RECIPROCAL EXCLUSIVE DEALING AGREEMENT

Exhibit 10.1

RECIPROCAL EXCLUSIVE DEALING AGREEMENT

     This Agreement is made effective on the 12 ^th day of March, 2005 between GENTEX OPTICS, INC. (“Gentex”), a Delaware corporation, with an office at 324 Main Street, Simpson, PA 18407, ESSILOR INTERNATIONAL COMPAGNIE GENERALE D’OPTIQUE, S.A. (“Essilor”), a limited entity known as a Societé Anonyme, with its commercial seat at 147 rue de Paris, Charenton, Cedex 94227 France, both on the one hand, and OAKLEY, INC. (“Oakley”), a Washington corporation with principal offices at One Icon, Foothill Ranch, CA 92610, on the other hand.

INTRODUCTION

THE PARTIES HEREBY AGREE AS FOLLOWS:

          1.  Definitions used in this Agreement

               (a) “Affiliate” of an “Entity” (as hereinafter defined) means any Entity which directly or indirectly controls, is controlled by, or is under common control with such Entity.

               (b)“Bailment Agreement” means the separate Agreement between the parties that governs their respective rights and obligations with respect to Vendor Managed Inventory (VMI) held at Oakley.

               (c) “Contract Year” means the period commencing with the “Effective Date” hereof (April 1, 2005) and continuing for 12 months, and each of the four immediately following twelve month periods.

               (d) “Decentered Lenses” means *

               (e) “Effective Date” means April 1, 2005.

               (f) “Entity” means any individual, proprietorship, partnership, corporation or other entity whether or not of limited liability

               (g) “Force Majeure” means an occurrence beyond the reasonable control of a Person, including, without limitation, fire, strike, directives of any governmental authority, civil or military war, insurrection, riot, embargoes, shortages, delays in transportation, or inability to obtain necessary labor, materials, or manufacturing facilities.

               (h) “Hard Coat” means *

               (i) “Minimum Purchases” means *. In the event of early Termination of this Agreement during a Contract Year or Renewal Year, the Minimum Purchases for such Contract Year or Renewal Year, as the case may be, shall be prorated.

               (j) “Optical Standards” means those standards as set forth in schedule-hereto specifying the minimum optical standards of the products to be supplied by Gentex under this Agreement.

               (k) “Period of Exclusivity” means the period commencing on the Effective Date and ending on the earlier of the end of the Term or the effective date of termination, in all events subject to earlier termination as provided in this Agreement.

               (l) “Plano” means non-glass, non-powered lenses and lens blanks which are or are intended to be made into non-corrective, non-ophthalmic, non-powered, non-glass lenses.

               (m) “Polarized Decentered Lenses” means Decentered Lenses that have a polarizing function.

               (n) “Products” means the lenses listed on Schedule A hereto.

               (o) “Purchaser” means Oakley and any Affiliate of Oakley that purchases The Products from Gentex or any Affiliate of Gentex.

               (p) “Renewal Year” means the 12 month period immediately following the end of the fifth Contract Year, and each 12 month period thereafter, commencing on the day following the end of the fourth Contract Year and each one year anniversary thereof, until this Agreement is terminated, as hereinafter provided.

               (q) “Seller” means Gentex or any Affiliate of Gentex that sells Product to a Purchaser.

               (r) “Shields” means Plano in single or twin lens form which is used or is designed to be used as a one-piece eye shield.

               (s) “Stocking Level” means that level of inventory requested by Oakley to be delivered to Oakley into VMI.

               (t) “Technology” means technology or technical information in the possession of Gentex or Essilor or their Affiliates not available from a “Third Person” (as hereinafter defined) which is used principally in the manufacture of The Products, but does not include Hard Coat, photochromic or other coatings, applications or processes (other than profiling or orienting the Lens) which are undertaken upon or made or applied to lenses after they have been molded.

               (u) “Toric” means lenses which are curved about each of two substantially perpendicular axes, each with a different radius.

               (v) “Unit” means a pair (two) of The Products or a single Shield.

               (w) “VMI” means Vendor Managed Inventory that will be held at Oakley’s warehouse, subject to the provisions of the Bailment Agreement.

          2.  Exclusive Dealing in The Products . Subject to the remaining provisions of this Agreement, during the Period of Exclusivity.

