ksh unix variable on cmd line

Solaris 9
Oracle 10.1.0.3

I see a reference (actually on lazydba) to supplying an environment variable on the sqlplus command line and referencing it within sqlplus. Here's that example:
  Sqlplus username/pwd $unix_variable_name <<END   Create or replace directory <directory_name> as '&1';   Exit;
  End

This sure doesn't work for me.

Does anyone see what I'm doing wrong?
Thanks for any help.

$ more test.sh
#!/bin/ksh

. /oracle/set_environ.sh
export SDAT=SYSDATE
echo $SDAT

sqlplus user/pwd $SDAT << EOF
select '&1' from dual;
exit
EOF
exit

./test.sh
Current oracle_home is /oracle/app/oracle/product/10g SYSDATE
Usage: SQLPLUS [ [<option>] [<logon>] [<start>] ]

where <option> ::= -H | -V | [ [-C <v>] [-L] [-M <o>] [-R <n>] [-S] ]


      <logon>  ::= <username>[/<password>][@<connect_identifier>] | / | /NOLOG

      <start>  ::= @<URL>|<filename>[.<ext>] [<parameter> ...]

        "-H" displays the SQL*Plus version banner and usage syntax
  . . . . .

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