<PAGE>

                                     OAKLEY, INC.

                                   FOURTH AMENDMENT
                       TO AMENDED AND RESTATED CREDIT AGREEMENT


          This FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT 
(this "AMENDMENT") is dated as of January 29, 1997 and entered into by and 
among OAKLEY, INC., a Washington corporation ("COMPANY"), THE FINANCIAL 
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred 
to herein as a "LENDER" and collectively as "LENDERS") and WELLS FARGO BANK, 
NATIONAL ASSOCIATION ("WELLS FARGO"), as agent for Lenders (in such capacity, 
"AGENT") and, for purposes of Section 5, the Consenting Parties (as defined 
therein), and is made with reference to that certain Amended and Restated 
Credit Agreement dated as of August 15, 1995, as amended by the First 
Amendment to Amended and Restated Credit Agreement, dated as of November 22, 
1995, by and among Company, Lenders and Agent, the Second Amendment to 
Amended and Restated Credit Agreement, dated as of October 10, 1996, by and 
among Company, Lenders and Agent, and the Third Amendment to Amended and 
Restated Credit Agreement, dated as of November 25, 1996 (as amended, the 
"CREDIT AGREEMENT"), by and among Company, Lenders and Agent.  Capitalized 
terms used herein without definition shall have the same meanings herein as 
set forth in the Credit Agreement.

                                       RECITALS


          A.   Company and Lenders desire to amend the Credit Agreement to 
increase the Revolving Loan Commitment to $30,000,000.

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

          SECTION 1.  MODIFICATIONS TO THE CREDIT AGREEMENT

1.1  AMENDMENT TO SUBSECTION 2.1A:  COMMITMENTS.

          Subsection 2.1A of the Credit Agreement is hereby amended by 
deleting the reference to "$18,000,000" contained therein and substituting 
"$30,000,000" therefor.

1.2  AMENDMENT TO SUBSECTION 7.6:  FINANCIAL COVENANTS

          Subsections 7.6A, 7.6B and 7.6C of the Credit Agreement are hereby 
amended and restated as follows:

               "A.  MINIMUM CASH FLOW COVERAGE RATIO.  

<PAGE>

          Company shall not permit the ratio of (i) an amount equal to EBITDA 
          minus the sum of (a) taxes paid or to be paid in cash, (b) Capital
          Expenditures paid in cash or other consideration and Stock
          Payments (determined as of the last day of any fiscal
          quarter of Company for the four consecutive fiscal quarters
          then ended in each case with respect to the Company and its
          Subsidiaries on a consolidated basis in conformity with
          GAAP) to (ii) the sum of Interest Expense (determined as of
          the last day of such fiscal quarter for such four fiscal
          quarter period then ended) plus the current portion of
          Funded Debt (determined as of the last day of such fiscal
          quarter) to be less than 2.0 to 1.00.  For purposes hereof,
          "Stock Payment" means (i) any dividend or other
          distribution, direct or indirect, on account of any shares
          of any class of stock of Company now or hereafter
          outstanding, except a dividend or distribution payable
          solely in shares of capital stock that is not subject to
          mandatory redemption or payment or (ii) any redemption,
          retirement, sinking fund or similar payment, purchase or
          other acquisition for value, direct or indirect, of any
          shares of any class of stock of Company, or of any warrants,
          options or other rights to acquire any such shares of stock,
          now or hereafter outstanding.

               B.   MINIMUM LIQUIDITY.  Company shall not permit the
          sum of its Cash and Cash Equivalents plus the amount (if
          any) by which the Commitments exceed the Total Utilization
          of Revolving Loan Commitments as of the last day of any
          fiscal quarter of Company on and after June 30, 1997 to be
          less than $4,000,000.

               C.   MAXIMUM LEVERAGE.  Company shall not permit the
          ratio of (i) an amount equal to total Indebtedness and other
          liabilities that would be reflected on the Company's balance
          sheet in accordance with GAAP minus Subordinated Debt
          (determined as of the last day of any fiscal quarter of
          Company with respect to Company and its Subsidiaries on a
          consolidated basis in conformity with GAAP) to (ii) an
          amount equal to Tangible Net Worth plus Subordinated Debt
          (determined as of the last day of any fiscal quarter of
          Company with respect to Company and its Subsidiaries on a
          consolidated basis in conformity with GAAP) to be more than
          .75 to 1.00."

