exv10w17







EXHIBIT 10.17


REVOLVING LINE OF CREDIT NOTE




			
	 	 	 
	$10,000,000.00
	 	Portland, Oregon

May 28, 2009






     FOR VALUE RECEIVED, the undersigned CORVEL CORPORATION (“Borrower”) promises to pay to the
order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at 1300 S.W. Fifth Avenue,
Portland, Oregon, 97201, or at such other place as the holder hereof may designate, in lawful money
of the United States of America and in immediately available funds, the principal sum of Ten
Million Dollars ($10,000,000.00), or so much thereof as may be advanced and be outstanding, with
interest thereon, to be computed on each advance from the date of its disbursement as set forth
herein.



DEFINITIONS:




     As used herein, the following terms shall have the meanings set forth after each, and any
other term defined in this Note shall have the meaning set forth at the place defined:



     (a) “Business Day” means any day except a Saturday, Sunday or any other day on which
commercial banks in Oregon are authorized or required by law to close.



     (b) “Daily One Month LIBOR” means for any day, the rate of interest equal to LIBOR then in
effect for delivery for a one (1) month period.



     (c) “Fixed Rate Term” means a period commencing on a Business Day and continuing for 3 months,
as designated by Borrower, during which all or a portion of the outstanding principal balance of
this Note bears interest determined in relation to LIBOR; provided however, that no Fixed Rate Term
may be selected for a principal amount less than One Hundred Thousand Dollars ($100,000.00); and
provided further, that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof.
If any Fixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term
shall be extended to the next succeeding Business Day.



     (d) “LIBOR” means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8
of 1%) and determined pursuant to the following formula:



	 	 	 	 	 
	LIBOR =

	 	Base LIBOR
 

100% — LIBOR Reserve Percentage
	 	 






     (i) “Base LIBOR” means the rate per annum for United States dollar deposits quoted by Bank (A)
for the purpose of calculating effective rates of interest for loans making reference to LIBOR, as
the Inter-Bank Market Offered Rate, with the understanding that such rate is quoted by Bank for the
purpose of calculating effective rates of interest for loans making reference thereto, on the first
day of a Fixed Rate Term for delivery of funds on said date for a period of time approximately
equal to the number of days in such Fixed Rate Term and in an amount approximately equal to the
principal amount to which such Fixed Rate Term applies, or (B) for the purpose of calculating
effective rates of interest for loans making reference to the Daily One Month LIBOR Rate, as the
Inter-Bank Market Offered Rate in effect from time to time for delivery of funds for one (1) month
in amounts approximately equal to the principal amount








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of such loans. Borrower understands and agrees that Bank may base its quotation of the Inter-Bank
Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Bank in
its discretion deems appropriate including, but not limited to, the rate offered for U.S. dollar
deposits on the London Inter-Bank Market.




     (ii) “LIBOR Reserve Percentage” means the reserve percentage prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities” (as
defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for expected
changes in such reserve percentage during the applicable term of this Note.



INTEREST:




     (a) Interest. The outstanding principal balance of this Note shall bear interest
(computed on the basis of a 360-day year, actual days elapsed) either (i) at a fluctuating rate per
annum determined by Bank to be one and one half percent (1.50%) above the Daily One Month LIBOR
Rate in effect from time to time, or (ii) at a fixed rate per annum determined by Bank to be one
and one half percent (1.50%) above LIBOR in effect on the first day of the applicable Fixed Rate
Term. When interest is determined in relation to the Daily One Month LIBOR Rate, each change in
the interest rate shall become effective each Business Day that the Bank determines that the Daily
One Month LIBOR Rate has changed. Bank is hereby authorized to note the date, principal amount and
interest rate applicable thereto and any payments made thereon on Bank’s books and records (either
manually or by electronic entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted.



