Exhibit 10.1


 


Schmitt Industries, Inc.


 


Common Stock


(no par value per share)


 


Sales Agreement


 


May 20, 2022


 


Roth Capital Partners, LLC


888 San Clemente Drive, Suite 400


Newport Beach, CA 92660


 


Ladies and Gentlemen:


 


Schmitt Industries, Inc.,
an Oregon corporation (the “Company”), confirms its agreement (this “Agreement”) with Roth Capital
Partners, LLC (the “Agent”), as follows:


 


1.                 
Issuance and Sale of Shares. The Company agrees that, from
time to time during the term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue and sell through
or to the Agent, shares (the “Placement Shares”) of common stock of the Company, no par value per share (the “Common
Stock”); provided, however, that in no event shall the Company issue or sell through the Agent such number or
dollar amount of Placement Shares that would exceed the (a) number or dollar amount of shares of Common Stock registered on the effective
Registration Statement (defined below) pursuant to which the offering is being made, (b) number of authorized but unissued shares of Common
Stock (less shares of Common Stock issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise
reserved from the Company’s authorized capital stock), (c) number or dollar amount of shares of Common Stock permitted to be sold
under Form S-3 (including General Instruction I.B.6 thereof, if applicable) or (d) number or dollar amount of shares of Common Stock for
which the Company has filed a Prospectus Supplement (defined below) (the lesser of (a), (b), (c) and (d),
the “Maximum Amount”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance
with the limitations set forth in this Section 1 on the amount of Placement Shares issued and sold under this Agreement shall
be the sole responsibility of the Company and that Agent shall have no obligation in connection with such compliance. The issuance and
sale of Placement Shares through or to Agent will be effected pursuant to the Registration Statement (as defined below) filed by the Company
and declared effective by the Securities and Exchange Commission (the “Commission”), although nothing in this Agreement
shall be construed as requiring the Company to use the Registration Statement to issue any Placement Shares.


 






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The Company has filed, in
accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and
regulations thereunder (the “Securities Act Regulations”), with the Commission a registration statement on Form S-3
(File No. 333-264622), declared effective by the Commission on May 10, 2022, including a base prospectus, relating to certain securities,
including the Placement Shares to be issued from time to time by the Company, and which incorporates by reference documents that the Company
has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the rules and regulations thereunder. The Company has prepared a prospectus or a prospectus supplement to the base prospectus included
as part of the registration statement, which prospectus or prospectus supplement relates to the Placement Shares to be issued from time
to time by the Company (the “Prospectus Supplement”). The Company will furnish to the Agent, for use by the Agent,
copies of the prospectus included as part of such registration statement, as supplemented, by the Prospectus Supplement, relating to the
Placement Shares to be issued from time to time by the Company. The Company may file one or more additional registration statements from
time to time that will contain a base prospectus and related prospectus or prospectus supplement, if applicable (which shall be a Prospectus
Supplement), with respect to the Placement Shares. Except where the context otherwise requires, such registration statement(s), including
all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as
defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act Regulations or deemed to be
a part of such registration statement pursuant to Rule 430B of the Securities Act Regulations, is herein called the “Registration
Statement.” The base prospectus or base prospectuses, including all documents incorporated therein by reference, included in
the Registration Statement, as it may be supplemented, if necessary, by the Prospectus Supplement, in the form in which such prospectus
or prospectuses and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b)
under the Securities Act Regulations, together with the then issued Issuer Free Writing Prospectus(es), is herein called the “Prospectus.”


 


Any reference herein to the
Registration Statement, any Prospectus Supplement, Prospectus or any Issuer Free Writing Prospectus (defined below) shall be deemed to
refer to and include the documents incorporated by reference therein (the “Incorporated Documents”), including, unless
the context otherwise requires, the documents, if any, filed as exhibits to such Incorporated Documents. Any reference herein to the terms
“amend,” “amendment” or “supplement” with respect to the Registration Statement, any Prospectus Supplement,
the Prospectus or any Issuer Free Writing Prospectus shall be deemed to refer to and include the filing of any document under the Exchange
Act on or after the most-recent effective date of the Registration Statement, or the date of the Prospectus Supplement, Prospectus or
such Issuer Free Writing Prospectus, as the case may be, and incorporated therein by reference. For purposes of this Agreement, all references
to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include the most recent copy
filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval system, or if applicable, the Interactive Data
Electronic Application system when used by the Commission (collectively, “EDGAR”).


 


2.                 
Placements. Each time that the Company wishes to issue and
sell Placement Shares hereunder (each, a “Placement”), it will notify the Agent by email notice (or other method mutually
agreed to in writing by the parties) of the number or dollar value of Placement Shares, the time period during which sales are requested
to be made, any limitation on the number of Placement Shares that may be sold in any one Trading Day and any minimum price below which
sales may not be made (a “Placement Notice”), the form of which is attached hereto as Schedule 1. The Placement
Notice shall originate from any of the individuals from the Company set forth on Schedule 3 (with a copy to each of the other individuals
from the Company listed on such schedule), and shall be addressed to each of the individuals from the Agent set forth on Schedule 3,
as such Schedule 3 may be amended from time to time. The Placement Notice shall be effective unless and until (i) the Agent
declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the Placement Shares
thereunder have been sold, (iii) the Company suspends or terminates the Placement Notice or (iv) this Agreement has been terminated
under the provisions of Section 12. The amount of any discount, commission or other compensation to be paid by the Company
to Agent in connection with the sale of the Placement Shares shall be calculated in accordance with the terms set forth in Schedule
2. It is expressly acknowledged and agreed that neither the Company nor the Agent will have any obligation whatsoever with respect
to a Placement or any Placement Shares unless and until the Company delivers a Placement Notice to the Agent and the Agent does not decline
such Placement Notice pursuant to the terms set forth above, and then only upon the terms specified therein and herein. In the event of
a conflict between the terms of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control.


 






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3.                 
Sale of Placement Shares by Agent. Subject to the provisions
of Section 5(a), the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts
consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the
Nasdaq Capital Market (the “Exchange”), to sell the Placement Shares up to the amount specified, and otherwise in accordance
with the terms of such Placement Notice. The Agent will provide written confirmation to the Company no later than the opening of the Trading
Day (as defined below) immediately following the Trading Day on which it has made sales of Placement Shares hereunder setting forth the
number of Placement Shares sold on such day, the compensation payable by the Company to the Agent pursuant to Section 2 with
respect to such sales, and the Net Proceeds (as defined below) payable to the Company, with an itemization of the deductions made by the
Agent (as set forth in Section 5(b)) from the gross proceeds that it receives from such sales. Subject to the terms of the
Placement Notice, the Agent may sell Placement Shares by any method permitted by law deemed to be an “at the market offering”
as defined in Rule 415(a)(4) of the Securities Act Regulations.


 


4.                 
Suspension of Sales.


 


(a)              
The Company or the Agent may, upon notice to the other party in writing (including by email correspondence to each of the individuals
of the other party set forth on Schedule 3, if receipt of such correspondence is actually acknowledged by any of the individuals
to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by verifiable facsimile transmission or
email correspondence to each of the individuals of the other party set forth on Schedule 3), suspend any sale of Placement Shares
(a “Suspension”); provided, however, that such Suspension shall not affect or impair any party’s obligations
with respect to any Placement Shares sold hereunder prior to the receipt of such notice. Each party agrees that no such notice under this
Section 4 shall be effective against any other party unless it is made to one of the individuals named on Schedule 3
hereto, as such Schedule may be amended from time to time. While a Suspension is in effect, any obligations under Sections 7(l),
7(m) and 7(n) with respect to delivery of certificates, opinions or comfort letters to the Agent shall be waived.


