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EXHIBIT 10.48    
    


CONSENT AND AMENDMENT NO. 1 TO LOAN DOCUMENTS  


        THIS CONSENT AND AMENDMENT NO. 1 TO LOAN DOCUMENTS (this "Amendment"), is entered into as of April 22,
2003, by and between FOOTHILL CAPITAL CORPORATION, a California corporation ("Lender"), and SPECIAL DEVICES, INCORPORATED, a Delaware corporation
("Borrower"), with reference to the following facts: 


        A.    Borrower
and Lender are parties to that certain Loan and Security Agreement dated as of June 27, 2001 (the "Original Loan
Agreement"), as amended by that certain letter agreement dated as of July 17, 2002, that certain letter agreement dated as of October 23, 2002, and that certain
letter agreement dated as of March 28, 2003 (collectively, the "Letter Agreements", and together with the Original Loan Agreement, collectively
the "Loan Agreement"). All initially capitalized terms used but not defined herein shall have the meanings set forth in the Loan Agreement. 


        B.    Lender
has agreed to extend $30,000,000 to Borrower under the Loan Agreement, provided certain conditions precedent are satisfied (the "Credit
Facility"). The Credit Facility consists of revolving loans and a term loan. 



        C.    The
Obligations under the Loan Agreement are secured by the Collateral described in the Loan Agreement. As of April 15, 2003, (i) the aggregate outstanding
principal balance of the Advances under the Credit Facility was $—0-, and (ii) the principal balance of the Term Loan was $3,475,000.00. 


        D.    Borrower
has requested that Lender, among other things, (i) amend the definition of Permitted Investments, (ii) increase the limit set forth in
Section 7.6 of the Loan Agreement, and (iii) consent to the transfer of certain Equipment and Inventory to Borrower's subsidiary in Thailand. 



        E.    Lender
is willing to amend the Loan Agreement as requested by Borrower upon such terms and conditions as are set forth in this Amendment. 


        NOW,
THEREFORE, in consideration of the mutual promises and agreements contained in this Amendment and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower and Lender hereby agree to the above Recitals and as follows: 


        1.     AMENDMENTS
TO LOAN AGREEMENT. The Loan Agreement is hereby amended as follows: 



        1.1   Section 1.1 of the Loan Agreement. Section 1.1 of the Loan Agreement is hereby amended as follows: 


        (a)    Loan Documents.    The term "Loan Documents" as defined in Section 1.1 the Loan Agreement is hereby
amended and supplemented to include the Letter Agreements and this Amendment. 


        (b)    Permitted Investments.    Clause (m) of the definition of "Permitted Investments" appearing in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 




"(m)
Investments not otherwise permitted under this Agreement in an amount not to exceed $10,000,000, so long as (i) no Default or Event of Default has occurred and is continuing prior to, nor
will any Default or Event of Default result from, any such Investment, and (ii) at the time Borrower makes any such Investment, Borrower must have not less than $5,000,000 of Excess
Availability (after giving effect to each such Investment)." 








 




        1.2   Schedule 5.8(c) of the Loan Agreement. Schedule 5.8(c) of the Loan Agreement is hereby amended and restated
in its entirety to read as follows: 



"SDI
Germany GmbH

Special Devices Japan K.K.

Special Devices (Thailand) Co., Ltd." 




        1.3   Section 7.6 of the Loan Agreement. Section 7.6 of the Loan Agreement is hereby amended by replacing the
amount of "$6,000,000" with "$10,000,000". 




        2.     CONSENT
TO TRANSFER OF CERTAIN INVENTORY AND EQUIPMENT. Notwithstanding Sections 6.9 and 7.4 of the Loan Agreement, the Lender hereby consents to the Borrower's transfer
of certain Equipment and Inventory to Special Devices (Thailand) Co., Ltd., subject to the following terms and conditions: 



        2.1   Borrower
shall provide Lender with at least 30 days prior written notice of any such transfer, and include a list of the Equipment and Inventory to be
transferred; 


        2.2   Within
one (1) Business Day after any Equipment is removed from the locations described on Schedule 5.5, Borrower shall make a prepayment of the Term Loan
in an amount equal to 115% of the orderly liquidation value of the transferred Equipment; provided, however, such prepayment shall not be required with respect to the following: 



        (a)   Equipment
purchased by Borrower on or after January 1, 2003 and shipped to Special Devices (Thailand) Co., Ltd. no later than October 31, 2003 (the
"New Equipment"); and 


