement Agreement, no brokerage
or finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
this Agreement.  The Investors shall have no obligation with respect
to any fees or with respect to any claims (other than such fees or commissions
owed by an Investor pursuant to written agreements executed by such Investor
which fees or commissions shall be the sole responsibility of such Investor)
made by or on behalf of other Persons for fees of a type contemplated in this
Section 3.1(q)
that may be due in connection with the transactions contemplated by this
Agreement.

       

      (r)           Private
Placement.  Assuming the accuracy of the Investors’
representations and warranties set forth in Section 3.2(b) through
(k), no registration under the Securities Act is required for the offer
and sale of the Common Shares by the Company to the Investors under the
Transaction Documents.  Neither the Company nor any of its Affiliates
nor, any Person acting on the Company’s behalf has, directly or indirectly, at
any time within the past six months, made any offer or sale of any security or
solicitation of any offer to buy any security under circumstances that would
(i) eliminate the availability of the exemption from registration under
Regulation D under the Securities Act in connection with the offer and sale
by the Company of the Common Shares as contemplated hereby or (ii) cause
the offering of the Common Shares pursuant to the Transaction Documents to be
integrated with prior offerings by the Company for purposes of any applicable
law, regulation or stockholder approval provisions.

       

      (s)           Registration Rights.
The Company has not granted or agreed to grant to any Person any rights
(including “piggy-back” registration rights) to have any securities of the
Company registered with the Commission or any other governmental authority that
have not been satisfied.

       

      
        
           

        

        
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      (t)           No General Solicitation;
Placement Agent's Fees.  Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Common
Shares.  The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commission (other
than for persons engaged by any Investor or its investment advisor) relating to
or arising out of the issuance of the Common Shares pursuant to this
Agreement.  The Company shall pay, and hold each Investor harmless
against, any liability, loss or expense (including, without limitation,
reasonable attorney's fees and out-of-pocket expenses) arising in connection
with any such claim for fees arising out of the issuance of the Common Shares
pursuant to this Agreement, subject to the provisions of the 1940
Act.  The Company acknowledges that is has engaged the Placement Agent
as its exclusive placement agent in connection with the sale of the Common
Shares, and that the Placement Agent may designate additional selling agents in
connection with the offer and sale of the Common Shares.  Other than
the Agents, the Company has not engaged any placement agent or other agent in
connection with the sale of the Common Shares.

       

      (u)           Foreign Corrupt
Practices.  Neither the Company nor, to the knowledge of the
Company, any director, officer, agent, employee or other Person acting on behalf
of the Company has, in the course of its actions for, or on behalf of, the
Company (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.

       

      (v)           Indebtedness.  As
of the date hereof, the Company has no outstanding indebtedness for borrowed
money (“Indebtedness”)
and is not a party to any contract, agreement or instrument relating to any
Indebtedness, which creates any direct or contingent obligation of the
Company.    

       

      (w)           Investment
Company.  The Company is not required to be registered as an
“investment company” within the meaning of the 1940 Act in reliance on the
exemption contained in Section 3(c)(1) of the 1940 Act; however, following the
final Closing under this Offering, and upon the filing with the Commission of
the Form 10 Registration Statement and the election to be regulated as a
business development company under the 1940 Act (“BDC Election”), all as
contemplated by Section 4.4 hereof,
the Company will be regulated as a business development company under the 1940
Act.

       

      (x)           Application of Takeover
Protections.  The Company has taken all necessary action, if
any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s  articles
of incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Investors as a result of
the Investors and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including without limitation the
Company’s issuance of the Common Shares and the Investors’ ownership of the
Common Shares.

       

      
        
           

        

        
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      (y)           No Additional
Agreements.  The Company does not have any agreement or
understanding with any Investor with respect to the transactions contemplated by
the Transaction Documents other than as specified in the Transaction
Documents.

       

      (z)           Disclosure.  The
Company understands and confirms that the Investors will rely on the foregoing
representations and covenants in purchasing the Common Shares.  Except
as specified below, all disclosure provided to the Investors regarding the
Company and its business and the transactions contemplated hereby, furnished by
or on behalf of the Company (including the Company’s representations and
warranties set forth in this Agreement) are true and correct and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not
misleading.  Notwithstanding the foregoing, any draft of the Form 10
Registration Statement to be filed with the Commission in connection with the
transactions contemplated hereby that was provided to the Investors prior to the
date hereof was incomplete in the form distributed, and such Investor is not
relying on such draft on Form 10 Registration Statement in making its decision
to enter into the transactions contemplated hereby.

       

      Each
Investor acknowledges and agrees that the Company has not made nor makes any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section
3.1.

