Document:

EXHIBIT 10.1

 

CONSENT SOLICITATION STATEMENT

 

SPECIAL DEVICES,
INCORPORATED

 

Solicitation of Consents to Proposed Amendments to 

the Indenture Governing

 

11 3/8% SENIOR SUBORDINATED NOTES DUE 2008, SERIES A

11 3/8% SENIOR SUBORDINATED NOTES DUE 2008, SERIES B

(CUSIP No. 847409AC3)

 

 

This
Consent Solicitation, as defined below, will expire on the earlier of: (i) the
date on which the Requisite Consents, as defined below, have been received, or
(ii) 5:00 p.m., New York City time, on May 27, 2005, or such later time and
date to which the Consent Solicitation is extended (such time and date, the
“Expiration Date”).  Consents may be
revoked at any time on or prior to the Expiration Date, but not thereafter.  Provided SDI obtains the Requisite Consents,
SDI intends to execute the Supplemental Indenture, as defined below, containing
the Proposed Amendments, as defined below, on or promptly following the
Expiration Date.

 

Special Devices,
Incorporated, a Delaware corporation (“SDI”), is furnishing this Consent Solicitation
Statement (as the same may be amended or supplemented from time to time, the “Statement”)
and the accompanying form of the Letter of Consent (the “Consent” and, together
with the Statement and other documents related to the Consent Solicitation, as defined
below, the “Consent Documents”) to the holders of record (each, a “Holder” and,
collectively, the “Holders”) at the close of business on April 21, 2005 (the “Record
Date”) of its outstanding 11 3/8% Senior Subordinated Notes due 2008, Series A
and Series B (collectively, the “Senior Notes”), in connection with a
solicitation (the “Consent Solicitation”) of Consents to certain proposed
amendments (the “Proposed Amendments”) to the Indenture, dated as of December
15, 1998, as supplemented and amended by the First Supplemental Indenture,
dated as of December 15, 1998, and the Second Supplemental Indenture, dated as
of September 21, 2000 (collectively, the “Indenture”), among SDI Acquisition
Corp., a Delaware corporation which merged into SDI on December 15, 1998
with SDI assuming all liabilities of SDI Acquisition Corp. under the Indenture
as a surviving company, as Issuer, the Guarantors named in the Indenture and
The Bank of New York, a New York banking corporation, as Successor Trustee (the
“Trustee”).  All capitalized terms used
herein but not defined in this Statement have the meaning ascribed to them in
the Indenture.

 

The principal purpose of
the Consent Solicitation is to eliminate SDI’s obligation under the Indenture
to file Quarterly and Annual Reports on Form 10-Q and 10-K, respectively, and
Current Reports on Form 8-K with the Securities and Exchange Commission (“SEC”).  See 

 

The date of this Statement is April 26, 2005

 

 

“Proposed
Amendments to the Indenture” for a description of the Proposed Amendments.  See “Certain Significant Considerations” for
a discussion of certain factors that should be considered in evaluating the
consequences of the adoption of the Proposed Amendments.

 

The written consent of the
Holders of at least a majority in the principal amount of the outstanding
Senior Notes (the “Requisite Consents”) is required pursuant to the terms of
the Indenture for the Proposed Amendments to be approved and binding on the
Holders or any subsequent holder of the Senior Notes.  Only Holders of the Senior Notes as of the
close of business on the Record Date, as reflected in the records of the
Trustee, are eligible to consent to the Proposed Amendments.  As of the Record Date, $73,594,000 in
aggregate principal amount of the Senior Notes was outstanding.  SDI will accept all properly completed,
executed and dated Consents received by the Depositary, as defined below, on or
prior to the Expiration Date.

 

In the Consent
Solicitation, SDI is seeking Consents to all of the Proposed Amendments to the
Indenture as a single proposal. 
Accordingly, any Consent purporting to consent only to some of the
Proposed Amendments shall constitute the Holder’s approval of all of the
Proposed Amendments.  Provided SDI
receives the Requisite Consents, the Proposed Amendments will be effected by a
third supplemental indenture (the “Supplemental Indenture”) attached hereto as
Appendix A.  On or promptly following the
Expiration Date and upon receipt of the Requisite Consents, SDI intends to
execute the Supplemental Indenture containing the Proposed Amendments.  If the Consent Solicitation is terminated or
withdrawn, the Indenture will remain in effect in its present form.

 

SDI appointed the Trustee
as depositary (the “Depositary”) for Consents with respect to the Consent
Solicitation and SDI will act as information agent (the “Information Agent”)
with respect to the Consent Solicitation.

 

Neither SDI nor the Trustee makes any recommendation as to whether or
not Holders should deliver Consents to the Proposed Amendments in response to
the Consent Solicitation.

 

ii

 

IMPORTANT INFORMATION

 

Any Holder desiring to
consent to the Proposed Amendments should complete and sign the Consent (or a
facsimile thereof) in accordance with the instructions set forth in the Consent
Documents and mail or deliver such manually signed Consent (or such manually
signed facsimile thereof) and any other documents required by the Consent
Documents to the Depositary at the address set forth on the back cover of this
Statement.  Beneficial owners whose Senior Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if they desire
to deliver Consents with respect to the Senior Notes so registered and instruct
the nominee to deliver Consents on the beneficial owner’s behalf.  See “Procedures for Delivering Consents.”

 

The Depositary Trust Company (“DTC”) participants
that hold the Senior Notes on behalf of beneficial owners of the Senior Notes
through DTC are authorized to consent to the Proposed Amendments as if they
were Holders.  To effect
a consent, DTC participants should follow the procedures set forth in “Procedures
for Delivering Consents.”  Holders
delivering Consents will not be obligated to pay fees, commissions or other
expenses of the Depositary.

 

Requests for additional
copies of the Consent Documents and questions and requests for assistance
relating to the Consent Documents may be directed to the Information Agent at
the address and telephone number set forth on the back cover of this
Statement.  Beneficial owners may also
contact their broker, dealer, commercial bank, trust company or other nominee
to obtain additional copies of the Consent Documents.

 

This Statement does not constitute a solicitation of Consents in any
jurisdiction in which, or to or from any person to or from whom, it is unlawful
to make such solicitation under applicable federal securities or blue sky
laws.  The delivery of this Statement
shall not under any circumstances create any implication that the information
contained herein is correct as of any time subsequent to the date hereof or
that there has been no change in the information set forth herein or in any
attachments hereto or in the affairs of SDI or any of its affiliates since the
date hereof.

 

The Statement is accompanied by a
copy of SDI’s Annual Report on Form 10-K for the fiscal year ended October 31,
2004 and a copy of SDI’s Quarterly Report on Form 10-Q for the quarter ended
January 30, 2005, which are incorporated by reference into this Statement, and
a copy of SEC comment letters and SDI’s responses dated March 17, 2005 and
March 31, 2005, respectively.

 

No person has been authorized to give any information or to make any
representation not contained in this Statement, or incorporated by reference
into this Statement, and, if given or made, such information or representation
may not be relied upon as having been authorized by SDI or the Trustee.

 

This Statement has not been approved or disapproved by the SEC or any
state securities commission nor has the SEC or any state securities commission
passed upon the fairness or merits of such transaction nor upon the accuracy or
adequacy of the 

 

iii

 

information contained in the Consent
Documents.  Any representation to the
contrary is unlawful.

 

This Consent Solicitation is made subject to the terms and conditions
set forth in the Consent Documents.  The
Consent Documents contain important information which should be read carefully
before any decision is made with respect to the Consent Solicitation.

 

iv

 

TABLE OF CONTENTS

 

	
  Summary

  	
   

  
	
  Available Information

  	
   

  
	
  Documents
  Incorporated by Reference

  	
   

  
	
  Statement
  Regarding Forward-Looking Statements

  	
   

  
	
  SDI

  	
   

  
	
  Purpose
  and Background of the Consent Solicitation

  	
   

  
	
  Proposed
  Amendments to the Indenture

  	
   

  
	
  Certain Significant
  Considerations

  	
   

  
	
  Principal
  Terms of the Consent Solicitation

  	
   

  
	
  General

  	
   

  
	
  Requisite
  Consents

  	
   

  
	
  Record Date

  	
   

  
	
  Expiration;
  Extension; Amendment; Termination

  	
   

  
	
  Effective Date
  of the Proposed Amendments

  	
   

  
	
  Procedures for
  Delivering Consents

  	
   

  
	
  General

  	
   

  
	
  Determination of Validity

  	
   

  
	
  Revocation of Consents

  	
   

  
	
  United
  States Federal Income Tax Considerations

  	
   

  
	
  Depositary and
  Information Agent

  	
   

  
	
  Fees
  and Expenses

  	
   

  
	
  Miscellaneous

  	
   

  
	
  Appendix A
  —Supplemental Indenture

  	
   

  

 

v

 

SUMMARY

 

The
following summary is qualified in its entirety by reference to, and should be
read in conjunction with, the information appearing elsewhere or incorporated
by reference in the Consent Documents. 
Each of the capitalized terms used in this Summary and not defined
herein has the meaning set forth elsewhere in this Statement or in the
Indenture.  

 

	
  Company

  	
   

  	
  Special Devices,
  Incorporated.

