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EXHIBIT 1.1
SDI ACQUISITION CORP.
$100,000,000
11 3/8% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
December 11, 1998
BT ALEX. XXXXX INCORPORATED
Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
PARIBAS CORPORATION
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
SDI Acquisition Corp., a Delaware corporation ("SDI Acquisition"),
hereby confirms its agreement with you (the "Initial Purchasers"), as set forth
below.
1. The Securities. Subject to the terms and conditions herein
contained, SDI Acquisition proposes to issue and sell to the Initial Purchasers
$100,000,000 aggregate principal amount of its 11 3/8% Senior Subordinated Notes
due 2008 (the "Notes").
The Notes are being sold in connection with the recapitalization
(the "Recapitalization") of Special Devices, Incorporated, a Delaware
corporation (the "Company"), pursuant to the Amended and Restated Agreement and
Plan of Merger dated as of June 19, 1998 by and between the Company and SDI
Acquisition (as amended through the date hereof and together with all ancillary
agreements entered into in connection therewith, the "Recapitalization
Agreement"). The Recapitalization Agreement provides for the merger (the
"Merger") of SDI Acquisition with and into the Company with the Company
surviving the Merger. The time of the consummation of the Recapitalization and
the Merger is referred to herein as the "Effective Time."
The Recapitalization will be financed with the proceeds of (i) a new
credit facility consisting of a revolving credit facility in the amount of $25.0
million and a $70.0 million senior term loan provided under a Credit Agreement,
dated as of the Closing Date (as defined in Section 3 below), among SDI
Acquisition, Bankers Trust Company, as lead arranger and administrative agent,
and the other lending institutions party thereto (the "Credit Agreement"); (ii)
the issuance of Notes; and (iii) an equity contribution of approximately $127.8
million in the aggregate consisting of (a) $74.0 million contributed by the New
Investor Group (as defined in the Final Memorandum) and (b) $53.8 million from
the Equity Rollover (as defined in the Final
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Memorandum) by the Continuing Shareholders (as defined in the Final Memorandum).
The Recapitalization and items (i), (ii) and (iii) above are sometimes
collectively referred to herein as the "Transactions" and the Recapitalization
Agreement and the Credit Agreement are sometimes collectively referred to herein
as the "Other Transaction Documents."
Immediately after the Effective Time, the Company and the Guarantor
(as defined below) will execute an assumption agreement (the "Assumption
Agreement"), substantially in the form attached hereto as Exhibit A, pursuant to
which (i) the Company, as survivor of the Merger, will assume all of the
obligations of SDI Acquisition under this Agreement, and Xxxx, Inc., a Delaware
corporation and a wholly owned subsidiary of the Company (the "Guarantor"), will
become a party to this Agreement and unconditionally guarantee the Notes (the
"Guarantee") on an unsecured, senior subordinated basis and (ii) the Company, as
the surviving corporation in the Merger, will assume all of the obligations of
SDI Acquisition under the Registration Rights Agreement by and among SDI
Acquisition and the Initial Purchasers, dated as of the Closing Date,
substantially in the form attached hereto as Exhibit B (the "Registration Rights
Agreement"), and Xxxx, Inc. will become a party to the Registration Rights
Agreement.
The Notes and the Guarantee are collectively referred to herein as
the "Securities." The Notes are to be issued under an indenture (the
"Indenture") to be dated as of December 15, 1998 by and between SDI Acquisition
and United States Trust Company of New York, a New York banking corporation, as
trustee (the "Trustee"). Immediately after the Effective Time, the Company, the
Guarantor and the Trustee will enter into a first supplemental indenture to the
Indenture (the "First Supplemental Indenture") providing for the express
assumption by the Company, as survivor of the Merger, of the covenants,
agreements and undertakings of SDI Acquisition in the Indenture and under the
Notes, and the guarantee of the Notes by the Guarantor. The Company and the
Guarantor will issue the Securities pursuant to the First Supplemental
Indenture. References to this Agreement as of and after the Effective Time will
refer to this Agreement together with the Assumption Agreement, references to
the Indenture as of and after the Effective Time will refer to the Indenture and
the First Supplemental Indenture, and references to the Registration Rights
Agreement as of and after the Effective Time will refer to the Registration
Rights Agreement together with the Assumption Agreement.
The Notes will be offered and sold to the Initial Purchasers (the
"Offering") without being registered under the Securities Act of 1933, as
amended (the "Act"), in reliance on exemptions therefrom.
In connection with the sale of the Securities, SDI Acquisition has
prepared a preliminary offering memorandum dated November 25, 1998 (the
"Preliminary Memorandum"), and a final offering memorandum dated December 11,
1998 (the "Final Memorandum"; the Preliminary Memorandum and the Final
Memorandum each herein being referred to as a "Memorandum") setting forth or
including a description of the terms of the Securities, the terms of the
offering of the Securities, a description of the Company and its Subsidiary (as
defined in Section 2(b) below) and any material developments relating to the
Company or its Subsidiary occurring after the date of the most recent historical
financial statements included therein.
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SDI Acquisition understands that the Initial Purchasers propose to
make an offering of the Securities only on the terms and in the manner set forth
in the Final Memorandum and Section 8 hereof as soon as the Initial Purchasers
deem advisable after this Agreement has been executed and delivered to persons
in the United States whom the Initial Purchasers reasonably believe to be
qualified institutional buyers ("Qualified Institutional Buyers" or "QIBs") as
defined in Rule 144A under the Act, as such rule may be amended from time to
time ("Rule 144A"), in transactions under Rule 144A and outside the United
States to certain persons in reliance on Regulation S under the Act ("Regulation
S").
The Initial Purchasers and their direct and indirect transferees of
the Securities will be entitled to the benefits of the Registration Rights
Agreement, pursuant to which SDI Acquisition will agree, among other things, to
file a registration statement (the "Registration Statement") with the Securities
and Exchange Commission (the "Commission") registering the Securities or the
Exchange Notes (as defined in the Registration Rights Agreement) and related
guarantees under the Act.
2. Representations and Warranties. SDI Acquisition and, as of the
Effective Time, the Company and the Guarantor, jointly and severally, represent
and warrant to and agree with the Initial Purchasers that:
(a) Neither the Final Memorandum nor any amendment or supplement
thereto as of the date thereof and at all times subsequent thereto up to
the Closing Date contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties
set forth in this Section 2(a) do not apply to statements or omissions
made in reliance upon and in conformity with information relating to the
Initial Purchasers furnished to the Company in writing by the Initial
Purchasers expressly for use in the Final Memorandum or any amendment or
supplement thereto.
(b) As of the Closing Date, the Company will have the authorized,
issued and outstanding capitalization set forth in the Final Memorandum;
as of the date hereof the only subsidiary of the Company is Xxxx, Inc.
(the "Subsidiary"); all of the outstanding shares of capital stock of the
Company and the Subsidiary have been, and as of the Closing Date will be,
duly authorized and validly issued, are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights; except
as set forth or referred to in the Final memorandum and except as provided
in the agreements listed in Schedule 2 attached hereto (the "Stockholders
Agreements") all of the outstanding shares of capital stock of the Company
and of the Subsidiary will be free and clear of all liens, encumbrances,
equities and claims or restrictions on transferability (other than those
imposed by the Act and the securities or "Blue Sky" laws of certain
jurisdictions) or voting; except as set forth or referred to in the Final
Memorandum, and except as provided in the Stockholders Agreements, there
are no (i) options, warrants or other rights to purchase, (ii) agreements
or other obligations to issue or (iii) other rights to convert any
obligation into, or exchange any securities for, shares of capital stock
of or ownership interests in the Company or the Subsidiary outstanding.
