Exhibit 10.72

 

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PLEDGE, SECURITY AND CUSTODY AGREEMENT

 

by and among

 

MCG COMMERCIAL LOAN TRUST 2005-1,

MCG FINANCE VI, LLC and

MCG CAPITAL CORPORATION

each, as Pledgor,

 

UBS AG, STAMFORD BRANCH,

as the Pledgee,

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as the Custodian

 

Dated as of April 21, 2005

 

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PLEDGE, SECURITY AND CUSTODY AGREEMENT

 

THIS PLEDGE, SECURITY AND CUSTODY AGREEMENT (such agreement as amended,
modified, waived, supplemented or restated from time to time, the “Pledge
Agreement”) is made as of this 21st day of April 2005, by and among:

 

(1) MCG COMMERCIAL LOAN TRUST 2005-1, a Delaware statutory trust, as a pledgor
(together with its successors and assigns, the “Borrower”);

 

(2) MCG FINANCE VI, LLC, a Delaware limited liability company, as a pledgor
(together with its successors and assigns, the “LLC”);

 

(3) MCG CAPITAL CORPORATION, a Delaware corporation, as a pledgor (together with
its successors and assigns, “MCG”; each of MCG, LLC and the Borrower is referred
to herein as a “Pledgor” and, collectively, as the “Pledgors”);

 

(4) UBS AG, STAMFORD BRANCH, as the pledgee (together with its successors and
assigns, the “Pledgee”); and

 

(5) WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), a national banking
association, not in its individual capacity but solely as the custodian
(together with its successors and assigns in such capacity, the “Custodian”).

 

R E C I T A L S

 

WHEREAS, as a condition to Pledgee’s entering into the Credit and Warehouse
Agreement, dated as of April 21, 2005 (such agreement as amended, modified,
waived, supplemented or restated from time to time, the “Credit Agreement”), by
and among the Borrower, MCG and the Pledgee, each Pledgor is required to execute
and deliver this Pledge Agreement;

 

NOW, THEREFORE, based upon the foregoing Recitals, the mutual premises and
agreements contained herein, and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

1. Certain Defined Terms.

 

Whenever used in this Pledge Agreement, the following words shall have the
meanings set forth below. Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Credit Agreement.

 

“Applicable Law”: For any Person or property of such Person, all then existing
applicable laws, rules, regulations, statutes, treaties, codes, ordinances,
permits, certificates, orders and licenses of and interpretations by any
Governmental Authority, and applicable judgments, decrees, injunctions, writs,
or orders of any court, arbitrator or other administrative, judicial, or
quasi-judicial tribunal or agency of competent jurisdiction.

 

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“Adverse Security Effect”: Any event or circumstance that impairs (a) the
creation, perfection or priority of any security interest purported to be
created hereunder, (b) the acquisition by LLC or the Borrower of rights in any
Collateral purported to be owned by it or (c) the practical realization of the
substantive benefits purported to be provided to the Pledgee by this Agreement.

 

“Collateral”: (i) Any Collateral Debt Security and any Contributed Capital Asset
including any investment property, instruments, payment intangibles, accounts,
monies, or other property related thereto, (ii) all Proceeds of any of the
foregoing, and (iii) the bank or deposit accounts of the Borrower in which such
Proceeds are held from time to time. In addition, (a) when used with respect to
the LLC, “Collateral” includes its rights acquired under Paragraph 7C and (b)
when used with respect to the Borrower, “Collateral” includes (i) its rights
acquired under Paragraph 7B and (ii) all of its rights under the Credit
Agreement with respect to any “Borrower Advance Payment” (as defined in the
Credit Agreement).

 

“Collateral Documents”: With respect to any Collateral Debt Security or any
Contributed Capital Assets, the duly executed originals of each related
Underlying Note, indorsement(s) or instrument(s), in each instance if any,
memorializing or otherwise evidencing the indebtedness of an Obligor.

 

“Collateral List”: An electronic list of Collateral Debt Securities and
Contributed Capital Assets funded under or otherwise servicing as collateral for
the indebtedness under the Credit Agreement, in a form reasonably acceptable to
the Custodian, as such list is provided by the Borrower to the Pledgee and the
Custodian (and containing such information as is specified in Schedule III) as
such list may be amended, supplemented or modified from time to time in
accordance with this Pledge Agreement. Such list shall contain such information
as is reasonably necessary to permit the Custodian to perform the review process
set forth in Paragraph 2, including, but not limited to, with respect to each
document to be inventoried by the Custodian.

 

“Communication”: The meaning specified in Paragraph 7J.

 

“Custodian Fee”: The meaning specified in Paragraph 5B.

 

“Designated Remedy Event”: The meaning specified in the Credit Agreement.

 

“Governmental Authority”: Any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, any court
or arbitrator and any accounting board or authority (whether or not a part of
the government) that is responsible for the establishment or interpretation of
national or international accounting principles.

 

“Grant”: To grant, bargain, sell, warrant, alienate, remise, demise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security interest
in and right of setoff against, deposit, set over and confirm.

 

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“Lien”: Any mortgage, deed of trust, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, participation
interest, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever, including any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing and the filing of any financing statement under
the UCC or comparable law of any jurisdiction to evidence any of the foregoing.

 

“Obligations”: Has the meaning given to such term in Paragraph 7A of this Pledge
Agreement.

 

“Obligor”: With respect to any Collateral Debt Security or any Contributed
Capital Asset, the Person or Persons obligated to make payments pursuant to such
Collateral Debt Security or Contributed Capital Asset, as applicable, including
any guarantor thereof.

 

“Proceeds”: Has the meaning given to “Proceeds” in Section 9-102 of the UCC,
together with all principal, interest and other payments and distributions of
cash or other property with respect to the Collateral (including, without
limitation, payments at maturity or upon redemption and any interest with
respect to the Collateral), and all rights, privileges and other securities of
every kind distributed with respect thereto or in exchange or substitution
therefor, upon conversion or otherwise.

 

“Remedy Event”: Any of the following: (a) any Obligations shall not have been
paid after the same shall have become due and (other than in the case of a
payment obligation under Section 2(k) of the Credit Agreement) such payment
failure continues for four Business Days, (b) the occurrence of the Termination
Date (as defined in the Credit Agreement) by reason of the occurrence of an
event specified in any of clauses (a), (c), (e), (f), (g), (h), (i) and (j) of
the definition of “Termination Date”, (c) any Pledgor shall fail to perform any
of its material obligations under, or shall breach any material provision of,
this Agreement (or, in the case of the Borrower, the Credit Agreement) and (in
the case of any failure or breach that, either individually or in the aggregate
with all other such failures or breaches, has not had and could not have an
Adverse Security Effect) such failure or breach continues for 15 days after
notice to such Pledgor, (d) any representation or warranty made by any Pledgor
in or pursuant to this Agreement (or, in the case of the Borrower, the Credit
Agreement), or in any certificate or other document furnished pursuant to this
Agreement (or, in the case of the Borrower, the Credit Agreement), shall prove
to have been incorrect in any material respect when made or (e) an Insolvency
Event occurs with respect to any Pledgor. For the avoidance of doubt, any
obligation or provision of this Agreement or the Credit Agreement, and any
failure of a representation or warranty to be correct, shall be deemed to be
“material” if a breach or failure thereof, either individually or in the
aggregate with all other such failures or breaches, has had or could have an
Adverse Security Effect.