 






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(b)              
Notwithstanding any other provision of this Agreement, during any period in which the Company is in possession of material non-public
information, the Company and the Agent agree that (i) no sale of Placement Shares will take place, (ii) the Company shall not request
the sale of any Placement Shares, and (iii) the Agent shall not be obligated to sell or offer to sell any Placement Shares.


 


5.                 
Sale and Delivery to the Agent; Settlement.


 


(a)              
Sale of Placement Shares. On the basis of the representations
and warranties herein contained and subject to the terms and conditions herein set forth, upon the Agent’s acceptance of the terms
of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended, or otherwise terminated
in accordance with the terms of this Agreement, the Agent, for the period specified in the Placement Notice, will use its commercially
reasonable efforts consistent with its normal trading and sales practices and applicable laws and regulations to sell such Placement Shares
up to the amount specified in such Placement Notice, and otherwise in accordance with the terms of such Placement Notice. The Company
acknowledges and agrees that (i) there can be no assurance that the Agent will be successful in selling Placement Shares, (ii) the
Agent will incur no liability or obligation to the Company or any other person or entity if it does not sell Placement Shares for any
reason other than a failure by the Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices
and applicable laws and regulations to sell such Placement Shares as required under this Agreement and (iii) the Agent shall be under
no obligation to purchase Placement Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by the Agent and
the Company.


 


(b)              
Settlement of Placement Shares. Unless otherwise
specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur on the second (2nd) Trading
Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a “Settlement
Date”). The Agent shall notify the Company in writing (including by email correspondence to each of the individuals set forth
on Schedule 3) of each sale of Placement Shares no later than the opening of the Trading Day immediately following the Trading
Day on which it has made sales of Placement Shares hereunder. The amount of proceeds to be delivered to the Company on a Settlement Date
against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to the aggregate sales price received
by the Agent, after deduction for (i) the Agent’s commission, discount or other compensation for such sales payable by the
Company pursuant to Section 2 hereof, and (ii) any transaction fees imposed by any governmental or self-regulatory organization
in respect of such sales.


 


(c)              
Delivery of Placement Shares. On each Settlement Date, the
Company will issue the Placement Shares being sold on such date and will cause its transfer agent to, electronically transfer the Placement
Shares being sold by crediting the Agent’s or its designee’s account (provided the Agent shall have given the Company written
notice of such designee prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian
System or by such other means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be duly authorized,
freely tradeable, transferable, registered shares in good deliverable form. On each Settlement Date, the Agent will deliver the related
Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement Date. The Company agrees that if
the Company, or its transfer agent (if applicable), defaults in its obligation to deliver Placement Shares on a Settlement Date (other
than as a result of a failure by the Agent to provide instructions for delivery), the Company agrees that in addition to and in no way
limiting the rights and obligations set forth in Section 10(a) hereto, it will (i) indemnify and hold the Agent harmless
against any loss, claim, damage, or reasonable and documented expense (including reasonable legal fees and expenses), as incurred, arising
out of or in connection with such default by the Company or its transfer agent (if applicable) and (ii) pay to the Agent (without
duplication) any commission, discount, or other compensation to which it would otherwise have been entitled absent such default.


 






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(d)              
Limitations on Offering Size. Under no circumstances
shall the Company cause or request the offer or sale of any Placement Shares if, after giving effect to the sale of such Placement Shares,
the aggregate gross sales proceeds of Placement Shares sold pursuant to this Agreement would exceed the lesser of (A) together with
all sales of Placement Shares under this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the Registration
Statement and (C) the amount authorized from time to time to be issued and sold under this Agreement by the Company’s board
of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing. Under
no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement at a price lower
than the minimum price authorized from time to time by the Company’s board of directors, duly authorized committee thereof or a
duly authorized executive committee, and notified to the Agent in writing. Further, under no circumstances shall the Company cause or
permit the aggregate offering amount of Placement Shares sold pursuant to this Agreement to exceed the Maximum Amount.


 


6.                 
Representations and Warranties of the Company. Except as
disclosed in the Registration Statement or Prospectus (including the Incorporated Documents), the Company represents and warrants to,
and agrees with the Agent that as of the date of this Agreement and as of each Applicable Time (as defined below), unless such representation,
warranty or agreement specifies a different date or time:


 


(a)              
Registration Statement and Prospectus. The Company and the
transactions contemplated by this Agreement meet the requirements for and comply with the conditions for the use of Form S-3 under the
Securities Act. The Registration Statement has been filed with the Commission and declared effective under the Securities Act. The Prospectus
Supplement will name the Agent as the agent in the section entitled “Plan of Distribution.” The Company has not received,
and has no notice of, any order of the Commission preventing or suspending the use of the Registration Statement, or threatening or instituting
proceedings for that purpose. The Registration Statement and the offer and sale of Placement Shares as contemplated hereby meet the requirements
of Rule 415 under the Securities Act and comply in all material respects with said Rule. Any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration
Statement have been so described or filed. Copies of the Registration Statement, the Prospectus, and any such amendments or supplements
and all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement have
been delivered, or are available through EDGAR, to Agent and its counsel. The Company has not distributed and, prior to the later to occur
of each Settlement Date and completion of the distribution of the Placement Shares, will not distribute any offering material in connection
with the offering or sale of the Placement Shares other than the Registration Statement and the Prospectus and any Issuer Free Writing
Prospectus to which Agent has consented. The Company has not, in the 12 months preceding the date hereof, received notice from the Exchange
to the effect that the Company is not in compliance with the listing or maintenance requirements.


 






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(b)              
No Misstatement or Omission. The Registration Statement,
when it became effective, and the Prospectus, and any amendment or supplement thereto, on the date of such Prospectus or amendment or
supplement, conformed and will conform in all material respects with the requirements of the Securities Act. At each Settlement Date,
the Registration Statement and the Prospectus, as of such date, will conform in all material respects with the requirements of the Securities
Act. The Registration Statement, when it became effective, did not, and will not, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus and
any amendment or supplement thereto, on the date thereof and at each Applicable Time (defined below), did not and will not include an
untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Incorporated Documents did not, and any further documents filed and incorporated by reference
therein will not, when filed with the Commission, contain an untrue statement of a material fact or omit to state a material fact required
to be stated in such document or necessary to make the statements in such document, in light of the circumstances under which they were
made, not misleading. The foregoing shall not apply to statements in, or omissions from, any such document made in reliance upon, and
in conformity with, information furnished to the Company by Agent specifically for use in the preparation thereof.


 


(c)              
Conformity with Securities Act and Exchange Act. The Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or any amendment or supplement thereto, and the Incorporated Documents,
when such documents were or are filed with the Commission under the Securities Act or the Exchange Act or became or become effective under
the Securities Act, as the case may be, conformed and will conform in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable.


 


(d)              
Financial Information. The financial statements of the Company
included or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any,
together with the related notes and schedules, present fairly, in all material respects, the financial position of the Company and its
subsidiaries as of and at the dates indicated and the results of operations, cash flows and changes in stockholders’ equity of the
Company for the periods specified and have been prepared in compliance with the requirements of the Securities Act and Exchange Act and
in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis
(except for (i) such adjustments to accounting standards and practices as are noted therein, (ii) in the case of unaudited interim
financial statements, to the extent such financial statements may not include footnotes required by GAAP or may be condensed or summary
statements and (iii) such adjustments which will not be material, either individually or in the aggregate) during the periods involved;
the other financial and statistical data with respect to the Company and its subsidiaries contained or incorporated by reference in the
Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, are accurately and fairly presented and prepared
on a basis consistent with the financial statements and books and records of the Company and its subsidiaries; there are no financial
statements (historical or pro forma) that are required to be included or incorporated by reference in the Registration Statement, or the
Prospectus that are not included or incorporated by reference as required; the Company and its subsidiaries do not have any material liabilities
or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Registration Statement (excluding
the exhibits thereto), and the Prospectus; and all disclosures contained or incorporated by reference in the Registration Statement, the
Prospectus and the Issuer Free Writing Prospectuses, if any, regarding “non-GAAP financial measures” (as such term is defined
by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and Item 10
of Regulation S-K under the Securities Act, to the extent applicable. The interactive data in eXtensible Business Reporting Language included
or incorporated by reference in the Registration Statement and the Prospectus fairly presents the information called for in all material
respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.


