<PAGE>

                                                                    EXHIBIT 10.7

                                 THIRD AMENDMENT

     THIRD AMENDMENT (this "Amendment"), dated as of March 27, 2006, to the
Amended and Restated Credit Agreement dated as of June 3, 2005 (the "Credit
Agreement"), among Quiksilver, Inc., a Delaware corporation, Quiksilver
Americas, Inc., a California corporation, the several banks and other
institutions from time to time parties thereto (the "Lenders"), Bank of America,
N.A., as documentation agent, Union Bank of California, N.A., as syndication
agent, JPMorgan Chase Bank, N.A., as US administrative agent for the US Lenders
thereunder (in such capacity, the "US Administrative Agent"), JPMorgan Chase
Bank, N.A., London Branch, as an alternate currency fronting lender, J.P. Morgan
Europe Limited, as alternate currency fronting agent (in such capacity, the
"Alternate Currency Fronting Agent"), and JPMorgan Chase Bank, N.A., Toronto
Branch, as Canadian administrative agent for the Canadian Lenders (in such
capacity, the "Canadian Administrative Agent").

                                   WITNESSETH:

     WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make,
and have made, certain loans and other extensions of credit to the Borrowers;

     WHEREAS, the Borrowers have requested that certain provisions of the Credit
Agreement be amended as set forth herein; and

     WHEREAS, the Lenders are willing to agree to such amendment on the terms
set forth herein;

     NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the undersigned hereby agree as follows:

     I. Defined Terms. Terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.

     II. US Revolving Commitments.

          (i) By executing this Amendment, the existing Lenders shall
automatically be deemed to have assigned their US Revolving Commitments pursuant
to the terms of the form of Assignment and Assumption attached as Exhibit B to
the Credit Agreement to the new Lenders such that, after giving effect to such
assignments and this Amendment, the US Revolving Commitments will be as set
forth on the restated Schedule 1.1 and, by executing this Amendment, each such
new Lender shall automatically be deemed to be a party to the Credit Agreement,
have the rights and obligations of a Lender thereunder and under the other Loan
Documents and be bound by the provisions thereof. No other action by the Lenders
shall be required in connection with such assignments or this Amendment.

          (ii) Schedule 1.1 is hereby amended by deleting the table therein and
replacing in lieu thereof the following:

<PAGE>

<TABLE>
<CAPTION>
LENDER                             FACILITY
------                           ------------
<S>                              <C>
JPMorgan Chase Bank, N.A.        $ 37,500,000
Union Bank of California         $ 37,500,000
Bank of America, N.A.            $ 37,500,000
General Electric Capital Corp.   $ 22,500,000
HSBC                             $ 22,500,000
Allied Irish Bank                $ 22,500,000
Israel Discount Bank             $ 15,000,000
Calyon                           $ 15,000,000
Natexis Banques Populaires       $ 15,000,000
BNP Paribas                      $ 15,000,000
Societe Generale                 $ 10,000,000
                                 ------------
   TOTAL ALLOCATION              $250,000,000
                                 ============
</TABLE>

     III. Amendments to Section 1.1. The definition of "EBITDA" is hereby
amended by (i) deleting the term "and" before clause (c) and replacing it with a
","and (ii) inserting the following:

          ", (d) up to $20,000,000 of aggregate cash charges incurred within one
year of July 22, 2005 related to the restructuring of the Target and its
Subsidiaries, (e) $18,300,000 in non-recurring, pro forma charges related to the
mark to market adjustment on Target derivative contracts incurred prior to July
22, 2005 and (f) other non-cash expenses including, without limitation,
compensation charges or other non-cash expenses arising from the grant or
issuance of stock options recorded in connection with the application of
Financial Accounting Standard No. 143 "Accounting for Asset Retirement
Obligations."

     IV. Amendment to Section 2.9. Section 2.9 is hereby amended by deleting the
phrase "8 Tranches" set forth therein and substituting in lien thereof the
phrase "20 Tranches".