  
	
   

  	
   

  	
   

  
	
  Senior Notes

  	
   

  	
  11 3/8% Senior
  Subordinated Notes due 2008, Series A and Series B, of which $73,594,000 in
  aggregate principal amount was outstanding as of the Record Date.

  
	
   

  	
   

  	
   

  
	
  Consent Solicitation

  	
   

  	
  SDI is seeking Consents
  from the Holders to the Proposed Amendments to the Indenture. Each Holder who
  consents to the Proposed Amendments by delivering Consents in accordance with
  the procedures set forth in the Consent Documents on or prior to the
  Expiration Date shall be deemed to have validly consented to the Proposed
  Amendments. See “Principal Terms of the Consent Solicitation.”

  
	
   

  	
   

  	
   

  
	
  Expiration Date

  	
   

  	
  The Consent Solicitation
  will expire on the earlier of: (i) the date on which the Requisite Consents
  have been received, or (ii) 5:00 p.m., New York City time, on May 27, 2005,
  or such later time and date to which the Consent Solicitation is extended.

  
	
   

  	
   

  	
   

  
	
  Purpose of the Consent
  Solicitation

  	
   

  	
  The principal purpose of
  the Consent Solicitation is to eliminate SDI’s obligation to file with the
  SEC Quarterly and Annual Reports on Form 10-Q and Form 10-K, respectively,
  and Current Reports on Form 8-K.

  
	
   

  	
   

  	
   

  
	
  Proposed Amendments

  	
   

  	
  If the Consent
  Solicitation is consummated, Sections 4.12 and 13.02 of the Indenture will be
  amended by (i) deleting SDI’s obligation to file periodic and current reports
  with the SEC and providing that quarterly and annual reports, which will
  contain certain financial and other information required to be included in
  the periodic reports filed with the SEC, will be sent to the Trustee and
  holders of the Senior Notes and (ii) updating certain contact information,
  respectively. For a detailed
  description of the Proposed Amendments to the Indenture, see “Proposed
  Amendments to the Indenture.”

  

 

 

	
  Requisite Consents

  	
   

  	
  The written consent of the
  Holders of at least a majority in the principal amount of the outstanding
  Senior Notes is required to adopt the Proposed Amendments.

  
	
   

  	
   

  	
   

  
	
  Effect of Proposed
  Amendments on Senior Notes

  	
   

  	
  If the Requisite Consents
  are received and the Proposed Amendments become effective, holders of the
  Senior Notes will no longer have the benefit of receiving copies of or
  otherwise having access to the periodic and current reports on Forms 10-K,
  10-Q and 8-K that SDI is required to file with the SEC as of the date hereof.
  If the Proposed Amendments are approved by Holders of the Senior Notes, the
  quarterly and annual reports that SDI will continue sending to the Trustee
  and holders of the Senior Notes will contain less information than the periodic
  reports that SDI has been filing with the SEC in compliance with Section 4.12
  of the Indenture. See “Certain Significant Considerations” for considerations
  relevant to the Consent Solicitation.

  
	
   

  	
   

  	
   

  
	
  Conditions of the Consent
  Solicitation

  	
   

  	
  SDI
  reserves the right to: (i) extend or amend the Consent Solicitation at
  any time on or prior to the Expiration Date; or (ii) terminate the
  Consent Solicitation prior to the effectiveness of the Proposed Amendments.
  See “Principal Terms of the Consent Solicitation.”

  
	
   

  	
   

  	
   

  
	
  Procedures for Delivering
  Consents

  	
   

  	
  Consents and any other
  required documents should be sent to the Depositary in accordance with the
  instructions set forth in the Consent Documents. See “Procedures for
  Delivering Consents.”

  
	
   

  	
   

  	
   

  
	
  Revocation Rights

  	
   

  	
  Consents may be revoked at
  any time on or prior to the Expiration Date, but not thereafter. To validly
  revoke Consents delivered in connection with the Consent Solicitation,
  Holders must follow the procedures set forth in “Revocation of Consents.”

  

 

2

 

	
  Federal Income Tax
  Consequences

  	
   

  	
  For a discussion of the
  United States federal income tax considerations of the Consent Solicitation,
  see “United States Federal Income Tax Considerations.” Each Holder
  should consult with the Holder’s own tax advisors for a full understanding of
  the tax consequences of the Consent Solicitation.

  
	
   

  	
   

  	
   

  
	
  Depositary

  	
   

  	
  The Trustee is serving as
  Depositary in connection with the Consent Solicitation. Its contact
  information appears on the back cover of this Statement.

  
	
   

  	
   

  	
   

  
	
  Information Agent

  	
   

  	
  SDI is serving as
  Information Agent in connection with the Consent Solicitation. Requests for
  additional copies of and questions related to the Consent Documents should be
  directed to the Information Agent. Its contact information appears on the
  back cover of this Statement.

  

 

3

 

AVAILABLE
INFORMATION

 

SDI is not subject to the
information and reporting requirement of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). 
However, SDI has been filing Annual, Quarterly and Current Reports on
Form 10-K, 10-Q and 8-K, respectively, and other information with the SEC in
compliance with Section 4.12 of the Indenture. 
Such reports and other information (including the documents incorporated
by reference into this Statement) may be inspected and copied at the SEC’s
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.  20549. 
Please call the SEC at 1-800-SEC-0330 for information on the operation
of the Public Reference Room.  SDI’s filings with the SEC are also available at the Internet site http://www.sec.gov
maintained by the SEC.  Except as
indicated below, information on this website is not and should not be
considered part of the Statement and is not incorporated by reference into this
Statement.

 

DOCUMENTS
INCORPORATED BY REFERENCE

 

The following documents
filed by SDI with the SEC since October 31, 2004 are
incorporated into this Statement by reference:

 

•                  Annual Report on Form 10-K for the fiscal
year ended October 31, 2004;

 

•                  Quarterly Report on Form 10-Q/A for the
quarter ended August 1, 2004;

 

•                  Current Report on Form 8-K dated January 31,
2005; and

 

•                  Quarterly Report on Form 10-Q for the quarter
ended January 30, 2005.

 

All documents subsequently
filed by SDI prior to the expiration or termination of the Consent Solicitation
shall be deemed to be incorporated by reference into this Statement and to be a
part hereof.  Any statement contained in
this Statement or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Statement to the extent that a statement contained herein or in any other
subsequently filed document, which also is, or is deemed to be, incorporated by
reference herein, modifies or supersedes any such statement.  Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Statement.

 

The Statement is accompanied
by a copy of SDI’s Annual Report on Form 10-K for the fiscal year ended October
31, 2004 and a copy of SDI’s Quarterly Report on Form 10-Q for the quarter
ended January 30, 2005, which are incorporated by reference into this
Statement, and a copy of SEC comment letters and SDI’s responses dated March
17, 2005 and March 31, 2005, respectively.

 

The Information Agent will
provide without charge to each Holder to whom this Statement is delivered, upon
the written or verbal request of such Holder, a copy of any and all documents
incorporated by reference into this Statement, other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference into
such documents).  Requests 

 

4

 

for such documents should be directed to the
Information Agent at its address and telephone number set forth on the back
cover of this Statement.

 

STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS

 

Except for any historical
information contained herein, the matters discussed in this Statement
(including the documents incorporated by reference) contain certain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.  These forward-looking
statements relating to SDI’s business are based on the beliefs of management as
well as assumptions made by and information currently available to
management.  For example, the words “anticipates,”
“believes,” “estimates,” “expects,” “plans,” “intends” and similar expressions,
as they relate to SDI’s operations, are intended to identify forward-looking
statements.  Such statements reflect SDI’s
current views with respect to future events and are subject to certain risks,
uncertainties and assumptions that could cause actual results to differ
materially from those expressed in any forward-looking statement.  Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein as anticipated,
believed, estimated or expected.  SDI
does not intend to update these forward-looking statements.

 

SDI

 

SDI is a designer and
manufacturer of highly reliable precision engineered pyrotechnic devices.  These devices are used predominantly in vehicle
airbag and other automotive safety systems. 
SDI’s primary products are initiators, which function like an “electrical
match” to ignite the gas generating charge in an automotive airbag system.

 

SDI’s Automotive Products
Division is an independent supplier of initiators sold to leading domestic and
foreign automotive airbag system manufacturers. 
Those manufacturers use SDI’s product in the assembly of integrated
airbag safety systems, which they then sell to automobile original equipment
manufacturers.  SDI’s Automotive Division
accounted for virtually all of SDI’s consolidated net sales and assets as of
and for the year ended October 31, 2004.

 

Following the expiration of
certain noncompete agreements in select aerospace and military market segments,
SDI has been developing internal capabilities for an emerging Aerospace
Division to reenter these markets. 
During the third quarter of 2004, SDI began bidding on contracts in
these markets and during the fourth quarter of 2004 shipped a small commercial
order under $0.1 million to a customer in these markets.  SDI expects to continue to pursue
opportunities in this business.  SDI has
been working on test units of a new product line called electronic ignition
modules that will be sold to commercial mining and blasting customers
worldwide.  The initial shipments to
customers are expected in 2005.

 

SDI’s principal executive
offices are located at 14370 White Sage Road, Moorpark, California  93021 and SDI’s phone number is (805)
553-1200.

