<PAGE>
                                                                    Exhibit 10.1


                           THIRD AMENDED AND RESTATED

                          REGISTRATION RIGHTS AGREEMENT

                                  by and among

                             MCG CAPITAL CORPORATION

                                       and

                              CERTAIN STOCKHOLDERS

                         Dated as of November 28, 2001

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                                TABLE OF CONTENTS
                                -----------------
                                                                            Page
                                                                            ----

1.   CERTAIN DEFINITIONS.....................................................2

2.   REGISTRATION RIGHTS.....................................................5

   2.1.  DEMAND REGISTRATIONS................................................5
   2.2.  PIGGYBACK REGISTRATIONS.............................................9
   2.3.  ALLOCATION OF SECURITIES INCLUDED IN REGISTRATION STATEMENT........10
   2.4.  REGISTRATION PROCEDURES............................................12
   2.5.  REGISTRATION EXPENSES..............................................17
   2.6.  CERTAIN LIMITATIONS ON REGISTRATION RIGHTS.........................18
   2.7.  LIMITATIONS ON SALE OR DISTRIBUTION OF OTHER SECURITIES............19
   2.8.  NO REQUIRED SALE...................................................20
   2.9.  INDEMNIFICATION....................................................21

3.   UNDERWRITTEN OFFERINGS.................................................25

   3.1.  REQUESTED UNDERWRITTEN OFFERINGS...................................25
   3.2.  PIGGYBACK UNDERWRITTEN OFFERINGS...................................25
   3.3.  INVESTMENT BANKING SERVICES........................................26

4.   GENERAL................................................................26

   4.1.  ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES.......................26
   4.2.  RULE 144...........................................................26
   4.3.  NOMINEES FOR BENEFICIAL OWNERS.....................................27
   4.4.  MISCELLANEOUS......................................................27
   4.5.  AMENDMENT..........................................................32
   4.6.  ADDITIONAL RIGHTS..................................................32
   4.7.  COMPLIANCE WITH APPLICABLE LAW.....................................32
   4.8.  RESCISSION OF AGREEMENT; RESTORATION...............................32


                                     - i -

<PAGE>

                           THIRD AMENDED AND RESTATED
                           --------------------------
                          REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

      This THIRD AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), is dated as of November ___, 2001 and shall be effective as of the
time specified in Section 4.8(b) below, by and among MCG CAPITAL CORPORATION, a
Delaware corporation (the "Company") (formerly known as named MCG Credit
                          --------
Corporation), each of the Persons listed on the signature pages hereto under the
heading "GOLDMAN STOCKHOLDERS" (the "Goldman Stockholders"), each of the Persons
                                     ---------------------
listed on the signature pages hereto under the heading "SOROS STOCKHOLDERS" (the
"Soros Stockholders"), each of the Persons listed on the signature pages hereto
 ------------------
under the heading "VESTAR STOCKHOLDERS" (the "Vestar Stockholders"), FBR Asset
                                              -------------------
Investment Corporation, a Virginia corporation (the "FBR Stockholder"), each of
                                                     ---------------
the Persons listed on the signature pages attached hereto under the heading
"Management Stockholders", including those listed under the subheading
"ADDITIONAL MANAGEMENT STOCKHOLDERS" (the "Management Stockholders"), and each
                                           -----------------------
of the Persons listed on the signature pages attached hereto under the heading
"ADDITIONAL INVESTORS" (the "Additional Stockholders" and collectively with the
                             -----------------------
Goldman Stockholders, the Soros Stockholders, the Vestar Stockholders, the FBR
Stockholder and the Management Stockholders, the "Stockholders").
                                                  ------------

         WHEREAS, the Company and certain of its stockholders entered into a
Registration Rights Agreement, dated as of June 24, 1998 (the "Original
                                                               -------
Registration Rights Agreement");
------------------------------

      WHEREAS, in connection with the Stock Purchase Agreement (the "Stock
                                                                     -----
Purchase Agreement") dated as of June 22, 2000, pursuant to which, among other
------------------
things, the Soros Stockholders and the Vestar Stockholders purchased shares of
the Company's Class E Common Stock, par value $.01 per share, the parties to the
Original Registration Rights Agreement and the Soros Stockholders and Vestar
Stockholders entered into an Amended and Restated Registration Rights Agreement
(the "First Amended and Restated Registration Rights Agreement"), dated as of
      --------------------------------------------------------
July 11, 2000, which amended and restated the Original Registration Rights
Agreement in its entirety; and

      WHEREAS, in contemplation of the Company's proposed initial public
offering of its common stock (heretofore named Class C Common Stock), par value
$0.01 per share (the "Common Stock"), the Company and certain Stockholders
entered into a Second Amended and Restated Registration Rights Agreement (the
"Second Amended and Restated Registration Rights Agreement"), dated as of the
-----------------------------------------------------------
date hereof, which amended and restated the First Amended and Restated
Registration Rights Agreement in its entirety;


                                     - 1 -

<PAGE>

      WHEREAS, concurrently with the execution of this Agreement, the FBR
Stockholder and the Company are entering into a Stock Purchase Agreement, dated
as of November ___, 2001 (the "FBR Stock Purchase Agreement"), pursuant to which
                              ------------------------------
the FBR Stockholder will agree to purchase 625,000 shares of Common Stock from
the Company on the terms set forth therein; and

      WHEREAS, in connection with the FBR Stock Purchase Agreement, the parties
to the Second Amended and Restated Registration Rights Agreement and the FBR
Stockholder desire to amend and restate the Second Amended and Restated
Registration Rights Agreement on the terms set forth herein effective as of the
time of the closing of (i) the Initial Public Offering (as defined below) and
(ii) the closing of the sale of shares of Common Stock contemplated by the FBR
Stock Purchase Agreement.

      NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.

      The parties hereto agree as follows:

      1. Certain Definitions. As used in this Agreement, the following terms
         -------------------
shall have the meanings ascribed to them below:

      "Affiliate" means with respect to any Person, any other Person that,
       ---------
directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person. Any Relative of an
individual shall be deemed to be an Affiliate of such individual for purposes
hereof. Without limiting the foregoing, any pooled investment vehicle organized
by Goldman, the FBR Stockholder, Vestar Capital Partners IV, L.P., or Soros
Private Equity Partners LLC or any other Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with each of them (each a "Fund") or an Affiliate of a Fund or
the investments of which are directed by a Fund or any Affiliate thereof or any
partner, officer or employee of a Fund or any Affiliate thereof, and any
investment fund organized by a Fund or any Affiliate thereof for the benefit of
the current or former partners, officers or employees of a Fund or their
dependents or any Affiliate thereof, shall be deemed an Affiliate of the Goldman
Stockholders, the FBR Stockholder, the Vestar Stockholders or the Soros
Stockholders, respectively, for purposes of this Agreement. Neither the Company
nor any Person controlled by the Company shall be deemed to be an Affiliate of
any Stockholder.

      "Applicable Law" means any federal, state, local or foreign law, rule,
       --------------
requirement, regulation, statute, ordinance, judgment, decree or bodies of law
applicable to the Company or the Stockholders, including the Investment Company
Act, the Securities Act or the securities laws of any state.


                                     - 2 -

<PAGE>

      "Certificate of Incorporation" means the Amended and Restated Certificate
       ----------------------------
of Incorporation of the Company, as the same may be amended and restated from
time to time.

      "Class A Stock" means the Class A Common Stock, par value $.01 per share,
       -------------
of the Company.

      "Class B Stock" means the Class B Common Stock, par value $.01 per share,
       -------------
of the Company.

      "Class C Stock" means the Class C Common Stock, par value $.01 per share,
       -------------
of the Company, which shall be renamed Common Stock, par value $.01 per share in
connection with the Initial Public Offering.

      "Class D Stock" means the Class D Common Stock, par value $.01 per share,
       -------------
of the Company.

      "Class E Stock" means the Class E Common Stock, par value $.01 per share,
       -------------
of the Company.

      "Common Stock" shall have the meaning set forth in the recitals to this
       ------------
Agreement.

      "Common Stock Equivalents" means any securities convertible into, or
       ------------------------
exercisable or exchangeable for, shares of Common Stock.

      "First Union" means First Union Corporation, a North Carolina corporation.
       -----------

      "Goldman" means The Goldman Sachs Group, Inc.
       -------

      "Initial Public Offering" means the consummation of the first public
       -----------------------
offering of Common Stock pursuant to a registration statement (other than on
Form S-8, a Form N-14 or a successor form) filed with, and declared effective
by, the Securities and Exchange Commission.

      "Investment Company Act" means the Investment Company Act of 1940, as
       ----------------------
amended.

      "Long-Form" has the meaning given it in Section 2.1(a)(i).
       ---------


                                     - 3 -

<PAGE>

      "Major Stockholder" means with respect to any registration, the
       -----------------
Stockholder that, together with its Affiliates, includes the largest number of
Registrable Securities in such registration.

      "Person" means any individual, corporation, limited liability company,
       ------
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivisions thereof.

