-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EEGSLHWT2lbzQO8G4E5io1xFGcHNOVpul8KoB9qR7n4t1A1DnBrx3X4jwBN1LZhZ guxiPgDPwUXYAFsWpizLbA== 0000895345-97-000132.txt : 19970430 0000895345-97-000132.hdr.sgml : 19970430 ACCESSION NUMBER: 0000895345-97-000132 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970429 SROS: NASD GROUP MEMBERS: BRIDGE STREET FUND 1996, L.P. GROUP MEMBERS: GOLDMAN SACHS GROUP LP GROUP MEMBERS: GOLDMAN, SACHS & CO. GROUP MEMBERS: GOLDMAN, SACHS & CO. OHG GROUP MEMBERS: GS ADVISORS II (CAYMAN), L.P. GROUP MEMBERS: GS ADVISORS, L.P. GROUP MEMBERS: GS CAPITAL PARTNERS II (GERMANY) CIVIL LAW PARTNERSHIP GROUP MEMBERS: GS CAPITAL PARTNERS II OFFSHORE, L.P. GROUP MEMBERS: GS CAPITAL PARTNERS II, L.P. GROUP MEMBERS: STONE STREET EMPIRE CORP. GROUP MEMBERS: STONE STREET FUND 1996, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RECOVERY ENGINEERING INC CENTRAL INDEX KEY: 0000818203 STANDARD INDUSTRIAL CLASSIFICATION: REFRIGERATION & SERVICE INDUSTRY MACHINERY [3580] IRS NUMBER: 411557115 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-44835 FILM NUMBER: 97590183 BUSINESS ADDRESS: STREET 1: 2229 EDGEWOOD AVE S CITY: MINNEAPOLIS STATE: MN ZIP: 55426 BUSINESS PHONE: 6125411313 MAIL ADDRESS: STREET 1: 2229 EDGEWOOD AVENUE SOUTH CITY: MINNEAPOLIS STATE: MN ZIP: 55426 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOLDMAN SACHS GROUP LP CENTRAL INDEX KEY: 0000904571 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133501777 STATE OF INCORPORATION: NY FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 2129021000 MAIL ADDRESS: STREET 1: 85 BROAD STREET CITY: NEW YORK STATE: NY ZIP: 10004 SC 13D/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 2) RECOVERY ENGINEERING, INC. --------------------------------------------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $0.01 PER SHARE --------------------------------------------------------------- (Title of Class of Securities) 756269106 ----------------------------- (CUSIP NUMBER) DAVID J. GREENWALD, ESQ. GOLDMAN, SACHS & CO. 85 BROAD STREET NEW YORK, NY 10004 (212) 902-1000 --------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) APRIL 24, 1997 ----------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. SCHEDULE 13D CUSIP No. 756269106 Page 2 of 17 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS Goldman, Sachs & Co. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [X] 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York NUMBER OF 7 SOLE VOTING POWER 0 SHARES 8 SHARED VOTING POWER BENEFICIALLY 1,010,101 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 1,010,101 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,010,101 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.9% 14 TYPE OF REPORTING PERSON* BD-PN-IA SCHEDULE 13D CUSIP No. 756269106 Page 3 of 17 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS The Goldman Sachs Group, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF 7 SOLE VOTING POWER 1,000 SHARES 8 SHARED VOTING POWER BENEFICIALLY 1,010,101 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 1,000 REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 1,010,101 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,011,101 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.9% 14 TYPE OF REPORTING PERSON* HC-PN SCHEDULE 13D CUSIP No. 756269106 Page 4 of 17 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS GS Capital Partners II, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF 7 SOLE VOTING POWER 0 SHARES 8 SHARED VOTING POWER BENEFICIALLY 633,767 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 633,767 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 633,767 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.8% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 756269106 Page 5 of 17 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS GS Capital Partners II Offshore, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands NUMBER OF 7 SOLE VOTING POWER 0 SHARES 8 SHARED VOTING POWER BENEFICIALLY 251,948 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 251,948 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 251,948 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.5% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 756269106 Page 6 of 17 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS GS Capital Partners II (Germany) Civil Law Partnership (with limitation of liability) 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Germany NUMBER OF 7 SOLE VOTING POWER 0 SHARES 8 SHARED VOTING POWER BENEFICIALLY 23,376 