THIRD AMENDMENT TO
REVISED AND RESTATED MANAGEMENT AGREEMENT
BY AND BETWEEN THE NEWSTAR GROUP AND CHEROKEE INC.
This Third Amendment to Revised and Restated Management Agreement (the "Third 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 as of June 1, 1997, a new Section 3.5 is added to the Agreement to read as follows:
3.5 Acquisition Bonus. In the event of an "Acquisition of Company" (as defined below) pursuant to an
"Acquisition Agreement" (as defined below) the "Execution Date" (as defined below) of which is during the term
of this Agreement and not later than May 31, 2000, Wilstar will receive from Company in cash at the closing of
such Acquisition of Company (the "Closing") an "Acquisition Bonus" (as defined below) as hereinafter provided
in this Section 3.5:
(a) For purposes of this Agreement, "Acquisition of Company" shall mean the consummation of an acquisition of
Company in a single transaction or a series of related transactions, by an acquiring party or parties other than
Wilstar, Mr. Margolis or their affiliates, whether by (i) acquisition of all or substantially all of the assets of
Company ("Asset Sale"), (ii) acquisition of more than 80% of the stock of Company by one or more affiliated
entities other than any current beneficial holder of 20% or more of the common stock of the Company, or (iii)
merger, consolidation or other transaction which results in the stockholders of Company immediately prior to the
consummation of such transacti