        (b)   An
amount equal to the capital refurbishment costs incurred by Borrower, on or after January 1, 2003, with respect to Equipment (other than New Equipment) that is
shipped to Special Devices (Thailand) Co., Ltd. no later than October 31, 2003. Borrower acknowledges that an amount equal to 115% of the remaining orderly liquidation value of such
Equipment (i.e., the orderly liquidation value of such Equipment before such capital refurbishment costs were incurred) shall be paid to Lender as
provided above; 




        2.3   For
purposes of Section 2.2 above, the orderly liquidation value shall be determined by an equipment appraiser satisfactory to Lender pursuant to a new appraisal
undertaken after the date of this Amendment; 


        2.4   Notwithstanding
any provision in this Amendment to the contrary, the maximum amount of Equipment that may be transferred to Special Devices (Thailand) Co., Ltd.
shall not exceed $1,000,000 in the aggregate (based on the orderly liquidation value thereof); and 



        2.5   With
respect to any Inventory transferred from Borrower to Special Devices (Thailand) Co., Ltd., such transferred Inventory shall not be "Eligible Inventory" for
purposes of the Loan Agreement. 




        3.     GENERAL
AMENDMENTS. All references to the "Agreement" or "Loan Agreement" in any of the Loan Documents shall mean the Loan Agreement, as amended by this Amendment. 


        4.     CONDITIONS
TO EFFECTIVENESS OF AMENDMENT. This Amendment shall not be deemed effective until each of the following conditions precedent have been satisfied (as determined
by Lender in Lender's sole discretion): 



        4.1   Borrower
shall have delivered to Lender a duly executed original of this Amendment; 


        4.2   Borrower
shall have delivered to Lender a written certification, in form and substance satisfactory to Lender, that all representations and warranties set forth in the
Loan Agreement are true and correct as of the effective date of this Amendment; 



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        4.3   Borrower
shall have delivered to Lender duly executed originals of all agreements relating to Borrower's pledge to Lender of 66% of the outstanding capital stock of
Special Devices Japan K.K. and Special Devices (Thailand) Co., Ltd., in form and substance satisfactory to Lender (the "Pledge Agreements"),
together with all other instruments and documents contemplated thereby (together with the Pledge Agreements, the "Pledge Documents); 


        4.4   Opinions
of Borrower's counsel shall have been delivered to Lender in a form and substance satisfactory to Lender and its counsel; 



        4.5   Borrower
and its Subsidiaries have taken all action necessary to authorize the execution and delivery of this Amendment and the Pledge Documents; and 


        4.6   All
other documents and legal matters in connection with the transactions contemplated hereby shall have been delivered and executed, and shall be in form and substance
satisfactory to Lender and its counsel. 




        5.     REPRESENTATIONS
AND WARRANTIES. Borrower represents and warrants that no Event of Default has occurred and is continuing under the Loan Agreement. 



        6.     LOAN
AGREEMENT IN FULL FORCE; INCORPORATION OF OTHER TERMS. The Loan Agreement and all other Loan Documents executed in connection therewith, as amended and supplemented
by this Amendment, shall remain in full force and effect in accordance with their terms. For purposes of this Amendment, the terms and conditions of Sections 13, 15.1, 16.1, 16.2, 16.3, 16.4, 16.6,
16.7 and 16.9 of the Loan Agreement are hereby incorporated by reference, provided that all references to "Agreement" in such sections shall mean this "Amendment" for purposes of this Amendment. This
Amendment cannot be changed or terminated orally. This Amendment together with the Loan Agreement and the other Loan Documents (including the documents and instruments executed in connection with this
Amendment), reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted, modified, or qualified by any other agreement, oral or
written, whether before or after the date hereof. 


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        IN
WITNESS WHEREOF, the parties hereto have caused this Consent and Amendment No. 1 to Loan Documents to be executed and delivered to Lender at Lender's offices in Santa Monica,
California. 



	BORROWER:	 
	

SPECIAL DEVICES, INCORPORATED

a Delaware corporation	

 
	

By:	

/s/  JAMES E. REEDER      
 Name: JAMES E. REEDER	

 
	 	Title: VICE PRESIDENT FINANCE
	

LENDER:	

 
	

FOOTHILL CAPITAL CORPORATION

a California corporation	

 
	

By:	

/s/  JOHN NOCITA      
 Name: JOHN NOCITA	

 
	 	Title: VICE PRESIDENT
	 	 	 




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EXHIBIT 10.48