Document:

First Amend. to Sales and Service agreement

 Exhibit 10.74 
  
 FIRST AMENDMENT TO SALE AND SERVICING AGREEMENT 
  
 THIS FIRST AMENDMENT TO THE SALE AND SERVICING AGREEMENT, dated as of May     , 2005 (this
“Amendment”), is entered into by and among MCG Commercial Loan Funding Trust, as the seller (in such capacity, the “Seller”), MCG Capital Corporation, as the originator (in such capacity, the
“Originator”) and as the servicer (in such capacity, the “Servicer”), Three Pillars Funding LLC, as a purchaser (“Three Pillars”), SunTrust Capital Markets, Inc., as the administrative agent (in
such capacity, the “Administrative Agent”), and Wells Fargo Bank, National Association, as the backup servicer (in such capacity, the “Backup Servicer”) and as trustee (in such capacity, the
“Trustee”). 
  
 RECITALS 
  
 1. The Seller, the Originator, the Servicer, Three Pillars, the
Administrative Agent, the Backup Servicer and the Trustee are parties to the Sale and Servicing Agreement dated as of November 10, 2004 (the “Agreement”); and 
  
 2. Such parties hereto desire to amend the Agreement as hereinafter set forth. 
  
 NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows: 
  
 1. Certain Defined Terms. Capitalized terms that are used herein without definition and that are defined in the Agreement (including terms incorporated by reference in the Agreement) shall have the same
meanings herein as therein defined. 
  
 2. Amendments to the
Agreement. The Agreement is hereby amended as follows: 
  
 2.1 The following definitions in Section 1.1 of the Agreement are hereby amended in their entirety to read as follows: 
  
 “Minimum Pool Yield”: With respect to any Determination Date, the average of the Pool Yield for the related Collection Period plus the
two immediately prior Collection Periods equal to 1.75%. 
  
 “Pool Yield”: As of any Determination Date, with respect to any Collection Period, the percentage equivalent of a fraction (a) the numerator of which is equal to (I) all Interest Collections on Loans included in the
Aggregate Outstanding Loan Balance as of the first (1st) day of the Collection Period related to such Determination Date that are deposited into the Collection Account during such Collection Period minus (II) the Carrying Costs incurred during such
Collection Period and (b) the denominator of which is equal to the Aggregate Outstanding Loan Balance as of the first (1st) day of such Collection Period. 

 “Specified Reserve Account Requirement”: For any Determination Date or Payment Date, the
greater of (a) the product of (x) the Carrying Costs, as calculated for such Determination Date and (y) 2 and (b) $1,000,000. 
  
 2.2 The definition of “Pool Rate” in Section 1.1 of the Agreement is hereby deleted in its entirety. 

 
 2.3 Section 2.7(a)(5) of the Agreement is hereby
amended to add the following parenthetical thereto: “(provided that the Overcollateralization Shortfall shall be calculated without giving effect to any amount on deposit in the Principal Collections Account to the extent such amounts are to be
distributed on such Payment Date)”. 
  
 2.4
Section 2.7(a)(6) of the Agreement is hereby amended in its entirety to read as follows: 
  
 “(6) first, if any Required Equity Shortfall exists, the amount necessary to cure such Required Equity Shortfall, to the Excess Spread
Account, for the payment thereof and second, to the Reserve Account, the amount (if any) equal to the lesser of the Scheduled Reserve Account Payment for such Payment Date and the excess of the Specified Reserve Account Requirement over the
amount on deposit in the Reserve Account;” 
  
 2.5 Section 5.3(a) of the Agreement is hereby amended to replace the phrase “If at any time the Pool Yield is less than 3.00%” with the phrase “If at any time the average Pool Yield of the such Collection Period and
the two immediately prior Collection Periods is less than 3.00%”. 
  
 2.6 Section 10.1(k) of the Agreement is hereby amended to replace the phrase “the Pool Yield” with the phrase “the average Pool Yield for any Collection Period and the two immediately prior
Collection Periods”. 
  
 3. No Waiver. The execution,
delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any party under the Agreement or any other document, instrument or agreement executed in connection therewith, nor constitute a waiver of any
provision contained therein. 
  
