<SEC-DOCUMENT>0001193125-19-050045.txt : 20190225
<SEC-HEADER>0001193125-19-050045.hdr.sgml : 20190225
<ACCEPTANCE-DATETIME>20190225171433
ACCESSION NUMBER:		0001193125-19-050045
CONFORMED SUBMISSION TYPE:	DFAN14A
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20190225
DATE AS OF CHANGE:		20190225
EFFECTIVENESS DATE:		20190225

SUBJECT COMPANY:	

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Medley Capital Corp
		CENTRAL INDEX KEY:			0001490349
		IRS NUMBER:				274576073
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		DFAN14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	814-00818
		FILM NUMBER:		19630519

	BUSINESS ADDRESS:	
		STREET 1:		280 PARK AVENUE
		STREET 2:		6TH FLOOR EAST
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10017
		BUSINESS PHONE:		212-759-0777

	MAIL ADDRESS:	
		STREET 1:		280 PARK AVENUE
		STREET 2:		6TH FLOOR EAST
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10017

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Medley Capital BDC LLC
		DATE OF NAME CHANGE:	20100426

FILED BY:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NexPoint Advisors, L.P.
		CENTRAL INDEX KEY:			0001617621
		IRS NUMBER:				364728498
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DFAN14A

	BUSINESS ADDRESS:	
		STREET 1:		300 CRESCENT COURT, SUITE 700
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75201
		BUSINESS PHONE:		972.628.4100

	MAIL ADDRESS:	
		STREET 1:		300 CRESCENT COURT, SUITE 700
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75201
</SEC-HEADER>
<DOCUMENT>
<TYPE>DFAN14A
<SEQUENCE>1
<FILENAME>d712374ddfan14a.htm
<DESCRIPTION>DFAN14A
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<TITLE>DFAN14A</TITLE>
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<Center><DIV STYLE="width:8.5in" align="left">
 <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P>
<P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>UNITED STATES </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Washington, D.C. 20549 </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>SCHEDULE 14A
</B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Proxy Statement Pursuant to Section&nbsp;14(a) of the </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Securities Exchange Act of 1934 </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Filed by the
Registrant&nbsp;&nbsp;&#9744;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filed by a Party other than the
Registrant&nbsp;&nbsp;&#9746; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Check the appropriate box: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top">&#9744;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Preliminary Proxy Statement</TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">&#9744;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"><B>Confidential, for Use of the Commission Only&nbsp;(as permitted by Rule <FONT STYLE="white-space:nowrap">14a-6(e)(2))</FONT></B></TD></TR>
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<TD HEIGHT="8"></TD>
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<TD VALIGN="top">&#9744;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Definitive Proxy Statement</TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top">&#9744;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Definitive Additional Materials</TD></TR>
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<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top">&#9746;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Soliciting Material Under Rule <FONT STYLE="white-space:nowrap">14a-12</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:22pt; font-family:Times New Roman" ALIGN="center"><B>MEDLEY CAPITAL CORPORATION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>(Name of the Registrant as Specified in its Charter) </B></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>NexPoint Advisors, L.P. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>NexPoint Advisors GP, LLC </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Highland Global Allocation Fund </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Highland Capital Management Fund Advisors, L.P. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Strand Advisors XVI, Inc. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Highland Select Equity Master Fund, L.P. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Highland Select Equity Fund GP, L.P. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Highland Select Equity GP, LLC </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Highland Capital Management, L.P. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Strand Advisors, Inc. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>James D. Dondero </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(Name of
Person(s) Filing Proxy Statement, if Other than the Registrant) </B></P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Payment of Filing Fee (Check the appropriate box): </P>
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<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>