 

5

 

PURPOSE
AND BACKGROUND OF THE CONSENT SOLICITATION

 

The principal purpose of the
Consent Solicitation is to eliminate SDI’s obligation under the Indenture to
file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K with the SEC. 
Although SDI is not subject to the periodic reporting requirements set
forth in Sections 13 or 15(d) of the Exchange Act, SDI has been preparing and
filing with the SEC the foregoing periodic and current reports in order to
comply with the requirements set forth in the Indenture.

 

In addition to filing
periodic and current reports with the SEC, SDI is also subject to certain
regulatory requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”) and SEC rules and regulations promulgated under the Sarbanes-Oxley
Act.  With the enactment of the
Sarbanes-Oxley Act, SDI’s costs of complying with the reporting obligations
under the Exchange Act on the basis of SDI’s contractual obligations under the
Indenture will become significant as consulting, accounting and legal costs
increase significantly in light of new SEC rules and regulations promulgated
under the Sarbanes-Oxley Act.  The cost
of periodic reporting, including (i) filing Current Reports on Form 8-K to
disclose an increased number of reportable events, and (ii) evaluating the
effectiveness of and documenting SDI’s system of internal control over
financial reporting and disclosure controls and procedures required by the SEC
rules and regulations promulgated under the Sarbanes-Oxley Act, is burdensome
to SDI, given SDI’s market capitalization and revenues, compared to larger
public companies and will lead to significant increases in SDI’s annual
accounting and legal costs.

 

SDI estimates that the annual
costs of compliance with the foregoing requirements were at least $400,000 in
fiscal 2004, which include the costs related to (i) annual audit and legal
fees, (ii) SEC EDGAR printer costs, and (iii) time devoted by SDI’s staff to
the preparation and filing of periodic and current reports with the SEC.

 

In addition, SDI estimates
that one-time increased costs to document and test SDI’s system of internal
control over financial reporting will be approximately between $450,000 to $700,000 in fiscal years 2005 and 2006.  These estimates include costs related to (i)
the retention of consultants to review, expand and document the system of
internal control over financial reporting and documentation procedures, (ii)
the hiring of additional SDI staff or an additional professional to oversee the
expanded process and documentation of internal control over financial
reporting, and (iii) additional audit fees to be charged by SDI’s independent
accountants during 2005 and 2006 to audit the new system of internal control.

 

In addition, SDI anticipates
incurring increased annual costs to document and test internal control over
financial reporting of approximately $300,000 on an annual ongoing basis, which costs include SDI’s internal staff
time and expenses and increased audit fees related to internal control over
financial reporting.

 

Since the enactment of the
Sarbanes-Oxley Act, SDI has been weighing the increased costs and compliance
burdens against the value to SDI, its stockholders and Holders of the Senior
Notes of filing periodic and current reports with the SEC in order to satisfy
SDI’s contractual obligations under the Indenture.  SDI does not have any class of equity
securities registered under the Exchange Act. 
There were only 7 Holders of the Senior Notes as of the 

 

6

 

Record Date.  SDI believes that Holders of the Senior Notes may derive little benefit
from SDI’s obligation to file periodic and current reports with the SEC.

 

In addition, management
devotes a significant amount of time and attention to the preparation of the
periodic and current reports required under the Exchange Act and to compliance
with the SEC rules and regulations promulgated under the Sarbanes-Oxley
Act.  Management believes this time could
be spent more efficiently on operating SDI’s business and evaluating business
opportunities.

 

Moreover, once filed with
the SEC, periodic and current reports on Form 10-K, Form 10-Q and
Form 8-K are publicly available and expose to the public a considerable
amount of potentially sensitive information concerning SDI, including, but not
limited to, SDI’s financial statements and notes to the financial
statements.  SDI believes that the filing
of such information with the SEC places SDI at a competitive disadvantage to
its competitors that do not publicly file such information.

 

If SDI obtains the Requisite
Consents and upon the execution of the Supplemental Indenture by SDI and the
Trustee, SDI will no longer be required to file periodic and current reports
with the SEC and will no longer be subject to many of the regulations imposed
by the SEC pursuant to the Sarbanes-Oxley Act. 
SDI will provide the Trustee and holders of the Senior Notes with
quarterly and annual reports which will contain more limited information than
the information provided in the periodic reports filed by SDI with the
SEC.  See “Certain Significant
Considerations.”

 

Compliance with rules and
regulations promulgated by the SEC under the Sarbanes-Oxley Act and the
preparation of periodic and current reports involve the above estimated costs
and disclosure of certain sensitive information about SDI’s operations.  SDI expects that if the Proposed Amendments
become effective, it will result in significant savings to SDI of the above
estimated costs, will allow its management to spend more time on business
matters that bear a direct relationship to SDI’s operations and profitability
and will give SDI a competitive advantage over its publicly held
competitors.  SDI believes that these
savings and competitive advantages will ultimately benefit all holders of the
Senior Notes.  SDI is, therefore,
requesting that the Holders consent to the Proposed Amendments which would
eliminate SDI’s obligation under the Indenture to file periodic and current reports
with the SEC.  See “Proposed Amendments
to the Indenture.”

 

PROPOSED
AMENDMENTS TO THE INDENTURE

 

SDI is soliciting the
Consents of the Holders to the Proposed Amendments and to the execution and
delivery by SDI of the Supplemental Indenture which will effect
the Proposed Amendments.  A copy of the
Supplemental Indenture is provided as Appendix A to this Statement.  All statements herein regarding the substance
of any provision of the Proposed Amendments, Supplemental Indenture and the
Indenture are qualified in their entirety by reference to the Supplemental
Indenture and the Indenture.  Copies of
the Indenture are available upon request from the Information Agent at the
address and telephone number set forth on the 

 

7

 

back cover of this Statement.  We urge you to read the text of the
Supplemental Indenture in its entirety.

 

Generally, the Proposed
Amendments (i) delete or modify the covenants contained in Section 4.12 of the
Indenture relating to SDI’s obligation to file periodic and current reports
with the SEC and provide copies of such reports to the Trustee and holders of
the Senior Notes; and (ii) update the contact information provided in Section
13.02 of the Indenture.  See “Certain
Significant Considerations” for a discussion of certain factors that should be
considered in evaluating the consequences of the adoption of the Proposed
Amendments.

 

Section 4.12 of the
Indenture in effect as of the date thereof provides as follows:

 

Reports to Holders.  At all times from and after the
earlier of (i) the date of the commencement of an Exchange Offer or the
effectiveness of the Shelf Registration Statement (the “Registration Date”)
and (ii) the date 180 days after the Issue Date, in either case,
whether or not the Company is then required to file reports with the
Commission, the Company will file with the Commission (to the extent accepted
by the Commission) annual reports containing the information required to be
contained in Form 10-K promulgated under the Exchange Act, quarterly
reports containing the information required to be contained in Form 10-Q
promulgated under the Exchange Act and from time to time such other information
as is required to be contained in Form 8-K promulgated under the Exchange
Act.  The Company will also be required
(a) to supply the Trustee and each Holder of Securities, or supply to the
Trustee for forwarding to each such Holder, without cost to such Holder, copies
of such reports and other documents within 15 days after the date on which
the Company files such reports and documents with the Commission or the date on
which the Company would be required to file such reports and documents if the
Company were so required and (b) if filing such reports and documents with
the Commission is not accepted by the Commission or is prohibited under the
Exchange Act, to supply at the Company’s cost copies of such reports and
documents to any prospective Holder of Securities promptly upon written
request.  In addition, at all times prior
to the earlier of the Registration Date and the date 180 days after the
Issue Date, the Company will, at its cost, deliver to each Holder of the
Securities quarterly and annual reports substantially equivalent to those that
would be required by the Exchange Act. 
Furthermore, at all times prior to the Registration Date, the Company
will supply at the Company’s cost copies of such reports and documents to any
prospective Holder of Securities promptly upon written request and as required
by Rule 144A(d)(4) under the Securities Act.

 

If the Consent Solicitation
is consummated, the text of Section 4.12, as amended by the Proposed
Amendments, will provide as follows:

 

Reports to Holders.  The Company shall supply to the
Trustee and each Holder of Securities, or supply to the Trustee for forwarding
to each such 

 

8

 

Holder, without cost to such Holder, (a) on a quarterly basis, no later
than 45 days after the end of each of the first three fiscal quarters of each
of the Company’s fiscal years during which the Securities remain outstanding,
the information required by the following items of Form 10-Q as in effect on
the effective date of this Third Supplemental Indenture (which incorporates by
reference Regulations S-K and S-X of the Rules and Regulations of the
Securities and Exchange Commission) in the form of: (1) a quarterly report
which includes: (i) Item 2 of Part I of Form 10-Q; and (ii) Items 1, 2, 3 and 4
of Part II of Form 10-Q; and (2) unaudited quarterly financial statements which
comply with the requirements of Item 1 of Part I of Form 10-Q; and (b) no later
than 90 days after the end of each of the Company’s fiscal years during which
the Securities remain outstanding, the information required by the following items
of Form 10-K as in effect on the effective date of this Third Supplemental
Indenture (which incorporates by reference Regulations S-K and S-X of the Rules
and Regulations of the Securities and Exchange Commission) in the form of: (1)
an annual report which includes: (i) Part I of Form 10-K, (ii) Items 6, 7, 7A
and 9 of Part II of Form 10-K, and (iii) Part III of Form 10-K; and (2) audited
financial statements which comply with the requirements of Item 8 of Part II of
Form 10-K as well as unaudited annual financial statements of any
unconsolidated subsidiaries or other entities if such separate financial
statements would be required under Rule 3-09 of Regulation S-X as in
effect on the effective date of this Third Supplemental Indenture, provided that,
nothing contained herein shall require the Company to provide audited financial
statements of such unconsolidated subsidiaries or other entities.  Notwithstanding any language to the contrary,
nothing in this Section 4.12 shall require the Company or its auditors to
comply with Item 4 of Part I of Form 10-Q or Item 9A of Part II of Form 10-K as
in effect on the effective date of this Third Supplemental Indenture or to
review the quarterly or annual reports described above unless such requirements
are imposed under generally accepted accounting principles or other accounting
pronouncements or are necessary in order for the auditors to provide an opinion
on the Company’s financial statements. 
In addition, the Company shall make available copies of such financial
statements and reports to one or more market makers in fixed income
securities.  Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers’
Certificates).