 

“Specified Matter”: With respect to any Collateral Debt Security or Contributed
Capital Asset, any amendment, supplement, consent, waiver or other modification
(howsoever documented) that (a) reduces the principal amount of the related
Collateral Debt Security or Contributed Capital Asset, (b) reduces the rate of
interest payable on the related Collateral Debt Security or Contributed Capital
Asset if, in the case of a Collateral Debt Security or Contributed Capital Asset
originated by MCG, such reduction (together with all prior such reductions

 

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occurring on or after the date on which the Borrower acquired such Collateral
Debt Security or Contributed Capital Asset) exceeds 10% of the rate of interest
payable on the date the Borrower acquired such Collateral Debt Security or
Contributed Capital Asset (such comparison to be made, in the case of a floating
interest rate, by reference only to the margin above or below the relevant
floating index so long as the floating index component of such floating interest
rate is unchanged by such reduction and otherwise by deeming the floating
component constant), (c) reduces any material fee payable on the related
Collateral Debt Security or Contributed Capital Asset, (d) postpones the due
date of any scheduled payment or distribution in respect of the related
Collateral Debt Security or Contributed Capital Asset if, in the case of a
Collateral Debt Security or Contributed Capital Asset originated by MCG, such
postponement (together with all prior such postponements occurring on or after
the date on which the Borrower acquired such Collateral Debt Security or
Contributed Capital Asset) has had or could reasonably be expected to have a
material adverse effect on the value of such Collateral Debt Security or
Contributed Capital Asset, (e) alters the pro rata allocation or sharing of
payments or distributions required by any Collateral Debt Security or
Contributed Capital Asset or any related document, (f) releases any material
guarantor of the related Collateral Debt Security or Contributed Capital Asset
from its obligations, (g) terminates or releases any material lien securing the
related Collateral Debt Security or Contributed Capital Asset, (h) changes any
of the provisions of any Collateral Debt Security or Contributed Capital Asset
or any related document specifying the number or percentage of lenders required
to effect any of the foregoing or (i) could reasonably be expected to have a
material adverse effect on the rights of the Pledgee in such Collateral Debt
Security or Contributed Capital Asset.

 

“UCC”: The Uniform Commercial Code of the State of New York (as the same may be
deemed to be in effect pursuant to applicable law and federal regulation).

 

“Underlying Note”: The promissory note (if any) of an Obligor evidencing a
Collateral Debt Security or a Contributed Capital Asset.

 

All references to time in this Pledge Agreement shall mean the time in effect on
that day in New York, New York.

 

2. Appointment of Custodian; Duties of Custodian.

 

A. Wells Fargo is hereby designated by each Pledgor and the Pledgee as, and
hereby agrees to perform the duties and obligations of, Custodian pursuant to
the terms hereof. With respect to any Collateral or Collateral Documents that
are delivered to the Custodian or which come into the possession of the
Custodian (“Custodial Property”), the Custodian shall hold and retain custody of
all such Custodial Property for the benefit of and as bailee for the Pledgee,
and shall make disposition thereof only in accordance with this Pledge
Agreement. The Custodian hereby accepts appointment as custodian and agent and
agrees to perform the duties and obligations with respect thereto set forth
herein.

 

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B. On and after the date of this Pledge Agreement, the Custodian shall perform
the following duties:

 

(i) Within two (2) Business Days after receipt of an updated Collateral List and
any related Collateral Documents, the Custodian shall deliver to the Pledgee a
custodial receipt in the form of Exhibit A hereto, wherein the Custodian shall
state (with any exceptions noted) that with respect to each Collateral Debt
Security and Contributed Capital Asset listed on the Collateral List the
Collateral Documents are in the possession of the Custodian.

 

(ii) All Custodial Property shall be kept in fire-resistant vaults or cabinets
at the locations specified on Schedule I attached hereto, or at such other
office(s) of the Custodian as shall be specified to the Pledgee and the Borrower
by the Custodian in a written notice delivered at least thirty (30) days prior
to such change. All Custodial Property shall be segregated from any other
documents or instruments maintained by the Custodian, identified with an
appropriate label (indicating the Pledgee’s interest therein) and maintained in
such a manner so as to permit retrieval and access.

 

(iii) In performing its duties, the Custodian shall use the same degree of care
and attention as it employs with respect to similar Custodial Property that it
holds as collateral custodian for other Persons.

 

C. The Custodian represents and agrees that: (a) it has established and is
maintaining on the books and records of its office first identified in Schedule
II hereto under the account number 17554300 in the name of the Custodian (said
account, together with any replacements thereof or substitutions therefor, the
“Account”), (b) the Account is a “deposit account” (within the meaning of
Section 9-102(a)(29) of the UCC) and (c) the Account and all property credited
thereto shall constitute “Collateral” and “Custodial Property” for the purposes
of this Agreement. MCG shall pay or cause to be paid to the Account all Proceeds
of any Collateral Debt Securities or Contributed Capital Assets promptly after
receipt by MCG, the LLC or the Borrower but in any event within four Business
Days. The Account may, for operational and administrative purposes, be divided
into subaccounts. Any amounts deposited in the Account constituting principal or
any Purchased Accrued Interest or any up front fees paid at the time of
acquisition by the Borrower or owing to the Borrower in respect of any
Collateral Debt Security (which shall be deposited into a “principal subaccount”
of the Account) will upon receipt of a written direction from or on behalf of
the Borrower be paid by the Custodian to the Pledgee for application as provided
in Section 2(k) of the Credit Agreement (provided that the absence of such
written direction shall not relieve the Borrower of any of its obligations under
said Section 2(k)). Any amounts deposited in the Account and of a type required
to be applied as provided in Section 2(l) of the Credit Agreement (which shall
be deposited into an “interest subaccount” of the Account) will, upon receipt of
a written direction from or on behalf of the Borrower, be paid by the Custodian
as directed by the Pledgee or MCG for application as provided in Section 2(l) of
the Credit Agreement (provided that the absence of such written direction shall
not relieve the Borrower of any of its obligations under said Section 2(l)).
Proceeds of any loan advanced by UBS pursuant to Section 2(c) of the Credit
Agreement for account of the Borrower will be deposited by the Custodian in a
“proceeds subaccount” of the Account and will be made available to the Borrower
(and to MCG on the Borrower’s behalf) to purchase any Collateral Debt Security.

