hereunder) will be true,
correct and complete and, unless specifically limited, shall remain so for so
long as any of the Commitments hereunder shall be in effect and until payment in
full of all Obligations:
4.1
ORGANIZATION, POWERS, CAPITALIZATION.
(A)
ORGANIZATION AND POWERS.
EACH OF THE LOAN
PARTIES IS DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS
OF ITS JURISDICTION OF INCORPORATION AND QUALIFIED TO DO BUSINESS IN ALL
JURISDICTIONS WHERE SUCH QUALIFICATION IS REQUIRED EXCEPT WHERE FAILURE TO BE SO
QUALIFIED COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
EACH OF THE LOAN PARTIES HAS ALL REQUISITE ORGANIZATIONAL POWER AND AUTHORITY TO
OWN AND OPERATE ITS PROPERTIES, TO CARRY ON ITS BUSINESS AS NOW CONDUCTED AND
PROPOSED TO BE CONDUCTED AND TO ENTER INTO EACH LOAN DOCUMENT.
(B)
CAPITALIZATION.
AS OF THE CLOSING DATE, THE
AUTHORIZED CAPITAL STOCK OF EACH OF THE LOAN PARTIES AND ITS RESPECTIVE
SUBSIDIARIES IS AS SET FORTH ON SCHEDULE 4.1(B), INCLUDING ALL PREEMPTIVE OR
OTHER OUTSTANDING RIGHTS, OPTIONS, WARRANTS, CONVERSION RIGHTS OR SIMILAR
AGREEMENTS OR UNDERSTANDINGS FOR THE PURCHASE OR ACQUISITION FROM ANY LOAN PARTY
OF ANY SHARES OF CAPITAL STOCK OR OTHER SECURITIES OF ANY SUCH ENTITY.
ALL
ISSUED AND OUTSTANDING SHARES OF CAPITAL STOCK OF EACH OF BORROWER AND ITS
SUBSIDIARIES ARE DULY AUTHORIZED AND VALIDLY ISSUED, FULLY PAID, NONASSESSABLE,
FREE AND CLEAR OF ALL LIENS OTHER THAN THOSE IN FAVOR OF AGENT FOR THE BENEFIT
OF AGENT AND LENDERS, AND SUCH SHARES WERE ISSUED IN COMPLIANCE WITH ALL
APPLICABLE STATE AND FEDERAL LAWS CONCERNING THE ISSUANCE OF SECURITIES.
BORROWER WILL PROMPTLY NOTIFY LENDER OF ANY CHANGE IN THE OWNERSHIP OR CORPORATE
STRUCTURE OF ANY LOAN PARTY THAT WOULD RESULT IN THE OCCURRENCE OF AN EVENT OF
DEFAULT PURSUANT TO PARAGRAPH (F) OF SUBSECTION 8.1.
4.2
AUTHORIZATION OF BORROWING, NO CONFLICT.
EACH OF THE OBLIGORS HAS THE ORGANIZATIONAL POWER AND AUTHORITY TO INCUR THE
OBLIGATIONS AND TO GRANT SECURITY INTERESTS IN THE COLLATERAL.
ON THE CLOSING
DATE, THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS BY EACH LOAN
PARTY SIGNATORY THERETO WILL HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY
CORPORATE AND SHAREHOLDER ACTION.
THE EXECUTION, DELIVERY AND PERFORMANCE BY
EACH LOAN PARTY OF EACH LOAN DOCUMENT TO WHICH IT IS A PARTY AND THE
CONSUMMATION OF THE TRANSACTIONS
26
CONTEMPLATED BY THE LOAN DOCUMENTS BY EACH LOAN PARTY DO NOT CONTRAVENE ANY
APPLICABLE LAW, THE CORPORATE CHARTER OR BYLAWS OR OTHER ORGANIZATIONAL
DOCUMENTS OF ANY LOAN PARTY OR ANY AGREEMENT OR ORDER BY WHICH ANY LOAN PARTY OR
ANY LOAN PARTY'S PROPERTY IS BOUND. THE LOAN DOCUMENTS ARE THE LEGALLY VALID AND
BINDING OBLIGATIONS OF THE APPLICABLE LOAN PARTIES RESPECTIVELY, EACH
ENFORCEABLE AGAINST THE LOAN PARTIES, AS APPLICABLE, IN ACCORDANCE WITH THEIR
RESPECTIVE TERMS.
4.3
FINANCIAL CONDITION.
ALL FINANCIAL
STATEMENTS CONCERNING THE LOAN PARTIES (EXCEPT FOR THE FINANCIAL STATEMENTS
CONCERNING SDI HOLDINGS AND ITS SUBSIDIARIES FOR PERIODS ENDING ON OR PRIOR TO
JUNE 30, 2005, WHICH ARE ADDRESSED IN THE FOLLOWING PARAGRAPH) WHICH HAVE