JWOD PROGRAM AGREEMENT

 
THIS JWOD PROGRAM AGREEMENT (the “Agreement”) is entered into as of
the ________ day of June, 2004 (by and between Omniglow Corporation
(“Omniglow”), a Delaware corporation, having its principal place of business at
96 Windsor Street, West Springfield, Massachusetts 01089, and LC Ind., Inc.
(“LCI”), a non-profit, North Carolina corporation, having its principal place of
business at 4500 Emperor Boulevard, Durham, North Carolina 27703. Omniglow and
LCI are referred to herein individually as a “Party” and together as the
“Parties”.
 
WHEREAS, both Parties are committed to creating, participating in and supporting
a program (the “Program”) under the Javits-Wagner-O’Day Act (“JWOD Act”) for the
manufacture, packaging, sale and supply of the chemiluminescent devices
specified in Exhibit A attached hereto (“Products”) required by the United
States Government. For purposes of this Agreement, the term “United States
Government” shall mean and include all agencies and other entities acting on
behalf of the government of the United States for purposes of procuring Products
for use by United States personnel and agencies, including, but not limited to,
the U.S. General Services Administration, Defense Logistics Agency, and U.S.
Base Stores operated directly or in partnership by LCI or National Industries
for the Blind (“NIB”) or NISH.
 
WHEREAS, LCI is a non-profit corporation and has received an exclusive
assignment from NIB to manufacture, package and supply the Products.
 
Omniglow Corporation
Confidential

 
 

--------------------------------------------------------------------------------

 
 
WHEREAS, Omniglow qualifies as a “small business concern” under the U.S. Small
Business Act.
 
WHEREAS, Omniglow (or its predecessor) has been the exclusive manufacturer and
supplier of the Products to the United States Government since 1972, and
Omniglow anticipates that it would continue to be such exclusive manufacturer
and supplier if it did not contract with LCI under this Agreement.
 
WHEREAS, LCI estimates that its manufacturing, packaging and supply of the
Products pursuant to this Agreement will result in the creation of a minimum of
twelve (12) jobs for people who are blind.
 
WHEREAS, Omniglow is a supporter of the JWOD Act and its goals and objectives,
and, in furtherance thereof, is interested in creating a long term exclusive
business relationship with LCI, by means of this Agreement.
 
WHEREAS, Omniglow is the owner of several U.S. Patents, trade secrets, and
know-how relevant to the manufacture of Products and other chemiluminescent
devices (collectively, the “Proprietary Know-how”).
 
WHEREAS, LCI requires the Proprietary Know-how and Intellectual Property of
Omniglow to be able to manufacture, package and supply the Products to the
United States Government.
 
WHEREAS, Omniglow is willing to transfer the Proprietary Know-how to LCI on a
royalty-free basis to allow LCI to perform under this Agreement.
 
Accordingly, the Parties desire to enter into this Agreement to evidence the
terms governing the Program and the terms upon which, among other things,
Omniglow will be the sole and exclusive supplier of certain Product subassembly
parts, materials and equipment to LCI for the manufacture by LCI of Products to
be supplied to the United States Government.

 
2

--------------------------------------------------------------------------------

 

The Parties agree as follows:
 
1.           Term.
 
(a)
The term of this Agreement (“Term”) will commence on the Effective Date (as
defined in Section 1(b)) and, unless earlier terminated as provided in this
Agreement, will continue for five (5) years from the Effective Date (the
“Initial Term”). At the end of the Initial Term, the Term shall automatically
extend for an additional five (5) year period (the “First Extension Term”)
unless Omniglow gives written notice of termination to LCI at least 365 days
prior to the last day of the Initial Term. Thereafter, the Term shall be
automatically extended for two (2) additional five (5) year periods (the “Second
Extension Term” and the “Third Extension Term”, respectively) unless Omniglow
gives written notice of termination to LCI at least 365 days prior to the last
day of the First Extension Term or the Second Extension Term, as the case may
be. After the Third Extension Term, if any, the Term may be extended for
additional one (1) year periods upon mutual written agreement of the Parties.
For that purpose, at least one hundred eighty (180) days prior to the expiration
of (i) the Third Extension Term, if any, and (ii) each one (1) year portion of
the Term thereafter, if any, the Parties shall arrange a meeting to discuss
whether to extend the Term. The Parties shall hold such meeting at a mutually
agreeable place and time, and each Party shall have in attendance at least one
senior corporate official with authority to confirm an extension of the Term.
Further, each Party agrees to act reasonably and in good faith in considering
whether to extend the Term. If Omniglow gives written notice to LCI of
termination pursuant to this Section 1(a) or if the Term expires,
notwithstanding the resulting termination or expiration of the Agreement,
Omniglow agrees to continue to provide to LCI the services, subassembly parts,
and materials set forth in Exhibit B upon the terms contained herein, for a
reasonable period (not to exceed one (1) year, unless otherwise agreed to by
Omniglow), for the sole purpose of allowing LCI to provide Products in
satisfaction of the requirements of all contracts between LCI and the United
States Government that are outstanding as of the end of the then current portion
of the Term. For purposes of this Agreement, “Term” shall mean (unless earlier
terminated as provided in this Agreement) the (i) Initial Term, (ii) until and
unless this Agreement is terminated by Omniglow as provided in this Section
1(a), any Extension Terms, and (iii) any additional one (1) year periods, if
any, that are agreed upon by the Parties.

