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                                                                    EXHIBIT 10.1

                                CREDIT AGREEMENT


                                (LINE OF CREDIT)


                               (FOREIGN EXCHANGE)


                         (LETTER OF CREDIT SUB-FACILITY)

     This Agreement (the "Agreement") is made and entered into as of JULY 20,
2006, by and between BANK OF THE WEST (the "Bank") and VOLCOM, INC. (the
"Borrower"), on the terms and conditions that follow:

                                     SECTION

                                       1

                                   DEFINITIONS

1.1     CERTAIN DEFINED TERMS: Unless elsewhere defined in this Agreement, the
        following terms shall have the following meanings (such meanings to be
        generally applicable to the singular and plural forms of the terms
        defined):

        1.1.1   "ADVANCE": shall mean an advance to the Borrower under the
                Agreement described in Section 2.

        1.1.2   "BUSINESS DAY": shall mean a day, other than a Saturday or
                Sunday, on which commercial banks are open for business in
                California.

        1.1.3   "CLOSE-OUT DATE": shall mean the Business Day on which the Bank
                closes out and liquidates an FX Transaction.

        1.1.4   "CLOSING VALUE": has the meaning given to it in Section 7.5(i)
                hereof.

        1.1.5   "CLOSING GAIN" AND "CLOSING LOSS": shall mean the amount
                determined in accordance with Section 7.5(ii) hereof.

        1.1.6   "CREDIT PERCENTAGE": shall mean 10%.

        1.1.7   "CURRENT LIABILITIES": shall mean current liabilities as
                determined in accordance with generally accepted accounting
                principles, including any negative cash balance on the
                Borrower's financial statement and Indebtedness for borrowed
                money under lines of credit with the Bank used by the Borrower
                for working capital purposes.

        1.1.8   "EFFECTIVE TANGIBLE NET WORTH": shall mean the Borrower's
                (including all subsidiaries) stated net worth plus Subordinated
                Debt but less all intangible assets of the Borrower (i.e.,
                goodwill, trademarks, patents, copyrights, organization expense,
                and similar intangible items including, but not limited to,
                investments in and all amounts due from affiliates, officers or
                employees).

        1.1.9   "ENVIRONMENTAL CLAIMS": shall mean all claims, however asserted
                provided it is in writing, by any governmental authority or
                other person alleging potential liability or responsibility for
                violation of any Environmental Law or for discharge or injury to
                the environment or threat to public health, personal injury
                (including sickness, disease or death), property damage,



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                natural resources damage, or otherwise alleging liability or
                responsibility for damages (punitive or otherwise), cleanup,
                removal, remedial or response costs, restitution, civil or
                criminal penalties, injunctive relief, or other type of relief,
                resulting from or based upon (a) the presence, placement,
                discharge, emission or release (including intentional and
                unintentional, negligent and non-negligent, sudden or
                non-sudden, accidental or non-accidental placement, spills,
                leaks, Discharges, emissions or releases) of any Hazardous
                Material at, in, or from property, whether or not owned by the
                Borrower, or (b) any other circumstances forming the basis of
                any violation, or alleged violation, of any Environmental Law.

        1.1.10  "ENVIRONMENTAL LAWS": shall mean all federal, state or local
                laws, statutes, common law duties, rules, regulations,
                ordinances and codes, together with all administrative orders,
                directed duties, requests, licenses, authorizations and permits
                of, and agreements with, any governmental authorities, in each
                case relating to environmental, health, safety and land use
                matters; including but not limited to the Comprehensive
                Environmental Response, Compensation and Liability Act of 1980
                ("CERCLA"), the Clean Air Act, the Federal Water Pollution
                Control Act of 1972, the Solid Waste Disposal Act, the Federal
                Resource Conservation and Recovery Act, the Toxic Substances
                Control Act, the Emergency Planning and Community Right-to-Know
                Act, the California Hazardous Waste Control Law, the California
                Solid Waste Management, Resource, Recovery and Recycling Act,
                the California Water Code and the California Health and Safety
                Code.

        1.1.11  "ENVIRONMENTAL PERMITS": shall have the meaning provided in
                Section 4.10 hereof.

        1.1.12  "ERISA": shall mean the Employee Retirement Income Security Act
                of 1974, as amended from time to time, including (unless the
                context otherwise requires) any rules or regulations promulgated
                thereunder.

        1.1.13  "EVENT OF DEFAULT": shall have the meaning set forth in Section
                6 of this Agreement.

        1.1.14  "EXPIRATION DATE": shall mean August 31, 2008, or the date of
                termination of the Bank's commitment to lend under this
                Agreement pursuant to Section 7, whichever shall occur first.

        1.1.15  "FOREIGN CURRENCY": shall mean any legally traded currency other
                than US dollars and which may be transferred by paperless wire
                transfer or cash and in which the Bank regularly trades.

        1.1.16  "FOREIGN EXCHANGE FACILITY": shall mean the credit facility
                described as such in Section 2.

        1.1.17  "FX RISK LIABILITY": shall mean the product of (a) the Credit
                Percentage, times (b) the aggregate of the Notional Values of
                all FX Transactions outstanding, net of any Offsetting
                Transactions.

        1.1.18  "FX LIMIT": shall mean $1,500,000.

        1.1.19  "FX TRANSACTION": shall mean any transaction between the Bank
                and the Borrower pursuant to which the Bank has agreed to sell
                to or to purchase from the Borrower a Foreign Currency of an
                agreed amount at an agreed price in US dollars or such other
                agreed upon Foreign Currency, deliverable and payable on an
                agreed date.

        1.1.20  "HAZARDOUS MATERIALS": shall mean all those substances which are
                regulated by, or which form the basis of liability under, any
                Environmental Law, including all substances identified under any
                Environmental Law as a pollutant, contaminant, hazardous waste,
                hazardous



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                constituent, special waste, hazardous substance, hazardous
                material, or toxic substance, or petroleum or petroleum derived
                substance or waste.

        1.1.21  "INDEBTEDNESS": shall mean, with respect to the Borrower, (i)
                all indebtedness for borrowed money or for the deferred purchase
                price of property or services for which is deferred six months
                or more in respect of which the Borrower is liable, contingently
                or otherwise, as obligor, guarantor or otherwise, or in respect
                of which the Borrower otherwise assures a creditor against loss
                but excluding obligations to trade creditors incurred in the
                ordinary course of business and (ii) obligations under leases
                which shall have been or should be, in accordance with generally
                accepted accounting principles, reported as capital leases in
                respect of which the Borrower is liable, contingently or
                otherwise, or in respect of which the Borrower otherwise assures
                a creditor against loss. The word "Indebtedness" also includes
                expenses incurred by the Bank to enforce obligations of the
                Borrower under this Agreement, together with interest on such
                amounts as provided in this Agreement, and all other
                obligations, debts, and liabilities of the Borrower to the Bank
                as well as all claims by the Bank against the Borrower that are
                now or hereafter existing, voluntary or involuntary, due or not
                due, absolute or contingent, liquidated or unliquidated, whether
                the Borrower may be liable individually or jointly with others,
                whether recovery upon such Indebtedness may be or hereafter may
                become barred by any statute of limitations, and whether such
                Indebtedness may be or hereafter may become otherwise
                unenforceable.