 

If the Consent Solicitation
is consummated, the contact information contained in Section 13.02 of the
Indenture will be updated as provided in the Supplemental Indenture attached
hereto as Appendix A.

 

9

 

In the Consent Solicitation,
SDI is seeking Consents to all of the Proposed Amendments to the Indenture as a
single proposal.  Accordingly, the
delivery of the fully completed and executed Consent by a Holder pursuant to
the Consent Documents shall constitute approval by such Holder of all of the
Proposed Amendments.  Upon the receipt of
the Requisite Consents with respect to the Proposed Amendments and the
execution of the Supplemental Indenture, the Senior Notes will be subject to
the terms of the Indenture as modified by the Supplemental Indenture.  If the Consent Solicitation is terminated,
the Proposed Amendments will have no effect on the Senior Notes or the Holders.

 

CERTAIN
SIGNIFICANT CONSIDERATIONS

 

The following considerations, in addition to the
other information described elsewhere in this Statement, should be carefully
considered by each Holder before deciding whether to consent to the Proposed
Amendments.

 

If the Proposed Amendments become effective, certain
covenants to be set forth in Section 4.12 of the Indenture, as described below,
will be less restrictive and will afford less protection to Holders than the
covenants contained in Section 4.12 of the Indenture as of the date
hereof.  In particular, Section 4.12 of
the Indenture will be amended to eliminate SDI’s obligation to file Quarterly
and Annual Reports on Form 10-Q and Form 10-K, respectively, and
Current Reports on Form 8-K with the SEC and to provide copies of such
reports to the Trustee and holders of the Senior Notes.  As a result, the amount of information to be
provided to holders of the Senior Notes upon the effectiveness of the Proposed
Amendments will be less than the amount of information currently supplied by
SDI and it will be more difficult for the holders of the Senior Notes to obtain
information about SDI.  Because SDI will
cease filing the foregoing periodic and current reports with the SEC,
information about SDI that is required to be included in such reports will no
longer be available at the SEC’s Internet site http://www.sec.gov.

 

SDI shall continue to
provide to the Trustee and the holders of the Senior Notes the following
information: (a) on a quarterly basis, no later than 45 days after the end of
each of the first three fiscal quarters of SDI’s fiscal year, (i) unaudited financial
statements and notes to financial statements as required by the SEC rules and
regulations applicable to Item 1 of Part I of the Quarterly Report on Form 10-Q
in effect on the date of the execution of the Supplemental Indenture; and (ii)
a quarterly report which will contain management’s discussion and analysis of
financial condition and results of operations and a description of SDI’s legal
proceedings, unregistered sales of equity securities, defaults upon senior
securities and matters submitted to the vote of SDI’s stockholders, as required
by the SEC rules and regulations applicable to Item 2 of Part I and Items 1, 2,
3 and 4 of Part II, respectively, of the Quarterly Report on Form 10-Q in
effect on the date of the execution of the Supplemental Indenture; and (b) no
later than 90 days after the end of SDI’s fiscal year, (i) audited financial
statements and notes to financial statements as required by the SEC rules and
regulations applicable to Item 8 of Part II of the Annual Report on Form 10-K
in effect on the date of the execution of the Supplemental Indenture and
unaudited annual financial statements of any unconsolidated subsidiaries of SDI
or other entities, the financial statements of which are not consolidated with
those of SDI; and (ii) an annual report containing certain information as
described below.

 

10

 

In addition, the foregoing
annual report will include a description of SDI’s business, properties, legal
proceedings, matters submitted to a vote of security holders, selected
financial data, management’s discussion and analysis of financial condition and
results of operations, quantitative and qualitative disclosures about the
market risk, information about SDI’s directors, executive officers and
beneficial owners and changes in and disagreements with accountants as required
by the SEC rules and regulations applicable to Part I, Items 6, 7, 7A and 9 of
Part II, and Part III of an Annual Report on Form 10-K in effect on the date of
the execution of the Supplemental Indenture. 
SDI also shall be required to provide copies of the foregoing financial
statements and reports to at least one market maker in fixed income securities.

 

However, as a result of the
Proposed Amendments, SDI shall no longer be under any obligation to provide
holders of the Senior Notes with the following information:

 

(i)                                   quantitative and qualitative disclosures
about the market risk for the first, second and third quarters of SDI’s fiscal
year as required by Item 3 of Part I of the Quarterly Report on Form 10-Q;

 

(ii)                                a discussion of the market for SDI’s common
equity, related stockholder matters and SDI’s purchases of equity securities as
required by Item 5 of Part II of an Annual Report on Form 10-K in effect on the
date of the execution of the Supplemental Indenture;

 

(iii)                             documents that are required to be filed as exhibits to
the Quarterly Report on Form 10-Q and the Annual Report on Form 10-K by the
applicable SEC rules and regulations;

 

(iv)                            audited annual financial statements of any
unconsolidated subsidiary of SDI or other entity, the financial statements of
which are not consolidated with those of SDI even if such subsidiary or other
entity meets the requirements of Rule 3-09 of Regulation S-X in effect on the date
of the execution of the Supplemental Indenture; and

 

(v)                               disclosure required to be provided in a
Current Report on Form 8-K within four business days following (or in Item 5 of
Part II of the Quarterly Report on Form 10-Q or Item 9B of Part II of the Annual
Report on Form 10-K if the required Current Report on Form 8-K was not filed in
compliance with the SEC rules and regulations), among other matters, SDI’s
entry into or termination of a material definitive agreement, the completion of
acquisition or disposition of assets, the creation of a direct financial
obligation, unregistered sales of equity securities, changes in the certifying
accountant, non-reliance on previously issued financial statements as well as
certain events related to the corporate governance and management matters.

 

In addition, SDI shall be
under no obligation to (i) disclose its efforts to test its system of internal
control over financial reporting and disclosure controls and procedures or any
changes to or material weaknesses or significant deficiencies in such system of
internal control over financial reporting and disclosure controls and
procedures or (ii) comply with other requirements of Item 4 of Part I of a
Quarterly Report on Form 10-Q or Item 9A of Part II of the Annual Report on
Form 10-K.

 

SDI’s principal executive
officer and principal financial officer will also be under no obligation to
sign certifications required by the Sarbanes-Oxley Act and SEC rules and
regulations promulgated under the Sarbanes-Oxley Act related to, among other
matters, the 

 

11

 

absence of material misstatements or omissions in
the periodic reports filed with the SEC and the fair presentation of SDI’s
financial condition and results of operations in such reports.

 

Moreover, there can be no
assurance that the liquidity, market value and price volatility of the Senior
Notes will not be adversely affected by the consummation of the Consent
Solicitation.

 

See “Proposed Amendments to the Indenture” for a
detailed description of the Proposed Amendments.

 

PRINCIPAL
TERMS OF THE CONSENT SOLICITATION

 

This section summarizes the terms of the Consent
Solicitation.  While SDI believes that
this description covers the material terms of the Consent Solicitation, this
summary may not contain all the information that is important to the Holder of
the Senior Notes.  You should read
carefully the entire Statement and other documents SDI refers to or
incorporates by references into the Statement for a more complete understanding
of the Consent Solicitation.

 

General

 

SDI is seeking Consents to
all of the Proposed Amendments for the Indenture as a single proposal.  Accordingly, any Consent purporting to
consent to only some of the Proposed Amendments will be deemed to be approval
by a Holder as to all of the Proposed Amendments.  On or promptly following the Expiration Date
and upon receipt of the Requisite Consents, SDI intends to execute the
Supplemental Indenture containing the Proposed Amendments.

 

Holders who deliver their properly completed,
executed and dated Consents to the Depositary on or prior to the Expiration
Date shall be deemed to have validly consented to the Proposed Amendments.  Holders who do not
deliver their Consents on or prior to the Expiration Date, shall be bound by
the Proposed Amendments upon the execution of the Supplemental Indenture by SDI
and the Trustee.  The adoption of the
Proposed Amendments may have adverse consequences for Holders who elect not to deliver
their Consents.  See “Certain Significant
Considerations.”  If the Consent
Solicitation is terminated or withdrawn, the Indenture will remain in effect in
its present form.