 4. Conditions To
Effectiveness. The effectiveness of the amendments in Section 2 hereof are subject to the condition precedent that each of the parties hereto shall have received counterparts of this Amendment, duly executed by all the parties
hereto. 
  
 5. Ratification. All of the provisions
of this Amendment are incorporated by reference into the Agreement, as if set forth in full therein. The Agreement, as amended hereby, remains in full force and effect. Any reference to the Agreement from and after the date hereof shall be deemed to
refer to the Agreement as amended hereby. As amended, the Agreement is hereby ratified and reaffirmed by the parties hereto. 
  

 2 

 6. Counterparts. This Amendment may be executed in any number of counterparts and by the different
parties hereto on separate counterparts (including by facsimile), each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. 
  
 7. Governing Law. THIS AMENDMENT, INCLUDING THE RIGHTS AND DUTIES OF
THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. 
  
 8. Section Headings. The various headings of this Amendment are included for convenience only and shall not affect the meaning or interpretation of
this Amendment, the Agreement or any provision hereof or thereof. 
  
 [SIGNATURE PAGES FOLLOW] 
  
  

 3 

 IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

  

			
	MCG COMMERCIAL LOAN FUNDING TRUST,
as Seller
	 
	
	 By:    Wilmington Trust Company, not in its       individual capacity, but
solely as Owner       Trustee

	 	 	 
		
	 By:
	 	 /s/ Jeanne M. Oller

	 	 	Name: Jeanne M. Oller
	 	 	Title: Senior Financial Services Officer

  
  

			
	MCG CAPITAL CORPORATION,
as Originator and as Servicer
		
	 By:
	 	 /s/ Michael R. McDonnell

	 	 	Name: Michael R. McDonnell
	 	 	Title: Chief Financial Officer

  
  

			
	 THREE PILLARS FUNDING LLC,
as a Purchaser

		
	 By:
	 	 /s/ Doris J. Hearn

	 	 	Name: Doris J. Hearn
	 	 	Title: Vice President

  
  

			
	SUNTRUST CAPITAL MARKETS, INC.,
as Administrative Agent
		
	 By:
	 	 /s/ Peter C. Vaky

	 	 	Name: Peter C. Vaky
	 	 	Title: Managing Director

  
  

 S-1 

			
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Backup Servicer
		
	 By:
	 	/s/ Cheryl Zimmerman
	 	 	Name: Cheryl Zimmerman
	 	 	Title: Assistant Vice President

  
  

			
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
		
	 By:
	 	/s/ Cheryl Zimmerman
	 	 	Name: Cheryl Zimmerman
	 	 	Title: Assistant Vice President

  

 S-2AGREEMENT LETTER

  
 EXHIBIT 10.1

  
 February 9, 2005 
  

			
	Robert S. Thomas	  	 Charles M. Swoboda

	President & CEO	  	 President & CEO

	Charles & Colvard, Ltd.	  	 Cree, Inc.

	300 Perimeter Park, Suite A	  	 4600 Silicon Drive

	Morrisville, NC 27560	  	 Durham, NC 27703

  
 This letter, when signed on behalf of
Charles & Colvard, Ltd. (formerly C3 Inc.) and Cree, Inc., will serve as an agreement between Charles & Colvard and Cree amending the parties’ December 14th, 2003 letter agreement to provide the following terms, effective on and after December 27, 2004. 
  

	 	1.	Cree will supply SiC production crystals to Charles & Colvard, and Charles & Colvard will purchase SiC production crystals from Cree, according to the terms stated in this
agreement. 

  

	 	2.	Charles & Colvard will purchase [*****] kg each quarter of calendar 2005 of “usable material” (where “usable material” will be determined in the manner
described in Paragraph 3) at a price of $[*****]/gram. Provided that Cree uses its best commercially reasonable efforts to deliver the quantities of usable material required by this agreement, Cree will not be held in breach for delays in delivery.
As used in this agreement, “quarter” refers to fiscal quarters of Cree ending during the indicated period. 

  

	 	3.	The quantity of “usable material” of crystals delivered to Charles & Colvard pursuant to this agreement will be determined according to the following:

  

	 	A.	Material will be graded according to the specifications in Attachment A. 

  

	 	B.	Grams of usable material will be calculated on a crystal by crystal basis according to the following equation: (usable mm) as a percent of total length of the crystal in mm
multiplied by the actual weight of the crystal in grams. “Usable mm” means millimeters of usable material as defined in Attachment A. 

