MEDLEY MANAGEMENT INC. (Form: 8-K, Received: 12/26/2018 06:09:29)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________________________

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): December 18, 2018

Medley Management Inc.

(Exact name of registrant as specified in its charter)



Delaware	001-36638	47-1130638
(State or other jurisdiction of	(Commission File Number)	(IRS Employer
incorporation)		Identification No.)

280 Park Avenue, 6 th Floor East, New York, NY 10017

(Address of principal executive offices) (Zip Code)

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



x		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒



Item 1.01	Entry into a Material Definitive Agreement.

On December 18, 2018, Medley Management Inc.’s operating company, Medley LLC (“Medley”) entered into a Waiver Letter (the “Waiver Letter”) with respect to certain provisions of Medley’s existing Credit Agreement, dated as of August 19, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), entered into by and among City National Bank, a national banking association, as the administrative agent and collateral agent (in such capacities, the “Agent”), the lenders party thereto and Medley, as borrower. The Credit Agreement has been previously amended by Amendment Number One to Credit Agreement, dated as of August 12, 2015, Amendment Number Two to Credit Agreement, dated as of May 3, 2016, and Amendment Number Three to Credit Agreement, dated as of September 22, 2017, each by and among Medley, the Agent and the lenders party thereto, and has been further modified by the Letter Agreement and the Waiver to Credit Agreement, each dated as of November 14, 2018. The Credit Agreement makes a Revolving Credit Facility available to Medley.

The Waiver Letter was entered into in connection with the proposed merger transaction to be consummated pursuant to the Merger Agreement dated as of August 9, 2018 (the “Merger Agreement”) among Medley Management Inc. (“MDLY”), Sierra Income Corporation (“Sierra”) and Sierra Management, Inc., a wholly-owned subsidiary of Sierra (“Merger Sub”), in accordance with which MDLY will merge with and into Merger Sub, with Merger Sub as the survivor thereof (the “Designated Transaction”). Pursuant to the Waiver Letter, the Agent and the lenders waive (a) the financial covenant contained in Section 6.10(a) of the Credit Agreement which provides that Medley and its subsidiaries will not cause nor permit the Net Leverage Ratio (as defined in the Agreement) as of the last day of any fiscal quarter to be greater than 5.00:1.00 (the “Net Leverage Ratio Covenant”), solely with respect to the fiscal period ending on March 31, 2019, and (b) the financial reporting provisions of Section 5.04(c)(i)(y) of the Credit Agreement, solely with respect to the fiscal quarter ending on March 31, 2019, to the extent it requires the calculation of the Net Leverage Ratio (the “Net Leverage Ratio Compliance Calculation”) be included in the compliance certificate to be delivered for the fiscal quarter ending as of such date (the waivers referred to in the foregoing clauses (a) and (b) being referred to collectively as the “Waiver”); provided, however, that the Waiver is effective only if the Designated Transaction occurs on or before March 29, 2019. If the Designated Transaction occurs on or after March 30, 2019, then the Waiver shall not be effective.

The Waiver Letter is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein. The above description of the Waiver Letter and the Waiver granted thereby does not purport to be complete and is qualified in its entirety by reference to the Waiver Letter.



Item 2.03	Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03 of this Current Report on Form 8-K.



Item 8.01	Other Events.

On December 21, 2018, MDLY issued a press release announcing investment commitments to middle market companies during the first nine months of 2018. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K. and is incorporated by reference herein.