 






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(e)              
Conformity with EDGAR Filing. The Prospectus delivered to
the Agent for use in connection with the sale of the Placement Shares pursuant to this Agreement will be identical to the versions of
the Prospectus created to be transmitted to the Commission for filing via EDGAR, except to the extent permitted by Regulation S-T.


 


(f)               
Organization. The Company and each of its subsidiaries are
duly organized, validly existing as a corporation and in good standing under the laws of their respective jurisdictions of organization.
The Company and each of its subsidiaries are, and will be, duly licensed or qualified as a foreign corporation for transaction of business
and in good standing under the laws of each other jurisdiction in which their respective ownership or lease of property or the conduct
of their respective businesses requires such license or qualification, and have all corporate power and authority necessary to own or
hold their respective properties and to conduct their respective businesses as described in the Registration Statement and the Prospectus,
except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate,
have a material adverse effect on or affecting the assets, business, operations, earnings, properties, condition (financial or otherwise),
prospects, stockholders’ equity or results of operations of the Company and its subsidiaries taken as a whole, or prevent or materially
interfere with consummation of the transactions contemplated hereby (a “Material Adverse Effect”).


 


(g)              
Subsidiaries. Except as set forth on Schedule 6(g),
the Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries
listed in Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the most recently ended fiscal year. The Company owns, directly
or indirectly, all of the equity interests of its subsidiaries free and clear of any lien, charge, security interest, encumbrance, right
of first refusal or other restriction, and all the equity interests of its subsidiaries are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights.


 






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(h)              
No Violation or Default. Neither the Company nor any
of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and
no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the Company is bound or to which any of the property or assets
of the Company or any of its subsidiaries are subject; or (iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of each of clauses (ii) and
(iii) above, for any such violation or default that would not, individually or in the aggregate, have a Material Adverse Effect.
To the Company’s knowledge, no other party under any material contract or other agreement to which it or any of its subsidiaries
is a party is in default in any respect thereunder where such default would have a Material Adverse Effect.


 


(i)                
No Material Adverse Effect. Subsequent to the respective
dates as of which information is given in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any,
(including any document deemed incorporated by reference therein), there has not been (i) any Material Adverse Effect, (ii) any
transaction which is material to the Company and its subsidiaries taken as a whole, (iii) any obligation or liability, direct or
contingent (including any off-balance sheet obligations), incurred by the Company or any subsidiary which is material to the Company and
its subsidiaries taken as whole, (iv) any material change in the capital stock or outstanding long-term indebtedness of the Company
or any of its subsidiaries (other than (A) the grant of additional awards under equity incentive plans, (B) changes in the number
of outstanding Common Stock due to the issuance of shares upon exercise or conversion of securities exercisable for or convertible into
Common Stock outstanding on the date hereof, (C) any repurchase of capital stock of the Company or any subsidiary, (D) as a
result of the sale of Placement Shares, or (E) other than as publicly reported or announced), or (v) any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company or any subsidiary, other than in each case above in the ordinary
course of business or as otherwise disclosed in the Registration Statement or Prospectus (including any document deemed incorporated by
reference therein).


 


(j)                
Capitalization. The issued and outstanding shares of capital
stock of the Company have been validly issued, are fully paid and non-assessable and, other than as disclosed in the Registration Statement
or the Prospectus, are not subject to any preemptive rights, rights of first refusal or similar rights. The Company has an authorized,
issued and outstanding capitalization as set forth in the Registration Statement and the Prospectus as of the dates referred to therein
(other than the grant of additional options and restricted stock units under the Company’s existing stock option plans, or changes
in the number of outstanding shares of Common Stock of the Company due to the issuance of shares upon the exercise or conversion of securities
exercisable for, or convertible into, Common Stock outstanding on the date hereof) and such authorized capital stock conforms to the description
thereof set forth in the Registration Statement and the Prospectus. The description of the securities of the Company in the Registration
Statement and the Prospectus is complete and accurate in all material respects. Except as set forth on Schedule 6(j), as of the
date referred to therein, the Company does not have outstanding any options to purchase, or any rights or warrants to subscribe for, or
any securities or obligations convertible into, or exchangeable for, or any contracts or commitments to issue or sell, any shares of capital
stock or other securities, except as set forth in the Registration Statement and the Prospectus.


 






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(k)              
Authorization; Enforceability. The Company has full legal
right, power and authority to enter into this Agreement and perform the transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Company and is a legal, valid and binding agreement of the Company enforceable against the Company
in accordance with its terms, except (i) to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general equitable principles and (ii) the indemnification
and contribution provisions of Section 10 hereof may be limited by federal or state securities laws and public policy considered
in respect thereof.


 


(l)                
Authorization of Placement Shares. The Placement Shares,
when issued and delivered pursuant to the terms approved by the board of directors of the Company or a duly authorized committee thereof,
against payment therefor as provided herein, will be duly and validly authorized and issued and fully paid and non-assessable, free and
clear of any pledge, lien, encumbrance, security interest or other claim, including any statutory or contractual preemptive rights, resale
rights, rights of first refusal or other similar rights, and will be registered pursuant to Section 12 of the Exchange Act. The Placement
Shares, when issued, will conform to the description thereof set forth in or incorporated into the Prospectus.


 


(m)            
No Consents Required. No consent, approval, authorization,
order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority having jurisdiction over
the Company is required for the execution, delivery and performance by the Company of this Agreement, and the issuance and sale by the
Company of the Placement Shares, except for such consents, approvals, authorizations, orders and registrations or qualifications as may
be required under applicable state securities laws or by the by-laws and rules (i) of the Financial Industry Regulatory Authority (“FINRA”)
or the Exchange in connection with the sale of the Placement Shares by the Agent, or (ii) that if not obtained or made, would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect or which would not reasonably be expected to have a material
adverse effect on the Company’s ability to perform their agreed upon obligations under this Agreement.


 


(n)              
No Preferential Rights. (i) No person, as
such term is defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a “Person”), has the
right, contractual or otherwise, to cause the Company to issue or sell to such Person any Common Stock or shares of any other capital
stock or other securities of the Company, (ii) no Person has any preemptive rights, resale rights, rights of first refusal, rights
of co-sale, or any other rights (whether pursuant to a “poison pill” provision or otherwise) to purchase any Common Stock
or shares of any other capital stock or other securities of the Company, (iii) no Person has the right to act as an underwriter or
as a financial advisor to the Company in connection with the offer and sale of Common Stock, and (iv) no Person has the right, contractual
or otherwise, to require the Company to register under the Securities Act any Common Stock or shares of any other capital stock or other
securities of the Company, or to include any such shares or other securities in the Registration Statement or the offering contemplated
thereby, whether as a result of the filing or effectiveness of the Registration Statement or the sale of the Placement Shares as contemplated
thereby or otherwise.


 






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(o)              
Independent Public Accountant. UHY LLP (the “Accountant”),
whose report on the financial statements of the Company is filed with the Commission as part of the Company’s most recent Annual
Report on Form 10-K filed with the Commission and incorporated into the Registration Statement and the Prospectus, are and, during the
periods covered by their report, were an independent registered public accounting firm within the meaning of the Securities Act and the
Public Company Accounting Oversight Board (United States) (“PCOAB”). To the Company’s knowledge, the Accountant
is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”)
with respect to the Company. Moss Adams LLP (“Moss Adams”), whose report on the financial statements of the Company
is filed with the Commission as part of the Company’s most recent Annual Report on Form 10-K filed with the Commission and incorporated
into the Registration Statement and the Prospectus, are and, during the periods covered by their report, were an independent registered
public accounting firm within the meaning of the Securities Act and the PCOAB. To the Company’s knowledge, Moss Adams was not in
violation of the auditor independence requirements of the Sarbanes-Oxley Act with respect to the Company.