      "Qualified IPO" means any issuance and sale of shares of Common Stock in
       -------------
an underwritten public offering registered under the Securities Act based on an
implied total equity value of the Company without giving effect to such issuance
of shares in such offering of not less than $15.00 per share of Common Stock (as
adjusted to reflect any stock split, combination, recapitalization or other
reorganization) assuming all outstanding shares of Common Stock had been
converted into Common Stock and all outstanding securities convertible into,
exercisable for, or exchangeable for Common Stock that have an exercise price
less than or equal to $15.00 per share (as adjusted to reflect any stock split,
combination, recapitalization or other reorganization) had been so converted
into, exercised for, or exchanged for Common Stock.

      "Registrable Securities" means any (i) shares of Common Stock held as of
       ----------------------
the date hereof by any Stockholder, (ii) shares of Class A Common Stock issued
pursuant to the exercise of Warrants issued to First Union prior to the date
hereof or any shares of Common Stock issued in exchange for such Warrants or
Class A Common Stock, (iii) shares of Class A Common Stock and/or Class E Common
Stock issued pursuant to the exercise of options issued to employees,
consultants or directors of the Company prior to a Qualified IPO or any shares
of Common Stock issued in exchange for such options, (iv) the shares of Common
Stock purchased by the FBR Stockholder pursuant to the terms of the FBR Stock
Purchase Agreement, (v) any shares of Common Stock issued upon a conversion or
exchange of shares of Common Stock referenced in clauses (i), (ii), (iii) or
(iv) above or (vi) any shares of Common Stock issued or issuable, directly or
indirectly, with respect to the Common Stock referenced in clauses (i), (ii),
(iii), (iv) and (v) above by way of stock dividend, stock split or combination
of shares. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (A) a registration statement with
respect to the sale of such securities shall have been declared effective under
the Securities Act and such securities shall have been disposed of in accordance
with such registration statement, or (B) such securities may be sold (other than
in a privately negotiated sale) pursuant to Rule 144 (or any successor
provision) under the Securities Act and in compliance with the requirements of
paragraphs (f) and (g) of Rule 144 (notwithstanding the provisions of paragraph
(k) of such Rule).


                                     - 4 -

<PAGE>

      "Relative" means with respect to each Stockholder, such Stockholder's
       --------
spouse, former spouse, child, parent, parent of spouse, sibling or grandchild.

      "S-3 Eligible Issuer" means an issuer that is qualified under the
       -------------------
Securities Act and the rules and regulations promulgated thereunder, including
without limitation, the General Instructions to Form S-3, to offer securities on
a Form S-3 registration statement (or other applicable equivalent short-form
registration statement, if any) or its successor form.

      "SEC" means the Securities and Exchange Commission.
       ---

      "Securities Act" means the Securities Act of 1933, as amended.
       --------------

      "Short-Form" has the meaning given it in Section 2.1(a)(i).
       ----------

      "Stockholder" or "Stockholders" means any party which is entitled to the
       -----------      ------------
benefits of this Agreement and any party which shall hereafter acquire and hold
Registrable Securities.

      2. Registration Rights.
         -------------------

            2.1 Demand Registrations.
                --------------------

                  (a) (i) Subject to Sections 2.1(b) and 2.3 below, at any time
and from time to time after the consummation of an Initial Public Offering, (A)
the Goldman Stockholders, (B) the Vestar Stockholders (C) the Soros Stockholders
and (D) the FBR Stockholder shall each have the right to require the Company to
file either a Form S-1 or Form N-2 registration statement, as applicable, or any
applicable equivalent long-form registration statement ("Long-Forms") or, if
                                                         ----------
available, a Form S-3 or any applicable equivalent short-form registration
statement ("Short-Forms") under the Securities Act covering all or any part of
            -----------
their respective Registrable Securities, by delivering a written request
therefor to the Company specifying the number of Registrable Securities to be
included in such registration by such Stockholder(s) and the intended method of
distribution thereof. All such requests by any Stockholder pursuant to this
Section 2.1(a)(i) are referred to herein as "Demand Registration Requests," and
                                             ----------------------------
the registrations so requested are referred to herein as "Demand Registrations"
                                                          --------------------
(with respect to any Demand Registration, the Stockholder(s) making such demand
for registration being referred to as the "Initiating Stockholder(s)"). As
                                           -------------------------
promptly as practicable, but no later than ten business days after receipt of a
Demand Registration Request, the Company shall give written notice (the "Demand
                                                                         ------
Exercise Notice") of such Demand Registration Request to all Stockholders of
---------------
record of Registrable Securities.


                                     - 5 -

<PAGE>

                        (ii) The Company, subject to Sections 2.3 and 2.6, shall
include in a Demand Registration (x) the Registrable Securities of the
Initiating Stockholder(s) and (y) the Registrable Securities of any other
Stockholder which shall have made a written request to the Company for inclusion
in such registration (which request shall specify the maximum number of
Registrable Securities intended to be disposed of by such Stockholder) within 30
days after the receipt of the Demand Exercise Notice (or within 15 days if, at
the request of the Initiating Stockholder(s) or the Major Stockholder
participating in such registration, the Company states in such written notice or
gives telephonic notice to all Stockholders, with written confirmation to follow
promptly thereafter, that such registration will be on a Form S-3).

                        (iii) The Company shall, as expeditiously as possible,
use all commercially reasonable efforts to (x) effect such registration under
the Securities Act (including, without limitation, by means of a shelf
registration pursuant to Rule 415 under the Securities Act if so requested and
if the Company is then eligible to use such a registration) of the Registrable
Securities which the Company has been so requested to register, for distribution
in accordance with such intended method of distribution, and (y) if requested by
the Initiating Stockholder(s) or the Major Stockholder participating in such
registration, obtain acceleration of the effective date of the registration
statement relating to such registration.

                  (b) The Demand Registration rights granted in Section 2.1(a)
to the Stockholders are subject to the following limitations: (i) each
registration in respect of a Demand Registration Request must include, in the
aggregate (based on Registrable Securities included in such registration by all
Stockholders participating in such registration) either (A) Registrable
Securities having an aggregate market value of at least $10,000,000 based on the
then-current market price or (B) at least 625,000 shares of Common Stock (as
adjusted to reflect any stock split, combination, recapitalization or other
reorganization) so long as the Demand Registration Request relating to such
registration included all Registrable Securities held by the Initiating
Stockholder(s); (ii) the Demand Registration must be initiated by either (A)
Initiating Stockholder(s) beneficially owning Registrable Securities
representing, in the aggregate, in excess of five percent (5%) of the amount of
shares of Common Stock outstanding immediately prior to such registration or (B)
the FBR Stockholder so long as it requests that all Registrable Securities
beneficially owned by it and its Affiliates be included in such Demand
Registration; (iii) the Company shall not be required to cause a registration
pursuant to Section 2.1(a)(i) to be declared effective within a period of 90
days after the date any registration statement of the Company is declared
effective; (iv) if the Board of Directors of the Company, in its good faith
judgment, determines that any registration of Registrable Securities should not
be made or continued because it would materially interfere with any material
financing, acquisition, corporate reorganization or merger or other transaction
involving the Company or any of its subsidiaries (a "Valid Business
                                                     --------------


                                     - 6 -

<PAGE>

Reason"), (x) the Company may postpone filing a registration statement relating
------
to a Demand Registration Request until such Valid Business Reason no longer
exists, but in no event for more than six months, and (y) in case a registration
statement has been filed relating to a Demand Registration Request, if the Valid
Business Reason has not resulted from actions taken by the Company, the Company
may cause such registration statement to be withdrawn and its effectiveness
terminated or may postpone amending or supplementing such registration
statement; and the Company shall give written notice of its determination to
postpone or withdraw a registration statement and of the fact that the Valid
Business Reason for such postponement or withdrawal no longer exists, in each
case, promptly after the occurrence thereof; (v) the offering of Registrable
Securities requested to be registered pursuant to Section 2.1(a)(i) shall be
pursuant to an underwritten offering unless the Company or any of its
Stockholders has previously sold Registrable Securities pursuant to a
registration statement under the Securities Act; and (vi) the Goldman
Stockholders shall be entitled to request up to four Demand Registrations, up to
two of which may be on a Long-Form, the Vestar Stockholders and the Soros
Stockholders shall each be entitled to request up to two Demand Registrations,
up to one of which may be made by each stockholder group on a Long-Form and the
FBR Stockholder shall be entitled to request one Demand Registration, which may
be on a Long-Form (provided that Demand Registrations shall be registered on a
Short Form (or its successor or equivalent) whenever the Company is S-3
Eligible); provided, however, that if, as a result of the allocations made
pursuant to Section 2.3, the Initiating Stockholder is not able to include at
least 75% of the Registrable Securities it requested to be registered pursuant
to a Demand Registration in the applicable Demand Exercise Notice, then such
Stockholder may elect not to be deemed the Initiating Stockholder for such
Demand Registration and that Demand Registration shall not count towards the
applicable limits in this clause (vi); and provided, further, that in no event
and notwithstanding any other provision in this Agreement, shall the Company be
required or obligated to effect more than nine (9) Demand Registrations, up to
five of which may be on a Long-Form.