       

      3.2.           Representations and
Warranties of the Investors.  Each
Investor hereby, for itself and for no other Investor, represents and warrants
to the Company as follows:

       

      (a)           Organization;
Authority.  If an entity, such Investor is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate, limited liability company or
partnership power and authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise to carry out
its obligations thereunder. The execution, delivery and performance by such
Investor of the transactions contemplated by this Agreement has been duly
authorized by all necessary corporate or, if such Investor is not a corporation,
such limited liability company, partnership or other applicable like action, on
the part of such Investor.  This Agreement has been duly executed by
such Investor, and when delivered by such Investor in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such
Investor, enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

       

      (b)           Investment
Intent.  Such Investor is acquiring the Common Shares as
principal for its own account for investment purposes only and not with a view
to or for distributing or reselling such Common Shares or any part thereof,
without prejudice, however, to such Investor’s right at all times to sell or
otherwise dispose of all or any part of such Common Shares in compliance with
applicable Federal and state securities laws.  Subject to the
immediately preceding sentence, nothing contained herein shall be deemed a
representation or warranty by such Investor to hold the Common Shares for any
period of time.  Such Investor is acquiring the Common Shares
hereunder in the ordinary course of its business. Such Investor does not have
any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Common Shares.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      (c)           Investor
Status.  At the time such Investor was offered the Common
Shares, it was, and at the date hereof it is, an “accredited investor” as
defined in Rule 501(a) under the Securities Act and a “qualified client” as defined in Rule 205-3(d)
under the Advisers Act.  Such Investor is not a registered
broker-dealer, and is not affiliated with a registered broker-dealer, under
Section 15 of the Exchange Act.  Such Investor, either alone or
together with its representatives has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Common Shares, and has
so evaluated the merits and risks of such investment.  Such Investor
understands that it must bear the economic risk of this investment in the Common
Shares indefinitely, and is able to bear such risk and is able to afford a
complete loss of such investment.

       

      (d)           General
Solicitation.  Such Investor is not purchasing the Common
Shares as a result of any advertisement, article, notice or other communication
regarding the Common Shares published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar or any
other general solicitation or general advertisement.

       

      (e)           Access to
Information.  Such Investor acknowledges that it has been
afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Common Shares and the merits and
risks of investing in the Common Shares; (ii) access to information about the
Company and its financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment.  Neither such inquiries nor any other investigation
conducted by or on behalf of such Investor or its representatives or counsel
shall modify, amend or affect such Investor’s right to rely on the truth,
accuracy and completeness of the Company’s representations and warranties
contained in the Transaction Documents.  Such Investor acknowledges
that notwithstanding the foregoing, any draft of the Form 10 Registration
Statement to be filed in connection with the transactions contemplated hereby
that was provided to such Investor prior to the date hereof was incomplete in
the form distributed, and such Investor is not relying on such draft of the Form
10 Registration Statement in making its decision to enter into the transactions
contemplated hereby.

       

      (f)           Independent Investment
Decision.  Such Investor has independently evaluated the merits
of its decision to purchase the Common Shares pursuant to the Transaction
Documents, and such Investor confirms that it has not relied on the advice of
any other Investor’s business and/or legal counsel in making such
decision.  Such Investor has not relied on the business or legal
advice of the Placement Agent or any of its agents, counsel or Affiliates in
making its investment decision hereunder, and confirms that none of such Persons
has made any representations or warranties to such Investor in connection with
the transactions contemplated by the Transaction Documents.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      (g)           No Governmental
Review.  Such Investor understands that no United States or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Common Shares or the fairness or
suitability of the investment in the Common Shares nor have such authorities
passed upon or endorsed the merits of the offering of the Common
Shares.

       

      (h)           No
Conflicts.  The execution, delivery and performance by such
Investor of this Agreement and the consummation by such Investor of the
transactions contemplated hereby will not (i) result in a violation of the
organizational documents, if any, of such Investor, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Investor is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including Federal and
state securities laws) applicable to such Investor, except in the case of
clauses (ii) and (iii) above, that do not otherwise affect the ability of such
Investor to consummate the transactions contemplated hereby.

       

      (i)           Restricted
Securities.  The Investors understand that the Common Shares
are characterized as “restricted securities” under the U.S. securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances.

       

      (j)           Legends.  It
is understood that, except as provided in Section 4.1(b)
of this Agreement, certificates evidencing such Common Shares may and shall bear
the legend set forth in Section 4.1(b).