 


(p)              
Enforceability of Agreements. All agreements between the
Company and third parties expressly referenced in the Prospectus, to the extent such agreements are in effect as of the date of this Agreement,
are legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except
to the extent that (i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general equitable principles and (ii) the indemnification provisions of certain agreements
may be limited by federal or state securities laws or public policy considerations in respect thereof and except for any unenforceability
that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.


 


(q)              
No Litigation. There are no legal, governmental or
regulatory actions, suits or proceedings pending, nor, to the Company’s knowledge, any legal, governmental or regulatory investigations,
to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is the subject
that, individually or in the aggregate, if determined adversely to the Company or any of its subsidiaries would reasonably be expected
to have a Material Adverse Effect or would reasonably be expected to materially and adversely affect the ability of the Company to perform
its obligations under this Agreement; to the Company’s knowledge, no such actions, suits or proceedings are threatened or contemplated
by any governmental or regulatory authority or threatened by others that individually or in the aggregate, if determined adversely to
the Company or any of its subsidiaries would have a Material Adverse Effect; and (i) there are no current or pending legal, governmental
or regulatory investigations, actions, suits or proceedings that are required under the Securities Act to be described in the Prospectus
that are not so described; and (ii) there are no contracts or other documents that are required under the Securities Act to be filed
as exhibits to the Registration Statement that are not so filed.


 






    10 


     


    

 


(r)               
Licenses and Permits. The Company and each of its subsidiaries
possesses or has obtained, all licenses, certificates, consents, orders, approvals, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are
necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the
Registration Statement and the Prospectus (the “Permits”), except where the failure to possess, obtain or make the
same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Company nor any
of its subsidiaries has received written notice of any proceeding relating to revocation or modification of any such Permit or has any
reason to believe that such Permit will not be renewed in the ordinary course, except where the failure to obtain any such renewal would
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


(s)               
No Material Defaults. Neither the Company nor any of its
subsidiaries has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which
defaults, individually or in the aggregate, would have a Material Adverse Effect. The Company has not filed a report pursuant to Section
13(a) or 15(d) of the Exchange Act since the filing of its last Annual Report on Form 10-K, indicating that it (i) has failed to pay any
dividend or sinking fund installment on preferred stock or (ii) has defaulted on any installment on indebtedness for borrowed money or
on any rental on one or more long-term leases, which is continuing, which defaults, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.


 


(t)                
Certain Market Activities. Neither the Company, nor any
of its subsidiaries, nor any of their respective directors, officers or controlling persons has taken, directly or indirectly, any action
designed, or that has constituted or might reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale of the Placement Shares.


 


(u)              
Broker/Dealer Relationships. Neither the Company nor any
of its subsidiaries (i) is required to register as a “broker” or “dealer” in accordance with the provisions
of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or is a “person associated
with a member” or “associated person of a member” (within the meaning set forth in the FINRA Manual).


 


(v)              
No Reliance. The Company has not relied upon the Agent
or legal counsel for the Agent for any legal, tax or accounting advice in connection with the offering and sale of the Placement Shares.


 


(w)            
Taxes. The Company and each of its subsidiaries have timely
filed (including any extension of the time to file) all federal, state, local and foreign tax returns which have been required to be filed
and paid all taxes shown thereon through the date hereof, to the extent that such taxes have become due and are not being contested in
good faith. Except as otherwise disclosed in or contemplated by the Registration Statement or the Prospectus, no tax deficiency has been
determined adversely to the Company or any of its subsidiaries which has had, or would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. Except as otherwise disclosed in the Registration Statement or Prospectus, the Company has
no knowledge of any federal, state or other governmental tax deficiency, penalty or assessment which has been or might be asserted or
threatened against it or any of its subsidiaries which reasonably would be expected to have a Material Adverse Effect.


 






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(x)              
Title to Real and Personal Property. The Company and each
of its subsidiaries have good and marketable title in fee simple to all items of real property owned by them and good and valid title
to all personal property described in the Registration Statement or Prospectus as being owned by them that are material to the business
of the Company or any of its subsidiaries, in each case free and clear of all liens, encumbrances and claims, except those that (i) do
not materially interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries or (ii) would
not reasonably expected, individually or in the aggregate, to have a Material Adverse Effect. Any real property described in the Registration
Statement or Prospectus as being leased by the Company or any of its subsidiaries is held by them under valid, existing and enforceable
leases, except those that (A) do not materially interfere with the use made or proposed to be made of such property by the Company
or any of its subsidiaries or (B) would not be reasonably expected, individually or in the aggregate, to have a Material Adverse
Effect. Each of the properties of the Company and its subsidiaries complies with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes, laws and regulations and laws relating to access to such properties), except if and to
the extent disclosed in the Registration Statement or Prospectus or except for such failures to comply that would not, individually or
in the aggregate, reasonably be expected to interfere in any material respect with the use made of such property by the Company and its
subsidiaries have a Material Adverse Effect. To the knowledge of the Company, none of the Company or its subsidiaries has received from
any governmental agency any written notice of any condemnation of, or zoning change affecting, the properties of the Company and its subsidiaries,
and the Company knows of no such condemnation or zoning change which is threatened, except for such that would not reasonably be expected
to interfere in any material respect with the use made and proposed to be made of such property by the Company and its subsidiaries or
otherwise have a Material Adverse Effect, individually or in the aggregate.


 


(y)              
Intellectual Property. The Company and each of its subsidiaries
owns or possesses adequate enforceable rights to use all patents, patent applications, trademarks (both registered and unregistered),
service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) (collectively, the “Intellectual
Property”), necessary for the conduct of their respective businesses as conducted as of the date hereof, except to the extent
that the failure to own or possess adequate rights to use such Intellectual Property would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect; neither the Company nor any of its subsidiaries have received any written notice of any
claim of infringement or conflict which asserted Intellectual Property rights of others, which infringement or conflict, if the subject
of an unfavorable decision, would result in a Material Adverse Effect; there are no pending, or to the Company’s knowledge, threatened
judicial proceedings or interference proceedings against the Company challenging the Company’s or any of its subsidiaries’
rights in or to or the validity of the scope of any of the Company’s or any of its subsidiaries’ patents, patent applications
or proprietary information.


 






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(z)              
Environmental Laws. The Company and each of its subsidiaries
(i) are in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, decisions and orders
relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”); (ii) have received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their respective businesses as described in the Registration
Statement and the Prospectus; and (iii) have not received notice of any actual or potential liability for the investigation or remediation
of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except, in the case of any of clauses
(i), (ii) or (iii) above, for any such failure to comply or failure to receive required permits, licenses, other approvals or
liability as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


(aa)           
Disclosure Controls. The Company maintains systems of internal
controls designed to provide reasonable assurance that (i) transactions are executed in accordance with management’s general
or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences. The Company is not aware of any material weaknesses in its internal control
over financial reporting (other than as set forth in the Prospectus). Except as set forth in the Company’s public filings on EDGAR,
there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial reporting (other than as set forth in the Prospectus).
The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company and
designed such disclosure controls and procedures to ensure that material information relating to the Company and each of its subsidiaries
is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, is being prepared. The Company’s certifying officers
have evaluated the effectiveness of the Company’s disclosure controls and procedures as of a date within 90 days prior to the filing
date of the Form 10-K for the fiscal year most recently ended (such date, the “Evaluation Date”). The Company presented
in its Form 10-K for the fiscal year most recently ended the conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date. Except as set forth in the Company’s public filings
on EDGAR, since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is
defined in Item 307(b) of Regulation S-K under the Securities Act) or, to the Company’s knowledge, in other factors that could
significantly affect the Company’s internal controls. Except as forth in the Company’s public filings on EDGAR, to the knowledge
of the Company, the Company’s “internal controls over financial reporting” and “disclosure controls and procedures”
are effective.


