Exhibit 10.1

FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT

THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT (this “Amendment”), dated as
of February 26, 2009 (the “First Amendment Date”), is made by and among MCG
CAPITAL CORPORATION (the “Borrower”), the financial institutions party hereto as
Lenders, and SUNTRUST BANK, as administrative agent for itself and the Lenders
(the “Agent”).

RECITALS:

WHEREAS, the Borrower, the Agent, the Lenders and SunTrust Robinson Humphrey,
Inc. entered into that certain Revolving Credit Agreement, dated as of May 30,
2008 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”; capitalized terms used herein and not otherwise
defined shall have the respective meanings ascribed thereto in the Credit
Agreement);

WHEREAS, Borrower has requested that the Agent and the Lenders amend certain
terms and provisions of the Credit Agreement; and

WHEREAS, the Agent and the Lenders are willing to amend the Credit Agreement as
set forth herein, subject to the terms set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises, and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

1. Amendments to the Credit Agreement. The Credit Agreement is hereby amended as
follows:

(a) Section 1.1 of the Credit Agreement is hereby amended by amending and
restating the following definitions in their entirety as follows:

“Commitment: For each Lender, the amount specified with respect to such Lender
on Schedule 1.1 to the First Amendment, or pursuant to the relevant Assignment
and Assumption Agreement, as such Lender’s maximum commitment with respect to
Loans and participations in Letters of Credit, in each case pursuant to this
Credit Agreement.”

“Federal Funds Rate Margin: Five and one-quarter of one percent (5.25%) per
annum; provided, that at any time that the Federal Funds Rate is less than
twenty-five (25) basis points lower than LIBOR, the Federal Funds Rate Margin
shall be reduced to four and one-quarter of one percent (4.25%) per annum.”

“Maximum Aggregate Available Amount: $35,000,000, as such amount may be
decreased from time to time in accordance with §2.5.1(b) or §2.5.3 or as may be
reduced to zero upon the acceleration of the Obligations during the occurrence
of an Event of Default pursuant to §8.”

 

1

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

“Private Placement Debt: The senior, unsecured Indebtedness of Borrower issued
pursuant to (i) that certain Note Purchase Agreement executed by Borrower on
October 11, 2005, as amended by an amendment substantively in all material
respects as set forth on Exhibit A to the First Amendment (as so amended and as
such agreement may be further amended and otherwise modified from time to time
to the extent permitted herein), and (ii) that certain Note Purchase Agreement
executed by Borrower on October 3, 2007, as amended by an amendment
substantively in all material respects as set forth on Exhibit A to the First
Amendment (as so amended and as such agreement may be further amended and
otherwise modified from time to time to the extent permitted herein).”

“Swingline Commitment: -$0-.”

(b) Section 1.1 of the Credit Agreement is hereby amended by adding the
following new definitions thereto in proper alphabetical sequence:

“2006-1 CLO: MCG Commercial Loan Trust 2006-1, a Delaware statutory trust that
is indirectly wholly-owned by the Borrower.”

“2006-1 CLO Indenture: means the Indenture dated as of April 18, 2006 by and
between 2006-1 CLO, as the issuer, and the 2006-1 CLO Trustee.”

“Advance Prepayment: any prepayment designated by Borrower as an “Advance
Prepayment” in any Prepayment Notice, and the payment of which has resulted in a
permanent reduction in the Maximum Aggregate Available Amount pursuant to
§2.5.2(c).”

“Applicable Prepayment Percentage: as of any date of determination, a percentage
equal to 60%; provided, that if at any time a Subsidiary Non-Recourse Debt Event
of Default has occurred and is continuing and a Private Placement Accelerated
Payment Event has occurred and is continuing, the Applicable Prepayment
Percentage shall equal 88%.”

“CLFT: MCG Commercial Loan Funding Trust, a Delaware statutory trust that is
indirectly wholly-owned by the Borrower.”

“Excess Prepayment: As defined in §2.5.1(b).”

“First Amendment: that certain First Amendment to Revolving Credit Agreement
dated as of February 26, 2009, by and among Borrower, the Lenders and the
Agent.”

“Monetization Event: any transaction or event that results in Net Cash Proceeds
of Portfolio Investments.”

