Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

DATED AS OF JUNE 26, 2006

BY AND BETWEEN

LSI INDUSTRIES INC.

AND

SACO TECHNOLOGIES INC.

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TABLE OF CONTENTS

 

ARTICLE 1 DEFINITIONS    1 ARTICLE 2 REGISTRATION RIGHTS    2 2.1    Mandatory
Registration.    2 ARTICLE 3 REGISTRATION PROCEDURES    3 3.1    Filings;
Information.    3 3.2    Registration Expenses.    5 ARTICLE 4 INDEMNIFICATION
AND CONTRIBUTION    5 4.1    Indemnification by the Company.    5 4.2   
Indemnification by the Holder.    6 4.3    Conduct of Indemnification
Proceedings.    7 4.4    Contribution.    7 ARTICLE 5 MISCELLANEOUS    8 5.1   
Rule 144 and Rule 145.    8 5.2    No Inconsistent Agreements.    8 5.3   
Successors and Assigns.    8 5.4    No Waivers, Amendments.    9 5.5    Notices.
   9 5.6    Terms of Agreement.    10 5.7    Governing Law; Submission to
Jurisdiction.    10 5.8    Section Headings.    11 5.9    Entire Agreement.   
11 5.10    Severability.    11 5.11    Counterparts.    11 5.12    Parties in
Interest.    11 5.13    Enforcement; Further Assurances.    12

 

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REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of
June 26, 2006 by and between LSI INDUSTRIES INC., an Ohio corporation (the
“Company”), and SACO TECHNOLOGIES INC., a corporation incorporated under the
Canada Business Corporation Act (the “Holder”). Capitalized terms used but not
otherwise defined herein have the meanings given to them in the Stock Purchase
Agreement (as hereinafter defined).

WITNESSETH:

WHEREAS, pursuant to that certain Stock Purchase Agreement (the “Stock Purchase
Agreement”), dated as of even date herewith, by and among the Company, Jalbout
Holdings Inc., 3970957 Canada, Inc., the Holder, 4349466 Canada Inc. (the
“Acquired Company”), Fred Jalbout and Bassam Jalbout, the Holder sold the
Purchased Shares and the Promissory Note to the Company in consideration for the
Purchase Price; and

WHEREAS, the Holder was induced in part to enter into the Stock Purchase
Agreement by the Company’s agreement to enter into this Agreement.

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

ARTICLE 1

DEFINITIONS

As used in this Agreement, the following terms have the following meanings:

 

  (a) “Affiliate”, as applied to any Person, shall mean any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities (the
ownership of more than 50% of the voting securities of an entity shall for
purposes of this definition be deemed to be “control”), by contract or
otherwise;

 

  (b) “Agreement” shall have the meaning set forth in the preamble of this
Agreement;

 

  (c) “Company” shall have the meaning set forth in the preamble of this
Agreement;

 

  (d) “Exchange Act” shall mean the United States Securities and Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder;

 

  (e) “Holder” shall have the meaning set forth in the preamble of this
Agreement;

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  (f) “Indemnified Party” has the meaning set forth in Section 4.3;

 

  (g) “Indemnifying Party” has the meaning set forth in Section 4.3;

 

  (h) “Mandatory Registration” has the meaning set forth in Section 2.1(a);

 

  (i) “Registrable Security” means any LSI Common Shares constituting the stock
consideration pursuant to the Stock Purchase Agreement (including such LSI
Common Shares held in escrow pursuant to the Stock Purchase Agreement and the
Escrow Agreement) and held by the Holder.

 

  (j) “Registration Expenses” has the meaning set forth in Section 3.2;

 

  (k) “Securities Act” shall mean the United States Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder;

 

  (l) “Stock Purchase Agreement” has the meaning set forth in the recitals to
this Agreement; and

ARTICLE 2

REGISTRATION RIGHTS

2.1 Mandatory Registration.

(a) Registration Requirement. The Company hereby agrees to file a registration
statement on Form S-3 (or any successor or similar short-form registration) with
the Commission to effect the registration under the Securities Act of all of the
Registrable Securities for resale by the Holder no later than thirty (30) days
after the date on which the Company files with the Commission its annual report
on Form 10-K with respect to the fiscal year ended June 30, 2006 (the “Mandatory
Registration”); provided, however, in any event, the Company shall file the
registration statement with respect to the Mandatory Registration with the
Commission pursuant to Section 3.1 no later than October 15, 2006.

