CONFIDENTIAL
CONFIDENTIAL
February
7, 2008
Xx.
Xxxxx
X. Xxxxxx
Chairman
of the Board, President & Chief Executive Officer
Blackhawk
Capital Group BDC, Inc.
00
Xxxx
Xxxxxx
New
York,
NY 10005
Dear
Xx.
Xxxxxx,
This
letter agreement (the "Agreement") will confirm the engagement of Xxxxxxx X.
Xxxxx, an individual ("Selling Agent"), by Blackhawk
Capital Group BDC, Inc., a Delaware corporation and a business development
company registered under the Investment Company Act of 1940, as amended
(the
"Company"), as selling agent in connection with the Company’s offering of a
maximum of $5 million in common stock of the Company ("Securities") to
accredited investors (the "Offering") pursuant to Regulation E under the
Securities Act of 1933, as amended ("Securities Act"). Your services under
this
Agreement are non-exclusive.
1.
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Scope
of Selling Agent’s Services.
Selling Agent will assist the Company in placing the Securities with
investors by introducing investors to the Company to purchase Securities.
The Company shall have absolute discretion to accept or reject a
subscription from a prospective
investor.
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2.
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Fees
and Non-Exclusivity.
In
return for Selling Agent’s services in the placement of Securities, the
Company will pay Selling Agent a cash fee equal to 10.00% (“Placement
Fee”) of the gross proceeds of any Securities placed by the Selling Agent
and accepted by the Company. Any Placement Fees payable to Selling
Agent
will be due at the closing date of the Offering and shall be payable
to
the Selling Agent by the Company.
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[The
Company shall also pay the Placement Fee on any Securities purchased by Selling
Agent.]
3.
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Expenses.
The Company will not be responsible for any expenses of the Selling
Agent
related to the Offering.
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4.
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Term.
This Agreement shall have no term and may be terminated at any time
by the
Company.
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5.
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Representations
and Warranties of the Selling Agent.
The Selling Agent represents and warrants to the Company as follows:
(a)
he is a licensed registered representative registered with the SEC,
FINRA,
and all States in which he is required to register; and (b) there
are no
judgments, orders, decrees, or like actions, or any proceedings pending,
before the SEC, NASD, any State, or any court or arbitration panel
that
prohibit or effect the Selling Agent from carrying out his obligations
under this Agreement.
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6.
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Confidentiality.
In
connection with this engagement, it is contemplated that the Selling
Agent
will receive from the Company certain information (including certain
business planning, product, marketing, financial, and other information
and materials) the Company considers confidential. The Selling Agent
shall
use this confidential information solely for the purpose of providing
services to the Company and will not disclose to any party any such
confidential information, except with the prior written approval
of the
Company.
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7.
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Miscellaneous.
The Offering will be completed in accordance with Regulation E under
the
Securities Act, which is the offering exemption available to business
development companies registered under the Investment Company Act
of 1940,
as amended ("Investment Company Act"), and all applicable state or
other
jurisdictional securities laws (i.e. “blue sky” laws). All investors in
the Offering will be persons who qualify as accredited investors
under all
applicable federal and state securities
laws.
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The
parties agree that their relationship under this Agreement is an advisory
relationship only, and nothing herein shall cause the Selling Agent to be
partners, agents or fiduciaries of, or joint venture partners with, the Company
or with each other.
This
Agreement may not be amended or modified except in writing and shall be governed
by, and construed in accordance with the laws of the State of New York. Each
party to this Agreement submits to the jurisdiction of the federal and state
courts in New York, New York to decide any dispute regarding this Agreement.
8.
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Selling
Away Agreement with SMH Capital, Inc.
This Agreement is conditioned upon, and shall only be enforceable,
if
Selling Agent delivers to the Company the selling away agreement
from SMH
Capital, Inc. in the form of Exhibit
A
attached hereto.