 

2

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

“Net Cash Proceeds of Portfolio Investments: Any cash or cash equivalents
actually received by the Borrower or any of its Subsidiaries (other than SPE
Subsidiaries and Solutions Capital and its Subsidiaries) from (a) the repayment
(including any regularly scheduled payments thereof) or prepayment of principal
on account of any Portfolio Investment owned by Borrower or its Subsidiaries
(excluding the SPE Subsidiaries and Solutions Capital and its Subsidiaries)
(other than, with respect to a revolving credit facility, prepayments that are
not accompanied by, or that do not otherwise result in, a reduction or
termination of the commitments of the lenders thereunder), (b) any sale,
transfer or other disposition of any Portfolio Investment (whether or not such
Portfolio Investment constitutes an Eligible Investment hereunder) owned by
Borrower or its Subsidiaries (excluding the SPE Subsidiaries and Solutions
Capital and its Subsidiaries), but excluding sales to Solutions Capital or an
SPE Subsidiary, (c) any sale, transfer or other disposition of any Subsidiary of
the Borrower (including, without limitation, each SPE Subsidiary and Solutions
Capital and its Subsidiaries) other than a transfer to the Borrower or another
Subsidiary, or (d) the release of cash or cash equivalents to the Borrower or
any Subsidiary of the Borrower from any escrow or contingency arrangement in
relation to any of the foregoing transactions consummated after the First
Amendment Date, after deducting therefrom (without duplication) in connection
with any transaction described in clauses (a) through (d) of this definition,
(1) all costs and expenses incurred by the Borrower or such Subsidiary in
connection with any such transaction, (2) to the extent received by the Borrower
or any Subsidiary, the portion of such cash or cash equivalents payable by the
Borrower or such Subsidiary to third parties having a co-lender or participation
interest in the related Portfolio Investment, (3) to the extent received by the
Borrower or any Subsidiary, the portion of such cash or cash equivalents that
are required to be held in escrow pursuant to the documentation giving rise to
such transaction, and (4) to the extent received by the Borrower or any
Subsidiary, the portion of such cash or cash equivalents that are required to be
rolled over or reinvested in a related Portfolio Investment, in each case by the
documentation giving rise to such transaction.”

“Permitted Intercompany Indebtedness: Unsecured Debt of any Subsidiary owing to
Borrower in an aggregate principal amount at any time not to exceed
$10,000,000.”

“Prepayment Notice: As defined in §2.5.2(b).”

“Private Placement Accelerated Payment Event: any event that results in the
holders of Private Placement Debt receiving cash net proceeds of Portfolio
Investment monetizations at a rate of 60% under the terms of the Private
Placement Debt agreements.

 

3

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

“Quarterly Cash Coverage Ratio: As measured as of the last day of each Fiscal
Quarter for such Fiscal Quarter of Borrower and its Consolidated Subsidiaries on
a consolidated basis, the ratio of (a) the sum of (i) Total Revenue for such
Fiscal Quarter, less (ii) to the extent included in the calculation of Total
Revenue for such Fiscal Quarter, all “payment in kind” (PIK) interest and
dividends that are accrued by but not paid in cash to Borrower during such
Fiscal Quarter with respect to any Portfolio Investment of Borrower or its
Consolidated Subsidiaries, plus (iii) to the extent not otherwise included in
the calculation of Total Revenue for such Fiscal Quarter, all “payment in kind”
(PIK) interest and dividends that are paid to Borrower in cash during such
Fiscal Quarter with respect to any Portfolio Investment of Borrower or its
Consolidated Subsidiaries, to (b) the sum of (i) “total operating expenses” for
such Fiscal Quarter (calculated in a manner consistent the audited Financials
for Borrower’s fiscal year ended December 31, 2007), minus (ii) to the extent
included in total operating expenses, non-cash amortization of employee and
director restricted stock awards, minus (iii) to the extent included in total
operating expenses, non-cash amortization of restructuring expenses and charges
in aggregate amount not to exceed $3,000,000 for any Fiscal Quarter, minus
(iv) to the extent included in total operating expenses, non-cash amortization
and depreciation expenses (other than non-cash amortization of restructuring
expenses and charges); in each instance for such Fiscal Quarter and, to the
extent applicable, as determined in accordance with GAAP.”

“Subsidiary Non-Recourse Debt:(a) the Debt of an SPE Subsidiary, and (b) the
Debt evidenced by certain debentures issued from time to time by Solutions
Capital through the debenture funding program with the U.S. Small Business
Administration, provided that in the case of either clause (a) or (b), (1) so
long as the Borrower and its Consolidated Subsidiaries other than the relevant
SPE Subsidiary or Solutions Capital is not by contract or otherwise liable for
such debt and the lender thereunder has not otherwise successfully established
any such liability to the Borrower, and (2) as such debt (and related
agreements) may be amended, supplemented, restated, increased, refinanced,
replaced or otherwise modified from time to time or any successor thereto.