 
3

--------------------------------------------------------------------------------

 
 
(b)
Notwithstanding anything else contained herein, this Agreement shall become
effective only upon the fulfillment of the following condition precedent: The
Committee for Purchase from the Blind or Other Severely Disabled (the
“Committee”) lists the Products on its Procurement List (the “Procurement
List”). In such event, the “Effective Date” of this Agreement shall be same date
as the effective date of the first contract between LCI and the United States
Government for the Products.

 
4

--------------------------------------------------------------------------------

 
 
2.           Duties and Responsibilities of the Parties.
 
(a) 
LCI shall have sole responsibility for the following:

 
 
(i)
obtaining and maintaining, at LCI’s expense, all contracts, licenses, permits or
other authorizations from the United States Government that are necessary to
supply Products thereto under the JWOD Act, in order for LCI to fulfill its
obligations contemplated under this Agreement;

 
(ii)
compliance with all JWOD Act requirements;

 
 
(iii)
obtaining the necessary equipment, services, subassembly parts and materials
from Omniglow and other vendors, and providing the services, as set forth on
Exhibit B attached hereto;

 
 
(iv)
manufacturing, packaging and supplying Products to the United States Government
in accordance with the requirements of all contracts between LCI and the United
States Government;

 
5

--------------------------------------------------------------------------------

 
 
 
(v)
providing to Omniglow, when requested, information on orders, shipments,
remaining inventory levels of Products, subassembly parts and materials;

 
 
(vi)
abiding by all rules, regulations, and directives established by the Committee
related to the sale of Products under the JWOD Act.

 
 
(vii)
as to any agreements necessary or convenient for LCI to enter into with the
Committee or NIB in connection with the supply of Products to the United States
Government, including, but not limited to agreements regarding Product pricing,
informing Omniglow thereof and conferring with Omniglow regarding them, on a
timely basis, but not later than ninety (90) days prior to the JWOD Annual Price
Review.

 
(b)
Omniglow shall have the sole responsibility for the following:

 
(i)
providing to LCI the services, subassembly parts, and materials set forth in
Exhibit B so as to allow LCI to supply the Products in accordance with the time
requirements of the contracts between LCI and the United States Government,
subject to LCI’s compliance with the procedures for forecasting, inventory
maintenance, ordering and other matters as are established by the parties
pursuant to sub-section (c) below;

 
6

--------------------------------------------------------------------------------

 
 
 
(ii)
selling or leasing to LCI all equipment necessary for LCI to manufacture the
Products; and

 
 
(iii)
complying with all rules, regulations, and directives established by the
Committee that LCI provides to Omniglow in writing and that are consistent with
the terms of this Agreement.

 
(c)
Omniglow and LCI agree to work together and with all necessary third parties to
maximize sales of Products to the United States Government. Prior to
commencement of the operations described above, Omniglow and LCI shall therefore
meet and confer to establish formal written procedures for forecasting Product
sales, setting inventory levels for Products, subassembly parts and other
materials, ordering lead times, and such other matters as are necessary to
efficiently work together to allow LCI to provide Products as required by the
United States Government. Omniglow and LCI also agree to discuss and negotiate
in good faith for the inclusion in this Agreement of all enhancements and
replacements of the Products, if any, or a separate agreement with regard to the
same.

 
3.           Compensation to LCI for Sales of Products to the United States
Government.
 
LCI will receive the full price from the United States Government for all sales
of Products made thereto in accordance with the terms of this Agreement, subject
to the terms of compensation of Omniglow set forth below.

 
7

--------------------------------------------------------------------------------

 
 
4.           Compensation to Omniglow for Supply of the Services, Subassembly
Parts, and Materials Set Forth in Exhibit B.
 
