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                                                                   EXHIBIT 10.7

                                  AMENDMENT NO. 1
                                         TO
                                MANAGEMENT AGREEMENT

          This Amendment No. 1 to Management Agreement (this "AMENDMENT") is
made and entered into as of September 15, 1998 by and among Elgar Holdings,
Inc., a Delaware corporation ("HOLDINGS"), Elgar Electronics Corporation, a
California corporation ("ELGAR") and J.F. Lehman & Company, Inc., a Delaware
corporation (the "ADVISOR").  Except as otherwise provided herein, capitalized
terms used herein will have the meanings ascribed to them in the Management
Agreement (as defined below).

                                 W I T N E S S E T H

          WHEREAS, the Holdings, Elgar and the Advisor entered into that certain
Management Agreement, dated as of February 3, 1998 (the "AGREEMENT"), pursuant
to which the parties agreed, among other things, that the Advisor shall be
entitled to receive an Annual Fee for certain management services rendered by
the Advisor to Elgar in accordance with the terms of Section 1(b) of the
Agreement;

          WHEREAS, Holdings, Elgar and the Advisor also entered into that
certain Management Services Agreement, dated as the date hereof (the "MANAGEMENT
SERVICES AGREEMENT"), effective as of February 3, 1998, which sets forth in
greater detail the management services to be provided by the Advisor to Elgar
and the fees to be paid to the Advisor in connection with the provision of those
services; and

          WHEREAS, Holdings, Elgar and the Advisor now desire to amend the
Agreement to delete Section 1(b) from the Agreement, effective as of February 3,
1998, and to replace the matters discussed therein with the Management Services
Agreement and (ii) to amend Section 4(i) of the Agreement to provide that the
Agreement will terminate on February 3, 2003 if not sooner terminated pursuant
to the provisions of Section 4(ii); and

          WHEREAS, Holdings, Elgar and the Advisor desire to further amend the
Agreement to amend Section 4(i) of the Agreement to provide that the Agreement
will terminate on February 3, 2003 if not sooner terminated pursuant to the
provisions of Section 4(ii) of the Agreement.

          NOW, THEREFORE, BE IT RESOLVED, that in consideration of the premises
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

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                                      AGREEMENT

          1.   Section 1(b) of the Agreement is hereby amended in its entirety
to read:

               "(b) Intentionally left blank."

          2.   The language contained in Section 4(i) of the Agreement is hereby
amended in its entirety to read:

               "(i) February 3, 2003 and"

          3.   This Amendment may be executed in one or more counterparts, all
of which will constitute one and the same instrument.

          4.   Except as amended hereby, the Agreement shall continue in full
force and effect.

          IN WITNESS WHEREOF, each of the parties hereto has executed this
Amendment as of the date first above written.

                              ELGAR HOLDINGS, INC.

                              By:  /s/ KENNETH R. KILPATRICK
                                   ---------------------------------------
                                   Kenneth R. Kilpatrick
                                   President and Chief Executive Officer


                              ELGAR ELECTRONICS CORPORATION

                              By:  /s/ Kenneth R. Kilpatrick
                                   ---------------------------------------
                                   Kenneth R. Kilpatrick
                                   President and Chief Executive Officer


                              J.F. LEHMAN & COMPANY, INC.

                              By:  /s/ Donald Glickman
                                   ---------------------------------------
                                   Donald Glickman
                                   Managing Principal


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