      If the Company shall give any notice of postponement or withdrawal of any
registration statement, the Company shall not, during the period of postponement
or withdrawal, register any Common Stock, other than an offering by the Company
for its own account or pursuant to a registration statement on Form S-4 or Form
N-14, as applicable, or Form S-8. Each Stockholder of Registrable Securities
agrees that, upon receipt of any notice from the Company that the Company has
determined to withdraw any registration statement pursuant to clause (iv) above,
such Stockholder will discontinue its disposition of Registrable Securities
pursuant to such registration statement and, if so directed by the Company, will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Stockholder's possession of the prospectus
covering such Registrable Securities that was in effect at the time of receipt
of such notice. If the Company shall have withdrawn or


                                     - 7 -

<PAGE>

prematurely terminated a registration statement filed under Section 2.1(a)(i)
(whether pursuant to clause (iv) above or as a result of any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court), the Company shall not be considered to have effected an
effective registration for the purposes of this Agreement until the Company
shall have filed a new registration statement covering the Registrable
Securities covered by the withdrawn registration statement and such registration
statement shall have been declared effective and shall not have been withdrawn.
If the Company shall give any notice of withdrawal or postponement of a
registration statement, the Company shall, at such time as the Valid Business
Reason that caused such withdrawal or postponement no longer exists (but in no
event later than six months after the date of the postponement or withdrawal),
use all commercially reasonable efforts to effect the registration under the
Securities Act of the Registrable Securities covered by the withdrawn or
postponed registration statement in accordance with this Section 2.1 (unless the
Initiating Stockholder shall have withdrawn such request, in which case the
Company shall not be considered to have effected an effective registration for
the purposes of this Agreement), and such registration shall not be withdrawn or
postponed pursuant to clause (iv) above.

                  (c) The Company, subject to Sections 2.3 and 2.6, may elect to
include in any registration statement and offering made pursuant to Section
2.1(a)(i), (i) authorized but unissued shares of Common Stock or shares of
Common Stock held by the Company as treasury shares and (ii) any other shares of
Common Stock which are requested to be included in such registration pursuant to
the exercise of piggyback registration rights granted by the Company after the
date hereof ("Additional Piggyback Rights"); provided, however, that such
              ---------------------------
inclusion shall be permitted only to the extent that it is pursuant to and
subject to the terms of the underwriting agreement or arrangements, if any,
entered into by the Major Stockholder; and, provided, further, that until such
time as the Goldman Stockholders and their Affiliates collectively own 25% or
less of the shares of the Company's outstanding Common Stock, the Company shall
not include, without prejudice to and subject to its rights under this Agreement
otherwise, any authorized shares of Common Stock (treasury or newly issued) in
any registration statement that becomes effective under the Securities Act
pursuant to Section 2.1(a)(i) if any of the Goldman Stockholders notifies the
Company that it proposes to sell shares of Common Stock in such offering in
accordance with Section 2.1.

                  (d) In connection with any Demand Registration, holders of a
majority of the Registrable Securities requested to be included in such
registration shall have the right to designate the lead managing underwriter for
such registration, provided that such managing underwriter is reasonably
satisfactory to the Company.


                                     - 8 -

<PAGE>

            2.2. Piggyback Registrations.
                 -----------------------

                  (a) If, at any time, the Company proposes or is required to
register any of its equity securities under the Securities Act (other than
pursuant to (i) registrations on such form or applicable equivalent form(s)
solely for registration of securities in connection with an employee benefit
plan or dividend reinvestment plan or a merger or consolidation, (ii) a Demand
Registration under Section 2.1 or (iii) in connection with an Initial Public
Offering) on a registration statement on Form N-2, S-1, Form S-2 or Form S-3 (or
an equivalent general registration form then in effect), whether or not for its
own account, the Company shall give prompt written notice of its intention to do
so to each of the Stockholders of record of Registrable Securities. Upon the
written request of any Stockholder, made within 20 days following the receipt of
any such written notice (which request shall specify the maximum number of
Registrable Securities intended to be disposed of by such Stockholder and the
intended method of distribution thereof), the Company shall, subject to Sections
2.2(b), 2.3 and 2.6 hereof, use all commercially reasonable efforts to cause all
such Registrable Securities, the Stockholders of which have so requested the
registration thereof, to be registered under the Securities Act (with the
securities which the Company at the time proposes to register) to permit the
sale or other disposition by the Stockholders (in accordance with the intended
method of distribution thereof) of the Registrable Securities to be so
registered. There is no limitation on the number of such piggyback registrations
pursuant to the preceding sentence which the Company is obligated to effect. No
registration effected under this Section 2.2(a) shall relieve the Company of its
obligations to effect Demand Registrations.

                  (b) If, at any time after giving written notice of its
intention to register any equity securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay registration
of such equity securities, the Company may, at its election, give written notice
of such determination to all Stockholders of record of Registrable Securities
and (i) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
abandoned registration, without prejudice, however, to the rights of
Stockholders under Section 2.1, and (ii) in the case of a determination to delay
such registration of its equity securities, shall be permitted to delay the
registration of such Registrable Securities for the same period as the delay in
registering such other equity securities.

                  (c) Any Stockholder shall have the right to withdraw its
request for inclusion of its Registrable Securities in any registration
statement pursuant to this Section 2.2 by giving written notice to the Company
of its request to withdraw; provided, however, that (i) such request must be
made in writing prior to the earlier of the execution of the underwriting
agreement or the execution of the custody agreement with respect to


                                     - 9 -

<PAGE>

such registration and (ii) such withdrawal shall be irrevocable and, after
making such withdrawal, a Stockholder shall no longer have any right to include
Registrable Securities in the registration as to which such withdrawal was made.

            2.3. Allocation of Securities Included in Registration Statement.
                 -----------------------------------------------------------

                  (a) If any requested registration pursuant to Section 2.1
involves an underwritten offering and the lead managing underwriter of such
offering (or a co-managing underwriter of such offering, if Goldman, the FBR
Stockholder or any of their Affiliates is the lead managing underwriter of such
offering) (the "Manager") shall advise the Company that, in its view, the number
                -------
of securities requested to be included in such registration by the Stockholders
or any other persons (including those shares of Common Stock requested by the
Company or by other stockholders exercising Additional Piggyback Rights with the
Company's consent but excluding shares of Common Stock of any Management
Stockholder who is prohibited from participating pursuant to Section 2.6(b)
hereof) exceeds the largest number (the "Section 2.1 Sale Number") that can be
                                         -----------------------
sold in an orderly manner in such offering within a price range acceptable to
the Major Stockholder, or in the case of a Demand Registration, the Initiating
Stockholder, the Company shall include in such registration:

                        (i) all Registrable Securities requested to be included
in such registration by Stockholders of Registrable Securities (excluding shares
of Common Stock of any Management Stockholder who is prohibited from
participating pursuant to Section 2.6(b) hereof) and all other shares of Common
Stock that holders of Additional Piggyback Rights propose to register
("Additional Registrable Securities"); provided, however, that, if the number of
such Registrable Securities and Additional Registrable Securities exceeds the
Section 2.1 Sale Number, the number of such Registrable Securities and
Additional Registrable Securities (not to exceed the Section 2.1 Sale Number) to
be included in such registration shall be allocated on a pro rata basis among
all Stockholders requesting that Registrable Securities be included in such
registration and all holders of Additional Registrable Securities requesting
that Additional Registrable Securities be included in such registration, based
on the number of Registrable Securities or Additional Registrable Securities, as
the case may be, then owned by each such Stockholder or holder of Additional
Registrable Securities requesting inclusion in relation to the number of
Registrable Securities then owned by all Stockholders requesting inclusion plus
the number of Additional Registrable Securities then owned by all holders of
Additional Registrable Securities; and

                        (ii) to the extent that the number of Registrable
Securities to be included by all Stockholders and holders of Additional
Registrable Securities is less than the Section 2.1 Sale Number, shares of
Common Stock that the Company proposes to register.


                                     - 10 -

<PAGE>

      If, as a result of the proration provisions of this Section 2.3(a), any
Stockholder or holders of Additional Registrable Securities shall not be
entitled to include all Registrable Securities or Additional Registrable
Securities in a registration that such Stockholder or holder of Additional
Registrable Securities has requested be included, such Stockholder or holder of
Additional Registrable Securities, as the case may be, may elect to withdraw his
request to include Registrable Securities or Additional Registrable Securities
in such registration or may reduce the number requested to be included;
provided, however, that (i) such request must be made in writing prior to the
earlier of the execution of the underwriting agreement or the execution of the
custody agreement with respect to such registration and (ii) such withdrawal
shall be irrevocable and, after making such withdrawal, a Stockholder or holder
of Additional Registrable Securities shall no longer have any right to include
Registrable Securities or Additional Registrable Securities in the registration
as to which such withdrawal was made.

