April 24, 1997
Recovery Engineering, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Dear Xx. Xxxxxxxx:
Reference is made to Amendment No. 1 (the "Amendment"),
dated as of March 31, 1997, to the Securities Purchase Agreement,
dated as of July 19, 1996 (the "Agreement"), between Recovery
Engineering, Inc., and GS Capital Partners II, L.P., GS Capital
Partners II Offshore, L.P., Xxxxxxx, Sachs & Co. Xxxxxxxxxxx
XxxX, Xxxxx Xxxxxx Xxxx 0000, L.P. and Bridge Street Fund 1996,
L.P. Capitalized terms not otherwise defined herein shall have
the respective meaning given to them in the Amendment or, if not
defined therein, in the Agreement.
This letter is to clarify our understanding regarding
Section 2.3 of the Amendment. It is the intention and the
understanding of the parties hereto that paragraph (j) of Section
9.6 of the Agreement shall be applicable to Subject Conversions
that occur on or after the third anniversary of the Closing Date,
and to Subject Conversions that occur following a Change in
Control regardless of when such Change in Control occurs. In the
case of Subject Conversions in which the shares received in the
conversion are to be tendered in a then pending tender offer,
paragraph (j) of Section 9.6 shall be applicable except that the
"Average Price" for purposes of such conversion shall be the
price per share offered to shareholders in the tender offer.
If the foregoing reflects your understanding of our
arrangement, please sign this letter and the enclosed copy and
return one of them to us, whereupon the foregoing shall be a
binding agreement between us.
GS CAPITAL PARTNERS II, L.P.
By: GS Advisors, L.P., its general
partner
By: GS Advisors, Inc., its general
partner
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
GS CAPITAL PARTNERS II OFFSHORE, L.P.
By: GS Advisors II (Cayman), L.P., its
general partner
By: GS Advisors II, Inc., its general
partner
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
XXXXXXX, XXXXX & CO. VERWALTUNGS GmbH
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Managing Director
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Registered Agent
STONE STREET FUND 1996, L.P.
By: Stone Street Empire Corp., its
general partner
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
XXXXXX XXXXXX XXXX 0000, X.X.
By: Stone Street Empire Corp., its
managing general partner
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
Agreed to and accepted
as of the date first above written
RECOVERY ENGINEERING, INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and CEO
cc: Xxxx X. Xxxxxx (Winthrop & Weinstine)