       

      (k)           No Legal, Tax or Investment
Advice.  Such Investor understands that nothing in this
Agreement or any other materials presented by or on behalf of the Company to the
Investor in connection with the purchase of the Common Shares constitutes legal,
tax or investment advice.  Such Investor has consulted such legal, tax
and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Common
Shares.  Such Investor understands that the Placement Agent has acted
solely as the agent of the Company in this placement of the Common Shares, and
that the Placement Agent makes no representation or warranty with regard to the
merits of this transaction or as to the accuracy of any information such
Investor may have received in connection therewith.  Such Investor
acknowledges that he has not relied on any information or advice furnished by or
on behalf of the Placement Agent.

       

      (l)           Investment Company.
Until the Company elects to be regulated as a business development company
pursuant to Section
4.4 hereof, each Investor represents, and warrants to, and covenants
with, the Company that:  (i) such Investor will not transfer its
Common Shares, (ii) such Investor authorizes the Company and its transfer agent
to place stop transfer restrictions on the Common Shares until such time as the
Company elects to be regulated as a business development company, (iii) such
Investor has not and will not acquire, by virtue of its purchase of Common
Shares under this Agreement or otherwise, in excess of 9.9% of the Company’s
outstanding voting securities, and (iv) such Investor is not a benefit plan
investor within the meaning of applicable Department of Labor regulations,
whether or not subject to regulation under the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or Section 4975 of
the Internal Revenue Code of 1986, as amended (the “Code”); provided, however,
that investments by individual retirement account or other similar arrangements
are permitted.

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      The
Company acknowledges and agrees that no Investor has made or makes any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2. or as
set forth in the subscription documents for the Common Shares (including the
Investor Questionnaire and the representations, warranties, acknowledgements and
agreements of the Investor included therein).

       

      3.3.           Representations and
Warranties of the Adviser.  The
Adviser hereby makes the following representations and warranties to each
Investor with the intention and understanding that such representations and
warranties are made as of the Closing Date:

       

      (a)           Organization and
Qualification.  The Adviser is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
with the requisite power and authority to own and use its properties and assets
and to carry on its business as currently conducted.  The Adviser is
not in violation of any of the provisions of its respective organization
documents.  The Adviser is duly qualified to conduct its respective
businesses and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not, individually or
in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.

       

      (b)           Authorization;
Enforcement.  The Adviser has the requisite power and authority
to enter into and to consummate the transactions contemplated by this Agreement
and the Investment Advisory and Administrative Services Agreement and otherwise
to carry out its obligations thereunder.  Prior to Closing, the
execution and delivery of this Agreement and the Investment Advisory and
Administrative Services Agreement by the Adviser have been duly authorized by
all necessary action on the part of the Adviser and no further action is
required by the Adviser in connection therewith.  When executed by the
Adviser, and delivered in accordance with the terms thereof, this Agreement and
the Investment Advisory and Administrative Services Agreement will constitute
the valid and binding obligation of the Adviser, enforceable against the Adviser
in accordance with its terms, except as (i) such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application, or
(ii) the rights to indemnification and contribution may be limited by equitable
principles of general applicability or by Federal or state securities laws or
the policies underlying such laws.

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      (c)           No Conflicts; Filings,
Consents and Approvals; Regulatory Permits.

       

      (1)           The
execution, delivery and performance of this Agreement and the Investment
Advisory and Administrative Services Agreement by the Adviser and the
consummation by the Adviser of the transactions contemplated thereby do not and
will not (a) conflict with or violate any provision of the Adviser’s
organization documents, or (b) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any material
agreement, lease, license, indenture, note, bond, permit, concession, franchise
or other instrument (evidencing a Adviser debt or otherwise) or other
understanding to which the Adviser is a party or by which any property or asset
of the Adviser is bound or affected, or (c) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Adviser is subject (including
Federal and state securities laws and regulations), or by which any property or
asset of the Adviser is bound or affected; except in the case of each of clauses
(b) and (c), such as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.

       

      (2)           The
Adviser is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any United
States court or other Federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and performance by the
Adviser of this Agreement or the Investment Advisory and Administrative Services
Agreement.  The Adviser possesses all certificates, authorizations and
permits issued by the appropriate Federal, state, local or foreign regulatory
authorities necessary to conduct its business, except where the failure to
possess such permits could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, and the Adviser
has not received any notice of proceedings relating to the revocation or
modification of any such permits.

       

      (d)           Litigation.  There
is no Action pending, or threatened in writing, against or affecting the Adviser
or its properties or adversely affecting or challenging the legality, validity
or enforceability of this Agreement or the Investment Advisory and
Administrative Services Agreement, which, if there were an unfavorable decision,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.  Neither the Adviser nor any director or
officer thereof (in his or her capacity as such), is or has been the subject of
any Action involving a claim of violation of or liability under Federal or state
securities laws or a claim of breach of fiduciary duty.  There has not
been, and to the knowledge of the Adviser, there is not pending any
investigation by the Commission involving the Adviser or any current or former
director or officer of the Adviser (in his or her capacity as
such).

