Document:

Exhibit 10.1

Exhibit 10.1

ESCROW AGREEMENT

This ESCROW AGREEMENT (“Escrow Agreement”) is made and entered into as of the 22nd day
of July, 2009 by and among LSI ACQUISITION INC., an Ohio corporation (“LSI”), KEVIN A.
KELLY, CRAIG A. MILLER and DAVID T. FEENEY (each a “Shareholder” and collectively, the
“Shareholders”) and U.S. BANK, NATIONAL ASSOCIATION, as escrow agent (the “Escrow
Agent”). Capitalized terms not otherwise defined herein shall have the meanings assigned such
terms in the Purchase Agreement (as defined below).

BACKGROUND

WHEREAS, pursuant to the terms of a Purchase and Sale Agreement (the “Purchase
Agreement”) dated as of even date herewith LSI purchased substantially all of the assets of ADL
Technology Inc., an Ohio corporation, and ADL Engineering Inc., an Ohio corporation (collectively,
the “Companies”) in exchange for cash and LSI Common Shares;

WHEREAS, promptly upon closing of the transactions contemplated by the Purchase Agreement, the
Companies have distributed to the Shareholders the Escrow Shares with each Shareholder receiving a
proportional amount of such LSI Common Shares, which percentage interest is set forth on
Exhibit A attached hereto (each a “Percentage Interest” and collectively, the
“Percentage Interests”); and

WHEREAS, under the terms of the Purchase Agreement, LSI, the Companies and the Shareholders
agreed that One Million Three Hundred Seventy-Two Thousand Sixty-Two (1,372,062) LSI Common Shares
(the “Escrow Shares”) issued to the Shareholders pursuant to the Purchase Agreement shall
be held in escrow pursuant to the terms of this Escrow Agreement, to be released, subject to the
terms of this Escrow Agreement, on or before the second anniversary of the date of this Escrow
Agreement (the “Termination Date”), and to serve, in the interim, as security to LSI for
the obligations of the Shareholders and the Companies under the Purchase Agreement.

NOW, THEREFORE, in consideration of the mutual covenants set forth below and other good and
valuable consideration, the parties hereto agree as follows:

1. Designation and Delivery. LSI and Shareholders hereby designate U.S. Bank,
National Association, as “Escrow Agent” under this Escrow Agreement. LSI and the Shareholders have
delivered to the Escrow Agent a copy of the Purchase Agreement, which agreement is attached hereto
as Exhibit B. LSI, in accordance with the terms of Sections 2.5(b) and 2.5(c) of the
Purchase Agreement, hereby delivers to the Escrow Agent certificates in the name of each
Shareholder evidencing the Escrow Shares (the “Deposit”). Each Shareholder hereby delivers
to the Escrow Agent duly executed stock powers (the “Stock Transfer Powers”) of such
Shareholder covering his portion of the Escrow Shares, as determined by such Shareholder’s
Percentage Interest as set forth on Exhibit A. The parties hereto agree that, for the
purposes of this Escrow Agreement, the Shareholders shall be deemed to be acting as one person and
that any consent required to be given by the Shareholders or act taken by or on behalf of the
Shareholders shall only be effective if given or taken by all three Shareholders. The distribution
of any or all of the Escrow Shares to the Shareholders or to LSI shall be made from the Escrow
Shares registered in the name of the respective
Shareholders on a pro rata basis, based on the respective Percentage Interests of each such
Shareholder.

 

 

 

2. Cash Portion of Escrow Fund. The Escrow Agent shall cause all stock dividends,
distributions in the form of securities (including shares distributed in a stock split), proceeds
from any sale or liquidation, or other income (excluding cash dividends paid or payable) earned on
or with respect to the Escrow Shares and received by the Escrow Agent, to be added to the Deposit.
Such deposited dividends, distributions, proceeds or other income (excluding cash dividends),
together with the Deposit, shall constitute the “Escrow Fund” to be distributed as provided
in Section 7 hereof. Notwithstanding the foregoing, any and all cash dividends earned on or with
respect to the Escrow Shares and received by the Escrow Agent shall be paid promptly to the
Shareholders in accordance with their Percentage Interests and shall not become part of the Escrow
Fund in accordance with their respective Percentage Interests; provided however, that after the
receipt by the Escrow Agent of a Notice of Claim, all cash dividends earned on or with respect to
those Escrow Shares that would be required to satisfy the indemnity claim set forth in such Notice
of Claim, if the same were to be resolved in favor of LSI, shall be added to the Deposit to provide
further security to LSI until resolution of such Notice of Claim (at which time such cash dividends
shall be released to the Shareholders from the Escrow Fund to the extent not required to satisfy
the indemnity claim represented by the Notice of Claim). Upon written request of the Shareholders,
the Escrow Agent shall sell all or a portion of the Escrow Shares pursuant to instructions
providing the number of Escrow Shares to be sold and any other conditions applicable to the sale of
such Escrow Shares; provided that the Escrow Agent shall have received from counsel to the
Shareholders a legal opinion providing that such sale is registered or exempt from registration
under applicable securities laws. The proceeds of such sale shall become part of the Escrow Fund
to be distributed as provided in Section 7 hereof. The Escrow Agent will invest the cash portions
of the Escrow Fund that are not distributed pursuant to the terms of this Escrow Agreement in money
market funds rated AAA or better which are authorized to invest in short term securities issued, or
guaranteed as to principal and interest, by the U.S. Government and repurchase agreements with
respect to such securities (including any money market fund managed by the Escrow Agent and any of
its affiliates) (collectively, the “Permitted Investments”) as directed by the Shareholders
in writing.