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If
this
Agreement reflects our mutual understanding, please execute two copies in the
space indicated below and return one to us.
Very
truly yours,
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/s/
Xxxxxxx
X. Xxxxx
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Xxxxxxx
X. Xxxxx
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Accepted
and agreed to as of February 7, 2008:
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BLACKHAWK
CAPITAL GROUP BDC, INC.
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/s/
Xxxxx X. Xxxxxx
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Name:
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Xx.
Xxxxx X. Xxxxxx
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Title:
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Chairman
of the Board, President & Chief Executive Officer
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EXHIBIT
A
SELLING
AWAY AGREEMENT WITH SMH CAPITAL, INC.
XXXXXXX
XXXXXX XXXXXX
Xxxx
X. Xxxxx
GENERAL
COUNSEL/SENIOR VICE PRESIDENT
January
31, 2008
Xx.
Xxxxx
X. Xxxxxx
Chairman,
President and Chief Executive Officer
Blackhawk
Capital Group BDC, Inc.
00
Xxxx
Xxxxxx, 11th Floor
New
York,
NY 10005
Re:
Selling
Away Letter
Dear
Xx.
Xxxxxx:
We
hereby
confirm that SMH Capital Inc. (formerly
Xxxxxxx
Xxxxxx Xxxxxx Inc.) (hereinafter "SMH")
is
registered as a broker-dealer under Section 15 of the Securities and Exchange
Act of 1934
and
is a member in good standing of the Financial Industry Regulatory Authority
("FINRA").
We further confirm that we have been duly notified by Xxxxxxx X. Xxxxx, a
registered representative
of SMH,
of
the current $5,000,000 financing by Blackhawk Capital Group BDC, Inc.
("Blackhawk") under Regulation E of the Securities Act of 1933, as amended,
pursuant to the
Blackhawk Amended
Offering Circular dated January 7, 2008 ("Current Offering") filed
with
the
Securities and Exchange Commission ("SEC").
A Form 1-E (including an Offering. Circular)
for
the
Current Offering was originally filed on December 3, 2007 with the
SEC.
We
have
been advised by Xx. Xxxxx that SMH is not named in the Offering Circular with
respect to
the
Current Offering in any capacity, including without limitation as an underwriter
or placement
agent.
Reference
is made to the agreement dated October 31, 2006, between SMH and Xxxxxxxxx,
as
amended by the
first- amendment dated January 27, 2007, and the second amendment dated July
13,
2007
(collectively the "SMH Agreement"). Pursuant to the SMH Agreement, SMH served
as
placement agent for Blackhawk's prior offering ("Prior Offering") of its common
stock under Regulation E. The
SMH
Agreement by its terms terminated October 31, 2007. XXX acknowledges
and agrees that the
SMH. Agreement
is terminated,
that
SMH
no longer
serves as placement
agent or in any other
role for
Blackhawk, and that Blackhawk does not owe SMH any money,
including, without limitation, any fees, commissions, and expenses.
Xx.
Xxxxx
previously
served as
an
SMH
employee who was in charge of the Prior
Offering
for SMH. Xx. Xxxxx is no longer employed by SMH, but as of January 31, 2008,
retained his registered
representative license with SMH.
We
confirm that SMH declines to be involved in the Current Offering by Xxxxxxxxx
and acknowledge
that Xx. Xxxxx may proceed with assisting you with the Current Offering
independent
of SMH. XXX acknowledges that Xx. Xxxxx has informed us of the compensation
arrangement between him and Blackhawk for his role with respect to the Current
Offering, We have
no
objection to your paying any compensation earned by Xx. Xxxxx directly to Xx.
Xxxxx for his
work
on the Current Offering and agree that SMH is not entitled to any portion of
such compensation.
Very
truly yours,
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SMH
CAPITAL INC.
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/s/
Xxxx X. Xxxxx
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Name:
Xxxx
X. Xxxxx
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Title:
Senior Vice President and General
Counsel
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