                  (b) If any registration pursuant to Section 2.2 involves an
underwritten offering and the Manager shall advise the Company that, in its
view, the number of securities requested to be included in such registration
(excluding shares of Common Stock of any Management Stockholder who is
prohibited from participating pursuant to Section 2.6(b) hereof) exceeds the
number (the "Section 2.2 Sale Number") that can be sold in an orderly manner in
             -----------------------
such registration within a price range acceptable to the Company, the Company
shall include in such registration:

                        (i) all Common Stock or Common Stock Equivalents that
the Company proposes to register for its own account (the "Company Securities");
                                                           ------------------
and

                        (ii) to the extent that the number of Company Securities
is less than the Section 2.2 Sale Number, all Registrable Securities requested
to be included in such registration by Stockholders of Registrable Securities
and holders of Additional Registrable Securities (excluding shares of Common
Stock of any Management Stockholder who is prohibited from participating
pursuant to Section 2.6(b) hereof); provided, however, that, if the number of
such Registrable Securities and Additional Registrable Securities exceeds the
Section 2.2 Sale Number less the number of Company Securities, then the number
of such Registrable Securities and Additional Registrable Securities (not to
exceed the Section 2.2 Sale Number less the number of Company Securities) to be
included in such registration shall be allocated on a pro rata basis among all
Stockholders requesting that Registrable Securities be included in such
registration and all holders of Additional Registrable Securities requesting
that Additional Registrable Securities be included in such registration, based
on the number of Registrable Securities or Additional Registrable Securities, as
the case may be, then owned by each such Stockholder or holder of Additional
Registrable Securities requesting inclusion in relation to the number of
Registrable Securities then owned by all Stockholders requesting


                                     - 11 -

<PAGE>

inclusion plus the number of Additional Registrable Securities then owned by all
holders exercising Additional Registrable Securities.

            2.4. Registration Procedures. If and whenever the Company is
                 -----------------------
required by the provisions of this Agreement to use all commercially reasonable
efforts to effect or cause the registration of any Registrable Securities under
the Securities Act as provided in this Agreement, the Company shall, as
expeditiously as possible:

                  (a) prepare and file with the SEC a registration statement on
an appropriate registration form of the SEC for the disposition of such
Registrable Securities in accordance with the intended method of disposition
thereof, which form (i) shall be selected by the Company and (ii) shall, in the
case of a shelf registration, be available for the sale of the Registrable
Securities by the selling Stockholders thereof and such registration statement
shall comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the SEC to be
filed therewith, and the Company shall use all commercially reasonable efforts
to cause such registration statement to become and remain effective; provided,
however, that before filing a registration statement or prospectus or any
amendments or supplements thereto, or comparable statements under securities or
"blue sky" laws of any jurisdiction, the Company will furnish, if requested, to
one counsel for the Stockholders participating in the planned offering (selected
by the Major Stockholder) and the underwriters, if any, copies of all such
documents proposed to be filed (including all exhibits thereto), which documents
will be subject to the reasonable review and reasonable comment of such counsel,
and the Company shall not file any registration statement or amendment thereto
or any prospectus or supplement thereto to which the Stockholders of a majority
of the Registrable Securities covered by such registration statement or the
underwriters, if any, shall reasonably object in writing;

                  (b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
such period (which shall not be required to exceed 150 days in the case of a
registration pursuant to Section 2.1 or 120 days in the case of a registration
pursuant to Section 2.2) as any seller of Registrable Securities pursuant to
such registration statement shall request and to comply with the provisions of
the Securities Act with respect to the sale or other disposition of all
Registrable Securities covered by such registration statement in accordance with
the intended methods of disposition by the seller or sellers thereof set forth
in such registration statement;

                  (c) furnish, without charge, to each seller of such
Registrable Securities and each underwriter, if any, of the securities covered
by such registration statement such number of copies of such registration
statement, each amendment and


                                     - 12 -

<PAGE>

supplement thereto (in each case including all exhibits), and the prospectus
included in such registration statement (including each preliminary prospectus)
in conformity with the requirements of the Securities Act, and other documents,
as such seller and underwriter may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Securities owned by such
seller (the Company hereby consenting to the use in accordance with all
applicable law of each such registration statement (or amendment or
post-effective amendment thereto) and each such prospectus (or preliminary
prospectus or supplement thereto) by each such seller of Registrable Securities
and the underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such registration statement or prospectus);

                  (d) use all commercially reasonable efforts to register or
qualify the Registrable Securities covered by such registration statement under
such other securities or "blue sky" laws of such jurisdictions as any sellers of
Registrable Securities or any managing underwriter, if any, shall reasonably
request, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such sellers or underwriter, if any, to
consummate the disposition of the Registrable Securities in such jurisdictions,
except that in no event shall the Company be required to qualify to do business
as a foreign corporation in any jurisdiction where it would not, but for the
requirements of this paragraph (d), be required to be so qualified, to subject
itself to taxation in any such jurisdiction or to consent to general service of
process in any such jurisdiction;

                  (e) promptly notify each Stockholder selling Registrable
Securities covered by such registration statement and each managing underwriter,
if any, (i) when the registration statement, any pre-effective amendment, the
prospectus or any prospectus supplement related thereto or post-effective
amendment to the registration statement has been filed and, with respect to the
registration statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC or state securities authority for
amendments or supplements to the registration statement or the prospectus
related thereto or for additional information; (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of the registration statement or
the initiation of any proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of any Registrable Securities for sale under the securities or "blue sky" laws
of any jurisdiction or the initiation of any proceeding for such purpose; (v) of
the existence of any fact of which the Company becomes aware which results in
the registration statement, the prospectus related thereto or any document
incorporated therein by reference containing an untrue statement of a material
fact or omitting to state a material fact required to be stated therein or
necessary to make any statement therein not misleading; and (vi) if at any time
the representations and warranties contemplated by any underwriting agreement,
securities sale agreement, or other similar agreement, relating to the offering
shall cease to be true


                                     - 13 -

<PAGE>

and correct in all material respects, and if the notification relates to an
event described in clause (v), the Company shall promptly prepare and furnish to
each such seller and each underwriter, if any, a reasonable number of copies of
a prospectus supplemented or amended so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein in the light of
the circumstances under which they were made not misleading;

                  (f) comply with all applicable rules and regulations of the
SEC, and make generally available to its security holders, as soon as reasonably
practicable after the effective date of the registration statement (and in any
event within 16 months thereafter), an earnings statement (which need not be
audited) covering the period of at least twelve consecutive months beginning
with the first day of the Company's first calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

                  (g) (i) use all commercially reasonable efforts to cause all
such Registrable Securities covered by such registration statement to be listed
on the principal securities exchange on which similar securities issued by the
Company are then listed (if any), if the listing of such Registrable Securities
is then permitted under the rules of such exchange, or (ii) if no similar
securities are then so listed, use all commercially reasonable efforts to either
cause all such Registrable Securities to be listed on a national securities
exchange or to secure designation of all such Registrable Securities as a Nasdaq
National Market, Inc. ("Nasdaq") "national market system security" within the
                        ------
meaning of Rule 11Aa2-1 of the Exchange Act or, failing that, secure Nasdaq
authorization for such shares and, without limiting the generality of the
foregoing, take all actions that may be required by the Company as the issuer of
such Registrable Securities in order to facilitate the managing underwriter's
arranging for the registration of at least two market makers as such with
respect to such shares with the National Association of Securities Dealers, Inc.
(the "NASD");
      ----

                  (h) provide and cause to be maintained a transfer agent and
registrar for all such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement;

                  (i) enter into such customary agreements (including, if
applicable, an underwriting agreement) and take such other actions as the
Stockholders of a majority of the Registrable Securities or the Major
Stockholder participating in such offering shall reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities, provided
that the underwriting agreement, if any, shall be reasonably satisfactory in
form and substance to the Company. The Stockholders of the


                                     - 14 -

<PAGE>

Registrable Securities which are to be distributed by such underwriters shall be
parties to such underwriting agreement and may, at their option, require that
the Company make to and for the benefit of such Stockholders the
representations, warranties and covenants of the Company which are being made to
and for the benefit of such underwriters and which are of the type customarily
provided to institutional investors in secondary offerings; provided, however,
that the Company shall not be required to make any representations or warranties
with respect to written information specifically provided by a Selling
Stockholder for inclusion in the registration documents;

                  (j) use all commercially reasonable efforts to obtain an
opinion from the Company's counsel and a "cold comfort" letter from the
Company's independent public accountants in customary form and covering such
matters as are customarily covered by such opinions and "cold comfort" letters
delivered to underwriters in underwritten public offerings, which opinion and
letter shall be reasonably satisfactory to the underwriter, if any, any
Initiating Stockholder in the case of a Demand Registration, or to the Major
Stockholder participating in any other offering, and furnish to each Stockholder
participating in the offering and to each underwriter, if any, a copy of such
opinion and letter addressed to such Stockholder or underwriter;

                  (k) deliver promptly to counsel for the selling Stockholders
participating in the offering and each underwriter, if any, copies of all
correspondence between the SEC and the Company, its counsel or auditors and all
memoranda relating to discussions with the SEC or its staff with respect to the
registration statement, other than those portions of any such correspondence or
memoranda which contain information subject to attorney-client privilege with
respect to the Company, and, upon receipt of such confidentiality agreements as
the Company may reasonably request, make reasonably available for inspection by
any seller of such Registrable Securities covered by such registration
statement, by any underwriter, if any, participating in any disposition to be
effected pursuant to such registration statement and by any attorney, accountant
or other agent retained by any such seller or any such underwriter, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause all of the Company's officers, directors
and employees to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement;