 

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3. Representations and Warranties. Each of the Pledgor, Pledgee and Custodian
represents and warrants as to itself only, as of the date of this Pledge
Agreement, with respect to Paragraphs 3A, 3B and 3C, and each Pledgor represents
and warrants as of the date of each Grant by such Pledgor of a Lien hereunder in
any Collateral in which such Pledgor has rights with respect to Paragraph 3D,
that:

 

A. It is duly organized and existing under the laws of the jurisdiction of its
organization with full power and authority to execute and deliver this Pledge
Agreement and to perform all of the duties and obligations to be performed by it
hereunder;

 

B. This Pledge Agreement is legally and validly entered into, does not violate
any Applicable Law applicable to it, and is enforceable in accordance with its
terms, except as may be limited by bankruptcy, insolvency or similar laws, or by
equitable principles relating to or limiting creditors’ rights generally.

 

C. The person executing this Pledge Agreement on its behalf has been duly and
properly authorized to do so.

 

D. Ownership, No Liens, etc.

 

(i) It is the owner of each item of Collateral in which such Pledgor has rights,
free and clear of any Liens, except such as may exist in favor of the Pledgee
under this Pledge Agreement. No effective financing statement covering all or
any part of the Collateral is on file in any recording office of any
jurisdiction, except such as may have been filed in favor of (or assigned to)
the Pledgee relating to this Pledge Agreement.

 

(ii) It has acquired its ownership in each item of Collateral in which such
Pledgor has rights for value and in good faith without notice of any adverse
claim.

 

(iii) It has not assigned, pledged or otherwise encumbered any interest in any
item of Collateral in which such Pledgor has rights other than interests Granted
pursuant to or in connection with this Pledge Agreement.

 

(iv) It has full right to Grant to the Pledgee (either directly or by assignment
by another Pledgor) the Collateral in which such Pledgor has rights as provided
herein.

 

(v) The Grant of a security interest by such Pledgor of the Collateral in which
such Pledgor has rights hereunder and the delivery of such Collateral to the
Custodian as provided hereunder are effective to create in favor of the Pledgee
(or in favor of the LLC with respect to the Grant by MCG, and in favor of the
Borrower with respect to the Grant by the LLC) a valid, perfected security
interest in such Collateral securing the Obligations, subject to no prior Liens
in such Collateral, assuming that the financing statements identified in
Schedule IV hereto are filed in the jurisdictions indicated in such Schedule.

 

4. Effecting the Custody.

 

A. Instructions to Custodian. Within five Business Days after the acquisition of
an interest in any Collateral Debt Security or any Contributed Capital Asset by
the Borrower, the

 

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Borrower shall deliver to the Custodian, and the Custodian shall take into
custody for the exclusive benefit of the Pledgee, in accordance with the terms
of Paragraph 2 above, all Collateral Documents that the Borrower has received
evidencing or memoralizing its rights in such indebtedness. In connection
therewith, the Borrower shall deliver to the Custodian and Pledgee the
Collateral List in the form of Schedule III hereto (as the same shall be amended
by the addition or deletion of Collateral Debt Securities or Contributed Capital
Assets, as applicable, on each date on which the Borrower acquires an interest
in any Collateral Debt Security or Contributed Capital Asset).

 

B. No Lien or Pledge by Custodian. The Custodian agrees that no Custodial
Property shall be subject to any Lien or right of setoff by the Custodian or any
third party claiming through the Custodian (including (a) any and all
contractual rights of set-off, lien or compensation, (b) any and all statutory
or regulatory rights of pledge, lien, set-off or compensation, (c) any and all
statutory, regulatory, contractual or other rights to put on hold, block
transfers from or fail to honor instructions of the Pledgee or (d) any and all
statutory or other rights to prohibit or otherwise limit the pledge, assignment,
collateral assignment or granting of any type of security interest in the
Custodial Property), and the Custodian shall not Grant any third party an
interest in, any Custodial Property. The Custodian agrees that, if there is any
conflict between this Pledge Agreement and any other agreement between the
Custodian and any Pledgor regarding the Custodial Property (other than an
agreement between Wells Fargo and MCG not related to the subject matter of this
Agreement), the provisions of this Pledge Agreement shall control. The Custodian
shall promptly notify the Pledgee if any person asserts or seeks to assert a
Lien or other adverse claim against any portion or all of the Custodial
Property.

 

C. Periodic Statements. Upon the request of any Pledgor or the Pledgee, the
Custodian shall provide such Person a list of all Collateral Debt Securities and
all Contributed Capital Assets for which it holds Collateral Documents pursuant
to this Pledge Agreement. Such list may be in the form of a copy of the
Collateral List with manual deletions to specifically note Collateral Debt
Securities and Contributed Capital Assets paid off or removed since the date of
this Pledge Agreement.

 

D. Copies of Collateral Documents. Upon request by the Pledgee, any Pledgor or
the Collateral Manager, the Custodian shall (at the expense of Borrower so long
as the aggregate amount of all such expenses and all expenses pursuant to
clauses (E) and (F) of Paragraph 7 do not exceed $75,000 and otherwise at the
expense of MCG) provide copies of any of the Collateral Documents in its
possession relating to one or more Collateral Debt Securities and/or Contributed
Capital Assets.

 

5. Limitation on Liability; Other Provisions Concerning Custodian.

 

A. Limitation on Liability.

 

(i) Except for its willful misconduct or gross negligence, the Custodian may
conclusively rely on and shall be fully protected in acting upon any
certificate, instrument, opinion, notice, letter, telegram or other document
delivered to it and that in good faith it reasonably believes to be genuine and
that has been signed by the proper party or parties. Until

 

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the Custodian receives written notice from the Pledgee that a Remedy Event has
occurred and is continuing, the Custodian shall follow the written instructions
of the Borrower (or the Collateral Manager acting on its behalf) with respect to
the Custodial Property. After the Custodian receives written notice from the
Pledgee (with a copy to MCG) that a Remedy Event has occurred and is continuing,
the Custodian shall exclusively follow the written instructions of the Pledgee
with respect to the Custodial Property (except for any instructions that MCG is
authorized to give pursuant to the last sentence of Paragraph 7G).

 

(ii) The Custodian may with consult counsel satisfactory to it and the advice or
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by the Custodian hereunder
in good faith and in accordance with the advice or opinion of such counsel.

 

(iii) The Custodian shall not be liable for any error of judgment, or for any
act done or step taken or omitted by it, in good faith, or for any mistakes of
fact or law, or for anything that it may do or refrain from doing in connection
herewith except (a) in the case of its willful misconduct or grossly negligent
performance or omission of its duties, (b) in the case of its negligent
performance of its duties in taking and retaining custody of the Collateral
Documents or (c) the failure of the Custodian to take any action requested to be
taken at the express direction of the Pledgee in accordance with an express
provision of this Pledge Agreement.