3. Escrow Agent as Custodian; Expenses. The Escrow Agent, for all purposes of this
Escrow Agreement, shall be treated as and considered legally a custodian. Except as otherwise
provided herein and in the Purchase Agreement, each Shareholder shall retain all of his rights as a
stockholder of LSI while the Escrow Shares are held in escrow hereunder, including the right to
vote such Escrow Shares. The Escrow Agent shall be entitled to rely conclusively upon all written
notices provided pursuant to Section 7 and may assume the genuineness of all signatures and
documents and the authority of all signatories. Except for its obligation to keep the Escrow Fund
safely in its custody (subject to the terms and provisions of this Escrow Agreement), the Escrow
Agent shall have no liability except for gross negligence or willful misconduct in the performance
of its duties under this Escrow Agreement for any action taken (or omission) in good faith.

 

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4. Escrow Account Statements. The Escrow Agent is hereby authorized to execute
purchases and sales of Permitted Investments through the facilities of its own trading or capital
markets operations or those of any affiliated entity. The Escrow Agent shall send statements to
LSI and the Shareholders on a monthly basis reflecting activity in the Escrow Fund for the
preceding
month. In doing so, the Escrow Agent may provide a statement containing information regarding
any deposits and disbursements and a separate statement reflecting the investment detail, including
the balance, purchases, sales, and interest postings. However, absent a specific request by either
LSI or the Shareholders to the contrary, no statement need be rendered pursuant to this Escrow
Agreement if no activity occurred for such month. LSI and the Shareholders each acknowledge and
agree that the delivery of the escrowed property is subject to the sale and final settlement of
investments described herein. Proceeds of a sale of investments will be delivered on the business
day on which the appropriate instructions are delivered to the Escrow Agent if received prior to
the deadline for same day sale of such investments. If such instructions are received after the
applicable deadline, proceeds will be delivered on the next succeeding business day.

The Shareholders and LSI acknowledge that regulations of the Comptroller of the Currency grant
them the right to receive brokerage confirmations of security transactions as they occur. They
specifically waive such notification to the extent permitted by law and knowledge that they will
receive periodic cash transaction statements, which will detail all investment transactions.

5. Compensation of the Escrow Agent. The Escrow Agent shall be entitled to reasonable
fees and reimbursement for reasonable expenses including, but not by way of limitation, the
reasonable fees and costs of attorneys or agents which it may find necessary to engage in
performance of its duties hereunder, in accordance with the fee schedule attached hereto as
Exhibit C; provided, however, the Escrow Agent shall to the extent practicable give
reasonable prior written notice to Shareholders and LSI of its intention to engage counsel. Such
fees and expenses shall, to the extent required to be paid at the Closing, be paid at the Closing,
and any remaining amounts shall be invoiced on an annual basis and in each case shall be paid one
half by LSI and one half by the Shareholders. The Escrow Agent shall have, and is hereby granted,
a prior lien upon any property, cash or assets of the Escrow Fund, with respect to its unpaid fees
and nonreimbursed expenses, superior to the interests of any other persons or entities, and shall
be entitled and is hereby granted the right to set off and deduct any unpaid fees and/or
nonreimbursed expenses from amounts on deposit in the Escrow Fund. To the extent that the Escrow
Agent exercises such right of set off and deducts a portion of the Escrow Fund to pay its fees and
expenses under this Section 5, and to the extent that such deduction results from a failure by LSI
to timely pay one-half of such fees and expenses to the Escrow Agent as required hereunder, LSI
shall promptly reimburse the Shareholders in cash for the full amount of such set off and deduction
that was attributable to LSI’s failure to pay.

6. Resignation; Disagreements.

(a) The Escrow Agent may resign from all further duties and liabilities hereunder as
escrow agent by giving to the Shareholders and LSI written notice of such resignation at
least sixty (60) days prior to the effective date thereof, or such shorter notice as the
Shareholders and LSI may accept as sufficient. The Shareholders and LSI shall have the
power by mutual agreement at any time to remove the Escrow Agent and to appoint a new escrow
agent. In the event of the Escrow Agent’s resignation or removal as aforesaid, the
Shareholders and LSI may (by mutual agreement) appoint a new escrow agent to serve as Escrow
Agent hereunder, and, failing such appointment, the retiring escrow agent may apply to any
court of competent jurisdiction in the State of Ohio for the appointment of a new escrow
agent to serve as Escrow Agent hereunder. Upon the appointment of a new escrow
agent and such new escrow agent’s acceptance as Escrow Agent hereunder, the Escrow
Agent shall transfer the Escrow Fund to such new escrow agent serving as Escrow Agent
hereunder.