                  (l) use all commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement;

                  (m) provide a CUSIP number for all Registrable Securities, not
later than the effective date of the registration statement;


                                     - 15 -

<PAGE>

                  (n) make reasonably available its employees and personnel and
otherwise provide reasonable assistance to the underwriters (taking into account
the needs of the Company's businesses and the requirements of the marketing
process) in the marketing of Registrable Securities in any underwritten
offering;

                  (o) promptly prior to the filing of any document which is to
be incorporated by reference into the registration statement or the prospectus
(after the initial filing of such registration statement) provide copies of such
document to counsel for the selling Stockholders of Registrable Securities and
to each managing underwriter, if any, and make the Company's representatives
reasonably available for discussion of such document and make such changes in
such document concerning the selling Stockholders prior to the filing thereof as
counsel for such selling Stockholders or underwriters may reasonably request;

                  (p) furnish to counsel for the selling Stockholders
participating in the offering and the managing underwriter, without charge, at
least one signed copy of the registration statement and any post-effective
amendments thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those incorporated
by reference);

                  (q) cooperate with the selling Stockholders of Registrable
Securities and the managing underwriter, if any, to facilitate the timely
preparation and delivery of certificates not bearing any restrictive legends
representing the Registrable Securities to be sold, and cause such Registrable
Securities to be issued in such denominations and registered in such names in
accordance with the underwriting agreement prior to any sale of Registrable
Securities to the underwriters or, if not an underwritten offering, in
accordance with the instructions of the selling Stockholders of Registrable
Securities at least three business days prior to any sale of Registrable
Securities and instruct any transfer agent and registrar of Registrable
Securities to release any stop transfer orders in respect thereof; and

                  (r) take all such other commercially reasonable actions as are
necessary or advisable in order to expedite or facilitate the disposition of
such Registrable Securities.

      The Company may require as a condition precedent to the Company's
obligations under this Section 2.4 that each seller of Registrable Securities as
to which any registration is being effected furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request, provided that such information shall be
used only in connection with such registration.


                                     - 16 -

<PAGE>

      Each Stockholder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (v) of paragraph (e) of this Section 2.4, such Stockholder will
discontinue such Stockholder's disposition of Registrable Securities pursuant to
the registration statement covering such Registrable Securities until such
Stockholder's receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (e) of this Section 2.4 and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such Stockholder's possession of the
prospectus covering such Registrable Securities that was in effect at the time
of receipt of such notice. In the event the Company shall give any such notice,
the applicable period mentioned in paragraph (b) of this Section 2.4 shall be
extended by the number of days during such period from and including the date of
the giving of such notice to and including the date when each seller of any
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
paragraph (e) of this Section 2.4.

      If any such registration statement or comparable statement under "blue
sky" laws refers to any Stockholder by name or otherwise as the Stockholder of
any securities of the Company, then such Stockholder shall have the right to
require (i) the insertion therein of language, in form and substance
satisfactory to such Stockholder and the Company, to the effect that the holding
by such Stockholder of such securities is not to be construed as a
recommendation by such Stockholder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such
Stockholder will assist in meeting any future financial requirements of the
Company, or (ii) in the event that such reference to such Stockholder by name or
otherwise is not in the judgment of the Company, as advised by counsel, required
by the Securities Act or any similar federal statute or any state "blue sky" or
securities law then in force, the deletion of the reference to such Stockholder.

            2.5. Registration Expenses.
                 ---------------------

                  (a) "Expenses" shall mean any and all reasonable fees and
                       --------
expenses incident to the Company's performance of or compliance with this
Article 2, including, without limitation, (i) SEC, stock exchange or NASD
registration and filing fees and all listing fees and fees with respect to the
inclusion of securities in Nasdaq, (ii) fees and expenses of compliance with
state securities or "blue sky" laws and in connection with the preparation of a
"blue sky" survey, including without limitation, reasonable fees and expenses of
"blue sky" counsel, (iii) printing and copying expenses, (iv) messenger and
delivery expenses, (v) fees and disbursements of counsel for the Company, (vi)
with respect to each registration, the fees and disbursements of one counsel for
the selling Stockholder(s) (selected by the Initiating Stockholder, in the case
of any Demand Registration, or the Major Stockholder in any other case), (vii)
fees and


                                     - 17 -

<PAGE>

disbursements of all independent public accountants (including the expenses of
any audit and/or "cold comfort" letter) and fees and expenses of other persons,
including special experts, retained by the Company, (viii) fees and expenses
payable to a Qualified Independent Underwriter (as such term is defined in Rule
2720(b)(15) of the National Association of Securities Dealers, Inc.'s Conduct
Rules), (ix) all expenses in connection with any road show, and (x) any other
fees and disbursements of underwriters, if any, customarily paid by issuers or
sellers of securities (collectively, "Expenses").
                                      --------

                  (b) The Company shall pay all Expenses with respect to any
Demand Registration and any Registration effected under Section 2.2.

                  (c) Notwithstanding the foregoing, (i) the provisions of this
Section 2.5 shall be deemed amended to the extent necessary to cause these
expense provisions to comply with "blue sky" laws of each state in which the
offering is made, (ii) in connection with any registration hereunder, each
Stockholder of Registrable Securities being registered shall pay all
underwriting discounts and commissions and any transfer taxes, if any,
attributable to the sale of such Registrable Securities, pro rata with respect
to payments of discounts and commissions in accordance with the number of shares
sold in the offering by such Stockholder, and (iii) the Company shall, in the
case of all registrations under this Article 2, be responsible for all its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties).

            2.6. Certain Limitations on Registration Rights.
                 ------------------------------------------

                  (a) In the case of any registration under Section 2.1 pursuant
to an underwritten offering, or in the case of a registration under Section 2.2
if the Company has determined to enter into an underwriting agreement in
connection therewith, all securities to be included in such registration shall
be subject to an underwriting agreement and no person may participate in such
registration unless such person agrees to sell such person's securities on the
basis provided therein and completes and executes all reasonable questionnaires,
and other documents (including custody agreements and powers of attorney) which
must be executed in connection therewith, and provides such other information to
the Company or the underwriter as may be necessary to register such Person's
securities.

                  (b) Notwithstanding anything to the contrary in the Agreement,
no Management Stockholder shall be entitled to include securities in any
registration pursuant to Section 2.1 or Section 2.2 if the Company believes that
such inclusion could result in a violation of Section 57 or any other provision
of the Investment Company Act.


                                     - 18 -

<PAGE>

            2.7. Limitations on Sale or Distribution of Other Securities.
                 -------------------------------------------------------

                  (a) To the extent requested in writing by the Company or the
managing underwriter, if any, of any registration effected pursuant to Sections
2.1 or 2.2, or in connection with any Rule 144A offering or in connection with
any subsequent exchange offer or conversion relating thereto or in connection
with an Initial Public Offering, each Stockholder of Registrable Securities
agrees not to sell, transfer or otherwise dispose of, including any sale
pursuant to Rule 144 under the Securities Act, any Common Stock, or any other
equity security of the Company or any security convertible into or exchangeable
or exercisable for any equity security of the Company during the time period
reasonably requested by the managing underwriter not to exceed 90 days (or 180
days with respect to the Initial Public Offering) beginning with the date of the
closing of such Rule 144A offering, exchange offer, conversion or Initial Public
Offering (such period, the "Stockholder Lockup") other than:

                        (i) sales of shares of Common Stock or other equity
securities of the Company as part of such underwritten public offering;

                        (ii) sales of shares Common Stock or other equity
securities of the Company purchased by the Stockholder in the secondary market
following the Initial Public Offering;

                        (iii) sales of shares of Common Stock or other equity
securities of the Company purchased by the Stockholder in connection with the
Company's dividend reinvestment plan;

                        (iv) sales of shares of Common Stock or other equity
securities purchased from the underwriters in connection with the directed share
program of any underwritten public offering;

                        (v) sales by a Management Stockholder of the number of
shares of Common Stock necessary to derive sufficient proceeds to (A) repay in a
timely fashion all amounts due under borrowings by such Management Stockholder
from the Company and (B) make all tax payments associated with the lapsing of
forfeiture restrictions on shares of restricted Common Stock held by such
Management Stockholder and the sale of any shares pursuant to this clause (v);

                        (vi) the transfer of shares of Common Stock or other
equity securities by any Stockholder to any Affiliate of such Stockholder;
provided, however, that the Stockholder Lockups entered into in connection with
the Initial Public Offering will not include this exception;


                                     - 19 -

<PAGE>

                        (vii) without limiting clause (vi) above, the transfer
of shares of Common Stock or other equity securities by Heller Financial, Inc.
to any successor entity pursuant to a merger or other acquisition of Heller
Financial, Inc., including, without limitation, by General Electric Company, GE
Capital Corporation or any of their Affiliates; or

                        (viii) other transfers customarily excluded from such
transfer restrictions, including, without limitation, bona fide gifts by the
Stockholder or other transfers by a Stockholder to a trust for the benefit of
the Stockholder and/or his or her family members;

provided, however, that in the case of clauses (vi) and (vii) and, to the extent
appropriate, clause (viii), transfers will be permitted only if the transferee
executes an agreement stating that the shares of Common Stock or equity
securities so transferred to the transferee will remain subject to the
Stockholder Lockup. The Company hereby also agrees to use all commercially
reasonable efforts to cause each Stockholder of any equity security or any
security convertible into or exchangeable or exercisable for any equity security
of the Company purchased from the Company at any time other than in a public
offering so to agree.