 

(iv) The Custodian makes no warranty or representation and shall have no
responsibility (except as expressly set forth in this Pledge Agreement) as to
the content, enforceability, completeness, validity, sufficiency, value,
genuineness, ownership or transferability of the Collateral, and will not be
required to and will not make any representations as to the validity or value
(except as expressly set forth in this Pledge Agreement) of any of the
Collateral. The Custodian shall not be obligated to take any legal action
hereunder that might in its judgment involve any expense or liability unless it
has been furnished with an indemnity reasonably satisfactory to it.

 

(v) The Custodian shall have no duties or responsibilities except such duties
and responsibilities as are specifically set forth in this Pledge Agreement, and
no covenants or obligations shall be implied in this Pledge Agreement against
the Custodian.

 

(vi) The Custodian shall not be required to expend or risk its own funds in the
performance of its duties hereunder (except for funds expended in the
administration in the ordinary course of its duties hereunder).

 

(vii) It is expressly agreed and acknowledged that the Custodian is not
guaranteeing performance of or assuming any liability for the obligations of the
other parties hereto or any Obligor.

 

B. Custodian Fee. As compensation for its custodian activities hereunder, the
Custodian shall be entitled to a custodian fee (the “Custodian Fee”) from the
Borrower as set forth in a separate fee letter executed by the Borrower. The
Custodian’s entitlement to receive the Custodian Fee shall cease on the earlier
to occur of: (i) its removal or resignation as the

 

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Custodian pursuant to Paragraph 6 (provided, however, that the Custodian is
entitled to receive any Custodian Fees accrued prior to the date on which it
ceases to act as the Custodian hereunder) or (ii) the termination of this Pledge
Agreement.

 

C. Release of Collateral Documents. From time to time and as appropriate for the
purposes contemplated by Section 9-312(g) of the UCC with respect to any of the
Collateral Debt Securities or the Contributed Capital Assets, the Custodian is
hereby authorized (unless and until such authorization is revoked in writing by
the Pledgee at a time when a Remedy Event has occurred and is continuing), upon
receipt from the Collateral Manager of a written request for release of
Collateral Documents in the form of Exhibit B hereto (with a copy of such
request of release to the Pledgee), to release to the Collateral Manager or its
designee the related Collateral Documents set forth in such request and receipt
to the Collateral Manager. All Collateral Documents so released to the
Collateral Manager shall be held by the Collateral Manager in trust for the
benefit of the Pledgee in accordance with the terms of this Pledge Agreement.
The Collateral Manager shall return to the Custodian the Collateral Documents
(i) promptly upon the request of the Pledgee, or (ii) except as the Pledgee
shall otherwise agree in writing, when the Collateral Manager’s need therefor in
connection with such purpose no longer exists (and in any event no later than 20
days after such release to the Collateral Manager).

 

D. Return of Collateral Documents. The Collateral Manager may, with the prior
written notice to the Pledgee, require that the Custodian return to the Borrower
each Collateral Document (a) delivered to the Custodian in error or (b) that is
required to be redelivered to the Borrower in connection with the termination of
this Pledge Agreement, in each case by submitting to the Custodian and the
Pledgee a written request in the form of Exhibit B hereto (signed by the
Collateral Manager) specifying the Collateral Debt Securities or the Contributed
Capital Assets to be so returned and reciting that the conditions to such
release have been met. The Custodian shall upon its receipt of each such request
for return executed by Collateral Manager promptly, but in any event within two
(2) Business Days after such receipt, return the Collateral Documents so
requested to the Borrower.

 

6. Term and Termination.

 

A. The Custodian may be removed, with or without cause, by the Pledgee or the
Borrower by notice given in writing to the Custodian (the “Custodian Termination
Notice”) along with a copy thereof provided respectively to the Borrower or the
Pledgee; provided that (x) the Borrower may give a Custodian Termination Notice
only for cause and only when no Remedy Event has occurred and is continuing and
(y) notwithstanding its receipt of a Custodian Termination Notice, the Custodian
shall continue to act in such capacity until a successor Custodian (i) has been
appointed by the Pledgee (with the consent of the Borrower, except that no such
consent shall be required if a Remedy Event has occurred and is continuing),
(ii) has agreed to act as the Custodian hereunder, and (iii) has received all
Collateral Documents held by the Custodian being removed. Upon the satisfaction
of the conditions specified in clauses (i) through (iii) above, the Custodian
subject to removal agrees that it will terminate its activities as Custodian
hereunder.

 

B. The Custodian shall not resign from the obligations and duties hereby imposed
on it except upon the Custodian’s determination that (i) the performance of its
duties hereunder is or

 

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becomes impermissible under Applicable Law and (ii) there is no reasonable
action that the Custodian could take to make the performance of its duties
hereunder permissible under such Applicable Law. Any such determination
permitting the resignation of the Custodian shall be evidenced as to clause (i)
above by an opinion of counsel to such effect delivered to the Pledgee and the
Borrower in a form reasonably acceptable to the Pledgee and the Borrower. No
such resignation shall become effective until a successor Custodian (i) has been
appointed by the Pledgee (with the consent of the Borrower, except that no such
consent shall be required if a Remedy Event has occurred and is continuing),
(ii) has agreed to act as the Custodian hereunder, and (iii) has received all
Collateral Documents held by the resigning Custodian. Upon the satisfaction of
the conditions specified in clauses (i) through (iii) above, the resigning
Custodian agrees that it will terminate its activities as Custodian hereunder.

 

7. Grant and Protection of Security Interest; Appointment of Pledgee as
Attorney-in-Fact.

 

A. As security for the prompt payment in full when due of the Borrower’s or
MCG’s obligations to the Pledgee, now existing or hereafter arising, under one
or more of the Credit Agreement and this Pledge Agreement (collectively, the
“Obligations”), the Borrower hereby Grants in favor of the Pledgee a security
interest in all of the Borrower’s right, title and interest, whether now owned
or existing, or hereafter acquired or arising, in, to and under the Collateral
(and, in the case of the Borrower’s rights acquired under Paragraph 7B, assigns
such rights to the Pledgee, all with the consent of MCG and the LLC).

 

B. Although MCG, the LLC, the Borrower and the Pledgee intend that (i) each
Collateral Debt Security acquired by the LLC and in turn the Borrower shall
constitute the acquisition by the LLC and in turn the Borrower of all right,
title and interest in and to such Collateral Debt Security and (ii) each
Contributed Capital Asset contributed by MCG to the capital of the LLC, and
contributed by the LLC to the capital of the Borrower, shall constitute the
contribution to the Borrower of all right, title and interest in and to such
Contributed Capital Asset, in the event any such acquisition or contribution is
deemed to be a loan to the LLC in respect of such Collateral Debt Security or
Contributed Capital Asset, then, as security for the prompt payment in full when
due of the Obligations, the LLC hereby Grants in favor of the Borrower a
security interest in all of the LLC’s right, title and interest, whether now
owned or existing, or hereafter acquired or arising, in, to and under the
Collateral (and, in the case of the LLC’s rights acquired under Paragraph 7C,
assigns such rights to the Borrower, all with the consent of MCG).