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 23,376 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 23,376 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.5% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 756269106 Page 7 of 17 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS GS Advisors, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF 7 SOLE VOTING POWER 0 SHARES 8 SHARED VOTING POWER BENEFICIALLY 633,767 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 633,767 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 633,767 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.8% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 756269106 Page 8 of 17 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS GS Advisors II (Cayman), L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands NUMBER OF 7 SOLE VOTING POWER 0 SHARES 8 SHARED VOTING POWER BENEFICIALLY 251,948 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 251,948 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 251,948 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.5% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 756269106 Page 9 of 17 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS Goldman, Sachs & Co. oHG 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Germany NUMBER OF 7 SOLE VOTING POWER 0 SHARES 8 SHARED VOTING POWER BENEFICIALLY 23,376 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 23,376 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 23,376 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.5% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 756269106 Page 10 of 17 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS Stone Street Fund 1996, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF 7 SOLE VOTING POWER 0 SHARES 8 SHARED VOTING POWER BENEFICIALLY 60,191 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 60,191 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 60,191 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.4% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 756269106 Page 11 of 17 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS Bridge Street Fund 1996, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF 7 SOLE VOTING POWER 0 SHARES 8 SHARED VOTING POWER BENEFICIALLY 40,819 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 40,819 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 40,819 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.9% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 756269106 Page 12 of 17 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS Stone Street Empire Corp. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF 7 SOLE VOTING POWER 0 SHARES 8 SHARED VOTING POWER BENEFICIALLY 101,010 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 101,010 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 101,010 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.3% 14 TYPE OF REPORTING PERSON* CO This Amendment No. 2 (this "Amendment No. 2") is being filed by GS Capital Partners II, L.P. ("GSCP"), GS Capital Partners II Offshore, L.P. ("GSCP II Offshore"), GS Capital Partners II (Germany) Civil Law Partnership (with limitation of liability) ("GSCP II Germany," and together with GSCP and GSCP II Offshore, "GSCP II"), GS Advisors, L.P. ("GS Advisors"), GS Advisors II (Cayman), L.P. ("GS Advisors Cayman"), Goldman, Sachs & Co. oHG ("GS oHG"), Stone Street Fund 1996, L.P. ("Stone Street"), Bridge Street Fund 1996, L.P. ("Bridge Street," and together with Stone Street, the "Stone/Bridge Funds"), Stone Street Empire Corp. ("Empire Corp."), Goldman, Sachs & Co. ("Goldman Sachs") and The Goldman Sachs Group, L.P. ("GS Group," and together with GSCP, GSCP II Offshore, GSCP II Germany, GS Advisors, GS Advisors Cayman, GS oHG, Stone Street, Bridge Street, Empire Corp. and Goldman Sachs, the "Filing Persons")(FN1) to amend and supplement the Statement on Schedule 13D (the "Original Schedule 13D") filed by the Filing Persons on July 29, 1996, and Amendment No. 1 to the Original Schedule 13D (the "Amendment No. 1"), filed by the Filing Persons on April 9, 1997, in respect of the Common Stock, par value $0.01 per share (the "Common Stock"), of Recovery Engineering, Inc., a Minnesota corporation (the "Company"). Capitalized terms used but not defined herein shall have the respective meanings given to them in Amendment No. 1, or if not defined therein, in the Original Schedule 13D. ITEM 4. PURPOSE OF TRANSACTION The Limited Partnerships and the Company have clarified the Amendment to the Securities Purchase Agreement described in Amendment No. 1, which clarifications are memorialized in a letter (a copy of which is attached as Exhibit 1). To reflect the foregoing, Item 4 of the Original Schedule 13D, as amended by Amendment No. 1, is hereby further amended by adding the following sentence after the first sentence of the second paragraph thereof: If applicable, these adjustments shall be made (i) for conversions occurring on or after July 19, 1999, and (ii) for conversions following a Change in Control (as defined in the Purchase Agreement) or in connection with a tender offer for the Company's Common Stock. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 1: Letter, dated April 24, 1997, from the Limited Partnerships to the Company. - --------------- (FN1) Neither the Original Schedule 13D, this Amendment No. 1 nor anything contained therein or herein shall be construed as an admission that any Filing Person constitutes a "person" for any purpose other than Section 13(d) of the Securities Exchange Act of 1934, as amended. SIGNATURE After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: April 29, 1997 GS CAPITAL PARTNERS II, L.P. By: GS Advisors, L.P., its general partner By: GS Advisors, Inc., its general partner By: /s/ Carla H. Skodinski --------------------------- Name: Carla H. Skodinski Title: Vice President GS ADVISORS, L.P. By: GS Advisors, Inc., its general partner By: /s/ Carla H. Skodinski --------------------------- Name: Carla H. Skodinski 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/ Carla H. Skodinski --------------------------- Name: Carla H. Skodinski Title: Vice President GS ADVISORS II (CAYMAN), L.P. By: GS Advisors II, Inc., its general partner By: /s/ Carla H. Skodinski --------------------------- Name: Carla H. Skodinski Title: Vice President GS CAPITAL PARTNERS II (Germany) CIVIL LAW PARTNERSHIP (with limitation of liability) By: Goldman, Sachs & Co. oHG, its managing partner By: /s/ Carla H. Skodinski --------------------------- Name: Carla H. Skodinski Title: Attorney-in-fact GOLDMAN, SACHS & CO. oHG By: /s/ Carla H. Skodinski --------------------------- Name: Carla H. Skodinski Title: Attorney-in-fact GOLDMAN, SACHS & CO. By: /s/ Barry S. Volpert --------------------------- Name: Barry S. Volpert Title: Managing Director THE GOLDMAN SACHS GROUP, L.P. By: The Goldman Sachs Corporation, its general partner By: /s/ Barry S. Volpert --------------------------- Name: Barry S. Volpert Title: Executive Vice President STONE STREET FUND 1996, L.P. By: Stone Street Empire Corp., its general partner By: /s/ Carla H. Skodinski --------------------------- Name: Carla H. Skodinski Title: Vice President BRIDGE STREET FUND 1996, L.P. By: Stone Street Empire Corp., its managing general partner By: /s/ Carla H. Skodinski --------------------------- Name: Carla H. Skodinski Title: Vice President STONE STREET EMPIRE CORP. By: /s/ Carla H. Skodinski --------------------------- Name: Carla H. Skodinski Title: Vice President INDEX OF EXHIBITS Exhibit 1: Letter, dated April 24, 1997, from the Limited Partnerships to the Company. EX-1 2 April 24, 1997 Recovery Engineering, Inc. 2229 Edgewood Avenue South Minneapolis, Minnesota 55426 Attention: Brian F. Sullivan Dear Mr. Sullivan: 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., Goldman, Sachs & Co. Verwaltungs GmbH, Stone Street Fund 1996, 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/ Carla H. Skodinski -------------------------------- Name: Carla H. Skodinski 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/ Carla H. Skodinski -------------------------------- Name: Carla H. Skodinski Title: Vice President GOLDMAN, SACHS & CO. VERWALTUNGS GmbH By: /s/ Joseph Gleberman -------------------------------- Name: Joseph Gleberman Title: Managing Director By: /s/ Carla H. Skodinski -------------------------------- Name: Carla H. Skodinski Title: Registered Agent STONE STREET FUND 1996, L.P. By: Stone Street Empire Corp., its general partner By: /s/ Carla H. Skodinski -------------------------------- Name: Carla H. Skodinski Title: Vice President BRIDGE STREET FUND 1996, L.P. By: Stone Street Empire Corp., its managing general partner By: /s/ Carla H. Skodinski -------------------------------- Name: Carla H. Skodinski Title: Vice President Agreed to and accepted as of the date first above written RECOVERY ENGINEERING, INC. By: /s/ Brian F. Sullivan -------------------------------- Name: Brian F. Sullivan Title: President and CEO cc: Eric O. Madson (Winthrop & Weinstine) -----END PRIVACY-ENHANCED MESSAGE-----