Document:

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                                                                   EXHIBIT 10.41

                            INDEMNIFICATION AGREEMENT

    This Indemnification Agreement is made as of this 3rd day of November 2005,
by and between OAKLEY, INC., a Washington corporation (the "Company"), and
RICHARD SHIELDS ("Indemnified Party").

    WHEREAS, as of the date hereof, the Company has provisions for
indemnification of its directors and officers in Article V of its Articles of
Incorporation (the "Articles of Incorporation") and Article VII of its Amended
and Restated Bylaws (the "Bylaws") which provide for indemnification of the
Company's directors and officers to the fullest extent permitted by law;

    WHEREAS, the indemnification provisions in the Bylaws provide that the right
of indemnification is a contract right of the covered parties;

    WHEREAS, the Bylaws provide that the Company may maintain, at its expense,
insurance to protect itself and any of its directors and officers against
liability asserted against such persons incurred in such capacity whether or not
the Company has the power to indemnify such persons against the same liability
under Section 23B.08.510 or .520 of the Act (as defined below) or a successor
statute;

    WHEREAS, the Company and the Indemnified Party recognize that the officers
and directors of publicly owned companies are frequently joined as parties to
Proceedings (as defined below) against their respective companies as a result of
their serving in such capacity; and

    WHEREAS, in order to induce Indemnified Party to serve or continue to serve
the Company, the Company wishes to confirm the contract indemnification rights
provided in the Bylaws and agrees to provide Indemnified Party with the benefits
contemplated by this Agreement and to supplement the provisions of this
Agreement with directors' and officers' liability insurance maintained by the
Company.

    NOW, THEREFORE, in consideration of the promises, conditions,
representations and warranties set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Indemnified Party hereby agree as follows:

        1. Definitions. The following terms, as used herein, shall have the
following respective meanings; other capitalized terms used and not specifically
defined in this Section 1 shall have the meanings provided elsewhere in the
Agreement and in the Bylaws:

            (a) "Act" means the Washington Business Corporation Act RCW Title
23B, as amended from time to time.

            (b) "Adjudication" shall refer to a final, non-appealable decision
by a court of competent jurisdiction. "Adjudged" shall have a correlative
meaning.

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            (c) "Covered Amount" means any Loss, Fine and Expense, to the extent
such Loss, Fine or Expense, in type or amount, is not insured under the D&O
Insurance maintained by the Company from time to time.

            (d) "Covered Act" means any act or omission of the Indemnified Party
in his or her capacity as a director, officer, employee, agent, fiduciary or
consultant of the Company alleged by any claimant or any claim against
Indemnified Party by reason of him or her serving in such a capacity, or by
reason of Indemnified Party serving, at the request of the Company, in such
capacity with another corporation, partnership, employee benefit plan, trust or
other enterprise, in all cases, whether such alleged act or omission occurred
before or after the date of this Agreement.

            (e) "D&O Insurance" means the liability insurance which the Company
may purchase on behalf of Indemnified Party against liability asserted against
or incurred by Indemnified Party in connection with claims arising from Covered
Acts, whether or not the Company would have the power to indemnify the
individual against the same liability under Section 23B.08.510 or 23B.08.520 of
the Act.

            (f) "Determination" means a determination, based on the facts known
at the time, made:

                (i) by the Board of Directors by majority vote of a quorum
consisting of directors not at the time parties to the Proceeding;

                (ii) if a quorum cannot be obtained under clause (i), by
majority vote of a duly designated committee of the Board of Directors, in the
manner provided by Section 23B.08.550(2)(b) of the Act;

                (iii) by special legal counsel, selected in the manner provided
by Section 23B.08.550(2)(c) of the Act, in a written opinion; or

                (iv) by a majority of the shareholders of the Company, excluding
shares owned or voted under the control of directors who are at the time parties
to the Proceeding.

                 "Determined" shall have a correlative meaning.

            (g) "Excluded Claim" means any payment for Losses, Fines or Expenses
in connection with any claim relating to or arising out of:

                (i) acts or omissions of the Indemnified Party Adjudged to be
intentional misconduct or a knowing violation of law;

                (ii) conduct of the Indemnified Party Adjudged to be in
violation of Section 23B.08.310 of the Act; or

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                (iii) any transaction with respect to which it was Adjudged that
such Indemnified Party personally received a benefit in money, property, or
services to which the Indemnified Party was not legally entitled.