(a)          LCI will pay Omniglow for services, subassembly parts, and
materials supplied by it hereunder at the prices set forth in Exhibit B. All
such prices are subject to increase, annually; provided, however, that the
aggregate of such price increases by Omniglow hereunder during each of the
Initial Term, the First Extension Term, the Second Extension Term and the Third
Extension, as the case may be, may not exceed ten percent (10%) of the price in
effect at the commencement of the Initial Term, the First Extension Term, the
Second Extension Term or the Third Extension Term, as applicable, respectively;
and, provided further, that to the extent that any price increase allowed under
the foregoing proviso cannot be recovered by LCI by an increase in its price of
the corresponding Product or Products to the United States Government,
Omniglow’s price increase shall be limited to 50% of the increase to which
Omniglow would otherwise be entitled. Such increases, if any, shall be
communicated to LCI by Octoberl of each year and shall become effective on
January 1 of the following year, commencing January 1, 2005.
 
(b)           Payment to Omniglow shall be due on a net thirty (30) day basis,
in accordance with Omniglow invoices.
 
(c)           The sale or lease of equipment by Omniglow to LCI shall be
separately negotiated.
 
(d)           Should Omniglow not receive full compensation as contemplated
herein and in Exhibit B for any reason (other than a breach of this Agreement by
Omniglow), Omniglow shall have the right to terminate this Agreement ten (10)
days after written notice to LCI that it has not received full compensation and
LCI’s failure to deliver same within such ten (10) day period.

 
8

--------------------------------------------------------------------------------

 

5.            Termination Rights.
 
(a)           LCI will have the right to terminate this Agreement upon written
notice to Omniglow if: (i) Omniglow is in breach of any term, condition,
warranty or covenant of this Agreement and fails to cure that breach within
sixty (60) days after receipt of written notice of such breach; (ii) Omniglow
files a petition for bankruptcy, becomes insolvent, admits in writing to
insolvency or inability to pay its debts or perform its obligations as they
mature, or makes an assignment for the benefit of creditors; (iii) Omniglow has
a petition in bankruptcy filed against it and it is not dismissed within sixty
(60) days of the filing date; (iv) any change occurs in the legal or regulatory
requirements applicable to the subject matter of this Agreement that would
render performance of a material obligation of LCI hereunder illegal or
otherwise subject to legal challenge, unless performance of such material
obligation is waived by Omniglow within sixty (60) days following receipt by
Omniglow of written notice of termination from LCI; or (v) Omniglow liquidates,
commences dissolution proceedings or sells substantially all of its assets
(other than in the context of a merger or acquisition of Omniglow and subject to
assignment and assumption in accordance with Section 23 of this Agreement); (vi)
the Products are no longer listed on the Procurement List; (vii) LCI no longer
has any contracts to supply Products to the United States Government; (viii) LCI
does not obtain or loses its authority to participate in the Program, or to
participate in the Program on an exclusive basis; or (ix) another non-profit
corporation that is a member of NIB or NISH receives an assignment for the
manufacture or supply of the Products or a portion thereof.

 
9

--------------------------------------------------------------------------------

 

(b)           Omniglow will have the right to terminate this Agreement upon
written notice to LCI if: (i) LCI is in breach of any term, condition, warranty
or covenant of this Agreement and fails to cure that breach within sixty (60)
days after receipt of written notice of such breach; (ii) LCI files a petition
for bankruptcy, becomes insolvent, admits in writing to insolvency or inability
to pay its debts or perform its obligations as they mature, or makes an
assignment for the benefit of creditors; (iii) LCI has a petition in bankruptcy
filed against it and it is not dismissed within sixty (60) days of the filing
date; (iv) any change occurs in the legal or regulatory requirements applicable
to the subject matter of this Agreement that would render performance of a
material obligation of Omniglow hereunder illegal or otherwise subject to legal
challenge, unless performance of such material obligation is waived by LCI
within sixty (60) days following receipt by LCI of written notice of termination
from Omniglow; (v) LCI does not obtain or loses its authority to participate in
the Program or to participate in the Program on an exclusive basis; (vi) LCI
breaches or is in default under any contract entered into between it and the
United States Government for the supply of Products and such default is not due
to the failure of Omniglow to supply services, subassembly parts, or materials
to LCI in accordance with this Agreement; (vii) LCI liquidates, commences
dissolution proceedings or sells substantially all of its assets (other than in
the context of a merger or acquisition of LCI and subject to assignment and
assumption in accordance with Section 23 of this Agreement); (viii) the Products
are no longer listed on the Procurement List; (ix) LCI no longer has any
contracts to supply Products to the United States Government; or (x) another
non-profit corporation that is a member of NIB or NISH receives an assignment
for the manufacture or supply of the Products or a portion thereof.

 
10

--------------------------------------------------------------------------------

 

(c)           Upon termination of this Agreement for any reason, LCI shall
return to Omniglow any and all equipment provided to it by Omniglow in
connection with LCI’s performance hereunder, except as may be otherwise provided
in any other agreement that may be entered into between the Parties in
connection with such equipment.
 