1.3  WAIVER OF SECTION 2.5A.

          Section 2.5A of the Credit Agreement is hereby waived to the extent 
necessary to permit Company during the 1996 and 1997 Fiscal Years to 
repurchase Company Common Stock from shareholders of Company using proceeds 
of Revolving Loans.

                                   2

<PAGE>


1.4  MODIFICATION OF SCHEDULE

          SCHEDULE 2.1:  LENDERS' COMMITMENTS AND PRO RATA SHARES.  SCHEDULE 
2.1 to the Credit Agreement is hereby amended by deleting said SCHEDULE 2.1 
in its entirety and substituting in its place thereof a new SCHEDULE 2.1 in 
the form of ANNEX A to this Amendment.

          SECTION 2.     REPLACEMENT REVOLVING NOTES

          Company agrees to execute and deliver to each Lender a new 
Revolving Note (collectively, the "REPLACEMENT REVOLVING NOTES") in the 
amount of such Lender's Revolving Loan Commitment in the form of EXHIBIT A 
attached hereto. Each Lender hereby agrees that as promptly as practicable 
after the Fourth Amendment Effective Date (as defined hereinafter) such 
Lender shall return to Company for cancellation any Notes in such Lender's 
possession evidencing Revolving Loans outstanding prior to the effectiveness 
of this Amendment.

          SECTION 3.     CONDITIONS TO EFFECTIVENESS

          Section 1 of this Amendment shall become effective only upon the 
satisfaction of all of the following conditions precedent (the date of 
satisfaction of such conditions being referred to herein as the "FOURTH 
AMENDMENT EFFECTIVE DATE"): 

          A.   Company shall deliver to Lenders (or to Agent for Lenders with 
sufficient originally executed copies, where appropriate, for each Lender and 
its counsel) the following, each, unless otherwise noted, dated the Fourth 
Amendment Effective Date:

          1.   Copies of this Amendment executed by Company and each Consenting
     Party;

          2.   Signature and incumbency certificates of Company's and each
     Guarantor's officers executing this Amendment and, in the case of Company,
     the Replacement Revolving Notes;

          3.   Resolutions of Company's and each Guarantor's Board of Directors
     approving and authorizing the execution, delivery and performance of this
     Amendment and, in the case of Company, approving and authorizing the
     execution, delivery and payment of the Replacement Revolving Notes; and

          4.   Replacement Revolving Notes executed by the Company,
     substantially in the form of EXHIBIT A to this Amendment, with appropriate
     insertions for each Lender as provided for in this Amendment.

          B.   On or before the Fourth Amendment Effective Date, Agent, on 
behalf of Lenders, shall have received a counterpart of this Amendment 
executed by a duly authorized

                                    3

<PAGE>

officer of each Lender.

          C.   Lenders and their respective counsel shall have received 
originally executed copies of one or more favorable written opinions of 
Skadden, Arps, Slate, Meagher & Flom LLP, counsel for Company and the 
Guarantors, and Preston, Gates, & Ellis, special Washington counsel for 
Company and Guarantors incorporated in Washington, in each case in form and 
substance reasonably satisfactory to Agent and its counsel, dated as of the 
date hereof.

          SECTION 4.     COMPANY'S REPRESENTATIONS AND WARRANTIES

          In order to induce Lenders to enter into this Amendment and to 
amend the Credit Agreement in the manner provided herein, Company represents 
and warrants to each Lender, as of the date hereof and as of the Fourth 
Amendment Effective Date, that the following statements are true, correct and 
complete:

          A.   CORPORATE POWER AND AUTHORITY.  Company has all requisite 
corporate power and authority to enter into this Amendment and the 
Replacement Revolving Notes, and to carry out the transactions contemplated 
by, and perform its obligations under, the Credit Agreement as amended by 
this Amendment (the "AMENDED AGREEMENT") and the Replacement Revolving Notes.

          B.   AUTHORIZATION OF AGREEMENTS.  The execution and delivery of 
this Amendment and the performance of the Amended Agreement have been duly 
authorized by all necessary corporate action on the part of Company and each 
Consenting Party.  The issuance, delivery and payment of the Replacement 
Revolving Notes have been duly authorized by all necessary corporate action 
on the part of the Company.