               (a) Oakley and its Affiliates will purchase from Gentex, and Gentex will use commercially reasonable best efforts to sell and supply to Oakley and its Affiliates, all the requirements of Oakley and its Affiliates for the Products. It being understood that the requirements of Oakley and its Affiliates for the subject Lenses is determined solely by Oakley but that Oakley and its Affiliates will not purchase the subject Lenses from anyone besides Gentex and its Affiliates, except as expressly permitted by other provisions of this Agreement;

               (b) Gentex will not sell or otherwise supply any other Entity with the Products, except as expressly permitted by other provisions of this Agreement.

               (c) Oakley will not purchase the Products from any Entity other than Gentex or its Affiliates, except as provided herein and in 4(b). However, Oakley has the right to manufacture decentered lenses contingent on meeting the defined minimum Purchases. If Oakley fails to meet the minimum Purchases in any given year, the parties will enter into negotiations as subject to section 5(b).

          3.  Conditions to Oakley Obligation to Purchase From Gentex Only

               (a) The obligation of Oakley and its Affiliates to purchase all of their respective requirements of the subject Lenses from Gentex, or from any Affiliate of Gentex on a temporary bases, is conditioned upon Gentex supplying the Products to Oakley and its Affiliates (i) of a quality consistent with the specifications and the quality standards as set forth in Schedule B, attached hereto, and as revised from time to time pursuant to the Mutual Agreement of the parties and (ii) Gentex supplying the Products in the quantities specified within the delivery schedule specified provided that sufficient time is given by Oakley to Gentex consistent with the past practice between Oakley and Gentex and pursuant to the Bailment Agreement between the parties.

               (b) As a condition to the obligations of Gentex in Subsection 3(a) hereof: Oakley will provide Gentex with a written three month rolling forecast which will include Oakley’s best estimate of its requirements for the subsequent three months. Said forecast will be provided to Gentex in writing by the 15 ^th of each month. The forecast will include an estimate of Oakley’s monthly requirements by geometry and color.

               (c) Oakley will periodically provide Gentex with a requested Stocking Level to be maintained in VMI.

               (d) Gentex will use commercially reasonable best efforts to provide Products to maintain the current Stocking Level requested by Oakley.

               (e) The prices for the products shall be as identified on Schedule A attached hereto as revised pursuant to the terms of this Agreement and/or the mutual agreement of the parties.

          4.  Purchases from Affiliates and Third Parties

               (a) If, for any reason, Gentex is, from time to time, unable to satisfy the provisions of Subsection 3(a), despite commercially reasonable best efforts to do so, then Gentex will promptly notify Oakley and may designate one or more Affiliates of Gentex to supply Products to Oakley and its Affiliates, but only for so long as Gentex is unable to supply Oakley and its Affiliates therewith in accordance with Section 3 hereof.

               (b) If Gentex and Gentex’s Affiliates are unable to satisfy Subsection 3(a) with respect to any Product, for a period of not less than 60 days (“Grace Period”), the Oakley may thereafter notify Gentex to that effect. Such notice will specify in what respects Gentex continues to fail to satisfy Subsection 3(a) hereof at the end of the Grace Period, including identifying the provision or provisions thereof which have not been complied with by Gentex, and the facts on which Oakley has based such determination. The parties will discuss in good faith Oakley’s contentions and concerns. Gentex will have the period specified in such notice from Oakley (“Cure Period”) (but not less than 180 days as same may be extended in writing on the basis of the discussions between the parties) within which to again comply with the provisions of Subsection 3(a) cited by Oakley. If Gentex (or its Affiliates) are still unable to comply with Section 3(a) at the expiration of the Cure Period, Oakley by notice to Gentex may terminate this Agreement at any time thereafter. In no event will damages be payable by Gentex to Oakley as a result of such termination and failure to satisfy Subsection 3(a) if Gentex has used its commercially reasonable best efforts.

               (c) From the commencement of the Cure period with respect to a particular type of Product, through the expiration of the thirtieth (30) day after the date on which Gentex is able to satisfy Subsection 3(a) with respect to such Product, Oakley and its Affiliates may purchase such Product type from any Entity other than Gentex and its Affiliates or may manufacture its own Product of that type for its own use. The number of Units purchased by Oakley and/or its Affiliates from others or manufactured by Oakley and/or its Affiliates pursuant to this Subsection, will be deducted from the Minimum Purchases required during the Contract Year and/or Renewal Year in which such Products were so manufactured or so purchased from others.

          5.  Minimum Purchases

               (a) In each Contract Year during the Term, Oakley and its Affiliates agree to purchase the minimum purchases from Gentex and its Affiliates of the Products.