(b) Effective Registration Statement. A registration effected pursuant to
Section 2.1 and Section 3.1 will not be deemed to have been effected unless it
has become effective and has remained continuously effective until the earliest
to occur of (such date being referred to herein as the “Termination Date”):
(i) a registration statement covering the Registrable Securities in accordance
with this Agreement has been declared effective by the Commission and such
Registrable Securities have been disposed of pursuant to such effective
registration statement, (ii) the Registrable Securities are sold pursuant to
Rule 144 or Rule 145 (or any similar provisions then in force) under the
Securities Act or (iii) the Registrable Securities held by the Holder can be
sold pursuant to Rule 144 or Rule 145 (or any similar provisions then in force)
without regard to the volume limitations set forth in Rule 144 or Rule 145 (or
any similar provisions then in force), as applicable.

 

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ARTICLE 3

REGISTRATION PROCEDURES

3.1 Filings; Information.

Whenever any Registrable Securities are to be registered pursuant to this
Agreement:

 

  (a) The Company will as expeditiously as possible in accordance with
Section 2.1(a) (i) prepare and file with the Commission a registration statement
on (i) Form S-3 with respect to the Mandatory Registration or (ii) if Form S-3
is not available, any form for which the Company then qualifies or which counsel
for the Company shall deem appropriate and which form shall be available for the
sale of the Registrable Securities to be registered thereunder in accordance
with the intended method of distribution reasonably acceptably to the Holder and
the Company (provided such distribution shall not consist of an underwritten
public offering), and the Company shall use its best efforts to cause such filed
registration statement to become effective as soon as practicable in accordance
with this Agreement.

 

  (b) The Company will prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement in
accordance with the intended method of distribution in accordance with
Section 3.1(a) until the Termination Date.

 

  (c) The Company will, prior to filing a registration statement or prospectus
or any amendment or supplement thereto, furnish to the Holder and its counsel
copies of such registration statement as proposed to be filed, together with
exhibits thereto, which documents will be subject to review by the foregoing
within three (3) Business Days after delivery, and thereafter furnish to the
Holder and its counsel such number of copies of such registration statement,
each amendment and supplement thereto (in each case including all exhibits
thereto and documents incorporated by reference therein), the prospectus
included in such registration statement (including each preliminary prospectus)
and such other documents as the Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by the Holder.

 

  (d) After the filing of the registration statement, the Company will promptly
notify the Holder covered by such registration statement of any stop order
issued or threatened by the Commission and take all reasonable actions required
to prevent the entry of such stop order or to remove it if entered.

 

  (e) The Company will use its best efforts to (i) register or qualify the
Registrable Securities under such other securities or blue sky laws of such
jurisdictions in the

 

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United States and such other jurisdictions (including in Canada) as the Holder
reasonably (in light of the Holder’s intended plan of distribution) requests and
(ii) cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities in the United States and Canada as
may be necessary by virtue of the business and operations of the Company and the
Holder’s intended plan of distribution and do any and all other acts and things
that may be reasonably necessary or advisable to enable the Holder to consummate
the disposition of the Registrable Securities owned by the Holder.

 

  (f) The Company will immediately notify the Holder of such Registrable
Securities, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and will promptly make available to the
Holder any such supplement or amendment.

 

  (g) The Company will deliver promptly to the Holder, subject to restrictions
imposed by the United States federal government or any agency or instrumentality
thereof, copies of all correspondence between the Commission and the Company and
its counsel or auditors and all memoranda relating to discussions with the
Commission or its staff with respect to the registration statement. The Company
will make available to the Holder appropriate officers of the Company to answer
any questions that the Holder may have with respect to the contents of the
registration statement to the extent reasonably necessary to conduct reasonable
due diligence on the Company and the matters addressed in the registration
statement.

