This Item 2 is qualified in its entirety by reference to SCHEDULE I, which is attached hereto and incorporated into this Item by reference.

Item 3. Source and Amount of Funds or Other Consideration

It is currently anticipated that the consideration will be furnished from working capital and funds being made available by existing lenders to the SDI group. The description of the Merger set forth in Item 4 below is incorporated by reference in its entirety in this Item 3 and is qualified in its entirety by reference to the Merger Agreement.

Item 4. Purpose of Transaction

On June 28, 2007, the Issuer entered into an Agreement and Plan of Merger, dated as of June 28, 2007 (the "Merger Agreement"), as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of June 29, 2007 (the "Amendment No. 1 to Agreement and Plan of Merger"; as so amended, the "Amended Merger Agreement"), with Holdings and Merger Sub pursuant to which each of the holders of the outstanding Common Stock will receive $33.00 per share in cash. Under the Amended Merger Agreement, each issued and outstanding share of Common Stock of the Issuer not held by Holdings, Merger Sub or the Issuer, or by the Issuer's stockholders who perfect their appraisal rights under Delaware law, will be converted into the right to receive $33.00 per share in cash and Merger Sub will thereafter merge with and into the Issuer with the Issuer being the surviving corporation in the merger. As a result of the merger, the Issuer will cease to be a publicly traded company. The Amended Merger Agreement and related transactions are subject to the approval of the Issuer's stockholders, the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and certain other customary closing conditions, which are expected to be completed during the second half of 2007. No members of the management or the Board of Directors of the Issuer will be participating in the purchase of the Issuer.

Concurrent with the execution of the Merger Agreement, on June 28, 2007, The Estate of George Q Horowitz (the "Estate") entered into a voting agreement (the "Voting Agreement") with Holdings and Merger Sub pursuant to which, subject to certain exceptions, the Estate has agreed to vote or execute consents, as applicable, with respect to such shares of Common Stock and any shares acquired after the date of the Voting Agreement: (i) in favor of the approval of the Merger Agreement (including as amended pursuant to Amendment No. 1 to the Agreement and Plan of Merger) and the transactions contemplated by the Merger Agreement (including as amended pursuant to Amendment No. 1 to the Agreement and Plan of Merger); (ii) against any action, proposal, transaction or agreement involving the Issuer or its subsidiaries that would reasonably be expected to, in any material respect, prevent, impede, frustrate, interfere with, delay, postpone or adversely affect the merger or the transactions contemplated by the Merger Agreement (including as amended pursuant to Amendment No. 1 to the Agreement and Plan of Merger); and (iii) against any acquisition proposal other than an acquisition proposal made by Holdings. The Voting Agreement terminates upon the earlier to occur of (1) the effective time of the merger, and (2) the termination of the Merger Agreement in accordance with the terms thereof.

Concurrent with the Merger Agreement, on June 28, 2007 SDI entered into a guarantee agreement (the "Guarantee") under which SDI agreed to guarantee Holding's financial obligations under the Merger Agreement (including as amended pursuant to Amendment No. 1 to the Agreement and Plan of Merger).