 

Requisite Consents

 

Under Section 10.02 of the
Indenture, approval of the Proposed Amendments requires the written consent of
the Holders of at least a majority in the principal amount of the outstanding
Senior Notes.  If the Requisite Consents
are received, the terms of the Indenture would permit and direct the Trustee to
consent to the Proposed Amendments and to execute the Supplemental Indenture.

 

Record Date

 

SDI has established the
close of business on April 21, 2005 as the Record Date.  All Holders of the Senior Notes as of the
Record Date, as reflected in the records of the Trustee, are 

 

12

 

eligible to participate in the Consent
Solicitation.  As of the Record Date,
there were 7 Holders of the Senior Notes and $73,594,000 in aggregate principal
amount of the Senior Notes was outstanding.

 

Expiration; Extension; Amendment; Termination

 

The Consent Solicitation
expires at 5:00 p.m., New York City time, on May 27, 2005.  If the Requisite Consents are obtained before
that time, the Consent Solicitation will expire following receipt of the
Requisite Consents.  SDI expressly
reserves the right to extend the Expiration Date at any time for such period(s)
as it may determine, in its sole discretion, from time to time by giving
written notice to the Depositary no later than 9:00 a.m., New York City time,
on the next business day after the previously announced Expiration Date.

 

SDI expressly reserves the
right, at any time on or prior to the Expiration Date, to:  (i) amend any of the terms of the
Consent Solicitation in any manner it deems necessary or advisable in its sole
discretion; or (ii) terminate the Consent Solicitation.

 

The Consent Solicitation may
also be terminated after the Expiration Date and prior to the effectiveness of
the Proposed Amendments in SDI’s sole discretion, whether or not the Requisite
Consents have been received.

 

If the Consent Solicitation,
or any of the Consent Documents, is amended prior to the Expiration Date in a
manner determined by SDI, in its sole discretion, to constitute a material
change to the terms of the Consent Solicitation, SDI shall promptly disseminate
additional Consent Solicitation materials and, if necessary, extend the
Expiration Date for a period deemed by SDI to be adequate to permit Holders to
consider such amendments.

 

Any such extension,
amendment or termination of the Consent Solicitation will be followed as
promptly as practicable by a press release or written notice to the Holders.

 

Effective Date of the Proposed Amendments

 

Provided the Requisite
Consents are received, the Proposed Amendments will become effective upon the
execution of the Supplemental Indenture by SDI and the Trustee.  If the Supplemental Indenture is executed,
Holders of the Senior Notes will be bound thereby, regardless of whether or not
they consented to the Proposed Amendments. 
SDI intends to execute the Supplemental Indenture on or promptly
following the Expiration Date.

 

PROCEDURES
FOR DELIVERING CONSENTS

 

General

 

Each Holder who delivers a Consent to the Proposed Amendments in accordance with the
procedures set forth in the Consent Documents is deemed to have validly
consented to the Proposed Amendments.

 

13

 

To effectively consent to
the Proposed Amendments, a properly completed Consent (or a facsimile thereof)
duly executed by the Holder must be received by the Depositary at its address
set forth on the back cover of this Statement on or prior to the Expiration
Date.  Consents
should be sent only to the Depositary and should not be sent to SDI.

 

If the Senior Notes are held
of record by a broker, dealer, commercial bank, trust company or other nominee
and the beneficial owner of the Senior Notes wishes to consent to the Proposed
Amendments, the beneficial owner must promptly contact and instruct such
registered Holder to deliver a Consent to the Depositary
on the beneficial owner’s behalf.  Any
beneficial owner of the Senior Notes held of record by a DTC participant may
direct the DTC participant through which such
beneficial owner’s Senior Notes are held to execute a Consent on such
beneficial owner’s behalf and deliver the executed Consent to the Depositary.

 

Consents by the Holder(s) of
the Senior Notes should be executed in exactly the same manner as the name(s)
of such Registered Holder(s) appear(s) on the Senior Notes.  If the Senior Notes to which a Consent relates are held of record by two or more joint
holders, all such holders should sign the Consent.  If a Consent is
signed by a trustee, partner, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person must so indicate when signing
and must submit with the Consent appropriate evidence of authority to execute
the Consent.  The Consent will be deemed
to relate to the entire aggregate principal amount of the Senior Notes
registered in the name of such Holder. 
If a Consent is executed by a person other than
the Holder of record, then it must be accompanied by a proxy duly executed by
the Holder.

 

The method
of delivery of the Consent and any other required documents to the Depositary
is at the election and risk of the Holder and, except as otherwise provided in
the Consent, delivery will be deemed made only when the Consent or any other
required document is actually received by the Depositary.  If the delivery is by mail, it is suggested
that the Holder use registered mail with return receipt requested, and that the
mailing be made sufficiently in advance of the Expiration Date to permit
delivery to the Depositary prior to such date.

 

In no event
should a Holder deliver the Senior Notes together with the Consent.  Giving a Consent
will not affect the Holder’s right to sell or transfer the Senior Notes.

 

Determination of Validity

 

All questions as to the
validity, form, eligibility (including time of receipt) and acceptance of any
delivered Consent pursuant to any of the procedures described above shall be
determined by SDI, in its sole discretion (which determination shall be final
and binding).  SDI reserves the absolute
right to reject any or all deliveries of any Consent determined by it not to be
in proper form or the acceptance of which would, in SDI’s opinion, be
unlawful.  SDI also reserves the absolute
right, in its sole discretion, to waive any defect or irregularity as to any
delivery of any Consent of any particular Holder, whether or not similar
defects or irregularities are waived in the case of other Holders.  SDI’s interpretation of the terms and
conditions of the Consent Solicitation, including the instructions to the
Consent, shall be final and binding.  Any
defect or irregularity in connection with deliveries of Consents must be cured
within such time as 

 

14

 

SDI determines, unless waived by SDI.  Deliveries of Consents shall not be deemed to
have been made until all defects and irregularities have been waived by SDI or
cured.  None of SDI, the Trustee, or any
other person shall be under any duty to give notification of any defects or
irregularities in deliveries of Consents or shall incur any liability for
failure to give any such notification.

 

REVOCATION
OF CONSENTS

 

A Consent may be revoked by
a Holder of the Senior Notes if the Depositary receives the written Notice of
Revocation of Consent (or a facsimile thereof) on or prior to the Expiration
Date.  A Holder desiring to revoke its
Consent must deliver to the Depositary the Notice of Revocation of Consent in
the form provided by SDI herewith.  The
Notice of Revocation of Consent must be signed by the Holder in the same manner
as the Consent to which the Notice of Revocation of Consent relates.  Notices of Revocation of Consent must be sent
to the Depositary at the address set forth on the back cover of this Statement
in accordance with the procedures set forth in the Consent Documents.

 

If the Consent Solicitation,
or any of the Consent Documents, is amended prior to the Expiration Date in a
manner determined by SDI, in its sole discretion, to constitute a material
change to the terms of the Consent Solicitation, SDI shall promptly disseminate
additional Consent Solicitation materials and, if necessary, extend the
Expiration Date for a period deemed by SDI to be adequate to permit Holders to
consider such amendments and revoke their Consents.  See “Principal Terms of the Consent
Solicitation.”

 

SDI reserves the right to
contest the validity of any Notice of Revocation of Consent and all questions
as to validity, including the time of receipt of any Notice of Revocation of
Consent, will be determined by SDI in its sole discretion, which determination
shall be final and binding on all parties. 
None of SDI, the Trustee, or any other person shall be under any duty to
give notification of any defects or irregularities with respect to any Notice
of Revocation of Consent or shall incur any liability for failure to give any
such notification.

 

A revocation of a Consent may be rescinded only by the execution and
delivery of a new Consent on or prior to the Expiration Date.  A Holder who delivered a Notice of Revocation
of Consent may thereafter deliver a new Consent by following the procedures
described in the Consent Documents at any time on or prior to the Expiration
Date.  See “Procedures for Delivering
Consents.”

 

There are
no appraisal or other similar statutory rights available to Holders in
connection with the Consent Solicitation.

 

UNITED
STATES FEDERAL INCOME TAX CONSIDERATIONS

 

The following is a general
discussion of certain of the United States federal income tax consequences of
the Proposed Amendments that may be relevant to Holders of the Senior
Notes.  This summary does not describe
all of the tax consequences that may be relevant to a Holder in light of its
particular circumstances.  For example,
it does not deal with special classes of 

 

15

 

Holders, such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies,
partnerships or other pass-through entities for United States federal income
tax purposes, dealers and traders in securities or currencies, or tax-exempt
investors.  It also does not discuss
securities held as part of a hedge, straddle, “synthetic security” or other
integrated transaction.  This summary
also does not address the tax consequences to: 
(i) Holders that have a functional currency other than the U.S. dollar,
or (ii) certain former citizens or residents of the United States.  Further, it does not include any description
of any United States federal estate, gift or alternative minimum tax consequences
or the tax laws of any state or local government or of any foreign government
that may be applicable to the securities.

 

This summary is based on the
Internal Revenue Code of 1986, as amended (the “Code”), the Treasury
regulations promulgated thereunder and administrative and judicial interpretations
thereof, all as of the date hereof, and all of which are subject to change
and/or differing interpretations, possibly on a retroactive basis.  SDI has not requested, and will not request,
a ruling from the Internal Revenue Service (“IRS”) with respect to the
statements made and the conclusions reached in this summary.  There can be no assurance that the IRS will
not disagree with or challenge any of the conclusions set forth herein.

