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Exhibit 10.1

AGREEMENT AND MUTUAL RELEASE

        This Agreement and Mutual Release (this "Agreement") is made as of
March 5, 2004, by and between Oakley, Inc., a Washington corporation (the
"Company"), and N2T, Inc., an Oregon corporation ("Lessor").

        WHEREAS, the Company has previously leased an aircraft from Lessor
pursuant to the provisions of that certain Aircraft Lease, dated May 6, 2002, by
and between the Company and Lessor (the "Previous Lease");

        WHEREAS, the Previous Lease was terminated by the Company in
November 2003 and, in lieu thereof, the Company and Lessor have entered into
that certain Aircraft Lease, dated December 18, 2003 (the "New Lease" and
together with the Previous Lease, the "Leases");

        WHEREAS, the Tax Collector's Office of the County of Orange, California
has issued a property tax assessment (the "Assessment") in the amount of
$296,045.68 relating to the Company's use, during the period from July 1, 2003
to June 30, 2004, of the aircrafts that are the subject of the Leases; and

        WHEREAS, although the Leases provide that the Company shall be
responsible for all Property Taxes (as defined below) assessed against the
aircrafts that are the subject of the Leases (or the use thereof), the Company
and Lessor wish to set forth their agreement that the Company's responsibility
for the payment of such Property Taxes shall be limited to $125,000.00 per year.

        NOW, THEREFORE, in consideration of the foregoing and the agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

        1.     Payment of Property Taxes.

        Notwithstanding Paragraph 5(l) of each of the Leases, the Company shall
be responsible for all ownership, personal property, use or similar taxes and
fees (the "Property Taxes") arising out of or in connection with one or both of
the Leases, up to an aggregate of $125,000 per year. All remaining Property
Taxes will be borne by the Lessor. The Lessor shall, promptly following notice
from the Company, pay to the Company the amount of Lessor's portion of any
Property Taxes as indicated in the notification from the Company, so that the
Company may make timely payment of the full amount of Property Taxes due. In the
event that the Company receives a refund of any portion of any assessment of
Property Taxes that has been paid in accordance with this Agreement, the Company
agrees to pay Lessor a portion of such refund equal to the amount of such refund
multiplied by a fraction, the numerator of which shall be the amount Lessor paid
to the Company to be applied towards such assessment and the denominator of
which shall be the amount of such assessment.

        2.     Release; Waiver.

        The Company shall pay $125,000.00 of the amount due under the Assessment
and the Lessor shall pay the remaining $171,045.68 due under the Assessment.
Upon such payment, each of the Company and Lessor for themselves and for their
respective successors and assignees, hereby releases and discharges each other,
and each other's respective successors and assignees, forever, from any and all
obligations, damages, debts, liabilities, demands, costs, expenses, claims and
causes of action, known or unknown, of any kind or nature whatsoever, which they
ever had, now have or may hereafter have, arising from, concerning or pertaining
to the Assessment, other than those regarding any payment due to Lessor pursuant
to the last sentence of Paragraph 1 of this Agreement.

        Each of the Company and Lessor fully understands and voluntarily waives
and relinquishes all rights and benefits afforded by Section 1542 of the Civil
Code of the State of California and any similar or successor laws of any state
or territory. Each of the Company and Lessor understands that the facts in
respect of which the general release made in this Agreement is given may
hereafter turn out to be other than or different from the facts in connection
therewith now known or believed by the Company

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or Lessor to be true; and each of the Company and Lessor hereby accepts and
assumes the risk of the facts turning out to be different and agrees that this
Agreement shall be, and remain in all respects, effective and not subject to
termination or rescission by virtue of any such difference in facts. Said
Section 1542 states as follows:

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

        3.     Entire Agreement.

        The terms and conditions of this Agreement constitute the entire
agreement between the parties as to the subject matter hereof and supersede all
prior written and oral negotiations, representations and agreements, if any,
between the parties on such matters and shall be binding upon the parties, their
successors, assigns and legal representatives.

        4.     Modification of Agreement.

        No change or modification hereof or waiver of any term or condition
hereof shall be effective unless the change or modification is in writing and
signed by both parties.

        5.     Counterparts.

        This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.

        6.     Governing Law.

        This Agreement will be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflict of laws principles
or rules thereof, including, without limitation, New York General Obligations
Law Section 5-1401.

        IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be duly executed as of the year and day first above written.

 
   
COMPANY:   LESSOR:
OAKLEY, INC.
 
N2T, INC.
/s/  LINK NEWCOMB      

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By: Link Newcomb
Title: Chief Operating Officer
 
/s/  JIM JANNARD      

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By: Jim Jannard
Title:

2

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Exhibit 10.1

AGREEMENT AND MUTUAL RELEASE