                  (b) The Company hereby agrees that, if it shall previously
have received a request for registration pursuant to Section 2.1 or 2.2, and if
such previous registration shall not have been withdrawn or abandoned, the
Company shall not, without the prior written consent of the Initiating
Stockholders, sell, transfer, or otherwise dispose of, any Common Stock, or any
other equity security of the Company or any security convertible into or
exchangeable or exercisable for any equity security of the Company (other than
as part of such underwritten public offering, a registration on Form S-4 or Form
N-14, as applicable, or Form S-8 or any successor or applicable equivalent form
which is then in effect or upon the conversion, exchange or exercise of any then
outstanding Common Stock Equivalent), until a period of 90 days (or such shorter
period of time as requested in writing by any managing underwriter of such
registration pursuant to Section 2.1 or 2.2), shall have elapsed from the
effective date of such previous registration; and the Company shall so provide
in any registration rights agreement hereafter entered into with respect to any
of its securities.

            2.8. No Required Sale. Nothing in this Agreement shall be deemed to
                 ----------------
create an independent obligation on the part of any Stockholder to sell any
Registrable Securities pursuant to any effective registration statement.


                                     - 20 -

<PAGE>

            2.9. Indemnification.
                 ---------------

                  (a) In the event of any registration of any securities of the
Company under the Securities Act pursuant to this Article 2, the Company will,
and hereby does, indemnify and hold harmless, to the fullest extent permitted by
law, each Stockholder of Registrable Securities, its directors, officers,
fiduciaries, employees and stockholders or general and limited partners (and the
directors, officers, employees and stockholders thereof), each other Person who
participates as an underwriter or a Qualified Independent Underwriter, if any,
in the offering or sale of such securities, each officer, director, employee,
stockholder or partner of such underwriter or Qualified Independent Underwriter,
and each other Person, if any, who controls such seller or any such underwriter
within the meaning of the Securities Act, against any and all losses, claims,
damages or liabilities, joint or several, actions or proceedings (whether
commenced or threatened) (collectively, "Claims"), and expenses (including
                                         ------
reasonable fees of counsel and any amounts paid in any settlement effected with
the Company's consent, which consent shall not be unreasonably withheld or
delayed) to which each such indemnified party may become subject under the
Securities Act or otherwise, insofar as such Claims or expenses arise out of or
are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement under which such
securities were registered under the Securities Act or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus or any amendment or supplement thereto,
together with the documents incorporated by reference therein, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or (iii) any
violation by the Company of any federal, state or common law rule or regulation
applicable to the Company and relating to action required of or inaction by the
Company in connection with any such registration, and the Company will reimburse
any such indemnified party for any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
Claim as such expenses are incurred; provided, however, that the Company shall
not be liable to any such indemnified party in any such case to the extent such
Claim or expense arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged omission of a
material fact made in such registration statement or amendment thereof or
supplement thereto or in any such prospectus or any preliminary, final or
summary prospectus or amendment thereof or supplement thereto in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such indemnified party specifically for use therein. Such indemnity
and reimbursement of expenses shall remain in full force and effect regardless
of any investigation made by or


                                     - 21 -

<PAGE>

on behalf of such indemnified party and shall survive the transfer of such
securities by such seller.

                  (b) Each Stockholder of Registrable Securities that are
included in the securities as to which any registration under Section 2.1 or 2.2
is being effected (and, if the Company requires as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 2.1 or 2.2, any underwriter and Qualified Independent Underwriter, if
any) shall, severally and not jointly, indemnify and hold harmless (in the same
manner and to the same extent as set forth in paragraph (a) of this Section 2.9)
to the extent permitted by law the Company, its officers and directors, each
Person controlling the Company within the meaning of the Securities Act and all
other prospective sellers and their directors, officers, general and limited
partners and respective controlling Persons with respect to any untrue statement
or alleged untrue statement of any material fact in, or omission or alleged
omission of any material fact from, such registration statement, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company or its representatives by or on behalf of
such Stockholder specifically for use therein and reimburse such indemnified
party for any legal or other expenses reasonably incurred in connection with
investigating or defending any such Claim as such expenses are incurred;
provided, however, that the aggregate amount which any such Stockholder shall be
required to pay pursuant to this Section 2.9(b) and Sections 2.9(c) and (e)
shall in no case be greater than the amount of the net proceeds received by such
person upon the sale of the Registrable Securities pursuant to the registration
statement giving rise to such claim. Such indemnity and reimbursement of
expenses shall remain in full force and effect regardless of any investigation
made by or on behalf of such indemnified party and shall survive the transfer of
such securities by such Stockholder.

                  (c) Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 2.9 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any state securities and "blue sky" laws.

                  (d) Any person entitled to indemnification under this
Agreement shall notify promptly the indemnifying party in writing of the
commencement of any action or proceeding with respect to which a claim for
indemnification may be made pursuant to this Section 2.9, but the failure of any
indemnified party to provide such notice shall not relieve the indemnifying
party of its obligations under the preceding paragraphs of this Section 2.9,
except to the extent the indemnifying party is materially prejudiced thereby and
shall not relieve the indemnifying party from any liability which it


                                     - 22 -

<PAGE>

may have to any indemnified party otherwise than under this Article 2. In case
any action or proceeding is brought against an indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, unless in the reasonable
opinion of outside counsel to the indemnified party a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim, to assume the defense thereof jointly with any other indemnifying party
similarly notified, to the extent that it chooses, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party that it so chooses,
the indemnifying party shall not be liable to such indemnified party for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that (i) if the indemnifying party fails to
take reasonable steps necessary to defend diligently the action or proceeding
within 20 days after receiving notice from such indemnified party that the
indemnified party believes it has failed to do so; or (ii) if such indemnified
party who is a defendant in any action or proceeding which is also brought
against the indemnifying party reasonably shall have concluded that there may be
one or more legal defenses available to such indemnified party which are not
available to the indemnifying party; or (iii) if representation of both parties
by the same counsel is otherwise inappropriate under applicable standards of
professional conduct, then, in any such case, the indemnified party shall have
the right to assume or continue its own defense as set forth above (but with no
more than one firm of counsel for all indemnified parties in each jurisdiction,
except to the extent any indemnified party or parties reasonably shall have
concluded that there may be legal defenses available to such party or parties
which are not available to the other indemnified parties or to the extent
representation of all indemnified parties by the same counsel is otherwise
inappropriate under applicable standards of professional conduct) and the
indemnifying party shall be liable for any expenses therefor. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.

                  (e) If for any reason the foregoing indemnity is unavailable
or is insufficient to hold harmless an indemnified party under Sections 2.9(a),
(b) or (c), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any Claim in such proportion as
is appropriate to reflect the relative fault of the indemnifying party, on the
one hand, and the indemnified party,


                                     - 23 -

<PAGE>

on the other hand, with respect to such offering of securities. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
indemnifying party or the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. If, however, the allocation provided in the second
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative faults
but also the relative benefits of the indemnifying party and the indemnified
party as well as any other relevant equitable considerations. The parties hereto
agree that it would not be just and equitable if contributions pursuant to this
Section 2.9(e) were to be determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to in the preceding sentences of this Section 2.9(e). The amount paid
or payable in respect of any Claim shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding anything in this Section 2.9(e) to
the contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 2.9(e) to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of Registrable
Securities in the offering to which the losses, claims, damages or liabilities
of the indemnified parties relate, less the amount of any indemnification
payment made by such indemnifying party pursuant to Sections 2.9(b) and (c).

                  (f) The indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made or
omitted by or on behalf of any indemnified party and shall survive the transfer
of the Registrable Securities by any such party.

                  (g) The indemnification and contribution required by this
Section 2.9 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.

                  (h) Notwithstanding the foregoing, so long as the Company is
registered under the Investment Company Act or elects to be regulated as a
business development company under the Investment Company Act, nothing contained
in this


                                     - 24 -

<PAGE>

Section 2.9 shall limit the liability of, or permit the indemnification of, any
director or officer of the Corporation for actions or matters for which such
limitation or indemnification would be prohibited by the Investment Company Act.

      3. Underwritten Offerings.
         ----------------------

            3.1. Requested Underwritten Offerings. If requested by the
                 --------------------------------
underwriters for any underwritten offering by the Stockholders pursuant to a
registration requested under Section 2.1, the Company shall enter into a
customary underwriting agreement with the underwriters. Such underwriting
agreement shall be satisfactory in form and substance to the Initiating
Stockholder in the case of a Demand Registration or to the Major Stockholder if
there is no Initiating Stockholder and shall contain such representations and
warranties by, and such other agreements on the part of, the Company and such
other terms as are generally prevailing in agreements of that type, including,
without limitation, indemnities and contribution agreements. Any Stockholder
participating in the offering shall be a party to such underwriting agreement
and may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
such Stockholder and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such Stockholder; provided, however, that the
Company shall not be required to make any representations or warranties with
respect to written information specifically provided by a selling Stockholder
for inclusion in the registration statement. Such underwriting agreement shall
also contain such representations and warranties by the participating
Stockholders as are customary in agreements of that type.

