REGISTRATION RIGHTS AGREEMENT DATED AS OF JUNE 26, 2006

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

DATED AS OF JUNE 26, 2006

BY AND BETWEEN

LSI INDUSTRIES INC.

AND

SACO TECHNOLOGIES INC.

TABLE OF CONTENTS

- i -

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:

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.

- 2 -

ARTICLE 3

REGISTRATION PROCEDURES

3.1 Filings; Information.

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

- 3 -

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.

- 4 -

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,

- 5 -

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

- 6 -

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

- 7 -

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

- 8 -

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):

LSI Industries Inc.

P.O. Box 42728

10000 Alliance Road

Cincinnati, Ohio 45242

Attention: Ronald S. Stowell

Facsimile No.: (513)  ###-###-####

- 9 -

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

Saco Technologies Inc.

260 Strathcona

Mont-Royal, QC

H3R 1E7

Attention: Fred Jalbout

Facsimile No.: (514)  ###-###-####

with a copy to:

Davies Ward Phillips & Vineberg LLP

1501 McGill College Avenue, 26^th Floor

Montreal, Quebec, Canada H3A 3N9

Attention: Denis Ferland

Facsimile No.: (514)  ###-###-####

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

- 10 -

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.

- 11 -

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.

- 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 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                 ,         .

Acknowledged and accepted on                                 ,                     .

- ii -