 






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(bb)          
Sarbanes-Oxley. There is and has been no failure on the
part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply with any applicable provisions
of the Sarbanes-Oxley Act and the applicable rules and regulations promulgated thereunder in all material respects. Each of the principal
executive officer and the principal financial officer of the Company (or each former principal executive officer of the Company and each
former principal financial officer of the Company as applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley
Act with respect to all reports, schedules, forms, statements and other documents required to be filed by it or furnished by it to the
Commission during the past 12 months. For purposes of the preceding sentence, “principal executive officer” and “principal
financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.


 


(cc)           
Finder’s Fees. Neither the Company nor any of its
subsidiaries have incurred any liability for any finder’s fees, brokerage commissions or similar payments in connection with the
transactions herein contemplated, except as may otherwise exist with respect to Agent pursuant to this Agreement.


 


(dd)          
Labor Disputes. No labor disturbance by or dispute
with employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is threatened which would be reasonably
likely to have a Material Adverse Effect.


 


(ee)           
Investment Company Act. Neither the Company nor any of its
subsidiaries are or after giving effect to the offering and sale of the Placement Shares, will be an “investment company”
or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act
of 1940, as amended (the “Investment Company Act”).


 


(ff)             
Operations. The operations of the Company and its subsidiaries
are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions to which the Company or
its subsidiaries are subject, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), except as would not
have a Material Adverse Effect; and no action, suit or proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company, threatened.


 


(gg)          
Off-Balance Sheet Arrangements. There are no transactions,
arrangements and other relationships between and/or among the Company, and/or any of its affiliates and any unconsolidated entity, including,
but not limited to, any structural finance, special purpose or limited purpose entity (each, an “Off Balance Sheet Transaction”)
that could reasonably be expected to affect materially the Company’s liquidity or the availability of or requirements for its capital
resources required to be described in the Prospectus which have not been described as required.


 


(hh)          
Underwriter Agreements. Other than with respect to this
Agreement, the Company is not a party to any agreement with an agent or underwriter for any other “at the market” or continuous
equity transaction.


 






    14 


     


    

 


(ii)             
ERISA. Each material employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and any of its
subsidiaries has been maintained in material compliance with its terms and the requirements of any applicable statutes, orders, rules
and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”);
no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred which would
result in a material liability to the Company with respect to any such plan excluding transactions effected pursuant to a statutory or
administrative exemption; and for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302
of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not
waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds
the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.


 


(jj)             
Forward Looking Statements. No forward-looking statement
(within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) (a “Forward Looking Statement”)
contained in the Registration Statement and the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith. The Forward Looking Statements incorporated by reference in the Registration Statement and the Prospectus from
the Company’s Annual Report on Form 10-K for the fiscal year most recently ended (i) are within the coverage of the safe harbor
for forward looking statements set forth in Section 27A of the Securities Act, Rule 175(b) under the Securities Act or Rule 3b-6
under the Exchange Act, as applicable, (ii) were made by the Company with a reasonable basis and in good faith and reflect the Company’s
good faith commercially reasonable best estimate of the matters described therein, and (iii) have been prepared in accordance with
Item 10 of Regulation S-K under the Securities Act.


 


(kk)          
Agent Purchases. The Company acknowledges and agrees that
Agent has informed the Company that the Agent may, to the extent permitted under the Securities Act and the Exchange Act, purchase and
sell Common Stock for its own account while this Agreement is in effect, provided, that (i) no such purchase or sales shall take
place while a Placement Notice is in effect (except to the extent each Agent may engage in sales of Placement Shares purchased or deemed
purchased from the Company as a “riskless principal” or in a similar capacity) and (ii) the Company shall not be deemed
to have authorized or consented to any such purchases or sales by the Agent.


 


(ll)             
Margin Rules. Neither the issuance, sale and delivery of
the Placement Shares nor the application of the proceeds thereof by the Company as described in the Registration Statement and the Prospectus
will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.


 


(mm)     
Insurance. The Company and each of its subsidiaries carry,
or are covered by, insurance in such amounts and covering such risks as the Company and each of its subsidiaries reasonably believe are
adequate for the conduct of their respective businesses and as is customary for companies engaged in similar businesses in similar industries.


 






    15 


     


    

 


(nn)          
No Improper Practices. (i) Neither the Company
nor its subsidiaries, nor any director, officer, or employee of the Company or any of its subsidiaries nor, to the Company’s knowledge,
any agent, affiliate or other person acting on behalf of the Company or any of its subsidiaries has, in the past five years, made any
unlawful contributions to any candidate for any political office (or failed fully to disclose any contribution in violation of law) or
made any contribution or other payment to any official of, or candidate for, any federal, state, municipal, or foreign office or other
person charged with similar public or quasi-public duty in violation of any law or of the character required to be disclosed in the Prospectus;
(ii) no relationship, direct or indirect, exists between or among the Company, any of its subsidiaries or any affiliate of any of
them, on the one hand, and the directors, officers and stockholders of the Company or any of its subsidiaries, on the other hand, that
is required by the Securities Act to be described in the Registration Statement and the Prospectus that is not so described; (iii) no
relationship, direct or indirect, exists between or among the Company or any of its subsidiaries or any affiliate of the Company, on the
one hand, and the directors, officers, or stockholders of the Company or any of its subsidiaries, on the other hand, that is required
by the rules of FINRA to be described in the Registration Statement and the Prospectus that is not so described; (iv) there are no
material outstanding loans or advances or material guarantees of indebtedness by the Company or any of its subsidiaries to or for the
benefit of any of their respective officers or directors or any of the members of the families of any of them; (v) the Company has not
offered, or caused any placement agent to offer, Common Stock to any person with the intent to influence unlawfully (A) a customer
or supplier of the Company or any of its subsidiaries to alter the customer’s or supplier’s level or type of business with
the Company or any of its subsidiaries or (B) a trade journalist or publication to write or publish favorable information about the
Company or any of its subsidiaries or their respective products or services, and, (vi) neither the Company nor any of its subsidiaries
nor any director, officer or employee of the Company or any of its subsidiaries nor, to the Company’s knowledge, any agent, affiliate
or other person acting on behalf of the Company or any of its subsidiaries has made any payment of funds of the Company or received or
retained any funds in violation of any law, rule or regulation (including, without limitation, the Foreign Corrupt Practices Act of 1977,
as amended, or any other applicable anti-bribery or anti-corruption law, which payment, receipt or retention of funds is of a character
required to be disclosed in the Registration Statement or the Prospectus).


 


(oo)          
Compliance with Applicable Laws. The Company has not been
advised, and has no reason to believe, that it and each of its subsidiaries are not conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is conducting business, except where failure to be so in compliance would
not reasonably be expected to result in a Material Adverse Effect.


 


(pp)          
Status Under the Securities Act. The Company was not and
is not an ineligible issuer as defined in Rule 405 under the Securities Act at the times specified in Rules 164 and 433 under the Securities
Act in connection with the offering of the Placement Shares.


 






    16 


     


    

 


(qq)          
No Misstatement or Omission in an Issuer Free Writing Prospectus.
Each Issuer Free Writing Prospectus, as of its issue date and as of each Applicable Time (as defined in Section 24 below),
did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the
Registration Statement or the Prospectus, including any incorporated document deemed to be a part thereof that has not been superseded
or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and
in conformity with written information furnished to the Company by the Agent specifically for use therein.