       

      (e)           Compliance with Applicable
Laws.  The Adviser (i) is not in default under or in violation
of (and no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Adviser under), nor has
the Adviser received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is not in
violation of any order of any court, arbitrator or governmental body, or (iii)
is not or has not been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, Federal, state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except
in each case as could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      (f)           Registered Investment
Adviser.  The Adviser is duly registered under the Advisers Act
and is not prohibited by the Advisers Act, the 1940 Act or the published rules
and regulations thereunder from acting under the Investment Advisory and
Administrative Services Agreement.  There does not exist any
Proceeding or, to the Adviser’s knowledge, any facts or circumstances the
existence of which could lead to any Proceedings which might adversely affect
the registration of the Adviser with the Commission.

       

      Each
Investor acknowledges and agrees that the Adviser has not made nor makes any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section
3.3.

       

      ARTICLE
4.

      OTHER
AGREEMENTS OF THE PARTIES

       

      4.1.           (a)        
The Common
Shares may only be disposed of in compliance with state and Federal securities
laws.  In connection with any transfer of the Common Shares other than
pursuant to an effective registration statement, to the Company, to an Affiliate
of an Investor or in connection with a pledge as contemplated in Section 4.1(b), the
Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Common Shares under
the Securities Act.

       

      (b)           Certificates
evidencing the Common Shares will contain the following legend, until such time
as the legend is not required under Section
4.1(c):

       

      THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      The
Company acknowledges and agrees that an Investor may from time to time pledge,
and/or grant a security interest in some or all of the Common Shares pursuant to
a bona fide margin agreement in connection with a bona fide margin account and,
if required under the terms of such agreement or account, such Investor may
transfer pledged or secured Common Shares to the pledgees or secured
parties.  Such a pledge or transfer would not be subject to approval
or consent of the Company and no legal opinion of legal counsel to the pledgee,
secured party or pledgor shall be required in connection with the pledge, but
such legal opinion may be required in connection with a subsequent transfer
following default by the Investor transferee of the pledge.  No notice
shall be required of such pledge.  At the appropriate Investor’s
expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Common Shares may reasonably request in connection
with a pledge or transfer of the Common Shares including the preparation and
filing of any required prospectus supplement under Rule 424(b)(3) of the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of selling stockholders
thereunder.  Except as otherwise provided in Section 4.1(c), any
Common Shares subject to a pledge or security interest as contemplated by this
Section 4.1(b)
shall continue to bear the legend set forth in this Section 4.1(b) and be
subject to the restrictions on transfer set forth in Section
4.1(a).

       

      (c)           The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Common Shares upon which it
is stamped, if, unless otherwise required by state securities laws, (i) such
Common Shares are registered for resale under the Securities Act, (ii) in
connection with a sale, assignment or other transfer, such holder provides the
Company with an opinion of a law firm reasonably acceptable to the Company, in a
generally acceptable form, to the effect that such sale, assignment or transfer
of the Common Shares may be made without registration under the applicable
requirements of the Securities Act, or (iii) such holder provides the Company
with reasonable assurance that the Common Shares can be sold, assigned or
transferred pursuant to Rule 144 or Rule 144A.

       

      (d)           The
Company has not registered with the Commission as an investment company pursuant
to the 1940 Act in reliance on the exemption contained in Section 3(c)(1)
thereunder.  As a result, investing in the Company’s Common Shares
will be subject to the following additional restrictions until the Company
elects to be regulated as a business development company: (i) the Company
intends to limit the ownership of its common stock to no more than 100
beneficial owners who meet the other conditions described in Section 3(c)(1) of
the 1940 Act, (ii) any transfer that would result in the Company’s common stock
(including the Common Shares offered hereby) being held by more than 100
beneficial owners will be void and any intended recipient of shares in violation
of such provisions will acquire no rights in such shares and will not be treated
as stockholder for any purpose, (iii) during the time that the Company is
relying on Section 3(c)(1) exemption under the 1940 Act, each Investor will be
prohibited from acquiring in excess of 9.9% of the Company’s outstanding voting
securities, and (iv) the Company will not sell, and is not soliciting any offers
to buy, Common Shares  from any person or entity that is a benefit
plan investor within the meaning of applicable Department of Labor regulations,
whether or not subject to regulation under the ERISA or Section 4975 of the Code
provided, however, that investments by individual retirement account or other
similar arrangements are permitted. Notwithstanding the foregoing, the
Company shall retain the authority to waive any such restriction, in its sole
and absolute discretion; provided, that any such waiver will not result in the
loss of the exemption contained in Section 3(c)(1) of the 1940 Act or otherwise
violate applicable law.