               (b) If, at the expiration of any Contract Year the actual purchases by Oakley and its Affiliates exceed the Minimum Purchases for such year, then such excess, (up to a maximum of ten percent (10%), will be applied to reduce the Minimum Purchases required in the immediately subsequent Contract Year. If the actual purchases by Oakley and its Affiliates do not meet the Minimum Purchases for any Contract Year, but said shortfall equals five percent (5%) or less of the Minimum Purchases, then the amount of the shortfall will be added to the Minimum Purchases for the following Contract Year. If Oakley’s actual purchases or any Contract Year fall more than five percent (5%) below the Minimum Purchases amount, then the parties agree that they will enter into good faith negotiations regarding a modification of the Purchase Prices, as defined in the Bailment Agreement. If Oakley’s actual purchases during any Contract Year fall more than 25% below the Minimum Purchases amount, then Gentex may elect to terminate this Agreement by giving Oakley no less than one year’s written notice. During this notice period, the Parties shall negotiate in good faith to agree upon a new Purchase Price. Failing written agreement on a new Purchase Price, the Agreement will terminate at the end of the one year notice period.

          6.  Hard Coat

               (a) Oakley will have the exclusive right to purchase from Gentex as far and/or their respective Affiliates the Products with Hard Coat applied at no additional cost. Products ordered without Hard Coat will be supplied at the cost as listed on Schedule A hereto with no additional cost.

               (b) Except as permitted by other provisions of this Agreement, Gentex will not supply Hard Coat to any other Entity for use on Decentered Lenses and, if it is determined that any Person is using such Hard Coat on Decentered Lenses, then Gentex will cease selling Hard Coat to such Entity.

               (c) Neither Oakley, nor any Affiliate thereof, will analyze or reverse engineer any Hard Coat or New Hard Coat to learn its composition (other than for the sole purpose of determining its compatibility with Oakley’s coatings or processes) or how to make it or manufacture it, nor will any Person directly or indirectly be employed by or retained by Oakley or any Affiliate thereof for such purpose. This obligation will continue after the expiration or termination of the Term.

          7.  Product Specifications

               (a) Seller will manufacture each Product in accordance with the applicable Product Specifications as set forth in Schedule B attached hereto, (Product Specification Schedule”) and all applicable federal, state and local laws and regulations. The parties will negotiate in good faith any modifications to the specifications or procedures set forth in any Product specification Schedule, if either party advises the other that such modification of such specification is desirable to improve the efficiency or quality of the Product or the production of that product or to lower the cost of production thereof, or to take into account any changes in processes, equipment or the Product itself, or the availability of material or changes in technology.

               (b) The Parties will negotiate in good faith a Product Specification Schedule for any new Products that Seller manufactures for Purchaser pursuant to this Agreement.

          8.  Plano Polarized Lenses

          Nothing in this Agreement shall be construed to require Oakley to purchase Plano Polarized Lenses from Gentex. In the event, however, that Oakley is unable to satisfy its own production requirements for Plano Polarized Lenses, Oakley agrees to grant Essilor’s Affiliate Company, BNL, the first opportunity to negotiate with Oakley regarding any necessary third party purchases of Plano Polarized Lenses.

          9.  Inspections, Rejections, Returns.

               Gentex will conduct quality inspections of all Products delivered to Oakley by way of inspectors stationed at Oakley but remaining on the Gentex payroll. Said inspectors will provide rejection reports weekly to Oakley which will be forwarded to Gentex. The inspections will be conducted upon Oakley’s receipt of Products from Gentex but before said Products are received into the VMI system. Upon receipt of the rejection notice, Gentex will advise Oakley as to whether to destroy the defective Product or return it to Gentex.

          10.  Indemnification

               (a) Each of Essilor and Gentex does hereby indemnify and hold harmless Oakley and its Affiliates, and each of their respective officers, directors, liabilities, costs, expenses (including, without limitation, investigative and legal fees and disbursements, both those incurred in connection with the defense of an indemnifiable claim and those incurred in connection with the enforcement of this provision) and damages (“Claims and Liabilities”) arising our of, or based upon, any infringement or alleged infringement of Third Person intellectual property rights by any Decentered Lens or Shield sold to Oakley or to any Oakley Affiliate by Gentex, Essilor or any Affiliate of either, but only to the extent such infringement results or is alleged to result from the process technology used in the design, manufacture or assembly thereof by Gentex or such Affiliate or the Product resulting therefrom. Notwithstanding the foregoing, there will be no such indemnification or hold harmless hereunder, for any other reason or (i) to the extent any such Claims and Liabilities for infringement or alleged infringement result or are alleged to result from technology, specifications, know-how, techniques or processes for the Product or for its processing, manufacture or assembly provided to Gentex or any Affiliate thereof by Oakl