Origami Capital Partners Issues Open Letter to the Board of Medley Capital Corporation

Origami Capital Partners, LLC (Origami), a leading asset management firm, today issued an open letter to the Board of Directors and management of Medley Capital Corporation (Medley or the Company) (NYSE: MCC) outlining its offer to acquire 100% of the Companys interests in Medley SBIC, L.P (Medley SBIC). The all-cash offer of $45 million represents 60.0% of the Medley SBICs regulatory capital at September 30, 2018, and implies a 36.2% premium to the Companys February 8, 2019, closing share price.

On April 4, 2018, we sent Medley Capital Corporation our original expression of interest in acquiring the Medley SBIC. Unfortunately, we received no response to our letter of nine months ago, said Jeff Young, Managing Partner of Origami. In light of the overwhelming shareholder opposition against Medleys proposed merger with Sierra and the Medley Boards rejection of the NexPoint proposal, Origami hereby formally and publicly announces our offer to acquire the Medley SBIC at a premium to the February 8 closing price for all cash. Our offer should be seriously considered as it benefits all shareholders. The Origami offer would deliver significantly more value to shareholders than either the Sierra merger or NexPoints proposal. The numbers speak for themselves. We look forward to working with the Board to conclude a transaction for the purchase of the Medley SBIC as it meets the objective of maximizing value for all shareholders.

The full text of the letter follows:

February 11, 2019

Brook Taube Chief Executive Officer & Chairman of the Board of Directors Medley Capital Corporation 280 Park Avenue 6th Floor East New York, NY 10017

Re: Letter of Intent for Medley SBIC

Dear Members of the Board:

Origami Capital Partners, LLC, is writing again to express its continued interest in purchasing 100% of Medley Capital Corporation and its affiliates (collectively, the Company) interests in Medley SBIC, L.P. (Medley SBIC). As you are aware, we reached out to the Company several times in the spring of 2018 and sent a formal letter expressing our interest in Medley SBIC on April 4, 2018. To date, we have not received a response or acknowledgement of the letters receipt from the Companys Board of Directors (the Board).

We learned this week you postponed the shareholder vote on the merger of MCC into Sierra Income Corporation (the Sierra Merger) in light of the negative recommendations from ISS and Glass Lewis and strong public shareholder opposition to the that deal. We also understand that the Board has rejected a competing proposal from NexPoint Advisors L.P. (the NexPoint Proposal).

As a consequence of these developments, we submit, again, a non-binding proposal to acquire Medley SBIC. We elected to make our offer public to give the Medley Board and shareholders another option they may consider in conjunction with either the Sierra Merger or the NexPoint proposal, or separately. Our offer presents shareholders an opportunity to receive cash now at a higher value than that offered by either the Sierra or NexPoint options for the Medley SBIC.

1. Transaction Structure. The transaction would be structured as an acquisition from the Company of 100% of the interests in Medley SBIC for cash.

2. Consideration. Origami would propose a cash consideration of $45,000,000. This represents 60.0% of Medley SBICs regulatory capital (or NAV) at September 30, 2018 and implies a 36.2% premium to the February 8th closing share price of Medley Capital Corporation.1

3. Financing. We have the necessary committed capital needed to complete the proposed transaction.

4. Conditions. The proposed transaction would be subject to: (a) satisfactory completion of customary due diligence, including on Medley SBICs portfolio; and (b) negotiation of one or more satisfactory definitive agreements with representations, warranties, covenants and closing conditions that are reasonable and customary for transactions of this type. We are prepared to commence work immediately to satisfy these conditions and have retained Sidley Austin LLP as legal advisors to that end.

5. Timing. Given appropriate access and engagement with the Company, we would expect to be able to sign and close this transaction within 45 days. We would work collaboratively with the U.S. Small Business Administration to ensure proper transfer of the SBIC license so that the fund would continue to operate and support the growth of its existing portfolio companies, but our proposed transaction would not be contingent on a successful transfer of the SBIC license. We suggest that Origami enter into a non-disclosure agreement with you so that Origami can begin due diligence and discussions with your financial and legal advisors at your earliest convenience.

6. Non-Binding. This letter of intent is non-binding and is intended only as a proposal summarizing key terms of a proposed acquisition of Medley SBIC. This letter of intent does not create any agreement, obligation, right, duties or commitment by any party to enter into any agreement. No obligation will arise or be created unless and until one or more definitive agreements are executed and delivered by the applicable parties.

We look forward to receiving your response to this letter and taking the next steps towards consummating a transaction.

Sincerely, /s/ Jeffrey D. Young Managing Partner

Sidley Austin LLP is representing Origami Capital Partners.