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      4.2.           Reservation of
Securities. The
Company shall maintain a reserve from its duly authorized shares of Common Stock
for the issuance Common Shares pursuant to the Transaction Documents in such
amount as may be required to fulfill its obligations to issue such Common Shares
under the Transaction Documents.  

       

      4.3.           Integration.  The
Company shall not, and shall use its commercially reasonable best efforts to
ensure that no Affiliate of the Company shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Common Shares in a manner that would require the registration under the
Securities Act of the sale of the Common Shares to the Investors.

       

      4.4.           Form 10 Registration
Statement; BDC Election.  Within
five (5) business days following the final closing of the Offering, the Company
shall prepare and file with the Commission the Form 10 Registration to register
its shares of Common Stock under Section 12(g) of the Exchange
Act.  Concurrently with the filing of the Form 10 Registration
Statement with Commission, the Company shall also file its election to be
regulated as a business development company on Form N-54A with the
Commission.  The Company shall respond as promptly as reasonably
possible, and in any event within ten (10) business days (except to the extent
that the Company reasonably requires additional time to respond to accounting
comments), to any comments received from the Commission with respect to the Form
10 Registration Statement or any amendment thereto.  Upon the Form 10
Registration Statement becoming effective and continuing until the date that all
of the Common Shares may be sold under Rule 144 of the Securities Act (or any
successor provision) without the requirement that information about the Company
be publicly available in accordance with Rule 144(c), the Company covenants: (i)
to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to the Exchange Act, and, if the Company is not
required to file reports pursuant to such laws, it will prepare and furnish to
the Investors and make publicly available in accordance with Rule 144(c) such
information as is required for the Investors to sell the Common Shares under
Rule 144, and (ii) not terminate its status as an issuer required to file
reports under the Exchange Act even if the Exchange Act or the rules and
regulations thereunder would permit such termination.  The Company
further covenants that it will take such further action as any holder of Common
Shares may reasonably request, all to the extent required from time to time to
enable such holder to sell the Common Shares without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144 and
Section 4.1(d) above.

       

      4.5.           Form D and Blue
Sky.  The
Company agrees to file a Form D with respect to the Common Shares as required
under Regulation D under the Securities Act and to provide a copy thereof to
each requesting Investor promptly after such filing.  The Company
shall, on or before the each Closing Date, take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for or to
qualify the Common Shares for sale to the Investors at each Closing pursuant to
this Agreement under applicable securities or "Blue Sky" laws of the states of
the United States (or to obtain an exemption from such qualification), and shall
provide evidence of any such action so taken to each requesting Investor on or
prior to each such Closing Date.  The Company shall make all filings
and reports relating to the offer and sale of the Common Shares required under
applicable securities or "Blue Sky" laws of the states of the United States
within such time periods as required under such laws.  Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Investor,
or include the name of any Investor in any filing with the Commission (other
than the Form 10 Registration Statement and any exhibits to filings made in
respect of this transaction in accordance with periodic filing requirements
under the Exchange Act) or any regulatory agency or OTC Bulletin Board, without
the prior written consent of such Investor, except to the extent such disclosure
is required by law or regulations.

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      4.6.           Indemnification of
Investors.  (a) The Company will indemnify and hold the
Investors and their respective directors, officers, shareholders, partners,
employees and agents (each, an “Investor Party”,
collectively, the “Investor
Parties”) harmless from any and all Losses that any such Investor Party
may suffer or incur as a result of or relating to any misrepresentation, breach
or inaccuracy of any representation, warranty, covenant or agreement made by the
Company in any Transaction Document.  In addition to the indemnity
contained herein, the Company will reimburse each Investor Party for its
reasonable legal and other expenses (including the cost of any investigation,
preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred.  It shall be understood,
however, that the Company shall not, in connection with any one such Proceeding
(including separate Proceedings that have been or will be consolidated before a
single judge) be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all Investor Parties, which firm shall be appointed
by a majority of the Investor Parties.

       

      (b)           The
Adviser will indemnify and hold the Investor Parties harmless from any and all
Losses that any such Investor Party may suffer or incur as a result of or
relating to any misrepresentation, breach or inaccuracy of any representation,
warranty, covenant or agreement made by the Adviser in this
Agreement.  In addition to the indemnity contained herein, the Adviser
will reimburse each Investor Party for its reasonable legal and other expenses
(including the cost of any investigation, preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are
incurred.  It shall be understood, however, that the Adviser shall
not, in connection with any one such Proceeding (including separate Proceedings
that have been or will be consolidated before a single judge) be liable for the
fees and expenses of more than one separate firm of attorneys at any time for
all Investor Parties, which firm shall be appointed by a majority of the
Investor Parties.

