EXHIBIT 10.39

FIRST AMENDMENT TO CREDIT AGREEMENT

FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of July 14, 1999, among SPECIAL DEVICES, INCORPORATED, a corporation organized under
the laws of the State of Delaware (the "Borrower"), the lenders party to the Credit Agreement referred to below (collectively, the "Banks") and BANKERS TRUST COMPANY, as Administrative Agent. All
capitalized terms used herein and not otherwise defined shall have the respective meanings provided such terms in the Credit Agreement.

W I T N E S S E T H:

WHEREAS, the Borrower, the Banks and the Administrative Agent are parties to a Credit Agreement, dated as of December 15, 1998 (the "Credit Agreement");
and

WHEREAS,
the parties hereto have agreed to amend the Credit Agreement as herein provided;

NOW,
THEREFORE, it is agreed:

I.Amendments to Credit Agreement.

1.  The
definition of "Maximum Swingline Amount" appearing in Section 11.01 of the Credit Agreement is hereby amended to read in its entirety as follows:

"Maximum
Swingline Amount" shall mean $3,000,000.

2.  The
definition of "Excess Cash Flow" appearing in Section 11.01 of the Credit Agreement is hereby amended by (x) inserting a parenthesis immediately
after the phrase "insurance proceeds or Indebtedness" appearing in sub-clause (b)(i) thereof and (y) deleting the reference to sub-clause (vii)
appearing in clause (b) thereof and inserting a reference to sub-clause (vi) in lieu thereof.

3.  The
Borrower hereby agrees to execute and deliver to the Administrative Agent for the benefit of the Swingline Bank a new Swingline Note reflecting the increased
Maximum Swingline Amount effected hereby, and the Swingline Bank shall, upon receipt of the new Swingline Note, surrender to the Borrower the Swingline Note being so replaced.

II.Miscellaneous.

1.  In
order to induce the Banks (including the Swingline Bank) to enter into this Amendment, the Borrower hereby represents and warrants that (i) all
representations, warranties and agreements contained in Section 7 of the Credit Agreement are true and correct in all material respects on and as of the First Amendment Effective Date (as
defined below) (unless such representations and warranties relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date) and
(ii) there exists no Default or Event of Default on the First Amendment Effective Date, in each case both before and after giving effect to this Amendment.

2.  This
Amendment is limited as specified and shall not constitute a modification, acceptance or waiver of any other provision of the Credit Agreement or any other
Credit Document.

3.  This
Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed
and delivered shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts shall be lodged with the Borrower and the Administrative
Agent.

4.THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.

5.  This
Amendment shall become effective on the date (the "First Amendment Effective Date") when each Credit Party, the Required Banks and the Swingline Bank shall
have signed a counterpart

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hereof (whether the same or different counterparts) and shall have delivered (including, without limitation, by usage of facsimile transmission) the same to the Administrative Agent at the Notice
Office. This Amendment and the agreements contained herein shall be binding on the successors and assigns of the parties hereto.

6.  From
and after the First Amendment Effective Date, all references in the Credit Agreement and the other Credit Documents to the Credit Agreement shall be deemed to
be references to the Credit Agreement as amended hereby.

*
* *

2

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IN
WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Amendment as of the date first above written.

| |  | SPECIAL DEVICES, INCORPORATED                                  
| |  | ---------------------------------------------------------------
| |  |                                                                
| |  | By:                                                            
| |  |                                                                
| |  | BANKERS TRUST COMPANY,
Individually and as Administrative Agent
| |  | By:                                                            
| |  |                                                                
| |  | BANKBOSTON, N.A.                                               
| |  |                                                                
| |  | By:                                                            
| |  |                                                                
| |  | THE BANK OF NOVA SCOTIA                                        
| |  |                                                                
| |  | By:                                                            
| |  |                                                                
| |  | CITY NATIONAL BANK                                             
| |  |                                                                
| |  | By:                                                            
| |  |                                                                
| |  | FIRST UNION NATIONAL BANK                                      
| |  |                                                                
| |  | By:                                                            

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| |  |                                               |  |                                                                                          
| |  | --------------------------------------------- |  | -----------------------------------------------------------------------------------------
| |  | GENERAL ELECTRIC CAPITAL CORPORATION         
| |  |                                               |  |                                                                                          
| |  | By:                                           |  | /s/ JAMES KOPACKName: James Kopack
Title: Risk Manager                                   
| |  |                                               |  |                                                                                          
| |  | MORGAN STANLEY DEAN WITTER PRIME INCOME TRUST
| |  |                                               |  |                                                                                          
| |  | By:                                           |  |                                                                                          
| |  |                                               |  | Name:
Title:                                                                             
| |  |                                               |  |                                                                                          
| |  | NATIONAL CITY BANK                           
| |  |                                               |  |                                                                                          
| |  | By:                                           |  | /s/ ROBERT C. ROWEName: Robert C. Rowe
Title: Senior Vice President                      
| |  |                                               |  |                                                                                          
| |  | PARIBAS                                      
| |  |                                               |  |                                                                                          
| |  | By:                                           |  | /s/ DARRYL M. MONASEBIANName: Darryl M. Monasebian
Title: Director Merchant Banking Group
| |  | By:                                           |  | /s/ EDWARD T. IRWINName: Edward T. Irwin
Title: Managing Director                        
| |  |                                               |  |                                                                                          
| |  | KZH STERLING LLC                             
| |  |                                               |  |                                                                                          
| |  | By:                                           |  |                                                                                          
| |  |                                               |  | Name:
Title:                                                                             
| |  |                                               |  |                                                                                          
| |  | UNION BANK OF CALIFORNIA, N.A.               
| |  |                                               |  |                                                                                          
| |  | By:                                           |  |                                                                                          
| |  |                                               |  | Name:
Title:                                                                             

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|Acknowledged and Agreed: |  |                                                                  |  | 
|------------------------ |  | ---------------------------------------------------------------- |  | 
|SCOTT, INCORPORATED      |  |                                                                  |  | 
|                         |  |                                                                  |  | 
|By:                      |  | /s/ JOSEPH A. STROUDName: Joseph A. Stroud
Title: Vice President |  | 

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