     (b) Selection of Interest Rate Options. At any time any portion of this Note bears
interest determined in relation to LIBOR for a Fixed Rate Term, it may be continued by Borrower at
the end of the Fixed Rate Term applicable thereto so that all or a portion thereof bears interest
determined in relation to the Daily One Month LIBOR Rate or to LIBOR for a new Fixed Rate Term
designated by Borrower. At any time any portion of this Note bears interest determined in relation
to the Daily One Month LIBOR Rate, Borrower may at any time convert all or a portion thereof so
that it bears interest determined in relation to LIBOR for a Fixed Rate Term designated by
Borrower. At such time as Borrower requests an advance hereunder or wishes to select an interest
rate determined in relation to the Daily One Month LIBOR Rate or a Fixed Rate Term for all or a
portion of the outstanding principal balance hereof, and at the end of each Fixed Rate Term,
Borrower shall give Bank notice specifying: (i) the interest rate option selected by Borrower; (ii)
the principal amount subject thereto; and (iii) for each LIBOR selection for a Fixed Rate Term, the
length of the applicable Fixed Rate Term. Any such notice may be given by telephone (or such other
electronic method as Bank may permit) so long as, with respect to each LIBOR selection for a Fixed
Rate Term, (A) if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than three (3) Business Days after such notice is given, and (B) such notice is given to Bank
prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during any Business
Day if Bank, at its sole option but without obligation to do so, accepts Borrower’s notice and
quotes a fixed rate to Borrower. If Borrower does not immediately accept a fixed rate when quoted
by Bank, the quoted rate shall expire and any subsequent LIBOR request from Borrower shall be
subject to a redetermination by Bank of the applicable fixed rate. If no specific designation of
interest is made at the time any advance is requested hereunder or at the end of any Fixed Rate
Term, Borrower shall be deemed to have made a Daily One Month LIBOR Rate interest selection for
such advance or the principal amount to which such Fixed Rate Term applied.



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     (c) Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand,
in addition to any other amounts due or to become due hereunder, any and all (i) withholdings,
interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed
by any domestic or foreign governmental authority and related in any manner to LIBOR, and (ii)
future, supplemental, emergency or other changes in the LIBOR Reserve Percentage, assessment rates
imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by
any domestic or foreign governmental authority or resulting from compliance by Bank with any
request or directive (whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are not included in
the calculation of LIBOR. In determining which of the foregoing are attributable to any LIBOR
option available to Borrower hereunder, any reasonable allocation made by Bank among its operations
shall be conclusive and binding upon Borrower.



     (d) Payment of Interest. Interest accrued on this Note shall be payable on the 1st
day of each month, commencing June 1, 2009.



     (e) Default Interest. From and after the maturity date of this Note, or such earlier
date as all principal owing hereunder becomes due and payable by acceleration or otherwise, the
outstanding principal balance of this Note shall bear interest until paid in full at an increased
rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to four percent
(4%) above the rate of interest from time to time applicable to this Note.



BORROWING AND REPAYMENT:




     (a) Borrowing and Repayment. Borrower may from time to time during the term of this
Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of
the limitations, terms and conditions of this Note and of any document executed in connection with
or governing this Note; provided however, that the total outstanding borrowings under this Note
shall not at any time exceed the principal amount stated above. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by the holder hereof less
the amount of principal payments made hereon by or for Borrower, which balance may be endorsed
hereon from time to time by the holder. The outstanding principal balance of this Note shall be
due and payable in full on May 1, 2010.



     (b) Advances. Advances hereunder, to the total amount of the principal sum stated
above, may be made by the holder at the oral or written request of (i) Daniel J. Starck or Gordon
Clemons, Sr. or Richard J. Schweppe or Scott McCloud, or any one acting alone, who are authorized
to request advances and direct the disposition of any advances until written notice of the
revocation of such authority is received by the holder at the office designated above, or (ii) any
person, with respect to advances deposited to the credit of any deposit account of Borrower, which
advances, when so deposited, shall be conclusively presumed to have been made to or for the benefit
of Borrower regardless of the fact that persons other than those authorized to request advances may
have authority to draw against such account. The holder shall have no obligation to determine
whether any person requesting an advance is or has been authorized by Borrower.