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<TD VALIGN="top">&#9746;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" COLSPAN="3">No fee required.</TD></TR>
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<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD></TR>
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<TD VALIGN="top">&#9744;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" COLSPAN="3">Fee computed on table below per Exchange Act Rules <FONT STYLE="white-space:nowrap">14a-6(i)(1)</FONT> and <FONT STYLE="white-space:nowrap">0-11.</FONT></TD></TR>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top">(1)</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Title of each class of securities to which transaction applies:</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top">(2)</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Aggregate number of securities to which transaction applies:</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD></TR>
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<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top">(3)</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule <FONT STYLE="white-space:nowrap">0-11</FONT>
(set forth the amount on which the filing fee is calculated and state how it was determined):</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top">(4)</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Proposed maximum aggregate value of transaction:</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD></TR>
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<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top">(5)</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Total fee paid:</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD></TR>
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<TD VALIGN="top">&#9744;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" COLSPAN="3">Fee paid previously with preliminary materials.</TD></TR>
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<TD HEIGHT="24" COLSPAN="4"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">&#9744;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" COLSPAN="3">Check box if any part of the fee is offset as provided by Exchange Act Rule <FONT STYLE="white-space:nowrap">0-11(a)(2)</FONT> and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its filing.</TD></TR>
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<TD HEIGHT="24" COLSPAN="2"></TD>
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<TD VALIGN="top">(1)</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Amount Previously Paid:</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD></TR>
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<TD VALIGN="top">(2)</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Form, Schedule or Registration Statement No.:</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Filing Party:</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD></TR>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top">(4)</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Date Filed:</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD></TR>
</TABLE> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">On February&nbsp;25, 2019, NexPoint Advisors, L.P. issued a press release which is filed as <U>Exhibit 1</U>
hereto and is incorporated herein by reference. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="90%"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt">
<TD VALIGN="bottom" NOWRAP> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; border-bottom:1.00pt solid #000000; display:table-cell; font-size:8pt; font-family:Times New Roman; ">Exhibits</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD></TR>