Except for the
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Subsidiary or as disclosed or referred to in the Final Memorandum, neither
the Company nor the Subsidiary own, directly or indirectly, any shares of
capital stock or any other equity or long-term debt securities or have any
equity interest in any firm, partnership, joint venture or other entity.
(c) Each of SDI Acquisition, the Company and the Subsidiary is duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to
own its properties and conduct its business as now conducted and as
described in the Final Memorandum; each of SDI Acquisition, the Company
and the Subsidiary is duly qualified to do business as a foreign
corporation in all other jurisdictions where the ownership or leasing of
its properties or the conduct of its business requires such qualification,
except where the failure to be so qualified would not, individually or in
the aggregate, be reasonably expected to have a material adverse effect on
the general affairs, management, business, condition (financial or
otherwise) or results of operations of the Company and the Subsidiary,
taken as a whole (any such event, a "Material Adverse Effect").
(d) SDI Acquisition has and immediately after the Effective Time,
the Company will have all requisite corporate power and authority to
execute, deliver and perform its obligations under the Notes, the Exchange
Notes and the Private Exchange Notes (as defined in the Registration
Rights Agreement). The Notes, when issued, will be in the form
contemplated by the Indenture and the First Supplemental Indenture. The
Notes, the Exchange Notes and the Private Exchange Notes have each been
duly and validly authorized by SDI Acquisition and, immediately after the
Effective Time, will have been duly and validly authorized by the Company
and, when executed by SDI Acquisition and the Company, as the case may be,
and authenticated by the Trustee in accordance with the provisions of the
Indenture and, in the case of the Notes, when delivered to and paid for by
the Initial Purchasers in accordance with the terms of this Agreement
(assuming the due authorization, execution and delivery thereof by all
other parties thereto), will constitute valid and legally binding
obligations of SDI Acquisition and, immediately after the Effective Time,
of the Company, as the case may be, entitled to the benefits of the
Indenture and enforceable against SDI Acquisition and the Company, as the
case may be, in accordance with their terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer, or other similar laws now
or hereafter in effect relating to creditors' rights generally, (ii)
general principles of equity (whether considered in a proceeding in equity
or at law) and the discretion of the court before which any proceeding
therefor may be brought, and (iii) an implied covenant of good faith.
(e) Immediately after the Effective Time, the Guarantor will have
all requisite corporate power and authority to execute, deliver and
perform its obligations under the Guarantee, its guarantee of the Exchange
Notes (the "Exchange Notes Guarantee") and its guarantee of the Private
Exchange Notes (the "Private Exchange Notes Guarantee"). The Guarantee,
when issued, will be in the form contemplated by the Indenture. The
Guarantee, the Exchange Notes Guarantee and the Private Exchange Notes
Guarantee will each be duly and validly authorized by the Guarantor and,
in the case of the Guarantee,
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when delivered to and paid for by the Initial Purchasers in accordance
with the terms of this Agreement (assuming the due authorization,
execution and delivery thereof by all other parties thereto), will
constitute valid and legally binding obligations of the Guarantor,
entitled to the benefits of the Indenture, and enforceable against the
Guarantor in accordance with its terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer, or other similar laws now
or hereafter in effect relating to creditors' rights generally, (ii)
general principles of equity (whether considered in a proceeding in equity
or at law) and the discretion of the court before which any proceeding
therefor may be brought, and (iii) an implied covenant of good faith.
(f) SDI Acquisition has and, immediately after the Effective Time,
each of the Company and the Guarantor will have all requisite corporate
power and authority to execute, deliver and perform its obligations under
the Indenture. The Indenture, in all material respects, meets the
requirements for qualification under the Trust Indenture Act of 1939, as
amended (the "TIA"). The Indenture has been duly and validly authorized by
SDI Acquisition. Immediately after the Effective Time, the First
Supplemental Indenture will have been duly and validly authorized by each
of the Company and the Guarantor. Assuming the due authorization,
execution and delivery of the Indenture and the First Supplemental
Indenture by the Trustee, each of the Indenture and the First Supplemental
Indenture will have been duly executed and delivered and, as applicable,
will constitute valid and legally binding agreements of SDI Acquisition
and, immediately after the Effective Time, the Company and the Guarantor,
enforceable against SDI Acquisition and, at and as of the Effective Time,
the Company and the Guarantor, in accordance with its terms, except that
the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer, or other
similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity (whether considered in a
proceeding in equity or at law) and the discretion of the court before
which any proceeding therefor may be brought, and (iii) an implied
covenant of good faith.
(g) SDI Acquisition has and, immediately after the Effective Time,
the Company and the Guarantor will have all requisite corporate power and
authority to execute, deliver and perform their respective obligations
under the Registration Rights Agreement. The Registration Rights Agreement
has been duly and validly authorized by SDI Acquisition and, immediately
after the Effective Time, will have been duly and validly authorized by
each of the Company and the Guarantor and, when executed and delivered by
SDI Acquisition and, immediately after the Effective Time, assumed by each
of the Company and the Guarantor, will have been duly executed and
delivered and will constitute a valid and legally binding agreement of SDI
Acquisition and, immediately after the Effective Time, each of the Company
and the Guarantor, enforceable against SDI Acquisition and, immediately
after the Effective Time, each of the Company and the Guarantor in
accordance with its terms, except that (A) the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer, or other similar laws now or hereafter
in effect relating to creditors' rights generally, (ii) general principles
of equity (whether considered in a proceeding in equity or at law) and
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the discretion of the court before which any proceeding therefor may be
brought, and (iii) an implied covenant of good faith and (B) any rights to
indemnity or contribution thereunder may be limited by federal and state
securities laws and public policy considerations.
(h) SDI Acquisition has and, at and as of the Effective Time, the
Company and the Guarantor will have, all requisite corporate power and
authority to execute, deliver and perform their respective obligations
under this Agreement and to consummate the transactions contemplated
hereby. This Agreement and the transactions contemplated hereby have been
duly and validly authorized by SDI Acquisition and, at and as of the
Effective Time, will have been duly and validly authorized by each of the
Company and the Guarantor. This Agreement has been duly and validly
executed and delivered by SDI Acquisition.
(i) Immediately after the Effective Time, each of the Company and
the Guarantor will have all requisite corporate power and authority to
execute, deliver and perform its respective obligations under the
Assumption Agreement and to consummate the transactions contemplated
thereby. Immediately after the Effective Time, the Assumption Agreement
and the transactions contemplated thereby have been duly and validly
authorized by each of the Company and the Guarantor and, when executed and
delivered by each of the Company and the Guarantor, will have been duly
executed and delivered by and (to the extent such Assumption Agreement
pertains to obligations under the Registration Rights Agreement) will
constitute a valid and legally binding agreement of each of the Company
and the Guarantor, enforceable against each of the Company and the
Guarantor in accordance with its terms, except that (i) the enforcement
thereof may be subject to (A) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and (B) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought and (ii) any rights to indemnity or
contribution thereunder may be limited by federal and state securities
laws and public policy considerations.
(j) SDI Acquisition has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Other
Transaction Documents and to consummate the transactions contemplated
thereby. On or prior to the Closing Date, the Other Transaction Documents
and the consummation by SDI Acquisition of the transactions contemplated
thereby will have been duly and validly authorized by SDI Acquisition and,
when executed and delivered by SDI Acquisition (assuming due
authorization, execution and delivery thereof of all other parties
thereto), will constitute a valid and legally binding agreement of SDI
Acquisition, enforceable against SDI Acquisition in accordance with its
respective terms, except that the enforcement thereof may be subject to
each of (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer, or other similar laws now or hereafter in effect
relating to creditors' rights generally, (ii) general principles of equity
(whether considered in a proceeding in equity or at law) and the
discretion of the court before which any proceeding therefor may be
brought, and (iii) an implied covenant of good faith.