 

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(b) In the event of any disagreement between the other parties hereto resulting in
adverse claims or demands being made in connection with the Escrow Fund or in the event that
Escrow Agent is in doubt as to what action it should take hereunder, the Escrow Agent shall
be entitled to (i) interplead all of the assets held hereunder into a court of competent
jurisdiction, and thereafter be fully relieved from any and all liability or obligation with
respect to such interpleaded assets or (ii) retain the Escrow Fund until the Escrow Agent
shall have received (A) a final non-appealable order of a court of competent jurisdiction
directing delivery of the Escrow Fund, or (B) a written agreement executed by both
Shareholders and LSI hereto directing delivery of the Escrow Fund, in which event the Escrow
Agent shall disburse the Escrow Fund in accordance with such order or agreement. Any court
order shall be accompanied by a legal opinion by counsel for the party or parties seeking
distribution of the Escrow Fund reasonably satisfactory to Escrow Agent to the effect that
the order is final and non-appealable. The Escrow Agent shall act on such court order and
legal opinion without further question or delay.

7. Termination and Distribution of Escrow Fund.

(a) Except as set forth in Section 7(d) and in Section 8, this Escrow Agreement shall
terminate upon the earlier of (i) the Termination Date or (ii) the date upon which the
Escrow Agent shall have distributed or released all of the Escrow Fund as provided herein.

(b) If, on or prior to the Termination Date, LSI has not delivered to the Escrow Agent
and the Shareholders a Notice of Claim (as defined in Section 7(f) below) with respect to
the Escrow Fund, the Escrow Fund shall be promptly released and delivered in its entirety to
the Shareholders by the Escrow Agent, it being agreed that to the extent the Escrow Fund
includes LSI Common Shares such release and delivery shall be accompanied by the return to
each Shareholder of such Shareholder’s original stock certificates for LSI Common Shares
registered in such Shareholder’s name and, in the case of any other property held by the
Escrow Agent in the Escrow Fund, the distribution shall be made to each Shareholder in
accordance with his Percentage Interest.

(c) If, on or prior to the Termination Date, LSI has delivered a Notice of Claim to the
Escrow Agent and the Shareholders, and the Shareholders have not disputed such Notice of
Claim in a writing addressed to the Escrow Agent and LSI within fifteen (15) business days
after receipt, the amount of the indemnity claim specified in the Notice of Claim shall
promptly be released and delivered to LSI by the Escrow Agent. For purposes of determining
the number of Escrow Shares to be released to LSI pursuant to this Section 7(c) in
satisfaction of indemnity claims and the amount received by LSI in satisfaction of the
indemnity claims, the value of the Escrow Shares shall be based upon the average of the
closing sale price of LSI’s common stock as reported on the NASDAQ National Market System
(or such other market where LSI Common Shares may then be traded) for the five (5) trading
days immediately preceding the second trading day immediately preceding the date
on which the Escrow Shares (or portion thereof) are released. The balance of the
Escrow Fund not so released shall continue to be held in escrow by the Escrow Agent pursuant
to the terms of this Escrow Agreement.

 

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(d) If, on or prior to the Termination Date, LSI has delivered a Notice of Claim to the
Shareholders and the Escrow Agent and the Shareholders have disputed the Notice of Claim in
a writing delivered to the Escrow Agent and LSI within fifteen (15) business days after
receipt, the Escrow Agent shall retain that portion of the Escrow Fund equal to the amount
of the indemnity claim specified in the Notice of Claim until the dispute is resolved by a
final, binding and non-appealable order of a court of competent jurisdiction or by agreement
between LSI and the Shareholders, even if the resolution of the dispute occurs after the
Termination Date, and shall distribute the portion so retained either pursuant to joint
written instructions from LSI and the Shareholders or pursuant to such court order. For
purposes of determining the number of Escrow Shares to be retained under this Section 7(d)
and Section 7(e) by the Escrow Agent upon receipt of a Notice of Claim, the value of the
Escrow Shares shall be based upon the average of the closing sale price of LSI’s common
stock as reported on the NASDAQ National Market System (or other applicable market) for the
five (5) trading days immediately preceding the second trading day immediately preceding the
date on which the Escrow Agent receives notice from the Shareholders that the Notice of
Claim is being disputed.