            3.2. Piggyback Underwritten Offerings. In the case of a registration
                 --------------------------------
pursuant to Section 2.2 hereof, if the Company shall have determined to enter
into an underwriting agreement in connection therewith, all of the Stockholders'
Registrable Securities to be included in such registration shall be subject to
such underwriting agreement. Any Stockholder participating in such registration
may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
such Stockholder and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such Stockholder. Such underwriting agreement
shall also contain such representations and warranties by the participating
Stockholders as are customary in agreements of that type.

            3.3. Investment Banking Services. Unless and until the Goldman
                 ---------------------------
Stockholders dispose of more than 50% of the Common Stock beneficially owned by


                                     - 25 -

<PAGE>

them on the date hereof (such percentage to be measured after taking into
account any stock split, reclassification, combination, stock dividend or
similar transaction), Goldman or any of its Affiliates shall have the right to
perform all investment banking services (excluding any underwriting of
securities, commercial banking services, any determination of fair market value
pursuant to any employment, consulting or severance agreement and services
relating to any asset securitization or other debt issuances) for the Company
for which an investment banking firm is retained (including, without limitation,
with respect to the sale of the Company), in each case, upon commercially
reasonable terms that are mutually satisfactory to Goldman and the Company;
provided, however, that the Company shall have the right, in its discretion, to
engage one or more other firms to serve as additional providers of investment
banking services performed by Goldman or any of its Affiliates for the Company,
so long as Goldman or an Affiliate is designated as the lead provider of such
services to the Company and such other engagement does not affect the
compensation that Goldman or its Affiliate will receive for providing such
services. If the Company and Goldman, after good faith discussions, cannot agree
on the terms of any such engagement, the Company may hire such other investment
banking firms as it desires.

      4. General.
         -------

            4.1. Adjustments Affecting Registrable Securities. The Company
                 --------------------------------------------
agrees that it shall not effect or permit to occur any combination or
subdivision of shares which would adversely affect the ability of the
Stockholder of any Registrable Securities to include such Registrable Securities
in any registration contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration. The Company agrees that it will
take all reasonable steps necessary to effect a subdivision of shares if in the
reasonable judgment of (a) the Initiating Stockholder of a Demand Registration
Request or (b) the managing underwriter for the offering in respect of such
Demand Registration Request, such subdivision would enhance the marketability of
the Registrable Securities.

            4.2. Rule 144. If the Company shall have filed a registration
                 --------
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act in
respect of the Common Stock or securities of the Company convertible into or
exchangeable or exercisable for Common Stock, the Company covenants that (i) so
long as it remains subject to the reporting provisions of the Exchange Act, it
will timely file the reports required to be filed by it under the Securities Act
or the Exchange Act (including, but not limited to, the reports under Sections
13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144
under the Securities Act), and (ii) will take such further action as any
Stockholder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such Stockholder to sell Registrable
Securities without


                                     - 26 -

<PAGE>

registration under the Securities Act within the limitation of the exemptions
provided by (A) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (B) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any Stockholder of Registrable Securities, the
Company will deliver to such Stockholder a written statement as to whether it
has complied with such requirements.

            4.3. Nominees for Beneficial Owners. If Registrable Securities are
                 ------------------------------
held by a nominee for the beneficial owner thereof, the beneficial owner thereof
may, at its option, be treated as the Stockholder of such Registrable Securities
for purposes of any request or other action by any Stockholder or Stockholders
of Registrable Securities pursuant to this Agreement (or any determination of
any number or percentage of shares constituting Registrable Securities held by
any Stockholder or Stockholders of Registrable Securities contemplated by this
Agreement), provided that the Company shall have received assurances reasonably
satisfactory to it of such beneficial ownership.

            4.4. Miscellaneous.
                 --------------

                  (a) No waiver of any of the provisions of this Agreement shall
be deemed to or shall constitute a waiver of any other provision hereof (whether
or not similar). No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof.

                  (b) Any notice, request, instruction or other document to be
given hereunder by any party hereto to any other party shall be in writing and
delivered (i) personally, (ii) by telecopy (provided that a copy of any notice
delivered pursuant to this clause (ii) shall also be sent pursuant to clause
(iv) below), (iii) by a generally recognized overnight courier service which
guarantees overnight delivery and provides written acknowledgment by the
addressee of receipt, or (iv) by registered or certified mail (or by air mail if
addressed to an address outside of the United States), postage prepaid, return
receipt requested,

          if to the Company to:

               MCG Capital Corporation
               1100 Wilson Boulevard
               Suite 800
               Arlington, Virginia  22209
               Fax:  (703) 247-7505
               Attention: Bryan J. Mitchell
                          Steven F. Tunney
                          Samuel G. Rubenstein


                                     - 27 -

<PAGE>

          with a copy to:

               Fried, Frank, Harris, Shriver & Jacobson
               1001 Pennsylvania Avenue, N.W.
               Suite 800
               Washington, D.C.  20004-2505
               Fax:  (202) 639-7003
               Attention:  Richard A. Steinwurtzel
                           Vasiliki B. Tsaganos

          if to the Goldman Stockholders,

               GS Capital Partners II, L.P.
               85 Broad Street
               New York, New York  10004
               Fax:  (212) 357-5505
               Attention:  Joseph H. Gleberman

          with a copy to:

               GS Capital Partners II, L.P.
               85 Broad Street
               New York, New York  10004
               Fax:  (212) 357-5505
               Attention:  Ben Adler

          if to any Vestar Stockholder, to:

          Vestar Capital Partners
          245 Park Avenue
          41st Floor
          New York, NY  10167
          Fax:  (212) 808-4922
          Attention: Todd N. Khoury
                     Jack M. Feder

          with a copy to:

          Kirkland & Ellis
          Citigroup Center
          153 East 53rd Street
          New York, NY  10022
          Fax:  (212) 446-4900


                                     - 28 -

<PAGE>

          Attention: Michael Movsovich

          if to any Soros Stockholder, to:

          Soros Private Equity Partners LLC
          888 7th Ave., 33rd Floor
          New York, NY  10106
          Fax:  (212) 315-1221
          Attn: Michael A. Pruzan
                Richard Holahan

          If to the FBR Stockholder, to:

          FBR Asset Investment Corporation
          Potomac Tower, 1001 Nineteenth Street North
          Arlington, Virginia  22209
          Fax:  (703) 312-9501
          Attn:  William Ginivan

          if to a Stockholder,

            at the address or facsimile number shown on the record books of the
            Company

or at such other address for a party as shall be specified by like notice. Any
notice which is delivered in the manner provided herein shall be deemed to have
been duly given to the party to whom it is directed upon actual receipt by such
party (evidenced, in the case of a telecopy, by the receipt of telephone
confirmation thereof).

                  (c) The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns of the
parties hereto. If any Person shall acquire Registrable Securities from any
Stockholder, in any manner, whether by operation of law or otherwise, such
transferee shall promptly notify the Company and such Registrable Securities
acquired from such Stockholder shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such Person
shall be entitled to receive the benefits of and be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement. If the Company shall so request, any such successor or assign shall
agree in writing to acquire and hold the Registrable Securities acquired from
such Stockholder subject to all of the terms hereof. If any Stockholder shall
acquire additional Registrable Securities, such Registrable Securities shall be
subject to all of the terms, and entitled to all the benefits, of this
Agreement.


                                     - 29 -

<PAGE>

                  (d) This Agreement (including the exhibits, any other
schedules and other documents referred to herein) constitutes the entire
agreement between the parties hereto and supersedes all prior agreements and
understandings, oral and written, between the parties hereto, with respect to
the subject matter hereof.

                  (E) THE VALIDITY, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT, UNLESS EXPRESSLY PROVIDED TO THE CONTRARY, SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF
CONFLICTS OF LAW THEREOF. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF DELAWARE FOR ANY ACTION, PROCEEDINGS OR INVESTIGATIONS IN ANY
COURT OR BEFORE ANY GOVERNMENTAL AUTHORITY ("LITIGATION") ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (AND AGREES
NOT TO COMMENCE ANY LITIGATION RELATING THERETO EXCEPT IN SUCH COURTS), AND
FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S.
REGISTERED MAIL TO ITS RESPECTIVE ADDRESS SET FORTH IN THIS AGREEMENT SHALL BE
EFFECTIVE SERVICE OF PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY SUCH
COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR
RELATING TO THE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN THE COURTS
OF THE STATE OF DELAWARE, AND HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY
WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO A TRIAL BY
JURY IN CONNECTION WITH ANY LITIGATION ARISING OUT OF OR RELATING TO THE
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF GS CAPITAL PARTNERS
II OFFSHORE, L.P., GOLDMAN, SACHS & CO. VERWALTUNGS GMBH AND QUANTUM INDUSTRIAL
PARTNERS, LDC HAS APPOINTED AN AGENT FOR SERVICE OF PROCESS IN DELAWARE AND HAS
PROVIDED THE COMPANY WITH DOCUMENTATION OF SUCH APPOINTMENT. EACH OF THE
FOREGOING PARTIES REPRESENTS AND WARRANTS THAT IT WILL NOT PERMIT SUCH
APPOINTMENT TO LAPSE AT ANY time THAT IT OWNS ANy SECURITIES OF THE COMPANY.