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(k) Except as set forth in the Final Memorandum, no consent,
approval, authorization or order of any court or governmental agency or
body, or third party is required for the issuance and sale by SDI
Acquisition of the Notes to the Initial Purchasers or the consummation by
SDI Acquisition, the Company and the Subsidiary of the other transactions
contemplated hereby, except such as have been obtained and such as may be
required under state securities or "Blue Sky" laws in connection with the
purchase and resale of the Notes by the Initial Purchasers or those the
failure of which to obtain would not reasonably be expected to cause a
Material Adverse Effect. Except as set forth in the Final Memorandum, none
of SDI Acquisition or to the knowledge of SDI Acquisition after due
inquiry, the Company or the Subsidiary is (i) in violation of its
certificate of incorporation or bylaws (or similar organizational
document), (ii) in breach or violation of any statute, judgment, decree,
order, rule or regulation applicable to any of them or any of their
respective properties or assets, except for any such breach or violation
which would not, individually or in the aggregate, be reasonably expected
to have a Material Adverse Effect, or (iii) in breach of or default under
(nor has any event occurred which, with notice or passage of time or both,
would constitute a default under) or in violation of any of the terms or
provisions of any indenture, mortgage, deed of trust, loan agreement,
note, lease, license, franchise agreement, permit, certificate, contract
or other agreement or instrument to which any of them is a party or to
which any of them or their respective properties or assets is subject
(collectively, "Contracts"), except for any such breach, default,
violation or event which would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect.
(l) The execution, delivery and performance by SDI Acquisition and,
immediately after the Effective Time, by the Company and the Guarantor (to
the extent each is a party thereto) of this Agreement, the Indenture, the
Registration Rights Agreement, the Assumption Agreement, the First
Supplemental Indenture, and the Other Transaction Documents and the
consummation by SDI Acquisition and, immediately after the Effective Time,
by the Company and the Guarantor (to the extent each is a party thereto)
of the transactions contemplated hereby and thereby (including, without
limitation, the issuance and sale of the Notes to the Initial Purchasers)
will not conflict with or constitute or result in a breach of or a default
under (or an event which with notice or passage of time or both would
constitute a default under) or violation of any of (i) the terms or
provisions of any Contract, except for any such conflict, breach,
violation, default or event which would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect, (ii)
the certificate of incorporation or bylaws (or similar organizational
document) of SDI Acquisition, the Company or the Subsidiary (after giving
effect to the Recapitalization), or (iii) (assuming compliance with all
applicable state securities or "Blue Sky" laws and assuming the accuracy
of the representations and warranties of the Initial Purchasers and the
compliance by the Initial Purchasers with their agreements, in each case,
set forth in Section 8 hereof) any statute, judgment, decree, order, rule
or regulation applicable to SDI Acquisition, the Company or the Subsidiary
or any of their respective properties or assets, except for any such
conflict, breach or violation which would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect.
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(m) The audited consolidated financial statements of the Company and
the Subsidiary included in the Final Memorandum present fairly in all
material respects the financial position or results of operations and cash
flows of the Company and the Subsidiary at the dates and for the periods
to which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except as
otherwise stated therein. The summary and selected financial data in the
Final Memorandum present fairly in all material respects the information
shown therein and have been prepared and compiled on a basis consistent
with the audited financial statements included therein, except as
otherwise stated therein. KPMG Peat Marwick LLP (the "Independent
Accountants") is an independent public accounting firm within the meaning
of the Act and the rules and regulations promulgated thereunder.
(n) The unaudited pro forma consolidated balance sheet as of October
31, 1998 and the unaudited pro forma consolidated statements for the year
ended October 31, 1998 (including the notes thereto) and the other pro
forma financial information included in the Final Memorandum (i) comply as
to form in all material respects with the applicable requirements of
Regulation S-X promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (ii) have been prepared in accordance with
the Commission's rules and guidelines with respect to pro forma financial
statements except with respect to "EBITDA" and related measures, and (iii)
have been properly computed on the bases described therein; the
assumptions used in the preparation of the pro forma financial data and
other pro forma financial information included in the Final Memorandum are
believed by the Company to be reasonable, and the adjustments used therein
are believed by the Company to be appropriate to give effect to the
transactions or circumstances referred to therein.
(o) There is not pending or, to the knowledge of SDI Acquisition
after due inquiry and immediately after the Effective Time, to the
knowledge of the Company or the Subsidiary, threatened any action, suit,
proceeding, inquiry or investigation to which SDI Acquisition or,
immediately after the Effective Time, the Company or the Subsidiary is a
party, or to which the property or assets of SDI Acquisition or,
immediately after the Effective Time, the Company or the Subsidiary are
subject, before or brought by any court, arbitrator or governmental agency
or body that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or that seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or sale of
the Securities to be sold hereunder or the consummation of the other
transactions described in the Final Memorandum.
(p) To the knowledge of SDI Acquisition after due inquiry, the
Company and the Subsidiary own or possess and, as of the Effective Time,
will own or possess all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations and
filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, presently required or necessary to own or lease, as the case
may be, and to operate its respective properties and to carry on its
respective businesses as now or proposed to be conducted as set forth in
the Final Memorandum ("Permits"), except where the failure to obtain such
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Permits would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect; to the knowledge of SDI
Acquisition after due inquiry, each of the Company and the Subsidiary has
fulfilled and performed all of its obligations with respect to such
Permits and, to the knowledge of SDI Acquisition after due inquiry, no
event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit; and to the
knowledge of SDI Acquisition after due inquiry, none of the Company or the
Subsidiary has received any notice of any proceeding relating to
revocation or modification of any such Permit, except as described in the
Final Memorandum and except where such revocation or modification would
not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect.
(q) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein or contemplated
thereby (including, without limitation, in connection with or relating to
the Recapitalization or the Stockholders Agreements), (i) none of SDI
Acquisition, the Company or the Subsidiary has incurred any liabilities or
obligations, direct or contingent, or entered into or agreed to enter into
any transactions or contracts (written or oral) not in the ordinary course
of business which liabilities, obligations, transactions or contracts
would, individually or in the aggregate, be reasonably expected to be
material to the general affairs, management, business, condition
(financial or otherwise), or results of operations of the Company and its
Subsidiary, taken as a whole, (ii) none of SDI Acquisition, the Company or
the Subsidiary has purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock (other than with respect to the Subsidiary, the
purchase of, or dividend or distribution on, capital stock owned by the
Company), and (iii) there has not been any change in the capital stock or
long-term indebtedness of SDI Acquisition, the Company or the Subsidiary.
(r) Each of SDI Acquisition, the Company and the Subsidiary has
filed all necessary federal, state and foreign income and franchise tax
returns, except where the failure to so file such returns would not,
individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect, and has paid all taxes shown as due thereon; and
other than tax deficiencies which SDI Acquisition, the Company or the
Subsidiary is contesting in good faith and for which SDI Acquisition, the
Company or the Subsidiary has provided adequate reserves in accordance
with generally accepted accounting principles, there is no tax deficiency
that has been asserted against SDI Acquisition, the Company or the
Subsidiary that would be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect.
(s) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which SDI Acquisition,
after due inquiry, believes to be reliable and accurate.