 

C. Although MCG, the LLC, the Borrower and the Pledgee intend that (i) each
Collateral Debt Security acquired by the LLC and in turn the Borrower shall
constitute the acquisition by the LLC and the Borrower of all right, title and
interest in and to such Collateral Debt Security and (ii) each Contributed
Capital Asset contributed by MCG to the capital of the LLC, and contributed by
the LLC to the capital of the Borrower, shall constitute the contribution to the
Borrower of all right, title and interest in and to such Contributed Capital
Asset, in the event any such acquisition or contribution is deemed to be a loan
to MCG in respect of such Collateral Debt Security or Contributed Capital Asset,
then, as security for the prompt payment in full when due of the Obligations,
MCG hereby Grants in favor of the LLC a security interest

 

10

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in all of MCG’s right, title and interest, whether now owned or existing, or
hereafter acquired or arising, in, to and under the Collateral.

 

D. With respect to the foregoing and the Grant hereunder, each Pledgor hereby
authorizes the Pledgee to file one or more financing or continuation statements,
and amendments thereto, relative to all or any part of the Collateral without
the signature of such Pledgor where permitted by law; and the Pledgee agrees to
notify such Pledgor of any such action taken by it. A carbon, photographic or
other reproduction of this Pledge Agreement or any financing statement covering
the Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law. Notwithstanding anything herein to the contrary, (x) any
financing statement filed in connection within the foregoing and the Grant
hereunder naming MCG as the debtor shall name the LLC as the secured party and
the Pledgee as the assignee thereof and (y) any financing statement naming the
LLC as the debtor shall name the Borrower as the secured party and the Pledgee
as the assignee thereof.

 

E. Each Pledgor agrees that from time to time, at such Pledgor’s expense
(provided that the Borrower shall be liable for all such expenses and all
expenses pursuant to clause (F) below and Paragraph 4(D) in an aggregate amount
up to $75,000), it will promptly execute and deliver all instruments and
documents, and will cooperate and take all actions, that may reasonably be
necessary or desirable, or that the Pledgee may reasonably request, to perfect,
protect or more fully evidence the Grant to the Pledgee of such Pledgor’s
interest in any Collateral, or to enable the Pledgee to exercise and enforce its
rights and remedies hereunder or under the Credit Agreement.

 

F. If any Pledgor fails to perform any of its obligations hereunder after ten
(10) Business Days’ written notice from the Pledgee, the Pledgee may (but shall
not be required to) perform, or cause performance of, such obligation; and the
Pledgee’s reasonable costs and expenses incurred in connection therewith shall
be payable by such Pledgor (provided that the Borrower shall be liable for all
such expenses and all expenses pursuant to clause (E) above and Paragraph 4(D)
in an aggregate amount up to $75,000). Each Pledgor irrevocably authorizes the
Pledgee and appoints the Pledgee as its attorney-in-fact to act on behalf of
such Pledgor, (i) to execute on behalf of such Pledgor as debtor and to file
financing statements necessary or desirable in the Pledgee’s sole discretion to
perfect and to maintain the perfection and priority of the interest of the
Pledgee in any Collateral and (ii) to file a photographic or other reproduction
of this Pledge Agreement or any financing statement with respect to any
Collateral in such offices as the Pledgee in its sole discretion deems necessary
or desirable to perfect and to maintain the perfection and priority of the
interests of the Pledgee in any Collateral. This appointment is coupled with an
interest and is irrevocable.

 

G. During the period in which a Remedy Event has occurred and is continuing, the
Pledgee shall have, with respect to the Collateral Granted hereunder, and in
addition to all other rights and remedies available to the Pledgee under this
Pledge Agreement or other Applicable Law, all rights and remedies of a secured
party upon default under the UCC (whether or not the UCC applies to the affected
Collateral) and also may, without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Pledgee’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Pledgee may deem commercially
reasonable. The proceeds of any collection, sale

 

11

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or other realization on all or any part of the Collateral pursuant hereto shall
be applied in accordance with Paragraph 7N. Notwithstanding any provision of
this Agreement to the contrary, for a period of up to 30 calendar days after the
occurrence of any Remedy Event and so long as no Designated Remedy Event has
occurred, MCG (on behalf of the Borrower) may (or, at the request of the
Pledgee, shall) sell or liquidate (in a default sale) each Collateral Debt
Security and each Contributed Capital Asset (including to MCG) on any
commercially reasonable terms (and the Pledgee shall have no right to effect any
such sale or liquidation except to direct MCG to effect the same on behalf of
the Borrower); provided that the foregoing shall not limit the Pledgee from
taking, during such 30-day period, any other action authorized to be taken by
the Pledgee under this Agreement while a Remedy Event has occurred and is
continuing that is not inconsistent with the foregoing limitation.

 

H. Each Pledgor agrees that, to the extent notice of sale shall be required by
law, at least 10 days’ prior notice to such Pledgor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Pledgee shall not be obligated to make
any sale of the Collateral regardless of notice of sale having been given. The
Pledgee may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.

 

I. While any Remedy Event has occurred and is continuing, the Pledgee may: (i)
transfer all or any part of the Collateral into the name of the Borrower (or, if
a Designated Remedy Event has occurred and is continuing, the Pledgee) or its
nominee, (ii) notify the parties obligated on any of the Collateral to make
payment to the Borrower (or, if a Designated Remedy Event has occurred and is
continuing, the Pledgee) of any amount due or to become due thereunder, (iii)
enforce collection of any of the Collateral, by suit or otherwise, (iv) so long
as any Designated Remedy Event has occurred and is continuing, surrender,
release or exchange all or any part of the Collateral, or compromise or extend
or renew for any period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto, (v) endorse any
checks, drafts or other writings in any Pledgor’s name to allow collection of
the Collateral, (vi) take control of any Proceeds of the Collateral, and (vii)
subject to the last sentence of Paragraph 7G, execute (in the name, place and
stead of any of any Pledgor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or any of the
Collateral. The proceeds of any collection of all or any part of the Collateral
pursuant hereto shall be applied in accordance with Paragraph 7N.

