SECOND AMENDMENT TO REVISED AND RESTATED MANAGEMENT
AGREEMENT BY AND BETWEEN
THE NEWSTAR GROUP AND CHEROKEE INC.
This Second Amendment to Revised and Restated Management Agreement (the "Second Amendment") is
entered into in Van Nuys, California, on July 21, 1997, by and between The Newstar Group, a California
corporation d/b/a The Wilstar Group ("Wilstar"), and Cherokee Inc., a Delaware corporation ("Company"), with
reference to the following facts:
A. Wilstar and Company entered into that certain Revised and Restated Management Agreement, dated as of
May 4, 1995, as heretofore amended (the "Agreement").
B. Wilstar and Company desire to amend further the Agreement pursuant to Section 13.4 thereof.
Now, therefore, the parties agree as follows:
1. Effective for services rendered on and after June 1, 1997, Sections 1.1 and 1.2 of the Agreement are hereby
amended in their entirety to read as follows:
1.1 Initial Term. Except as provided in Sections 1.2 and 9 below,the term of this Agreement shall terminate on
May 31, 2000.
1.2 Extended Term. In the event the Company's consolidated "pre-tax earnings" computed in accordance with
generally accepted accounting principles ("GAAP") (the "Pre-Tax Earnings"), as set forth in the Company's
audited financial statements for any of the Company's fiscal years during the term hereof (the "Financial
Statements") commencing with the fiscal year ending May 31, 1998, are no less than 80% of the Pre-Tax
Earnings contained in the budget submitted to and approved by the Board of Directors and by Margolis for such
fiscal year (the "Budgeted Earnings"), and for all fiscal years ending after May 31, 1998 are also no less than the
Pre-Tax Earnings for the immediately preceding fiscal year, the termination date of this Agreement will
automatically be extended an additional year. For the purposes hereof, "Term" shall refer to the Initial Term and
the Extended Term, if applicable.
2. Effective for services rendered on and after June 1, 1997, S