     V. Amendment to Section 6.2. In connection with the Purchase Agreement, the
Sellers and Quiksilver entered into agreements under which Quiksilver has a call
option to purchase, and the Sellers have an option to require Quiksilver to
purchase, the remaining shares in the Holding Company held by the Sellers. For
the avoidance of doubt, the Loan Parties and the Lenders mutually agree that
effective on the date hereof such option arrangements shall be considered
Indebtedness for purposes of the Credit Agreement. Section 6.2 is hereby amended
by (i) deleting the term "and" at the end of clause (l), (ii) deleting "." at
the end of clause (m) and inserting in lieu thereof the terms "; and" and (iii)
inserting a new clause (n) to read as follows:

          "(n) any obligations related to the call and put option arrangements
to purchase the remaining shares in the Holding Company held by the Sellers in
connection with the Purchase Agreement, dated as of April 12, 2005, among
Quiksilver, Laurent Boix-Vives, Jeannine Boix-Vives, Christine Simon, Sylvie
Bernard and SDI Societe de Services et Developpement (it being understood, for
the avoidance of doubt, that the amount of such obligations for purposes of this
Agreement shall not be increased as a result of any amendment to the Purchase
Agreement)."


                                       2

<PAGE>

     VI. Effective Date. This Amendment shall become effective on the date (the
"Effective Date") on which (x) the Borrowers and each of the Lenders under the
Credit Agreement shall have duly executed and delivered to the US Administrative
Agent this Amendment and (y) the US Borrower has paid and reimbursed the
Administrative Agents for all of their out-of-pocket costs and reasonable
expenses incurred to date in connection with this Amendment and the other Loan
Documents, including, without limitation, the reasonable fees and disbursements
of legal counsel to the Administrative Agents.

     VII. Representations and Warranties. The Borrowers hereby represent and
warrants that (a) each of the representations and warranties in Article III of
the Credit Agreement shall be, after giving effect to this Amendment, true and
correct in all material respects as if made on and as of the Effective Date
(unless such representations and warranties are stated to relate to a specific
earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date) and (b) after
giving effect to this Amendment, no Default or Event of Default shall have
occurred and be continuing.

     VIII. No Other Amendments; Confirmation. Except as expressly amended
hereby, the provisions of the Credit Agreement, as amended and restated, are and
shall remain in full force and effect.

     IX. Governing Law. This Amendment and the rights and obligations of the
parties hereto shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.

     X. Counterparts. This Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. This Amendment may be delivered by facsimile transmission of the
relevant signature pages hereof.

                            [signature pages follow]


                                       3

<PAGE>

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

                                        QUIKSILVER, INC.


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


                                        QUIKSILVER AMERICAS, INC.


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


                            Amendment Signature Page

<PAGE>

                                        JPMORGAN CHASE BANK, N.A., as US
                                        Administrative Agent and as a Lender


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

                            Amendment Signature Page

<PAGE>

                                        BANK OF AMERICA, N.A., as
                                        Documentation Agent and as a Lender


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

                            Amendment Signature Page

<PAGE>

                                        UNION BANK OF CALIFORNIA, N.A., as
                                        Syndication Agent and as a Lender


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

                            Amendment Signature Page

<PAGE>

                                        ALLIED IRISH BANK


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

                            Amendment Signature Page

<PAGE>

                                        GENERAL ELECTRIC CAPITAL CORP.


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

                            Amendment Signature Page

<PAGE>

                                        HSBC


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

                            Amendment Signature Page

<PAGE>

                                        ISRAEL DISCOUNT BANK NEW YORK


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

                            Amendment Signature Page

<PAGE>

                                        CALYON


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

                            Amendment Signature Page

<PAGE>

                                        NATEXIS


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

                            Amendment Signature Page

<PAGE>

                                        BNP-PARIBAS


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

                            Amendment Signature Page

<PAGE>

                                        SOCIETE GENERALE


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

                            Amendment Signature Page

<PAGE>

     The US Guarantors hereby consent and agree to this Amendment as of the date
hereof and reaffirm their obligations under the US Security Agreement, the US
Guarantee and the other Loan Documents to which they are party.

                                        QS RETAIL, INC.


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


                                        QS WHOLESALE, INC.


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


                                        DC SHOES, INC.


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


                                        HAWK DESIGNS, INC.


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


                                        MERVIN MANUFACTURING, INC.


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


                                        FIDRA, INC.


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


                                        ROSSIGNOL SKI COMPANY INCORPORATED


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

                            Amendment Signature Page

<PAGE>

                                        SKIS DYNASTAR, INC.


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

                            Amendment Signature Page