6.           Exclusive Program Agreement.
 
(a)            The parties agree that this Agreement will be the exclusive
arrangement for each of them for the supply of Products to the United States
Government under the JWOD Act. For purposes of clarity, the Parties acknowledge
and agree that, notwithstanding anything else contained herein, Omniglow has
previously submitted a bid to the United States Government to supply all
requirements thereof for certain chemical light devices and accessories, similar
to but differing from the Products, solicited under U.S. Defense Supply Center
Solicitation SPO560-03-R-0169, and that to the extent that Omniglow is awarded a
contract to supply any of such devices or accessories, it will do so directly,
not subject to this Agreement and without the participation of LCI.
Additionally, if the United States Government solicits Products outside of the
JWOD Act for any reason, Omniglow may supply such Products to the United States
Government directly, not subject to this Agreement and without the participation
of LCI. LCI shall not manufacture or sell any Products to the United States
Government other than those containing the subassembly parts and materials
supplied by Omniglow, as described in Exhibit B, and LCI shall not sell any
Products or any other chemiluminescent devices to any entity other than the
United States Government without Omniglow’s prior written consent.

 
11

--------------------------------------------------------------------------------

 
 
(b)       In view of the close cooperation which shall be required to execute
the Program, the expenditures which shall be incurred, and the necessity to
exchange the Proprietary Know-how and other confidential business and technical
information for the purposes of this Agreement, LCI agrees that until this
Agreement expires or is terminated in accordance with the provisions herein, LCI
shall not participate in any manner in the preparation or submission of
proposals or bids or any part thereof, by itself or by any third party, relating
to or competitive with this Agreement or the Program, nor provide any services,
data, information or other assistance to any third party in furtherance thereof
nor enter into any agreement with any third party for the provision of services
or materials relating to or competitive with this Agreement or the Program,
without the prior written consent of Omniglow, which Omniglow may grant or
withhold in its sole and absolute discretion.

 
12

--------------------------------------------------------------------------------

 
 
7.           Confidentiality.
 
In the performance of or otherwise in connection with this Agreement, one Party
(“Discloser”) may disclose to the other Party (“Recipient”) certain Confidential
Information of the Discloser. “Confidential Information” means any information
of either Party that is not generally known to the public, whether of a
technical, business or other nature (including, but not necessarily limited to,
trade secrets, know-how and information relating to such Party’s technology,
customers, business plans, product information, promotional and marketing
activities, finances and other business affairs of such Party) and which a
reasonable business person would deem confidential. The Recipient will treat the
Discloser’s Confidential Information confidentially, and during and after the
Term will: (a) use the Confidential Information of the Discloser solely for the
purposes of performing under this Agreement; (b) take suitable precautions and
measures to maintain the confidentiality of the Confidential Information of the
Discloser; and (c) not disclose or otherwise furnish the Confidential
Information of the Discloser to any third party other than employees or
independent contractors of the Recipient who have a need to know the
Confidential Information to perform its obligations under this Agreement,
provided such employees or independent contractors are obligated to maintain the
confidentiality of the Confidential Information and the Discloser has authorized
such disclosure in advance.

 
13

--------------------------------------------------------------------------------

 
 
The obligations under this Section will not apply to any: (a) approved use or
approved disclosure of any information pursuant to the exercise of the
Discloser’s rights under this Agreement; (b) information that is generally known
or available to the public other than through a violation of this Agreement; (c)
information that is obtained by the Recipient from a third party (other than in
connection with this Agreement) who was not under any obligation of secrecy or
confidentiality with  respect to such information; (d) information that is
independently developed by the Recipient without reference to any Confidential
Information; (e) any disclosure required by applicable law, provided that the
Recipient will use reasonable efforts to give advance notice to and cooperate
with the Discloser in connection with any such disclosure, and provided further
that the Recipient shall limit such disclosure to only that information that is
required to be disclosed; and (f) any disclosure made with the explicit consent
of the Discloser. The Recipient shall promptly return to the Discloser all
copies of any Confidential Information of the Discloser in its possession or
control upon written request, made at any time either before or after any
termination or expiration of the Term.
 
8.           Intellectual Property Ownership and Licenses.
 
Each Party owns and shall retain all right, title and interest in its own
intellectual property rights, including without limitation, names, logos,
trademarks, service marks, trade dress, copyrights, patents, and proprietary
technology; provided, however, that Omniglow hereby grants to LCI, for the
period during which this Agreement remains in effect, an exclusive, royalty-free
license under all Proprietary Know-how owned by Omniglow which is applicable to
Products or the services, subassembly parts, and materials to be provided by
Omniglow hereunder, to make, use and sell Products, solely for the purpose of
supplying Products to the United States Government in accordance with the terms
of this Agreement.