(e) At 5:00 pm Eastern Time on January 22, 2011 or, if such day is not a Business Day
at 5:00 pm Eastern Time on the next Business Day thereafter (the “Interim Release
Date”), the Escrow Agent shall release Six Hundred Eighty Six Thousand Thirty One
(686,031) Escrow Shares (the “Interim Release Shares”) to the Shareholders in
accordance with their Percentage Interests; provided, however, that if a Notice of Claim has
been delivered to the Escrow Agent by LSI prior to the Interim Release Date, the Escrow
Agent shall release all of the Interim Release Shares less the number of Escrow
Shares having a value (as determined in accordance with Section 7(c)) as of the Interim
Release Date equal to the amount of the indemnity claim specified in the Notice of Claim or,
if the Notice of Claim was disputed and later resolved for a lesser value, then less the
number of Escrow Shares having such lesser value as determined in accordance with Section
7(c) as of the Interim Release Date. If a dispute exists with respect to an indemnification
claim referred to in a Notice of Claim delivered prior to the Interim Release Date, once the
dispute is resolved by a final, binding and non-appealable order of a court of competent
jurisdiction or by agreement between LSI and the Shareholders, the Escrow Agent shall
promptly distribute to the Shareholders the portion of the Escrow Fund equal to the lesser
of: (i) the amount of indemnity claim specified in the disputed Notice of Claim less the
amount which is finally determined as due and owing to LSI (which amount shall be released
to LSI by the Escrow Agent), or (ii) the Interim Release Shares.

(f) For purposes of this Escrow Agreement, a “Notice of Claim” is a written
notice by LSI to the Escrow Agent, with copies thereof to each Shareholder, (i) stating that
LSI is asserting a claim for indemnification in respect of the Escrow Fund against the
Shareholders pursuant to the indemnification provisions contained in the Purchase Agreement,
(ii) containing a reasonably detailed description of the nature and basis of all
such claims, and (iii) setting forth in reasonable detail and with reasonable
specificity LSI’s estimate of the amount of monetary damages reasonably expected to be
incurred in conjunction with such claims for which indemnification is available to LSI under
the Purchase Agreement (taking into consideration, among other limitations, to the extent
applicable, the effect of the Threshold and the Indemnification Cap).

 

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(g) Any release or disbursement of Escrow Shares in accordance with this Section 7
shall be made by delivering the original share certificates representing such Escrow Shares
to the designated party or parties. In the event of disbursement to LSI, the Escrow Agent
shall also deliver to LSI appropriate Stock Transfer Powers, each completed with the amount
of Escrow Shares being disbursed to LSI by each Shareholder in accordance with his
Percentage Interests. Upon receipt thereof, LSI shall deliver to the Escrow Agent, as soon
as practicable thereafter, new share certificates relating to the balance of Escrow Shares
remaining in the hands of the Escrow Agent with respect to each Shareholder in accordance
with his Percentage Interests. Each Shareholder hereby appoints the Escrow Agent as such
Shareholder’s attorney-in-fact to act, in the name, place and stead of such Shareholder, to
(i) execute and complete additional Stock Transfer Powers, (ii) to take any actions or
exercising any rights, powers or privileges that such Shareholder is entitled or required to
take or exercise under the terms of any of provisions of this Escrow Agreement and (iii) to
do or cause to be done any or all things necessary or, in the determination of the Escrow
Agent, desirable to observe or perform the terms, conditions, covenants and agreements to be
observed or performed by the Shareholders to transfer their respective rights, title and
interests in and to LSI Common Shares held in escrow in accordance with this Escrow
Agreement. Notwithstanding anything to the contrary in this Escrow Agreement, a
disbursement of any Escrow Shares to LSI shall, if accompanied by delivery of the original
share certificates, be valid and shall have full force and effect even in the absence of
delivery of Stock Transfer Powers to LSI. Any disbursement of Escrow Shares to LSI shall be
deemed to be a redemption of such Escrow Shares.

(h) If LSI at any time or from time to time effects a stock-split, reclassification,
reorganization, reverse reclassification, or other change in the number of outstanding
number of LSI Common Shares into a larger or smaller number of shares, the number of Escrow
Shares to be released pursuant to Section 7 shall be proportionately adjusted.

8. Duties of Escrow Agent. The duties of the Escrow Agent under this Escrow Agreement
shall be entirely administrative and, except for a breach of its obligation to keep the Escrow Fund
safely in its custody (subject, however, to the terms and conditions of this Agreement), the Escrow
Agent shall not be liable to any third party as a result of any action or omission taken or made by
it in performing its duties hereunder, if taken in good faith, except for gross negligence, willful
misconduct or fraud. LSI, on one hand, and the Shareholders, on the other hand, shall severally
(each being responsible for 50% of the indemnity amount claimed by the Escrow Agent) indemnify,
defend and hold harmless the Escrow Agent from and against and reimburse the Escrow Agent for any
and all liability, costs and expenses the Escrow Agent may suffer or incur by reason of its
execution and performance of this Agreement except to the extent caused by or arising out of the
Escrow Agent’s gross negligence, willful misconduct or fraud or except for a failure to comply with
its obligation to keep the Escrow Fund in its custody (subject, however, to the terms and
conditions
of this Escrow Agreement). The Escrow Agent shall have no duties except those which are
expressly set forth herein, and, except as otherwise expressly set forth herein, it shall not be
bound by any notice of a claim, or demand with respect thereto, or any waiver, modification,
amendment, termination or rescission of this Escrow Agreement, unless in writing received by it and
signed by the parties hereto and otherwise conforming to any requirements contained herein.