       

      (c)           Notwithstanding
any other provision of this Agreement, no party shall be entitled to
indemnification under this Agreement in violation of the 1940 Act or the
Advisers Act.

       

      4.7.           Non-Public
Information.  The
Company covenants and agrees that from and after the final Closing under this
Agreement neither it nor any other Person acting on its behalf will provide any
Investor or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Investor
shall have executed a written agreement regarding the confidentiality and use of
such information.  The Company understands and confirms that each
Investor shall be relying on the foregoing representations in effecting
transactions in securities of the Company.

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      4.8.           Listing of Common
Stock.  The
Company agrees: (i) it will take all action reasonably necessary to have its
Common Stock quoted on the OTC Bulletin Board and will comply in all material
respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of the OTC BB; and (ii) within five (5) business days of the
final Closing, to have caused to be prepared a completed Form 211 to initiate
quotations on the OTC Bulletin Board, with any and all attachments required
pursuant thereto, in a format that is ready for submission to the Financial
Industry Regulatory Authority (“FINRA”), accompanied by a
letter from a registered broker-dealer dated as of no more than five business
days prior to the Closing, identifying itself as a prospective market-maker in
the Company’s Common Stock and confirming its readiness to so submit such Form
211 immediately following the Closing, but with effectiveness of such Form 211
being subject to such conditions as may be applicable, including the
effectiveness of the Form 10 Registration Statement and the availability for
resale of Company Common stock registered under the Securities Act or otherwise
available for resale under Rule 144.

       

      4.9.           Use of
Proceeds.  The
Company will use the net proceeds from the sale of the Common Shares hereunder
to make investments in portfolio companies and to pay management and incentive
fees to the Adviser as the Company’s investment adviser for investment advisory
services, administrative expenses incurred on behalf of the Company by the
Company’s investment adviser, marketing and investor relations expenses and
other operating expenses of the Company.  Pending such uses, the
Company shall invest the net proceeds primarily in cash, cash equivalents, U.S.
government securities and other high-quality investments that mature in one year
or less from the date of investment. The Company will not use the net
proceeds from the sale of the Common Shares for the satisfaction of any portion
of the Company’s debt (other than payment of trade payables and accrued expenses
in the ordinary course of the Company’s business and consistent with prior
practices), or to redeem any Common Stock.

       

      4.10.         Corporate
Governance.  In addition to complying with its reporting and
other obligations under the Federal securities laws, the Company shall, prior to
the initial Closing of the Offering: (i) cause a majority of  the
members of the Company’s Board of Directors to not be “interested persons” of
the Company as defined in Section 2(a)(19) of the 1940 Act, (ii) cause
the audit and valuation committees of the Board of Directors to be established
and the members thereof elected, (iii) cause any other requirement necessary to
be regulated as a business development company under the 1940 Act to be
satisfied including, without limitation, obtaining an appropriate fidelity bond
and adopting a code of ethics, and (iv) cause the adoption of policies and
procedures as required by the 1940 Act including, without limitation, the
valuation policies and procedures and Rule 38a-1.

       

       

      4.11.         Audited Financial
Statements.  Prior to the final Closing of the Offering, the
Company shall deliver to the Investors its financial statements for the period
from May 9, 2008 (inception) to June 30, 2008, audited by  an accounting firm which
is registered with the U.S. Public Company Accounting Oversight Board, prepared
in accordance with generally accepted accounting principles, consistently
applied, during each period involved (except as may be otherwise indicated in
such financial statements or the notes thereto) and fairly presenting in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for each such year then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).

      


      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      4.12.         D&O Insurance; Indemnity
Agreements.  The Company: (i) within ninety (90) days of the
initial Closing of the Offering, shall obtain directors and officers insurance
coverage for its directors and officers in coverage and amounts determined
reasonably sufficient by the Company's Board of Directors, consistent with other
similarly situated companies in the same industry, and (ii) prior to the initial
Closing of the Offering, shall have executed and delivered an indemnity
agreement with each director of the Company.

      


      


      ARTICLE
5.

