DIRECT ACCESS PARTNERS
DIRECT
ACCESS PARTNERS
▇▇ ▇▇▇▇
▇▇▇▇▇▇, 18th
Floor
New York,
NY 10005
T:
212.850.8888 F 212.850.8898
CONFIDENTIAL
July 20,
2009
▇▇. ▇▇▇▇▇
▇ ▇▇▇▇▇▇
Chairman
of the Board, President & Chief Executive Officer
Blackhawk
Capital Group BDC, Inc.
▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
New York,
NY 10005
Dear ▇▇.
▇▇▇▇▇▇,
This
letter (the "Agreement") will confirm the engagement of Direct Access Partners,
with corporate offices located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Placement Agent"), by Blackhawk Capital Group BDC, Inc., a
Delaware corporation and a business development company registered under the
Investment Company Act of 1940, as amended (the "Company"), as placement agent
in connection with the Company's Rule 506 offering under Regulation D under the
Securities Act of 1933, as amended (the "Securities Act"), of up to
$250,000,000.00 in common stock ("Securities" or “Shares”) to qualified
institutional buyers ("QIBs") and "accredited investors" (as those terms are
defined under the Securities Act) (the "Investors"). The Offering
will be pursuant to a Confidential Private Placement Memorandum dated July 7,
2009 (“Memorandum”) and a subscription agreement and purchase questionnaire
("Subscription Agreement"). The maximum amount to be raised in the
Offering is $250,000,000.00 (and 50,000,000 Shares have been
sold). There is no minimum requirement for the sale of Shares by the
Company. Closings will occur upon receipt of funds as
received. Investors must be advised that there is no minimum amount
of subscriptions that must be raised in the Offering before the initial closing
or any “rolling” closing can take place. Funds will be placed into an
escrow account prior to any closing. The Company reserves the right
to lower the minimum or increase the maximum at its sole
discretion. The purchase price shall be $5.00 per Share.
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1.
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Scope
of Placement Agent's Services. Placement Agent will
assist in the distribution of Offering Materials (as hereinafter defined)
to potential investors, report to the Company on the status of potential
investors, assist in consummating the Offering, and perform such other
services, as necessary and as requested by the Company, including, but not
limited to:
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(a)
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familiarizing
itself to the extent it deems appropriate and feasible with the business
operations, financial condition, and prospects of the
Company,
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(b)
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screening
and contacting prospective investors,
and
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(c)
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assisting
in negotiations with prospective
investors.
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It is
understood by both parties that Placement Agent intends to solicit interest from
a limited number of potential Investors (QIBs and accredited
investors). Placement Agent will, in its sole discretion, determine
the reasonableness of their efforts and are under no obligation to perform at
any level other than what each deems reasonable. The Company shall
retain control of the Offering and shall have the right to determine (a) whether
to accept and close the sale of the Securities to a specific Investor, (b)
whether to close or terminate the Offering, and (c) the content of the Offering
Materials.
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2.
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Fees. In return
for Placement Agent's services in the placement of Securities, the Company
will pay Placement Agent a cash fee equal to five percent (5%) of the
gross proceeds (the "Financing Fee") of any Securities placed by Placement
Agent. Any Financing Fees payable to Placement Agent will be
due at the closing date of the Offering and shall be payable to Placement
Agent by the Company. Placement Agent shall not be entitled to
receive the reimbursement of any expenses from the
Company.
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3.
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Term. Unless
extended or earlier terminated by mutual agreement in writing of the
parties, the term of this Agreement shall commence July 20, 2009 and
terminate on the earliest to occur of: (i) ten (10) calendar
days after written notice given to the Company by Placement Agent of a
potential Investor purchasing at least 50,000,000 Shares that will close
on the purchase of Shares within five (5) calendar days of the date of
such written notice; (ii) 180 calendar days from July 20, 2009; (iii) the
date of closing and funding by any Investor of a Subscription Agreement
for a minimum of 50,000,000 Shares (the "Term"); or (iv) ten (10) calendar
days after written notice given to Placement Agent by the Company that the
Offering will be closed at the sole discretion of the
Company. Upon any termination or expiration of this Agreement,
neither the Company nor a potential Placement Investor shall have any
obligation or liability to any other party under this
Agreement. For a period of 180 calendar days from July 20, 2009
("Period"), Placement Agent shall have the non-exclusive right on behalf
of the Company to solicit prospective Investors who are QIBs and/or
accredited investors regarding the possible sale to such Investors of
Shares. During the Period, Placement Agent shall not have the
right to conduct any other discussions on behalf of the Company regarding
any matter other than the sale of the Shares to the prospective
Investors. For purposes of clarification, the Company during
the Period shall deal on a non-exclusive basis with Placement Agent
concerning the sale of the Shares.