 


(rr)             
No Conflicts. Neither the execution of this Agreement,
nor the issuance, offering or sale of the Placement Shares, nor the consummation of any of the transactions contemplated herein and therein,
nor the compliance by the Company with the terms and provisions hereof and thereof will conflict with, or will result in a breach of,
any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any contract or other
agreement to which the Company may be bound or to which any of the property or assets of the Company is subject, except (i) such
conflicts, breaches or defaults as may have been waived and (ii) such conflicts, breaches and defaults that would not reasonably
be expected to have a Material Adverse Effect; nor will such action result (x) in any violation of the provisions of the organizational
or governing documents of the Company, or (y) in any material violation of the provisions of any statute or any order, rule or regulation
applicable to the Company or of any court or of any federal, state or other regulatory authority or other government body having jurisdiction
over the Company.


 


(ss)            
Sanctions. (i) The Company represents that, neither the Company nor any of its subsidiaries (collectively, the “Entity”)
or any director, officer, employee, agent, affiliate or representative of the Entity, is a government, individual, or entity (in this
paragraph (ss), “Person”) that is, or is owned or controlled by a Person that is:


 


(A) the subject of any
sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”),
the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authorities, including,
without limitation, designation on OFAC’s Specially Designated Nationals and Blocked Persons List or OFAC’s Foreign Sanctions
Evaders List (as amended, collectively, “Sanctions”), nor


 


(B) located, organized
or resident in a country or territory that is the subject of Sanctions that broadly prohibit dealings with that country or territory (including,
without limitation, Cuba, Iran, North Korea, Sudan, Syria and the Crimea Region of Ukraine) (the “Sanctioned Countries”).


 


(ii) The Entity represents and
covenants that it will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other Person:


 






    17 


     


    

 


(A) to fund or facilitate
any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is
the subject of Sanctions or is a Sanctioned Country; or


 


(B) in any other manner
that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter,
advisor, investor or otherwise).


 


(iii)
The Entity represents and covenants that, except as disclosed in the Registration Statement or the Prospectus, for the past five (5) years,
it has not engaged in, is not now engaging in, and will not engage in, any dealings or transactions with any Person, or in any country
or territory, that at the time of the dealing or transaction is or was the subject of Sanctions or is or was a Sanctioned Country.


 


(tt)             
Stock Transfer Taxes. On each Settlement Date, all stock
transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Placement
Shares to be sold hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will
be or will have been fully complied with.


 


(uu)          
Statistical and Market-Related Data. The statistical, demographic and market-related data included in the Registration Statement
and Prospectus are based on or derived from sources that the Company believes to be reliable and accurate or represent the Company’s
good faith estimates that are made on the basis of data derived from such sources.


 


(vv)          
Cybersecurity. The Company’s and its subsidiaries’ information technology assets and equipment, computers, systems,
networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for,
and operate and perform in all material respects as required in connection with the operation of the businesses of the Company and each
of its subsidiaries as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and
other corruptants. The Company and its subsidiaries have implemented and maintained commercially reasonable physical, technical and administrative
controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous
operation, redundancy and security of all IT Systems and data, including all “Personal Data” and all sensitive, confidential
or regulated data (“Confidential Data”) used in connection with their businesses. “Personal Data”
means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax identification
number, driver’s license number, passport number, credit card number, bank information, or customer or account number; (ii) any
information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended;
(iii) “personal data” as defined by the European Union General Data Protection Regulation (EU 2016/679) (“GDPR”);
(iv) any information which would qualify as “protected health information” under the Health Insurance Portability and Accountability
Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”);
(v) any “personal information” as defined by the California Consumer Privacy Act (“CCPA”); and (vi) any
other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis
of any data related to an identified person’s health or sexual orientation. There have been no breaches, violations, outages or
unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the duty to notify
any other person, nor any incidents under internal review or investigations relating to the same. The Company and its subsidiaries are
presently in material compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or
arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security
of IT Systems, Confidential Data, and Personal Data and to the protection of such IT Systems, Confidential Data, and Personal Data from
unauthorized use, access, misappropriation or modification, except as would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.


 






    18 


     


    

 


(ww)      
Compliance with Data Privacy Laws. The Company and its subsidiaries are, and to the knowledge of the Company, at all prior
times were, in material compliance with all applicable state and federal data privacy and security laws and regulations, including without
limitation HIPAA, CCPA, and the GDPR (collectively, the “Privacy Laws”), except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect. To ensure compliance with the Privacy Laws, the Company has
in place, complies with, and takes appropriate steps to ensure compliance in all material respects with their policies and procedures
relating to data privacy and security and the collection, storage, use, processing, disclosure, handling, and analysis of Personal Data
and Confidential Data (the “Policies”). The Company has at all times made all disclosures to users or customers required
by applicable laws and regulatory rules or requirements, and none of such disclosures made or contained in any Policy have been inaccurate
or in violation of any applicable laws and regulatory rules or requirements in any material respect. The Company further certifies that
neither it nor any subsidiary: (i) has received notice of any actual or potential liability under or relating to, or actual or potential
violation of, any of the Privacy Laws, and has no knowledge of any event or condition that would reasonably be expected to result in any
such notice; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation, or other corrective action
pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement that imposes any obligation or liability under any
Privacy Law.


 


Any certificate signed by
an officer of the Company and delivered to the Agent or to counsel for the Agent pursuant to or in connection with this Agreement shall
be deemed to be a representation and warranty by the Company, as applicable, to the Agent as to the matters set forth therein.


 


7.                 
Covenants of the Company. The Company covenants and agrees
with Agent that:


 


(a)              
Registration Statement Amendments. After the date of this
Agreement and during any period in which a Prospectus relating to any Placement Shares is required to be delivered by Agent under the
Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act) (the
“Prospectus Delivery Period”) (i) the Company will notify the Agent promptly of the time when any subsequent amendment
to the Registration Statement, other than documents incorporated by reference, has been filed with the Commission and/or has become effective
or any subsequent supplement to the Prospectus has been filed and of any request by the Commission for any amendment or supplement to
the Registration Statement or Prospectus or for additional information, (ii) the Company will prepare and file with the Commission, promptly
upon the Agent’s reasonable request, any amendments or supplements to the Registration Statement or Prospectus that, in such Agent’s
reasonable opinion, may be necessary or advisable in connection with the distribution of the Placement Shares by the Agent (provided,
however, that the failure of the Agent to make such request shall not relieve the Company of any obligation or liability hereunder, or
affect the Agent’s right to rely on the representations and warranties made by the Company in this Agreement and provided, further,
that the only remedy the Agent shall have with respect to the failure to make such filing shall be to cease making sales under this Agreement
until such amendment or supplement is filed); (iii) the Company will not file any amendment or supplement to the Registration Statement
or Prospectus relating to the Placement Shares or a security convertible into the Placement Shares unless a copy thereof has been submitted
to Agent within a reasonable period of time before the filing and the Agent has not objected thereto (provided, however, that (A) the
failure of the Agent to make such objection shall not relieve the Company of any obligation or liability hereunder, or affect the Agent’s
right to rely on the representations and warranties made by the Company in this Agreement and (B) the Company has no obligation to
provide the Agent any advance copy of such filing or to provide the Agent an opportunity to object to such filing if the filing does not
name the Agent or does not relate to the transaction herein provided; and provided, further, that the only remedy Agent shall have with
respect to the failure to by the Company to obtain such consent shall be to cease making sales under this Agreement) and the Company will
furnish to the Agent at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference into
the Registration Statement or Prospectus, except for those documents available via EDGAR; and (iv) the Company will cause each amendment
or supplement to the Prospectus to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the
Securities Act or, in the case of any document to be incorporated therein by reference, to be filed with the Commission as required pursuant
to the Exchange Act, within the time period prescribed (the determination to file or not file any amendment or supplement with the Commission
under this Section 7(a), based on the Company’s reasonable opinion or reasonable objections, shall be made exclusively by
the Company).