        1.1.22  "LETTER OF CREDIT FACILITY": shall mean the credit facility
                described as such in Section 2 hereof.

        1.1.23  "LIBOR ADVANCE": shall have the respective meaning as it is
                defined for each facility under Section 2, hereof.

        1.1.24  "LIBOR INTEREST PERIOD": shall have the respective meaning as it
                is defined for each facility under Section 2, hereof.

        1.1.25  "LIBOR RATE": shall have the respective meaning as it is defined
                for each facility under Section 2, hereof.

        1.1.26  "LINE ACCOUNT": shall have the meaning provided in Section 2.4
                hereof.

        1.1.27  "LINE OF CREDIT": shall mean the credit facility described as
                such in Section 2.

        1.1.28  "NOTIONAL VALUE": shall mean the US Dollar equivalent of the
                price at which the Bank agreed to purchase or sell to the
                Borrower a Foreign Currency.

        1.1.29  "OBLIGATIONS": shall mean all amounts owing by the Borrower to
                the Bank pursuant to this Agreement including, but not limited
                to, the unpaid principal amount of any loans or advances.

        1.1.30  "OFFSETTING TRANSACTION": shall mean a FX Transaction to
                purchase a Foreign Currency and a FX Transaction to sell the
                same Foreign Currency , each with the same Settlement Date and
                designated as an Offsetting Transaction at the time of entering
                into the FX Transaction.

        1.1.31  "ORDINARY COURSE OF BUSINESS": shall mean, with respect to any
                transaction involving the Borrower or any of its subsidiaries or
                affiliates, the ordinary course of the Borrower's business, as
                conducted by the Borrower in accordance with past practice or
                industry custom or practice.



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        1.1.32  "PERMITTED LIENS": shall mean: (i) liens and security interests
                securing indebtedness owed by the Borrower to the Bank; (ii)
                liens for taxes, assessments or similar charges not yet due;
                (iii) liens of materialmen, mechanics, warehousemen, or carriers
                or other like liens arising in the Ordinary Course of Business
                and securing obligations which are not yet delinquent; (iv)
                purchase money liens or purchase money security interests upon
                or in any property acquired or held by the Borrower in the
                Ordinary Course of Business to secure Indebtedness outstanding
                on the date hereof or permitted to be incurred herein; (v) liens
                and security interests which, as of the date hereof, have been
                disclosed to and approved by the Bank in writing; and (vi) those
                liens and security interests which in the aggregate do not
                constitute a material monetary amount with respect to the net
                value of the Borrower's assets.

        1.1.33  "PRIME RATE": shall mean an index for a variable interest rate
                which is quoted, published or announced by Bank as its prime
                rate and as to which loans may be made by Bank at, above or
                below such rate.

        1.1.34  "SETTLEMENT DATE": shall mean the Business Day on which the
                Borrower has agreed to (a) deliver the required amount of
                Foreign Currency, or (b) pay in US dollars the agreed upon
                purchase price of the Foreign Currency.

        1.1.35  "SUBORDINATED DEBT": shall mean such liabilities of the Borrower
                which have been subordinated to those owed to the Bank in a
                manner acceptable to the Bank.

        1.1.36  "VARIABLE RATE ADVANCE": shall have the respective meaning as it
                is defined for each facility under Section 2, hereof.

        1.1.37  "VARIABLE RATE": shall have the respective meaning as it is
                defined for each facility under Section 2, hereof.

1.2     ACCOUNTING TERMS: All references to financial statements, assets,
        liabilities, and similar accounting items not specifically defined
        herein shall mean such financial statements or such items prepared or
        determined in accordance with generally accepted accounting principles
        consistently applied and, except where otherwise specified, all
        financial data submitted pursuant to this Agreement shall be prepared in
        accordance with such principles.

1.3     OTHER TERMS: Other terms not otherwise defined shall have the meanings
        attributed to such terms in the Uniform Commercial Code as in effect on
        July 1, 2001 and from time to time thereafter.


                                     SECTION

                                       2

                                CREDIT FACILITIES

2.1     THE LINE OF CREDIT

        2.1.1   THE LINE OF CREDIT: On terms and conditions as set forth herein,
                the Bank agrees to make Advances to the Borrower from time to
                time from the date hereof to the Expiration Date, provided the
                aggregate amount of such Advances outstanding at any time does
                not exceed $20,000,000.00 (the "Line of Credit"). Within the
                foregoing limits, the Borrower may borrow, partially or wholly
                prepay, and reborrow under this Section 2.1. Proceeds of the
                Line of Credit shall be used for general working capital needs,
                including loans and advances to subsidiaries; provided, however,
                that up to $10,000,000.00 of the Line of Credit may also be used
                for the acquisitions.


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        2.1.2   MAKING LINE ADVANCES: Each Advance shall be conclusively deemed
                to have been made at the request of and for the benefit of the
                Borrower (i) when credited to any deposit account of the
                Borrower maintained with the Bank or (ii) when paid in
                accordance with the Borrower's written instructions. Subject to
                the requirements of Section 3 and provided such request is made
                in a timely manner as provided in Section 2.1.5 below, Advances
                shall be made by the Bank under the Line of Credit.

        2.1.3   REPAYMENT: On the Expiration Date, the Borrower hereby promises
                and agrees to pay to the Bank in full the aggregate unpaid
                principal amount of all Advances then outstanding, together with
                all accrued and unpaid interest thereon.

        2.1.4   INTEREST ON ADVANCES: Interest shall accrue from the date of
                each Advance under the Line of Credit at one of the following
                rates, as quoted by the Bank and as elected by the Borrower
                below:

                (i)     Variable Rate Advances: A variable rate per annum
                        equivalent to the Prime Rate (the "Variable Rate").
                        Interest shall be adjusted concurrently with any change
                        in the Prime Rate. An Advance based upon the Variable
                        Rate is hereinafter referred to as a "Variable Rate
                        Advance".

