EXHIBIT 99.5
STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of January 4, 2005 (this
"Agreement"), between CIT GROUP INC., a Delaware corporation ("Parent") and
FABRIZIO BALESTRI (the "Stockholder").
WHEREAS, as of the date hereof, the Stockholder owns of record and has the
power to vote the number of shares of common stock, par value $0.001 per share
("Company Common Stock"), of Education Lending Group, Inc., a Delaware
corporation (the "Company"), as set forth on Exhibit A attached hereto ("Exhibit
A") (all such shares of Company Common Stock and any shares of Company Common
Stock of which ownership of record or the power to vote is hereafter acquired by
the Stockholder prior to the termination of this Agreement being referred to
herein as the "Shares"); and
WHEREAS, Parent, a wholly owned subsidiary of Parent ("Merger Sub") and
the Company propose to enter into, simultaneously herewith, an Agreement and
Plan of Merger (the "Merger Agreement"; terms used but not defined in this
Agreement shall have the meanings ascribed to them in the Merger Agreement), a
draft of which has been made available to the Stockholder, which provides, upon
the terms and subject to the conditions thereof, for the merger of Merger Sub
with and into the Company (the "Merger");
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein and in the Merger Agreement, and
intending to be legally bound hereby, Parent and the Stockholder hereby agree as
follows:
1. Tender of Shares. Promptly following the commencement of the Offer, the
Stockholder hereby agrees that the Stockholder (a) shall tender, or cause to be
tendered, in the Offer, as promptly as practicable but in any event within three
business days of the date of the commencement of the Offer, all of his Shares
pursuant to the terms of the Offer and (b) shall not withdraw, or cause to be
withdrawn, such Shares.
2. Grant of Proxy. The Stockholder, by this Agreement, with respect to his
Shares, hereby grants an irrevocable proxy to Parent (and agrees to execute such
documents or certificates evidencing such proxy as Parent may reasonably
request) to vote, at any meeting of the stockholders of the Company, and in any
action by written consent of the stockholders of the Company, all of the
Stockholder's Shares (i) in favor of the approval and adoption of the Merger
Agreement and approval of the Merger and all other transactions contemplated by
the Merger Agreement and this Agreement, (ii) against any Company Acquisition
Proposal, (iii) against any action, agreement or transaction (other than the
Merger Agreement or the transactions contemplated thereby) or proposal that
could result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement or that
could result in any of the conditions to the consummation of the Offer or the
Merger not being fulfilled, and (iv) in favor of any other matter necessary to
the consummation of the transactions contemplated by the Merger Agreement and
considered and voted upon by the stockholders of the Company. The Stockholder
further agrees to cause the Stockholder's Shares to be voted in accordance with
the foregoing. THIS PROXY IS IRREVOCABLE AND COUPLED WITH AN INTEREST.
3. Transfer of Shares. The Stockholder agrees that he shall not, directly
or indirectly, except as provided in this Agreement, (a) sell, assign, transfer
(including by operation of law), lien, pledge, dispose of or otherwise encumber
any of the Shares or otherwise agree to do any of the foregoing, (b) deposit any
Shares into a voting trust or enter into a voting agreement or arrangement or
grant any proxy or power of attorney with respect thereto, (c) enter into any
contract, option or other arrangement or undertaking with respect to the direct
or indirect acquisition or sale, assignment, transfer (including by operation of
law) or other disposition of any Shares or (d) take any action that would make
any representation or warranty of the Stockholder herein untrue or incorrect in
any material respect or have the effect of preventing or disabling the
Stockholder from performing his obligations hereunder.
4. No Solicitation of Transactions. The Stockholder will not, and will
direct and will cause his employees and agents not to, directly or indirectly,
(i) solicit, initiate, knowingly encourage, take any action to facilitate the
consummation of, or enter into agreements with any other Person with respect to,
any Company
Acquisition Proposal, (ii) participate in discussions or negotiations with any
Person with respect to a Company Acquisition Proposal, or (iii) in connection
with a Company Acquisition Proposal, disclose any nonpublic information relating
to the Company or any of its Subsidiaries to any Person. The Stockholder will
promptly notify Parent orally, and confirm such notification in writing within
24 hours of such notification, of any Company Acquisition Proposal or any
inquiries with respect thereto. Any such written notification will include the
identity of the Person making such inquiry or Company Acquisition Proposal and a
description of the material terms of the Company Acquisition Proposal (or the
nature of the inquiry) and will indicate whether the Company is providing or
intends to provide the Person making the Company Acquisition Proposal with
access to nonpublic information relating to the Company or any of its
Subsidiaries.