“Subsidiary Non-Recourse Debt Event of Default: a default by an SPE Subsidiary
or Solutions Capital in (a) the payment of any principal of or premium or
make-whole amount or interest or fee on any Subsidiary Non-Recourse Debt beyond
any period of grace provided with respect thereto, or (b) the performance of or
compliance with any term (including payment term) of any Subsidiary Non-Recourse
Debt or any other condition exists, and as a consequence of such default or
condition either (i) such Subsidiary Non-Recourse Debt has become, or has been
declared (or one or more Persons are entitled to declare such debt to be) due
and payable before its stated maturity or before its regularly scheduled dates
of payment or (ii) such SPE Subsidiary or Solutions Capital is obligated to
purchase or repay such Subsidiary Non-Recourse Debt before its regular maturity
or before its regularly scheduled dates of payment.

 

4

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

“Total Revenue: for any period, with respect to Borrower and its Consolidated
Subsidiaries, on a consolidated basis, “Total revenue” for such period
(calculated in a manner consistent with the audited Financials for Borrower’s
fiscal year ended December 31, 2007).”

“Unapplied Advance Prepayments: as of any date of determination, the aggregate
amount of all Advance Prepayments which have not, prior to such date, been
deducted pursuant to §2.5.1(b)(iv) from the amounts required to prepay the Loans
under §2.5.1(b).”

(c) Section 1.1 of the Credit Agreement is hereby amended by deleting the
following terms therefrom: “Commitment Increase”, “Commitment Increase Date”,
“Increasing Lender”, “New Lender”, “Permitted Subsidiary Indebtedness”,
“Swingline Exposure”, “Swingline Loan”, “Swingline Loan Request”, and “Swingline
Rate”.

(d) Section 2.3 of the Credit Agreement (including, without limitation,
subsections 2.3.1 through 2.3.5) is hereby amended and restated in its entirety
as follows:

“2.3 Reserved.”

(e) Section 2.4.1 of the Credit Agreement is hereby amended and restated in its
entirety as follows:

“2.4.1 In General. So long as no Event of Default has occurred and is
continuing, (i) each Loan that is a LIBOR Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate of four percent (4.00%) per
annum above the LIBOR Rate determined for such Interest Period, (ii) each Loan
that is a Prime Rate Loan shall bear interest for the period commencing with the
Drawdown Date thereof and ending on the last day of the Interest Period with
respect thereto at the rate of two and one-half of one percent (2.50%) per annum
above the Prime Rate, and (iii) each Loan that is a Federal Funds Rate Loan
shall bear interest for the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect thereto at a rate per
annum equal to the Federal Funds Rate Margin plus the Federal Funds Rate.
Borrower promises to pay interest on the Loans or any portion thereof
outstanding during each Interest Period in arrears on each Interest Payment Date
applicable to such Interest Period.”

(f) Section 2.5.1 of the Credit Agreement is hereby amended by amending and
restating clauses (b) and (c) therein in their entirety as follows:

“(b) (i) Within five (5) Business Days after each date upon which Borrower and
its Subsidiaries have received aggregate Net Cash Proceeds of Portfolio
Investments in excess of $3,000,000 (in each case since the later of the First
Amendment Date or the last date Borrower has made any prepayment required under
this §2.5.1(b)), Borrower shall prepay the Loans and the Private

 

5

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

Placement Debt in an aggregate amount equal to (A) (1) the Applicable Prepayment
Percentage as of such date, multiplied by (2) the amount of such Net Cash
Proceeds of Portfolio Investments, minus (B) the amount of any Excess Prepayment
made prior to such date which has not previously been used as a deduction
pursuant to this subclause (B).

(ii) On any date a prepayment is required under clause (i) of this §2.5.1(b),
Borrower may elect, in addition to and not in substitution of such required
prepayment, to make an additional prepayment of the Loans and Private Placement
Debt on such date in excess of the amount of such required prepayment (such
excess, an “Excess Prepayment”).