 

Holders
should consult with their own tax advisors regarding the federal, state, local
and foreign income, franchise, personal property and any other tax consequences
of the Proposed Amendments discussed in this Consent Solicitation.

 

Under general principles of
federal income tax law, the modification of a debt instrument creates a deemed
exchange of the original debt instrument for the modified debt instrument upon which gain or loss is realized (a “Deemed
Exchange”) if the modified debt instrument differs materially either in kind or
in extent from the original debt instrument. 
In general, a modification of a debt instrument is a “significant
modification,” and therefore results in a Deemed Exchange, if, based on all the
facts and circumstances and taking into account certain modifications of the
debt instrument collectively, the legal rights or obligations that are altered
and the degree to which they are altered are “economically significant.”  A modification of a debt instrument that is
not a significant modification does not create a Deemed Exchange.

 

SDI intends to treat the
Proposed Amendments as not constituting a significant modification to the terms
of the Senior Notes for U.S. federal income tax purposes.  If the Proposed Amendments do not constitute
a significant modification to the terms of the Senior Notes for U.S. federal
income tax purposes, a Holder would not recognize any gain or loss, for U.S.
federal income tax purposes, upon the effectiveness of the Proposed Amendments,
and would have the same adjusted tax basis and holding period in the Senior
Notes after the adoption of the Proposed Amendments that such Holder had in the
Senior Notes immediately before such adoption.

 

DEPOSITARY
AND INFORMATION AGENT

 

The Trustee has been
appointed as Depositary for the Consent Solicitation.  All Consents and correspondence sent to the
Depositary should be directed to the address set forth on the back cover of
this Statement.  SDI has agreed to
indemnify the Depositary for certain liabilities, 

 

16

 

including liabilities under the federal securities
laws.  The Trustee has agreed to
facilitate this Consent Solicitation as Depositary; however, the Trustee is not
passing upon the merits of this Consent Solicitation.

 

SDI will act as Information
Agent with respect to the Consent Solicitation. 
Requests for additional copies of and questions relating to the Consent
Documents may be directed to the Information Agent at the address and telephone
number set forth on the back cover of this Statement.

 

In connection with the Consent
Solicitation, directors, officers and regular employees of SDI (who will not be
specifically compensated for such services) may solicit Consents by use of the
mails, personally or by telephone, facsimile or other means.

 

FEES AND EXPENSES

 

In addition to its customary
fees, SDI will pay the Trustee, as Depositary, reasonable and customary fees
for its services and will reimburse it for its out-of-pocket expenses in
connection with the Trustee’s services as Depositary.

 

SDI will also pay brokerage
firms and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Statement
and related documents to the beneficial owners of the Senior Notes and in
handling or forwarding deliveries of Consents on behalf of the beneficial
owners of the Senior Notes.

 

No commission or other
remuneration will be paid or given, directly or indirectly, in connection with
this Consent Solicitation.

 

MISCELLANEOUS

 

SDI is not aware of any
jurisdiction where the making of the Consent Solicitation is not in compliance
with the laws of such jurisdiction.  If
SDI becomes aware of any jurisdiction where the making of the Consent
Solicitation would not be in compliance with such laws, SDI will make a good
faith effort to comply with any such laws or may seek to have such laws
declared inapplicable to the Consent Solicitation.  If, after such good faith effort, SDI cannot
comply with any such applicable laws, the Consent Solicitation will not be made
to (nor will Consents be accepted from or on behalf of) the Holders of the
Senior Notes residing or having a principal place of business in each such
jurisdiction.

 

From time to time, SDI or
its affiliates may engage in additional Consent Solicitations.  Any future Consent Solicitations may be on
the same terms or on terms that are more or less favorable to Holders of the
Senior Notes than the terms of this Consent Solicitation, as SDI may determine
in its sole discretion.

 

17

 

APPENDIX
A

 

SUPPLEMENTAL INDENTURE

 

A-1

 

SPECIAL
DEVICES, INCORPORATED,

as Issuer

 

 

and

 

THE
BANK OF NEW YORK,

as
Successor Trustee

 

 

THIRD
SUPPLEMENTAL INDENTURE

 

Dated
as of            , 2005

 

to

 

INDENTURE

 

Dated
as of December 15, 1998

 

between

 

SPECIAL
DEVICES, INCORPORATED, as Issuer

 

and

 

THE
BANK OF NEW YORK, as Successor Trustee

 

 

up to
$150,000,000

 

11
3/8% Senior Subordinated Notes due 2008, Series A

11
3/8% Senior Subordinated Notes due 2008, Series B

 

A-2

 

THIRD SUPPLEMENTAL INDENTURE, dated as of            ,
2005, between Special Devices, Incorporated, a Delaware corporation (the “Company”),
and The Bank of New York, a New York banking corporation, as successor trustee
(the “Trustee”).

 

WHEREAS, SDI Acquisition Corp., a Delaware
corporation (“SDI Acquisition”), has heretofore executed and delivered to the
Trustee an Indenture dated as of December 15, 1998 (as amended, the “Indenture”),
providing for the issuance of its 11 3/8% Senior Subordinated Notes due 2008,
Series A in the principal amount of $100,000,000 (the “Initial Securities”) and
its 11 3/8% Senior Subordinated Notes due 2008, Series B (the “Exchange
Securities” and, together with the Initial Securities, the “Securities”); and

 

WHEREAS, SDI Acquisition merged with and into the
Company and, in connection with the First Supplemental Indenture, the Company
assumed by operation of law all of SDI Acquisition’s debts, liabilities, duties
and obligations, including SDI Acquisition’s obligations in respect of the
Securities and under the Indenture; and

 

WHEREAS, The Bank of New York acquired the corporate
trust assets of United States Trust Company of New York as of April 18, 2001,
in accordance with which The Bank of New York became the successor trustee
under the Indenture; and

 

WHEREAS, pursuant to that certain Consent
Solicitation Statement dated April 26, 2005 (the “Statement”), the Company
solicited the consent of the Holders of the Securities to certain amendments to
the Indenture; and

 

WHEREAS, in accordance with Section 10.02 of the
Indenture, the Company has obtained the written consent of the Holders of a
majority in principal amount of the Securities outstanding as of April 21, 2005
to the amendments of the Indenture set forth in the Statement; and

 

WHEREAS, all conditions and requirements necessary
to make this Third Supplemental Indenture a valid, binding and legal
instrument, in accordance with its terms upon the Company and the Trustee, have
been performed and fulfilled by the applicable parties hereto and the execution
and delivery thereof have been in all respects duly authorized by the
applicable parties hereto.

 

NOW, THEREFORE, in consideration of the above
premises, and for the purpose of memorializing the amendments to the Indenture
consented to by the Holders of the Securities, each party agrees, for the
benefit of the others and for the equal and ratable benefit of the Holders of
the Securities, as follows:

 

A-3

 

ARTICLE
ONE

 

AMENDMENT
OF INDENTURE

 

SECTION 1.01.                 Amendment and
Restatement of Section 4.12.

 

Section 4.12 of the Indenture is hereby amended and
restated in its entirety to read as follows:

 

SECTION 4.12                    Reports to Holders.

 

The Company shall supply to the Trustee and each Holder of Securities,
or supply to the Trustee for forwarding to each such Holder, without cost to
such Holder, (a) on a quarterly basis, no later than 45 days after the end of
each of the first three fiscal quarters of each of the Company’s fiscal years
during which the Securities remain outstanding, the information required by the
following items of Form 10-Q as in effect on the effective date of this Third
Supplemental Indenture (which incorporates by reference Regulations S-K and S-X
of the Rules and Regulations of the Securities and Exchange Commission) in the
form of: (1) a quarterly report which includes: (i) Item 2 of Part I of Form
10-Q; and (ii) Items 1, 2, 3 and 4 of Part II of Form 10-Q; and (2) unaudited
quarterly financial statements which comply with the requirements of Item 1 of
Part I of Form 10-Q; and (b) no later than 90 days after the end of each of the
Company’s fiscal years during which the Securities remain outstanding, the information
required by the following items of Form 10-K as in effect on the effective date
of this Third Supplemental Indenture (which incorporates by reference
Regulations S-K and S-X of the Rules and Regulations of the Securities and
Exchange Commission) in the form of: (1) an annual report which includes: (i)
Part I of Form 10-K, (ii) Items 6, 7, 7A and 9 of Part II of Form 10-K, and
(iii) Part III of Form 10-K; and (2) audited financial statements which comply
with the requirements of Item 8 of Part II of Form 10-K as well as unaudited
annual financial statements of any unconsolidated subsidiaries or other
entities if such separate financial statements would be required under
Rule 3-09 of Regulation S-X as in effect on the effective date of this Third
Supplemental Indenture, provided that, nothing contained herein shall require
the Company to provide audited financial statements of such unconsolidated
subsidiaries or other entities. 
Notwithstanding any language to the contrary, nothing in this Section
4.12 shall require the Company or its auditors to comply with Item 4 of Part I
of Form 10-Q or Item 9A of Part II of Form 10-K as in effect on the effective
date of this Third Supplemental 

 

A-4

 

Indenture
or to review the quarterly or annual reports described above unless such
requirements are imposed under generally accepted accounting principles or
other accounting pronouncements or are necessary in order for the auditors to
provide an opinion on the Company’s financial statements.  In addition, the Company shall make available
copies of such financial statements and reports to one or more market makers in
fixed income securities.  Delivery of
such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers’ Certificates).