      CONDITIONS
PRECEDENT TO CLOSING

       

      5.1.           Conditions Precedent to the
Obligations of the Investors to Purchase Common Shares.  The
obligation of each Investor to acquire Common Shares at each Closing is subject
to the satisfaction or waiver by such Investor, at or before each such Closing,
of each of the following conditions:

       

      (a)           Representations and
Warranties.  The representations and warranties of the Company
and the Adviser contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing as though made on and as
of such date;

       

      (b)           Performance.  The
Company and the Adviser shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by them at or
prior to the Closing;

       

      (c)           No
Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

       

      (d)           Adverse
Changes.  Since the date of execution of this Agreement, no
event or series of events shall have occurred that reasonably could have or
result in a Material Adverse Effect or a material adverse change with respect to
the Company or the Adviser;

       

      (e)           Minimum
Offering.  The Company shall have sold, subject to Closing, at
least 500,000 Common Shares pursuant to this Agreement;

       

      (f)           Certain
Agreements.  Prior to the initial Closing, the Company and the
Adviser shall have executed and delivered the Investment Advisory and
Administrative Services Agreement and the License Agreement, each of which have
been duly authorized and approved by all necessary action of the Company’s Board
of Directors and stockholders and by the Adviser’s managers;

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      (g)           Company
Deliverables.  The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a);
and

       

      (h)           Termination.  This
Agreement shall not have been terminated as to such Investor in accordance with
Section
6.5.

       

      5.2.           Conditions Precedent to the
Obligations of the Company to Sell Common Shares.  The
obligation of the Company to sell Common Shares at each Closing is subject to
the satisfaction or waiver by the Company, at or before each such Closing, of
each of the following conditions:

       

      (a)           Representations and
Warranties.  The representations and warranties of each
Investor contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing Date as though made on and as of
such date;

       

      (b)           Performance.  Each
Investor shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Investor at or
prior to the Closing;

       

      (c)           No
Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

       

      (d)           Investors’
Deliverables.  Each Investor shall have delivered its
Investors’ Deliverables in accordance with Section
2.2(b);

       

      (e)           Minimum
Offering.  The Company shall have sold, subject to Closing, at
least 500,000 Common Shares pursuant to this Agreement; and

       

      (f)           Termination.  This
Agreement shall not have been terminated as to such Investor in accordance with
Section
6.5.

       

      ARTICLE
6.

      MISCELLANEOUS

       

      6.1.           Fees and
Expenses.  Each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of the
Transaction Documents.  The Company shall pay all stamp and other
taxes and duties levied in connection with the sale of the Common
Shares.

       

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      6.2.           Entire
Agreement.  The
Transaction Documents, together with the exhibits and schedules thereto, contain
the entire understanding of the parties with respect to the subject matter
hereof and supersede all prior agreements, understandings, discussions and
representations, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and
schedules.

       

      6.3.           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective upon actual receipt by the party to whom such notice is required to be
given.  The address for such notices and communications shall be as
follows:

       

      If to the
Company:                                   Keating
Capital, Inc.

      5251 DTC
Parkway, Suite 1000

      Greenwood
Village, CO 80111

      Telephone:        (720)
889-0131

      Attention:
Timothy J. Keating, President and CEO

       

      


      If to the
Adviser:                                      Keating
Investments, LLC

      5251 DTC
Parkway, Suite 1000

      Greenwood
Village, CO 80111

      Telephone:        (720)
889-0131

      Attention:
Timothy J. Keating, Manager

       

      
        	
                 
      

              	
                If
      to an Investor:

              	
                To
      the address set forth under such Investor’s name on the signature pages
      hereof;

              


      

       

      or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.

       

      6.4.           Amendments; Waivers; No
Additional Consideration.  No
provision of this Agreement may be waived or amended except in a written
instrument signed by the Company, the Adviser and the Investors holding a
majority of the Common Shares.  No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.  No consideration shall be
offered or paid to any Investor to amend or consent to a waiver or modification
of any provision of any Transaction Document unless the same consideration is
also offered to all Investors who then hold Common Shares.

       

      6.5.           Termination.  This
Agreement may be terminated prior to Closing:

       

      (a)           by
written agreement of the Investors and the Company; and

       

      (b)           by
the Company, or an Investor (as to itself but no other Investor) upon written
notice to the other, if the Closing shall not have taken place by 5:00 p.m. New
York time on the Outside Date; provided, that the
right to terminate this Agreement under this Section 6.5(b)
shall not be available to any Person whose failure to comply with its
obligations under this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such time.

       

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

      In the
event of a termination pursuant to this Section 6.5, the
Company shall promptly notify all non-terminating Investors and the Adviser.
Upon a termination in accordance with this Section 6.5, the
Company, the Adviser and terminating Investor(s) shall not have any further
obligation or liability (including as arising from such termination) to the
other and no Investor will have any liability to any other Investor under the
Transaction Documents as a result therefrom.

       

      6.6.           Construction.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.  The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.  This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.

       

      6.7.           Successors and
Assigns.  This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns.  The Company and the Adviser
may not assign this Agreement or any rights or obligations hereunder without the
prior written consent of the Investors.  Any Investor may assign any
or all of its rights under this Agreement to any Person to whom such Investor
assigns or transfers any Common Shares, provided such transferee agrees in
writing to be bound, with respect to the transferred Common Shares, by the
provisions hereof that apply to “Investors.”

