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Exhibit 10.5    
    


WAIVER AND FIRST AMENDMENT

TO CREDIT AGREEMENT  


        This WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated as of June 30, 2003 and is
entered into by and between Cherokee International Corporation, a Delaware corporation ("Borrower"), GSC Partners Gemini Fund Limited, as Lender under
the Credit Agreement described below ("Lender"). 


        WHEREAS,
U.S. Bank, N.A., as Agent, Lender and Borrower are parties to that certain Credit Agreement, dated as of November 27, 2002 (as amended, restated, supplemented or
otherwise modified from time to time, the "Agreement"), and Lender and Borrower desire to amend the Agreement, and to waive compliance with certain
provisions thereof set forth on Exhibit A hereto (the "Waived Provisions"), subject to the terms
and conditions set forth herein; 


        NOW
THEREFORE, in consideration of the mutual conditions and agreements set forth in the Agreement and this Amendment, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 


        1.    Definitions.    Capitalized terms used in this Amendment, unless otherwise defined herein, shall have the
meaning ascribed to such terms in the Agreement. 


        2.    Amendments.    Subject to the conditions set forth in this Amendment, the Agreement is hereby amended as
follows: 



	(a)
	Section 4.3
of the Agreement is amended by deleting the table therein in its entirety and replacing it with the following table: 







	Period
 
	 	Minimum Fixed

Charge Coverage

	Closing Date through 12/31/02	 	N.A.
	3/31/03	 	0.65x
	6/30/03 through 9/30/03	 	0.55x
	12/31/03	 	0.75x
	3/31/04 through 6/30/05	 	1.00x
	Thereafter	 	1.05x






        (b)   Section 4.4
of the Agreement is amended by deleting the table therein in its entirety and replacing it with the following table: 



	Period
 
	 	Minimum Total

Interest Coverage

	Closing Date through 12/31/02	 	N.A.
	3/31/03	 	0.85x
	6/30/03	 	0.75x
	9/30/03	 	0.90x
	Thereafter	 	1.50x








 

        (c)   Section 4.5
of the Agreement is amended by deleting the table therein in its entirety and replacing it with the following table: 



	Period
 
	 	Maximum Senior

Indebtedness to

EBITDA Ratio

	Closing Date through 12/31/02	 	N.A.
	3/31/03	 	1.55x
	6/30/03 through 9/30/03	 	2.30x
	12/31/03	 	2.20x
	3/31/04 through 3/31/05	 	1.75x
	6/30/05	 	1.60x
	Thereafter	 	1.50x






        (d)   Exhibit 1.5(B)
of the Agreement is amended by adding to the end of the paragraph on page 2 thereof that begins "The aggregate of all voluntary prepayments of the
Term Loans," the following phrase: "and all prepayments of the Term Loans under the Heller Credit Agreement". 


        (e)   Exhibit 4.6(D)
of the Agreement is amended as follows: 



        (i)    By
deleting in its entirety the first paragraph in the section entitled "Fixed Charge Coverage," which begins "Fixed Charge Coverage shall be calculated on a trailing
twelve month basis," and replacing it with the following paragraph: 



"Fixed
Charge Coverage shall be calculated on a trailing twelve-month basis ending on the most recent Determination Date, and is otherwise defined as follows:". 




        (ii)   By
deleting in its entirety the paragraph under the heading "Operating Cash Flow" in the section entitled "Fixed Charge Coverage," which begins "EBITDA shall be
calculated on a trailing twelve month basis," and replacing it with the following paragraph: 



"EBITDA
shall be calculated on a trailing twelve-month basis ending on the most recent Determination Date, and is otherwise defined as follows:". 




        (iii)  By
adding the following paragraph after the paragraph that begins "Losses (or less gains) from Asset Dispositions," which is located under the heading "Operating Cash
Flow" in the section entitled "Fixed Charge Coverage": 



"Expenses
included in the determination of net income that relate to the operational restructuring of Borrower's European Subsidiaries". 




        (iv)  By
deleting in their entirety the repetitive paragraphs under the heading "Operating Cash Flow" in the section entitled "Fixed Charge Coverage," which begin, in
succession, "Extraordinary Losses (or less gains)," "Expenses of the Related Transactions," "Less: Expenditures pursuant to the last sentence of subsection 4.7," and "EBITDA," and also by deleting in
their entirety the placeholders for entering calculations corresponding to the aforementioned paragraphs. 



        (v)   By
deleting in its entirety the paragraph under the heading "Operating Cash Flow" in the section entitled "Fixed Charge Coverage," which begins "Expenses of the Related
Transactions," and replacing it with the following paragraph: 



"Expenses
of the Related Transactions included in the determination of net income". 





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        (vi)  By
deleting in its entirety the paragraph under the heading "Operating Cash Flow" in the section entitled "Fixed Charge Coverage," which begins "Unfinanced Capital
Expenditures," and replacing it with the following paragraph: 



"Unfinanced
Capital Expenditures (calculated on a trailing twelve-month basis ending on the most recent Determination Date)". 





        (f)    Section 6.3
of the Agreement is amended by deleting the phrase "subsections 6.1(F) or 6.1(G)" in the first sentence thereof and replacing it with the phrase
"subsections 6.1(G) or 6.1(H)". 


        (g)   Section 6.4
of the Agreement is amended by deleting the term "subsection 1.2(E)" in the second sentence thereof and replacing it with the term "subsection
1.2(C)". 