 






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(b)              
Notice of Commission Stop Orders. The Company will advise
the Agent, promptly after it receives notice or obtains knowledge thereof, of the issuance or threatened issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Placement Shares
for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and it will promptly
use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should
be issued. The Company will advise the Agent promptly after it receives any request by the Commission for any amendments to the Registration
Statement or any amendment or supplements to the Prospectus or any Issuer Free Writing Prospectus or for additional information related
to the offering of the Placement Shares or for additional information related to the Registration Statement, the Prospectus or any Issuer
Free Writing Prospectus.


 


(c)              
Delivery of Prospectus; Subsequent Changes. During the Prospectus
Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act, as from time to time in force, and
to file on or before their respective due dates all reports and any definitive proxy or information statements required to be filed by
the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If the
Company has omitted any information from the Registration Statement pursuant to Rule 430B under the Securities Act, it will use its best
efforts to comply with the provisions of and make all requisite filings with the Commission pursuant to said Rule 430B and to notify the
Agent promptly of all such filings. If during the Prospectus Delivery Period any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not misleading, or if during the Prospectus Delivery Period it is necessary
to amend or supplement the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify Agent
to suspend the offering of Placement Shares during such period and the Company will promptly amend or supplement the Registration Statement
or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance; provided, however,
that the Company may delay the filing of any amendment or supplement, if in the judgment of the Company, it is in the best interests of
the Company.


 






    20 


     


    

 


(d)              
Listing of Placement Shares. During the Prospectus Delivery
Period, the Company will use its commercially reasonable efforts to cause the Placement Shares to be listed on the Exchange and to qualify
the Placement Shares for sale under the securities laws of such jurisdictions in the United States as Agent reasonably designates and
to continue such qualifications in effect so long as required for the distribution of the Placement Shares; provided, however, that the
Company shall not be required in connection therewith to qualify as a foreign corporation or dealer in securities or file a general consent
to service of process in any jurisdiction.


 


(e)              
Delivery of Registration Statement and Prospectus. The Company
will furnish to the Agent and its counsel (at the expense of the Company) copies of the Registration Statement, the Prospectus (including
all documents incorporated by reference therein) and all amendments and supplements to the Registration Statement or Prospectus that are
filed with the Commission during the Prospectus Delivery Period (including all documents filed with the Commission during such period
that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and in such quantities as the
Agent may from time to time reasonably request and, at Agent’s request, will also furnish copies of the Prospectus to each exchange
or market on which sales of the Placement Shares may be made; provided, however, that the Company shall not be required to furnish any
document (other than the Prospectus) to the Agent to the extent such document is available on EDGAR.


 


(f)               
Earnings Statement. The Company will make generally available
to its security holders as soon as practicable, but in any event not later than 15 months after the end of the Company’s current
fiscal quarter, an earnings statement covering a 12-month period that satisfies the provisions of Section 11(a) and Rule 158 of the
Securities Act.


 


(g)              
Use of Proceeds. The Company will use the Net Proceeds as
described in the Prospectus in the section entitled “Use of Proceeds.”


 






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(h)              
Notice of Other Sales. Without prior written notice to Agent,
the Company will not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of
any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for
Common Stock, warrants or any rights to purchase or acquire, Common Stock during the period beginning on the date on which any Placement
Notice is delivered to Agent hereunder and ending on the second (2nd) Trading Day immediately following the final Settlement
Date with respect to Placement Shares sold pursuant to such Placement Notice (or, if the Placement Notice has been terminated or suspended
prior to the sale of all Placement Shares covered by a Placement Notice, the date of such suspension or termination); and will not directly
or indirectly in any other “at the market” or continuous equity transaction offer to sell, sell, contract to sell, grant any
option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock prior to the termination
of this Agreement; provided, however, that such restrictions will not be required in connection with the Company’s issuance or sale
of (i) Common Stock, restricted stock, restricted stock units, options to purchase Common Stock or Common Stock issuable upon the exercise
of options, pursuant to any employee or director stock option or benefits plan, stock ownership plan or dividend reinvestment plan (but
not Common Stock subject to a waiver to exceed plan limits in its dividend reinvestment plan) of the Company whether now in effect or
hereafter implemented, (ii) Common Stock issuable upon conversion of securities or the exercise of warrants, options or other rights in
effect or outstanding, and disclosed in filings by the Company available on EDGAR or otherwise in writing to the Agent, and (iii) Common
Stock, or securities convertible into or exercisable for Common Stock, offered and sold in a negotiated transaction to vendors, customers,
strategic partners or potential strategic partners, acquisition candidates or other investors conducted in a manner so as not to be integrated
with the offering of Common Stock hereby. For the avoidance of doubt, nothing herein shall be construed to restrict the Company’s
ability, or require the Company to provide notice to the Agent, to file a registration statement with the Commission.


 


(i)                
Change of Circumstances. The Company will, at any time during
the pendency of a Placement Notice, advise the Agent promptly after it shall have received notice or obtained knowledge thereof, of any
information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document required to
be provided to the Agent pursuant to this Agreement.


 


(j)                
Due Diligence Cooperation. During the term of this Agreement,
the Company will cooperate with any reasonable due diligence review conducted by the Agent or its representatives in connection with the
transactions contemplated hereby, including, without limitation, providing information and making available documents and senior corporate
officers, during regular business hours and at the Company’s principal offices, as the Agent may reasonably request.


 


(k)              
Required Filings Relating to Placement of Placement Shares.
The Company agrees that on such dates as the Securities Act shall require, the Company will (i) file a prospectus supplement with
the Commission under the applicable paragraph of Rule 424(b) under the Securities Act, which prospectus supplement will set forth, within
the relevant period, the amount of Placement Shares sold through the Agent, the Net Proceeds to the Company and the compensation payable
by the Company to the Agent with respect to such Placement Shares, and (ii) deliver such number of copies of each such prospectus
supplement to each exchange or market on which such sales were effected as may be required by the rules or regulations of such exchange
or market.


 






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(l)                
Representation Dates; Certificate. On the date of this Agreement
and within five (5) trading days of each time the Company (each date of filing of one or more of the documents referred to in clauses
(i) through (iv) shall be a “Representation Date”):


 


(i)                
files the Prospectus relating to the Placement Shares or amends or supplements (other than a prospectus supplement relating solely
to an offering of securities other than the Placement Shares), the Registration Statement or the Prospectus relating to the Placement
Shares by means of a post-effective amendment, sticker, or supplement but not by means of incorporation of documents by reference into
the Registration Statement or the Prospectus relating to the Placement Shares;


 


(ii)             
files an annual report on Form 10-K under the Exchange Act (including any Form 10-K/A containing amended financial information
or a material amendment to the previously filed Form 10-K);


 


(iii)           
files a quarterly report on Form 10-Q under the Exchange Act; or


 


(iv)            
files a current report on Form 8-K containing amended financial information (other than information “furnished” pursuant
to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassification
of certain properties as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144) under the
Exchange Act;


 


the Company shall furnish the Agent (but in the
case of clause (iv) above only if the Agent reasonably determines that the information contained in such Form 8-K is material)
with a certificate, in the form attached hereto as Exhibit 7(l) (the “Representation Date Certificate”); provided
however, if no Placement Notice is pending at such Representation Date, then before the Company delivers a Placement Notice or the Agent
sells any Placement Shares, the Company shall provide the Agent with a Representation Date Certificate. The requirement to provide a Representation
Date Certificate shall be waived for any Representation Date occurring at a time at which no Placement Notice is pending, which waiver
shall continue until the earlier to occur of the date the Company delivers a Placement Notice hereunder (which for such calendar quarter
shall be considered a Representation Date) and the next occurring Representation Date; provided, however, that such waiver shall not apply
for any Representation Date on which the Company files its annual report on Form 10-K. Notwithstanding the foregoing, if the Company subsequently
decides to sell Placement Shares following a Representation Date when the Company relied on such waiver and did not provide the Agent
with a Representation Date Certificate, then before the Company delivers the Placement Notice or the Agent sells any Placement Shares,
the Company shall provide the Agent with a Representation Date Certificate, dated the date of the Placement Notice.