 

  (h) The Company will use its best efforts to comply with all applicable rules
and regulations of the Commission and under all applicable securities laws in
Canada and the rules and regulations of all securities regulatory authorities in
Canada and, and make available to its securityholders, as soon as reasonably
practicable, an earnings statement covering a period of 12 months, beginning
within three months after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder and laws and rules of similar effect in
Canada.

 

  (i) The Company will use its best efforts to cause all Registrable Securities
to be listed on the NASDAQ National Market or, upon, The Nasdaq Stock Market,
Inc.’s registration as a national securities exchange, the NASDAQ Global Market
(which will be the successor to the NASDAQ National Market).

 

  (j) The Company may require the Holder to promptly furnish in writing to the
Company such information regarding the distribution of the Registrable
Securities as the Company may from time to time reasonably request and such
other information as may be legally required in connection with such
registration.

 

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  (k) The Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3.1(g) hereof, the
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to the registration statement covering such Registrable Securities until the
Holder’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3.1(g) hereof, and, if so directed by the Company the
Holder will deliver to the Company all copies, other than permanent file copies
then in the Holder’s possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event the
Company shall give such notice, the Company shall extend the period during which
such registration statement shall be maintained effective (including the period
referred to in Section 3.1(b) hereof) by the number of days during the period
from and including the date of the giving of notice pursuant to Section 3.1(g)
hereof to the date when the Company shall make available to the Holder covered
by such registration statement a prospectus supplemented or amended to conform
with the requirements of Section 3.1(g) hereof.

3.2 Registration Expenses.

In connection with any registration statement filed pursuant to Section 2.1, the
Company shall pay the following registration expenses incurred in connection
with any registration hereunder (the “Registration Expenses”): (i) all
registration and filing fees, (ii) fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), (iii) printing expenses, (iv) the Company’s internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) fees and expenses incurred
in connection with the listing of the Registrable Securities, (vi) reasonable
fees and disbursements of counsel for the Company and not more than one counsel
for the Holder, as may be chosen by the Holder, and customary fees and expenses
for independent certified public accountants retained by the Company (including
the expenses of any comfort letters or costs associated with the delivery by
independent certified public accountants of a comfort letter or comfort letters
requested pursuant to Section 3.1 hereof), and (vii) reasonable fees and
expenses of any special experts retained by the Company in connection with such
registration.

The Company shall have no obligation to pay any underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities.

ARTICLE 4

INDEMNIFICATION AND CONTRIBUTION

4.1 Indemnification by the Company.

To the fullest extent permitted by law, the Company agrees to indemnify and hold
harmless the Holder, its officers, directors, employees and agents, and each
person, if any, who controls the Holder within the meaning of the Securities Act
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to,

 

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any loss, claim, damage, liability or action relating to purchases and sales of
LSI Common Shares) to which the Holder, officer, director, employee or agent or
controlling Person may become subject under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any registration statement, preliminary prospectus or final
prospectus or any amendment or supplement thereto relating to the Registrable
Securities or (ii) any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading and shall reimburse the Holder and each such officer, director,
employee, agent and controlling Person for any legal and other expenses
reasonably incurred by the Holder, officer, director, employee, agent or
controlling Person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred, except insofar as the same are contained in any
information furnished in writing to the Company by the Holder expressly for use
therein; provided, however, that the Company shall not be liable to the Holder
or such Person’s directors, officers, agents or controlling Persons, in any such
case for any such loss, claim, damage or liability to the extent that it arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in connection with such registration
statement, preliminary prospectus, final prospectus or amendments or supplements
thereto, in conformity with written information relating to the Holder furnished
to the Company by the Holder expressly for inclusion therein in connection with
such registration; and, provided, further, that as to any preliminary prospectus
or any final prospectus, this indemnity agreement shall not inure to the benefit
of the Holder or such Person’s directors, officers, agents or controlling
Persons, on account of any loss, claim, damage or liability arising from the
sale of Registrable Securities to any Person by the Holder if the Holder or its
representatives failed to send or give a copy of the final prospectus or a
prospectus supplement, as the case may be (excluding documents incorporated by
reference therein), as the same may be amended or supplemented, to that Person
within the time required by the Securities Act, and the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact in such preliminary prospectus or final prospectus was
corrected in the final prospectus or such prospectus supplement, as the case may
be (excluding documents incorporated by reference therein), unless such failure
resulted from the non-compliance by the Company with Section 3.1(f). The
indemnities provided by this Section 4.1 shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holder.
Notwithstanding the foregoing, the indemnity set forth in this Section 4.1 shall
not apply to amounts paid in settlement effected without the consent of the
Holder (which consent shall not be unreasonably withheld or delayed).

