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Nicholas Financial Enters Into Arrangement Agreement With Prospect Capital Corporation

CLEARWATER, Fla., Dec. 18, 2013 (GLOBE NEWSWIRE) -- Nicholas Financial, Inc. (the "Company") (Nasdaq:NICK) announced today that it has signed an arrangement agreement dated December 17, 2013 (the "Arrangement Agreement") whereby the Company has agreed to sell all of its issued and outstanding Common shares to an indirect wholly-owned subsidiary of Prospect Capital Corporation ("Prospect"), pursuant to a plan of arrangement (the "Arrangement") under the Business Corporations Act (British Columbia).

Prospect (Nasdaq:PSEC) ( www.prospectstreet.com) is a closed-end investment company that lends to and invests in private and public middle market businesses. Prospect's investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.

Prospect has elected to be treated as a business development company under the Investment Company Act of 1940 ("1940 Act"). Prospect is required to comply with a series of regulatory requirements under the 1940 Act as well as applicable NASDAQ, federal and state rules and regulations. Prospect has elected to be treated as a regulated investment company under the Internal Revenue Code of 1986. Failure to comply with any of the laws and regulations that apply to Prospect could have an adverse effect on Prospect and its shareholders.

Pursuant to the terms of the Arrangement, the Company's shareholders are to receive (subject to applicable dissenter's rights under the Business Corporation Act (British Columbia)), in exchange for each Common share of the Company held immediately prior to the effective time of the Arrangement, the number of shares of common stock of Prospect (or fraction thereof) determined by dividing US $16.00 by the volume-weighted average price, or VWAP, of Prospect common stock for the twenty (20) trading days prior to and ending on the trading day immediately preceding the effective time of the Arrangement. In addition, each and every option to acquire Common shares of the Company outstanding immediately prior to the effective time of the Arrangement will be cancelled or transferred by the holder thereof to the Company (subject to applicable dissenters' rights under the Business Corporations Act (British Columbia)) in exchange for a cash amount equal to the amount by which (i) the product obtained by multiplying (x) the number of Common shares of the Company underlying each option by (y) $16.00 exceeds (ii) the aggregate exercise price payable under such option.

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