(iii) Each prepayment required under clause (i) of this §2.5.1(b) and each
Excess Prepayment shall be applied on a pro rata basis to the Loans and the
Private Placement Debt based on the respective outstanding principal balances
thereof on the date of such prepayment. For the purposes of determining the
outstanding principal balance of the Loans under this clause (iii) on any date,
the principal balance of the Loans shall be deemed increased by an amount equal
to the aggregate amount of all Unapplied Advance Prepayments as of such date.

(iv) Following the determination of any prepayment amount required to be applied
to the Loans pursuant to and in accordance with clause (iii) of this §2.5.1(b),
such amount shall be reduced by the aggregate amount of all Unapplied Advance
Prepayments as of the applicable prepayment date.

(v) Borrower shall, at the time of each prepayment required under clause (i) of
this §2.5.1(b), deliver to the Agent a certificate executed by a Financial
Officer of Borrower setting forth, (A) the amount of Net Cash Proceeds of
Portfolio Investments related to such prepayment and the date on which such
proceeds were received, (B) the amount of Cash owned by the Borrower and its
Subsidiaries as of such date, and the resulting Applicable Prepayment Percentage
with respect to such prepayment, (C) the respective outstanding principal
balances of the Loans and Private Placement Debt on such date (prior to giving
effect to such prepayment), (D) the amount of any Advance Prepayment or Excess
Prepayment that is permitted to be deducted from the required prepayment amount
pursuant to clause (i) of this §2.5.1(b), and (E) the aggregate amount of such
prepayment (and any Excess Prepayment) and the corresponding amounts thereof
that are required to prepay the Loans and Private Placement Debt, respectively.

(vi) Each prepayment of the Loans required by this §2.5.1(b) and each Excess
Prepayment shall cause a simultaneous permanent reduction in the Maximum
Aggregate Available Amount in an amount equal to the amount of each such
prepayment or Excess Prepayment, effective as of the date of each such
prepayment or Excess Prepayment. Reductions of the Maximum Aggregate Available
Amount shall also reduce, pro rata, the respective Commitments of Lenders. Any
reduction in the Maximum Aggregate Available Amount below the Letter of Credit
Sublimit shall result in a proportionate reduction (rounded to the next lowest
integral multiple of $100,000) in the Letter of Credit Sublimit.

 

6

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

(c) If at any time the outstanding principal amount of the Loans plus Letter of
Credit Outstandings shall exceed the Maximum Aggregate Available Amount at such
time, then Borrower shall immediately pay to Agent for the ratable benefit of
Lenders and application to the Loans the amount of such excess, plus all accrued
interest thereon (in each case ratably in accordance with the respective
interests of Lenders therein).”

(g) Section 2.5.2 of the Credit Agreement is hereby amended and restated in its
entirety as follows:

2.5.2 Optional Repayment; Advance Prepayments; Notice; Reborrowing; Etc.

(a) Borrower may elect to prepay the outstanding principal of all or any part of
any Loan, without premium or penalty, in a minimum amount of $250,000 with
respect to prepayment of any LIBOR Loan and in a minimum amount of $100,000 with
respect to prepayment of any Federal Funds Rate Loan or Prime Rate Loan,
provided that any full or partial prepayment of the outstanding amount of any
LIBOR Loans made on any date other than the last day of the Interest Period
relating thereto shall be subject to §3.5.

(b) Borrower shall give Agent prior written notice (a “Prepayment Notice”) of
any proposed prepayment of any Loan pursuant to this §2.5.2, which notice shall
be given no later than 12:00 noon New York time at least three (3) Eurodollar
Business Days prior to any proposed prepayment of any LIBOR Loan and at least
one (1) Business Day prior to any proposed prepayment of any Federal Funds Rate
Loan or Prime Rate Loan. Each such notice shall specify the proposed date of
such prepayment and the amount to be prepaid. Agent will provide such notice to
Lenders promptly upon its receipt thereof.

(c) Borrower may specify in any Prepayment Notice that the proposed prepayment
described therein shall be an “Advance Prepayment” and, upon such designation,
the making of such prepayment shall cause a simultaneous permanent reduction in
the Maximum Aggregate Available Amount in an amount equal to the amount of each
such prepayment. Reductions of the Maximum Aggregate Available Amount shall also
reduce, pro rata, the respective Commitments of Lenders. Any reduction in the
Maximum Aggregate Available Amount below the Letter of Credit Sublimit shall
result in a proportionate reduction (rounded to the next lowest integral
multiple of $100,000) in the Letter of Credit Sublimit.