No Offer or Solicitation

The information in this communication is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Important Information and Where to Find It

In connection with the proposed transactions, Sierra has filed with the SEC a Registration Statement on Form N-14 that it intends to mail to its stockholders and which includes a preliminary proxy statement and that also will constitute a prospectus of Sierra, and Medley Capital Corporation (“MCC”) and MDLY have filed with the SEC a preliminary proxy statement which MCC and MDLY intend to mail to their stockholders (collectively, the “Joint Proxy Statement/Prospectus”). The definitive Joint Proxy Statement/Prospectus will be mailed to stockholders of Sierra, MCC, and MDLY, respectively. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT SIERRA, MCC, AND MDLY, THE PROPOSED TRANSACTIONS AND RELATED MATTERS. Investors and security holders are able to obtain the preliminary Joint Proxy Statement/Prospectus and other documents filed with the SEC by Sierra, MCC, and Medley, free of charge, from the SEC’s web site at www.sec.gov and from Sierra’s website (www.sierraincomecorp.com), MCC’s website (www.medleycapitalcorp.com), or MDLY’s website (www.mdly.com). Investors and security holders may also obtain free copies of the Joint Proxy Statement/Prospectus and other documents filed with the SEC from Sierra, MCC, or Medley by contacting Sam Anderson, Medley’s Investor Relations contact, at 212-759-0777.

Participants in the Potential Solicitation

Sierra, MCC, and MDLY and their respective directors, executive officers, other members of their management, employees and other persons may be deemed to be participants in the anticipated solicitation of proxies in connection with the proposed transactions. Information regarding Sierra’s directors and executive officers is available in its definitive proxy statement for its 2018 annual meeting of stockholders filed with the SEC on March 14, 2018 (the “ Sierra 2018 Proxy Statement ”). Information regarding MCC’s directors and executive officers is available in its definitive proxy statement for its 2018 annual meeting of stockholders filed with the SEC on December 21, 2017 (the “ MCC 2018 Proxy Statement ”). Information regarding Medley’s directors and executive officers is available in its annual report for the year ended December 31, 2017 on Form 10-K filed with the SEC on March 29, 2018 (the “ MDLY 2017 10-K ”). To the extent holdings of securities by such directors or executive officers have changed since the amounts disclosed in the Sierra 2018 Proxy Statement, the MCC 2018 Proxy Statement, and the MDLY 2017 Form 10-K, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed by such directors or executive officers, as the case may be, with the SEC, and in the Joint Proxy Statement/Prospectus. Additionally, more detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, is set forth in the Joint Proxy Statement/Prospectus and in other relevant materials to be filed with the SEC. These documents may be obtained free of charge from the sources indicated above.



Item 9.01	Financial Statements and Exhibits.



Exhibit No.		Description
10.1		Waiver Letter, dated as of December 18, 2018, regarding the Credit Agreement, dated as of August 19, 2014, among Medley LLC, the lenders party thereto and City National Bank.
99.1		Press Release of Medley Management Inc. dated December 21, 2018.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




MEDLEY MANAGEMENT INC.

By:	/s/ Richard T. Allorto, Jr.
	Name:	Richard T. Allorto, Jr.
	Title:	Chief Financial Officer

Date: December 21, 2018

December 18, 2018 Medley LLC 280 Park Avenue, 6th Floor East New York, NY 10017 Re: Waiver Letter (the “Waiver Letter”) Ladies and Gentlemen: We refer to that certain Credit Agreement, dated as of August 19, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Medley LLC, a Delaware limited liability company (the “Borrower” or “you”), the lenders from time to time party thereto (the “Lenders”), and City National Bank, a national banking association, in its capacity as the administrative agent (the “Administrative Agent”) and in its capacity as the collateral agent for the Lenders (the “Administrative Agent” and the “Collateral Agent”, collectively “Agents”). Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement. You have informed the Agents and the Lenders that you intend to enter into a merger transaction, pursuant to the Merger Agreement dated as of August 9, 2018, in the form provided to Agents prior to the date hereof (the “Merger Agreement”) among Medley Management Inc., a Delaware corporation (“Medley”), Sierra Income Corporation, a Maryland corporation (“SIC”) and Sierra Management, Inc., a Delaware corporation and wholly-owned subsidiary of SIC (“Merger Sub”), in accordance with which Medley will merge with and into Merger Sub, with Merger Sub as the survivor thereof (the “Designated Transaction”). You have requested that in connection with the Designated Transaction, the Lenders hereby waive, solely for the fiscal quarter ending on March 31, 2019, (a) the financial covenant contained in Section 6.10(a) of the Credit Agreement which provides that Borrower and its Subsidiaries will not cause nor permit the Net Leverage Ratio as of the last day of any fiscal quarter to be greater than 5.00:1.00 (the “Net Leverage Ratio Covenant”), and (b) the financial reporting provisions of Section 5.04(c)(i)(y) of the Credit Agreement, to the extent it requires the calculation of the Net Leverage Ratio (the “Net Leverage Ratio Compliance Calculation”) be included in the compliance certificate required to be delivered for the fiscal quarter ending as of such date. In consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Agents, the Lenders and Borrower agree as follows: 1. Waiver. Subject to the Conditions Precedent to Effectiveness set forth in Paragraph 2 below, and in accordance with the Credit Agreement, the Agents and Lenders hereby waive (a) LEGAL_US_W # 96878823.2 38468.00116