          C.   NO CONFLICT.  The execution and delivery by Company and each 
Consenting Party of this Amendment and, in the case of Company, the 
Replacement Revolving Notes, and the performance by Company and each 
Consenting Party of the Loan Documents and, in the case of Company, the 
Replacement Revolving Notes do not and will not (i) violate the Certificate 
or Articles of Incorporation or Bylaws of Company or any of its Subsidiaries, 
(ii) violate any provision of any law or any governmental rule or regulation 
applicable to Company or any of its Subsidiaries or any order, judgment or 
decree of any court or other agency of government binding on Company or any 
of its Subsidiaries, which violation could reasonably be expected to have a 
Material Adverse Effect, (iii) conflict with, result in a breach of or 
constitute (with due notice or lapse of time or both) a default under any 
Contractual Obligation of Company or any of its Subsidiaries in a manner that 
could reasonably be expected to have a Material Adverse Effect, (iv) result 
in or require the creation or imposition of any Lien upon any of the 
properties or assets of Company or any of its Subsidiaries (other than any 
Liens created under any of the Loan Documents in favor of Agent on behalf of 
Lenders), or (v) require any approval of stockholders or any approval or 
consent of any Person under any Contractual Obligation of Company or any of 
its Subsidiaries.

                                     4

<PAGE>

          D.   GOVERNMENTAL CONSENTS.  The execution and delivery by Company 
and each Consenting Party of this Amendment and, in the case of Company, the 
Replacement Revolving Notes, and the performance by Company and each 
Consenting Party of the Loan Documents and, in the case of Company, the 
Replacement Revolving Notes, do not and will not require any registration 
with, consent or approval of, or notice to, or other action to, with or by, 
any federal, state or other governmental authority or regulatory body.

          E.   BINDING OBLIGATION.  Each Loan Document and, in the case of 
Company, the Replacement Revolving Notes have been duly executed and 
delivered by Company and each Consenting Party, as applicable, and are the 
legally valid and binding obligations of Company and each Consenting Party 
thereto, enforceable against each such Person in accordance with their 
respective terms, except as may be limited by bankruptcy, insolvency, 
reorganization, moratorium or similar laws relating to or limiting creditors' 
rights generally or by equitable principles relating to enforceability.

          F.   All Subsidiaries of Company required to guaranty the 
Obligations have guarantied the Obligations.  All Persons required to enter 
into the Subordination Agreement have entered into the Subordination 
Agreement.

          G.   ABSENCE OF DEFAULT.  Upon giving effect to this Amendment, no 
event has occurred and is continuing or will result from the consummation of 
the transactions contemplated by this Amendment that would constitute an 
Event of Default or a Potential Event of Default.

          SECTION 5.     ACKNOWLEDGEMENT AND CONSENT

          Repeat Incorporated, an Arizona corporation ("REPEAT"), and Barter 
Optical, Inc., a Washington corporation ("BARTER"), are parties to the 
Guaranty, pursuant to which Repeat and Barter have guarantied the Obligations 
of Company under the Credit Agreement.  Repeat, Barter, James H. Jannard 
("JANNARD") and Mike D. Parnell ("PARNELL" and together with Repeat, Barter 
and Jannard, the "CONSENTING PARTIES") are parties to the Subordination 
Agreement pursuant to which the Consenting Parties have subordinated the 
Subordinated Debt (as defined in the Subordination Agreement) to all Senior 
Debt (as defined in the Subordination Agreement), including the Obligations.

          Each Consenting Party hereby acknowledges that it has reviewed the 
terms and provisions of the Credit Agreement and this Amendment and consents 
to the amendment of the Credit Agreement effected pursuant to this Amendment, 
including the increase in the Commitments pursuant hereto.  Repeat and Barter 
hereby confirm that the Guaranty will continue to guaranty to the fullest 
extent possible the payment and performance of all "Guarantied Obligations" 
(as such term is defined in the Guaranty), including without limitation the 
payment and performance of all such Guarantied Obligations, in respect of the 
Obligations of Company now or hereafter existing under or in respect of the 
Amended Agreement and all Notes.  Each Consenting Party hereby confirms that 
the Subordination Agreement will continue to subordinate to the fullest 
extent possible all Subordinated Debt to all Senior Debt, including all 
Obligations now or hereafter existing under or in respect of the 

                                    5

<PAGE>

Amended Agreement and all Notes and other Loan Documents.