 
14

--------------------------------------------------------------------------------

 
 
Subject to the owning Party’s prior written approval, each Party grants the
other a revocable, non-exclusive, license to use, reproduce and transmit its
name, logos, trademarks, service marks, and trade dress, solely for the purpose
of effectuating each Party’s respective obligations hereunder during the Term.
Neither Party may sublicense, assign or transfer any such licenses for any
purpose, and any attempt at such sublicense, assignment or transfer shall be
void ab initio.
 
It is the intention of the Parties that the Products will be co-branded with the
brands of both Parties. The Parties will therefore engage in good faith
negotiations to agree upon co-branded packaging for the Products and will co-own
any intellectual property rights associated with any co-branding developed for
use with the Products and not previously owned by either party.
 
9.          Warranties and Representations.
 
Each Party (the “Warranting Party”), to induce the other Party to enter into
this Agreement, represents, warrants and covenants that: (1) the Warranting
Party has the full corporate right and authority, and possesses all licenses,
permits, authorizations and rights to intellectual property required to enter
into this Agreement and to perform the acts required of it hereunder; (2) the
performance by the Warranting Party pursuant to this Agreement and/or the rights
herein granted to the other Party will not conflict with or result in a breach
or violation of any of the terms or provisions, or constitute a default under
any agreement by which the Warranting Party is bound; (3) the Warranting Party
owns all right title and interest in and to its marks and all associated
intellectual property rights (including, with respect to Omniglow, the
Proprietary Know-how), and none of its marks or any other related materials or
items delivered to the other Party by the Warranting Party under this Agreement
will violate, misappropriate or infringe any intellectual property right or
other right of any third party; and (4) with respect to the performance of its
obligations hereunder, the Warranting Party will comply with all applicable
laws, rules and regulations.

 
15

--------------------------------------------------------------------------------

 

Omniglow represents and warrants to LCI that each sub-assembly part supplied by
Omniglow to LCI hereunder will meet the specification for such sub-assembly part
referenced on Exhibit B and their respective specifications books.
 
LCI represents and warrants to Omniglow that (i) as of the date of this
Agreement, LCI has the exclusive assignment from NIB to manufacture or supply
the Products to the United States Government and no other non-profit corporation
which is a member of NIB or NISH has such an assignment from NIB or NISH or the
Committee, and (ii) to LCI’s actual knowledge and based on LCI’s understanding
of the JWOD laws, rules and regulations in effect as of the date of this
Agreement, no other non-profit corporation that is or may become a member of
either NIB or NISH will receive an assignment under the JWOD laws, rules and
regulations in effect as of the date of this Agreement from either NIB or NISH
or the Committee for the manufacture, package or supply of the Products to the
United States Government so long as LCI’s assignment from NIB for same is in
full force and effect.
 
The representations and warranties and covenants in this section are continuous
in nature and shall be deemed to have been given by each Party at execution of
this Agreement and at each stage of performance hereunder. These
representations, warranties and covenants shall survive termination or
expiration of this Agreement.

 
16

--------------------------------------------------------------------------------

 
 
EXCEPT FOR THE SPECIFIC REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN, NEITHER
PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE OTHER PARTY, INCLUDING, BUT
NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
 
10.         Indemnification and Limitation of Liability.
 
Each Party (the “Indemnifying Party”) hereby agrees to indemnify, defend and
hold harmless the other Party (the “Indemnified Party”) and its affiliates,
directors, officers, employees and agents, from and against any and all
liability, claims, losses, damages, injuries or expenses (including reasonable
attorneys’ fees) brought by a third party, arising out of a breach, or alleged
breach, of any of its representations, warranties, covenants or obligations
herein or resulting from or based on any negligent or wrongful act or omission
committed by the Indemnifying Party, or its officers, directors, agents or
employees related to the Indemnifying Party’s performance under this Agreement.
 
In no event shall either Party be liable to the other Party for any incidental,
indirect or consequential damages (including, but not limited to, lost profits)
arising from or related to any services performed or goods developed pursuant to
this Agreement.

 
17

--------------------------------------------------------------------------------

 
 
11.         Compliance with Laws.
 
The parties, in the performance of this Agreement, shall fully comply with any
and all applicable federal, state and local laws, rules, regulations and
ordinances, including, without limitation, Section 27 of the Office of Federal
Procurement Policy Act, 41 U.S.C. 423, including all implementing regulations
and other governmental implementation thereof. Insofar as relevant, the parties
shall likewise comply with all laws and rules of foreign countries that may be
applicable. To the extent that any such laws, ordinances, regulations or rules
require their inclusion in this Agreement, they are hereby incorporated by this
reference.
 
In addition, the parties agree to provide promptly to each other any and all
information and certifications requested by the other and required by the
Government.
 
Each party agrees to indemnify and save harmless the other party, its officers,
employees and agents from and against any claims, liabilities, losses or costs,
including reasonable attorney’s fees, attributable to or resulting from its
noncompliance with the requirements of this Section.
 
