Exhibit 10.1


 








INCREMENTAL ASSUMPTION
AGREEMENT


dated as of January 31, 2012,


made by


BARCLAYS BANK PLC,

as Assuming Lender


relating to the


SENIOR SECURED REVOLVING CREDIT AGREEMENT


dated as of August 4, 2011,


among


MEDLEY CAPITAL CORPORATION,

as Borrower,


 


The Several Lenders and Agents

from Time to Time Parties Thereto,


and


ING CAPITAL LLC,

as Administrative Agent and Collateral Agent


 


 



 



    	 



    	 



    
INCREMENTAL ASSUMPTION AGREEMENT, dated as of January
31, 2012 (this “Assumption Agreement”), by and among MEDLEY CAPITAL CORPORATION (the “Borrower”),
MOF I BDC LLC (the “Subsidiary Guarantor”), ING CAPITAL LLC, in its capacity as Administrative Agent (the “Administrative
Agent”), and BARCLAYS BANK PLC, as assuming lender (the “Assuming Lender”), relating to the SENIOR
SECURED REVOLVING CREDIT AGREEMENT, dated as of August 4, 2011 (as amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”), among the Borrower, the Administrative Agent and the several banks and other financial
institutions or entities from time to time party to the Credit Agreement.


A.The Borrower
has requested that the Assuming Lender provide an additional Commitment in an aggregate amount equal to $20,000,000 (the “Incremental
Commitment”) pursuant to Section 2.06(f) of the Credit Agreement.


B.The Assuming
Lender is willing to make such an Incremental Commitment to the Borrower on the terms and subject to the conditions set forth herein
and in the Credit Agreement.


Accordingly,
in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as follows:


SECTION 1.
Defined Terms; Interpretation; Etc. Capitalized terms used and not defined herein shall have the meanings assigned
to such terms in the Credit Agreement. The rules of construction set forth in Section 1.03 of the Credit Agreement shall apply
equally to this Assumption Agreement. This Assumption Agreement shall be a “Loan Document” for all purposes of the
Credit Agreement and the other Loan Documents.


SECTION 2.
Incremental Commitment. a) Pursuant to Section 2.06(f) of the Credit Agreement and subject to the terms and conditions hereof,
the Assuming Lender hereby agrees to make the Incremental Commitment to the Borrower effective on and as of the Effective Date
(as defined below). The Incremental Commitment shall constitute an additional “Commitment” for all purposes of the
Credit Agreement and the other Loan Documents.


(b)Except
as set forth herein, the terms of the Incremental Commitment shall be the same as the other Commitments made under the Credit Agreement.


(c)On
the Effective Date, in connection with the adjustments to any outstanding Loans and participation
interests contemplated by Section 2.06(f)(iv) of the Credit Agreement, the Assuming Lender shall make a payment to the Administrative
Agent, for account of the other Lenders, in an amount calculated by the Administrative Agent in accordance with such section,
so that after giving effect to such payment and to the distribution thereof to the other Lenders in accordance with such section,
the Loans are held ratably by the Lenders in accordance with the respective Commitments of such Lenders (after giving effect to
the Incremental Commitment and any other Commitment Increases, if any, occurring on the date hereof).



    	 



    	 



    



(d)As of
the Effective Date, the Assuming Lender shall become a Lender under the Credit Agreement and shall have all rights of a Lender
under the Credit Agreement and any other documents or instruments delivered pursuant thereto.


SECTION 3.
Conditions Precedent to Incremental Commitment. This Assumption Agreement, and the obligations of the Assuming Lender to
make the Incremental Commitment, shall become effective on and as of the Business Day (the “Effective Date”)
occurring on or before January 31, 2012 on which the following conditions precedent have been satisfied:


(a)the
Administrative Agent shall have received counterparts of this Assumption Agreement that, when taken together, bear the signatures
of the Borrower, the Subsidiary Guarantor, the Administrative Agent and the Assuming Lender;


(b)on the
date hereof, each of the conditions set forth or referred to in Section 2.06(f)(i) of the Credit Agreement shall be satisfied,
and pursuant to Section 2.06(f)(ii)(x) of the Credit Agreement, the Administrative Agent shall have received a certificate of a
duly authorized officer of the Borrower dated the date hereof certifying as to the foregoing;


(c)the
Administrative Agent shall have received for the account of the Lenders the amounts, if any, payable under Section 2.13 of the
Credit Agreement as a result of the adjustments of Borrowings pursuant to Section 2(c) of this Assumption Agreement;


(d)the
Assuming Lender shall have received an up-front fee in the amount of $200,000, due to the Assuming Lender on the date hereof; and


(e)the
Administrative Agent shall have received all other documented fees and expenses related to this Assumption Agreement owing on the
date hereof.


SECTION 4.
Representations and Warranties of the Borrower. To induce the other parties hereto to enter into this Assumption Agreement,
the Borrower represents and warrants to the Administrative Agent and the Assuming Lender that, as of the date hereof:


(a)This
Assumption Agreement has been duly authorized, executed and delivered by the Borrower and the Subsidiary Guarantor, and constitutes
a legal, valid and binding obligation of the Borrower and the Subsidiary Guarantor in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).