 

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If the Escrow Agent shall find it necessary to consult with counsel of its own choosing in
connection with this Escrow Agreement, the Escrow Agent shall not incur any liability for any
action taken in good faith in accordance with such advice except to the extent caused by or arising
out of the Escrow Agent’s gross negligence, willful misconduct or fraud or except for a failure to
comply with its obligation to keep the Escrow Funds in its custody (subject, however, to the terms
and conditions of this Agreement). The foregoing indemnification shall survive termination of this
Escrow Agreement.

The Escrow Agent is not a party to, and is not bound by, any other agreements with the parties
hereto regarding the subject matter hereof. In the event that any of the terms and provisions of
any other agreement (excluding any amendment to this Escrow Agreement) between any of the parties
hereto, conflict or are inconsistent with any of the provisions of this Escrow Agreement, the terms
and provisions of this Escrow Agreement shall govern and control in all respects.

The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of the terms
and conditions of any other agreement, instrument or document between the other parties hereto, in
connection herewith, including without limitation the Purchase Agreement. This Escrow Agreement
sets forth all matters pertinent to the escrow contemplated hereunder, and no additional
obligations of the Escrow Agent shall be inferred from the terms of this Escrow Agreement or any
other agreement. IN NO EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY (i)
DAMAGES OR EXPENSES ARISING OUT OF THE SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES WHICH RESULT
FROM THE ESCROW AGENT’S FAILURE TO ACT IN ACCORDANCE WITH THE STANDARDS SET FORTH IN THIS ESCROW
AGREEMENT, OR (ii) SPECIAL OR CONSEQUENTIAL DAMAGES, EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.

The Escrow Agent shall have the right to perform any of its duties hereunder through agents,
attorneys, custodians or nominees.

Any banking association or corporation into which the Escrow Agent may be merged, converted or
with which the Escrow Agent may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Escrow Agent shall be a party, or any banking association
or corporation to which all or substantially all of the corporate trust business of the Escrow
Agent shall be transferred, shall succeed to all the Escrow Agent’s rights, obligations and
immunities hereunder without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

 

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9. Notices. All notices, consents or other communications required or permitted to be
given under this Escrow Agreement shall be in writing and shall be deemed given only if (i)
delivered personally or (ii) sent by registered or certified mail, postage prepaid, or (iii)
sent by an internationally recognized overnight courier service with next day delivery guaranteed
and delivery charges prepaid, or (iv) sent by confirmed facsimile with the original to follow by
first class mail, postage prepaid, as follows:

	 	 	 	 	 

	 

	 	If to the Shareholders: 	 	David T. Feeney

5521 Kinvarra Court

Dublin, OH 43016
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Bricker & Eckler LLP

100 South Third Street

Columbus, OH 43215

Attention: John W. Cook, III

Facsimile No.: (614) 227-2390
	 
	 	 	 	 
	 

	 	If to LSI:
	 	LSI Acquisition Inc.

10000 Alliance Road

Cincinnati, Ohio 45242

Attention: Ronald S. Stowell

Facsimile No.: (513) 791-0813
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Keating Muething & Klekamp PLL

One East Fourth Street, Suite 1400

Cincinnati, Ohio 45202

Attention: Michael J. Moeddel, Esq.

Facsimile No.: (513) 579-6457
	 
	 	 	 	 
	 

	 	If to Escrow Agent:
	 	U.S. Bank, National Association

425 Walnut Street, 6th Floor

Cincinnati, Ohio 45202

Attention: William Sicking

Facsimile No.: (513) 632-5511

or to such other address as the addressee may have specified in a notice duly given to the sender
as provided herein. Such notice, request, demand, waiver, consent, approval or other communication
will be deemed to have been given as of the date so delivered, mailed or received by facsimile
transmission.

10. Ownership for Tax Purposes. Each Shareholder agrees that, for purposes of federal
and other taxes based on income, each Shareholder will be treated as the owner of his proportion
(based on his Percentage Interest) of the Escrow Shares held in escrow and that each Shareholder
will report all income, if any, that is earned on, or derived from such Escrow Shares as his income
in
the taxable year or years in which such income is properly includible and pay any taxes
attributable thereto.

 

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11. Amendment. No amendment or modification of this Escrow Agreement shall be
effective unless in writing and signed by the parties. This Escrow Agreement may not be terminated
except in a written document signed by the parties.

12. Parties in Interest. This Escrow Agreement shall bind, benefit, and be
enforceable by and against each party hereto and their successors, assigns, heirs and personal
representatives. Except as otherwise expressly authorized herein or in the Purchase Agreement, no
party shall in any manner assign any of its rights or obligations under this Escrow Agreement
without the express prior written consent of the other parties; provided however, that LSI may
assign its rights hereunder to any permitted assignee of any of LSI’s rights under the Purchase
Agreement and such transferee shall be subject to LSI’s obligations hereunder. No assignment or
transfer permitted hereunder shall relieve or release any such transferor from any liability or
obligation hereunder.

13. No Waivers. No waiver with respect to this Escrow Agreement shall be enforceable
unless in writing and signed by the party against whom enforcement is sought. Except as otherwise
expressly provided herein, no failure to exercise, delay in exercising, or single or partial
exercise of any right, power or remedy by any party, and no course of dealing between or among any
of the parties, shall constitute a waiver of, or shall preclude any other or further exercise of
the same or any other right, power or remedy.