This indemnification shall survive the termination of this Agreement.
 
12.         Employees.
 
The parties agree that during the term of this Agreement and for a period of one
(1) year after the expiration or termination of this Agreement, neither party
shall, without the advance written consent of the other, actively solicit for
employment any person or persons employed by the other who is working on or with
respect to this Agreement or the Program.

 
18

--------------------------------------------------------------------------------

 
 
13.         Scope of Agreement.
 
This Agreement shall relate only to the Program, and nothing herein shall be
deemed to:
 
(a)           Confer any right or impose any obligation or restriction on either
Party with respect to any other program effort or marketing activity at any time
undertaken by either Party, jointly or separately; or
 
(b)           Preclude either Party from soliciting or accepting a prime
contract or subcontract from any third party prime contractor (or subcontractor
of any tier) under any other program or under the JWOD Act for any services,
parts, devices or products not covered by this Agreement; or
 
(c)           Limit the rights of either Party to promote, market, sell, lease,
license or otherwise dispose of its other services, parts, devices or products,
except where such would conflict with the obligations of the Party under this
Agreement.
 
14.    Relationship.
 
Each Party shall act as an independent contractor and shall have no authority to
obligate or bind the other in any respect. Nothing contained herein shall cause
either Party to be deemed to be a partner or venturer with the other or to
create or establish any partnership or venture between the Parties.

 
19

--------------------------------------------------------------------------------

 
 
15.         Disruption of Performance.
 
If performance hereunder is prevented, restricted or interfered with by any act
or condition whatsoever beyond the reasonable control of a Party, the Party so
affected, upon giving prompt written notice to the other Party, shall be excused
from such performance to the extent of such prevention, restriction or
interference; provided, however, that during the continuance of such condition,
the unaffected party may take reasonable steps to obtain its benefits under this
Agreement from another source; and, provided further, that if such situation
continues for one hundred twenty (120) days, the unaffected party may terminate
this Agreement in its entirety upon written notice to the affected party at any
time thereafter, so long as such condition continues.
 
16.         Non-competition.
 
LCI agrees that it will not compete with Omniglow, directly or indirectly, in
the manufacture or sale, in any form, of the Products, services, subassembly
parts or materials that are the subject of this Agreement during the Term and,
for a period of one (1) year thereafter. This clause does not apply if LCI
properly terminates this Agreement: (i) as a result of Omniglow’s breach
pursuant to Clause 5(a); or (ii) pursuant to Section 15 above.
 
17.         Publicity.
 
Neither Party will issue any press release or make any other public announcement
or otherwise disclose any information relating to the transactions contemplated
by this Agreement without the prior written consent of the other Party hereto,
which consent will not be unreasonably withheld, conditioned or delayed except
that any Party may make any disclosure required to be made by it under
applicable law if such Party determines in good faith that it is appropriate to
do so and gives prior written notice to the other Party.

 
20

--------------------------------------------------------------------------------

 

18.         Disputes.
 
Each Party commits that in the event a dispute should arise under this Agreement
or relating in any manner hereto, the Parties shall first endeavor to resolve
their dispute by good faith negotiations between the Parties. In the event the
Parties are unable to resolve the matter, the Parties agree to attempt in good
faith to mediate their dispute within thirty (30) days after the dispute
initially arose, using a third party mediator. All mediation proceedings shall
be confidential, and no information exchanged in such mediation shall be
discoverable or admissible in any litigation involving the Parties.
Notwithstanding the foregoing, in the event that either party requires, prior to
or pending mediation, an equitable remedy to protect its interest or must file a
lawsuit to preclude a defense that the statute of limitations has expired, it
shall have the right to commence litigation limited to such purposes.
 
In the event the Parties are unable to mediate their dispute to satisfactory
resolution, then any litigation between the Parties shall be conducted in
Federal District Court in Springfield, Massachusetts, if the dispute satisfies
the jurisdictional amount, and if there is diversity between the Parties. If
such conditions are not satisfied, then the matter may be litigated in state
court in the City of Springfield, Massachusetts. Each Party hereby consents to
the jurisdiction of all of said courts for purposes of this Agreement.

 
21

--------------------------------------------------------------------------------

 
 
19.           Governing Law.
 
The laws of the Commonwealth of Massachusetts shall govern the validity,
construction, scope, and performance of this Agreement, without giving effect to
the conflict of laws rules thereof, except as to provisions hereof that are
governed by the laws of the United States.
 
20.           Remedies.
 
Unless otherwise expressly provided herein, the rights and remedies of the
Parties under this Agreement are in addition to, and not in limitation of, any
other rights and remedies that may exist at law or in equity, and the exercise
of one right or remedy shall not be deemed a wavier of any other right or
remedy.
 