the Net Leverage Ratio Covenant solely with respect to the fiscal period ending on March 31, 2019, and (b) the requirement to include the Net Leverage Ratio Compliance Calculation, solely with respect to the fiscal quarter ending on March 31, 2019, in the compliance certificate required to be delivered for the fiscal quarter ending as of such date (the “Waiver”); provided, however, that the Waiver set forth in this paragraph is effective only if the Designated Transaction occurs on or before March 29, 2019. If the Designated Transaction occurs on or after March 30, 2019, then the Waiver shall not be effective. Further, the Waiver set forth in this paragraph will not be effective unless the Waiver Letter is executed by the Borrower, Agents, and the Lenders. 2. Conditions Precedent to Effectiveness. The satisfaction of the following shall constitute conditions precedent to the effectiveness of this Waiver Letter: a. The Designated Transaction shall have occurred on or before March 29, 2019; and b. The Waiver Letter shall have been executed by the Borrower, Agents, and the Lenders. 3. Representations and Warranties. Borrower hereby represents and warrants to the Agents and the Lenders as follows: a. Each of Borrower and its Subsidiaries is duly organized and validly existing, in good standing under the laws of the State of its formation and is duly qualified to conduct business in all jurisdictions where its failure to do so could reasonably be expected to have a Material Adverse Effect on such Person. b. Borrower has all requisite power to execute and deliver this Waiver Letter and the other Loan Documents to which it is a party, and to borrow the sums provided for in the Credit Agreement. Each Loan Party has all governmental licenses, authorizations, consents, and approvals necessary to own and operate its Assets and to carry on its businesses as now conducted and as proposed to be conducted, other than licenses, authorizations, consents, and approvals that are not currently required or the failure to obtain which could not reasonably be expected to have a Material Adverse Effect. The execution, delivery, and performance by Borrower of this Waiver Letter and the other Loan Documents have been duly authorized by Borrower and all necessary action in respect thereof has been taken, and the execution, delivery, and performance thereof do not require any consent or approval of any other Person that has not been obtained. c. The execution, delivery, and performance by Borrower of this Waiver Letter and the other Loan Documents to which it is or will be a party, do not and will not: (i) violate (A) any provision of any federal (including the Exchange Act), state, or local law, rule, or regulation (including Regulations T, U, and X of the Federal Reserve Board) binding on any Loan Party, (B) any order of any domestic governmental authority, court, arbitration board, or tribunal binding on any Loan Party, or (C) the Organizational Documents of any Loan Party, or (ii) contravene any provisions of, result in a breach of, constitute (with the giving of notice or the lapse of time) a default 2 LEGAL_US_W # 96878823.2 38468.00116