          Each Consenting Party acknowledges and agrees that the Guaranty and 
the Subordination Agreement to which such Person is a party shall continue in 
full force and effect and that all of its obligations thereunder shall be 
valid and enforceable and shall not be impaired or limited by the execution 
or effectiveness of this Amendment.  Each Consenting Party represents and 
warrants that all representations and warranties contained in the Guaranty 
and the Subordination Agreement to which it is a party or otherwise bound are 
true, correct and complete in all material respects on and as of the Fourth 
Amendment Effective Date to the same extent as though made on and as of that 
date, except to the extent such representations and warranties specifically 
relate to an earlier date, in which case they were true, correct and complete 
in all material respects on and as of such earlier date.

          Each Consenting Party acknowledges and agrees that (i) 
notwithstanding the conditions to effectiveness set forth in this Amendment, 
such Consenting Party is not required by the terms of the Credit Agreement or 
any other Loan Document to consent to the amendments to the Credit Agreement 
effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, 
this Amendment or any other Loan Document shall be deemed to require the 
consent of such Consenting Party to any future amendments to the Credit 
Agreement.

          SECTION 6.     MISCELLANEOUS

          A.   REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER 
LOAN DOCUMENTS.

          (i)       On and after the Fourth Amendment Effective Date, each
     reference in the Credit Agreement to "this Agreement", "hereunder",
     "hereof", "herein" or words of like import referring to the Credit
     Agreement, and each reference in the other Loan Documents to the "Credit
     Agreement", "thereunder", "thereof" or words of like import referring to
     the Credit Agreement shall mean and be a reference to the Amended
     Agreement. 

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

        (iii)       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 Agent
     or any Lender under, the Credit Agreement or any of the other Loan
     Documents. 

          B.   FEES AND EXPENSES.  Company acknowledges that all costs, fees 
and expenses as described in subsection 10.2 of the Credit Agreement incurred 
by Agent and its counsel with respect to this Amendment and the documents and 
transactions contemplated hereby shall be for the account of Company.

                                    6

<PAGE>

          C.   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. 

          D.   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.

          E.   COUNTERPARTS; EFFECTIVENESS.  This Amendment may be executed 
in any number of counterparts and by 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.  This Amendment shall become 
effective upon the execution of a counterpart hereof by Requisite Lenders and 
each of the other parties hereto and receipt by Company and Agent of written 
or telephonic notification of such execution and authorization of delivery 
thereof. 

                  [Remainder of page intentionally left blank]

                                        7

<PAGE>


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

                              OAKLEY, INC., as the Borrower


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

                             WELLS FARGO BANK, NATIONAL 
                             ASSOCIATION, Individually and as Agent


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

                             UNION BANK OF CALIFORNIA, N.A., 
                             (formerly named Union Bank) as a Lender


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

                             BANK OF AMERICA NATIONAL TRUST 
                             AND SAVINGS ASSOCIATION, as a Lender


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

ACKNOWLEDGMENT AND CONSENT
--------------------------

BARTER OPTICAL, INC., as a Consenting Party


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

                                     S-1

<PAGE>

REPEAT INCORPORATED, as a Consenting Party


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

JAMES H. JANNARD, as a Consenting Party


-----------------------------------


MIKE D. PARNELL, as a Consenting Party


-----------------------------------

                                              S-2

<PAGE>



                                       ANNEX A

                                     SCHEDULE 2.1

                       LENDERS' COMMITMENTS AND PRO RATA SHARES

                                           Revolving Loan      Pro Rata
Lender                                      Commitment          Share  
------                                    ----------------    ---------

Wells Fargo Bank, N.A.                     $10,500,000         35.00%

Union Bank of                              $ 9,750,000         32.50%
California, N.A.

Bank of America                            $ 9,750,000         32.50%
N.T. & S.A.
                                          -------------        ------
TOTAL                                      $30,000,000           100%

                                        A-1

<PAGE>

                                      EXHIBIT A

                         [FORM OF REPLACEMENT REVOLVING NOTE]


                                     OAKLEY, INC.

                                   PROMISSORY NOTE

$[1]                                                     Los Angeles, California
                                                                January __, 1997

          FOR VALUE RECEIVED, Oakley, Inc., a Washington corporation 
("COMPANY"), promises to pay to the order of [2] ("PAYEE") on or before the 
Revolving Loan Commitment Termination Date, as defined in the Credit 
Agreement referred to below, the lesser of (x) [3] ($[1]) and (y) the unpaid 
principal amount of all advances made by Payee to Company as Revolving Loans 
under the Credit Agreement referred to below.