        3.    Waiver.    Subject to the conditions set forth herein, Lender hereby waives the Waived Provisions and the Events
of Default arising under Section 6.1(B), (C), (D) or (E) of the Agreement that arose directly as a result of Borrower's failure to comply with the Waived Provisions. This is a
limited waiver relating to the Waived Provisions and such Events of Default and shall not be deemed to constitute a waiver of any other Event of Default (now or hereafter existing) or any future
breach of the Agreement or any of the other Loan Documents. 


        4.    Conditions.    The effectiveness of this Amendment is subject to the following conditions precedent: 



        (a)   Borrower
and Lender shall have executed and delivered this Amendment, and such other documents and instruments as Lender may reasonably require shall have been executed
and/or delivered to Lender; 


        (b)   All
proceedings taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be
reasonably satisfactory to Lender; 


        (c)   No
Default or Event of Default shall have occurred and be continuing after giving effect to this Amendment; 


        (d)   Borrower
shall have delivered to Lender duly executed, valid and binding amendments and waivers with respect to the other Financing Documents relating to matters similar
to those addressed by this Amendment, in form and substance reasonably satisfactory to Lender; and 


        (e)   The
representations and warranties set forth in Section 5 of this Amendment shall be true and correct. 




        5.    Representations and Warranties.    To induce Lender to enter into this Amendment, Borrower represents and
warrants as follows: 



        (a)   the
execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate action on the part of Borrower and that this Amendment has
been duly executed and delivered by Borrower; 


        (b)   each
of the representations and warranties set forth in Section 5 of the Agreement (other than those that, by their terms, specifically are made as of certain
date prior to the date hereof) are true and correct in all material respects as of the date hereof (after giving effect to this Amendment); 



        (c)   there
is no Default or Event of Default other than those resulting from Borrower's failure to comply with the Waived Provisions; and 



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        (d)   No
default or event of default exists under any Financing Document that has not been (or will not be) permanently waived prior to (or contemporaneously with) the
effectiveness of this Amendment. 




        6.    Severability.    Any provision of this Amendment held by a court of competent jurisdiction to be invalid or
unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. 


        7.    References.    Any reference to the Agreement contained in any document, instrument or agreement executed in
connection with the Agreement shall be deemed to be a reference to the Agreement as modified by this Amendment. 



        8.    Counterparts.    This Amendment may be executed by facsimile or other electronic means and in one or more
counterparts, each of which shall constitute an original, but all of which taken together shall be one and the same instrument. 


        9.    Ratification of Liability; Acknowledgment of Rights; Release of Claims.    The terms and provisions set forth in
this Amendment shall modify and supersede all inconsistent terms and provisions of the Agreement and shall not be deemed to be a consent to the modification or waiver of any other term or condition of
the Agreement. Except as expressly modified and superseded by this Amendment, the terms and provisions of the Agreement are ratified and confirmed and shall continue in full force and effect. As of
the date hereof, Borrower hereby ratifies and confirms its liabilities, obligations and agreements under the Agreement and the other Loan Documents, and the liens and security interests created
thereby, and acknowledges that: (i) it has no defenses, claims or set-offs to the enforcement by Lenders of such liabilities, obligations and agreements; (ii) Lender has
fully performed all undertakings owed to Borrower as of the date hereof; and (iii) Lender does not waive, diminish or limit any term or condition contained in the Agreement or in any of the
other Loan Documents beyond the waiver contained herein. In consideration of Lender's agreement to provide this Amendment, Borrower hereby irrevocably releases and forever discharges Lender and its
affiliates, subsidiaries, successors, assigns, directors, officers, employees, agents, consultants, attorneys, auditors and accountants (each, a "Released
Person") of and from all damages, losses, claims, demands, liabilities, obligations, actions and causes of action whatsoever that Borrower may have, arising as of or prior to
the date hereof, against Lender or any Released Person on account of or in any way touching, concerning, arising out of or founded upon the Agreement or the other Loan Documents, whether presently
known or unknown and of every nature and extent whatsoever. 


        10.    Governing Law.    This Amendment shall be governed by and shall be construed and
enforced in accordance with the laws of the state of New York.


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        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective duly authorized officers on the date first written above. 



	 	 	CHEROKEE INTERNATIONAL CORPORATION
	

 	
 	

By:	
 	

/s/  R. V. HOLLAND, JR.      
 Name: R. V. Holland, Jr.

Title: Chief Financial Officer











	 	 	GSC PARTNERS GEMINI FUND LIMITED

as a Lender
	

 	
 	

By:	
 	

/s/  SETH KATZENSTEIN      
 Name: Seth Katzenstein

Title: Vice President









EXHIBIT A TO AMENDMENT  


DESCRIPTION OF WAIVED PROVISIONS  


	1.
	Section 4.6(C)
of the Agreement, with respect to the obligation to deliver audited year-end financials for the fiscal year ending December 31, 2002.



	2.
	Section 4.6(G)
of the Agreement, with respect to the obligation to deliver management reports with each Compliance Certificate for the fiscal quarters ending December 31,
2002 and March 31, 2003.



	3.
	Section 4.6(J)
of the Agreement, with respect to the obligation to deliver projections prior to December 31, 2002.



	4.
	Section 4.08
of each of the Indentures (as defined in the Agreement), with respect to the obligation to deliver an annual report to the Trustee and the holders of the Notes (as
each such term is respectively defined in the Indentures) as specified in such section for the fiscal year ending December 31, 2002, and a quarterly report as specified in such section, for the
fiscal quarter ending March 31, 2003.



	5.
	Section 4.6(L)
of the Agreement, relating to the obligation to deliver a certificate describing the failure to comply with the aforementioned provisions as of the dates
indicated. 









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Exhibit 10.5