  

	 	C.	Crystals shipped to Charles & Colvard must contain at least [*****] grams of usable material for the 2” crystals, [*****] grams for 2.25” crystals or [*****] grams for
3” crystals. This usable area must be contiguous. Crystal diameter to be shipped will be 2”, 2,25” or 3” as determined by Cree. 

  

	 	4.	Except as provided above, the supply and purchase of SiC material will be governed by the terms and conditions of the parties’ Amended and Restated Exclusive Supply Agreement
dated June 6, 1997 (the “Supply Agreement”, as amended). 

  

	 	5.	The contents of this letter shall be considered “Confidential Information” of each party subject to the provisions of Section 5 of the Supply Agreement.

  

									
	 CHARLES & COLVARD, LTD.
	 	 	 	 CREE, INC.

					
	By:	 	/s/ Robert S. Thomas	 	 	 	By:	 	/s/ Charles M. Swoboda
	 	 	 Robert S. Thomas
	 	 	 	 	 	 Charles M. Swoboda

	 	 	 President & CEO
	 	 	 	 	 	 President & CEO

	 	 	 Charles & Colvard Ltd.
	 	 	 	 	 	 Cree, Inc.

  

					
	1 of 2	  	Cree, Inc. and Charles and Colvard, Ltd. Proprietary	  	02/08/05

  

	[*****] 	Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with
the Commission. 

  

  
 ATTACHMENT A

  
 Specification of usable material as referenced in paragraph 2 above.

  
 COLOR: Usable material is calculated as “light
gray” or “very light gray”. Specifically tone/color number 20 and 10 1 as used in the Charles &
Colvard boule-grading screen will be considered acceptable tone and color material. (Note: Grade 10 is preferred. Grade 20 material will be valued at $[*****] per-gram.) 
  
 DEFECTS: 
  
 Material volume of acceptable color will be reduced by the percentage of the defects listed in the table below. Charles & Colvard shall set the acceptable standards
for the quality of both the color and defects of all material purchased pursuant to this letter agreement. Unless otherwise mutually agreed by the parties in writing, however, the grading of the material by both Cree and Charles & Colvard will
adhere to those standards and methods identified in Notes 1-3 below, applied on a consistent basis in the same manner as applied during September, October and November of calendar 2003. Should Charles & Colvard deem such standards and methods or
new defects unacceptable, it can request changes to its volume commitment or the methods, standards or list of price reducing defects, with such changes to be effective 60 days after giving Cree notice of the changes. Cree may request changes to its
pricing and/or volume commitment. If the parties do not agree in writing on the changes to be made, before the effective date of the requested changes, either party can terminate this agreement upon notice and, in that event, the Supply Agreement
will govern the parties’ obligations thereafter. 
  

					
	 ID

	  	 D-Type

	  	 
	 1
	  	[*****]	  	Reduce
	 2
	  	[*****]	  	Reduce
	 3
	  	[*****]	  	Reduce
	 4
	  	[*****]	  	No reduction
	 5
	  	[*****]	  	Reduce
	 6
	  	[*****] 2	  	Reduce
	 7
	  	[*****]	  	No reduction
	 8
	  	[*****]	  	Reduce
	 9
	  	[*****] 3	  	Reduce

  
 Notes 
  

	1	CH0257R 17.4mm tone/color 20 (lightest 20), new gray boules that are lighter than this will grade as 10, CE0269R 9.5mm tone/color 30 (lightest 30), new gray boules that are
lighter than this will grade as 20 

  

	2	Micropipe grading will be performed according to the Cree document identified as the CCG – 948 Dense Fine Pipe Grading procedure (Revision 12/3/03). The area determined
according to this procedure multiplied by 1.2, (“20% adder”), defines the area of non-usable material for micropipes. 

  

	3	Crystals CC0213R, CH0165R and CH0215R represent [*****] grading. 

  

					
	2 of 2	  	Cree, Inc. and Charles and Colvard, Ltd. Proprietary	  	02/08/05

  

	[*****] 	Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with
the Commission.

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