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(b)Each
of the representations and warranties made by the Borrower and the Subsidiary Guarantor in or pursuant to the Loan Documents are
true and correct in all material respects as if made on such date (except to the extent they relate specifically to an earlier
date, in which case they are true and correct in all material respects as of such earlier date, and unless a representation or
warranty is already qualified by materiality or by Material Adverse Effect, in which case it is true and correct in all respects).


(c)No Default
or Event of Default has occurred and is continuing on the date hereof or shall result from the Incremental Commitment.


SECTION 5.
Representations, Warranties and Covenants of the Assuming Lender. The Assuming Lender (a) represents and warrants that (i)
from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the
extent of the Incremental Commitment, shall have the obligations of a Lender thereunder, and (ii) it has received a copy of the
Credit Agreement, together with copies of the consolidated statement of assets and liabilities and the related consolidated statements
of operations, changes in net assets and cash flows and related schedule of investments of the Borrower and its Subsidiaries as
of and for the fiscal year ended September 30, 2011, delivered pursuant to Section 5.01(a) thereof, and such other documents and
information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assumption Agreement and
to make the Incremental Commitment on the basis of which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender; and (b) agrees that (i) it will, independently and without reliance on the Administrative
Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.


SECTION
6. Consent and Reaffirmation. (a)  The Subsidiary Guarantor hereby consents to this Assumption Agreement and the transactions
contemplated hereby, (b) the Borrower and the Subsidiary Guarantor agree that, notwithstanding the effectiveness of this
Assumption Agreement, the Guarantee and Security Agreement and each of the other Security Documents continue to be in full force
and effect, (c) the Borrower and the Subsidiary Guarantor acknowledge that the terms “Credit Agreement Obligations,”
“Guaranteed Obligations” and “Secured Obligations” (each as defined in the Guarantee and Security Agreement)
include any and all Loans made now or in the future by the Assuming Lender in respect of the Incremental Commitment and all interest
and other amounts owing in respect thereof under the Loan Documents (including all interest and expenses accrued or incurred subsequent
to the commencement of any bankruptcy or insolvency proceeding with respect to the Borrower, whether or not such interest or expenses
are allowed as a claim in such proceeding), and (d) the Subsidiary Guarantor confirms its guarantee of the Guaranteed Obligations
and the Borrower and the Subsidiary Guarantor confirm their grant of a security interest in their assets as Collateral for the
Secured Obligations, all as provided in the Loan Documents as originally executed (and amended prior to the date hereof and supplemented
hereby).



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SECTION
7. Notices. All notices hereunder shall be given in accordance with the provisions of Section 9.01 of the Credit Agreement.


SECTION 8.
Expenses. The Borrower agrees to pay all reasonable and documented out-of-pocket expenses incurred by the Administrative
Agent in connection with this Assumption Agreement in accordance with the Credit Agreement, including the reasonable and documented
fees, charges and disbursements of one outside counsel for the Administrative Agent.


SECTION 9.
Counterparts. This Assumption Agreement may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together
shall constitute but one and the same contract. Delivery of an executed counterpart of a signature page of this Assumption Agreement
by facsimile or electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.


SECTION 10.
Applicable Law; Jurisdiction; Consent to Service of Process; Other. THIS ASSUMPTION AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK. THE PROVISIONS OF SECTION 9.09 OF THE CREDIT AGREEMENT (AND ALL OTHER APPLICABLE PROVISIONS OF ARTICLE
IX OF THE CREDIT AGREEMENT) ARE HEREBY INCORPORATED BY REFERENCE.


SECTION 11.
Headings. The headings of this Assumption Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.


SECTION 12.
No Third Party Beneficiaries. This Assumption Agreement is intended to be solely for the benefit of the parties hereto and
is not intended to confer any benefits upon, or create any rights in favor of, any other person or entity. No person or entity
other than the parties hereto shall have any rights under or be entitled to rely upon this Assumption Agreement.


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IN WITNESS WHEREOF,
the parties hereto have caused this Assumption Agreement to be duly executed and delivered by their proper and duly authorized
representatives as of the day and year first above written.


	 	MEDLEY CAPITAL CORPORATION,
	 	as Borrower	 
	 	 	 
	 	 	 
	 	By: /s/ Richard T. Allorto, Jr.	 
	 	Name: Richard T. Allorto, Jr.	 
	 	Title:   Chief Financial Officer	 
	 	 	 
	 	 	 
	 	MOF I BDC LLC, as Subsidiary Guarantor	 
	 	 	 
	 	By: /s/ Richard T. Allorto, Jr.	 
	 	Name: Richard T. Allorto, Jr.	 
	 	Title:   Chief Financial Officer	 





  



    	 



    	 



    



 


	 	ING CAPITAL LLC, as Administrative Agent
	 	By: /s/ Patrick Frisch	 
	 	Name: Patrick Frisch, CFA	 
	 	Title: Managing Director	 






    	 



    	 



    






	 	BARCLAYS BANK PLC, as Assuming Lender


 



	 	 
	 	By: /s/ Michael Mozer	 
	 	Name: Michael Mozer	 
	 	Title:   Vice President