21.         Counterparts.
 
This Agreement may be executed in one or more counterparts, all of which taken
together shall form one and the same instrument. The Parties agree that
execution may be achieved in any format convenient to the Parties.
 
22.         Severability.
 
The provisions of this Agreement are independent of and separable from each
other, and no provision shall be affected or rendered invalid or unenforceable
by virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.
 
23.         Assignment.
 
Neither this Agreement nor any interest herein may be assigned, in whole or in
part, by either party without the prior written consent of the other party;
provided, however, that if either party is the subject of a merger or
acquisition, the Agreement may be assigned to the entity participating in or
resulting from the merger or acquisition so long as such entity assumes, in
writing, all of the assigning party’s obligations under this Agreement and
written confirmation of such assignment and assumption are delivered to the
other party.

 
22

--------------------------------------------------------------------------------

 

24.         Modification.
 
Neither Party may modify any of the terms and conditions contained in this
Agreement without the prior written consent of the other Party and no
modification shall be effective unless it is in writing and signed by the
Parties.
 
25.         Notice.
 
Any notice, request, instruction or other document to be given hereunder by
either Party to the other shall be in writing, and delivered personally or by
overnight courier, express mail, or certified mail, return receipt requested,
postage prepaid (such mailed notice to be effective on the date such receipt is
signed by the receiving Party), as follows:
 
If to Omniglow:
Omniglow Corporation
96 Windsor Street
West Springfield, MA 01089
Attention: President
   
If to LCI:
LC Ind., Inc.
 
4500 Emperor Boulevard
Durham, North Carolina 27703
Attention: President

 
26.         Integration.
 
This Agreement, together with all Exhibits attached hereto, constitutes the
entire agreement between the Parties with respect to the subject matter hereof.
This Agreement supersedes, and the terms of this Agreement govern, any prior
agreements with respect to the subject matter hereof with the exception of any
prior confidentiality agreements between the Parties.

 
23

--------------------------------------------------------------------------------

 
 
27.        Authority.
 
The Parties represent and certify that they have received the approval of their
respective Board of Directors to enter this Agreement.

 
IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement
as of the date first set forth above.

LC IND., INC.
 
OMNIGLOW CORPORATION
         
By:
/s/ William L. Hudson
 
By:
/s/ Thomas C. McCarthy
 
William L. Hudson, President
   
For Fred Kaplan, President

 
24

--------------------------------------------------------------------------------

 
 
EXHIBIT A
 
PRODUCTS

Product (NSN)
6260-01-178-5560
6260-01-074-4229
6260-01-247-0363
6260-01-195-9753
6260-01-230-8601
6260-01-178-5559
6260-01-247-0368
6260-01-218-5146
6260-01-074-4230
6260-01-196-0136
6260-00-106-7478
6260-01-282-7630
6260-01-265-0614
6260-01-247-0362
6260-01-265-0612
6260-01-247-0367
6260-01-265-0613

 
25

--------------------------------------------------------------------------------

 
 
EXHIBIT B
 
The services, subassembly parts and materials to be provided by Omniglow and
LCI, respectively, and the amounts payable to Omniglow for the services,
subassembly parts and materials provided by it, shall be subject to change over
time, as set forth below and in the following Schedules:
 
1.   From Agreement Inception through December 31, 2005 (“Phase I”):
 
Omniglow shall manufacture and ship to LCI the subassembly parts for the
Products specified on Schedule I hereto (the “Schedule I Parts”), as ordered by
LCI.

 
Upon request by LCI, Omniglow will provide reasonable technical assistance
services to LCI at no additional cost.

 
LCI shall obtain other necessary subassembly parts from other vendors, QC the
incoming Schedule I Parts and other subassembly parts, manufacture and warehouse
the Products in accordance with the specifications of the United States
Government, and shall pick, pack and ship them in accordance with purchase
orders therefor.

 
At the option of LCI, Omniglow shall sell or lease machinery necessary for
Product manufacturing during Phase I to LCI pursuant to a mutually acceptable
agreement to be negotiated between the Parties.

 
Schedule I Part numbers, specifications, Product references and prices from
Omniglow to LCI during Phase I are set forth on Schedule I hereto.

 
2.   From January 1, 2006 through December 31, 2008 (“Phase II”):

 
Omniglow shall manufacture and ship to LCI the subassembly parts for the
Products specified on Schedule II hereto (the “Schedule II Parts”), as ordered
by LCI.

 
Upon request by LCI, Omniglow will provide reasonable technical assistance
services to LCI at no additional cost.

 
LCI shall obtain other necessary subassembly parts from other vendors, QC the
incoming Schedule II Parts and other subassembly parts, manufacture and
warehouse the Products in accordance with the specifications of the United
States Government, and shall pick, pack and ship them in accordance with
purchase orders therefor.