                  (f) The headings of the sections and paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof. Terms
stated in either the singular or the plural shall include the singular and the
plural, and pronouns stated in either the masculine or the neuter gender shall
include the masculine, the feminine and the neuter. References to any statute or
any provision thereof shall be deemed to include a reference


                                     - 30 -

<PAGE>

to any statute or provision that amends, extends, consolidates or replaces the
same and shall include any orders, regulations, instruments, official government
interpretations or other subordinate legislation made under the relevant
statute.

                  (g) If any term or provision of this Agreement or any
application thereof shall be declared or held invalid, illegal or unenforceable,
in whole or in part, whether generally or in any particular jurisdiction, such
provision shall be deemed amended to the extent, but only to the extent,
necessary to cure such invalidity, illegality or unenforceability, and the
validity, legality and enforceability of the remaining provisions, both
generally and in every other jurisdiction, shall not in any way be affected or
impaired thereby.

                  (h) The parties hereto hereby acknowledge that each party
hereto would suffer irreparable injury and would not have an adequate remedy at
law for money damages if the provisions of this Agreement were not performed in
accordance with their terms. Each party hereto agrees that the other parties
hereto shall be entitled to specific enforcement of the terms of this Agreement
in addition to any other remedy to which they are entitled, at law or in equity.
Furthermore, if any action or proceeding shall be instituted to enforce the
provisions hereof, any party against whom such action or proceeding is brought
hereby waives the claim or defense therein that there is an adequate remedy at
law, and agrees not to argue in any such action or proceeding the claim or
defense that such remedy at law exists.

                  (i) This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which together shall constitute one and the same instrument.

                  (j) At any time or from time to time the parties hereto agree
to cooperate with each other, and at the request of another party, to execute
and deliver or cause to be executed or delivered any further instruments or
documents and to take all such further action as the other party may reasonably
request in order to evidence or effectuate the consummation of the transactions
contemplated hereby and to otherwise carry out the intent of the parties
hereunder.

            4.5. Amendment. This Agreement may be amended, modified,
                 ---------
supplemented or waived only upon the written consent of the Company, the Goldman
Stockholders holding a majority of all Common Stock held by the Goldman
Stockholders, the Vestar Stockholders holding a majority of all Common Stock
held by the Vestar Stockholders, the Soros Stockholders holding a majority of
all Common Stock held by the Soros Stockholders, the Management Stockholders
holding a majority of all Common Stock held by the Management Stockholders and
the FBR Stockholder.


                                     - 31 -

<PAGE>

            4.6. Additional Rights. The parties hereto acknowledge that the
                 -----------------
Company may from time to time grant holders of the Company's capital stock
demand and piggyback registration rights that are in addition to those set forth
herein.

            4.7. Compliance with Applicable Law. Notwithstanding anything to the
                 ------------------------------
contrary in this Agreement, (i) no right granted by or derived from this
Agreement may be exercised in a manner that would violate any Applicable Law and
(ii) the Company shall have no obligation to take any action or omit to take any
action that would otherwise be required hereunder if such action or omission
would violate any Applicable Law or result in any violation of any Applicable
Law.

            4.8. Rescission of Agreement; Restoration; Effective Date.
                 ------------------------------------

                  (a) If the Initial Public Offering is not consummated on or
prior to the earlier of (i) the 20th day following the effective date of the
contemplated filing by the Company of a Form N-8A with the SEC pursuant to which
the Company will register under the Investment Company Act as a closed-end
investment company or (ii) December 31, 2001, then the parties hereto agree that
(x) the Second Amended and Restated Registration Rights Agreement and this Third
Amended and Restated Registration Rights Agreement shall both be automatically
rescinded and shall be null and void and (y) the First Amended and Restated
Registration Rights Agreement shall be automatically restored and shall be in
full force and effect on the terms set forth therein. In such event, each of the
parties to this Agreement agrees to execute any documents or instruments and
take all other actions required to restore the parties' rights and preferences
prior to the execution of the Second Amended and Restated Registration Rights
Agreement.

                  (b) Subject to Section 4.8(a), this Third Amended and Restated
Registration Rights Agreement shall become effective upon the closing of (i) the
Initial Public Offering and (ii) the closing of the sale of shares of Common
Stock contemplated by the FBR Stock Purchase Agreement.


                                     - 32 -

<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date set forth above.

                         MCG CAPITAL CORPORATION

                         By:  /s/ Bryan J. Mitchell
                            ---------------------------------------
                              Name: Bryan J. Mitchell
                              Title: CEO


                         GOLDMAN STOCKHOLDERS

                         GS CAPITAL PARTNERS II, L.P.

                         By:  GS Advisors, L.L.C., Its General Partner

                         By:  /s/ John E. Bowman
                           ----------------------------------------
                              Name: John E. Bowman
                              Title: Vice President


                                     - 33 -

<PAGE>

                         GS CAPITAL PARTNERS II OFFSHORE, L.P.

                         By:  GS Advisors II L.L.C., Its General
                              Partner

                         By:  /s/ John E. Bowman
                            ----------------------------------------
                              Name: John E. Bowman
                              Title: Vice President


                         GOLDMAN, SACHS & CO. VERWALTUNGS
                           GmbH

                         By:  /s/ John E. Bowman
                            ----------------------------------------
                              Name: John E. Bowman
                              Title: Vice President


                         STONE STREET FUND 1998, L.P.

                         By:  Stone Street 1998, L.L.C.,
                              Its General Partner


                         By:  /s/ John E. Bowman
                            ----------------------------------------
                              Name: John E. Bowman
                              Title: Vice President


                         BRIDGE STREET FUND 1998, L.P.

                         By:  Stone Street 1998, L.L.C.,
                              Its General Partner

                         By:  /s/ John E. Bowman
                            ----------------------------------------
                              Name: John E. Bowman
                              Title: Vice President


                                     - 34 -

<PAGE>

                         SOROS STOCKHOLDERS

                         QUANTUM INDUSTRIAL PARTNERS LDC

                         By:  /s/ Richard Holahan, Jr.
                            ---------------------------------------
                              Name: Richard Holahan, Jr.
                              Title: Attorney-In-Fact


                         SFM DOMESTIC INVESTMENTS LLC


                         By:  /s/ Richard Holahan, Jr.
                            ---------------------------------------
                              Name: Richard Holahan, Jr.
                              Title: Attorney-In-Fact


                         VESTAR STOCKHOLDERS

                         VESTAR CAPITAL PARTNERS IV, L.P.

                         By:     Vestar Associates IV, L.P.
                                 Its General Partner

                         By:     Vestar Associates Corporation IV
                                 Its General Partner

                         By:  /s/ Norman W. Alpert
                            ---------------------------------------
                              Name: Norman W. Alpert
                              Title: Managing Director


                         VESTAR /MCG LLC

                          By:     Vestar Associates Corporation IV
                                  Its Managing Member

                         By: /s/ Norman W. Alpert
                            ---------------------------------------
                              Name: Norman W. Alpert
                              Title: Managing Director


                                     - 35 -

<PAGE>

                         FBR STOCKHOLDER

                         FBR ASSET INVESTMENT CORPORATION


                         By:  /s/ Eric Billings
                            ---------------------------------------
                              Name: Eric Billings
                              Title: Chairman and CEO


                         MANAGEMENT STOCKHOLDERS

                         /s/ Bryan J. Mitchell
                         ------------------------------------------
                         Bryan J. Mitchell

                         /s/ B. Hagen Saville
                         ------------------------------------------
                         B. Hagen Saville

                         /s/ Steven F. Tunney
                         ------------------------------------------
                         Steven F. Tunney


                         OTHER MANAGEMENT STOCKHOLDERS

                         Wallace B. Millner
                         Robert Merrick
                         Jon A. Slabaugh
                         Vincent P. Griffin
                         Joseph Bowden
                         Andrew Jacobson
                         Robert Merrick Custodian For Laurin K. Merrick
                           ###-##-#### Under UGMA
                         Robert Merrick Custodian John A. Merrick
                           ###-##-#### Under UGMA
                         Samuel G. Rubenstein
                         Janet Perlowski


                                     - 36 -

<PAGE>

                              ADDITIONAL INVESTORS

                         First Union Corporation
                         Heller Financial, Inc.
                         John E. Oxendine
                         Larry J. Perrotto Revocable Trust
                         Robert N. Snyder
                         John S. Patton, Sr.
                         John S. Patton, Jr.
                         Jill P. Hunter
                         John H. Satterwhite
                         Mary Ann Satterwhite 85 Trust
                         Jackson & Sons, LP
                         United Communications Group
                         James McGinty
                         Rube Enterprises, L.P.


                                     - 37 -