 

SECTION 1.02.                 Amendment and
Restatement of Section 13.02.

 

Section 13.02 of the Indenture is hereby amended and
restated in its entirety to read as follows:

 

SECTION 13.02.           Notices.

 

Any notice or communication shall be sufficiently given if in writing
and delivered in person, by facsimile and confirmed by overnight courier, or
mailed by first-class mail addressed as follows:

 

if to the Company and the Guarantors:

 

Special Devices, Incorporated

14370 White Sage Road

Moorpark, California  93021

 

Attention:  Chief Executive
Officer

 

	
  Facsimile:

  	
  (805) 553-1208

  
	
  Telephone:

  	
  (805) 553-1200

  

 

with copies to:

 

J.F. Lehman & Company, Inc.

450 Park Avenue, 6th Floor

New York, New York 
10022

 

A-5

 

Attention:                                         Louis N. Mintz

 

	
  Facsimile:

  	
  (212) 634-1162

  
	
  Telephone:

  	
  (212) 634-1174

  

 

and

 

Blank Rome LLP

The Watergate

600 New Hampshire Avenue, NW

Washington, DC  20037

 

Attention:  Barbara D. Linney,
Esq.

 

	
  Facsimile:

  	
  (202) 572-8378

  
	
  Telephone:

  	
  (202) 772-5935

  

 

if to the Trustee:

 

The Bank of New York

101 Barclay Street

8th Floor West

New York, New York 
10286

 

Attention:  Corporate Trust
Administration

 

 

	
  Facsimile:

  	
  (212) 815-5707

  
	
  Telephone:

  	
  (212) 815-3067

  

 

Each party by notice to the others may designate additional or
different addresses for subsequent notices or communications.

 

Any notice or communication mailed, first-class, postage prepaid, to a
Holder, including any notice delivered in connection with TIA § 310(b), TIA §
313(c), TIA § 314(a) and TIA § 315(b), shall be mailed to such Holder at the
address as set forth on the list maintained pursuant to Section 2.05 and shall
be sufficiently given to him if so mailed within the time prescribed.  To the extent required by the TIA, any notice
or communication shall also be mailed to any Person described in TIA § 313(c).

 

Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.  Except for a notice to the Trustee, which is
deemed given only when received, if a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee receives
it.

 

A-6

 

ARTICLE
TWO

 

MISCELLANEOUS
PROVISIONS

 

SECTION 2.01                    Terms Defined.

 

For all purposes of this Third Supplemental
Indenture, except as otherwise defined or unless the context otherwise
requires, terms used in capitalized forms in this Third Supplemental Indenture
and defined in the Indenture have the meanings specified in the Indenture.

 

SECTION 2.02                    Indenture.

 

Except as amended hereby, the Indenture and the
Securities are in all respects ratified and confirmed and all the terms shall
remain in full force and effect.

 

SECTION 2.03                    Governing Law.

 

THIS THIRD SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

 

SECTION 2.04                    Successors.

 

All agreements of the Company in this Third
Supplemental Indenture and the Securities shall bind their respective
successors.  All agreements of the
Trustee in this Third Supplemental Indenture shall bind its successors.

 

SECTION 2.05                    Duplicate Originals.

 

The parties may sign any number of copies of this
Third Supplemental Indenture.  Each
signed copy shall be an original, but all of them together shall represent the
same agreement.

 

SECTION 2.06                    Trustee Disclaimer.

 

The Trustee accepts the amendment of the Indenture
effected by this Third Supplemental Indenture and agrees to execute the trust
created by the Indenture as hereby amended, but only upon the terms and
conditions set forth in the Indenture, including the terms and provisions
defining and limiting the liabilities and responsibilities of the Trustee,
which terms and provisions shall in like manner define and limit its
liabilities and responsibilities in the performance of the trust created by the
Indenture as hereby amended and, without limiting the generality of the
foregoing, the Trustee shall not be responsible in any manner whatsoever for or
with respect to any of the recitals or statements contained herein, all of
which recitals or statements are made solely by the Company, or for or with
respect to (i) the validity or sufficiency of the terms of this Third
Supplemental Indenture or any of the terms or provisions hereof, (ii) the
proper authorization hereof by the Company by corporate action or otherwise,
(iii) the due execution hereof by the Company or (iv) the consequences (direct
or indirect and 

 

A-7

 

whether deliberate or inadvertent) of any amendment
herein provided for, and the Trustee makes no representation with respect to
any such matters.

 

[Signature Page Follows]

 

A-8

 

SIGNATURES

 

IN WITNESS WHEREOF, the parties hereto have caused
this Third Supplemental Indenture to be duly executed, all as of the date first
written above.

 

	
   

  	
  SPECIAL DEVICES,
  INCORPORATED,

  
	
   

  	
  as Issuer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas W. Cresante

  
	
   

  	
   

  	
  Title:

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Successor Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jeremy Finkelstein

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  

 

A-9

 

CONSENT SOLICITATION STATEMENT

 

SPECIAL DEVICES, INCORPORATED

 

Questions and requests for
assistance or additional copies of the Consent Documents may be directed to
SDI, as Information Agent, at the following address:

 

Special Devices,
Incorporated

14370 White Sage Road

Moorpark, California  93021

Attention:  James E. Reeder

Telephone: (805) 553-1200

Facsimile:  (805) 553-1208

 

Holders should retain their
Senior Notes and not deliver any such Senior Notes to the Depositary or the
Information Agent.  Duly executed
Consents should be sent to the Depositary at the address provided below in accordance
with the instructions set forth in the Consent Documents.

 

 

	
  By Mail, Hand Delivery or Courier:

  	
   

  	
  By Facsimile:

  
	
   

  	
   

  	
   

  
	
  The Bank of New York

  	
   

  	
  (212) 298-1915

  
	
  Corporate Trust Operations

  	
   

  	
  Attn: Ms. Giselle Guadalupe

  
	
  Reorganization Unit

  	
   

  	
   

  
	
  101 Barclay Street - Floor 7 East

  	
   

  	
   

  
	
  New York, New York 10286

  	
   

  	
   

  
	
  Attn: Ms. Giselle GuadalupeExhibit 10.1

 

SECOND AMENDMENT OF CREDIT AGREEMENT

 

THIS SECOND AMENDMENT OF
CREDIT AGREEMENT ( this “Amendment”)
is dated as of April 22, 2005 and entered into by and among TRAMMELL CROW COMPANY, a Delaware
corporation (“Borrower”),
BANK OF AMERICA, N.A., a national
banking association, as Administrative Agent for the Lenders defined below (in
such capacity, together with its successors and assigns, “Administrative Agent”)
and as Issuing Bank (in such capacity, together with its successors and
assigns, “Issuing Bank”),
and each Lender that is a signatory to this Amendment.

 

R E  C  I  T  A  L
S

 

A.            Reference is hereby made to that certain Credit Agreement
dated as of June 28, 2002, executed by Borrower, Administrative Agent, and the
Lenders (herein so called) defined therein, and amended by that certain First
Amendment of Credit Agreement dated September 1,2004 (the “Credit Agreement”)
pursuant to which such Lenders extended to Borrower a $150,000,000 revolving
credit facility.

 

B.            Capitalized terms used herein shall, unless otherwise
indicated, have the respective meanings set forth in the Credit Agreement.

 

C.            Borrower, Administrative Agent, Issuing Bank, and
the Lenders that are signatory to this Amendment desire to modify certain provisions contained in the Credit Agreement
subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.             Amendment
to the Credit Agreement.   Section 6.2(c) is hereby deleted in its entirety and
replaced with the following:

 

(c)           the Companies may make Investments in
(i) Savills existing on the Closing Date and additional Investments made after
the Closing Date; provided, that
such additional Investments in Savills made pursuant to this clause (c) shall
not result in the aggregate common equity ownership in Savills held by the
Companies exceeding 20% of the fully diluted common equity ownership of Savills
(measured immediately after each such Investment (but not thereafter)), and
(ii) Unconsolidated Entities (other than Savills) not constituting Real Estate
Investments in an aggregate amount not exceeding $5,000,000 at any time
outstanding;

 

2.             Amendment
of Credit Agreement and Other Loan Documents.

 

(a)           All references in the Loan Documents
to the Credit Agreement shall henceforth include references to the Credit
Agreement, as modified and amended by this Amendment, and as may, from time to
time, be further modified, amended, renewed, extended, restated, and/or
increased.

 

(b)           Any and all of the terms and
provisions of the Loan Documents are hereby amended and modified wherever
necessary, even though not specifically addressed herein, so as to conform to
the amendments and modifications set forth herein.

 

 

3.             Ratifications. 
Borrower (a) ratifies and confirms all provisions of the Loan Documents
as amended by this Amendment, (b) ratifies and confirms that all guaranties,
assurances, and Liens granted, conveyed, or assigned to the Credit Parties
under the Loan Documents are not released, reduced, or otherwise adversely
affected by this Amendment and continue to guarantee, assure, and secure full
payment and performance of the present and future Obligations, and
(c) agrees to perform such acts and duly authorize, execute, acknowledge,
deliver, file, and record such additional documents, and certificates as
Administrative Agent may reasonably request in order to create, perfect,
preserve, and protect such guaranties, assurances, and Liens.

