Item 1.01. Entry into a Material Definitive Agreement.
Amendments to the Credit Facilities
On September 16, 2016 (the “Closing Date”), Medley Capital
Corporation (the “Company”) entered into Amendment No. 1 to its existing Amended and Restated Senior Secured Revolving
Credit Agreement (the “Revolver Amendment”) and Amendment No. 1 to its existing Amended and Restated Senior Secured
Term Loan Credit Agreement (the “Term Loan Amendment” and, together with the “Revolver Amendment,” the
“Amendments”), each with certain lenders party thereto, ING Capital LLC, as administrative agent (the “Administrative
Agent”), and, solely with respect to Section 2.9 of each Amendment, MCC Investment Holdings LLC, MCC Investment Holdings
Sendero LLC, MCC Investment Holdings RT1 LLC, MCC Investment Holdings Omnivere LLC, MCC Investment Holdings Amvestar, LLC, and
MCC Investment Holdings AAR, LLC, as subsidiary guarantors. The Amendments amend certain provisions of the Company’s Amended
and Restated Senior Secured Revolving Credit Agreement (the “Revolving Credit Facility”) and the Amended and Restated
Senior Secured Term Loan Credit Agreement (the “Term Loan Facility” and, together with the Revolving Credit Facility,
each as amended, the “Facilities”).
The Facilities were amended to, among
other things: (i) decrease the minimum stockholders’ equity covenant from $400,000,000 to $350,000,000
(ii) decrease the minimum net worth covenant from $400,000,000 to $325,000,000 and (iii) add a limit to the total
amount of repurchases by the Company of its stock to $65,500,000 over the lifetime of the Facilities.
Borrowings under the Facilities are subject to, among other things,
a minimum borrowing/collateral base and substantially all of the Company’s assets are pledged as collateral under the Facilities.
In addition, the Facilities require the Company to, among other things: (i) make representations and warranties regarding the
collateral as well the Company’s business and operations; (ii) agree to certain indemnification obligations; and (iii)
agree to comply with various affirmative and negative covenants. The documentation for each of the Facilities also includes default
provisions such as the failure to make timely payments under the Facilities, the occurrence of a change in control and the failure
by the Company to materially perform under the operative agreements governing the Facilities, which, if not complied with, could
accelerate repayment under the Facilities, thereby materially and adversely affecting the Company’s liquidity, financial
condition and results of operations.
The foregoing description of the Revolver Amendment does not purport
to be complete and is qualified in its entirety by reference to the full text of the Revolver Amendment attached hereto as Exhibit
10.1.
The foregoing description of the Term Loan Amendment does not
purport to be complete and is qualified in its entirety by reference to the full text of the Term Loan Amendment attached hereto
as Exhibit 10.2.