 

J. It is understood and agreed by the parties hereto that, subject to Paragraph
7G, MCG has been appointed by the Borrower to manage and monitor the Collateral
and that MCG is authorized to act on behalf of the Borrower for all purposes of
this Pledge Agreement, including the exercise of the Borrower’s rights described
herein. With respect to each item of Collateral, in the event that, in its
capacity as collateral manager of such item of Collateral and on behalf of the
Borrower, MCG receives any written notice or other written communication (each,
a “Communication”) under or in respect of such item of Collateral or any related
document relating to any amendment, waiver or other modification, MCG, on behalf
of the Borrower, shall give notice thereof to the Pledgee to the extent required
by Section 2(i) of the Credit Agreement. With respect to each item of
Collateral, in the event that, in its capacity as collateral manager of such
item of Collateral and on behalf of the Borrower, MCG makes any affirmative

 

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determination to exercise or refrain from exercising any rights or remedies in
respect of such item of Collateral, MCG, on behalf of the Borrower, shall give
prompt notice thereof to the Pledgee. With respect to any Communication as to
which such notice is required to be given to the Pledgee, MCG, on behalf of the
Borrower, shall, with respect to such item of Collateral, exercise all voting
and other powers of consensual ownership relating to such Communication or the
exercise of such rights or remedies as MCG, on behalf of the Borrower, shall
deem appropriate under the circumstances; provided that, insofar as any such
Communication is related to a Specified Matter or following the occurrence of a
Collateral Manager Event, MCG, on behalf of the Borrower, shall exercise all
voting and other powers of consensual ownership only with the prior written
consent of the Pledgee (such consent not to be unreasonably withheld, delayed or
conditioned), except to the extent that the grant by the Borrower to the Pledgee
of such consent right would expressly violate a provision of such item of
Collateral or any related document prohibiting any such grant or expressly
restricting the matters that may be the subject of any such right, in which
event the Pledgee’s right to so consent shall be so limited.

 

K. Each Pledgor agrees that, in connection with any sale of the Collateral while
any Remedy Event has occurred and is continuing, the Pledgee is hereby
authorized to comply with any limitation or restriction in connection with such
sale as it may be advised in writing by counsel (with a copy provided to such
Pledgor) is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and each Pledgor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Pledgee be liable nor accountable to any
Pledgor for any discount allowed by reason of the fact that such Collateral is
sold in compliance with any such limitation or restriction.

 

L. Without prior consent of the Pledgee, each Pledgor agrees that it shall not
change the jurisdiction under whose laws it is organized.

 

M. The Pledgee shall incur no liability as a result of a sale of the Collateral,
or any part thereof, at any private sale conducted in a commercially reasonable
manner. Each Pledgor hereby waives any claims against the Pledgee arising by
reason of the fact that the price at which the Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale.

 

N. The proceeds of any collection, sale or other realization on all or any part
of the Collateral pursuant hereto, and any other cash at the time held in the
Account, shall be applied by the Pledgee toward payment of the Obligations in
such order and manner as the Pledgee, in its discretion, may deem advisable (but
subject to any applicable provisions of the Credit Agreement). Any surplus
remaining shall be delivered to the Borrower.

 

O. Subject to the last sentence of Paragraph 7G, each Pledgor hereby appoints
the Pledgee as such Pledgor’s attorney-in-fact, with full authority in the place
and stead of such

 

13

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Pledgor and in the name of such Pledgor, from time to time in the Pledgee’s
discretion, while any Remedy Event has occurred and is continuing, to take any
action and to execute any instrument which the Pledgee may deem necessary or
advisable to accomplish the purposes of this Pledge Agreement, including without
limitation: (i) to ask, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral; (ii) to receive, endorse and collect any
drafts or other instruments and documents, in connection with clause (i) above;
and (iii) to file any claims or take any action or institute any proceedings
which the Pledgee may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of the Pledgee with respect to
any of the Collateral. In addition, each Pledgor hereby appoints the Pledgee as
such Pledgor’s attorney-in-fact, with full authority in the place and stead of
such Pledgor and in the name of such Pledgor, from time to time in the Pledgee’s
discretion, while any Remedy Event has occurred and is continuing, to take any
action and to execute any instrument which the Pledgee may deem necessary or
advisable to accomplish the right of the Pledgee to sell any Collateral Debt
Security or Contributed Capital Asset, subject to the last sentence of Paragraph
7G. Each Pledgor hereby acknowledges, consents and agrees that the powers of
attorney granted pursuant to this paragraph are irrevocable during the term of
this Pledge Agreement, are granted by way of security and are coupled with an
interest.

 

P. The powers and rights conferred on the Pledgee hereunder are solely to
protect its interest in the Collateral and shall not impose any duty on it to
exercise any such powers. The Pledgee shall have no fiduciary duty in respect of
any Pledgor or any indirect beneficiary of this Pledge Agreement or the
Collateral, provided that the Pledgee is required to exercise reasonable care in
the custody and preservation of any of the Collateral in its possession;
provided further that the Pledgee shall be deemed to have exercised reasonable
care in the custody and preservation of any of the Collateral if it takes such
action for that purpose as the Collateral Manager reasonably requests in
writing, but failure of the Pledgee to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable care.

 

8. Miscellaneous.

 

A. Access to Books and Records. The Custodian shall provide to the Pledgee, each
Pledgor and Collateral Manager (and/or the accountants, counsel and other agents
and representatives thereof) access to the Collateral Documents and all other
documentation regarding the Collateral Debt Securities and the Contributed
Capital Assets, such access being afforded without charge but only (i) upon
three (3) Business Days prior written request, (ii) during normal business hours
and (iii) subject to the Custodian’s normal security and confidentiality
procedures.

 

B. Merger or Consolidation of Custodian. Any Person (i) into which the Custodian
may be merged or consolidated, (ii) that may result from any merger or
consolidation to which the Custodian shall be a party, or (iii) that may succeed
to the properties and assets of the Custodian substantially as a whole, which
Person in any of the foregoing cases shall be the successor to the Custodian
under this Pledge Agreement without further act of any of the parties to this
Pledge Agreement.

 

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C. Invalidity of any Provision. If any term, provision, covenant or condition of
this Pledge Agreement, or the application thereof to either party or any
circumstance, is held to be unenforceable, invalid or illegal (in whole or in
part) for any reason (in any relevant jurisdiction), the remaining terms,
provisions, covenants and conditions of this Pledge Agreement, modified by the
deletion of the unenforceable, invalid or illegal portion (in any relevant
jurisdiction), will continue in full force and effect, and such
unenforceability, invalidity or illegality will not otherwise affect the
enforceability, validity or legality of the remaining terms, provisions,
covenants and conditions of this Pledge Agreement so long as this Pledge
Agreement as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the
deletion of such portion of this Pledge Agreement will not substantially impair
the respective expectations or reciprocal obligations of the parties or the
practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the
prohibited or unenforceable provision with a valid provision, the economic
effect of which comes as close as possible to that of the prohibited or
unenforceable provision.

 

D. Amendments and Waivers. No amendment, modification or waiver in respect of
this Pledge Agreement will be effective unless in writing (including a writing
evidenced by a facsimile transmission ) and executed by each of the parties.

 

E. Binding Agreement. This Pledge Agreement shall extend to and shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No Person other than the parties hereto shall
have any rights under this Pledge Agreement. Neither this Pledge Agreement nor
any right or obligation in or under this Pledge Agreement may be transferred
(whether by way of security or otherwise) by (a) any Pledgor without the prior
written consent of the Pledgee, (b) the Custodian without the prior written
consent of the Borrower and the Pledgee (but without limiting Paragraph 8B) and
(c) the Pledgee without the prior written consent of the Borrower. Any purported
transfer that is not in compliance with this provision will be void.