14. Entire Agreement. This Escrow Agreement supersedes all prior agreements among the
parties with respect to its subject matter and constitutes (along with the documents referred to in
this Escrow Agreement, including the Purchase Agreement) a complete and exclusive statement of the
terms of the agreement between the parties with respect to its subject matter.

15. Severability. If any provision of this Escrow Agreement is construed to be
invalid, illegal or unenforceable, then the remaining provisions hereof shall not be affected
thereby and shall be enforceable without regard thereto.

16. Counterparts. This Escrow Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall constitute an original hereof, and
it shall not be necessary in making proof of this Escrow Agreement to produce or account for more
than one original counterpart hereof. Facsimile signatures shall be treated as original signatures
and shall be binding upon the parties.

17. Controlling Law; Forum Selection. This Escrow Agreement is made under, and shall
be construed and enforced in accordance with, the laws of the State of Ohio applicable to
agreements made and to be performed solely therein, without giving effect to principles of
conflicts of law. Each party hereto agrees that it shall bring any action or proceeding in respect
of any claim arising out of or related to this Agreement or the transactions contained in or
contemplated by this Agreement, exclusively in the United States District Court for the Southern
District of Ohio or any Ohio state court sitting in Hamilton County, Ohio (the “Chosen
Courts”), and solely in connection with claims arising under this Agreement or the transactions
that are the subject of this Agreement: (i)
irrevocably submits to the exclusive jurisdiction of the Chosen Courts; (ii) waives any
objection to laying venue in any such action or proceeding in the Chosen Courts; (iii) waives any
objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any
party hereto; and (iv) agrees that service of process upon such party in any such action or
proceeding shall be effective if notice is given in accordance with Section 9. Each party hereto
irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.

 

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18. Definitions. To the extent not specifically defined herein, all terms used herein
shall have the meanings ascribed to them in the Purchase Agreement. As used in this Escrow
Agreement the term “including” shall mean “including without limitation.”

19. Patriot Act. To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to obtain, verify and record
information that identifies each person who opens an account. For a non-individual person such as a
business entity, a charity, a Trust or other legal entity we will ask for documentation to verify
its formation and existence as a legal entity. We may also ask to see financial statements,
licenses, identification and authorization documents from individuals claiming authority to
represent the entity or other relevant documentation.

20. WAIVER OF JURY. THE PARTIES HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS ESCROW AGREEMENT.

[Remainder of Page Intentionally Left Blank; Signature Page to Follow]

 

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IN WITNESS WHEREOF, the parties have executed, or caused their duly authorized representatives
to execute, this Escrow Agreement on the date first written above.

	 	 	 	 	 
	 

	 	LSI:	 	 
	 
	 	 	 	 
	 	 	LSI ACQUISITION INC.
	 
	 	 	 	 
	 	 	By:	/s/ Ronald S. Stowell
	 

	 	 	 
	 

	 	 
	Name:	Ronald S. Stowell
	 

	 	 
	Title:	Treasurer and Secretary
	 
	 	 	 	 
	 	 	SHAREHOLDERS:
	 
	 	 	 	 
	 	 	/s/ Kevin A. Kelly
	 	 	 
	 	 	Kevin A. Kelly
	 
	 	 	 	 
	 	 	/s/ Craig A. Miller
	 	 	 
	 	 	Craig A. Miller
	 
	 	 	 	 
	 	 	/s/ David T. Feeney
	 	 	 
	 	 	David T. Feeney
	 
	 	 	 	 
	 	 	ESCROW AGENT:
	 
	 	 	 	 
	 	 	U.S. BANK, NATIONAL ASSOCIATION
	 
	 	 	 	 
	 

	 	By:	/s/ William E. Sicking
	 

	 	 	 
	 

	 	 	Name:	 William E. Sicking
	 

	 	 	 	 
	 

	 	 	Title:	 Vice President and Trust
Officer
	 

	 	 	 	 

 

- 11 -

 

EXHIBIT “A”

Percentage Interests

	 	 	 	 	 
	Shareholder:	 	Percentage Interest	 
	 
	 	 	 	 
	Kevin A. Kelly
	 	 	42.47	%
	Craig A. Miller
	 	 	42.47	%
	David T. Feeney
	 	 	15.06	%

 

- 12 -

 

EXHIBIT “B”

Purchase Agreement

See attached.

 

- 13 -

 

EXHIBIT “C”

ESCROW AGENT FEES AND EXPENSES

The total Escrow Agent Fee under this Escrow Agreement shall be $4,000, which includes the Escrow
Agent Acceptance Fee and the Annual Escrow Agent Fee for the term of this Escrow Agreement. This
total fee shall be paid to the Escrow Agent at Closing.

 

- 14 -Exhibit 10.2

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

DATED AS OF JULY 22, 2009

BY AND BETWEEN

LSI INDUSTRIES INC.