(t) None of SDI Acquisition, the Company, the Subsidiary or any
agent acting on their behalf has taken or will take any action that might
cause this Agreement or the sale of the Notes to violate Regulation T, U
or X of the Board of Governors of the Federal
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Reserve System, in each case as in effect, or as the same may hereafter be
in effect, on the Closing Date.
(u) Each of the Company and the Subsidiary has and, at and as of the
Effective Time, will have good and marketable title to all real property
and good title to all personal property described in the Final Memorandum
as being owned by it and good and marketable title to a leasehold estate
in the real and personal property described in the Final Memorandum as
being leased by it free and clear of all liens, charges, encumbrances or
restrictions, except as described in the Final Memorandum or to the extent
the failure to have such title or the existence of such liens, charges,
encumbrances or restrictions would not, individually or in the aggregate,
be reasonably expected to have a Material Adverse Effect. All leases,
contracts and agreements to which the Company or the Subsidiary is a party
or by which any of them is bound (A) are valid and enforceable against the
Company or the Subsidiary except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer, or other similar laws now or hereafter
in effect relating to creditors' rights generally, (ii) general principles
of equity (whether considered in a proceeding in equity or at law) and the
discretion of the court before which any proceeding therefor may be
brought, and (iii) an implied covenant of good faith, and (B) are in full
force and effect with only such exceptions as would not, individually or
in the aggregate, be reasonably expected to have a Material Adverse
Effect. The Company and the Subsidiary own or possess and, at and as of
the Effective Time, will own or possess adequate licenses or other rights
to use all patents, trademarks, service marks, trade names, copyrights and
know-how necessary to conduct the businesses now or proposed to be
operated by them as described in the Final Memorandum, and none of the
Company or the Subsidiary has received any notice of infringement of or
conflict with (or knows of any such infringement of or conflict with,
except as described or referred to in the Final Memorandum) asserted
rights of others with respect to any patents, trademarks, service marks,
trade names, copyrights or know-how which, if such assertion of
infringement or conflict were sustained, would be reasonably expected to
have a Material Adverse Effect.
(v) There are no legal or governmental proceedings involving or
affecting the Company or the Subsidiary or any of their respective
properties or assets which would be required to be described in a
prospectus pursuant to the Act that are not described or referred to in
the Final Memorandum, nor are there any material contracts or other
documents which would be required to be described in a prospectus pursuant
to the Act that are not described or referred to in the Final Memorandum.
(w) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect (A) each of the
Company and the Subsidiary is in compliance with and not subject to
liability under applicable Environmental Laws (as defined below), (B) each
of the Company and the Subsidiary has made all filings and provided all
notices required under any applicable Environmental Law, and has and is in
compliance with all Permits required under any applicable Environmental
Laws and each of them is in full force and effect, (C) there is no civil,
criminal or administrative action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or
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demand letter or request for information pending or, to the knowledge of
the Company or the Subsidiary, threatened against the Company or the
Subsidiary under any Environmental Law, (D) no lien, charge, encumbrance
or restriction has been recorded under any Environmental Law with respect
to any assets, facility or property owned, operated, leased or controlled
by the Company or the Subsidiary, (E) none of the Company or the
Subsidiary has received notice that it has been identified as a
potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"),
or any comparable state law, and (F) no property or facility of the
Company or the Subsidiary is (i) listed or proposed for listing on the
National Priorities List under CERCLA or (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by
any state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, laws relating to (i) emissions, discharges,
releases or threatened releases of hazardous materials into the
environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), (ii) the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of hazardous materials, and (iii) underground and
above ground storage tanks and related piping, and emissions, discharges,
releases or threatened releases therefrom.
(x) There is no strike, labor dispute, slowdown or work stoppage
with the employees of the Company or the Subsidiary which is pending or,
to the knowledge of the Company, the Guarantor or SDI Acquisition after
due inquiry, threatened, except for such as would not reasonably be
expected to have a Material Adverse Effect.
(y) Each of the Company and the Subsidiary carries insurance in such
amounts and covering such risks as the Company believes to be reasonably
adequate for the conduct of its business and the value of its properties.
(z) None of SDI Acquisition or to the knowledge of SDI Acquisition
after due inquiry, the Company or the Subsidiary has any liability for any
prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing or other
plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which SDI Acquisition, the Company or the
Subsidiary makes or ever has made a contribution and in which any employee
of SDI Acquisition, the Company or the Subsidiary is or has ever been a
participant, except for such as would not reasonably be expected to have a
Material Adverse Effect. With respect to such plans, each of SDI
Acquisition, and to the knowledge of SDI Acquisition after due inquiry,
the Company and the Subsidiary is in compliance in all material respects
with all applicable provisions of ERISA.
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(aa) Each of SDI Acquisition, and to the knowledge of SDI
Acquisition after due inquiry, the Company and the Subsidiary (i) makes
and keeps accurate books and records and (ii) maintains internal
accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with management's authorization,
(B) transactions are recorded as necessary to permit preparation of its
financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization, and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(bb) None of SDI Acquisition, the Company or the Subsidiary will be
an "investment company" or "promoter" or "principal underwriter" for an
"investment company," as such terms are defined in the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder.
(cc) The Securities, the Indenture, the Registration Rights
Agreement and each of the Other Transaction Documents will conform in all
material respects to the descriptions thereof in the Final Memorandum.
(dd) No holder of securities of SDI Acquisition, the Company or the
Subsidiary will be entitled to have such securities registered under the
registration statements required to be filed by the Company and the
Guarantor pursuant to the Registration Rights Agreement other than as
expressly permitted thereby.
(ee) Immediately after the consummation of the transactions
contemplated by this Agreement, the Indenture and each of the Other
Transaction Documents, the fair value and present fair saleable value of
the assets of each of the Company and the Subsidiary (each on a
consolidated basis) will exceed the sum of its stated liabilities and
identified contingent liabilities; none of the Company or the Subsidiary
(each on a consolidated basis) is, nor will any of the Company or the
Subsidiary (each on a consolidated basis) be, after giving effect to the
execution, delivery and performance of this Agreement, the Indenture and
each of the Other Transaction Documents, and the consummation of the
transactions contemplated hereby and thereby, (a) left with unreasonably
small capital with which to carry on its business as it is proposed to be
conducted, (b) generally unable to pay its debts (contingent or otherwise)
as they mature, or (c) otherwise insolvent.
(ff) None of SDI Acquisition, the Company, the Subsidiary or any of
their respective Affiliates (as defined in Rule 501(b) of Regulation D
under the Act) has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of, any
"security" (as defined in the Act) which is or could be integrated with
the sale of the Securities in a manner that would require the registration
under the Act of the Securities or (ii) engaged in any form of general
solicitation or general advertising (as those terms are used in Regulation
D under the Act) in connection with the offering of the Securities or in
any manner involving a public offering within the meaning of Section 4(2)
of the Act. Assuming the accuracy of the representations and warranties of
the Initial Purchasers and the compliance by the Initial Purchasers with
their agreements, in each case, set forth in Section 8 hereof, it is not
necessary in connection
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with the offer, sale and delivery of the Securities to the Initial
Purchasers in the manner contemplated by this Agreement to register any of
the Securities under the Act or to qualify the Indenture under the TIA.
(gg) No securities of SDI Acquisition, the Company or the Subsidiary
are of the same class (within the meaning of Rule 144A under the Act) as
the Notes and the Guarantee and listed on a national securities exchange
registered under Section 6 of the Exchange Act, or quoted in a U.S.
automated inter-dealer quotation system.
(hh) None of SDI Acquisition, the Company or the Subsidiary has
taken, nor will any of them take, directly or indirectly, any action
designed to, or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Securities.