 

F. Applicable Law; Jurisdiction; No Immunity. This Pledge Agreement shall be
construed in accordance with, and this Pledge Agreement and all matters arising
out of or relating in any way whatsoever to this Pledge Agreement (whether in
contract, tort or otherwise) shall be governed by, the law of the State of New
York (without reference to any choice of law doctrine that would have the effect
of causing this Agreement to be construed in accordance with or governed by the
law of any other jurisdiction). With respect to any suit, action or proceedings
relating to this Pledge Agreement (“Proceedings”), each party irrevocably: (i)
submits to the non-exclusive jurisdiction of the courts of the State of New York
and the United States District Court located in the Borough of Manhattan in New
York City; and (ii) waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such court
does not have any jurisdiction over such party. Nothing in this Pledge Agreement
precludes any party from bringing Proceedings in any other jurisdiction, nor
will the bringing of Proceedings in any one or more jurisdictions preclude the
bringing of Proceedings in any other jurisdiction.

 

15

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G. Waiver of Jury Trial Right. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

H. Headings and References. The headings and captions in this Pledge Agreement
are for reference only and shall not affect the construction or interpretation
of any of its provisions.

 

I. Counterparts. This Pledge Agreement (and each amendment, modification and
waiver in respect of it) may be executed and delivered in counterparts
(including by facsimile transmission or other written form of communication),
each of which will be deemed an original as against each party whose signature
appears thereon, and all of which shall together constitute one and the same
enforceable, effective and valid agreement.

 

J. Notices. All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including telex communication and
communication by facsimile copy) and mailed, delivered by a
nationally-recognized overnight parcel express service, telexed, transmitted or
hand delivered, as to each party hereto, at its address specified in Schedule II
or to such other person or persons as the receiving party may from time to time
designate in writing. All such notices and communications shall be effective,
upon receipt, or in the case of (a) notice by mail, five days after being
deposited in the United States mail, first class postage prepaid, (b) notice by
overnight parcel express service, when delivered, but in any event, no later
than the Business Day after the day on which it is delivered to such service,
(c) notice by telex, when telexed against receipt of answer back, or (d) notice
by facsimile copy, when verbal or electronic communication of receipt is
obtained.

 

K. No Waiver, Rights and Remedies. No failure on the part of the Pledgee or the
Custodian or any assignee of the Pledgee or the Custodian to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies herein provided are cumulative and not
exclusive of any rights and remedies provided by law.

 

L. Termination. Upon the payment in full of all Obligations, the security
interest granted herein shall automatically terminate and all rights of the
Pledgor to the Collateral shall revert to the Borrower. Upon any such
termination, the Pledgee will, at the Borrower’s sole expense, deliver to the
Borrower and instruct the Custodian to deliver to the Borrower, without any
representations, warranties or recourse of any kind whatsoever, all certificates
and instruments representing or evidencing all of the Collateral held by the
Pledgee or the Custodian hereunder, and execute and deliver to the Borrower (or
such other person as the Borrower shall request) such documents as the Borrower
shall reasonably request to evidence such termination.

 

M. No Petition. Each of the parties hereto, by entering into this Pledge
Agreement, hereby covenants and agrees that it will not at any time institute
against the Borrower or the LLC, or voluntarily join in any institution against
the Borrower or the LLC of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under

 

16

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any United States federal or state bankruptcy or similar law of any jurisdiction
within or outside the United States in connection with any obligations owing to
it.

 

N. Limited Recourse Obligations of the Borrower. Other than as expressly set
forth in the Credit Agreement, the Obligations are limited recourse obligations
payable solely from the Collateral and following realization of such Collateral
and the application of all Proceeds thereof to the payment of the Obligations,
any claims of the Pledgee hereunder shall be extinguished. No recourse shall be
had against any officer, director, employee, equityholder, agent or incorporator
of any Pledgor or its successors or assigns for any amounts payable under the
Obligations; provided that, notwithstanding the ownership by MCG of LLC and by
LLC of the Borrower, the foregoing shall not limit direct recourse available to
any Pledgor by reason of its contractual obligations arising hereunder or under
the Credit Agreement. It is understood that the foregoing provisions shall not
(a) prevent recourse to the Collateral for the sums due or to become due under
any instrument or agreement which is part of the Collateral or (b) constitute a
waiver, release or discharge of any Obligations until such Collateral has been
realized and all Proceeds thereof applied to the Obligations, whereupon any
outstanding indebtedness or obligation shall be extinguished. It is further
understood that the foregoing provisions shall not limit the right of any person
to name the Borrower as a party or defendant in any action or suit or in the
exercise of any other remedy pursuant to the Obligations, so long as no judgment
in the nature of a deficiency judgment or seeking personal liability shall be
asked for or (if obtained) enforced against any such person or entity. This
paragraph will survive termination of this Pledge Agreement.

 

O. Confidentiality Restrictions of Custodian. The Custodian shall and shall
cause its representatives, its legal counsel and its auditors to hold in
confidence all information provided to it pursuant to this Agreement, except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Custodian may reasonably determine that such disclosure is consistent with its
obligations hereunder and under applicable law.

 

[Remainder of page intentionally left blank.]

 

17

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IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be
executed by their respective corporate officers, thereunto duly authorized, as
of this 21st day of April, 2005.

 

MCG COMMERCIAL LOAN TRUST 2005-1

(a Delaware statutory trust)

      MCG FINANCE VI, LLC, as Pledgor By:  

WILMINGTON TRUST COMPANY,

solely in its capacity as Trustee
and not in its individual capacity

                     

By:

  /s/  Samuel G. Rubenstein          

Name:

 

Samuel G. Rubenstein

            Title:  

General Counsel and Executive Vice President

By:   /s/  James P. Lawler            

Name:

 

James P. Lawler

           

Title:

 

Vice President

           

 

MCG CAPITAL CORPORATION, as Pledgee

     

UBS AG, STAMFORD BRANCH, as the Pledgee

By:   /s/  Michael R. McDonnell       By:   /s/  Anthony N. Joseph

Name:

 

Michael R. McDonnell

     

Name:

 

Anthony N. Joseph

Title:

 

Chief Financial Officer

     

Title:

 

Director, Banking Products Services, US

By:   /s/  Samuel G. Rubenstein       By:   /s/  Pamela Oh

Name:

 

Samuel G. Rubenstein

     

Name:

 

Pamela Oh

Title:

 

General Counsel and Executive Vice President

     

Title:

 

Associate Director, Banking Products Services, US

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity but
solely as the Custodian By:   /s/  Cory Branden

Name:

 

Cory Branden

Title:

 

Vice President

 

18

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SCHEDULE I

 

LOCATION(S) OF REQUIRED COLLATERAL DOCUMENTS

 

Wells Fargo Bank, National Association

MAC N9328-011

Suite ABS

751 Kasota Avenue

Minneapolis, Minnesota 55414

 

Schedule I-1

--------------------------------------------------------------------------------

SCHEDULE II

 