 

7

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

(d) Except with respect to Advance Prepayments, Borrower shall be entitled to
reborrow amounts prepaid pursuant to this §2.5.2 at any time and from time to
time during the Revolving Credit Availability Period upon the terms and subject
to the conditions of this Credit Agreement. Each repayment or prepayment of
principal of any Loan shall be accompanied by payment of the unpaid interest
accrued to such date on the principal being repaid or prepaid.

(h) Section 2.6.3 of the Credit Agreement is hereby amended by deleting the
reference to “two and three-quarters percent (2.75%)” contained therein and by
substituting “four percent (4.00%)” in lieu thereof.

(i) Section 2.8 of the Credit Agreement (including, without limitation, clauses
(a) through (d) thereof) is hereby amended and restated in its entirety as
follows:

“2.8 Reserved.”

(j) Section 6.2(b) of the Credit Agreement is hereby amended and restated in its
entirety as follows:

“(b) Defaults and Events of Default. No Default or Event of Default shall have
occurred and be continuing.”

(k) Section 7.1(a) of the Credit Agreement is hereby amended and restated in its
entirety as follows:

“(a) Financial Reporting. Borrower shall furnish to the Agent: (i) (A) as soon
as publicly available but in any event within ninety (90) days after the close
of each fiscal year, its audited Financials for such fiscal year as certified by
Borrower’s certified public accountants, and (B) as soon as publicly available
but in any event within forty-five (45) days after the end of each Fiscal
Quarter (other than the fourth Fiscal Quarter of each year) its unaudited
Financials for such Fiscal Quarter, as certified by the principal financial or
accounting officer of Borrower; and (ii) contemporaneously with the delivery of
the Financials referred to in (i)(A) and (B) herein, a statement, certified by
an officer of Borrower to the best of his or her knowledge, that Borrower is in
compliance with the covenants contained in §7 as of the end of the applicable
period (or describing the extent to which Borrower is not in compliance with
such covenants), that no Default or Event of Default has occurred (or if a
Default or Event of Default has occurred, disclosing the nature of such Default
or Event of Default) and setting forth in reasonable detail any applicable
computations evidencing (A) compliance with the financial covenants set forth in
§7.1(l) and (B) compliance with the “asset coverage ratio” as defined in and
required by the ICA 1940 (it being understood that delivery by Borrower to the
Agent of Borrower’s annual reports on Form 10-K for any such fiscal year and its
quarterly report on Form 10-Q for any such Fiscal Quarter, in each instance as
filed with the SEC, will satisfy the applicable requirements of §7.1(a)(i));
(iii) within ten (10) Business Days after delivery to the trustee or holders of
such Indebtedness, all financial covenant compliance certificates (together with
the supporting financial covenant calculations delivered to such trustee or
holders) delivered in respect of the Private Placement Debt and

 

8

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

any Indebtedness of an SPE Subsidiary incurred in connection with a
Securitization Transaction; (iv) within ten (10) Business Days after the end of
each fiscal month of Borrower, written notice of any event giving rise to
Monetization Event during the previous fiscal month, together with a forecast of
the Monetization Events expected to occur in the following fiscal month; and
(v) from time to time, at the request of the Agent, such additional financial
and other information with respect to Borrower or its Subsidiaries as the Agent
may reasonably request.”

(l) Section 7.1(l) of the Credit Agreement is hereby amended by:

(i) amending and restating clause (i) thereof in its entirety as follows,
effective as of December 31, 2008:

“(i) Minimum Consolidated Stockholders’ Equity. Borrower shall maintain
Consolidated Stockholder’s Equity as measured as of the last day of each Fiscal
Quarter of Borrower, commencing with the Fiscal Quarter ending December 31,
2008, of no less than (A) $500,000,000, plus (B) 50% of the cumulative Net
Proceeds of Capital Stock/Conversion of Debt received at any time after the
First Amendment Date (excluding the Net Proceeds of Capital Stock/Conversion of
Debt by a Subsidiary to a Subsidiary or to Borrower).”

(ii) amending and restating clause (iii) thereof in its entirety as follows:

“(iii) Minimum Quarterly Cash Coverage Ratio. Borrower shall cause the Quarterly
Cash Coverage Ratio, determined on a consolidated basis for the Borrower and its
Subsidiaries, as of the last day of each Fiscal Quarter for such Fiscal Quarter
commencing with the Fiscal Quarter ending March 31, 2009, to be not less than
1.25 to 1.00.”;

(iii) amending and restating clause (iv) therein in its entirety as follows:

“(iv) Reserved.”; and

(iv) amending and restating clause (v) thereof in its entirety as follows:

“(v) Minimum Liquidity. Borrower will not permit at any time the amount of Cash
to be less than $12,500,000.”