(ii) None of SDI Acquisition, the Company, the Subsidiary, any of
their respective Affiliates or any person acting on its or their behalf
(other than the Initial Purchasers) has engaged in any "directed selling
efforts" (as that term is defined in Regulation S) with respect to the
Notes or the Guarantee; SDI Acquisition, the Company, the Subsidiary and
their respective Affiliates and any person acting on its or their behalf
(other than the Initial Purchasers) have complied with the offering
restrictions requirement of Regulation S.
Any certificate signed by any officer of SDI Acquisition, the
Company or the Subsidiary and delivered to the Initial Purchasers or to counsel
for the Initial Purchasers shall be deemed a joint and several representation
and warranty by SDI Acquisition, the Company and the Subsidiary to the Initial
Purchasers as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, SDI Acquisition agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers, jointly
and not severally, agree to purchase the Securities from SDI Acquisition at
97.0% of their principal amount, in the respective principal amounts set forth
opposite their names on Schedule 1 hereto. One or more certificates in
definitive form for the Securities that the Initial Purchasers have agreed to
purchase hereunder, and in such denomination or denominations and registered in
such name or names as the Initial Purchasers request upon notice to SDI
Acquisition at least 36 hours prior to the Closing Date, shall be delivered by
or on behalf of SDI Acquisition to the Initial Purchasers, against payment by or
on behalf of the Initial Purchasers of the purchase price therefor by wire
transfer (same day funds), net of the overnight cost of such funds, to such
account or accounts as SDI Acquisition shall specify prior to the Closing Date,
or by such means as the parties hereto shall agree prior to the Closing Date.
Such delivery of and payment for the Securities shall be made at the offices of
White & Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m.,
New York time, on December 15, 1998, or at such other place, time or date as the
Initial Purchasers, on the one hand, and SDI Acquisition, on the other hand, may
agree upon, such time and date of delivery against payment being herein referred
to as the "Closing Date." SDI Acquisition will make such certificate or
certificates for the Notes available for checking and packaging by the Initial
Purchasers at the offices of BT Alex. Xxxxx Incorporated in New York, New York,
or at such other place as BT Alex. Xxxxx Incorporated may designate, at least 24
hours prior to the Closing Date.
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4. Offering by the Initial Purchasers. The Initial Purchasers
propose to make an offering of the Securities at the price and upon the terms
set forth in the Final Memorandum, as soon as practicable after this Agreement
is entered into and as in the judgment of the Initial Purchasers is advisable.
5. Covenants of the SDI Acquisition, the Company and the Guarantor.
SDI Acquisition and, at and as of the Effective Time, the Company and the
Guarantor, jointly and severally, covenant and agree with the Initial Purchasers
that:
(a) Prior to the completion of the distribution by the Initial
Purchasers of the Securities or the Private Exchange Notes and Private
Exchange Notes Guarantee (which in no event will be prior to the Closing
Date), SDI Acquisition will not and, at and after the Effective Time, the
Company and the Guarantor will not, amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers shall not previously have been advised and furnished a copy for
a reasonable period of time prior to the proposed amendment or supplement
and as to which the Initial Purchasers shall not have given their consent.
SDI Acquisition will and, at and after the Effective Time, the Company and
the Guarantor will, promptly, upon the reasonable request of the Initial
Purchasers or counsel for the Initial Purchasers, make any amendments or
supplements to the Preliminary Memorandum or the Final Memorandum that may
be necessary or advisable in connection with the resale of the Securities
by the Initial Purchasers in accordance with Section 8 hereof.
(b) Prior to the completion of the distribution by the Initial
Purchasers of the Securities or the Private Exchange Notes and Private
Exchange Notes Guarantee (which in no event will be prior to the Closing
Date), SDI Acquisition will and, at and after the Effective Time, the
Company and the Guarantor will, cooperate with the Initial Purchasers in
arranging for the qualification of the Securities for offering and sale
under the securities or "Blue Sky" laws of which jurisdictions as the
Initial Purchasers may designate and will continue such qualifications in
effect for as long as may reasonably be necessary to complete the resale
of the Securities; provided, however, that in connection therewith, none
of SDI Acquisition, the Company or the Guarantor shall be required to
qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself to taxation in
excess of a nominal dollar amount in any such jurisdiction where it is not
then so subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchasers of the Securities or the Private Exchange Notes and
Private Exchange Notes Guarantee, any event occurs or information becomes
known as a result of which the Final Memorandum as then amended or
supplemented would include any untrue statement of a material fact, or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
or if for any other reason it is necessary at any time to amend or
supplement the Final Memorandum to comply with applicable law, SDI
Acquisition will and, at and after the Effective Time, the Company and the
Guarantor will promptly notify the Initial Purchasers thereof and will
prepare, at the expense of SDI Acquisition and, at and after the Effective
Time, the
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Company and the Guarantor, an amendment or supplement to the Final
Memorandum that corrects such statement or omission or effects such
compliance.
(d) Prior to the completion of the distribution by the Initial
Purchasers of the Securities or the Private Exchange Notes and Private
Exchange Notes Guarantee (which in no event will be prior to the Closing
Date), SDI Acquisition will and, at and after the Effective Time, the
Company and the Guarantor will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.
(e) SDI Acquisition will and, at and after the Effective Time, the
Company and the Guarantor will, apply the net proceeds from the sale of
the Securities as set forth under "Sources and Uses of Funds" in the Final
Memorandum.
(f) For so long as any of the Securities remain outstanding, SDI
Acquisition will and, at and after the Effective Time, the Company and the
Guarantor will, furnish to the Initial Purchasers copies of all reports
and other communications (financial or otherwise) furnished by SDI
Acquisition and, at and after the Effective Time, the Company and the
Guarantor, to the Trustee or to the holders of the Securities and, as soon
as available, copies of any reports or financial statements furnished to
or filed by SDI Acquisition or, at and after the Effective Time, the
Company or the Guarantor, with the Commission or any national securities
exchange on which any class of securities of any of SDI Acquisition and,
at and after the Effective Time, the Company and the Guarantor, may be
listed.
(g) Prior to the Closing Date, SDI Acquisition and, at and after the
Effective Time, the Company will furnish to the Initial Purchasers, as
soon as they have been prepared, a copy of any available unaudited interim
financial statements of the Company for any period subsequent to the
period covered by the most recent financial statements appearing in the
Final Memorandum.
(h) None of SDI Acquisition or any of its Affiliates or, at and
after the Effective Time, the Company, the Guarantor or any of their
Affiliates will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any "security" (as defined in the Act) which could
be integrated with the sale of the Securities in a manner which would
require the registration under the Act of the Securities.
(i) SDI Acquisition will not and, at and after the Effective Time,
the Company will not, and will not permit the Subsidiary to, engage in any
form of general solicitation or general advertising (as those terms are
used in Regulation D under the Act) in connection with the offering of the
Securities or in any manner involving a public offering within the meaning
of Section 4(2) of the Act.
(j) For so long as any of the Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Act, SDI Acquisition will and, at and after the Effective Time, the
Company and the Guarantor will, make available at
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their expense, upon request, to any holder of such Securities and any
prospective purchasers thereof the information specified in Rule
144A(d)(4) under the Act, unless the Company is then subject to Section 13
or 15(d) of the Exchange Act.
(k) SDI Acquisition will and, at and after the Effective Time, the
Company and the Guarantor will, use their reasonable best efforts to (i)
permit the Securities to be designated PORTAL securities in accordance
with the rules and regulations adopted by the NASD relating to trading in
the Private Offerings, Resales and Trading through Automated Linkages
market (the "PORTAL Market") and (ii) permit the Securities to be eligible
for clearance and settlement through The Depository Trust Company.
