Exhibit 10.1

CONSULTING AGREEMENT

This Consulting Agreement is made as of this 30th day of July, 2019, by and
between Schmitt Industries, Inc. (the “Company”) and Sententia Capital
Management, LLC (“Consultant”).

RECITALS:

WHEREAS, the Board of Directors (the “Board”) of the Company has appointed
Michael R. Zapata (“Zapata”) to serve as the Company’s president and chief
executive officer;

WHEREAS, Zapata is owner of the Consultant;

WHEREAS, the Consultant has agreed to provide such executive management services
to the Company, upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:

1.    Engagement. The Company hereby agrees to engage Consultant to render the
consulting services described herein, and Consultant hereby accepts such
engagement.

2.    Term. The engagement of Consultant by the Company as provided in Section 1
shall commence on the date hereof and continue through and until July 31, 2020
unless further extended or earlier terminated as hereinafter provided (the
period of such engagement, the “Term”).

3.    Services. Consultant shall make the services of Zapata available to the
Company and shall provide such other services to the Company as the Consultant
and the Company shall mutually agree upon from time to time. The Consultant
shall cause Zapata to serve as the Company’s principal executive officer in the
capacities of president and chief executive officer, with all the power and
authority and executing all the functions associated with such offices, and to
cause Zapata to commit sufficient business time to effectively discharge the
responsibilities of the Company’s president and chief executive officer, without
any additional compensation. The foregoing notwithstanding, nothing in this
Agreement shall restrict Zapata from performing other duties and/or accepting
consulting or employment arrangements or other positions outside of his
activities for the Company.

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4.    Payment and Expenses.

(a)    Cash Payment. The Company shall pay to Consultant compensation in the
amount of $14,000.00 per month during the Term.

(b)    Restricted Stock Units (“RSUs”). Effective August 6, 2019, Zapata shall
be granted 17,777 RSUs in accordance with the Company’s 2014 Equity Incentive
Plan. The RSUs shall vest immediately.

(c)    Bonuses. Zapata shall be eligible for each of the following bonuses from
the Company:

 

  (i)

Payable upon achieving Performance Based objectives determined by the
Compensation Committee and agreed upon by Zapata, an RSU bonus up to 100% of
annual cash payment compensation;

 

  (ii)

Discretionary bonuses to Consultant determined by Compensation Committee and
approved by the Board.

(d)    Expenses. Zapata shall be entitled to reimbursement for any out of pocket
expenses (travel, transportation, office, etc.) incurred in connection with the
consulting services rendered pursuant hereto.

(e)    D&O Coverage. The Company has confirmed that Zapata will be covered by
the Company’s primary and excess D&O insurance policy in his capacities of
director as well as president and chief executive officer, notwithstanding the
fact that he is not an employee of the Company, on the same basis as the other
directors and executive officers of the Company.

(f)    Death. If Zapata dies, this Agreement shall automatically terminate on
the date of his death. Consultant shall be entitled to receive that portion of
the payments and expenses that Consultant or Zapata earned through and including
the date of Zapata’s death and any bonus earned prior to the date of Zapata’s
death that remains unpaid. All restricted stock and/or RSUs (or comparable forms
of equity compensation, if any) held by Zapata, as of the date of the death of
Zapata, which are not then subject to any performance conditions for vesting,
shall be fully vested and shall not be subject to any risk of forfeiture or
repurchase as of the date of Zapata’s death.

(g)     Disability. Zapata shall be deemed “Permanently Disabled” when he has
suffered any medically determinable physical or mental illness, injury or
infirmity that prevents Zapata from performing his responsibilities under this
Agreement and which disability has lasted or that the Board in good faith has
determined can be expected to last for a continuous period of not less than 120
calendar days. The Board has the discretion to determine whether Zapata is
disabled and that determination shall be

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binding and conclusive on Consultant and Zapata (and any guardians or
representatives for him). If Zapata becomes Permanently Disabled, the Company
may terminate this Agreement as a result of the Permanent Disability by
providing written notice to Consultant thirty (30) calendar days prior to the
Termination Date, or Consultant may terminate this Agreement with the Company by
providing written notice to the Company thirty (30) calendar days prior to the
Resignation Date. In the event Consultant terminates this Agreement as a result
of Zapata’s disability, or Zapata resigns as a result of a Permanent Disability,
Consultant shall be entitled to receive that portion of the payment and expenses
that Consultant or Zapata earned through and including the Termination Date or
Resignation Date, as applicable and any bonus earned prior to such date. All
restricted stock and/or RSUs (or comparable forms of equity compensation, if
any) held by Zapata which, as of the date of the disability of Zapata, are not
then subject to any performance conditions for vesting, shall be fully vested
and shall not be subject to any risk of forfeiture or repurchase as of the date
of Zapata’s termination due to disability (as defined in this paragraph).

(h)    No Other Compensation. Other than as set forth herein or otherwise agreed
in writing or required by applicable law, neither Consultant or Zapata shall be
entitled to any other compensation or benefits in connection with this Agreement
or Zapata’s service as a director and president and chief executive officer of
the Company.

5.    Termination. Either party may terminate this Agreement for any or no
reason upon thirty (30) days’ notice to the other party, provided however, that
in the event of termination by the Company, Consultant and Zapata shall still be
entitled to the payments and expenses provided for in Section 4(a) through the
end of the given Term subject to the limitations set forth in Sections 4(f) and
4(g).

6.     Confidentiality. For purposes of this Section 6, the term “Company” shall
include, in addition to the Company, its affiliates, subsidiaries and any of
their respective predecessors, successors and assigns, and the term “Zapata”
shall include Consultant.