AND

DAVID T. FEENEY, KEVIN A. KELLY AND CRAIG A. MILLER

 

 

 

TABLE OF CONTENTS

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

 

- i -

 

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is entered into as of July 22,
2009 by and between LSI Industries Inc., an Ohio corporation (the “Company”), and David T.
Feeney, Kevin A. Kelly and Craig A. Miller (each, a “Holder, and collectively, the
“Holders”). Capitalized terms used but not otherwise defined herein have the meanings given
to them in the Purchase Agreement (as hereinafter defined).

WITNESSETH:

WHEREAS, pursuant to that certain Purchase and Sale Agreement (the “Purchase
Agreement”), dated as of even date herewith, by and among the Company, LSI Acquisition Inc.,
and the Sellers identified therein and a Real Estate Purchase Agreement dated as of even date
herewith between certain parties to the Purchase Agreement, the Companies sold substantially all of
their assets to the Company; and

WHEREAS, the Holders own 100% of the issued and outstanding capital interests in Kelmilfeen,
Technology and Engineering and were induced in part to enter into the 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)	 	“Holders” shall have the meaning set forth in the preamble of this
Agreement;

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

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

	 	(j)	 	“Registrable Security” means any LSI Common Shares constituting the
Stock Consideration pursuant to the Purchase Agreement (including such LSI Common
Shares held in escrow pursuant to the Purchase Agreement and the Escrow Agreement) and
held by the Holders.

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

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

ARTICLE 2

REGISTRATION RIGHTS

2.1 Piggyback Registration.

(a) Right to Piggyback. If at any time from the date hereof until the earlier of July
31, 2013 or second anniversary of the release of all of the Escrow Shares by the Escrow Agent under
the Escrow Agreement, the Company proposes, either unilaterally or pursuant to the exercise of
demand registration rights by a third party, to file a registration statement under the Securities
Act (except with respect to registration statements on Forms S-4 or S-8, or any other form not
available for registering the Registrable Securities for sale to the public generally) (a
“Registration Statement”) with respect to an offering for its own account or for the
account of another person (other than the Holders in their capacity as such) of LSI Shares (a
“Proposed Registration”), then the Company shall in each case give written notice (the
“Piggyback Notice”) of such proposed filing to each Holder at least fifteen (15) days
before the anticipated filing date, and shall, subject to the terms and conditions herein, include
in such Registration Statement such amount of Registrable Securities as the Holder may request
within five (5) days of the receipt of such notice (each a “Piggyback Reply Notice”.) The
Company shall register (“Piggyback Registration”) such Registrable Securities on the same
terms and subject to the same conditions applicable to the registration in the Proposed
Registration of securities to be sold by the Company or the persons selling under such Proposed
Registration. The Holders acknowledge that the Company makes no representation regarding its
eligibility to file a registration statement on Form S-3 with the Commission.

(b) Priority on Piggyback Registrations. If the managing underwriter or underwriters
of such offering delivers an opinion to the Holders that the total dollar amount which they and any
other persons intend to include in such offering is reasonably likely to materially and adversely
affect the success or offering price of such offering, then the amount of securities to be offered
for the accounts of holders of Registrable Securities shall be reduced and the securities to be
included in such Proposed Registration shall be prioritized as follows: first, the securities which
the Company proposes to sell or that the Company is requested to register pursuant to the exercise
by a third party of demand registration rights; and second, the Registrable Securities of the
Holders and the other securities requested to be included in such registration, pro rata in
accordance with the aggregate principal amount of such securities among the holders of securities
requested (including the Holders) to be included in such registration.

 

- 2 -

 

(c) Right of Company to Withdraw/Abandon. Nothing herein shall be construed as
limiting or otherwise interfering with the right of the Company to withdraw or abandon in its sole
discretion any registration statement filed by it in connection with a Piggyback Registration
notwithstanding the inclusion of Registrable Securities.

ARTICLE 3

REGISTRATION PROCEDURES

3.1 Filings; Information.

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

	 	(a)	 	[Reserved.]

	 	(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
Registrable Securities covered by such Registration Statement in accordance with the
intended method of distribution.

	 	(c)	 	The Company will, prior to filing a Registration Statement or prospectus or any
amendment or supplement thereto, furnish to the Holders and their counsel copies of
such Registration Statement as proposed to be filed, together with exhibits thereto,
which documents will be subject to review and approval, which approval shall not be
unreasonably withheld or delayed, by the foregoing at least fifteen (15) days before
the anticipated date of filing of the Registration Statement or prospectus or at least
five (5) days before the anticipated date of filing of any amendments or supplements
thereto, and thereafter furnish to the Holders and their 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 Holders may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by the Holders.

	 	(d)	 	After the filing of the Registration Statement, the Company will promptly
notify the Holders 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.

 

- 3 -

 

	 	(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 United States and such other jurisdictions as any Holder
reasonably (in light of such 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 as may be necessary by virtue of the
business and operations of the Company and such Holder’s intended plan of
distribution and do any and all other acts and things that may be reasonably
necessary or advisable to enable such Holder to consummate the disposition of the
Registrable Securities owned by such Holder.

	 	(f)	 	The Company will immediately notify the Holders 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 Holders any such supplement or amendment.