            (h) "Expenses" means any reasonable expenses incurred by Indemnified
Party as a result of a claim or claims made against Indemnified Party from
Covered Acts, including, without limitation, reasonable counsel fees and costs
of investigative, judicial or administrative proceedings or appeals.

            (i) "Fines" means any fine or penalty including, with respect to an
employee benefit plan, any excise tax assessed with respect thereto.

            (j) "Losses" means amounts, as determined by an Adjudication, which
the Indemnified Party is legally obligated to pay as a result of a claim or
claims arising from Covered Acts, including, without limitation, Fines, damages
and judgments and sums paid in settlement of such claim or claims.

            (k) "Proceeding" means any threatened, pending or completed action,
suit, proceeding or investigation, whether civil, criminal or administrative
whether formal or informal.

        2. Maintenance of D&O Insurance.

            (a) The Company hereby covenants and agrees that, so long as
Indemnified Party shall continue to serve as a director or executive officer of
the Company and thereafter, for so long as Indemnified Party shall be subject to
any possible Proceeding arising from any Covered Act, the Company, subject to
Section 2(c), shall maintain in full force and effect D&O Insurance.

            (b) In all policies of D&O Insurance, Indemnified Party shall be
named as an insured in such a manner as to provide Indemnified Party the same
rights and benefits, and the same limitations, as are accorded to the Company's
directors or executive officers most favorably insured by such policy.

            (c) The Company shall have no obligation to maintain D&O Insurance
if the Company, by majority vote of the Board of Directors, determines in good
faith that such insurance is not reasonably available, the premium costs for
such insurance are disproportionate to the amount of coverage provided, or the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit; provided, however, that such decision shall not adversely
affect coverage of D&O Insurance for periods prior to such decision without the
unanimous vote of all directors.

        3. Indemnification. The Company shall indemnify Indemnified Party up to
the Covered Amount and shall advance any and all Expenses to Indemnified Party
in connection with any Proceeding or any Covered Act, subject, in each case, to
the further provisions of this Agreement. This Agreement is made pursuant to and
to effectuate the indemnification provisions set forth in Article V of the
Articles of Incorporation and Article VII of the Bylaws. Notwithstanding any
other provision of this Agreement, the

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Company shall indemnify Indemnified Party to the extent Indemnified Party is
successful, on the merits or otherwise, in the defense of any Proceeding to
which Indemnified Party was a party because of being a director, officer,
employee, agent, fiduciary or consultant of the Company, against reasonable
Expenses incurred by Indemnified Party in connection with the Proceeding.

        4. Excluded Coverage. The Company shall have no obligation to indemnify
Indemnified Party for any Losses or Expenses which arise from an Excluded Claim.

        5. Indemnification Procedures.

            (a) Promptly after receipt by Indemnified Party of notice of the
commencement of or the threat of commencement of any Proceeding, Indemnified
Party shall, if indemnification or advancement of Expenses with respect thereto
may be sought from the Company under this Agreement, notify the Company of the
commencement or the threat of commencement thereof.

            (b) If, at the time of the receipt of such notice, the Company has
D&O Insurance in effect, the Company shall give prompt notice of the
commencement or the threat of commencement of such Proceeding to the appropriate
insurers in accordance with the procedures set forth in the respective policies
in favor of Indemnified Party. The Company shall thereafter take all necessary
or desirable action to cause such insurers to, in accordance with the terms of
such policies: (i) advance, to the extent permitted by law, any and all Expenses
to Indemnified Party, (ii) pay, on behalf of Indemnified Party, all amounts
(including, without limitation, Losses and Expenses) payable as a result of, or
in connection with, such Proceeding and (iii) reimburse Indemnified Party for
all amounts (including, without limitation, Losses and Expenses) paid by
Indemnified Party as a result of, or in connection with, such Proceeding.