1 Medley Capital Corporations closing share price on February 8, 2019 was $3.23, and the pro forma NAV per share disclosed in the Companys August 2018 investor presentation was $7.33, which represents a trading ratio of 44.1% of pro forma NAV per share. The offer price of $45,000,000 for $75,000,000 of regulatory capital represents a ratio of 60.0% of NAV, or a 36.2% premium to the 44.1% trading ratio.

About Origami Capital Partners, LLC

Origami Capital Partners, LLC (Origami Capital) is a leading asset management firm with greater than $450m of assets under management. Since 2008, the partners of Origami Capital have been focused on acquiring private assets trapped in complex structures, providing patient, flexible solutions to owners who are seeking liquidity. Origami Capital recognizes the value of trapped assets, and has been able to solve sellers challenges, whether they are caused by legal, structural, valuation or ownership issues. The underlying assets have been interests in real estate, private equity, debt, bankruptcy and litigation claims. Examples of specific holdings include interests in commercial real estate, private operating businesses in developed and emerging markets, as well as energy and infrastructure assets. Origami Capital invests globally, but focuses primarily on assets in North America and Europe. Origami is a registered investment adviser and, since its inception in 2008, has invested over $900 million. The Origami Capital investment strategy is described at https://origamicapital.com/investment-strategy.

Forward-Looking Statements

This communication contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning Origami Capital and Medley Capital Corporation. These statements include, but are not limited to, statements that address Origami Capitals and Medley Capital Corporations expected future business and financial performance and statements about the proposed transaction involving Origami Capital and Medley Capital Corporation and the expected benefits of the proposed transaction and other statements identified by words such as will, expect, believe, anticipate, estimate, should, could, would, may, intend, plan, potential, target, predict, project, aim, opportunity, tentative, positioning, designed, create, seek, ongoing, upside, increase or continue and variations or other similar words, phrases or expressions. These forward-looking statements are based on current expectations and beliefs of the management of Origami Capital, as well as assumptions made by, and information currently available to, such management, current market trends and market conditions, and involve risks and uncertainties, many of which are outside Origami Capitals and such managements control, and which may cause actual results to differ materially from those contained in forward-looking statements. Accordingly, you should not place undue reliance on such statements.

Such risks, uncertainties and assumptions include: the ultimate outcome of any possible transaction involving Origami Capital and/or Medley Capital Corporation, including the possibility that Medley Capital Corporation will reject the proposed transaction with Origami Capital; uncertainties as to whether Medley Capital Corporation will cooperate with Origami Capital regarding the proposed transaction; the effect of the announcement of the proposed transaction on the ability of Medley Capital Corporation to retain capital, to retain and hire key personnel and to maintain favorable relationships; the timing of the proposed transaction; the ability to obtain regulatory approvals and satisfy other closing conditions to the completion of the proposed transaction (including stockholder approvals if necessary); and other risks related to the completion of the proposed transaction and actions related thereto. Other risks, uncertainties and assumptions that could materially affect future results include: any risks associated with the loss of Medley Capital Corporations capital; delays, challenges and expenses associated with receiving governmental and regulatory approvals and satisfying other closing conditions; Medley Capital Corporations competitive performance; rates of growth in Medley Capital Corporations target markets; and Medley Capital Corporations ability to maintain or improve gross margin.

Origami Capital undertakes no intent or obligation to publicly update or revise any of these forward looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Additional Information

This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates to a proposal which Origami Capital has made for a transaction with Medley Capital Corporation. In furtherance of this proposal and subject to future developments, Origami Capital (and, if a negotiated transaction is agreed, Medley Capital Corporation) may file one or more registration statements, proxy statements, tender offer statements or other documents with the United States Securities and Exchange Commission (the SEC). This communication is not a substitute for any proxy statement, registration statement, tender offer statement, prospectus or other document Origami Capital and/or Medley Capital Corporation may file with the SEC in connection with the proposed transaction.

INVESTORS AND SECURITY HOLDERS OF MEDLEY CAPITAL CORPORATION ARE URGED TO READ ANY SUCH PROXY STATEMENT(S), REGISTRATION STATEMENT, TENDER OFFER STATEMENT, PROSPECTUS AND/OR OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Any definitive proxy statement(s) or prospectus(es) (if and when available) will be mailed to stockholders of Medley Capital Corporation. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by Origami Capital and/or Medley Capital Corporation through the website maintained by the SEC at https://www.sec.gov.

This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

This communication is neither a solicitation of a proxy nor a substitute for any proxy statement or other filings that may be made with the SEC. Nonetheless, Origami Capital and/or its respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Additional information regarding the interests of such potential participants will be included in one or more registration statements, proxy statements, tender offer statements or other documents filed with the SEC if and when they become available. These documents (if and when available) may be obtained free of charge from the SECs website https://www.sec.gov.

Media:
Dan Gagnier
Gagnier Communications
646-569-5897
[email protected]