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For a
period up to one year from the termination of this Agreement and if Placement
Agent enters into a selling group of any subsequent securities offerings of the
Company, then Placement Agent shall receive additional financing fees
("Additional Fees") if the Company sells securities to those Investors
previously introduced by Placement Agent ("Protected
Investors"). Prior to the termination date, Placement Agent will
furnish the Company with a written list of the Protected
Investors. The Additional Fees will be equal to any underwriting or
placement fees that are listed in any future offering circular or
prospectus.
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4.
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Company
Information. The Company
will furnish Placement Agent such information concerning the Company as
Placement Agent reasonable determine to be appropriate with respect to the
Offering ("Information"). The Company shall afford Placement
Agent and its counsel and representatives full and complete access to its
books and records and will use commercially reasonable efforts to afford
Placement Agent with full and complete cooperation of management to gather
the Information on a reasonable basis. The Company recognizes
and confirms that Placement Agent (a) will use and rely on the Information
in performing the services contemplated by this Agreement, without
independently verifying the accuracy and completeness of the same, (b)
does not assume responsibility for the accuracy or completeness of the
Information, and (c) will not make an appraisal of any assets or liability
of the Company.
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2
The
Company hereby represents to Placement Agent that all solicitation materials
prepared by the Company and used in connection with the Offering, including,
without limitation, the Confidential Private Placement Memorandum (the "Offering
Materials") will not, as of the date of any offer or sale in connection with the
Offering, contain any untrue statement of a material fact or omit a material
fact necessary to make the statements contained therein, not misleading, in
light of the circumstances under which they were made. If at any time
an event occurs as a result of which the Offering Materials, as then amended or
supplemented, would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made when such Offering Materials are
delivered to a prospective purchaser pursuant hereto, not misleading, the
Company will promptly notify Placement Agent to suspend solicitation of
prospective purchasers in connection with the Offering; and if the Company
decides to amend or supplement the Offering Materials, it will promptly advise
Placement Agent by telephone (with confirmation in writing) and will promptly
prepare an amendment or supplement that will correct such statement or
omission.
Placement
Agent will not violate, or cause the Company to violate, any applicable federal
and state securities laws in connection with the Offering.
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5.
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Confidentiality. In
connection with this engagement, it is contemplated that Placement Agent
will receive from the Company certain information (including certain
business planning, investment, product, marketing, technical, financial,
and other information and materials) the Company considers
confidential. Placement Agent shall use this confidential
information solely for the purpose of providing services to the Company
and will not disclose to any party (other than Placement Agent's officers,
directors, employees, affiliates, and counsel who have a need to know such
information, herein “Representatives”) any such confidential information,
except with the prior written approval of the Company; provided, however,
that the foregoing restrictions shall not apply to any information that:
(a) is included in the Offering Materials and disclosed pursuant to the
distribution of the Offering Materials as permitted by the Company, (b)
the Company consents to having disclosed in connection with the Offering,
(c) is publicly available when provided or thereafter becomes publicly
available other than through disclosure by Placement Agent or its
Representatives, or (d) is required to be disclosed by Placement Agent by
judicial or administrative process in connection with any action, suit,
proceeding, or investigation; and provided, further, however, that
Placement Agent shall give the Company notice of any such requirement
immediately upon the becoming aware of same and shall not disclose such
information except only to the extent required after the maximum time
permitted. Information shall be deemed “publicly available” if
it becomes a matter of public knowledge or is contained in materials
available to the public or is obtained by Placement Agent from any source
other than the Company or its representatives, provided that such source
was not to Placement Agent's actual knowledge subject to a confidentiality
agreement with the Company. Placement Agent will take
reasonable steps to assure that the Offering Materials are not distributed
to any persons not permitted to receive them pursuant to the terms
hereof. Placement Agent will not provide any confidential
information to prospective Investors or any other third party without the
express written consent of the Company unless the prospective Investor has
executed a confidentiality agreement acceptable to the
Company.