                (ii)    LIBOR Advances: A fixed rate quoted by the Bank for 1 to
                        6 months or for such other period of time that the Bank
                        may quote and offer (provided that any such period of
                        time does not extend beyond the Expiration Date) (the
                        "LIBOR Interest Period") for Advances in the minimum
                        amount of $100,000.00. Such interest rate shall be a
                        percentage approximately equivalent to 1.50% in excess
                        of the Bank's LIBOR Rate which is that rate determined
                        by the Bank's Treasury Desk as being the arithmetic mean
                        (rounded upwards, if necessary, to the nearest whole
                        multiple of one-sixteenth of one percent (1/16%)) of the
                        U. S. dollar London Interbank Offered Rates for such
                        period appearing on page USD (or such other page as may
                        replace page USD) of the Bloomberg Financial Markets
                        screen at or about 10:00 a.m. (New York Time) on the
                        second Business Day prior to the first day of such
                        period (adjusted for any and all assessments, surcharges
                        and reserve requirements) (the "LIBOR Rate"). An Advance
                        based upon the LIBOR Rate is hereinafter referred to as
                        a "LIBOR Advance".

                Interest on any Advance shall be computed on the basis of 360
                days per year, but charged on the actual number of days elapsed.

                The Borrower hereby promises and agrees to pay interest in
                arrears on Variable Rate Advances and LIBOR Advances on the last
                calendar day of each month.

                If interest is not paid as and when it is due, it shall be added
                to the principal, become and be treated as a part thereof, and
                shall thereafter bear like interest.

        2.1.5   NOTICE OF BORROWING: Upon written or telephonic notice which
                shall be received by the Bank at or before 2:00 p.m. (Pacific
                time) on a Business Day, the Borrower may borrow under the Line
                of Credit by requesting:

                (i)     A Variable Rate Advance. A Variable Rate Advance may be
                        made on the day notice is received by the Bank;
                        provided, however, that if the Bank shall not have
                        received notice at or before 2:00 p.m. on the day such
                        Advance is requested to be made, such Variable Rate
                        Advance may, at the Bank's option, be made on the next
                        Business Day.



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                (ii)    A LIBOR Advance. Notice of any LIBOR Advance shall be
                        received by the Bank no later than two Business Days
                        prior to the day (which shall be a Business Day) on
                        which the Borrower requests such LIBOR Advance to be
                        made.

        2.1.6   NOTICE OF ELECTION TO ADJUST INTEREST RATE: The Borrower may
                elect:

                (i)     That interest on a Variable Rate Advance shall be
                        adjusted to accrue at the LIBOR Rate; provided, however,
                        that such notice shall be received by the Bank no later
                        than two Business Days prior to the day (which shall be
                        a Business Day) on which the Borrower requests that
                        interest be adjusted to accrue at the LIBOR Rate.

                (ii)    That interest on a LIBOR Advance shall continue to
                        accrue at a newly quoted LIBOR Rate or shall be adjusted
                        to commence to accrue at the Variable Rate; provided,
                        however, that such notice shall be received by the Bank
                        no later than two Business Days prior to the last day of
                        the LIBOR Interest Period pertaining to such LIBOR
                        Advance. If the Bank shall not have received notice (as
                        prescribed herein) of the Borrower's election that
                        interest on any LIBOR Advance shall continue to accrue
                        at the newly quoted LIBOR Rate, the Borrower shall be
                        deemed to have elected that interest thereon shall be
                        adjusted to accrue at the Variable Rate upon the
                        expiration of the LIBOR Interest Period pertaining to
                        such Advance.

        2.1.7   PREPAYMENT: The Borrower may prepay any Advance in whole or in
                part, at any time and without penalty, provided, however, that:
                (i) any partial prepayment shall first be applied, at the Bank's
                option, to accrued and unpaid interest and next to the
                outstanding principal balance; and (ii) during any period of
                time in which interest is accruing on any Advance on the basis
                of the LIBOR Rate, no prepayment shall be made except on a day
                which is the last day of the LIBOR Interest Period pertaining
                thereto. If the whole or any part of any LIBOR Advance is
                prepaid by reason of acceleration or otherwise, the Borrower
                shall, upon the Bank's request, promptly pay to and indemnify
                the Bank for all costs, expenses and any loss (including loss of
                profit resulting from the re-employment of funds) sustained by
                the Bank as a direct consequence of such prepayment.

                The Bank shall be entitled to fund all or any portion of its
                Advances in any manner it may determine in its sole discretion,
                but all calculations and transactions hereunder shall be
                conducted as though the Bank actually funded all Advances
                through the purchase of dollar deposits bearing interest at the
                same rate as U.S. Treasury securities in the amount of the
                relevant Advance and in maturities corresponding to the date of
                such purchase to the Expiration Date hereunder.

        2.1.8   INDEMNIFICATION FOR LIBOR RATE COSTS: During any period of time
                in which interest on any Advance is accruing on the basis of the
                LIBOR Rate, the Borrower shall, upon the Bank's request,
                promptly pay to and reimburse the Bank for all costs incurred
                and payments made by the Bank by reason of any future
                assessment, reserve, deposit or similar requirement or any
                surcharge, tax or fee imposed upon the Bank or as a result of
                the Bank's compliance with any directive or requirement of any
                regulatory authority pertaining or relating to funds used by the
                Bank in quoting and determining the LIBOR Rate.

        2.1.9   CONVERSION FROM LIBOR RATE TO VARIABLE RATE: In the event that
                the Bank shall at any time determine that the accrual of
                interest on the basis of the LIBOR Rate (i) is infeasible
                because the Bank is unable to determine the LIBOR Rate due to
                the unavailability of U.S. dollar deposits, contracts or
                certificates of deposit in an amount approximately equal to the
                amount of the relevant Advance and for a period of time
                approximately equal to relevant LIBOR Interest Period or (ii) is
                or has become unlawful or infeasible by reason of the Bank's
                compliance with any new law, rule, regulation, guideline or
                order, or any new interpretation of any present law, rule,
                regulation, guideline or order, then the Bank shall



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                give telephonic notice thereof (confirmed in writing) to the
                Borrower, in which event any Advance bearing interest at the
                LIBOR Rate shall be deemed to be a Variable Rate Advance and
                interest shall thereupon immediately accrue at the Variable
                Rate.

2.2     LETTER OF CREDIT SUB-FACILITY

        2.2.1   LETTER OF CREDIT SUB-FACILITY: The Bank agrees to issue standby
                letters of credit (each a "Letter of Credit") on behalf of the
                Borrower of up to $10,000,000.00. At no time, however, shall the
                total principal amount of all Advances outstanding under the
                Line of Credit, together with the total face amount of all
                Letters of Credit outstanding, less any partial draws paid by
                the Bank, exceed the Line of Credit.

                For the purposes hereof, any Letters of Credit issued and
                outstanding for the account of the Borrower as of the date
                hereof shall be deemed to be issued hereunder.

                (i)     Upon the Bank's request, the Borrower shall promptly pay
                        to the Bank issuance fees and such other customary fees,
                        commissions, costs and any out-of-pocket expenses
                        charged or incurred by the Bank with respect to any
                        Letter of Credit.

