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                                     OAKLEY, INC.

                           FIRST AMENDMENT TO STANDING LOAN
                                      AGREEMENT


          This FIRST AMENDMENT TO STANDING LOAN AGREEMENT (this "Amendment") 
is dated as of January 12, 1998 and entered into by and among OAKLEY, INC., a 
Washington corporation ("Company"), and BANK OF AMERICA NATIONAL TRUST AND 
SAVINGS ASSOCIATION ("Bank"), and is made with reference to that certain 
Standing Loan Agreement dated as of August 7, 1997 (the "Loan Agreement") 
between Company and Bank.  Capitalized terms used herein without definition 
shall have the same meanings herein as set forth in the Credit Agreement.

                                      RECITALS

          A.   Company and Bank desire to amend the Loan Agreement as 
provided herein.

          NOW, THEREFORE, in consideration of the premises and the 
agreements, provisions and covenants herein contained, the parties hereto 
agree as follows:

          SECTION 1.  MODIFICATIONS.

          Section 1.1  AMENDMENT OF SECTION 2.13(a).  Section 2.13 (a) of the 
Loan Agreement is hereby amended by inserting the following at the end of 
such Section: 

          ";provided that Company and its subsidiaries may engage in business 
of the type described in those certain resolutions of Company's board of 
directors dated June 19, 1997, copies of which have previously been 
distributed to the Bank;"

          SECTION 2.  EFFECTIVENESS

          Section 1 of this Amendment shall become effective as of September 
30, 1997; provided that Company shall deliver to Bank a copy of this 
Amendment executed by Company.

          SECTION 3.  MISCELLANEOUS

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          B.   REFERENCE TO AND EFFECT ON THE LOAN AGREEMENT AND THE OTHER 
LOAN DOCUMENTS.

               (ii)  On and after the date hereof, each reference in the Loan
          Agreement to "this Agreement", "hereunder", "hereof", "herein" or
          words of like import referring to the Loan Agreement, and each
          reference in the other Loan Documents to the "Loan Agreement",
          "thereunder", "thereof" or words of like import referring to the Loan
          Agreement shall mean and be a reference to the Loan Agreement, as
          amended by this Amendment.

              (iii)  Except as specifically amended or waived by this
          Amendment, the Loan Agreement and the other Loan Documents shall
          remain in full force and effect and are hereby ratified and confirmed.

               (iv)  The execution, delivery and performance of this Amendment
          shall not, except as expressly provided herein, constitute a waiver of
          any provision of, or operate as a waiver of any right, power or remedy
          of Bank under, the Loan Agreement or any of the other Loan Documents.

          B.   HEADINGS.  Section and subsection headings in this Amendment 
are included herein for convenience of reference only and shall not 
constitute a part of this Amendment for any other purpose or be given any 
substantive effect.

          C.   APPLICABLE LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS 
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND 
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, 
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

          D.   COUNTERPARTS; EFFECTIVENESS.  This Amendment may be executed 
in any number of counterparts and by the different parties hereto in separate 
counterparts, each of which when so executed and delivered shall be deemed an 
original, but all such counterparts together shall constitute but one and the 
same instrument; signature pages may be detached from multiple separate 
counterparts and attached to a single counterpart so that all signature pages 
are physically attached to the same document. 

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment 
to be duly executed and delivered by their respective officers hereunto duly 
authorized as of the date first written above.

                                  OAKLEY, INC., as the Borrower


                                  By:                          
                                     ---------------------------
                                  Title:                       
                                        ------------------------

                                  BANK OF AMERICA NATIONAL TRUST
                                  AND SAVINGS ASSOCIATION, as Bank


                                  By:
                                     ---------------------------
                                  Title:
                                        ------------------------


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