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

Origami seeks to acquire 100% interests of the Medley SBIC for $45
million in cash

Offer implies a 36.2% premium to the February 8, 2019 closing share
price of Medley Capital Corporation

NEW YORK–(BUSINESS WIRE)–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 Company’s
interests in Medley SBIC, L.P (“Medley SBIC”). The all-cash offer of $45
million represents 60.0% of the Medley SBIC’s regulatory capital at
September 30, 2018, and implies a 36.2% premium to the Company’s
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 Medley’s proposed merger with Sierra and the Medley
Board’s 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 NexPoint’s 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
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 letter’s receipt from the Company’s 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
”) 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 SBIC’s 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 SBIC’s 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.

Jeffrey D. Young
Managing Partner

Sidley Austin LLP is representing Origami Capital Partners.

1 Medley Capital Corporation’s closing share price on
February 8, 2019 was $3.23, and the pro forma NAV per share disclosed in
the Company’s 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 Capital’s and Medley Capital
Corporation’s 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 Capital’s and such management’s 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 Corporation’s capital; delays, challenges and
expenses associated with receiving governmental and regulatory approvals
and satisfying other closing conditions; Medley Capital Corporation’s
competitive performance; rates of growth in Medley Capital Corporation’s
target markets; and Medley Capital Corporation’s 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.

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 SEC’s website https://www.sec.gov.


Dan Gagnier
Gagnier Communications

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