4.2 Indemnification by the Holder.

To the fullest extent permitted by law, the Holder agrees to indemnify and hold
harmless the Company its officers, directors and agents and each Person, if any,
who controls the Company within the meaning of the Securities Act to the same
extent as the indemnity from the Company to the Holder pursuant to clauses
(i) and (ii) of Section 4.1, but only with reference to information related to
the Holder furnished in writing by the Holder or on the Holder’s behalf
expressly for use in any registration statement or prospectus relating to the
Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus; provided will be limited to the net amount of proceeds
received by the Holder from the sale of Registrable

 

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Securities pursuant to such Registration Statement. Notwithstanding the
foregoing, the indemnity set forth in this Section 4.2, shall not apply to
amounts paid in settlements effected without the consent of the Holder (which
consent shall not be unreasonably withheld or delayed).

4.3 Conduct of Indemnification Proceedings.

Promptly after receipt by any person in respect of which indemnity may be sought
pursuant to Section 4.1 or 4.2 (an “Indemnified Party”) of notice of any claim
or the commencement of any action, the Indemnified Party shall, if a claim in
respect thereof is to be made against the person against whom such indemnity may
be sought (an “Indemnifying Party”) notify the Indemnifying Party in writing of
the claim or the commencement of such action, provided that the failure to
notify the Indemnifying Party shall not relieve it from any liability which it
may have to an Indemnified Party otherwise than under Section 4.1 or 4.2, except
to the extent of any actual prejudice resulting therefrom. If any such claim or
action shall be brought against an Indemnified Party, and it shall notify the
Indemnifying Party thereof, the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified Indemnifying Party, to assume the defense thereof with
counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, the Indemnifying Party shall not be liable to
the Indemnified Party for any legal or other expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided that the Indemnified Party shall
have the right to employ separate counsel to represent the Indemnified Party and
its controlling Persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, but the fees and expenses of such counsel shall be for the
account of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the reasonable judgment of such Indemnified Party representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any claim or
pending or threatened proceeding in respect of which the Indemnified Party is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability arising out of such claim or
proceeding.

4.4 Contribution.

If the indemnification provided for in this Article 4 is unavailable to the
Indemnified Parties in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages,
liabilities or expenses as between the Company, on the one hand, and the Holder,
on the other, in such proportion as is appropriate to reflect the relative fault
of the Company and of the Holder in connection with such statements or
omissions, as well as any other relevant equitable considerations. The relative
fault of the Company, on the one hand, and of the Holder, on the other, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state

 

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a material fact relates to information supplied by such party, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

The Company and the Holder agree that it would not be just and equitable if
contribution pursuant to this Section 4.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, the Holder shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities were offered to the public (less
underwriting discounts and commissions) exceeds the amount of any damages which
the Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

ARTICLE 5

MISCELLANEOUS

5.1 Rule 144 and Rule 145.

The Company covenants that it will file any reports required to be filed by it
under the Securities Act and the Exchange Act and that it will take such further
action as the Holder may reasonably request, all to the extent required from
time to time to enable the Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 or Rule 145 under the Securities Act, as such Rules may
be amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of the Holder, the Company will
deliver to the Holder a written statement as to whether it has complied with
such requirements.

5.2 No Inconsistent Agreements.

The Company will not hereafter enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the Holder in this
Agreement.

