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                                                                    EXHIBIT 10.4

             AMENDMENT NUMBER TWO TO SENIOR SUBORDINATION AGREEMENT

      This AMENDMENT NUMBER TWO TO SENIOR SUBORDINATION AGREEMENT (this
"Amendment"), dated as of June 27, 2003, is entered into among COMERICA
BANK-CALIFORNIA, a California banking corporation ("Senior Lender"), THE
PENINSULA FUND III LIMITED PARTNERSHIP, a Delaware limited partnership
("Subordinate Lender"), DECKERS OUTDOOR CORPORATION, a Delaware corporation
("Parent"), and UGG Holdings, Inc., a California corporation ("UGG") (Parent and
UGG are collectively sometimes referred to herein as "Borrowers" and
individually as a "Borrower"), with reference to the following facts:

      A. Senior Lender, Subordinate Lender and the Borrowers previously entered
into that certain Senior Subordination Agreement, dated as of November 25, 2002,
as amended by that certain Amendment Number One to Senior Subordination
Agreement, dated as of April 29, 2003 (the "Agreement"); and

      B. Senior Lender, Subordinate Lender and the Borrowers desire to amend the
Agreement in accordance with the terms of this Amendment.

      NOW, THEREFORE, in consideration of the foregoing, the parties hereto
hereby agree as follows:

      1. Defined Terms. All initially capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Agreement.

      2. Permitted Payment. The definition of "Permitted Payment" set forth in
Section 1 of the Agreement is hereby amended in its entirety as follows:

                        "PERMITTED PAYMENT" means (i) monthly interest payments
            owing on the Senior Subordinated Note (as defined in the Note
            Purchase Agreement) at the per annum rate not to exceed 12% (or
            $140,000 per month), (ii) quarterly payments of principal owing on
            the Senior Subordinated Note in accordance with Section 2.1(a) of
            the Note Purchase Agreement, as in effect on the date hereof, (iii)
            Deferred Interest Payments, provided in each case that the
            conditions set forth in Section 3(c)(2)(i) and (ii) hereof have been
            met, and (iv) a principal prepayment on the Senior Subordinated Note
            in an amount not to exceed $2,000,000, together with a prepayment
            fee in the amount of $100,000, during the month of July 2003.

      3. Conditions Precedent to Effectiveness of Amendment. The effectiveness
of this Amendment is subject to and contingent upon the fulfillment of each and
every one of the following conditions:


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            (a) Senior Lender shall have received this Amendment, duly executed
by Subordinate Lender, the Borrowers and Senior Lender;

            (b) Senior Lender shall have received that certain Amendment Number
Two to Amended and Restated Revolving Credit Agreement, dated as of even date
herewith ("Credit Agreement Amendment"), duly executed by the Borrowers and
Senior Lender;

            (c) No Senior Event of Default shall have occurred and be
continuing; and

            (d) All of the representations and warranties set forth herein and
in the Agreement shall be true, complete and accurate in all respects as of the
date hereof (except for representations and warranties which are expressly
stated to be true and correct as of date of the Agreement).

      4. Representations and Warranties. In order to induce Senior Lender to
enter into this Amendment, Borrowers and Subordinate Lender hereby represent and
warrant to Senior Lender that:

            (a) No Senior Event of Default is continuing;

            (b) All of the representations and warranties set forth in the
Agreement are true, complete and accurate in all respects (except for
representations and warranties which are expressly stated to be true and correct
as of the date of the Agreement); and

            (c) This Amendment has been duly executed and delivered by the
Borrowers and the Subordinate Lender, and after giving effect to this Amendment,
the Agreement continues to constitute the legal, valid and binding agreements
and obligations of the Borrowers and the Subordinate Lender, enforceable in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, and similar laws and equitable principles affecting the
enforcement of creditors' rights generally.

      5. Counterparts; Telefacsimile Execution. This Amendment may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Amendment. Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also shall deliver a manually executed
counterpart of this Amendment but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.

      6. Integration. The Agreement as amended by this Amendment constitutes the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and thereof, and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof and thereof.



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      7. Reaffirmation of the Agreement. The Agreement as amended hereby remains
in full force and effect.

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      IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Amendment as of the date first hereinabove written.

                                    DECKERS OUTDOOR CORPORATION,
                                    a Delaware corporation

                                    By:  /s/ M. Scott Ash
                                        --------------------------
                                    Name:  M. Scott Ash
                                    Title: Chief Financial Officer

                                    UGG HOLDINGS, INC.,
                                    a California corporation

                                    By:  /s/ M. Scott Ash
                                        --------------------------
                                    Name:  M. Scott Ash
                                    Title: Chief Financial Officer

                                    THE PENINSULA FUND III LIMITED PARTNERSHIP,
                                    a Delaware limited partnership

                                    By:   Peninsula Capital Partners, L.L.C.
                                    Its:  General Partner

                                          By:  /s/ Scott A. Reilly
                                             --------------------------
                                          Name:  Scott A. Reilly
                                          Title: President and Chief Investment
                                                 Officer

                                    COMERICA BANK - CALIFORNIA,
                                    a California banking corporation


                                    By:  /s/ Jason D. Brown
                                        --------------------------
                                    Name:  Jason D. Brown
                                    Title: Vice President



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