5. Disclosure. The Stockholder authorizes and agrees to permit Parent and
Merger Sub to publish and disclose in the Offer Documents and the Proxy
Statement and related filings under the securities laws the Stockholder's
identity and ownership of Shares and the nature of his commitments, arrangements
and understandings under this Agreement and any other information required by
Applicable Law.
6. Representations and Warranties of the Stockholder. The Stockholder
hereby severally represents and warrants to Parent as follows:
(a) The Stockholder has full legal right and capacity to execute and
deliver this Agreement, to perform his obligations hereunder and to consummate
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Stockholder and, assuming the due authorization, execution and
delivery by Parent, constitutes the legal, valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
The failure of the spouse, if any, of the Stockholder to be a party or signatory
to this Agreement shall not (a) prevent the Stockholder from performing the
Stockholder's obligations and consummating the transactions contemplated
hereunder or (b) prevent this Agreement from constituting the legal, valid and
binding obligation of the Stockholder, enforceable against the Stockholder in
accordance with its terms.
(b) The execution and delivery of this Agreement by the Stockholder do
not, and the performance of this Agreement by the Stockholder will not (A)
result in any breach of or constitute a default (or an event which, with notice
or lapse of time or both, would become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a Lien or other encumbrance on the Stockholder's Shares pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation or (B) violate any
Applicable Law.
(c) The Stockholder owns of record and beneficially and has good and
marketable title to, free and clear of any Lien, proxy, voting restriction,
limitation on disposition, adverse claim of ownership or use or encumbrance of
any kind, other than pursuant to this Agreement, and has the sole power to vote
and full right, power and authority to sell, transfer and deliver, the number of
Shares set forth on Exhibit A.
(d) The Stockholder has had access, prior to the execution of this
Agreement, to the information he felt he needed and desired in connection with
his evaluation of this Agreement and the Merger Agreement and the transactions
contemplated hereby and thereby and has had, prior to the execution of this
Agreement, the opportunity to ask questions of, and receive answers from, the
Company and legal counsel concerning the terms and conditions of the
transactions contemplated by this Agreement and the Merger Agreement and to
obtain additional information necessary to assess the transactions contemplated
hereby and thereby.
(e) None of the information relating to the Stockholder and his affiliates
provided by or on behalf of the Stockholder or his affiliates for inclusion in
the Schedule 14D-9 the Offer Documents, or the Proxy Statement will, at the
respective times the Schedule 14D-9, the Offer Documents, or the Proxy Statement
are filed with the SEC or are first published, sent or given to stockholders of
the Company, contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
7. Non-Solicitation. In consideration of the amounts that the Stockholder
will receive for his Shares, including the portion of such amount attributable
to the "goodwill" of the business of the Company, during the Restricted Period
(as defined below), the Stockholder shall not (a) solicit, divert or take away,
or attempt to
divert or take away, either directly or indirectly, any of EDLG's customers or
clients, members or patrons or any other person with whom the Stockholder knows
or has reason to know then has a business or prospective business relationship
with EDLG or (b) recruit or solicit any individual who is then an employee or
other service provided to EDLG or any individual who was an employee or service
provider to EDLG within the then most recent three-month period for employment
or retention with Executive or any person or entity other than the EDLG with
whom Executive is then associated. For purposes of clause (b) of the previous
sentence, "recruit or solicit" means directly or indirectly to initiate
correspondence, a telephone call, e-mail or other form of oral, written or
electronic communication or a personal meeting with respect to the retention of
such individual or to facilitate any of the foregoing by a third party. For
purposes of this Section 7 and Section 8, "EDLG" shall include the Company and
each direct or indirect Subsidiary thereof, and "Restricted Period" shall mean
the period beginning at the Effective Time and ending on the third anniversary
thereof.