	 	(g)	 	The Company will deliver promptly to the Holders, 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 Holders appropriate officers of the Company to answer any questions that the
Holders 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 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.

	 	(i)	 	The Company will use its best efforts to cause all Registrable Securities to be
listed on The Nasdaq Global Select Market or any successor thereof.

	 	(j)	 	The Company may require the Holders 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.

 

- 4 -

 

	 	(k)	 	Each 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(f) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until such Holder’s receipt
of the copies of the supplemented or amended prospectus contemplated by
Section 3.1(f) hereof, and, if so directed by the Company such Holder will deliver
to the Company all copies, other than permanent file copies then in such 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(f) hereof to the date when the Company
shall make available to the Holders covered by such registration statement a
prospectus supplemented or amended to conform with the requirements of Section
3.1(f) hereof.

	 	(l)	 	The Company will furnish, at the request of any Holder requesting registration
of Registrable Securities pursuant to Article 2, on the date or dates provided for in
the underwriting agreement if such securities are being sold through underwriters,
(i) an opinion, dated as of such date, of the counsel representing the Company
for the purposes of such registration, covering such matters as such counsel,
underwriters and the Holders may reasonably agree upon (including such matters as are
customarily given to underwriters in an underwritten public offering), addressed to the
underwriters, if any, and (ii) a letter or letters dated as of such date, from
the independent certified public accountants of the Company, addressed to the
underwriters, if any, covering such matters as such accountants, underwriters and
Holders may reasonably agree upon.

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 Holders, as may be
chosen by the Holders, and customary fees and expenses for independent certified public accountants
retained by the Company, 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. The Company shall have no obligation to
arrange for any offering of Registrable Securities by or through any underwriter, investment bank,
placement agent or other Person.

 

- 5 -

 

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 each
Holder, its officers, directors, employees and agents, and each person, if any, who controls each
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, any
loss, claim, damage, liability or action relating to purchases and sales of LSI Common Shares) to
which such 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 such Holder and each such officer,
director, employee, agent and controlling Person for any legal and other expenses reasonably
incurred by such 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 such Holder expressly for use therein;
provided, however, that the Company shall not be liable to any such 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 such Holder furnished to the Company by
such 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 any such 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 such Holder if such
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 any 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 Company (which consent shall not be
unreasonably withheld or delayed).

 

- 6 -

 

4.2 Indemnification by the Holders.

To the fullest extent permitted by law, each Holder jointly and severally 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 each Holder pursuant to clauses (i) and (ii) of Section 4.1, but only with
reference to information related to Holders furnished in writing by the Holders or on either
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 Holders from the sale of
Registrable 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 each 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.

 

- 7 -

 

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 Holders, on the other, in
such proportion as is appropriate to reflect the relative fault of the Company and of the Holders
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 Holders, 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 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 Holders 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 Holders 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 Holders have 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 use commercially reasonable efforts to 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 each Holder may reasonably request, all to the extent required from time to time
to enable such 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 either Holder, the Company will deliver
promptly to such Holder a written statement as to whether it has complied with such requirements.

 

- 8 -

 

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 Holders 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 Holders 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 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 Holders 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 Holders to 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
Holders.

(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.

 

- 9 -

 

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

	 
	 	 	 	with a copy to:

	 
	 	 	 	Keating Muething & Klekamp PLL

One East Fourth Street, Suite 1400

Cincinnati, Ohio 45202

Attention: Michael J. Moeddel and F. Mark Reuter

Facsimile No.:(513) 579-6457

	 
	 	(ii)	 	if to the Holders:

	 
	 	 	 	c/o David T. Feeney

5521 Kinvarra Court

Dublin, OH 43016

Facsimile No.: (614)
                

	 
	 	 	 	with a copy to:

	 
	 	 	 	Bricker & Eckler LLP

100 South Third Street

Columbus, Ohio 43215

Attention: John W. Cook III

Facsimile No.:(614) 227-2390

 

- 10 -

 

5.6 Terms of Agreement.

This Agreement shall terminate at such time as each 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 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.

 

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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.

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.]

 

- 12 -

 

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 	 
	 	 	 
	 	/s/
David T. Feeney	 
	 	DAVID T. FEENEY 	 
	 	 	 
	 	/s/
Kevin A. Kelly	 
	 	KEVIN A. KELLY 	 
	 	 	 
	 	/s/
Craig A. Miller	 
	 	CRAIG A. MILLER 	 

 

- 13 -

 

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 July 22, 2009 (the “Agreement”), by and between LSI Industries Inc. and the Holder
identified therein. 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:	 	 	 	 	 
	 	 	 	 	 	 	 

 

 

Acknowledged and accepted on_______________________, ______.

	 	 	 	 	 	 	 
	LSI INDUSTRIES INC.	 	 	 
	 
	 	 	 	 	 	 
	By:	 	 	 	 	 
	 	 	 	 
	 

	Name:	 	 	 	 
	 

	 	 	 	 
	 

	Title:	 	 	 	 
	 

	 	 	 	 

 

- ii -

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