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<TD VALIGN="top" NOWRAP>Exhibit&nbsp;1</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top">Press Release.</TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>NexPoint Urges Stockholders of Medley Capital Corporation to Vote AGAINST the Proposed Merger, Suggests a
New Path Forward via Board Composition Changes </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><I>NexPoint Advisors Continues to Encourage MCC Stockholders to Vote AGAINST the
Merger, Provides Plan to Nominate New Directors to the MCC Board of Directors </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">DALLAS,&nbsp;February 25, 2019 &#151; NexPoint Advisors, L.P.
(&#147;<B>NexPoint</B>&#148;<B></B>) reiterated its opposition of the proposal to merge Medley Capital Corporation (&#147;<B>MCC</B>&#148;; NYSE:MCC; TASE:MCC), a <FONT STYLE="white-space:nowrap">closed-end</FONT> investment company that is
regulated as a business development company (&#147;<B>BDC</B>&#148;), with Sierra Income Corporation (&#147;<B>Sierra</B>&#148;), a <FONT STYLE="white-space:nowrap">non-traded</FONT> BDC, while acquiring Medley Management Inc.
(&#147;<B>MDLY</B>&#148;; NYSE: MDLY) under the combined entity (the &#147;<B>Merger Transaction</B>&#148;). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>NexPoint encourages stockholders of MCC
to vote <U>AGAINST</U> the Merger Transaction on or before the special meeting of stockholders on March&nbsp;8, 2019 (the &#147;Special Meeting&#148;). </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">NexPoint highlights below the numerous issues with the Merger Transaction: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">The proposal siphons over $100&nbsp;million of cash from both the surviving company in the Merger Transaction
(the &#147;<B>Surviving Company</B>&#148;) and the stockholders of MCC in favor of the MDLY stockholders;<SUP STYLE="font-size:85%; vertical-align:top">1</SUP> </P></TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">Under the Merger Transaction, more than $75 million in cash is being paid to Messrs. Brook and Seth Taube,
MDLY&#146;s co-CEOs; </P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">The Merger Transaction significantly undervalues MCC and thus dilutes MCC&#146;s stockholders; and
</P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">The valuation determination in the Merger Transaction is particularly unfair to MCC stockholders because they are
contributing tangible assets with audited market values at a steep discount in exchange for MDLY&#146;s management contract contribution at an enormous premium (a questionable intangible asset that NexPoint believes is likely to drop in value
precipitously post-Merger Transaction). </P></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In summary, the Merger Transaction would enrich MDLY (particularly its co-CEOs, Messrs. Brook
and Seth Taube), at the expense of MCC stockholders. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">NexPoint&#146;s conclusions about the flawed Merger Transaction are supported by the recommendations
made by both Institutional Shareholder Services and Glass Lewis, two leading independent proxy advisory firms, to vote AGAINST the Merger Transaction. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>A New Path Forward </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">At the 2019 Annual Meeting of MCC
stockholders (the &#147;<B>2019 Annual Meeting</B>&#148;), two directors of MCC&#146;s staggered board of directors (the &#147;<B>MCC Board</B>&#148;) are set to be elected. If the Merger Transaction is not approved by stockholders, NexPoint
(through an affiliate) will be </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="line-height:8.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000;width:10%">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><SUP STYLE="font-size:85%; vertical-align:top">1</SUP>&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">A condition to the consummation of the Merger Transaction is the approval of the merger of MDLY with and into
Sierra Management Inc., a wholly owned subsidiary of Sierra (the &#147;<B>MDLY Merger</B>&#148;). Nexpoint determined this value based on the following: (i)&nbsp;aggregate cash per share from Sierra to MDLY of $4.09 to unaffiliated MDLY stockholders
and $3.79 to affiliated MDLY stockholders, as disclosed in MCC&#146;s Proxy Statement dated December&nbsp;21, 2018 (the &#147;<B>Proxy Statement</B>&#148;); MDLY Class&nbsp;A shares outstanding of 5,693,814, as disclosed in MDLY&#146;s Form <FONT
STYLE="white-space:nowrap">10-Q</FONT> filed November&nbsp;14, 2018; plus an additional 24,839,302 MDLY shares to be issued immediately preceding the MDLY Merger, resulting in total MDLY shares of 30,533,116 eligible to receive the $4.09 per share
cash to unaffiliated MDLY stockholders and $3.79 to affiliated MDLY stockholders from Sierra and total cash to MDLY stockholders of $117,428,654. The number of additional MDLY shares to be issued in connection with the MDLY Merger is found on page
237 of the Proxy Statement. </P></TD></TR></TABLE>
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prepared to nominate two independent directors (the &#147;<B>New Directors</B>&#148;) at that meeting. Although the window for stockholders to nominate directors at the 2019 Annual Meeting (the
&#147;<B>Nomination Window</B>&#148;) is not currently open, NexPoint believes that MCC will have to <FONT STYLE="white-space:nowrap">re-open</FONT> the Nomination Window because MCC will not be able to hold the 2019 Annual Meeting by March&nbsp;15,
2019 under applicable law.<SUP STYLE="font-size:85%; vertical-align:top">2</SUP> Pursuant to MCC&#146;s Bylaws, if an annual meeting is held more than 30 days after the anniversary of the preceding year&#146;s annual meeting (i.e., after
March&nbsp;15, 2019), then the Nomination Window <FONT STYLE="white-space:nowrap">re-opens.</FONT> </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">NexPoint is committed to nominating individuals to the
MCC Board who are truly independent directors (and not &#147;interested persons&#148; of MCC, as defined in Section&nbsp;2(a)(19) of the Investment Company Act of 1940, as amended). The New Directors will be completely independent of both MCC and
NexPoint and will force the MCC Board to honor their fiduciary duties to stockholders. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">While NexPoint remains ready, willing and able to <FONT
STYLE="white-space:nowrap">step-in</FONT> as the external investment manager of MCC, NexPoint&#146;s preliminary focus is preventing the Merger Transaction. Once the Merger Transaction is defeated, NexPoint hopes to make changes to MCC&#146;s Board