                (ii)    The commitment by the Bank to issue Letters of Credit
                        shall, unless earlier terminated in accordance with the
                        terms of the Agreement, automatically terminate on the
                        Expiration Date of the Line of Credit and no Letter of
                        Credit shall expire on a date which is more than 90 days
                        after the Expiration Date.

                (iii)   Each Letter of Credit shall be in form and substance
                        satisfactory to the Bank and in favor of beneficiaries
                        reasonably satisfactory to the Bank, provided that the
                        Bank may refuse to issue a Letter of Credit due to the
                        nature of the transaction or its terms or in connection
                        with any transaction where the Bank, due to the
                        beneficiary or the nationality or residence of the
                        beneficiary, would be prohibited by any applicable law,
                        regulation or order from issuing such Letter of Credit.

                (iv)    Prior to the issuance of each Letter of Credit, but in
                        no event later than 10:00 a.m. (California time) on the
                        day such Letter of Credit is to be issued (which shall
                        be a Business Day), the Borrower shall deliver to the
                        Bank a duly executed form of the Bank's standard form of
                        application for issuance of a Letter of Credit with
                        proper insertions.

                (v)     The Borrower shall, upon the Bank's request, promptly
                        pay to and reimburse the Bank for all costs incurred and
                        payments made by the Bank by reason of any future
                        assessment, reserve, deposit or similar requirement or
                        any surcharge, tax or fee imposed upon the Bank or as a
                        result of the Bank's compliance with any directive or
                        requirement of any regulatory authority pertaining or
                        relating to any Letter of Credit.

        In the event that the Borrower fails to pay any drawing under any Letter
        of Credit or the balances in the depository account or accounts
        maintained by the Borrower with Bank are insufficient to pay such
        drawing, without limiting the rights of Bank hereunder or waiving any
        Event of Default caused thereby, Bank may, and Borrower hereby
        authorizes Bank to create an Advance bearing interest at the rate or
        rates provided in Section 8.2 hereof to pay such drawing.

2.3     FOREIGN EXCHANGE FACILITY

        2.3.1   FOREIGN EXCHANGE FACILITY: The Bank agrees to enter into FX
                Transactions with the Borrower, at the Borrower's request
                therefor made prior to the Expiration Date, provided however,
                that at no time shall the aggregate FX Risk Liability of the
                Borrower exceed the



                                      -7-
<PAGE>

                FX Limit. Each FX Transaction shall be used to hedge the
                Borrower's foreign exchange exposure.


                (i)     REQUESTS. Each request for a FX Transaction shall be
                        made by telephone to the Bank's Treasury Department
                        ("Request"), shall specify the Foreign Currency to be
                        purchased or sold, the amount of such Foreign Currency
                        and the Settlement Date. Each Request shall be
                        communicated to the Bank no later than 3:00 p.m.
                        California time on the Business Day on which the FX
                        Transaction is requested.

                (ii)    TENOR. No FX Transaction shall have a Settlement Date
                        which is more than 365 days after the date of entry into
                        such FX Transaction, and provided further, no FX
                        Transaction shall expire on a date which is more than 90
                        days after the Expiration Date.

                (iii)   AVAILABILITY. Bank may refuse to enter into a FX
                        Transaction with the Borrower where the Bank, at its
                        sole discretion, determines that (1) the requested
                        Foreign Currency is unavailable, or (2) the Bank is not
                        then dealing in the requested Foreign Currency, or (3)
                        the Bank would be prohibited by any applicable law,
                        rule, regulation or order from purchasing such Foreign
                        Currency.

                (iv)    PAYMENT. Payment is due on the Settlement Date of the
                        relevant FX Transaction. The Bank is hereby authorized
                        by the Borrower to charge the full settlement price of
                        any FX Transaction against the depository account or
                        accounts maintained by the Borrower with the Bank on the
                        Settlement Date. In the event that the Borrower fails to
                        pay the settlement price of any FX Transaction on the
                        Settlement Date or the balances in the depository
                        account or accounts maintained with Bank are
                        insufficient to pay the settlement price, without
                        limiting the rights of Bank hereunder or waiving any
                        Event of Default caused thereby, Bank may , and Borrower
                        hereby authorizes Bank to, create an Advance bearing
                        interest at the Variable Rate to pay the settlement
                        price on the Settlement Date.

                (v)     INCREASED COSTS. Borrower shall promptly pay to and
                        reimburse the Bank for all costs incurred and payments
                        made by the Bank by reason of any assessment, reserve,
                        deposit, capital maintenance or similar requirement or
                        any surcharge, tax or fee imposed upon the Bank or as a
                        result of the Bank's compliance with any directive or
                        requirement of any regulatory authority pertaining or
                        relating to any FX Transaction.

                (vi)    IMPOSSIBILITY OF PERFORMANCE. In the event that the
                        Borrower or the Bank cannot perform under a FX
                        Transaction due to force majeure or an act of State or
                        it becomes unlawful or impossible to perform, all in the
                        good faith judgement of the Borrower or the Bank, then
                        upon notice to the other party, the Borrower or the Bank
                        may require the close-out and liquidation of the
                        affected FX Transaction in accordance with the
                        provisions of this Agreement.

2.4     LINE ACCOUNT: The Bank shall maintain on its books a record of account
        in which the Bank shall make entries for each Advance and such other
        debits and credits as shall be appropriate in connection with the credit
        facilities granted hereunder (the "Line Account"). The Bank shall
        provide the Borrower with a statement of the Borrower's Line Account,
        which statement shall be considered to be correct and conclusively
        binding on the Borrower unless the Borrower notifies the Bank to the
        contrary within 60 days after the Borrower's receipt of any such
        statement which it deems to be incorrect.

2.5     LATE PAYMENT: In addition to any other rights the Bank may have
        hereunder, if any payment of principal or interest or any portion
        thereof, under this Agreement is not paid within 15 days of when due, a
        late payment charge equal to five percent (5%) of such past due payment
        may be assessed and shall be immediately payable.



                                      -8-
<PAGE>

                                    SECTION

                                       3

                              CONDITIONS PRECEDENT

3.1     CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT: The obligation
        of the Bank to make the initial Advance or the first extension of credit
        to or on account of the Borrower hereunder is subject to the conditions
        precedent that the Bank shall have received before the date of such
        initial Advance or such first extension of credit all of the following,
        in form and substance satisfactory to the Bank:

                (i)     AUTHORITY TO BORROW. Evidence that the execution,
                        delivery and performance by the Borrower of this
                        Agreement and any document, instrument or agreement
                        required hereunder have been duly authorized.

                (ii)    FEES. Payment of all of the Bank's reasonable
                        out-of-pocket expenses in connection with the
                        preparation and negotiation of this Agreement. The bank
                        shall provide written notice to the Borrower for any
                        fees of more than $500.00 and shall discuss the
                        retention of outside counsel with the Company prior to
                        such counsel performing any work that will be billed to
                        Borrower.