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6.
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Representations
and Warranties of Placement Agent. (a) Placement Agent
is a broker-dealer registered with the SEC and FINRA; (b) there are no
judgments, orders, decrees, or like actions, or any proceedings pending,
before the SEC, FINRA, any State, or any court or arbitration panel that
prohibit or affect it from carrying out its obligations under this
Agreement; and (c) this Agreement has been duly authorized and approved by
Placement Agent, does not contravene its organizational documents or any
agreement or order to which it is a party, and is a legal and valid
obligation binding on Placement
Agent.
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7.
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Indemnification. The Company
acknowledges that Placement Agent will be acting on behalf of the Company
and will require indemnification by the Company. The Company
further acknowledges that Placement Agent's indemnification provisions
attached hereto as Exhibit A are
incorporated by reference herein or are made a part hereof for all
purposes as though set forth entirely
herein.
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8.
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Miscellaneous. The
Offering will be completed in accordance with Rule 506 under Regulation D
under the Securities Act and all applicable state or other jurisdictional
securities laws (i.e. "blue sky" laws). All prospective
Investors will be persons who qualify as QIBs and/or accredited investors
under all applicable federal and state securities laws and who execute a
Subscription Agreement.
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The
Company shall have the right to identify Investors with which it has
affiliations who would be suitable QIBs and/or accredited investors for the
Offering ("Company-Introduced Investors"). In the event that the Company decides
that these Investors are suitable for the Offering and these Investors purchase
Securities in the Offering, no fees shall be due to Placement Agent respecting
Securities purchased by Company-Introduced Investors pursuant to Section 2
above.
The
Company agrees that, following the closing of the Offering, Placement Agent and
shall have the right to place advertisements in financial and other newspapers
and journals at their own expense describing its services to the Company
hereunder, provided that Placement Agent will submit a copy of any such
advertisement to the Company for its approval, which approval shall not be
unreasonably withheld or delayed, and that such action is not in violation of
Rule 506 under Regulation D or other federal and state securities
laws.
The
parties agree that their relationship under this Agreement is an advisory
relationship only, and nothing herein shall cause Placement Agent to be
partners, agents or fiduciaries of, or joint venture partners with, the
Company.
This
Agreement may not be amended or modified except in writing and shall be governed
by, and construed in accordance with the laws of the State of New
York.
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If this
Agreement reflects our mutual understanding, please execute two copies in the
space indicated below and return one to us.
Very
truly yours,
DIRECT
ACCESS PARTNERS
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name:
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▇▇▇▇▇▇
▇. ▇▇▇▇▇, C.R.C.P.
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Title:
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CFO/COMP
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BLACKHAWK
CAPITAL GROUP BDC, INC.
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇.
▇▇▇▇▇ ▇ ▇▇▇▇▇▇
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Chairman
of the Board, President & Chief Executive
Officer
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5
Exhibit
A
Indemnification
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"), agrees to indemnify and hold harmless Placement Agent Inc.
("Placement Agent") together with its affiliates, directors, officers, agents,
and employees (Placement Agent each such entity or person, an "Indemnified
Person"), from and against any and all losses, claims, damages, judgments, and
liabilities, expenses, or costs (and all actions in respect thereof and any
legal or other expenses in giving testimony or furnishing documents in response
to a subpoena or otherwise), including the cost of investigating, preparing for,
or defending any such action or claim, whether or not in connection with
litigation in which an Indemnified Person is a party, as and when incurred,
directly or indirectly caused by, relating to, based upon, or arising out of
Placement Agent's performance of its engagement by the Company under the letter
agreement dated as of July 20, 2009, as it may be amended from time to time (the
"Agreement"), or otherwise arising out of or in connection with advice or
services provided or to be provided by Indemnified Persons pursuant to the
Agreement, the transactions contemplated thereby, or any Indemnified Person’s
actions or inactions in connection with any such advice, services, or
transactions, including any indemnified person's sole or contributory
negligence, if such activities were performed (i) in good faith and (ii) in such
manner reasonably believed by such Indemnified Person to be within the scope of
the authority conferred by the Agreement or by law and to be on behalf of the
Company or in furtherance of the performance of Placement Agent's services under
the Agreement; provided, however, such indemnity agreement shall not apply to
any such loss, claim, damage, liability, or cost incurred by any Indemnified
Person to the extent it is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted primarily and
directly from the gross negligence or willful misconduct or bad faith of such
Indemnified Person. The Company also agrees that no Indemnified
Person shall have any liability (whether direct or indirect, in contract or tort
or otherwise) to the Company for or in connection with the any advice or
services provided by any Indemnified Persons in connection with the Agreement,
the transactions contemplated by the Agreement, or any Indemnified Persons’
actions or inactions in connection with any such advice, services, or
transactions except for any such liability for losses, claims, damages,
liabilities, or costs found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted primarily and
directly from such Indemnified Person’s gross negligence or willful misconduct
or bad faith in connection with such advice, actions, inactions, or
services.
These
Indemnification Provisions shall be in addition to any liability that the
Company may otherwise have to any Indemnified Person and shall extend to the
following: Placement Agent, its affiliated entities, directors, officers,
employees, agents, legal counsel and controlling persons of Placement Agent
within the meaning of the federal securities laws, and the respective
successors, assigns, heirs, beneficiaries, and legal representatives of each of
the foregoing indemnified persons or entities. All references to
Placement Agent, or Indemnified Persons, in these Indemnification Provisions
shall be understood to include any and all of the foregoing indemnified persons
or entities.
If any
action, proceeding, or investigation is commenced, as to which an Indemnified
Person proposes to demand such indemnification, it will notify the Company with
reasonable promptness; provided, however, that any failure by an Indemnified
Person to notify the Company will not relieve the Company from its obligations
hereunder except if and only to the extent that the Company’s defense of such
action, proceeding or investigation is actually prejudiced by the Indemnified
Person’s failure so to notify the Company. Placement Agent will have
the right to retain counsel of its own choice to represent them; however, such
firm shall be acceptable to the Company, which acceptance shall not be
unreasonably withheld, and unless the Company assumes Placement Agent's defense
as provided below, the Company will pay the reasonable fees and expenses of such
counsel, and such counsel shall to the fullest extent consistent with its
professional responsibilities cooperate with the Company and any counsel
designated by it. The Company will be entitled to participate at its
own expense in the defense, or if it so elects, to assume and control the
defense of any action, proceeding, or investigation, but if the Company elects
to assume the defense, such defense shall be conducted by counsel reasonably
acceptable to Placement Agent. Any Indemnified Person may retain
additional counsel of its own choice to represent it but shall bear the fees and
expenses of such counsel unless the Company shall have specifically authorized
the retaining of such counsel. The Company will not be liable for any
settlement of any claim against an Indemnified Person made without its written
consent.
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In order
to provide for just and equitable contribution, if a claim for indemnification
pursuant to these Indemnification Provisions is made but it is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal)
that such indemnification may not be enforced in such case, even though the
express provisions hereof provide for indemnification in such case, then the
Company, on the one hand, and any Indemnified Person, on the other hand, shall
contribute to the losses, claims, damages, liabilities, or costs to which the
Indemnified Persons may be subject in accordance with the relative benefits
received by the Company, on the one hand, and Placement Agent, on the other
hand, and also the relative fault of the Company, on the one hand, and Placement
Agent, on the other hand, in connection with the statements, acts or omissions
that resulted in such losses, claims, damages, liabilities, or costs, and the
relevant equitable considerations shall also be considered. No person
found liable for a fraudulent misrepresentation shall be entitled to
contribution from any person who is not also found liable for such
misrepresentation. Notwithstanding the foregoing, Placement Agent
shall be obligated to contribute any amount hereunder that exceeds the amount of
fees received by Placement Agent to the Agreement.
The
liability of the Company under the indemnification provisions set forth in this
Exhibit A shall be
limited to $25,000.
Neither
termination nor completion of the engagement of Placement Agent or any
Indemnified Person under the Agreement shall affect the provisions of these
Indemnification Provisions, which shall then remain operative and in full force
and effect for one year.
If any
provision contained in this Exhibit A is held by a court
of competent jurisdiction or other authority to be invalid, void, unenforceable,
or against its regulatory policy, the remainder of the provisions contained in
this Exhibit A shall
remain in full force and effect and shall in no way be affected, impaired, or
invalidated. These Indemnification Provisions may not be amended or
modified in any way, except by subsequent agreement executed in
writing.
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