under, or result in the creation of any Lien (other than a Permitted Lien) upon any of the Assets of any Loan Party pursuant to, any contractual obligation of such Loan Party, or (iii) require termination of any contractual obligation of any Loan Party, or (iv) constitute a tortious interference with any contractual obligation of any Loan Party. d. Other than such as may have previously been obtained, filed, or given, as applicable, no consent, license, permit, approval, or authorization of, exemption by, notice to, report to or registration, filing, or declaration with, any governmental authority or agency is required in connection with the execution, delivery, and performance by the Loan Parties of this Waiver Letter or the Loan Documents. e. This Waiver Letter and the other Loan Documents to which Borrower is a party, when executed and delivered by Borrower, will constitute, the legal, valid, and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except as the enforceability hereof or thereof may be affected by: (i) bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting the enforcement of creditors’ rights generally, and (ii) the limitation of certain remedies by certain equitable principles of general applicability. f. No litigation, inquiry, other action or proceeding (governmental or otherwise), or injunction or other restraining order shall be pending or overtly threatened in writing that could reasonably be expected to have: (i) a material adverse effect on any Loan Party’s ability to repay the Obligations or (ii) a Material Adverse Effect on any Loan Party. g. No Default or Event of Default has occurred and is continuing as of the date of the effectiveness of this Waiver Letter. h. No event or development has occurred as of the date of the effectiveness of this Waiver Letter which could reasonably be expected to result in a Material Adverse Effect with respect to any Loan Party. i. The representations and warranties set forth in this Waiver Letter, in the Credit Agreement, as agreed to in this Waiver Letter after giving effect to this Waiver Letter, and the other Loan Documents to which Borrower is a party are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date). j. This Waiver Letter has been entered into without force or duress, of the free will of Borrower, and the decision of Borrower to enter into this Waiver Letter is a fully informed decision and such Person is aware of all legal and other ramifications of each decision. 3 LEGAL_US_W # 96878823.2 38468.00116

k. Borrower has read and understands this Waiver Letter, has consulted with and been represented by independent legal counsel of its own choosing in negotiations for and the preparation of this Waiver Letter, has read this Waiver Letter in full and final form, and has been advised by its counsel of its rights and obligations hereunder. 4. Loan Document. This Waiver Letter is a Loan Document. Borrower hereby reaffirms its obligations under each Loan Document to which it is a party. Borrower hereby further ratifies and reaffirms the validity and enforceability of all of the liens and security interests heretofore granted, pursuant to and in connection with any Loan Document to Collateral Agent, on behalf and for the benefit of each Lender and Bank Product Provider, as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and acknowledges that all of such liens and security interests, and all collateral heretofore pledged as security for such obligations, continues to be and remain collateral for such obligations from and after the date hereof. The Waiver Letter is limited solely to the specific events listed above and shall not be deemed to be a consent to or waiver of any Default or Event of Default or an amendment of any provision of the Credit Agreement or any other Loan Documents. As modified by this Waiver Letter, the Credit Agreement shall remain in full force and effect and constitute the legal, valid, binding and enforceable obligations of the Borrower. This Waiver Letter shall be governed by, and construed in accordance with the internal laws (and not the laws of conflicts) of the State of New York. The Borrower agrees to pay promptly after demand all costs and expenses (including, without limitation, reasonable fees and expenses of counsel) incurred by the Agents in connection with this Waiver Letter. This Waiver Letter constitutes the entire understanding of the parties hereto and supersedes any other prior or contemporaneous negotiations or agreements with respect to the subject matter hereof. This Waiver Letter may be executed in any number of separate counterparts, each of which shall, collectively and separately, constitute one agreement. [Signature Pages Follow.] 4 LEGAL_US_W # 96878823.2 38468.00116

Medley Committed Over $675 Million to U.S. Middle Market Companies in the First Nine Months of 2018

NEW YORK, (December 21, 2018) -- Medley Management Inc. (NYSE:MDLY), an alternative asset management firm, today announced that it committed over $675 million of capital to U.S. middle market companies in the first nine months of 2018.