                (iii)   MISCELLANEOUS. Such other evidence as the Bank may
                        reasonably request to establish the consummation of the
                        transaction contemplated hereunder and compliance with
                        the conditions of this Agreement.

3.2     CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT: The obligation of the
        Bank to make each Advance or each other extension of credit, as the case
        may be, to or on account of the Borrower (including the initial Advance
        or the first extension of credit) shall be subject to the further
        conditions precedent that, on the date of each Advance or each extension
        of credit and after the making of such Advance or extension of credit:

                (i)     REPORTING REQUIREMENTS. The Bank shall have received the
                        documents set forth in Section 5.1.

                (ii)    REPRESENTATIONS AND WARRANTIES. The representations
                        contained in Section 4, except for representation and
                        warranties dating specifically to an earlier date and in
                        any other document, instrument or certificate delivered
                        to the Bank hereunder are true, correct and complete in
                        all material respects.

                (iii)   EVENT OF DEFAULT. No event has occurred and is
                        continuing which constitutes, or with the lapse of time
                        or giving of notice or both, would constitute an Event
                        of Default.

The Borrower's acceptance of the proceeds of any loan, Advance or extension of
credit, or the Borrower's applying for any Letter of Credit, or the Borrower's
execution of any document or instrument evidencing or creating any Obligation
hereunder shall be deemed to constitute the Borrower's representation and
warranty that all of the above statements are true and correct.



                                      -9-
<PAGE>

                                     SECTION

                                       4

                         REPRESENTATIONS AND WARRANTIES

The Borrower hereby makes the following representations and warranties to the
Bank, which representations and warranties are continuing:

4.1     STATUS: The Borrower's correct legal name is as stated in this Agreement
        and the Borrower is a corporation duly organized and validly existing
        under the laws of Delaware and with its chief executive office in the
        state of California. The Borrower is qualified to do business and in
        good standing under the laws of the state of Delaware and is qualified
        to do business and is in good standing in the state of California.

4.2     AUTHORITY: The execution, delivery and performance by the Borrower of
        this Agreement and any instrument, document or agreement required
        hereunder have been duly authorized and do not and will not: (i) violate
        any federal or California statute, rule or regulation or provision of
        the DGCL, in each case, applicable to the Borrower; (ii) result in a
        breach of or constitute a default under any material indenture or loan
        or credit agreement or other material agreement, lease or instrument to
        which the Borrower is a party or by which it or its properties may be
        bound or affected; or (iii) require any consent or approval of its
        stockholders or violate any provision of its certificate of
        incorporation or by-laws.

4.3     LEGAL EFFECT: This Agreement constitutes, and any instrument, document
        or agreement required hereunder when delivered hereunder will
        constitute, legal, valid and binding obligations of the Borrower
        enforceable against the Borrower in accordance with its terms.

4.4     FINANCIAL STATEMENTS: All financial statements, information and other
        data which may have been or which may hereafter be submitted by the
        Borrower to the Bank are true, accurate and correct in all material
        respects, except as they may have been amended in public filings with
        the U.S. Securities Exchange Commission, and have been or will be
        prepared in accordance with generally accepted accounting principles
        consistently applied and accurately represent the financial condition
        or, as applicable, the other information disclosed therein. Since the
        most recent submission of such financial information or data to the
        Bank, the Borrower represents and warrants that no material adverse
        change in the Borrower's financial condition or operations has occurred
        which has not been fully disclosed to the Bank in writing.

4.5     LITIGATION: Except as have been disclosed to the Bank in writing, there
        are no material actions, suits or proceedings pending or, to the
        knowledge of the Borrower, threatened against or affecting the Borrower
        or the Borrower's properties before any court or administrative agency,
        which, if determined adversely to the Borrower, would have a material
        adverse effect on the Borrower's financial condition.

4.6     TITLE TO ASSETS: The Borrower has good and marketable title to all of
        its assets and the same are not subject to any security interest,
        encumbrance, lien or claim of any third person except for Permitted
        Liens.

4.7     ERISA: If the Borrower has a pension, profit sharing or retirement plan
        subject to ERISA, such plan has been and will continue to be funded in
        accordance with its terms and otherwise complies with and continues to
        comply with the requirements of ERISA.

4.8     TAXES: Except where the failure to do so will not result in a material
        adverse effect on the Borrower, the Borrower has filed all tax returns
        required to be filed and paid all taxes shown thereon to be due,
        including interest and penalties, other than such taxes which are
        currently payable



                                      -10-
<PAGE>

        without penalty or interest or those which are being duly contested in
        good faith or which payment could not reasonably cause a change in the
        Borrower's financial condition.

4.9     MARGIN STOCK. The proceeds of any loan or advance hereunder will not be
        used to purchase or carry margin stock as such term is defined under
        Regulation U of the Board of Governors of the Federal Reserve System.

4.10    ENVIRONMENTAL COMPLIANCE. The operations of the Borrower comply, and
        during the term of this Agreement will at all times comply, in all
        respects with all Environmental Laws; to the Borrower's best knowledge,
        has obtained all licenses, permits, authorizations and registrations
        required under any Environmental Law ("Environmental Permits") and
        necessary for its ordinary course operations, all such Environmental
        Permits are in good standing, and the Borrower is in compliance with all
        material terms and conditions of such Environmental Permits; neither the
        Borrower nor any of its present property or operations is subject to any
        outstanding written order from or agreement with any governmental
        authority nor subject to any judicial or docketed administrative
        proceeding, respecting any Environmental Law, Environmental Claim or
        Hazardous Material; there are no Hazardous Materials or other conditions
        or circumstances existing, or arising from operations prior to the date
        of this Agreement, with respect to any property of the Borrower that
        would reasonably be expected to give rise to Environmental Claims;
        provided, however, that with respect to property leased from an
        unrelated third party, the foregoing representation is made to the
        actual knowledge of the Borrower. In addition, (i) the Borrower does not
        have any underground storage tanks that are not properly registered or
        permitted under applicable Environmental Laws, or that are leaking or
        disposing of Hazardous Materials off-site, and (ii) the Borrower has
        notified all of their employees of the existence, if any, of any health
        hazard arising from the conditions of their employment and have met all
        notification requirements under Title III of CERCLA and all other
        Environmental Laws.

                                     SECTION

                                        5

                                    COVENANTS

The Borrower covenants and agrees that during the term of this Agreement, and so
long thereafter as the Borrower is indebted to the Bank under this Agreement,
the Borrower will, unless the Bank shall otherwise consent in writing:

5.1     REPORTING AND CERTIFICATION REQUIREMENTS: Deliver or cause to be
        delivered to the Bank:

                (i)     Not later than 90 days after the end of each of the
                        Borrower's fiscal years or at such time as Borrow files
                        its Form 10-K with the Securities and Exchange
                        Commission, a copy of the Borrower's Form 10-K filed for
                        such year (If the Borrower has filed its Form 10-K with
                        the Securities and Exchange Commission electronically
                        via EDGAR (or other similar electronic filing system,
                        Borrower shall not be obligated to provide a hard copy
                        of its Form 10-K to the Bank).