(l) In connection with Securities offered and sold in an "offshore
transaction" (as defined in Regulation S), SDI Acquisition will not and,
at and after the Effective Time, the Company and the Guarantor will not,
register any transfer of such Securities not made in accordance with the
provisions of Regulation S and will not, except in accordance with the
provisions of Regulation S, if applicable, issue any such Securities in
definitive form.
6. Expenses. SDI Acquisition agrees to pay all costs and expenses
incident to the performance of their obligations under this Agreement, whether
or not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions contemplated hereby, including any costs of
printing the Preliminary Memorandum and the Final Memorandum and any amendment
or supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements
relating to the delivery to the Initial Purchasers of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by SDI Acquisition, (iv) preparation
(including printing), issuance and delivery to the Initial Purchasers of the
Securities, (v) the qualification of the Securities under state securities and
"Blue Sky" laws, including filing fees and reasonable fees and disbursements of
Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Initial Purchasers, relating thereto,
(vi) expenses in connection with any meetings with prospective investors in the
Securities, (vii) fees and expenses of the Trustee including fees and expenses
of its counsel, (viii) all expenses and listing fees incurred in connection with
the application for quotation of the Securities on the PORTAL Market, and (ix)
any fees charged by investment rating agencies for the rating of the Notes. If
the sale of the Notes provided for herein is not consummated because any
condition to the obligations of the Initial Purchasers set forth in Section 7
hereof is not satisfied, because this Agreement is terminated or because of any
failure, refusal or inability on the part of SDI Acquisition, the Company or the
Guarantor to perform all their obligations and satisfy all conditions on their
part to be performed or satisfied hereunder (other than solely by reason of a
default by the Initial Purchasers of their obligations hereunder after all
conditions hereunder have been satisfied in accordance herewith), each of SDI
Acquisition and, at and after the Effective Time, the Company and the Guarantor,
jointly and severally, agrees to promptly reimburse the Initial Purchasers upon
demand for all reasonable out-of-pocket expenses (including reasonable fees,
disbursements and charges of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Initial
Purchasers) that shall have been incurred by the Initial Purchasers in
connection with the proposed purchase and sale of the Securities. Except as
specifically set forth in this Section 6, the Initial Purchasers shall pay their
own costs and expenses incurred in
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connection with the proposed purchase and sale of the Securities, including the
costs and expenses of their counsel.
7. Conditions of the Initial Purchasers' Obligations. The obligation
of the Initial Purchasers to purchase and pay for the Notes shall, in their sole
discretion, be subject to the satisfaction or waiver of the following conditions
on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, special outside
counsel for SDI Acquisition and, at and as of the Effective Time, the
Company and the Guarantor, in form and substance satisfactory to counsel
for the Initial Purchasers, substantially in the form attached hereto as
Exhibit C.
(b) On the Closing Date, the Initial Purchasers shall have received
the opinion, in form and substance satisfactory to the Initial Purchasers,
dated as of the Closing Date and addressed to the Initial Purchasers, of
Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Initial Purchasers, with respect
to certain legal matters relating to this Agreement and such other related
matters as the Initial Purchasers may reasonably require. In rendering
such opinion, Xxxxxx Xxxxxx & Xxxxxxx shall have received and may rely
upon such certificates and other documents and information as it may
reasonably request to pass upon such matters.
(c) The Initial Purchasers shall have received from the Independent
Accountants a comfort letter or letters dated the date hereof and the
Closing Date, in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.
(d) The representations and warranties of SDI Acquisition contained
in this Agreement shall be true and correct on and as of the date hereof
and on and as of the Closing Date as if made on and as of the Closing
Date; the statements of officers of SDI Acquisition, the Company and the
Guarantor made pursuant to any certificate delivered in accordance with
the provisions hereof shall be true and correct on and as of the date made
and on and as of the Closing Date; SDI Acquisition, the Company and the
Guarantor shall have performed all covenants and agreements and satisfied
all conditions on their part to be performed or satisfied hereunder at or
prior to the Closing Date; and, except as described in the Final
Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), subsequent to the date of the most recent financial
statements in such Final Memorandum, there shall have been no event or
development, and no information shall have become known, that,
individually or in the aggregate, has had or would be reasonably likely to
have a Material Adverse Effect.
(e) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(f) Subsequent to the date of the most recent financial statements
in the Final Memorandum (exclusive of any amendment or supplement thereto
after the date hereof), none of the Company or the Subsidiary shall have
sustained any loss or interference with
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respect to its business or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any strike, labor dispute, slow down or work stoppage or from any legal or
governmental proceeding, order or decree, which loss or interference,
individually or in the aggregate, has or would be reasonably likely to
have a Material Adverse Effect.
(g) The Initial Purchasers shall have received a certificate of SDI
Acquisition, dated the Closing Date, signed on behalf of SDI Acquisition
by its Chief Executive Officer, President or any Senior Vice President and
the Chief Financial Officer, to the effect that:
(i) The representations and warranties of SDI Acquisition
contained in this Agreement are true and correct on and as of the
date hereof and on and as of the Closing Date, and SDI Acquisition
has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the
date of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), no event or development has occurred, and no information
has become known, that, individually or in the aggregate, has had or
would be reasonably likely to have a Material Adverse Effect; and
(iii) The sale of the Securities hereunder has not been enjoined
(temporarily or permanently).
(h) The Initial Purchasers shall have received a certificate of each
of the Company and the Guarantor, dated as of the Closing Date, signed on
behalf of the Company by its President and Secretary and of the Guarantor
by its Chairman of the Board, President and Chief Executive Officer or any
Vice President and the Chief Financial Officer, to the effect that:
(i) The representations and warranties of the Company or the
Guarantor contained in this Agreement are true and correct as of the
Closing Date, and each of the Company and the Guarantor have
performed all covenants and agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to
the Closing Date;
(ii) At the Closing Date, since the date hereof or since the
date of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), no event or events have occurred, no information has become
known nor does any condition exist that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect; and
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(iii) The sale of the Notes hereunder has not been enjoined
(temporarily or permanently).
(i) The Indenture shall have been duly executed and delivered by SDI
Acquisition and the Trustee. The First Supplemental Indenture shall have
been duly executed and delivered by the Company and the Guarantor and the
Securities shall have been duly executed and delivered by the Company and
the Guarantor and duly authenticated by the Trustee.
(j) On the Closing Date, the Initial Purchasers shall have received
the Registration Rights Agreement executed by SDI Acquisition and such
agreement shall be in full force and effect at all times from and after
the Closing Date.
(k) On or before the Closing Date, (i) the Merger shall have been
consummated and (ii) the Initial Purchasers and counsel for the Initial
Purchasers shall have received executed copies of the Recapitalization
Agreement, as in effect on the Closing Date, and such other documents,
opinions and reliance letters as they shall have reasonably requested.
(l) The Assumption Agreement shall have been duly authorized,
executed and delivered by the Company and the Guarantor and such agreement
shall be in full force and effect at all times from and after the Closing
Date.
(m) On or before the Closing Date, (i) the Initial Purchasers and
counsel for the Initial Purchasers shall have received executed copies of
the Credit Agreement, dated the Closing Date, including any schedules,
amendments or waivers thereto, and such other documents, opinions and
reliance letters as they shall have reasonably requested, and (ii) after
giving effect to the transactions contemplated by this Agreement and the
application of the proceeds received by SDI Acquisition from the sale of
the Notes, no condition that would constitute a default or event of
default under the Credit Agreement shall exist.