          Company also promises to pay interest on the unpaid principal 
amount hereof, until paid in full, at the rates, from the dates and at the 
times which shall be determined in accordance with the provisions of that 
certain Amended and Restated Credit Agreement dated as of August 15, 1995 by 
and among Company, the financial institutions listed therein as Lenders, and 
Wells Fargo Bank, National Association, as Agent (said Amended and Restated 
Credit Agreement, as it may be amended, supplemented or otherwise modified 
from time to time, being the "CREDIT AGREEMENT", the terms defined therein 
and not otherwise defined herein being used herein as therein defined).

          This Note is one of Company's "Revolving Notes" in the aggregate 
principal amount of $30,000,000 and is issued pursuant to and entitled to the 
benefits of the Credit Agreement, to which reference is hereby made for a 
more complete statement of the terms and conditions under which the Revolving 
Loans evidenced hereby were made and are to be repaid.

          All payments of principal and interest in respect of this Note 
shall be made in lawful money of the United States of America in same day 
funds at the Funding and Payment Office or at such other place as shall be 
designated in writing for such purpose in accordance with the terms of the 
Credit Agreement. Unless and until an Assignment Agreement effecting the 
assignment or transfer of this Note shall have been accepted by Agent and 
recorded in the Register as provided in subsection 10.1B(ii) of the Credit 
Agreement, Company and Agent 

--------------------
[1] Insert amount of Lender's Revolving Loan Commitment in numbers.

[2] Insert Lender's name in capital letters.

[3] Insert amount of Lender's Revolving Loan Commitment in words.

                                 Exh. A-1


<PAGE>

shall be entitled to deem and treat Payee as the owner and holder of this 
Note and the Loans evidenced hereby.  Payee hereby agrees, by its acceptance 
hereof, that before disposing of this Note or any part hereof it will make a 
notation hereon of all principal payments previously made hereunder and of 
the date to which interest hereon has been paid; PROVIDED, HOWEVER, that the 
failure to make a notation of any payment made on this Note shall not limit 
or otherwise affect the obligations of Company hereunder with respect to 
payments of principal of or interest on this Note.

          Whenever any payment on this Note shall be stated to be due on a 
day which is not a Business Day, such payment shall be made on the next 
succeeding Business Day and such extension of time shall be included in the 
computation of the payment of interest on this Note.

          This Note is subject to mandatory prepayment as provided in 
subsection 2.4A(iii) of the Credit Agreement and to prepayment at the option 
of Company as provided in subsection 2.4A(i) of the Credit Agreement.

          THE CREDIT AGREEMENT AND THIS NOTE 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.

          Upon the occurrence of an Event of Default, the unpaid balance of 
the principal amount of this Note, together with all accrued and unpaid 
interest thereon, may become, or may be declared to be, due and payable in 
the manner, upon the conditions and with the effect provided in the Credit 
Agreement.

          The terms of this Note are subject to amendment only in the manner 
provided in the Credit Agreement.

          This Note is subject to restrictions on transfer or assignment as 
provided in subsections 10.1 and 10.16 of the Credit Agreement.

          No reference herein to the Credit Agreement and no provision of 
this Note or the Credit Agreement shall alter or impair the obligations of 
Company, which are absolute and unconditional, to pay the principal of and 
interest on this Note at the place, at the respective times, and in the 
currency herein prescribed.

          Company promises to pay all costs and expenses, including 
reasonable attorneys' fees, all as provided in subsection 10.2 of the Credit 
Agreement, incurred in the collection and enforcement of this Note.  Company 
and any endorsers of this Note hereby consent to renewals and extensions of 
time at or after the maturity hereof, without notice, and hereby waive 
diligence, presentment, protest, demand and notice of every kind and, to the 
full extent permitted by law, the right to plead any statute of limitations 
as a defense to any demand hereunder.

                                 Exh. A-2

<PAGE>

          IN WITNESS WHEREOF, Company has caused this Note to be duly 
executed and delivered by its officer thereunto duly authorized as of the 
date and at the place first written above.

                                   OAKLEY, INC.


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

                                 Exh. A-3

<PAGE>


                                     TRANSACTIONS
                                          ON
                                    REVOLVING NOTE

<TABLE>
<CAPTION>

                                                          Outstanding
               Type of     Amount of      Amount of        Principal
              Loan Made    Loan Made   Principal Paid       Balance       Notation
  Date        This Date    This Date     This Date         This Date       Made By
  ----        ---------    ---------   ---------------    ------------    ---------
<S>           <C>          <C>         <C>                <C>             <C>
           

</TABLE>

                                 Exh. A-4