Investments include:

A senior secured 1st lien loan to a manufacturer of high performance, in-room air conditioning products

A senior secured 1st lien loan to a platform of managed service providers offering outsourced IT services to small and medium sized businesses

A senior secured 1st lien loan to a leading provider of remote tank monitoring solutions serving industrial gas and propane suppliers worldwide

A senior secured 1st lien loan to a leading consumer data analytics and supply chain management company

A senior secured 1st lien loan to an aggregator of specialized and vertically oriented software businesses

“In the first nine months of 2018, we provided capital to companies operating in more than 30 industries in the U.S. We are well positioned for the current market environment and are actively looking for attractive investment opportunities,” said Brook Taube, CEO of Medley. “Our combination of permanent capital and long-dated institutional funds makes us a reliable source of capital for our corporate partners.”

Medley is an alternative asset management firm offering yield solutions to retail and institutional investors. Medley's national direct origination franchise is a premier provider of capital to the middle market in the U.S. Medley has $4.8 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE: MCC) (TASE: MCC) and Sierra Income Corporation, a credit interval fund, Sierra Total Return Fund (NASDAQ: SRNTX) and several private investment vehicles. Over the past 15 years, Medley has provided capital to over 400 companies across 35 industries in North America. ¹

Medley Management Inc. is the parent company of Medley LLC and several registered investment advisors (collectively, ”Medley”). Assets under management refers to assets of our funds, which represents the sum of the net asset value of such funds, the drawn and undrawn debt (at the fund level, including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods). Assets under management are as of September 30, 2018.

Medley LLC, the operating company of Medley Management Inc., has outstanding bonds which trade on the NYSE under the symbols (NYSE: MDLX) and (NYSE: MDLQ). Medley Capital Corporation is dual-listed on the New York Stock Exchange (NYSE: MCC) and the Tel Aviv Stock Exchange (TASE: MCC) and has outstanding bonds which trade on both the New York Stock Exchange under the symbols (NYSE: MCV), (NYSE: MCX) and the Tel Aviv Stock Exchange under the symbol (TASE: MCC.B1).

Head of Capital Markets & Risk Management

Medley Management Inc.

¹ Medley Management Inc. is the parent company of Medley LLC and several registered investment advisors (collectively, ”Medley”). Assets under management refers to assets of our funds, which represents the sum of the net asset value of such funds, the drawn and undrawn debt (at the fund level, including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods). Assets under management are as of September 30, 2018.

Forward-Looking Statements

This press release contains “forward-looking” statements, including statements regarding the proposed transactions. Such forward-looking statements reflect current views with respect to future events and financial performance, and each of Sierra Income Corporation (“Sierra”), Medley Capital Corporation (“MCC”) and Medley Management Inc. (“MDLY”) may make related oral forward-looking statements on or following the date hereof. Statements that include the words “should,” “would,” “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “seek,” “will,” and similar statements of a future or forward-looking nature identify forward-looking statements in this material or similar oral statements for purposes of the U.S. federal securities laws or otherwise. Because forward-looking statements, such as the date that the parties expect the proposed transactions to be completed and the expectation that the proposed transactions will provide improved liquidity for Sierra, MCC, and MDLY stockholders and will be accretive to net investment income for both Sierra and MCC, include risks and uncertainties, actual results may differ materially from those expressed or implied and include, but are not limited to, those discussed in each of Sierra’s, MCC’s and MDLY’s filings with the Securities and Exchange Commission (the “SEC”), and (i) the satisfaction or waiver of closing conditions relating to the proposed transactions described herein, including, but not limited to, the requisite approvals of the stockholders of each of Sierra, MCC, and MDLY, Sierra successfully taking all actions reasonably required with respect to certain outstanding indebtedness of MCC and MDLY to prevent any material adverse effect relating thereto, certain required approvals of the SEC and the Small Business Administration, the necessary consents of certain third-party advisory clients of MDLY, and any applicable waiting period (and any extension thereof) applicable to the transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have expired or been terminated, (ii) the parties’ ability to successfully consummate the proposed transactions, and the timing thereof, and (iii) the possibility that competing offers or acquisition proposals related to the proposed transactions will be made and, if made, could be successful. Additional risks and uncertainties specific to Sierra, MCC and MDLY include, but are not limited to, (i) the costs and expenses that Sierra, MCC and MDLY have, and may incur, in connection with the proposed transactions (whether or not they are consummated), (ii) the impact that any litigation relating to the proposed transactions may have on any of Sierra, MCC and MDLY, (iii) that projections with respect to dividends may prove to be incorrect, (iv) Sierra’s ability to invest our portfolio of cash in a timely manner following the closing of the proposed transactions, (v) the market performance of the combined portfolio, (vi) the ability of portfolio companies to pay interest and principal in the future; (vii) the ability of MDLY to grow its fee earning assets under management; (viii) whether Sierra, as the surviving company, will trade with more volume and perform better than MCC and MDLY prior to the proposed transactions; and (ix) negative effects of entering into the proposed transactions on the trading volume and market price of the MCC’s or MDLY’s common stock.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that will be included in the Joint Proxy Statement/Prospectus (as defined below) relating to the proposed transactions, and in the “Risk Factors” sections of each of Sierra’s, MCC’s and MDLY’s most recent Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q. The forward- looking statements in this press release represent Sierra’s, MCC’s and MDLY’s views as of the date of hereof. Sierra, MCC and MDLY anticipate that subsequent events and developments will cause their views to change. However, while they may elect to update these forward-looking statements at some point in the future, none of Sierra, MCC or MDLY have the current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing Sierra’s, MCC’s or MDLY’s views as of any date subsequent to the date of this material.