                (ii)    Not later than 45 days after the end of each fiscal
                        quarter or at such time as Borrower files its Form 10-Q
                        with the Securities and Exchange Commission, a copy of
                        the Borrower's Form 10-Q filed for such period (If the
                        Borrower has filed its Form 10-Q with the Securities and
                        Exchange Commission electronically via EDGAR (or other
                        similar electronic filing system, Borrower shall not be
                        obligated to provide a hard copy of its Form 10-K to the
                        Bank).

                (iii)   Concurrently with the delivery of the financial reports
                        required hereunder, a compliance certificate in form and
                        detail satisfactory to the Bank stating that the
                        Borrower is in compliance with all covenants contained
                        herein and that no Event of



                                      -11-
<PAGE>

                        Default has occurred or is continuing, and certified to
                        by the chief financial officer or VP- Finance of the
                        Borrower.


                (iv)    Promptly upon the Bank's request, such other information
                        pertaining to the Borrower, as the Bank may reasonably
                        request.

5.2     FINANCIAL CONDITION: The Borrower promises and agrees, during the term
        of this Agreement and until payment in full of all of the Borrower's
        Obligations, the Borrower will maintain at all times:

                (i)     A minimum Effective Tangible Net Worth of at least
                        $90,000,000.00.

                (ii)    A ratio of the sum of cash, cash equivalents and
                        accounts receivable to Current Liabilities of not less
                        than 1.0 to 1.

                (iii)   A minimum net profit after tax and payment of dividends
                        of at least $2,000,000.00 at each fiscal year end.

5.3     PRESERVATION OF EXISTENCE; COMPLIANCE WITH APPLICABLE LAWS: Maintain and
        preserve its existence and all rights and privileges now enjoyed; and
        conduct its business and operations in accordance with all applicable
        laws, rules and regulations, except where failure to do so will result
        in a material adverse change to Borrower.

5.4     MERGE OR CONSOLIDATE: Not liquidate or dissolve, merge or consolidate
        with or into any other business organization, provided however, that
        this Section 5.4 shall not apply to transactions in which Borrower is
        the surviving entity.

5.5     MAINTENANCE OF INSURANCE: Maintain insurance in such amounts and
        covering such risks as is usually carried by companies engaged in
        similar businesses and owning similar properties in the same general
        areas in which the Borrower operates and maintain such other insurance
        and coverages as may be reasonably required by the Bank. All such
        insurance shall be in form and amount and with companies reasonably
        satisfactory to the Bank.

5.6     PAYMENT OF OBLIGATIONS AND TAXES: Except where failure to do so will
        result in a material adverse change to Borrower, make timely payment of
        all assessments and taxes and all of its liabilities and obligations
        including, but not limited to, trade payables, unless the same are being
        contested in good faith by appropriate proceedings with the appropriate
        court or regulatory agency. For purposes hereof, the Borrower's issuance
        of a check, draft or similar instrument without delivery to the intended
        payee shall not constitute payment.

5.7     DEPOSITORY RELATIONSHIPS: Maintain its primary business depository
        relationship with Bank, including general, operating and administrative
        deposit accounts and cash management services.

5.8     INSPECTION RIGHTS AND ACCOUNTING RECORDS: The Borrower will maintain
        adequate books and records in accordance with generally accepted
        accounting principles consistently applied and in a manner otherwise
        acceptable to Bank, and, at any reasonable time and from time to time,
        permit the Bank or any representative thereof to examine and make copies
        of the records and visit the properties of the Borrower and discuss the
        business and operations of the Borrower with any employee or
        representative thereof. If the Borrower shall maintain any records
        (including, but not limited to, computer generated records or computer
        programs for the generation of such records) in the possession of a
        third party, the Borrower hereby agrees to notify such third party to
        permit the Bank free access to such records at all reasonable times and
        to provide the Bank with copies of any records which it may request, all
        at the Borrower's expense, the amount of which shall be payable
        immediately upon demand.



                                      -12-
<PAGE>

5.9     ADDITIONAL INDEBTEDNESS: Not, after the date hereof, create, incur or
        assume, directly or indirectly, any additional Indebtedness other than
        (i) Indebtedness owed or to be owed to the Bank or (ii) Indebtedness to
        trade creditors incurred in the Ordinary Course of Business or (iii)
        Indebtedness of up to $5,000,000.00 in any one fiscal year.

5.10    LOANS: Except for credit extended in the Ordinary Course of Business,
        not make any loans or advances or extend credit to any directors,
        officers, members and partners of the Borrower and in no case extend
        credit to any third person or employee in excess of an aggregate total
        of $500,000.

5.11    LIENS AND ENCUMBRANCES: Not create, assume or permit to exist any
        security interest, encumbrance, mortgage, deed of trust, or other lien
        (including, but not limited to, a lien of attachment, judgment or
        execution) affecting any of the Borrower's properties, or execute or
        allow to be filed any financing statement or continuation thereof
        affecting any of such properties, except for Permitted Liens or as
        otherwise provided in this Agreement.

5.12    TRANSFER ASSETS: Not, after the date hereof, sell, contract for sale,
        convey, transfer, assign, lease or sublet, any of its assets except in
        the Ordinary Course of Business or wherein such action would not cause a
        material adverse change to the Borrower's financial condition.

5.13    CHANGE IN NATURE OF BUSINESS: Not make any material change in its
        financial structure or the nature of its business as existing or
        conducted as of the date hereof.

5.14    MAINTENANCE OF JURISDICTION: Borrower shall maintain the jurisdiction of
        its organization and chief executive office, or if applicable, principal
        residence, as set forth herein and not change such jurisdiction name or
        form of organization without 30 days prior written notice to Bank.

5.15    NOTICE: Give the Bank prompt written notice of any and all (i) Events of
        Default; (ii) material litigation, arbitration or administrative
        proceedings to which the Borrower is a party and in which the claim or
        liability exceeds $10,000,000; (iii) other matters which have resulted
        in, or might result in a material adverse change in the financial
        condition or business operations of the Borrower, and (iv) any
        enforcement, cleanup, removal or other governmental or regulatory
        actions instituted, completed or threatened against the Borrower or any
        of its properties.

5.16    ENVIRONMENTAL COMPLIANCE: The Borrower shall conduct its operations and
        keep and maintain all of its property in compliance with all material
        Environmental Laws and, upon the written request of the Bank, the
        Borrower shall submit to the Bank, at the Borrower's sole cost and
        expense, at reasonable intervals, a report providing the status of any
        environmental, health or safety compliance, hazard or liability.