(n) On the Closing Date, each of the Transactions shall have been
concurrently consummated.
(o) On or prior to the Closing Date, the Initial Purchasers shall
have received a solvency opinion from Houlihan, Lokey, Xxxxxx & Zufkin
Financial Advisors, Inc., which solvency opinion shall be in form and
substance reasonably satisfactory to the Initial Purchasers and shall set
forth in the conclusions that, after giving effect to the Transactions,
the Company and its Subsidiary on a consolidated basis, is not insolvent,
will not be rendered insolvent by the indebtedness incurred in connection
therewith, will not be left with unreasonably small capital with which to
engage in their business and will not have incurred debts beyond their
ability to pay such debts as they mature.
On or before the Closing Date, the Initial Purchasers and counsel
for the Initial Purchasers shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of SDI Acquisition,
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the Company and the Subsidiary as they shall have heretofore reasonably
requested from SDI Acquisition and the Company.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel for the Initial Purchasers. SDI Acquisition and
the Company shall furnish to the Initial Purchasers such conformed copies of
such documents, opinions, certificates, letters, schedules and instruments in
such quantities as the Initial Purchasers shall reasonably request.
8. Offering of Securities; Restrictions on Transfer. (a) Each of the
Initial Purchasers represents and warrants (as to itself only) that it is a QIB.
Each of the Initial Purchasers agrees (as to itself only) that (i) it has not
and will not solicit offers for, or offer or sell, the Securities by any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Act; (ii) it has and will solicit offers for
the Securities only from, and will offer the Securities only to (A) in the case
of offers inside the United States, persons whom such Initial Purchaser
reasonably believes to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchasers that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A, and (B) in the case of offers outside the United States, persons
other than "U.S. persons" (as defined in Regulation S) ("foreign purchasers,"
which term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)); provided, however, that, in the case of this clause (B),
in purchasing such Securities such persons are deemed to have represented and
agreed as provided under the caption "Transfer Restrictions" contained in the
Final Memorandum (or, if the Final Memorandum is not in existence, in the most
recent Memorandum); (iii) it will take reasonable steps to inform, and cause
each of its U.S. affiliates to take reasonable steps to inform, persons
acquiring Securities from it or any its affiliates, as the case may be, in the
United States that the Securities (A) have not been and will not be registered
under the Act, (B) are being sold to such persons without registration under the
Act in reliance on Rule 144A or in accordance with another exemption from
registration under the Act, as the case may be, and (C) may not be offered, sold
or otherwise transferred except (1) to SDI Acquisition and, at and after the
Effective Time, the Company, (2) outside the United States in accordance with
Regulation S or (3) inside the United States in accordance with (x) Rule 144A to
a person whom such Initial Purchaser reasonably believes is a QIB that is
purchasing such Securities for its own account or for the account of a QIB to
whom notice is given that the offer, sale or transfer is being made in reliance
on Rule 144A or (y) pursuant to another available exemption from registration
under the Act; and (iv) it will cause to be mailed to each purchaser of the
Securities, in connection with the original distribution of the Securities, a
copy of the Final Memorandum.
(b) Each of the Initial Purchasers represents and warrants (as to
itself only) with respect to offers and sales outside the United States that (i)
it has and will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers the Securities or
has in its possession or distributes any Memorandum or any such other material,
in
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all cases at its own expense; (ii) the Securities have not been and will not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except pursuant to an exemption from the registration
requirements of the Act; (iii) it has offered the Securities and will offer and
sell the Securities (A) as part of its distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date, only in accordance with Rule 903 of Regulation S and,
accordingly, neither it nor any persons acting on its behalf have engaged or
will engage in any "directed selling efforts" (within the meaning of Regulation
S) with respect to the Securities, and any such persons have complied and will
comply with the offering restrictions requirement of Regulation S; and (iv) it
agrees that, at or prior to confirmation of sales of the Securities, it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the United
States Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of the distribution of the Securities
at any time or (ii) otherwise until 40 days after the later of the
commencement of the offering and the closing date of the offering, except
in either case in accordance with Regulation S (or Rule 144A if available)
under the Securities Act. Terms used above have the meaning given to them
in Regulation S."
Terms used in this Section 8 and not defined in this Agreement have
the meanings given to them in Regulation S.
9. Indemnification and Contribution. (a) SDI Acquisition and, at and
after the Effective Time, the Company and the Guarantor, jointly and severally
agree to indemnify and hold harmless the Initial Purchasers and the affiliates,
directors, officers, agents, representatives and employees of any Initial
Purchaser or their affiliates, and each other person, if any, who controls any
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, against any losses, claims, damages or liabilities to which
the Initial Purchasers or such controlling person may become subject under the
Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in any Memorandum or any amendment or supplement
thereto; or
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto, a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
and, subject to the last sentence of this paragraph, will reimburse, as
incurred, the Initial Purchasers and each such other person for any reasonable
legal or other expenses incurred by the Initial Purchasers or such other person
in connection with investigating, defending against or
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appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, SDI Acquisition and, at and
after the Effective Time, the Company and the Guarantor will not be liable in
any such case (A) to the extent that any such loss, claim, damage, or liability
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in any Memorandum or any amendment or
supplement thereto in reliance upon and in conformity with written information
concerning the Initial Purchasers furnished to SDI Acquisition by the Initial
Purchasers specifically for use therein, (B) with respect to the Preliminary
Memorandum, to the extent that any such loss, claim, damage or liability arises
solely from the fact that the Initial Purchasers sold Securities to a person to
whom there was not sent or given a copy of the Final Memorandum (as amended or
supplemented) at or prior to the written confirmation of such sale if SDI
Acquisition shall have previously furnished copies thereof to the Initial
Purchasers in accordance with Section 5(d) hereof and the Final Memorandum (as
amended or supplemented) would have corrected any such untrue statement or
omission, or (C) where amounts are paid in settlement of claims without its
written consent (which consent shall not be unreasonably withheld). This
indemnity agreement will be in addition to any liability that SDI Acquisition,
the Company and the Guarantor may otherwise have to the indemnified parties. SDI
Acquisition and, at and after the Effective Time, the Company and the Guarantor
shall not be liable under this Section 9 for any settlement of any claim or
action effected without its prior written consent, which shall not be
unreasonably withheld. In the event that SDI Acquisition, the Company or the
Guarantor reimburses the Initial Purchasers or any other person hereunder for
any expenses incurred in connection with a lawsuit, claim or other proceeding
for which indemnification is sought, the Initial Purchasers hereby agree to
refund such reimbursement of expenses to the extent that the Initial Purchasers
or such other person are not entitled to indemnification pursuant to this
Agreement, as determined by a final non-appealable judicial determination.