8. Non-Competition. In consideration of the amounts that the Stockholder
will receive for his Shares, including the portion of such amount attributable
to the "goodwill" of the business of the Company, during the Restricted Period,
the Stockholder shall not, directly or indirectly, without the prior written
consent of the Parent, own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be connected as an officer,
employee, partner, stockholder, consultant or otherwise, in any business or
organization that directly or indirectly competes with the Company's Business
(as hereinafter defined), except that the Stockholder shall be permitted to make
a passive investment in the stock of a publicly traded company in which the
Stockholder does not, alone or in concert with another Person, have or acquire
beneficial ownership of more than two percent (2%) of the outstanding stock of
the entity. The "Business" shall mean student loan origination, servicing,
purchasing, selling, and securitization; providing or marketing student loan
products, services, or solutions to students, parents, schools, alumni
associations or similar groups; originating or purchasing guaranteed student
loans or consolidation loans; offering or purchasing alternative supplemental
loans guaranteed by third-party guarantors; selling originated loans to the
secondary market; earning revenue by interest income or otherwise on any of the
foregoing loans; offering consolidation loan products; or any other business
activity in which EDLG is engaged during the Restricted Period or any business
or activity materially related to any of the foregoing.
9. Termination. The obligations of the Stockholder under this Agreement
(other than the obligations under Sections 7 and 8 above) shall terminate upon
the earlier of (i) the termination of the Merger Agreement in accordance with
its terms, (ii) the Effective Time and (iii) December 31, 2005. Nothing in this
Section 9 shall relieve any party of liability for any breach of this Agreement.
10. Miscellaneous. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses; all notices, requests and other communications hereunder shall be in
writing (including facsimile) and shall be given to the respective parties at
their addresses as specified on the signature pages of this Agreement and shall
be effective upon receipt; if any term or other provision of this Agreement is
invalid, illegal or unenforceable, all other provisions of this Agreement shall
remain in full force and effect so long as the economic and legal substance of
the transactions contemplated hereby is not affected; this Agreement constitutes
the entire agreement among the parties with respect to the subject matter hereof
and supersedes all prior agreements, both written and oral, between the parties,
with respect to the subject matter hereof; this Agreement shall not be assigned,
except that Parent may assign all or any of its rights and obligations hereunder
to any affiliate of Parent; provided, however, that no such assignment shall
relieve Parent of its obligations hereunder if such assignee does not perform
such obligations; the provisions of this Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns;
neither this Agreement nor any provision hereof is intended to confer upon any
Person other than the parties any rights or remedies; the parties agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity; the interpretation, validity and enforceability of
this Agreement will be governed by the laws of the State of Delaware,
notwithstanding any conflict of law provision; this Agreement may be signed in
any number of counterparts, each of which will be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument;
this Agreement will become effective when each party has received counterparts
hereof signed by all of the other parties; any provision of this Agreement may
be amended or waived if such amendment or waiver is in writing and duly executed
and delivered, in the case of an amendment, by each of the parties or, in the
case of a waiver, by the party against whom the waiver is to be effective; no
failure or delay by any party in exercising any right, power or
privilege hereunder will operate as a waiver thereof, nor will any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege; the headings contained in this
Agreement are for reference purposes only and will not in any way affect the
meaning or interpretation of this Agreement; from time to time, at the request
of Parent, in the case of the Stockholder, or at the request of the Stockholder,
in the case of Parent, and without further consideration, each party shall
execute and deliver or cause to be executed and delivered such additional
documents and instruments and take all such further action as may be reasonably
necessary or desirable to consummate the transactions contemplated by this
Agreement; EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW ANY RIGHT HE MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11. IN WITNESS WHEREOF, the parties have executed, or caused to be
executed, this Agreement as of the date first written above.
CIT GROUP INC.
/s/ Chris Reilly
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Name: Chris Reilly
Title: Executive Vice President
STOCKHOLDER:
/s/ Fabrizio Balestri
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Name: FABRIZIO BALESTRI
Address: Suite 210
12760 High Bluff Drive
San Diego, CA 92130
EXHIBIT A
Number of Shares of Company
Common Stock Owned
Beneficially and of Record
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22,000