On January 11, 2017, Nicholas Financial, Inc. executed an amendment to its existing $250.0 million credit facility. The amendment provides for a temporary adjustment to the calculation of the availability under the credit facility effective as of December 30, 2016 and will be in place through June 30, 2017. In connection with such adjustment, the interest rate under the credit facility was temporarily increased by fifty basis points (0.5%) on borrowings outstanding during such period and an additional event of default was added to the credit facility that would be triggered if the sum of the percentages of accounts that were more than thirty days past due, accounts that were charged off, and the value of repossessed vehicles held as assets exceeds a specified monthly threshold. The Company negotiated this amendment due to greater than anticipated weakness in portfolio collections and subsequent charge-offs in October and November of 2016. The Company's continued portfolio weakness has been exacerbated by greater than anticipated difficulties in implementing a centralized collection model beginning October 1, 2016. Due to the difficulty of predicting future delinquencies and subsequent charge-offs, the Company views the execution of this amendment as a prudent step in order to better ensure the availability of its credit line during the six months ending June 30, 2017.