(m) Section 7.2(a) of the Credit Agreement is hereby amended and restated in its
entirety as follows:

“(a) Indebtedness. Borrower shall not, and shall not permit any of its
Subsidiaries (other than Solutions Capital, any SPE Subsidiary or any of their
respective Subsidiaries) to:

(i) incur any Indebtedness for borrowed money after the First Amendment Date
other than the Loans and Permitted Intercompany Indebtedness; or

 

9

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

(ii) incur any other Indebtedness after the Closing Date unless (A) no Event of
Default has occurred and is continuing or would result from the incurrence of
such Indebtedness and (B) so long as after giving effect to such incurrence of
Indebtedness (and any concurrent acquisitions of Portfolio Investments or
payment of outstanding Loans or other Indebtedness) the Borrower is in pro forma
compliance with the Asset Coverage Ratio required by §7.1(l)(ii).”

(n) Section 7.2(f) of the Credit Agreement is hereby amended by amended and
restating clause (iv) therein in its entirety as follows:

“(iv) As used herein, one or more sales, transfers or other dispositions of
assets will be deemed a “Substantial Part” of the assets of the Borrower and its
Subsidiaries if (A) the book value of assets sold, transferred or otherwise
disposed of in a given period of 12 consecutive months ending on the date of any
sale, transfer or other disposition of assets exceeds (1) with respect to sales,
transfers or dispositions of Portfolio Investments, 25% of Consolidated Total
Assets, or (2) with respect to sales, transfers or dispositions of any other
assets, 15% of Consolidated Total Assets, in each case determined at the close
of the immediately preceding fiscal quarter, or (B) the assets sold, transferred
or otherwise disposed of in a given period of 12 consecutive months ending on
the date of any sale, transfer or other disposition of assets generated (1) with
respect to sales, transfers or dispositions of Portfolio Investments, 25% or
more of the consolidated operating profits of the Borrower and its Subsidiaries,
or (2) with respect to sales, transfers or dispositions of any other assets, 15%
or more of the consolidated operating profits of the Borrower and its
Subsidiaries, in each case during the immediately preceding period of four
consecutive fiscal quarters; provided, however, that for purposes of the
foregoing calculation, there shall not be included (I) any sale, transfer or
other disposition of assets (including Portfolio Investments) in the ordinary
course of business of the Borrower and its Subsidiaries, (II) any sale, transfer
or other disposition of assets from the Borrower to any Subsidiary or from any
Subsidiary to the Borrower or another Subsidiary and (III) any sale of assets if
a portion of the proceeds of such asset sale equal to the aggregate book value
thereof immediately prior to such sale was or is applied within 365 days of the
date of such sale of such assets to either (x) the acquisition of assets useful
and intended to be used in the operation of the business of the Borrower and its
Subsidiaries and having a fair market value (as determined in good faith by the
board of directors of the Borrower) at least equal to the book value of the
assets so disposed of or (y) the prepayment at any applicable prepayment
premium, on a pro rata basis, of Senior Unsecured Debt of the Borrower.”

 

10

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

(o) Section 7.2(f) of the Credit Agreement is hereby amended by adding a new
clause (v) thereto as follows:

“(v) After the acceleration of maturity as a result of the occurrence and
continuance of an Event of Default under and as defined in the 2006-1 CLO
Indenture, the Borrower will not, and will not permit any Subsidiary to, sell,
transfer or otherwise dispose of any assets to either CLFT or 2006-1 CLO,
respectively; provided, however that the Borrower may and may permit their
Subsidiaries to engage in transactions in order to facilitate substitutions of
collateral in compliance with the documents governing such facilities and
otherwise in the ordinary course of business of the Borrower or such Subsidiary
(such transaction being referred to herein as a “Permitted Substitution”) so
long as the total amount of Permitted Substitutions with respect to either CLFT
or 2006-1 CLO, respectively, does not, in any 12 month period, exceed
(i) $15,000,000 at any time prior to the date that the Borrower has made
aggregate offers of prepayments of the Private Placement Debt in accordance with
§2.5.1(b) of at least $35,000,000; and (ii) $30,000,000 at any time following
the date that the Borrower has made aggregate offers of prepayments of the
Private Placement Debt in accordance with §2.5.1(b) of at least $35,000,000.”

