THIS CREDIT
AGREEMENT (this “Agreement”) is entered into as of
May 28, 2009, by and between CORVEL CORPORATION, a Delaware
corporation (“Borrower”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION (“Bank”).
Borrower has
requested that Bank extend or continue credit to Borrower as
described below, and Bank has agreed to provide such credit to
Borrower on the terms and conditions contained herein.
NOW, THEREFORE,
for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Bank and Borrower hereby agree as
follows:
SECTION 1.1. LINE
OF CREDIT.
(a) Line
of Credit . Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from
time to time up to and including May 27, 2010, not to exceed
at any time the aggregate principal amount of Ten Million Dollars
($10,000,000.00) (“Line of Credit”), the proceeds of
which shall be used to finance Borrower’s working capital
requirements. Borrower’s obligation to repay advances under
the Line of Credit shall be evidenced by a promissory note dated as
of May 28, 2009 (“Line of Credit Note”), all terms
of which are incorporated herein by this reference.
(b)
Borrowing and Repayment . Borrower may from time to time
during the term of the Line of Credit borrow, partially or wholly
repay its outstanding borrowings, and reborrow, subject to all of
the limitations, terms and conditions contained herein or in the
Line of Credit Note; provided however, that the total outstanding
borrowings under the Line of Credit shall not at any time exceed
the maximum principal amount available thereunder, as set forth
above.
SECTION 1.2.
STANDBY LETTERS OF CREDIT.
(a)
Standby Letters of Credit . Subject to the terms and
conditions of this Agreement, Bank hereby agrees to issue or cause
an affiliate to issue (i) a standby letter of credit for the
account of Borrower and for the benefit of Montana State Fund for
financing in the event of non-payment (the “Standby Letter of
Credit A”) in the principal amount of One Million Five
Hundred Thousand Dollars ($1,500,000.00) and (ii) a standby
letter of credit for the account of Borrower and for the benefit of
Travelers Insurance for financing in the event of non-payment (the
“Standby Letter of Credit B”) in the principal amount
of Four Million Seven Hundred Ninety Five Thousand Dollars
($4,795,000.00). The form and substance of Standby Letter of Credit
A and Standby Letter of Credit B shall be subject to approval by
Bank, in its sole discretion. Standby Letter of Credit A shall have
an expiration date of December 31, 2009, and Standby Letter of
Credit B shall have an expiration date of May 26, 2010 with
each such letter of credit to be subject to the additional terms of
the Letter of Credit agreement, application and any related
documents required by Bank in connection with the issuance thereof
(the “Letter of Credit Agreement”). Neither the
issuance nor existence of Standby Letter of Credit A or
Standby Letter of Credit B (with Standby Letter of Credit A and
Standby Letter of Credit B each being
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