                                     SECTION

                                        6

                                EVENTS OF DEFAULT

        Any one or more of the following described events shall constitute an
        event of default (an "Event of Default") under this Agreement:

6.1     NON-PAYMENT: Any Borrower shall fail to pay the principal amount of any
        Obligations when due or interest on the Obligations within 5 days of
        when due.

6.2     PERFORMANCE UNDER THIS AGREEMENT: The Borrower shall fail in any
        material respect to perform or observe any term, covenant or agreement
        contained in this Agreement or in any document, instrument or agreement
        relating to this Agreement or any other document or agreement executed



                                      -13-
<PAGE>

        by the Borrower with or in favor of Bank and any such failure shall
        continue unremedied for more than 30 days after the occurrence thereof.

6.3     REPRESENTATIONS AND WARRANTIES; FINANCIAL STATEMENTS: Any representation
        or warranty made by the Borrower under or in connection with this
        Agreement or any financial statement given by the Borrower or any
        guarantor shall prove to have been incorrect in any material respect
        when made or given or when deemed to have been made or given.

6.4     OTHER AGREEMENTS: If there is a default under any agreement to which
        Borrower is a party with Bank or with a third party or parties resulting
        in a right by the Bank or by such third party or parties, whether or not
        exercised, to accelerate the maturity of any Indebtedness, except where
        such acceleration would not have a material adverse effect on the
        Borrower.

6.5     INSOLVENCY: The Borrower or any guarantor shall: (i) become insolvent or
        be unable to pay its debts as they mature; (ii) make an assignment for
        the benefit of creditors or to an agent authorized to liquidate any
        substantial amount of its properties and assets; (iii) file a voluntary
        petition in bankruptcy or seeking reorganization or to effect a plan or
        other arrangement with creditors; (iv) file an answer admitting the
        material allegations of an involuntary petition relating to bankruptcy
        or reorganization or join in any such petition; (v) become or be
        adjudicated a bankrupt; (vi) apply for or consent to the appointment of,
        or consent that an order be made, appointing any receiver, custodian or
        trustee, for itself or any of its properties, assets or businesses; or
        (vii) in an involuntary proceeding, any receiver, custodian or trustee
        shall have been appointed for all or substantial part of the Borrower's
        or guarantor's properties, assets or businesses and shall not be
        discharged within 30 days after the date of such appointment.

6.6     EXECUTION: Any writ of execution or attachment or any judgment lien
        shall be issued against any property of the Borrower and shall not be
        discharged or bonded against or released within 30 days after the
        issuance or attachment of such writ or lien.

6.7     SUSPENSION: The Borrower shall voluntarily suspend the transaction of
        business or allow to be suspended, terminated, revoked or expired any
        permit, license or approval of any governmental body necessary to
        conduct the Borrower's business as now conducted, except where such
        failure would not have a material adverse effect on the Borrower.

6.8     MATERIAL ADVERSE CHANGE: If there occurs a material adverse change in
        the Borrower's business or financial condition, or if there is a
        material impairment of the prospect of repayment of any portion of the
        Obligations.

6.9     CHANGE IN OWNERSHIP: There shall occur a sale, transfer, disposition or
        encumbrance (whether voluntary or involuntary to), or an agreement shall
        be entered into to do so with, any Person or group of Persons (as such
        terms are defined pursuant to Federal securities laws) with respect to
        more than 50.1% of the issued and outstanding capital stock of the
        Borrower and, as a result thereof, such Person or group of Persons has
        the ability to direct or cause the direction of the management and
        policies of the Borrower.

                                     SECTION

                                        7

                               REMEDIES ON DEFAULT

Upon the occurrence of any Event of Default, the Bank may, at its sole and
absolute election, without demand and only upon such notice as may be required
by law:



                                      -14-
<PAGE>

7.1     ACCELERATION: Declare any or all of the Borrower's indebtedness owing to
        the Bank, whether under this Agreement or any other document, instrument
        or agreement, immediately due and payable, whether or not otherwise due
        and payable.

7.2     CEASE EXTENDING CREDIT: Cease making Advances or otherwise extending
        credit to or for the account of the Borrower under this Agreement or
        under any other agreement now existing or hereafter entered into between
        the Borrower and the Bank.

7.3     TERMINATION: Terminate this Agreement as to any future obligation of the
        Bank without affecting the Borrower's obligations to the Bank or the
        Bank's rights and remedies under this Agreement or under any other
        document, instrument or agreement.

7.4     LETTERS OF CREDIT: Require the Borrower to pay immediately to the Bank,
        for application against drawings under any outstanding Letters of
        Credit, the outstanding principal amount of any such Letters of Credit
        which have not expired. Any portion of the amount so paid to the Bank
        which is not applied to satisfy draws under any such Letters of Credit
        or any other obligations of the Borrower to the Bank shall be repaid to
        the Borrower without interest.

7.5     CLOSE-OUT AND LIQUIDATION: Close-out and liquidate each outstanding FX
        Transaction so that each FX Transaction is canceled in accordance with
        the following:

                (i)     CLOSING VALUE. The Bank shall calculate value of such
                        canceled FX Transaction by converting (1) in the case of
                        a FX Transaction whose Settlement Date is the same as or
                        later than the Close-Out Date, the amount of Foreign
                        Currency into US dollars at a rate of exchange at which
                        the Bank can buy or sell US dollars with or against the
                        Foreign Currency for delivery on the Settlement Date of
                        the relevant FX Transaction; or (2) in the case of a FX
                        Transaction whose Settlement Date precedes the Close-Out
                        Date, the amount of the Foreign Currency adjusted by
                        adding interest with respect thereto at the Variable
                        Rate from the Settlement Date to the Close-Out Date,
                        into US Dollars at a rate of exchange at which the Bank
                        can buy or sell US dollars with or against the Foreign
                        Currency for delivery on the Close-Out Date.

                (ii)    CLOSING GAIN OR LOSS. (1) For a FX Transaction for which
                        the Bank agreed to purchase a Foreign Currency, the
                        amount by which the Closing Value exceeds the Notional
                        Value shall be a Closing Loss and the amount by which
                        the Closing Value is less than the Notional Value shall
                        be a Closing Gain; and (2) For a FX Transaction for
                        which the Bank agreed to sell a Foreign Currency, the
                        amount by which the Closing Value exceeds the Notional
                        Value shall be a Closing Gain and the amount by which
                        the Closing Value is less than the Notional Value shall
                        be a Closing Loss.

                (iii)   NET PRESENT VALUE. The Closing Gain or Closing Loss for
                        each Settlement Date falling after the Close-out Date
                        will be discounted by the Bank to it net present value.

                (iv)    PAYMENT. To the extent that the net amount of the
                        aggregate Closing Gains exceeds the Closing Losses, such
                        amount shall be payable by the Bank to the Borrower. To
                        the extent that the aggregate net amount of the Closing
                        Losses exceeds the Closing Gains, such amount shall be
                        payable by the Borrower to the Bank.