ADDRESS FOR NOTICES

 

If to any Pledgor or Collateral Manager:

 

MCG Capital Corporation

9011 Arboretum Place, Suite 250

Richmond, Virginia 23236

Attention: Chief Financial Officer

Telecopy: (804) 272–3694

  

MCG Capital Corporation

1100 Wilson Boulevard, Suite 3000

Arlington, Virginia 22209

Attention: General Counsel

Telecopy: (703) 247–7545

with a copy to:

 

Dechert LLP

Bank of America Corporate Center

100 North Tryon Street

Suite 4000

Charlotte, North Carolina 28202

Attention: John M. Timperio

Telecopy: (704) 339-3101

E-mail: john.timperio@dechert.com

    

 

If to Pledgee:

 

UBS AG, Stamford Branch

677 Washington Blvd

Stamford CT 06901

Telephone:

Facsimile:

Attention:

  

203-719-3176

203 719-3180

Anthony Joseph

 

Schedule II-1

--------------------------------------------------------------------------------

If to Custodian:

 

Wells Fargo Bank, National Association

MAC N9311-161

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

Attention: Corporate Trust Services Asset Backed Administration

Telecopy: (612) 667-3464

 

with a copy to:

 

Wells Fargo Bank, National Association

MAC N9328-011

Suite ABS

751 Kasota Avenue

Minneapolis, Minnesota 55414

Attention: Corporate Trust Services - Asset Backed Securities

Telecopy: (612) 667-1080

 

Schedule II-2

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SCHEDULE III

 

COLLATERAL LIST

 

[To be provided by MCG]

 

Schedule III-1

--------------------------------------------------------------------------------

SCHEDULE IV

 

FINANCING STATEMENTS

 

Schedule IV-1

--------------------------------------------------------------------------------

EXHIBIT A

 

FORM OF TRUST RECEIPT AND INITIAL CERTIFICATION

 

[Delivery Date]

 

BY FACSIMILE: (704) 383-4012

 

UBS AG, Stamford Branch

 

  Re: Pledge, Security and Custody Agreement, dated as of April 21, 2005 (as
amended, modified, waived, supplemented or restated from time to time, the
“Pledge Agreement”), by and among MCG Commercial Loan Trust 2005-1, as Pledgor,
UBS AG, Stamford Branch, as Pledgee, and Wells Fargo Bank, National Association,
as Custodian

 

Ladies and Gentlemen:

 

In accordance with the provisions of Paragraph 2 of the Pledge Agreement, the
undersigned, as the Custodian, hereby certifies that it has received, except
with respect to the exceptions listed on Exhibit A hereto, the Collateral
Documents with respect to each Collateral Debt Security and Contributed Capital
Asset identified on the Collateral List attached hereto. The Custodian hereby
certifies that it shall hold such Collateral Documents in accordance with the
terms of the Pledge Agreement (other than any Collateral Documents specifically
referenced on the exception report attached hereto). The Custodian makes no
representations as to (i) the validity, legality, enforceability, sufficiency,
due authorization or genuineness of any of the Collateral and (ii) the
collectability, insurability, effectiveness or suitability of any of the
Collateral.

 

The Custodian will accept and act on instructions with respect to the Collateral
Documents subject hereto upon surrender of this Trust Receipt and Initial
Certification at its office at 751 Kasota Avenue, Minneapolis, Minnesota 55414.

 

Capitalized terms used herein shall have the meaning ascribed to them in the
Pledge Agreement.

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Custodian By    

Name:

   

Title:

   

 

A-1

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EXHIBIT A TO TRUST RECEIPT AND INITIAL CERTIFICATION

 

EXCEPTION REPORT

 

A-2

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EXHIBIT B

 

FORM OF RELEASE OF REQUIRED COLLATERAL DOCUMENTS

 

[Delivery Date]

 

Wells Fargo Bank, National Association

MAC N9328-011

Suite ABS

751 Kasota Avenue

Minneapolis, Minnesota 55414

Attention: Corporate Trust Services Asset Backed Securities Vault

 

  Re: Pledge, Security and Custody Agreement, dated as of April 21, 2005 (as
amended, modified, waived, supplemented or restated from time to time, the
“Pledge Agreement”), by and among MCG COMMERCIAL LOAN TRUST 2005-1, MCG FINANCE
VI, LLC, MCG CAPITAL CORPORATION, UBS AG, STAMFORD BRANCH and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Custodian

 

Ladies and Gentlemen:

 

In accordance with Paragraph 5C of the Pledge Agreement, we request the release
of the Collateral Documents (or such documents as specified below) for the
Collateral Debt Security or the Contributed Capital Asset described below, for
the reason indicated. All capitalized terms used but not defined herein shall
have the meaning given thereto in the Pledge Agreement.

 

Obligor’s Name, Address & Zip Code:

 

Collateral Documents:

 

Reason for Requesting Documents (check one)

 

¨  1. Collateral Debt Security or Contributed Capital Asset is being paid in
full. (The Collateral Manager hereby certifies that all amounts received in
connection with such Collateral Debt Security or Contributed Capital Asset will
be promptly paid or credited to or for the benefit of the Pledgee.)

 

¨  2. Collateral Debt Security or Contributed Capital Asset is being liquidated
by                                               (The Collateral Manager hereby
certifies that all proceeds (net of liquidation expenses which Collateral
Manager may retain to pay such expenses) of foreclosure, insurance, condemnation
or other liquidation finally received will be promptly paid or credited to or
for the benefit of the Pledgee)

 

¨  3. Collateral Debt Security or Contributed Capital Asset is in foreclosure or
is otherwise being enforced pursuant to creditor remedies.

 

B-1

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¨ 4. Collateral Debt Security or Contributed Capital Asset is being ¨ modified,
¨ serviced, ¨ substituted, ¨ released, ¨ revised or ¨ subordinated. [Please
check one]

 

¨ 5. Other (explain).

 

Collateral Documents should be delivered to: [                    ]

 

If box 1 or 2 above is checked, and if all or part of the Collateral Documents
were previously released to us, please release to us the Collateral Documents,
requested in our previous request and receipt on file with you, as well as any
additional documents in your possession relating to the specified Collateral
Debt Security or Contributed Capital Asset.

 

If box 3, 4 or 5 above is checked, upon our return of all of the above
Collateral Documents to you as the Custodian, please acknowledge your receipt by
signing in the space indicated below, and returning this form.

 

The Collateral Documents deliverable as indicated herein are being delivered
solely for a purpose contemplated by Section 9-312(g) of the UCC and are subject
to redelivery to the Custodian in accordance with Paragraph 5C of the Pledge
Agreement.

 

MCG CAPITAL CORPORATION,

as the Collateral Manager on behalf of the Borrower

By:            

Name:

       

Title:

       

Date:

   

 

Acknowledgment of Collateral Documents returned to the Custodian:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Custodian By:            

Name:

       

Title:

       

Date:

   

 

B-2