(b) Each of the Initial Purchasers, severally and not jointly,
agrees to indemnify and hold harmless SDI Acquisition and, at and after the
Effective Time, the Company and the Guarantor, their directors, their officers
and each person, if any, who controls SDI Acquisition, the Company or the
Guarantor within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which SDI
Acquisition, the Company and the Guarantor or any such director, officer or
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any Memorandum or any
amendment or supplement thereto, or (ii) the omission or the alleged omission to
state therein a material fact required to be stated in any Memorandum or any
amendment or supplement thereto, or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning the
Initial Purchasers, furnished to SDI Acquisition by the Initial Purchasers
specifically for use therein; and subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any reasonable
legal or other expenses incurred by SDI Acquisition and, at and after the
Effective Time, the Company or the Guarantor or any such director, officer or
controlling person in connection with investigating or defending against or
appearing as a third party witness in
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connection with any such loss, claim, damage, liability or action in respect
thereof. This indemnity agreement will be in addition to any liability that the
Initial Purchasers may otherwise have to the indemnified parties. The Initial
Purchasers shall not be liable under this Section 9 for any settlement of any
claim or action effected without its consent, which shall not be unreasonably
withheld. SDI Acquisition and, at and after the Effective Time, the Company or
the Guarantor, shall not, without the prior written consent of the Initial
Purchasers, effect any settlement or compromise of any pending or threatened
proceeding in respect of which the Initial Purchasers are or could have been a
party, or indemnity could have been sought hereunder by the Initial Purchasers,
unless such settlement (A) includes an unconditional written release of the
Initial Purchasers, in form and substance reasonably satisfactory to the Initial
Purchasers, from all liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of the Initial Purchasers.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof in writing; but the omission to so notify the indemnifying party (i)
will not relieve it from any liability under paragraph (a) or (b) above unless
and to the extent such failure results in material prejudice to the indemnifying
party and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraphs (a) and (b) above. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have been advised by counsel that there may be
one or more legal defenses available to it and/or other indemnified parties that
are different from or additional to those available to the indemnifying party,
or (iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after receipt by the indemnifying party of notice of the
institution of such action, then, in each such case, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the
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expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchasers in the case of paragraph (a) of this
Section 9 or SDI Acquisition and, at and after the Effective Time, the Company
or the Guarantor, in the case of paragraph (b) of this Section 9, representing
the indemnified parties under such paragraph (a) or paragraph (b), as the case
may be, who are parties to such action or actions) or (ii) the indemnifying
party has authorized in writing the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not be
liable for the costs and expenses of any settlement of such action effected by
such indemnified party without the prior written consent of the indemnifying
party (which consent shall not be unreasonably withheld), unless such
indemnified party waived in writing its rights under this Section 9, in which
case the indemnified party may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 9 is unavailable to, or insufficient
to hold harmless, an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof), each indemnifying party, in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party or
parties on the other from the offering of the Notes or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, not
only such relative benefits but also the relative fault of the indemnifying
party or parties on the one hand and the indemnified party or parties on the
other in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by SDI Acquisition,
the Company and the Guarantor on the one hand and the Initial Purchasers on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by SDI Acquisition, the
Company and the Guarantor bear to the total discounts and commissions received
by the Initial Purchasers. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by SDI Acquisition, on the one
hand, or the Initial Purchasers on the other, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission or alleged statement or omission, and any other equitable
considerations appropriate in the circumstances. SDI Acquisition, the Company,
the Guarantor and the Initial Purchasers agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). Notwithstanding any other provision of this paragraph (d), the Initial
Purchasers shall not be obligated to make contributions hereunder that in the
aggregate exceed the total discounts, commissions and other compensation
received by the Initial Purchasers under this Agreement, less the aggregate
amount of any damages that the Initial Purchasers have otherwise been required
to pay by reason of the untrue or alleged untrue statements or the omissions or
alleged omissions to state a material fact,
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and no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), the affiliates, directors, officers, agents, representatives and
employees of an Initial Purchaser or their affiliates and each person, if any,
who controls an Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Initial Purchasers, and each director of SDI Acquisition, the Company or the
Guarantor, each officer of SDI Acquisition, the Company or the Guarantor and
each person, if any, who controls SDI Acquisition, the Company or the Guarantor
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as SDI Acquisition.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of SDI Acquisition, the
Company and the Guarantor, their respective officers and the Initial Purchasers
set forth in this Agreement or made by or on behalf of them pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the SDI Acquisition, the Company or the
Guarantor, any of their respective officers or directors, the Initial Purchasers
or any other person referred to in Section 9 hereof and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 6, 9 and 15 hereof shall remain in
full force and effect, regardless of any termination or cancellation of this
Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to SDI Acquisition, given prior
to the Closing Date in the event that SDI Acquisition, the Company or the
Guarantor shall have failed, refused or been unable to perform all obligations
and satisfy all conditions on their part to be performed or satisfied hereunder
at or prior thereto or, if at or prior to the Closing Date:
(i) any of SDI Acquisition, the Company or the Subsidiary shall
have sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor dispute,
slow down or work stoppage or any legal or governmental proceeding, which
loss or interference, in the sole judgment of the Initial Purchasers, has
had or has a Material Adverse Effect, or there shall have been, in the
sole judgment of the Initial Purchasers, any event or development that,
individually or in the aggregate, has had or would be reasonably likely to
have a Material Adverse Effect (including without limitation a change in
control of SDI Acquisition, the Company or the Subsidiary), except in each
case as described or referred to in the Final Memorandum (exclusive of any
amendment or supplement thereto);
(ii) trading in securities of SDI Acquisition or the Company or in
securities generally on the New York Stock Exchange, American Stock
Exchange or the NASDAQ National Market shall have been suspended or
minimum or maximum prices shall have been established on any such exchange
or market;
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(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material adverse change in the financial
markets of the United States which, in the case of (A), (B) or (C) above
and in the sole judgment of the Initial Purchasers, makes it impracticable
or inadvisable to proceed with the offering or the delivery of the
Securities as contemplated by the Final Memorandum; or
(v) any securities of SDI Acquisition or the Company shall have
been downgraded or placed on any "watch list" for possible downgrading by
any nationally recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchasers. The statements
set forth in the third and seventh paragraphs under the heading "Private
Placement" in the Final Memorandum (to the extent such statements relate to the
Initial Purchasers) constitute the only information furnished by the Initial
Purchasers to SDI Acquisition for the purposes of Sections 2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered to (i) BT Alex.
Xxxxx Incorporated, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department; if sent to SDI Acquisition, the Company or the
Guarantor shall be mailed or delivered to Special Devices, Incorporated at 00000
Xxxx Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Chief
Financial Officer; with a copy to Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxxxx,
Esq.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; and one business
day after being timely delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, SDI Acquisition, the Company and the
Guarantor and their respective successors and legal representatives, and nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained; this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person except that (i) the indemnities of SDI Acquisition, the Company and the
Guarantor contained in Section 9 of this Agreement shall
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also be for the benefit of affiliates, directors, officers, agents,
representatives and employees of an Initial Purchaser or their affiliates and
any person or persons who control any of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchasers contained in Section 9 of this Agreement
shall also be for the benefit of the directors of SDI Acquisition, the Company
or the Guarantor, its officers and any person or persons who control SDI
Acquisition, the Company or the Guarantor within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act. No purchaser of Securities from the
Initial Purchasers will be deemed a successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. Assumption Permitted. The assumption by the Company and the
Subsidiary pursuant to the Assumption Agreement of the obligations of SDI
Acquisition hereunder shall be permitted without the written consent of any of
the parties hereto.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among SDI Acquisition
and the Initial Purchasers as of the date first written above.
Very truly yours,
SDI ACQUISITION CORP.
By:/s/ Xxxxx Xxxxx
----------------------------------
Xxxxx Xxxxx, Secretary
The foregoing Agreement is hereby confirmed and accepted as of the date first
written above.
BT ALEX. XXXXX INCORPORATED
By:/s/ Xxxx Xxxxxx
------------------------------------
Xxxx Xxxxxx, Managing Director
PARIBAS CORPORATION
By:/s/ Xxxxxx Xxxxxx
------------------------------------
Xxxxxx Xxxxxx, Authorized Signatory
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SCHEDULE 1
Initial Purchaser Principal Amount of Notes
----------------- -------------------------
BT Alex. Xxxxx Incorporated $ 65,200,000
Paribas Corporation $ 34,800,000
------------
Total $100,000,000