     (c) Application of Payments. Each payment made on this Note shall be credited first,
to any interest then due and second, to the outstanding principal balance hereof. All



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payments credited to principal shall be applied first, to the outstanding principal balance of this
Note which bears interest determined in relation to the Daily One Month LIBOR Rate, if any, and
second, to the outstanding principal balance of this Note which bears interest determined in
relation to LIBOR, with such payments applied to the oldest Fixed Rate Term first.



PREPAYMENT:




     (a) Daily One Month LIBOR Rate. Borrower may prepay principal on any portion of this
Note which bears interest determined in relation to the Daily One Month LIBOR Rate at any time, in
any amount and without penalty.



     (b) LIBOR. Borrower may prepay principal on any portion of this Note which bears
interest determined in relation to LIBOR at any time and in the minimum amount of One Hundred
Thousand Dollars ($100,000.00); provided however, that if the outstanding principal balance of such
portion of this Note is less than said amount, the minimum prepayment amount shall be the entire
outstanding principal balance thereof. In consideration of Bank providing this prepayment option
to Borrower, or if any such portion of this Note shall become due and payable at any time prior to
the last day of the Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower shall
pay to Bank immediately upon demand a fee which is the sum of the discounted monthly differences
for each month from the month of prepayment through the month in which such Fixed Rate Term
matures, calculated as follows for each such month:




	 	(i)	 	Determine the amount of interest which would have accrued each
month on the amount prepaid at the interest rate applicable to such amount had it
remained outstanding until the last day of the Fixed Rate Term applicable thereto.
	 
	 	(ii)	 	Subtract from the amount determined in (i) above the amount of
interest which would have accrued for the same month on the amount prepaid for the
remaining term of such Fixed Rate Term at LIBOR in effect on the date of prepayment
for new loans made for such term and in a principal amount equal to the amount
prepaid.
	 
	 	(iii)	 	If the result obtained in (ii) for any month is greater than zero,
discount that difference by LIBOR used in (ii) above.




Borrower acknowledges that prepayment of such amount may result in Bank incurring additional costs,
expenses and/or liabilities, and that it is difficult to ascertain the full extent of such costs,
expenses and/or liabilities. Borrower, therefore, agrees to pay the above-described prepayment fee
and agrees that said amount represents a reasonable estimate of the prepayment costs, expenses
and/or liabilities of Bank. If Borrower fails to pay any prepayment fee when due, the amount of
such prepayment fee shall thereafter bear interest until paid at a rate per annum two percent
(2.00%) above the Daily One Month LIBOR Rate in effect from time to time (computed on the basis of
a 360-day year, actual days elapsed).




EVENTS OF DEFAULT:




     This Note is made pursuant to and is subject to the terms and conditions of that certain
Credit Agreement between Borrower and Bank dated as of May 1, 2009 as amended from time



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to time (the “Credit Agreement”). Any default in the payment or performance of any obligation
under this Note, or any defined event of default under the Credit Agreement, shall constitute an
“Event of Default” under this Note.



MISCELLANEOUS:




     (a) Remedies. Upon the occurrence of any Event of Default, the holder of this Note,
at the holder’s option, may declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice of nonperformance, notice of
protest, protest or notice of dishonor, all of which are expressly waived by Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall immediately cease
and terminate. Borrower shall pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable attorneys’ fees (to include
outside counsel fees and all allocated costs of the holder’s in-house counsel), expended or
incurred by the holder in connection with the enforcement of the holder’s rights and/or the
collection of any amounts which become due to the holder under this Note, and the prosecution or
defense of any action in any way related to this Note, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any bankruptcy
proceeding (including without limitation, any adversary proceeding, contested matter or motion
brought by Bank or any other person) relating to Borrower or any other person or entity.



     (b) Obligations Joint and Several. Should more than one person or entity sign this
Note as a Borrower, the obligations of each such Borrower shall be joint and several.



     (c) Governing Law. This Note shall be governed by and construed in accordance with
the laws of the State of Oregon.


UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK CONCERNING LOANS AND
OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY
BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE
ENFORCEABLE.




     IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above.



CORVEL CORPORATION




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 	 	Daniel J. Starck, President and Chief Executive Officer







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