       

      6.8.           No Third-Party
Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as otherwise set forth
in Section 4.6
(as to each Investor Party).

       

      6.9.           Governing
Law.  All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof.  Each party agrees that all
Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the state or Federal courts sitting
in New York, New York (“New
York Courts”).  Each party hereto hereby irrevocably submits to
the exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of the any
of the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum.  Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.  EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  If either
party shall commence a Proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such Proceeding shall be reimbursed by
the other party for its reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such
Proceeding.

       

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      6.10.         Survival.  The
representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Common Shares.

       

      6.11.         Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

       

      6.12.         Severability.  If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

       

      6.13.         Rescission and Withdrawal
Right.  Notwithstanding
anything to the contrary contained in (and without limiting any similar
provisions of) the Transaction Documents, whenever any Investor exercises a
right, election, demand or option under a Transaction Document and the Company
does not timely perform its related obligations within the periods therein
provided, then such Investor may rescind or withdraw, in its sole discretion
from time to time upon written notice to the Company, any relevant notice,
demand or election in whole or in part without prejudice to its future actions
and rights.

       

      6.14.         Replacement of
Securities.  If
any certificate or instrument evidencing any Common Shares is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested.  The
applicants for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs associated with the issuance of such
replacement Common Shares.  If a replacement certificate or instrument
evidencing any Common Shares is requested due to a mutilation thereof, the
Company may require delivery of such mutilated certificate or instrument as a
condition precedent to any issuance of a replacement.

       

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

      6.15.         Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Investors and the Company will
be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

       

      6.16.         Payment Set
Aside.  To
the extent that the Company makes a payment or payments to any Investor pursuant
to any Transaction Document or an Investor enforces or exercises its rights
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or Federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.

       

      6.17.         Independent Nature of
Investors’ Obligations and Rights.  The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document.  The decision of each
Investor to purchase Common Shares pursuant to the Transaction Documents has
been made by such Investor independently of any other
Investor.  Nothing contained herein or in any Transaction Document,
and no action taken by any Investor pursuant thereto, shall be deemed to
constitute the Investors as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Investors are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents.  Each Investor
acknowledges that no other Investor has acted as agent for such Investor in
connection with making its investment hereunder and that no Investor will be
acting as agent of such Investor in connection with monitoring its investment in
the Common Shares or enforcing its rights under the Transaction
Documents.  Each Investor shall be entitled to independently protect
and enforce its rights, including without limitation the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose.  The Company acknowledges that each of
the Investors has been provided with the same Transaction Documents for the
purpose of closing a transaction with multiple Investors and not because it was
required or requested to do so by any Investor.

       

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

      


       

      


       

      6.18.         Limitation of
Liability.  Notwithstanding
anything herein to the contrary, the Company acknowledges and agrees that the
liability of an Investor arising directly or indirectly, under any Transaction
Document of any and every nature whatsoever shall be satisfied solely out of the
assets of such Investor, and that no trustee, officer, other investment vehicle
or any other Affiliate of such Investor or any investor, shareholder or holder
of shares of beneficial interest of such a Investor shall be personally liable
for any liabilities of such Investor.

       

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
PAGES FOLLOW]

       

       

       

       

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, each
Investor, the Company, the Adviser and the other parties hereto have caused this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date indicated on the first page of the Securities
Purchase Agreement.

       

       

      
        
          	 	KEATING
      CAPITAL, INC.	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 	 
	 	 	Name:
      Timothy
      J. Keating	 
	 	 	      
                  Title:  President
      and Chief Executive Officer

                	 
	 	 	 	 


        

      

       

       

      
        
          
            	 	KEATING
      INVESTMENTS, LLC	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	 	 
	 	 	Name:
      Timothy
      J. Keating	 
	 	 	      
                    Title:  Manager

                  	 
	 	 	 	 


          

        

         



      


       

      


       

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
PAGE FOR INVESTORS FOLLOWS]

       

       

       

       

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, each
Investor, the Company, the Adviser and the other parties hereto have caused this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date indicated on the first page of this Securities
Purchase Agreement.

       

      
         

        
          
            
              	 	INVESTOR(S):	 
	 	 	 
	 	 	 
	 	Print
      Name of Investor(s)	 
	 	 	 
	 	 	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	 
      	 
	 	 	 	 
	 	 	 	 
	 	Name
      (print): 	 
      	 
	 	 	 	 
	 	 	 	 
	 	Title
      (print, if applicable):	 
      	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 	 


            

          

           

        

      

    

     

    28