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Exhibit 10.50

LETTER AGREEMENT

June 24, 2003

Special Devices, Incorporated
14370 White Sage Road
Moorpark, CA 93021

Ladies and Gentlemen:

        This letter agreement is entered into by and between Special Devices,
Incorporated, a Delaware corporation (the "Company"), and Wells Fargo
Foothill, Inc. (the "Lender") (this "Letter Agreement"). Reference is made to
that certain Loan and Security Agreement dated as of June 27, 2001, between the
Company and Lender (as amended, the "Loan Agreement"). Capitalized terms used
but not otherwise defined in this Letter Agreement shall have the meanings
ascribed to them in the Loan Agreement. The term "Loan Documents" as defined in
the Loan Agreement is hereby amended and supplemented to include this Letter
Agreement.

        The Company may wish, from time to time, to present for payment to Wells
Fargo Bank ("Wells Fargo") certain checks or drafts made payable to the Company
that are denominated in a foreign currency (collectively, the "Foreign Drafts").
In addition to seeking payment on the Foreign Drafts, the Company may request
that Wells Fargo convert the proceeds of the Foreign Drafts into United States
Dollars (such conversions being referred to herein as the "Currency
Conversions").

        Wells Fargo may agree, in Well Fargo's discretion, from time to time to
assist with the payment or collection of the Foreign Drafts and/or the Currency
Conversions, so long as Lender agrees to reimburse and/or indemnify Wells Fargo
(i) in the event that any Foreign Draft is not paid or honored for any reason,
and (ii) for any other cost, expense, loss, claim, action, or damages arising
from or incurred in connection with such Foreign Drafts or the Currency
Conversions (collectively, "Wells Fargo Claims").

        In order to induce Lender to agree to reimburse and indemnify Wells
Fargo for any and all Wells Fargo Claims, the Company agrees to reimburse and
indemnify Lender, on demand, for any cost, expense, loss, claim, action, or
damages arising from or incurred by Lender in connection with the Wells Fargo
Claims, whether now existing or hereafter arising (the "Lender Claims"). Such
reimbursement and indemnification obligations of the Company shall be deemed to
be "Obligations" under the Loan Agreement.

        Any Obligation of the Company to make payments to Lender arising out of
Lender Claims shall be irrevocable, without any qualification or exception
whatsoever, and shall be made without set-off or defense under all
circumstances, including, without limitation, any of the following: (i) any lack
of validity or enforceability of the Loan Agreement, this Letter Agreement, and
any other Loan Document, (ii) the existence of any claim, setoff, defense or
other right that the Company or Lender may have at any time against Wells Fargo
or any other Person in connection with the Wells Fargo Claims, (iii) any
certificate, notice, document, representation or any statement presented to or
by, or asserted by, Wells Fargo proving to be forged, fraudulent, invalid, or
insufficient in any respect, and (iv) any payment of the Wells Fargo Claims by
Lender based on any error, negligence or mistake, whether omission or
commission, except for any gross negligence or willful misconduct on the part of
Lender.

        This Letter Agreement may be executed in counterparts, each of which
shall constitute an original, but all of which taken together shall constitute
one and the same instrument. The terms and conditions of the Loan Agreement are
hereby incorporated by reference into this Letter Agreement.

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        This Letter Agreement shall become effective upon Borrower's returning a
executed copy of this Letter Agreement to Lender

        Please indicate your agreement by signing as indicated below.

Very truly yours,           WELLS FARGO FOOTHILL, INC.                 /s/ JOHN
NOCITA

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AGREED AND ACKNOWLEDGED:

SPECIAL DEVICES, INCORPORATED

By:   /s/ JAMES E. REEDER

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    Name:   JAMES E. REEDER

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    Title:   VICE PRESIDENT FINANCE

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    Date:   JUNE 25, 2003

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Exhibit 10.50