(p) Section 7.2(g) of the Credit Agreement is hereby amended and restated in its
entirety as follows:

“(g) Restricted Payments; Investments.

(i) Borrower shall not declare or make, or agree to pay or make, directly or
indirectly, any dividend or distribution with respect to the Capital Stock of
the Borrower, except that the Borrower may:

(A) declare any dividend so long as the declared payment date thereof is on or
after July 1, 2009;

(B) declare and pay dividends and distributions with respect to the capital
stock of the Borrower payable solely in additional shares of the Borrower’s
Capital Stock; and

(C) declare and pay dividends and distributions in either case in cash or other
property in any taxable year of the Borrower in amounts not to exceed the amount
that is estimated in good faith by the Borrower to be required to (i) reduce to
zero for such taxable year or for the previous taxable year, its investment
company taxable income (within the meaning of Section 852(b)(2) of the Code) and
reduce to zero the tax imposed by Section 852(b)(3) of the Code, and (ii) avoid
federal excise taxes for such taxable year imposed by Section 4982 of the Code.

 

11

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

(ii) Borrower shall not make any prepayments of principal with respect to the
Private Placement Debt other than prepayments or Excess Prepayments as required
or permitted by §2.5.1(b).

(iii) Borrower shall not, and shall not permit any of its Subsidiaries, to make
any payment on account of the purchase, redemption, retirement, cancellation or
acquisition of the Capital Stock of Borrower or any Indebtedness of any
Subsidiary (including any SPE Subsidiary); provided, that:

(A) Borrower may purchase one or more notes under the 2006-1 CLO Indenture, for
an aggregate purchase price not to exceed $5,000,000; and

(B) 2006-1 CLO may use proceeds of Portfolio Investments owned by it to redeem
outstanding Indebtedness under the 2006-1 CLO Indenture.”

(q) Section 10(d) of the Credit Agreement is hereby amended (i) by deleting the
reference to clause “(viii)” contained therein (but without amending or deleting
the language in such clause) and by substituting “(ix)” therefor, and (ii) by
deleting the second reference to clause “(vii)” contained therein (but without
amending or deleting the language in such clause) and by substituting “(viii)”
therefor.

2. Consent to Amendment to Private Placement Debt. Agent and each Lender each
hereby consents to the amendments to each of the Note Purchase Agreements
governing the Private Placement Debt, in each case, substantively in all
material respects as set forth in Exhibit A attached hereto and as and to the
extent otherwise permitted under the Credit Agreement.

3. Effectiveness; Conditions Precedent; Covenants to be Fulfilled Upon
Effectiveness.

(a) The effectiveness of this Amendment is subject to the following conditions
precedent:

(i) receipt by the Agent of counterparts of this Amendment executed by Borrower,
the Required Lenders and the Agent; and

(ii) All required corporate action necessary for the valid execution, delivery
and performance by Borrower of this Amendment and any other documents executed
in connection herewith have been duly and effectively taken, and evidence
thereof satisfactory to Agent shall have been provided to Agent.

 

12

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

(b) Not later than 11:00 a.m. (eastern time) on February 27, 2009:

(i) the Borrower shall have repaid all outstanding Swingline Loans and shall
have prepaid the Loans so that, after giving effect to this Amendment and the
reduction of the Maximum Aggregate Available Amount contemplated hereby, the
aggregate outstanding principal balance of the Loans plus Letter of Credit
Outstandings does not exceed the Maximum Aggregate Available Amount, as so
amended; and

(ii) the Borrower shall have paid to the Agent the Amendment Fee (as defined
below) and all other reasonable fees and expenses required to be paid on or
contemporaneously with the occurrence of the First Amendment Date.

(c) The failure to timely make any of the payments set forth above in subsection
(b) shall constitute an Event of Default under the Credit Agreement.

4. Amendment Fee. In consideration of the foregoing amendments, the Borrower
agrees to pay to the Agent, for the ratable benefit of each Lender that has
executed and delivered a signature to this Amendment on the First Amendment Date
(such Lender, a “Consenting Lender”), an amendment fee (the “Amendment Fee”) in
an amount equal to 0.50% multiplied by the aggregate Commitments of the
Consenting Lenders (calculated after giving effect to this Amendment).