            (c) To the extent the Company does not, at the time of the
commencement of or the threat of commencement of such Proceeding, have
applicable D&O Insurance, or if a Determination is made that any Loss, Fine or
Expense of the Indemnified Party arising out of such Proceeding will not be
payable under the D&O Insurance then in effect, the Company shall be obligated
to pay the Covered Amount with respect to any Proceeding and to provide counsel
satisfactory to Indemnified Party upon the delivery to Indemnified Party of
written notice of the Company's election to do so. After delivery of such
notice, the Company will not be liable to Indemnified Party under this Agreement
for any legal or other Expenses subsequently incurred by the Indemnified Party
in connection with such defense other than the reasonable Expenses of
investigation of Indemnified Party; provided, that Indemnified Party shall have
the right to employ his or her own counsel in connection with the defense of any
such Proceeding, the fees and expenses of such counsel incurred after delivery
of notice from the Company of its assumption of such defense to be at the
Indemnified Party's sole expense. Notwithstanding the foregoing, if (i) the
employment of counsel by Indemnified Party has been previously authorized by the
Company, (ii) Indemnified Party shall have been advised by counsel that there
may be a conflict of interest between the Company and Indemnified Party in the
conduct of any such defense or (iii) the Company shall not, in

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fact, have employed counsel to assume the defense of such Proceeding, in each
such case, the fees and expenses of such counsel retained by Indemnified Party
shall be at the expense of the Company. In the event Indemnified Party is
entitled to employ counsel at the Company's expense pursuant to the terms of
this Paragraph 5(c), and if so requested in writing by Indemnified Party, the
Company shall advance any and all Expenses to Indemnified Party to the extent
permitted by law.

            (d) All payments on account of the Company's indemnification or
advancement obligations under Paragraph 5(b) of this Agreement shall be made
within sixty (60) days of Indemnified Party's written request therefor unless a
Determination is made that the claims giving rise to Indemnified Party's request
are Excluded Claims or otherwise not payable under this Agreement. All payments
on account of the Company's obligations under Paragraph 5(c) of this Agreement
shall be made within 20 days of Indemnified Party's written request therefor,
subject to Paragraph 5(e) of this Agreement.

            (e) In the event that (i) a Determination is made that the claims
giving rise to Indemnified Party's request are Excluded Claims or otherwise not
payable under this Agreement or (ii) it is Adjudged that the Indemnified Party
is not entitled to be indemnified by the Company for Losses or Expenses under
this Agreement, the Articles of Incorporation, the Bylaws or the Act, the
Company shall have no obligation to indemnify, or advance any Expenses to
Indemnified Party. Further, in either case, Indemnified Party agrees that he or
she will reimburse the Company for all Losses and Expenses paid by the Company
and all Expenses advanced by the Company in connection with such Proceeding
against Indemnified Party.

        6. Settlement. The Company shall have no obligation to indemnify
Indemnified Party under this Agreement for any amounts paid in settlement of any
Proceeding effected without the Company's prior written consent. The Company
shall not settle any claim in any manner which would impose any loss or expense
on Indemnified Party without Indemnified Party's prior written consent, unless
the Company provides a written undertaking to the Indemnified Party to pay for
such loss or expense on behalf of the Indemnified Party. Neither the Company nor
Indemnified Party shall unreasonably withhold their consent to any proposed
settlement.

        7. Rights Not Exclusive. The rights provided hereunder shall be in
addition to any other rights to which Indemnified Party may be entitled under
the Articles of Incorporation, the Bylaws, the Act, any agreement or vote of
shareholders or directors or otherwise, both as to action in Indemnified Party's
official capacity and as to action in any other capacity, and such rights shall
continue after Indemnified Party ceases to serve the Company as a director or
officer.

        8. Enforcement.

            (a) Indemnified Party's rights to indemnification or advancement of
Expenses hereunder shall be enforceable by Indemnified Party notwithstanding any
adverse Determination. In any such action, if a prior adverse Determination has
been made, the burden of proving that indemnification or advancement of Expenses
is required

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under this Agreement, the Articles of Incorporation, the Bylaws or the Act shall
be on the Indemnified Party. The Company shall have the burden of proving that
indemnification or advancement of Expenses is not required under this Agreement
if no prior adverse Determination shall have been made.

            (b) In the event that any action is instituted by Indemnified Party
under this Agreement, or to enforce or interpret any of the terms of this
Agreement, Indemnified Party shall be entitled to be paid all court costs and
expenses, including reasonable counsel fees, incurred by Indemnified Party with
respect to such action, unless the court determines that each of the material
assertions made by Indemnified Party as a basis for such action were not made in
good faith or were frivolous.

        9. No Presumptions. For purposes of this Agreement, the termination of
any Proceeding by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendre, or its equivalent,
shall not create a presumption that the Indemnified Party did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification or advancement of Expenses by the Company is not
permitted hereunder or by applicable law. In addition, neither the absence of a
Determination as to whether Indemnified Party has met any particular standard of
conduct or had any particular belief or the existence of a Determination that
Indemnified Party has not met such standard of conduct or did not have such
belief, prior to the commencement of legal proceedings by Indemnified Party to
secure an Adjudication that Indemnified Party should be indemnified or advanced
or reimbursed Expenses hereunder or under applicable law, shall be a defense to
Indemnified Party's claim or create a presumption that Indemnified Party has not
met any particular standard of conduct or did not have any particular belief.

        10. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnified Party, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company to effectively bring
suit to enforce such rights.

        11. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any Proceeding against
Indemnified Party to the extent Indemnified Party has otherwise actually
received payment (under any D&O Insurance, the Articles of Incorporation, the
Bylaws, the Act or otherwise) of the amounts which may be paid hereunder.

        12. Severability. In the event that any provision of this Agreement is
determined by a court of competent jurisdiction to require the Company to do or
to fail to do an act which is in violation of the Articles of Incorporation, the
Bylaws or the Act or other applicable law, such provision shall be limited or
modified in its application to the minimum extent necessary to avoid such
violation, and, as so limited or modified, such provision and the remainder of
this Agreement shall be enforceable in accordance with the respective terms.

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        13. Choice of Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Washington, without
reference to conflicts of law principles therein.

        14. Successors and Assigns. This Agreement shall be (i) binding upon all
successors and assigns of the Company (including any transferee of all or
substantially all of the Company's assets and any successor by merger or
otherwise by operation of law) and (ii) binding on and inure to the benefit of
the heirs, personal representatives and estate of Indemnified Party. Indemnified
Party may not assign this Agreement or any of Indemnified Party's rights
hereunder without the prior written consent of the Company.

        15. Amendment. No amendment, modification, termination or cancellation
of this Agreement shall be effective unless made in a writing signed by each of
the parties hereto.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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    IN WITNESS WHEREOF, the Company and Indemnified Party have executed this
Indemnification Agreement as of the date first above written.

                                            OAKLEY, INC.

                                            By: /s/ Cosmas N. Lykos
                                                --------------------------------
                                            Name: Cosmas N. Lykos
                                                  ------------------------------
                                            Title: V.P. Business Development
                                                   -----------------------------

                                            /s/ Richard Shields
                                            ------------------------------------
                                            Richard Shields, Indemnified Party

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                                                                   EXHIBIT 10.42

                                  OAKLEY, INC.

                                 FIRST AMENDMENT
                                       TO
                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                This FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT
AGREEMENT (this "AMENDMENT") is dated as of January 18, 2006 and entered into by
and among Oakley, Inc., a Washington corporation ("BORROWER"), the financial
institutions listed on the signature pages hereof ("LENDERS") and Bank of
America, N.A., as administrative agent for Lenders ("AGENT"), and, for purposes
of Section 4 hereof, the Guarantors (as defined in Section 4 hereof) listed on
the signature pages hereof, and is made with reference to that certain Third
Amended and Restated Credit Agreement dated as of August 19, 2004 (the "CREDIT
AGREEMENT"), by and among Borrower, Lenders and Agent. Capitalized terms used
herein without definition shall have the same meanings herein as set forth in
the Credit Agreement.

                                    RECITALS

                WHEREAS, Borrower and Lenders desire to amend the Credit
Agreement to (i) permit the proposed acquisition by Borrower of all of the
capital stock of Oliver Peoples, Inc., a California corporation, and Kenneth
Lorence Opticians, Inc., a California corporation (collectively, the "TARGET"),
on the terms and conditions set forth below, and (ii) make certain other
amendments as set forth below;

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

                SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT

1.1     AMENDMENTS TO SECTION 1: DEFINITIONS AND ACCOUNTING TERMS

                A. Section 1.1 of the Credit Agreement is hereby amended by
adding thereto the following definitions, which shall be inserted in proper
alphabetical order:

                "COMERICA CREDIT FACILITY" means the Loan and Security Agreement
(Accounts and Inventory), dated July 15, 2005, by and among OP and Mosley, as
borrowers, and Comerica Bank as the same maybe amended from time to time
consistent with the terms of this Agreement.

                "MOSLEY" means Mosley Tribes, Ltd., a California corporation.

                "OP" means Oliver Peoples, Inc., a California corporation.

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                "OP/KLO ACQUISITION" means the transactions contemplated by the
OP/KLO Acquisition Agreement.

                "OP/KLO ACQUISITION AGREEMENT" means that certain Stock Purchase
Agreement by and among Borrower, OP, Kenneth Lorence Opticians, Inc., a
California corporation, and the owners of OP and Kenneth Lorence Opticians,
Inc., in the form delivered to Agent and Lenders prior to their execution of
this Amendment, as such agreement may be amended from time to time consistent
with the terms of this Agreement.

                "OP/KLO ACQUISITION CONSIDERATION" means all amounts required to
pay the consideration for the OP/KLO Acquisition and related fees, costs and
expenses paid by Borrower in connection therewith within one year of the closing
date of the OP/KLO Acquisition.

                B. The definition of "Permitted Acquisition" in Section 1.1 of
the Credit Agreement is hereby amended by inserting the following text at the
end thereof:

        "Notwithstanding the foregoing, the OP/KLO Acquisition Consideration
        shall be excluded from the calculations in clause (iii) above for the
        purposes of compliance with Section 7.6(viii)."

1.2     AMENDMENTS TO SECTION 7: BORROWER'S NEGATIVE COVENANTS

                A. INDEBTEDNESS.

                (i) Section 7.1 of the Credit Agreement is hereby amended by
deleting the word "and" at the end of Section 7.1(viii), deleting the period at
the end of Section 7.1(ix) and substituting therefor "; and", and inserting the
following new Section 7.1(x):

                "(x) In addition to amounts permitted under Section 7.1(viii),
        upon consummation of the OP/KLO Acquisition, OP and Mosley may remain
        liable for Indebtedness under the Comerica Credit Facility until July
        31, 2006, so long as (i) the aggregate principal amount outstanding
        under the Comerica Credit Facility does not exceed $4,000,000 at any
        time, (ii) no other Loan Party guarantees such Indebtedness, and (iii)
        no Liens to secure such Indebtedness attach to assets of any Loan Party
        other than OP and Mosley."

                (ii) Section 7.1 of the Credit Agreement is hereby further
amended by deleting the last sentence thereof in its entirety and substituting
the following therefor:

        "Notwithstanding the foregoing, clauses (i) through (x) above shall not
        apply to Oakley Denmark and Oakley Holding."

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                B. LIENS AND RELATED MATTERS.

                Section 7.2(a)(ix) is hereby amended by deleting it in its
entirety and substituting the following therefor:

                "(ix) Liens securing Indebtedness permitted under Section
        7.1(viii) and Section 7.1(x)."

                C. RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND
ACQUISITIONS.

                (i) Section 7.6 of the Credit Agreement is hereby amended by
deleting the word "and" at the end of Section 7.6(vi), renumbering Section
7.6(vii) as Section 7.6(viii), and inserting the following new Section 7.6(vii):

                "(vii)Borrower and its Subsidiaries may consummate the OP/KLO
        Acquisition in accordance with the terms of the OP/KLO Acquisition
        Agreement; and"

                (ii) Section 7.6 of the Credit Agreement is hereby further
amended by deleting the last sentence thereof in its entirety and substituting
the following therefor:

        "Notwithstanding the foregoing, clauses (i) through (viii) above shall
        not apply to Oakley Denmark and Oakley Holding."

                SECTION 2. 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 "FIRST AMENDMENT
EFFECTIVE DATE"):

                A. On the First Amendment Effective Date, (a) after giving
effect to Section 1 hereof, the representations and warranties contained in
Section 3 hereof shall be true and correct as of such date, as though made on
and as of such date; (b) after giving effect to Section 1 hereof, no Default or
Event of Default shall then exist; and (c) Borrower shall deliver to Agent a
certificate signed by a Responsible Officer of Borrower confirming the
foregoing.

                B. On or before the First Amendment Effective Date, Borrower
shall deliver 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 First Amendment Effective Date:

                        1. A certificate of its corporate secretary or an
        assistant secretary certifying that the organizational documents of the
        Borrower as delivered to Agent on the Closing Date, are in full force
        and effect and have not been amended or modified in any respect since
        the Closing Date;

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                        2. Resolutions of its Board of Directors approving and
        authorizing the execution, delivery, and performance of this Amendment
        and the OP/KLO Acquisition Agreement, certified as of the First
        Amendment Effective Date by its corporate secretary or an assistant
        secretary as being in full force and effect without modification or
        amendment;