 
26

--------------------------------------------------------------------------------

 
 
At the option of LCI, Omniglow shall sell or lease additional machinery
necessary for Product manufacturing during Phase II to LCI pursuant to a
mutually acceptable agreement to be negotiated between the Parties.
 
Schedule II Part numbers, specifications, Product references, and prices from
Omniglow to LCI during Phase II are set forth on Schedule II hereto.
 
3.    From January 1, 2009 and Thereafter (“Phase III”):
 
During Phase III, the Parties will explore the feasibility of expanding LCI’s
manufacturing responsibilities to include one or more of the following:
 
(a)
injection molding of subassembly plastic parts;

 
(b)
filling of injection molded subassembly parts with subassembly chemicals and
subassembly filled ampoules, and sealing such parts;

 
(c)
subassembly chemical filling and sealing of glass ampoules; and

 
(d)
subassembly manufacturing of glass ampoules.

 
At the option of LCI, Omniglow shall sell or lease additional machinery
necessary for Product manufacturing during Phase III to LCI pursuant to a
mutually acceptable agreement to be negotiated between the Parties.
 
Subassembly part numbers, specifications, Product references, and prices from
Omniglow to LCI during Phase III shall be adjusted as appropriate to account for
the transfer of any additional manufacturing responsibilities from Omniglow to
LCI.

 
27

--------------------------------------------------------------------------------

 
 
SCHEDULE I
 
PHASE I
 
OMNIGLOW SUBASSEMBLY PART NUMBERS,
SPECIFICATIONS. PRODUCT REFERENCES AND PRICES

Omniglow Part No.
 
Specification Index
 
Product Reference (NSN)
 
Initial Price*
   
No.**
       
***
 
1
 
6260-01-178-5560
 
***
***
 
2
 
6260-01-074-4229
 
***
***
 
3
 
6260-01-247-0363
 
***
***
 
4
 
6260-01-195-9753
 
***
***
 
5
 
6260-01-230-8601
 
***
***
 
6
 
6260-01-178-5559
 
***
***
 
7
 
6260-01-247-0368
 
***
***
 
8
 
6260-01-218-5146
 
***
***
 
9
 
6260-01-074-4230
 
***
***
 
10
 
6260-01-196-0136
 
***
***
 
11
 
6260-00-106-7478
 
***
***
 
12
 
6260-01-282-7630
 
***
***
 
13
 
6260-01-265-0614
 
***
***
 
14
 
6260-01-247-0362
 
***
***
 
15
 
6260-01-265-0612
 
***
***
 
16
 
6260-01-247-0367
 
***
***
 
17
 
6260-01-265-0613
 
***

 
*Price is per subassembly part.

 
**Specifications 1 through 17 are set forth in
Omniglow Specifications Manual
for Phase I Subassembly Parts for LCI
 
*** - Confidential treatment requested. Confidential portions of this agreement
have been redacted and have been separately filed with the Commission.
 
 
28

--------------------------------------------------------------------------------

 
 
SCHEDULE II
 
PHASE II
 
OMNIGLOW SUBASSEMBLY PART NUMBERS,
SPECIFICATIONS, PRODUCT REFERENCES AND PRICES

Omniglow Part No.
 
Specification Index
 
Product Reference (NSN)
 
Estimated Initial Price*
   
No.**
       
***
 
18
 
6260-01-178-5560
 
***
***
 
19
 
6260-01-074-4229
 
***
***
 
20
 
6260-01-247-0363
 
***
***
 
21
 
6260-01-195-9753
 
***
***
 
22
 
6260-01-230-8601
 
***
***
 
23
 
6260-01-178-5559
 
***
***
 
24
 
6260-01-247-0368
 
***
***
 
25
 
6260-01-218-5146
 
***
***
 
26
 
6260-01-074-4230
 
***
***
 
27
 
6260-01-196-0136
 
***
***
 
28
 
6260-00-106-7478
 
***
***
 
29
 
6260-01-282-7630
 
***
***
 
30
 
6260-01-265-0614
 
***
***
 
31
 
6260-01-247-0362
 
***
***
 
32
 
6260-01-265-0612
 
***
***
 
33
 
6260-01-247-0367
 
***
***
 
34
 
6260-01-265-0613
 
***

 
* Price is per subassembly part. Initial prices set forth above are estimated
and are subject to increase upon inception of Phase II, depending upon
Omniglow’s cost experience between the date of this Agreement and January 1,
2006.

 
**Specifications 18 through 34 are set forth in Omniglow Specifications Manual
for Phase II Subassembly Parts for LCI.
 
*** - Confidential treatment requested. Confidential portions of this agreement
have been redacted and have been separately filed with the Commission.
 

 
29

--------------------------------------------------------------------------------