Important Information and Where to Find It

In connection with the proposed transactions, Sierra intends to file with the SEC and mail to its stockholders a Registration Statement on Form N-14 that will include a proxy statement and that also will constitute a prospectus of Sierra, and MCC and MDLY intend to file with the SEC and mail to their respective stockholders a proxy statement on Schedule 14A (collectively, the “Joint Proxy Statement/Prospectus”). The definitive Joint Proxy Statement/Prospectus will be mailed to stockholders of Sierra, MCC, and MDLY, respectively. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT SIERRA, MCC, AND MDLY, THE PROPOSED TRANSACTIONS AND RELATED MATTERS. When available, investors and security holders will be able to obtain the Joint Proxy Statement/Prospectus and other documents filed with the SEC by Sierra, MCC, and MDLY, free of charge, from the SEC’s web site at www.sec.gov and from Sierra’s website ( www.sierraincomecorp.com), MCC’s website (www.medleycapitalcorp.com), or MDLY’s website (www.mdly.com) . Investors and security holders may also obtain free copies of the Joint Proxy Statement/Prospectus and other documents filed with the SEC from Sierra, MCC, or MDLY by contacting Sam Anderson, Medley’s Investor Relations contact, at 212-759-0777.

Participants in the Potential Solicitation

Sierra, MCC, and MDLY and their respective directors, executive officers, other members of their management, employees and other persons may be deemed to be participants in the anticipated solicitation of proxies in connection with the proposed transactions. Information regarding Sierra’s directors and executive officers is available in its definitive proxy statement for its 2018 annual meeting of stockholders filed with the SEC on March 14, 2018 (the “ Sierra 2018 Proxy Statement ”). Information regarding MCC’s directors and executive officers is available in its definitive proxy statement for its 2018 annual meeting of stockholders filed with the SEC on December 21, 2017 (the “ MCC 2018 Proxy Statement ”). Information regarding MDLY’s directors and executive officers is available in its annual report for the year ended December 31, 2017 on Form 10-K filed with the SEC on March 29, 2018 (the “ MDLY 2017 10-K ”). To the extent holdings of securities by such directors or executive officers have changed since the amounts disclosed in the Sierra 2018 Proxy Statement, the MCC 2018 Proxy Statement, and the MDLY 2017 Form 10-K, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed by such directors or executive officers, as the case may be, with the SEC. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the Joint Proxy Statement/Prospectus when such documents become available and in other relevant materials to be filed with the SEC. These documents may be obtained free of charge from the sources indicated above.

No Offer or Solicitation

The information in this press release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.