 

4.             Representations. 
Borrower represents and warrants to the Credit Parties that as of the
date of this Amendment: (a) this Amendment has been duly authorized,
executed, and delivered by Borrower and each of the other Companies that are
parties to this Amendment; (b) no action of, or filing with, any
Governmental Authority is required to authorize, or is otherwise required in
connection with, the execution, delivery, and performance by Borrower or the
other Companies of this Amendment other than filings with the Securities and
Exchange Commission; (c) the Loan Documents, as amended by this Amendment,
are valid and binding upon Borrower and the other Companies that are parties to
this Amendment and are enforceable against Borrower and the other Companies in accordance
with their respective terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors’
rights generally or by general principles of equity; (d) the execution,
delivery, and performance by Borrower and the other Companies of this Amendment
do not require the consent of any other Person and do not and will not
constitute a violation of any Governmental Requirement, order of any
Governmental Authority, or material agreements to which Borrower or any other
Company is a party thereto or by which Borrower or any other Company is bound;
(e) all representations and warranties in the Loan Documents are true and
correct in all material respects on and as of the date of this Amendment,
except to the extent that (i) any of them speak to a different specific date,
or (ii) the facts on which any of them were based have been changed by
transactions contemplated or permitted by the Credit Agreement; and (f) both
before and after giving effect to this Amendment, no Potential Default or Event
of Default exists.

 

5.             Conditions.  This
Amendment shall not be effective unless and until:

 

(a)           Administrative Agent shall have
received this Amendment duly executed by Borrower, each of the Companies that
is party hereto, and the Requisite Lenders;

 

(b)           the representations and warranties in
this Amendment are true and correct in all material respects on and as of the
date of this Amendment, except to the extent that (i) any of them speak to a
different specific date, or (ii) the facts on which any of them were based have
been changed by transactions contemplated or permitted by the Credit Agreement;
and

 

(c)           both before and after giving effect
to this Amendment, no Potential Default or Event of Default exists.

 

6.             Continued
Effect.  Except to the extent amended hereby or by any
documents executed in connection herewith, all terms, provisions, and
conditions of the Credit Agreement and the other Loan Documents, and all
documents executed in connection therewith, shall continue in full force and
effect and shall remain enforceable and binding in accordance with their
respective terms.

 

7.             Miscellaneous. 
Unless stated otherwise (a) the singular number includes the plural and vice versa and words of any gender include
each other gender, in each case, as appropriate, (b) headings

 

2

 

and
captions may not be construed in interpreting provisions, (c) this Amendment
must be construed — and its performance enforced — under Texas law, (d) if any
part of this Amendment is for any reason found to be unenforceable, all other
portions of it nevertheless remain enforceable, and (e) this Amendment may be
executed in any number of counterparts with the same effect as if all
signatories had signed the same document, and all of those counterparts must be
construed together to constitute the same document.

 

8.             Parties.  This
Amendment binds and inures to Borrower and the Credit Parties and their
respective successors and permitted assigns.

 

9.             ENTIRETIES.   THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AS AMENDED BY THIS AMENDMENT, REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES ABOUT THE SUBJECT MATTER OF THE CREDIT AGREEMENT AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Remainder of Page Intentionally Left Blank; Signature Pages
Follow]

 

3

 

SIGNATURE PAGE TO SECOND AMENDMENT OF CREDIT AGREEMENT

EXECUTED BY

TRAMMELL CROW COMPANY, AS BORROWER,

BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT AND ISSUING
BANK,

AND THE LENDERS DEFINED THEREIN

 

 

EXECUTED as of the day and
year first mentioned.

 

	
   

  	
  TRAMMELL
  CROW COMPANY, a Delaware
  corporation,

  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Derek R. McClain

  
	
   

  	
   

  	
  Name:

  	
  Derek R. McClain

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  

 

Signature Page to Trammell Crow Company
Second Amendment

 

 

SIGNATURE PAGE TO SECOND AMENDMENT OF CREDIT AGREEMENT

EXECUTED BY

TRAMMELL CROW COMPANY, AS BORROWER,

BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT AND ISSUING
BANK,

AND THE LENDERS DEFINED THEREIN

 

 

	
   

  	
  BANK OF
  AMERICA, N.A.,

  
	
   

  	
  as
  Administrative Agent, Issuing Bank, and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ron Odlozil

  
	
   

  	
   

  	
  Ron Odlozil

  
	
   

  	
   

  	
  Senior Vice President

  

 

Signature Page to Trammell Crow Company
Second Amendment

 

 

SIGNATURE PAGE TO SECOND AMENDMENT OF CREDIT AGREEMENT

EXECUTED BY

TRAMMELL CROW COMPANY, AS BORROWER,

BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT AND ISSUING
BANK,

AND THE LENDERS DEFINED THEREIN

 

 

	
   

  	
  THE BANK
  OF NOVA SCOTIA, Acting Through its San Francisco Agency,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Sparrow

  
	
   

  	
   

  	
  Name:

  	
  Mark Sparrow

  
	
   

  	
   

  	
  Title:

  	
  Director

  

 

Signature Page to Trammell Crow Company
Second Amendment

 

 

SIGNATURE PAGE TO SECOND AMENDMENT OF CREDIT AGREEMENT

EXECUTED BY

TRAMMELL CROW COMPANY, AS BORROWER,

BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT AND ISSUING
BANK,

AND THE LENDERS DEFINED THEREIN

 

 

	
   

  	
  FIRST
  TENNESSEE BANK, N.A.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sam Jenkins

  
	
   

  	
   

  	
  Name:

  	
  Sam Jenkins

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  

 

Signature Page to Trammell Crow Company
Second Amendment

 

 

SIGNATURE PAGE TO SECOND AMENDMENT OF CREDIT AGREEMENT

EXECUTED BY

TRAMMELL CROW COMPANY, AS BORROWER,

BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT AND ISSUING
BANK,

AND THE LENDERS DEFINED THEREIN

 

 

	
   

  	
  LASALLE
  BANK,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Josh Procter

  
	
   

  	
   

  	
  Name:

  	
  Josh Procter

  
	
   

  	
   

  	
  Title:

  	
  AVP

  

 

Signature Page to Trammell Crow Company
Second Amendment

 

 

SIGNATURE PAGE TO SECOND AMENDMENT OF CREDIT AGREEMENT

EXECUTED BY

TRAMMELL CROW COMPANY, AS BORROWER,

BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT AND ISSUING
BANK,

AND THE LENDERS DEFINED THEREIN

 

 

	
   

  	
  UNION BANK OF CALIFORNIA N.A.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick Trowbridge

  
	
   

  	
   

  	
  Name:

  	
  Patrick Trowbridge

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

Signature Page to Trammell Crow Company
Second Amendment

 

 

SIGNATURE PAGE TO SECOND AMENDMENT OF CREDIT AGREEMENT

EXECUTED BY

TRAMMELL CROW COMPANY, AS BORROWER,

BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT AND ISSUING
BANK,

AND THE LENDERS DEFINED THEREIN

 

 

	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stewart Wilson

  
	
   

  	
   

  	
  Name:

  	
  Stewart Wilson

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  

 

Signature Page to Trammell Crow Company
Second Amendment

 

 

To induce the Credit Parties to enter into this Amendment, the
undersigned jointly and severally (a) consent and agree to the Amendment’s
execution and delivery, (b) ratify and confirm that all guaranties, assurances,
and Liens granted, conveyed, or assigned to the Credit Parties under the Loan
Documents are not released, diminished, impaired, reduced, or otherwise
adversely affected by the Amendment and continue to guarantee, assure, and
secure the full payment and performance of all present and future Obligations
(except to the extent specifically limited by the terms of such guaranties,
assurances, or Liens), (c) agree to perform such acts and duly authorize,
execute, acknowledge, deliver, file, and record such additional guaranties,
assignments, security agreements, deeds of trust, mortgages, and other
agreements, documents, instruments, and certificates as Administrative Agent
may reasonably deem necessary or appropriate in order to create, perfect,
preserve, and protect those guaranties, assurances, and Liens, and (d) waive
notice of acceptance of this consent and agreement, which consent and agreement
binds the undersigned and their successors and permitted assigns and inures to
the Credit Parties and their respective successors and permitted assigns.

 

	
   

  	
  EACH OF
  THE CORPORATE GUARANTORS/PLEDGORS LISTED ON SCHEDULE
  I ATTACHED HERETO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Derek R. McClain

  
	
   

  	
   

  	
  Name:

  	
  Derek R. McClain

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  

 

Guarantor/Pledgor Signature Page to Second
Amendment

 

 

SCHEDULE 1

 

1.             TC
Houston, Inc.

2.             TCCT
Real Estate, Inc.

3.             TCDFW,
Inc.

4.             Trammell
Crow Services, Inc.

5.             Trammell
Crow NW, Inc.

6.             TCC
Risk Services, Inc.

 

Schedule 1 to Trammell Crow Second Amendment Guarantor/Pledgor
Signature Page

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