so that the newly comprised MCC Board will act properly and in the best interest of stockholders. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>For these reasons, NexPoint encourages stockholders
of MCC to vote <U>AGAINST</U> the Merger Transaction on or before the Special Meeting. </B></P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>About NexPoint Advisors, L.P. </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">NexPoint, together with its affiliates, is a multibillion-dollar global alternative investment manager founded in 1993 by Jim Dondero and Mark Okada. A pioneer
in the leveraged loan market, the firm has evolved over 25 years, building on its credit expertise and value-based approach to expand into other asset classes. Today, NexPoint and its affiliates operate a diverse investment platform, serving both
institutional and retail investors worldwide. In addition to high yield credit, the firm&#146;s investment capabilities include public equities, real estate, private equity and special situations, structured credit, and sector- and region-specific
verticals built around specialized teams. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">CERTAIN INFORMATION CONCERNING THE PARTICIPANTS </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In connection with their intended proxy solicitation, NexPoint Advisors, L.P. (&#147;NexPoint&#148;), together with the other participants named below, intend
to file a proxy statement with the Securities and Exchange Commission (the &#147;SEC&#148;) to solicit stockholders in connection with the Special Meeting of Stockholders (the &#147;Special Meeting&#148;) of Medley Capital Corporation (the
&#147;Company&#148;) expected to take place on March&nbsp;8, 2019. </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="line-height:8.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000;width:10%">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><SUP STYLE="font-size:85%; vertical-align:top">2</SUP>&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">MCC has only 18 days from the date of this press release to hold the 2019 Annual Meeting until MCC is obligated
to <FONT STYLE="white-space:nowrap">re-open</FONT> the Nomination Window in accordance with its bylaws (the &#147;<B>Bylaws</B>&#148;). Rule <FONT STYLE="white-space:nowrap">14a-13</FONT> of the Securities Exchange Act of 1934 requires issuers to do
a broker search at least 20 business days prior to the record date for a meeting of stockholders (the &#147;<B>Record Date</B>&#148;). (MCC may try to argue that an exception to this rule would apply to the 2019 Annual Meeting, but Nexpoint does not
think that is the case, and believes that if the MCC Board took this action, it would be a clear violation of their duty of loyalty.) In addition, Section&nbsp;6.4 of the Bylaws states that the Record Date must be not less than 10 days before a
meeting of stockholders. Therefore, since MCC cannot set the Record Date until 20 business days after they complete the broker search, and then it has to wait ten more days before the meeting can be held, the Nomination Window will need to be <FONT
STYLE="white-space:nowrap">re-opened.</FONT> </P></TD></TR></TABLE>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">NEXPOINT STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY
MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC&#146;S WEB SITE AT WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE
COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In accordance
with Rule <FONT STYLE="white-space:nowrap">14a-12(a)(1)(i)</FONT> under the Securities Exchange Act of 1934, as amended, the following persons are anticipated to be, or may be deemed to be, participants in any such proxy solicitation: NexPoint,
NexPoint Advisors GP, LLC, the general partner of NexPoint (&#147;NexPoint Advisors GP&#148;), Highland Global Allocation Fund (&#147;Global Fund&#148;), Highland Capital Management Fund Advisors, L.P., the investment advisor to Global Fund
(&#147;Highland Fund Advisors&#148;), Strand Advisors XVI, Inc., the general partner of Highland Fund Advisors (&#147;Strand XVI&#148;), Highland Select Equity Master Fund, L.P. (&#147;Select Fund&#148;), Highland Select Equity Fund GP, L.P., the
general partner of Select Fund (&#147;Select GP&#148;), Highland Select Equity GP, LLC, the general partner of Select GP (&#147;Select LLC&#148;), Highland Capital Management, L.P., the sole member of Select LLC and the investment advisor to Select
Fund (&#147;Highland Capital&#148;), Strand Advisors, Inc., the general partner of Highland Capital (&#147;Strand&#148;) and James D. Dondero, the President of NexPoint Advisors GP and Strand and ultimate control person of Strand XVI, NexPoint
Advisors GP and Strand (collectively, the &#147;Participants&#148;). The Participants have an interest in the matters to be acted on at the Special Meeting as they intend to nominate two independent directors at the Company&#146;s 2019 Annual
Meeting of Stockholders if the merger transaction to be considered at the Special Meeting is not approved by stockholders and NexPoint has stated its willingness to <FONT STYLE="white-space:nowrap">step-in</FONT> as the external investment manager
of the Company if the merger transaction is not approved by stockholders. Certain of the Participants hold direct or indirect interests in securities of the Company as follows: Global Fund holds and beneficially owns 135,000 shares of common stock
of the Company and Highland Fund Advisors, Strand XVI and Mr.&nbsp;Dondero indirectly beneficially own such shares of common stock of the Company due to their relationship with Global Fund; Select Fund holds and beneficially owns 100 shares of
common stock of the Company and Select GP, Select LLC, Highland Capital, Strand and Mr.&nbsp;Dondero indirectly beneficially own such shares of common stock of the Company due to their relationship to Select Fund. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>NexPoint is not asking stockholders for their proxy cards and cannot accept proxy cards if sent. Stockholders SHOULD NOT send NexPoint their proxy
cards. </I></B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">#&nbsp;#&nbsp;# </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Media
Contact </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Lucy Bannon </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">(972) <FONT
STYLE="white-space:nowrap">419-6272</FONT> </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">lbannon@highlandcapital.com </P>
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