SECOND AMENDMENT TO SALE AND SERVICING AGREEMENT

SECOND AMENDMENT TO SALE AND SERVICING AGREEMENT

THIS SECOND AMENDMENT TO THE SALE AND SERVICING AGREEMENT, dated as of July 29, 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 definition of “Facility Amount” in Section 1.1 of the Agreement is hereby amended to replace the amount “$150,000,000” therein with the amount “$250,000,000”.

2.2 The “Commitment” of Three Pillars Funding LLC is hereby increased to $250,000,000.

2.3 The Seller hereby agrees to deliver a replacement Variable Funding Certificate to Three Pillars Funding LLC reflecting the facility increase described above on or prior to the effective date hereof. Upon receipt of such replacement Variable Funding Certificate, Three Pillars Funding LLC agrees to deliver to the Trustee its existing Variable Funding Certificate for cancellation.

2.4 Clause (3) of the definition of “Pool Concentration Criteria” in Section 1.1 of the Agreement is hereby amended to add a new industry segment as set forth below:

2.5 Clause (3) of the definition of Pool Concentration Criteria in Section 1.1 of the Agreement is hereby amended to add “Manufacturing” to the “Combined Limited to segments other than Radio, Television, Community Newspapers, Publishing, Towers, Cable Television Operators, Business Information Services and Security Alarm Leasing Companies” as follows: