FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER

EXHIBIT 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER

     This FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER dated as of August 1, 2008 (this “ Amendment ”), is by and among PACIFIC SUNWEAR OF CALIFORNIA, INC., a California corporation (the “ Borrower ”), JPMORGAN CHASE BANK, N.A. as administrative agent for the Lenders under the Credit Agreement described below (in such capacity, the “ Administrative Agent ”) and the Lenders party hereto.

     WHEREAS the Borrower is party to a Credit Agreement dated as of April 29, 2008, with the Lenders and the Administrative Agent (as amended and as the same shall be further amended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), pursuant to which the Lenders agreed, subject to the terms and conditions set forth therein, to make certain Loans to the Borrower;

     WHEREAS, the Borrower has informed the Administrative Agent that in the course of reviewing several of the Loan Parties’ retail store leases, the Borrower has discovered that certain leases include provisions which grant Liens (collectively, “ Landlord Lease Liens ”) in favor of the applicable landlords on assets of the Loan Parties to secure the Loan Parties’ obligations under the leases;

     WHEREAS, the existence of the Landlord Lease Liens constitutes an Event of Default under subsections (c) and (d) of Article VII of the Credit Agreement (such Event of Default, the “ Specified Event of Default ”); and

     WHEREAS, the Borrower has requested and the Administrative Agent and the Lenders have agreed, on the terms set forth herein, to waive the Specified Event of Default and to amend the Credit Agreement as set forth herein;

     NOW, THEREFORE, in consideration of the foregoing and the agreements contained herein, the parties hereby agree as follows:

1. Capitalized Terms . Capitalized terms used herein which are defined in the Credit Agreement have the same meanings herein as therein, except to the extent that such meanings are amended hereby.

2. Waiver of Specified Event of Default . Subject to the satisfaction of the terms and conditions set forth in Section 5 hereof, the Administrative Agent and the Lenders hereby waive the Specified Event of Default. The parties hereby acknowledge and agree that the waiver set forth in this Section 2 is limited solely to the Specified Event of Default, solely for the periods through and ending on the effective date of this Amendment, and that such waiver does not constitute a waiver of any other presently existing or future Event of Default or a modification or waiver of any provision of the Credit Agreement.

3. Amendments to Credit Agreement. Subject to the satisfaction of the terms and conditions set forth in Section 5 hereof, the Borrower, the Lenders and the Administrative Agent agree that the Credit Agreement shall be amended as follows:

(a) Amendment to Definition of “Permitted Encumbrances” . The definition of “Permitted Encumbrances” set forth in Section 1.01 of the Credit Agreement is hereby amended by deleting clause (b) of such definition in its entirety and replacing such clause with the following:

“(b) (i) landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, Liens of collecting banks under the Uniform Commercial Code

on items in the course of collection, Liens and rights of set-off of banks, in each case arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 5.04, (ii) landlord’s Liens arising by operation of law which are subordinated to the Liens in favor of the Administrative Agent, (iii) landlord’s Liens in Landlord Lien States arising by operation of law and (iv) any Lien in favor of a landlord on the assets of any Loan Party arising under the terms of the lease relating to any retail store to secure such Loan Party’s obligations under such lease (provided that the Administrative Agent’s Liens are senior in priority to such landlord’s Lien);”

(b) Amendment to definition of “Reserves” . The definition of “Reserves” set forth in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety and replaced with the following:

“ Reserves ” means any and all reserves which the Administrative Agent deems necessary, in its Permitted Discretion, to maintain (including, without limitation, Banking Services Reserves, reserves for rent at any retail store location leased by any Loan Party in any Landlord Lien State for which the applicable landlord has not executed and delivered a Collateral Access Agreement (it being agreed that the maximum amount of any Reserve for any retail store in any Landlord Lien State shall not exceed two month’s rent for such location), reserves for rent with respect to any Leased Distribution Cent