(a)    Confidential Information. As used in this Agreement, “Confidential
Information” means any and all confidential, proprietary or other information,
whether or not originated by Zapata or the Company, which is in any way related
to the past or present Company’s business and is either designated as
confidential or not generally known by or available to the public. Confidential
Information includes, but is not limited to (whether or not reduced to writing
or designated as confidential) (i) information regarding the Company’s existing
and potential customers and vendors; (ii) any contracts (including the existence
and contents thereof and parties thereto) to which the Company is a party or is
bound; (iii) information regarding products and services being purchased or
leased by or provided to the Company; (iv) information received by the Company
from third parties under an obligation of confidentiality, restricted disclosure
or restricted use;

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(v)    personnel and financial information of the Company; (vi) information with
respect to the Company’s products, services, facilities, business methods,
systems, trade secrets, technical know-how, and other intellectual property; and
(vii) marketing and developmental plans and techniques, price and cost data,
forecasts and forecast assumptions, and potential strategies of the Company.

(b)    Non-Disclosure and Non-Use of Confidential Information. Zapata
acknowledges that the Confidential Information of the Company is a valuable,
unique asset of the Company and Zapata’s use or disclosure thereof could cause
irreparable harm to the Company for which no remedy at law could be adequate.
Accordingly, Zapata agrees that he shall hold all Confidential Information of
the Company in strict confidence and solely for the benefit of the Company, and
that, except as necessary in the course of Zapata’s duties as CEO of the
Company, he shall not, directly or indirectly, disclose or use or authorize any
third party to disclose or use any Confidential Information. Zapata shall follow
all the Company policies and procedures to protect all Confidential Information
and take any additional precautions necessary to preserve and protect the use or
disclosure of any Confidential Information at all times.

(c)    Ownership of Confidential Information. Zapata acknowledges and agrees
that all Confidential Information is and shall remain the exclusive property of
the Company, whether or not prepared in whole or in part by Zapata and whether
or not disclosed to or entrusted to the custody of Zapata. Upon the termination
or resignation of this agreement by the Company, or at any other time at the
request of the Company, Zapata shall promptly deliver to the Company all
documents, tapes, disks, or other storage media and any other materials, and all
copies thereof in whatever form, in the possession of Zapata pertaining to the
Company’s Business, including, but not limited to, any containing Confidential
Information.

(d)    Confidentiality Policy. Zapata’s obligations under this Section 6 are in
addition to those imposed by the Board’s Confidentiality Policy which Zapata has
executed.

(e)    During the Term and for one year thereafter, Zapata shall not, except
pursuant to and in furtherance of Zapata’s duties hereunder, directly or
indirectly solicit or initiate contact with any employee of the Company or its
subsidiaries with a view to inducing or encouraging such employee to leave the
employ of the Company for the purpose of being hired by Zapata, an employer
affiliated with Zapata or any competitor of the Company.

(f)    Survival. Zapata’s obligations set forth in this Section 6, and the
Company’s rights and remedies with respect hereto, shall indefinitely survive
the termination of this Agreement, regardless of the reason therefor.

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(g)    Zapata acknowledges that the provisions of this Section 6 are reasonable
and necessary for the protection of the Company and that the Company will be
irrevocably damaged if such covenants are not specifically enforced.
Accordingly, Zapata agrees that, in addition to any other relief to which the
Company may be entitled in the form of actual or punitive damages, the Company
shall be entitled to seek and obtain injunctive relief from a court of competent
jurisdiction for the purposes of restraining Zapata from any actual or
threatened breach of such covenants.

7.    Independent Contractor Status. Nothing contained in this Agreement is
intended or shall be construed to create the relationship of employer/employee
or principal/agent. Consultant is an independent contractor for all purposes,
and shall be solely responsible for all federal, state, and local taxes due with
respect to compensation received pursuant to this Agreement. As such, the
Company shall not pay for, carry or obtain workers’ compensation insurance,
unemployment compensation insurance, or any other insurance on behalf of
Consultant other than pursuant to Section 4(e) hereof. Consultant shall be
responsible for providing any such coverages and shall not make any claim
against the Company for any such coverage, and further shall indemnify and hold
the Company harmless from any claims arising out of the absence of any such
coverage. This indemnity obligation shall survive any termination of this
Agreement. The time to be expended by the Consultant in the performance of its
duties is solely within its discretion, and the means and manner in which it
carries out this Agreement are also in its sole discretion.

8.    Entire Agreement. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof. This Agreement may not be
modified or extended except by a writing signed by both parties hereto. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective legal representatives, successors and assigns.

9.    Governing Law. This Agreement and all matters and issues collateral
thereto shall be governed by the laws of the State of Oregon applicable to
contracts performed entirely therein.

10.    Severability. If any provision of this Agreement, as applied to either
party or to any circumstance, shall be adjudged by a court to be void and
unenforceable, the same shall in no way affect any other provision of this
Agreement or the validity or enforceability thereof.

11.    Notices. All notices or other communications hereunder shall be given in
writing and shall be deemed given if served personally, mailed by registered or
certified mail, return receipt requested or sent by nationally recognized
courier service, to the parties at the addresses below, or at such other address
or addresses as they may hereafter designate in writing.

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If to the Company:

Schmitt Industries, Inc.

2765 NW Nicolai Street

Portland, OR 97210

Attention: Chief Financial Officer

If to Consultant:

Sententia Capital Management, LLC

102 W. 87th #1s

New York, New York

10024

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.

 

SCHMITT INDUSTRIES, INC.

 

      By:    /s/ Ann Ferguson    Name:    Ann Ferguson    Title:    Chief
Financial Officer   

 

SENTENTIA CAPITAL MANAGEMENT, LLC

 

      By:    /s/ Michael R. Zapata    Name:    Michael R. Zapata    Title:   
Founder, CEO   

 

               Michael R. Zapata (as to provisions applicable to
him individually)