5.3 Successors and Assigns.

(a) Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any shares of
Registrable Securities) who shall, upon such successions or assignment, as the
case may be, be entitled to the rights of the Holder hereunder and shall be
deemed a “Holder” for this Agreement; provided further the rights to cause the
Company to register Registrable Securities pursuant to Article 2 may only be
assigned pursuant to the terms of Section 5.3(b). Nothing in this Agreement,
express or implied, is intended to

 

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confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
In addition, the Holder shall be entitled to transfer any rights hereunder to
any Affiliate, subject solely to the obligation that such member notify the
Company of such assignment in writing and agree in writing to be bound by the
terms of this Agreement.

(b) The rights to cause the Company to register Registrable Securities pursuant
to Article 2 may be assigned (but only with all related obligations) by the
Holder to Fred Jalbout or Bassam Jalbout, their immediate family members, or any
entity which is wholly owned by such person or a trust established solely for
the benefit of one or more such persons, upon the transfer to such Person(s) of
Registrable Securities, provided that: (a) the Company is, at the time of or
within a reasonable time after such transfer, furnished with written notice of
the name and address of such transferee and the securities with respect to which
such registration rights are being assigned; and (b) such transferee agrees in
writing to be bound by and subject to the terms and conditions of this
Agreement, including the execution of an Adoption Agreement in the form attached
hereto as Exhibit A.

5.4 No Waivers, Amendments.

(a) Except as expressly set forth herein, no failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.

(b) Any amendment, modification or supplement to this Agreement shall not be
enforced against any party hereto unless such amendment, modification or
supplement is signed by the Company and the Holder.

(c) Any provision of this Agreement may be waived if, but only if, such waiver
is in writing and is signed by the party against whom the enforcement of such
waiver is sought.

5.5 Notices.

All notices, requests and other communications to any party hereunder shall be
in writing (including telex, telecopier or similar writing) and shall be given
to such party at its address or telecopier number set forth below, or such other
address or telecopier number as such party may hereinafter specify for the
purpose to the party giving such notice. Each such notice, request or other
communication shall be effective (a) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified in this Section and the appropriate
answerback is received or, (b) if given by overnight courier or express mail
service, when delivery is confirmed or, (c) if given by any other means, when
delivered at the address specified in this Section 5.5. In each case, notice
shall be sent to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):

 

  (i) if to the Company:

LSI Industries Inc.

P.O. Box 42728

10000 Alliance Road

Cincinnati, Ohio 45242

Attention: Ronald S. Stowell

Facsimile No.: (513) 791-0813

 

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with a copy to:

Keating Muething & Klekamp PLL

One East Fourth Street, Suite 1400

Cincinnati, Ohio 45202

Attention: Paul V. Muething

Facsimile No.:(513) 579-6457

 

  (ii) if to the Holder:

Saco Technologies Inc.

260 Strathcona

Mont-Royal, QC

H3R 1E7

Attention: Fred Jalbout

Facsimile No.: (514) 745-1299

with a copy to:

Davies Ward Phillips & Vineberg LLP

1501 McGill College Avenue, 26th Floor

Montreal, Quebec, Canada H3A 3N9

Attention: Denis Ferland

Facsimile No.: (514) 841-6499

5.6 Terms of Agreement.

This Agreement shall terminate at such time as the Holder ceases to beneficially
own any Registrable Securities; provided that any termination pursuant to this
Section 5.6 will not relieve any party for any liability arising from a breach
of representation, warranty, covenant or agreement occurring prior to such
termination.

