EXHIBIT 5
May 4, 2001
Private Equity Holding AG
Xxxxxxxxxxxxxxxx 00, XX-0000
Xxxxxx, Xxxxxxxxxxx
Attn: Dr. Petra Salesny
Dear Dr. Salesny:
Reference is hereby made to the Agreement of Limited Partnership (the
"Partnership Agreement") of Trefoil Euro Fund, L.P. (the "Partnership"),
dated as of April 8, 1999, by and among Shamrock Euro, L.L.C., as the
general partner (the "General Partner"), Private Equity Holding AG, as a
limited partner ("Private Equity"), and Shamrock Holdings, Inc., as a
limited partner ("Shamrock Holdings"). Terms used herein and not otherwise
defined shall have the meaning assigned to them in the Partnership
Agreement.
Since the formation of the Partnership, certain affiliates of the
General Partner and Shamrock Holdings (collectively, the "Shamrock
Entities") have made investments in various companies in Israel and Europe,
as described below, which the parties to the Partnership Agreement desire
to be held by the Partnership. Pending determination of a structure that
best meets the requirements of all the parties (the "Structure"), the
Partnership has not directly made these or any other investments, and none
of such parties have made Capital Contributions directly to the
Partnership. Instead of making Capital Contributions in connection with
these investments, as it would have if the investments had been made by the
Partnership, Private Equity has made certain payments to the Shamrock
Entities in the aggregate amount of approximately US$***, representing
one-half of the investment in these companies by the Shamrock Entities
(including one-half of certain expenses incurred in connection with these
investments and, in certain cases, an interest factor), US$***,
representing the management fee contributions and US$***, representing
reimbursement for organizational costs incurred that would have been
payable under the Partnership Agreement by Private Equity.
-----------------------
*** MATERIAL OMITTED AND FILED SEPARATELY WITH SEC PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATEMENT
This letter is to confirm that the Shamrock Entities have purchased
the following interests in the following entities (together, the
"Investments") with the amounts funded by Private Equity and the Shamrock
Entities:
TOTAL COST TO PEH
ENTITY INTEREST AND SHAMROCK***
------------------------- ---------------------------------- ----------------
*** *** ***
------------------------- ---------------------------------- ----------------
*** *** ***
------------------------- ---------------------------------- ----------------
*** *** ***
------------------------- ---------------------------------- ----------------
Paradigm Geophysical Ltd. 1,649,943 Ordinary Shares ***
------------------------- ---------------------------------- ----------------
Gilat Communications Ltd. $25,000,000 in principal amount ***
of 7% Convertible Notes
------------------------- ---------------------------------- ----------------
*** *** ***
------------------------- ---------------------------------- ----------------
---------------------------------
*** MATERIAL OMITTED AND FILED SEPARATELY WITH SEC PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATEMENT
Pending the determination of the Structure, we hereby confirm that the
Investments are being held by the Shamrock Entities in part for the benefit
of Private Equity in accordance with its interest in the Partnership. We
hereby confirm that the Shamrock Entities will transfer the legal ownership
of the Investments to the Partnership promptly upon the determination of
the Structure (including the manner of transfer of these Investments to the
Partnership).
We further confirm that any proceeds or distributions in kind received
by the Shamrock Entities in respect of the Investments prior to the
determination of the Structure shall be held by the Shamrock Entities in
part for the account of Private Equity in accordance with its interest in
the Partnership. Thus, any such amounts, net of any taxes borne by any of
the Shamrock Entities, or any required withholding, as a result of the
Shamrock Entities' ownership of them, will be allocated and distributed to
the Shamrock Entities, on the one hand, and PEH, on the other hand, in a
manner intended to duplicate, to the extent possible, the economics
provided for in the distribution section of the Partnership Agreement as if
the Investments had been made directly by the Partnership. For purposes of
determining the distributions that would have been made under the
Partnership Agreement and allocating these amounts to PEH and the Shamrock
Entities, the Shamrock Entities will be treated as holding collectively
both the ***% general partners' interest of the General Partner and the ***%
limited partners' interest of Shamrock Holdings.
***
-----------------------
*** MATERIAL OMITTED AND FILED SEPARATELY WITH SEC PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATEMENT
Promptly following the execution hereof, the Partnership Agreement
will be amended to change the currency in which transactions are
denominated from euros to United States dollars, to change the capital
commitments to appropriate dollar-denominated amounts and otherwise as the
parties may agree.
Sincerely,
Shamrock Euro, L.L.C.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
Agreed:
Private Equity Holding AG
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Deputy Chief Executive Officer
cc: Xxxxxx X. Xxxxxxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