                        3. Signature and incumbency certificates of its
        Responsible Officers executing this Amendment;

                        4. Executed copies of this Amendment; and

                        5. A Certificate of a Responsible Officer to the effect
        that (i) the OP/KLO Acquisition Agreement attached thereto is in full
        force and effect and is a true and correct copy of the executed version
        of such agreement, (ii) the OP/KLO Acquisition Consideration shall not
        exceed $60,000,000, (iii) the OP/KLO Acquisition is not a Hostile
        Acquisition, (iv) the OP/KLO Acquisition is in a line of business
        related to the lines of business of Borrower and its Subsidiaries, (v)
        no Event of Default or Default exists or shall occur as a result of
        giving effect to the OP/KLO Acquisition, and (vi) the Target has
        positive Consolidated EBITDA for the four fiscal quarters ended December
        31, 2005.

                C. Required Lenders shall have executed and delivered to the
Agent a counterpart to this Amendment.

                D. On or before the First Amendment Effective Date, all
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Agent, acting on behalf of Lenders, and its
counsel shall be satisfactory in form and substance to Agent and such counsel,
and Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Agent may reasonably request.

                SECTION 3. BORROWER'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, Borrower represents
and warrants to each Lender that the following statements are true, correct and
complete:

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

                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 Borrower.

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                C. NO CONFLICT. The execution and delivery by Borrower of this
Amendment and the performance by Borrower of the Amended Agreement do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Borrower or any of its Subsidiaries, the certificate or
articles of incorporation or bylaws of Borrower or any of its Subsidiaries or
any order, judgment or decree of any court or other agency of government binding
on Borrower or any of its Subsidiaries, (ii) 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 Borrower or any of its Subsidiaries, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of Borrower or any of its Subsidiaries (other than Liens created under
any of the Loan Documents in favor of Agent on behalf of Lenders), or (iv)
require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of Borrower or any of its Subsidiaries, except
for such approvals or consents which have been obtained on or before the First
Amendment Effective Date and disclosed in writing to Lenders.

                D. GOVERNMENTAL CONSENTS. The execution and delivery by Borrower
of this Amendment and the performance by Borrower of the Amended Agreement 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. This Amendment has been duly executed and
delivered by Borrower and this Amendment and the Amended Agreement are the
legally valid and binding obligations of Borrower, enforceable against Borrower
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. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First 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.

                G. ABSENCE OF DEFAULT. 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 Default.

                SECTION 4. ACKNOWLEDGEMENT AND CONSENT

                Each guarantor (or pledgor) listed on the signatures pages
hereof (each, a "GUARANTOR") hereby acknowledges and agrees that each Loan
Document to which it is a party or otherwise bound (each, a "CREDIT SUPPORT
DOCUMENT") 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

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Guarantor represents and warrants that all representations and warranties
contained in the Amended Agreement and the Credit Support Documents to which it
is a party or otherwise bound are true, correct and complete in all material
respects on and as of the First 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 Guarantor acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this Amendment, such Guarantor 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 Guarantor to any
future amendments to the Credit Agreement.

                SECTION 5. MISCELLANEOUS

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

                (i) On and after the First 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 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. Borrower acknowledges that all costs, fees
and expenses as described in Section 10.4 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 Borrower.

                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,

                                       6
<PAGE>

AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF CALIFORNIA (INCLUDING WITHOUT LIMITATION SECTION 1646.5 OF THE CIVIL
CODE 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.

                  [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.

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

                                        BAZOOKA, INC., (for purposes of Section
                                        4 only) as a Credit Support Party

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

                                        OAKLEY SALES CORP., (for purposes of
                                        Section 4 only) as a Credit Support
                                        Party

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

                                        OAKLEY DIRECT, INC., (for purposes of
                                        Section 4 only) as a Credit Support
                                        Party

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

                                        OAKLEY DENMARK, APS, (for purposes of
                                        Section 4 only) as a Credit Support
                                        Party

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

                                      S-1
<PAGE>

                                        OAKLEY HOLDING, SAS, (for purposes of
                                        Section 4 only) as a Credit Support
                                        Party

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

                                      S-2
<PAGE>

                                        BANK OF AMERICA, N.A., as Agent

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

                                        BANK OF AMERICA, N.A., as a Lender, L/C
                                        Issuer and Swing Line Lender

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

                                        UNION BANK OF CALIFORNIA, N.A., as a
                                        Lender

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

                                        JPMORGAN CHASE BANK, as a Lender

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

                                      S-3

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