5.7 Governing Law; Submission to Jurisdiction.

The Agreement shall be governed by and construed in accordance with the laws of
the State of New York without regard to its conflict of law provisions. Each of
the parties hereto irrevocably agrees that any legal action or proceeding with
respect to this Agreement or for the recognition and enforcement of any judgment
in respect hereof brought by the other party hereto or its, his or her
executors, heirs, legal representatives, successors or permitted assigns

 

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may be brought and determined in any federal or state court located in New York,
New York, and each of the parties hereby irrevocably submits with regard to any
action or proceeding for itself and in respect to its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of
the parties hereby irrevocably waives and agrees not to assert, by way of
motion, as a defense, counterclaim or otherwise, in any action or proceeding
with respect to this Agreement (a) any claim that it is not personally subject
to the jurisdiction of the above-named courts for any reason other than the
failure to lawfully serve process, (b) that it or its property is exempt or
immune from jurisdiction of any such court or from any legal process commenced
in such courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
and (c) to the fullest extent permitted by applicable law, that (i) the suit,
action or proceeding in any such court is brought in an inconvenient forum,
(ii) the venue of such suit, action or proceeding is improper and (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by such
courts.

5.8 Section Headings.

The section headings contained in this Agreement are for reference purposes only
and shall not affect the meaning or interpretation of this Agreement.

5.9 Entire Agreement.

This Agreement and the Exhibit attached hereto constitutes the entire agreement
and understanding among the parties hereto and supersedes any and all prior
agreements and understandings, written or oral, relating to the subject matter
hereof.

5.10 Severability.

Any term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdictions, it being intended that all rights and obligations of the
parties hereunder shall be enforceable to the fullest extent permitted by law.

5.11 Counterparts.

This Agreement may be signed in counterparts, each of which shall constitute an
original and which together shall constitute one and the same agreement.

5.12 Parties in Interest.

This Agreement and all the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors. Except as
expressly set forth herein, neither this Agreement nor any of their rights
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties.

 

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5.13 Enforcement; Further Assurances.

(a) The parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms. It is accordingly agreed that the parties shall be
entitled to specific performance of the terms hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.

(b) The parties hereto agree to execute, acknowledge, deliver, file and record
such further certificates, amendments, instruments, agreements and documents,
and to do all such other acts and things, as may be required by law or as may be
necessary or advisable to carry out the intent and purposes of this Agreement.

[Remainder of this page intentionally left blank.]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
set forth above.

 

LSI INDUSTRIES INC. By:  

/s/ Ronald S. Stowell

 

Name:   Ronald S. Stowell Title:   Vice President, Chief Financial Officer, and
Treasurer SACO TECHNOLOGIES INC. By:  

/s/ Fred Jalbout

 

Name:   Fred Jalbout Title:   President

 

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EXHIBIT A

ADOPTION AGREEMENT

This Adoption Agreement (“Adoption Agreement”) is executed by the undersigned
(the “Transferee”) pursuant to the terms of that certain Registration Rights
Agreement, dated as of June 26, 2006 (the “Agreement”), by and between LSI
Industries Inc. and Saco Technologies Inc. Capitalized terms used but not
defined herein shall have the respective meanings ascribed to such terms in the
Agreement. By the execution of this Adoption Agreement, the Transferee agrees as
follows:

1. Acknowledgement. Transferee acknowledges that Transferee is acquiring certain
shares of the capital stock of the Company (the “Stock”), which shares are
subject to the terms and conditions of the Agreement.

2. Agreement. As partial consideration for such transfer, Transferee (i) agrees
that the Stock acquired by Transferee shall be bound by and subject to the terms
of the Agreement, to the same extent and with the same rights and obligations as
the person(s) from which such Stock is received and (ii) hereby agrees to become
a party to the Agreement with the same force and effect as if Transferee were
originally a party thereto.

3. Notice. Any notice required or permitted by the Agreement shall be given to
Transferee at the address listed beside Transferee’s signature below.

4. Joinder. The spouse of the undersigned Transferee, if applicable, executes
this Adoption to acknowledge its fairness and that it is in such spouse’s best
interests and to bind to the terms of the Agreement such spouse’s community
interest, if any, in the Stock.

EXECUTED AND DATED this      day of                 ,         .

 

TRANSFEREE:

 

Title:  

 

Address:  

 

Fax:  

 

Spouse: (if applicable):

 

Name:  

 

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Acknowledged and accepted on                                 ,
                    .

 

LSI INDUSTRIES INC. By:  

 

Name:  

 

Title:  

 

 

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