5. Representations and Warranties. To induce the Agent and the Lenders to enter
into this Amendment, Borrower does hereby represent and warrant that as of the
date hereof:

(a) no Default or Event of Default exists under the Credit Agreement or any of
the other Loan Documents;

(b) the execution, delivery and performance of this Amendment and the
transactions contemplated hereby (i) are within the corporate authority of
Borrower, (ii) have been duly authorized by all necessary corporate proceedings,
(iii) do not result in any breach or violation by Borrower of any provision of
applicable Requirement of Law or any judgment, order, writ, injunction, license
or permit, in each instance binding on Borrower or on any of its properties,
except to the extent any such breach or violation could not, with reasonable
likelihood, be expected to have a Materially Adverse Effect, (iv) do not violate
the Charter Documents of Borrower, (v) do not result in a breach or violation by
Borrower of any material agreement to which Borrower is a party or to which any
of its material properties or assets are bound, except to the extent any such
breach or violation could not, with reasonable likelihood, be expected to have a
Materially Adverse Effect, and (vi) do not result in the creation or imposition
of any Lien upon any of the assets of Borrower; and

(c) upon execution and delivery of this Amendment by Borrower, this Amendment
shall constitute the legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with the terms hereof, except as such
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of creditors’
rights and except to the extent that the availability of certain equitable
remedies such as specific performance and injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.

 

13

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

6. General. This Amendment:

(a) shall be deemed to be a Loan Document;

(b) embodies the entire understanding and agreement among the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements,
understandings and inducements, whether express or implied, oral or written with
respect to such subject matter; and

(c) may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart by facsimile shall be
equally effective as delivery of a manually executed counterpart to this
Amendment.

7. Effect on Credit Agreement. Except as expressly set forth herein, the Agent
and the Lenders agree to no waiver or amendment with respect to the Credit
Agreement or any other Loan Document, and the Credit Agreement and the other
Loan Documents remain in full force in accordance with their respective terms.
The Agent’s and the Lenders’ agreeing to the amendments contained herein does
not and shall not create (nor shall Borrower rely upon the existence of or claim
or assert that there exists) any obligation of the Agent or any Lender to
consider or to agree to any further amendment to any Loan Document. In the event
that the Agent or Lenders subsequently agree to consider any further amendment
to any Loan Document, neither the amendments contained herein nor any other
conduct of the Agent shall be of any force or effect on the Agent’s or Lenders’
consideration or decision with respect to any such amendment, and the Agent and
Lenders shall have no further obligation whatsoever to consider or to agree to
any such amendment. The Agent, on behalf of the Lenders, expressly reserves the
right to require strict compliance with the terms of the Credit Agreement and
the other Loan Documents in all respects. The amendments agreed to herein shall
not constitute a course of dealing at variance with the Credit Agreement so as
to require further notice by the Agent or the Lenders to require strict
compliance with the terms of the Credit Agreement and the other Loan Documents
in the future. On and after the date hereof, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to the “Credit Agreement”, “thereunder”, “thereof”, “therein” or words
of like import referring to the Credit Agreement shall mean and be a reference
to the Credit Agreement, as hereby amended.

8. Expenses. Borrower shall reimburse the Agent for the Agent’s legal fees and
expenses incurred in connection with the preparation, negotiation, execution and
delivery of this Amendment and all other agreements and documents contemplated
hereby.

9. Successors and Assigns. This Amendment shall be binding upon and inure to the
benefit of the successors and permitted assigns of the parties hereto.

10. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN NEW YORK.

 

14

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

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective duly authorized representatives as of the date first above
written.

 

MCG CAPITAL CORPORATION, as Borrower By:   /s/ Steven F. Tunney Name:   Steven
F. Tunney Title:   President & CEO

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

SUNTRUST BANK, as Agent, Issuing Bank, Swingline Lender and as a Lender By:  
/s/ Robert S. Ashcom Name:   Robert S. Ashcom Title:   Director SOVEREIGN BANK,
as a Lender By:   /s/ Thomas J. Young Name:   Thomas J. Young Title:   Vice
President BMO CAPITAL MARKETS INC., as a Lender By:     Name:     Title:    
CHEVY CHASE BANK, F.S.B., as a Lender By:   /s/ Charles Youles Name:   Charles
Youles Title:   Vice President

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

Schedule 1.1

Commitments

 

Lender

   Commitment

SunTrust Bank

   $ 12,500,000

Sovereign Bank

   $ 7,500,000

BMO Capital Markets Inc.

   $ 7,500,000

Chevy Chase Bank, F.S.B.

   $ 7,500,000