7.6     NON-EXCLUSIVITY OF REMEDIES: Exercise one or more of the Bank's rights
        set forth herein or seek such other rights or pursue such other remedies
        as may be provided by law, in equity or in any other agreement now
        existing or hereafter entered into between the Borrower and the Bank, or
        otherwise.


                                      -15-
<PAGE>

                                     SECTION

                                        8

                                  MISCELLANEOUS

8.1     AMOUNTS PAYABLE ON DEMAND: If the Borrower shall fail to pay on demand
        any amount so payable under this Agreement, the Bank may, at its option
        and without any obligation to do so and without waiving any default
        occasioned by the Borrower having so failed to pay such amount, create
        an Advance under this Agreement in an amount equal to the amount so
        payable, which Advance shall thereafter bear interest as provided
        hereunder.

8.2     DEFAULT INTEREST RATE: If an Event of Default, or an event which, with
        notice or passage of time could become an Event of Default, has occurred
        or is continuing, the Borrower shall pay to the Bank interest on any
        Indebtedness or amount payable under this Agreement at a rate which is
        5% in excess of the rate or rates then in effect under this Agreement.

8.3     RELIANCE AND FURTHER ASSURANCES: Each warranty, representation,
        covenant, obligation and agreement contained in this Agreement shall be
        conclusively presumed to have been relied upon by the Bank regardless of
        any investigation made or information possessed by the Bank and shall be
        cumulative and in addition to any other warranties, representations,
        covenants and agreements which the Borrower now or hereafter shall give,
        or cause to be given, to the Bank. Borrower agrees to execute all
        documents and instruments and to perform such acts as the Bank may
        reasonably deem necessary to confirm and secure to the Bank all rights
        and remedies conferred upon the Bank by this agreement and all other
        documents related thereto.

8.4     ATTORNEYS' FEES: Borrower shall pay to the Bank all reasonable, actual,
        out-of-pocket costs and expenses, including but not limited to
        reasonable attorneys fees, incurred by Bank in connection with the
        administration, enforcement, including any bankruptcy, appeal or the
        enforcement of any judgment or any refinancing or restructuring of this
        Agreement or any document, instrument or agreement executed with respect
        to, evidencing or securing the indebtedness hereunder.

8.5     NOTICES: All notices, payments, requests, information and demands which
        either party hereto may desire, or may be required to give or make to
        the other party hereto, shall be given or made to such party by hand
        delivery or through deposit in the United States mail, postage prepaid,
        or by facsimile delivery, or to such other address as may be specified
        from time to time in writing by either party to the other. Such notice
        shall be deemed given upon receipt by the other party.

        TO THE BORROWER:                TO THE BANK:

        VOLCOM, INC.                    BANK OF THE WEST
        1740 Monrovia Avenue            Newport Beach Office (CBC)
        Costa Mesa, CA 92627            4400 MacArthur Boulevard, Suite 150
        Attn:  Douglas Collier          Newport Beach, CA 92660
               CFO                      Attn: Mario DePasquale
                                              Vice President
        FAX:
                                        FAX:

8.6     WAIVER: Neither the failure nor delay by the Bank in exercising any
        right hereunder or under any document, instrument or agreement mentioned
        herein shall operate as a waiver thereof, nor shall any single or
        partial exercise of any right hereunder or under any other document,
        instrument or



                                      -16-
<PAGE>

        agreement mentioned herein preclude other or further exercise thereof or
        the exercise of any other right; nor shall any waiver of any right or
        default hereunder, or under any other document, instrument or agreement
        mentioned herein, constitute a waiver of any other right or default or
        constitute a waiver of any other default of the same or any other term
        or provision.

8.7     CONFIDENTIALITY: The Bank shall treat all financial statements, reports
        and other information required to be disclosed by Borrower to Bank under
        the Agreement as confidential. The Bank shall make no disclosure of such
        information to any person other than to the Bank's external auditors and
        state and federal examiners and regulators and except as may be required
        by law, rule, regulation or government agency or in connection with any
        action to enforce this Agreement if such information is relevant and a
        protective order satisfactory to Borrower is in effect.

8.8     CONFLICTING PROVISIONS: To the extent the provisions contained in this
        Agreement are inconsistent with those contained in any other document,
        instrument or agreement executed pursuant hereto, the terms and
        provisions contained herein shall control. Otherwise, such provisions
        shall be considered cumulative.

8.9     BINDING EFFECT; ASSIGNMENT: This Agreement shall be binding upon and
        inure to the benefit of the Borrower and the Bank and their respective
        successors and assigns, except that the Borrower shall not have the
        right to assign its rights hereunder or any interest herein without the
        prior written consent of the Bank. The Bank may sell, assign or grant
        participation in all or any portion of its rights and benefits hereunder
        with the consent of the Borrower.

8.10    JURISDICTION: This Agreement, any notes issued hereunder, the rights of
        the parties hereunder, and any documents, instruments or agreements
        mentioned or referred to herein shall be governed by and construed
        according to the laws of the State of California without regard to
        conflict of law principles, to the jurisdiction of whose courts the
        parties hereby submit.

8.11    TELEPHONE RECORDING: The Borrower agrees that the Bank may
        electronically record all telephone conversations between the Borrower
        and the Bank with respect to any FX Transaction and that any such
        recording may be submitted in evidence in any arbitration or other legal
        proceeding. Such recording shall be deemed to be conclusive evidence as
        to the terms of any FX Transaction in the event of a dispute.

8.12    COUNTERPARTS: This Agreement may be executed in any number of
        counterparts and all such counterparts taken together shall be deemed to
        constitute one and the same instrument.

8.13    HEADINGS: The headings herein set forth are solely for the purpose of
        identification and have no legal significance.

8.14    ENTIRE AGREEMENT AND AMENDMENTS: This Agreement and all documents,
        instruments and agreements mentioned herein constitute the entire and
        complete understanding of the parties with respect to the transactions
        contemplated hereunder. All previous conversations, memoranda and
        writings between the parties pertaining to the transactions contemplated
        hereunder not incorporated or referenced in this Agreement or in such
        documents, instruments and agreements are superseded hereby. This
        Agreement may be amended only by an instrument in writing signed by the
        Borrower and the Bank.



                                      -17-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first hereinabove written.



BANK:                                       BORROWER:

BANK OF THE WEST                            VOLCOM, INC.

BY: /s/ Mario DePasquale                    BY: /s/ Richard Woolcott
   -----------------------------------          --------------------------------
NAME: Mario DePasquale, Vice President      NAME: Richard R. Woolcott, President
                                                  and CEO



                                            BY: /s/ Douglas Collier
                                                --------------------------------
                                            NAME: Douglas P. Collier, CFO and
                                                  Secretary



                                      -18-