 






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(m)            
Legal Opinion. On the date of this Agreement, the Company
shall cause to be furnished to the Agent a written opinion and negative assurance letter of Olshan Frome Wolosky LLP (“Company
Special Counsel”), or other counsel satisfactory to the Agent, in form and substance reasonably satisfactory to Agent and its
counsel. Thereafter, within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver
a Representation Date Certificate for which no waiver is applicable, the Company shall cause to be furnished to the Agent a negative assurance
letter of Company Special Counsel in form and substance reasonably satisfactory to Agent and its counsel; provided however, if no Placement
Notice is pending at such Representation Date, then before the Company delivers a Placement Notice or the Agent sells any Placement Shares,
the Company shall provide the Agent with such negative assurance letter; provided, further, that in lieu of such negative assurance letter
for subsequent periodic filings under the Exchange Act, counsel may furnish the Agent with a letter (a “Reliance Letter”)
to the effect that the Agent may rely on a prior negative assurance letter delivered under this Section 7(m) to the same extent
as if it were dated the date of such letter (except that statements in such prior negative assurance letter shall be deemed to relate
to the Registration Statement and the Prospectus as amended or supplemented as of the date of the Reliance Letter).


 


(n)              
Comfort Letter. (1) On the date of this Agreement and
(2) within five (5) Trading Days of each Representation Date on which the Company files its annual report on Form 10-K, as contemplated
by Section 7(l)(ii), with respect to which the Company is obligated to deliver a certificate in the form attached hereto as
Exhibit 7(l) for which no waiver is applicable, the Company shall cause its independent accountants to furnish the Agent letters
(the “Comfort Letters”), dated the date the Comfort Letter is delivered, which shall meet the requirements set forth
in this Section 7(n); provided however, if no Placement Notice is pending at such Representation Date, then before the Company
delivers a Placement Notice or the Agent sells any Placement Shares, the Company shall provide the Agent with the Comfort Letter; provided,
further, that if reasonably requested by the Agent, the Company shall cause a Comfort Letter to be furnished to the Agent within ten (10) Trading
Days of the date of occurrence of any material transaction or event, including the restatement of the Company’s financial statements.
The Comfort Letter from the Company’s independent accountants shall be in a form and substance satisfactory to the Agent, (i) confirming
that they are an independent public accounting firm within the meaning of the Securities Act and the PCOAB, (ii) stating, as of such
date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’
“comfort letters” to underwriters in connection with registered public offerings (the first such letter from each of the Accountant
and Moss Adams, the “Initial Comfort Letters”) and (iii) updating the Initial Comfort Letters with any information
that would have been included in the Initial Comfort Letters had it been given on such date and modified as necessary to relate to the
Registration Statement and the Prospectus, as amended and supplemented to the date of such letters.


 


(o)              
Market Activities. The Company will not, directly or indirectly,
(i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale of Common Stock or (ii) sell, bid for,
or purchase Common Stock, or pay anyone any compensation for soliciting purchases of the Placement Shares other than the Agent.


 






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(p)              
Investment Company Act. The Company will conduct its affairs
in such a manner so as to reasonably ensure that it will not become, at any time prior to the termination of this Agreement, an “investment
company,” as such term is defined in the Investment Company Act.


 


(q)              
No Offer to Sell. Other than an Issuer Free Writing
Prospectus approved in advance by the Company and the Agent in its capacity as agent hereunder, neither the Agent nor the Company (including
its agents and representatives, other than Agent in their capacity as such) will make, use, prepare, authorize, approve or refer to any
written communication (as defined in Rule 405 under the Securities Act), required to be filed with the Commission, that constitutes an
offer to sell or solicitation of an offer to buy Placement Shares hereunder.


 


(r)               
Sarbanes-Oxley Act. The Company and each of its subsidiaries
will maintain and keep accurate books and records reflecting their assets and maintain internal accounting controls in a manner designed
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP and including those policies and procedures that (i) pertain to the maintenance of records that
in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable
assurance that transactions are recorded as necessary to permit the preparation of the Company’s consolidated financial statements
in accordance with GAAP, (iii) that receipts and expenditures of the Company are being made only in accordance with management’s
and the Company’s directors’ authorization, and (iv) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its financial statements.
The Company and each of its subsidiaries will maintain such controls and other procedures, including, without limitation, those required
by Sections 302 and 906 of the Sarbanes-Oxley Act, and the applicable regulations thereunder that are designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms, including, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal
financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure and
to ensure that material information relating to the Company or
any of its subsidiaries is made known to them by others within those entities, particularly during the period in which such periodic
reports are being prepared.


 


8.                 
Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the preparation, filing, including any fees required by
the Commission, and printing of the Registration Statement (including financial statements and exhibits) as originally filed and of each
amendment and supplement thereto, in such number as the Agent shall deem necessary, (ii) the printing and delivery to the Agent of
this Agreement and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the
Placement Shares, (iii) the preparation, issuance and delivery of the certificates, if any, for the Placement Shares to the Agent,
including any stock or other transfer taxes and any capital duties, stamp duties or other duties or taxes payable upon the sale, issuance
or delivery of the Placement Shares to the Agent, (iv) the fees and disbursements of the counsel, accountants and other advisors
to the Company, (v) the reasonable out-of-pocket expenses of Agent, including fees and disbursements of counsel to the Agent up to
$25,000 (which amount shall include all fees and disbursements of such counsel described in clause (ix) below), (vi) the printing
and delivery to the Agent of copies of any Permitted Issuer Free Writing Prospectus (defined below) and the Prospectus and any amendments
or supplements thereto in such number as the Agent shall deem necessary, (vii) the preparation, printing and delivery to the Agent
of copies of the blue sky survey and any Canadian “wrapper” and any supplements thereto, in such number as the Agent shall
deem necessary, (viii) the fees and expenses of the transfer agent and registrar for the Common Stock, (ix) the fees and expenses
incident to any review by FINRA of the terms of the sale of the Placement Shares, including fees and expenses of counsel to the Agent,
and (x) the fees and expenses incurred in connection with the listing of the Placement Shares on the Exchange.


 






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9.                 
Conditions to Agent’s Obligations. The obligations
of the Agent hereunder with respect to a Placement will be subject to the continuing accuracy and completeness of the representations
and warranties made by the Company herein, to the due performance by the Company of its obligations hereunder, to the completion by the
Agent of a due diligence review satisfactory to it in its reasonable judgment, and to the continuing satisfaction (or waiver by the Agent
in its sole discretion) of the following additional conditions:


 


(a)              
Registration Statement Effective. The Registration Statement
shall have become effective and shall be available for the sale of all Placement Shares contemplated to be issued by any Placement Notice.


 


(b)              
No Material Notices. None of the following events shall
have occurred and be continuing: (i) receipt by the Company of any request for additional information from the Commission or any
other federal or state governmental authority during the period of effectiveness of the Registration Statement, the response to which
would require any post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by
the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; or (iv) the occurrence of any event that makes any material statement
made in the Registration Statement or the Prospectus or any material document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes in the Registration Statement, the Prospectus or documents so
that, in the case of the Registration Statement, it 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, that in the case of the Prospectus,
it 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, in the light of the circumstances under which they were made, not misleading.


 






    26 


     


    

 


(c)              
No Misstatement or Material Omission. Agent shall not
have advised the Company that the Registration Statement or Prospectus, or any amendment or supplement thereto, contains an untrue statement
of fact that in the Agent’s reasonable opinion is material, or omits to state a fact that in the Agent’s reasonable opinion
is material and is required to be stated therein or is necessary to make the statements therein not misleading.


 


(d)              
Material Changes. Except as contemplated in the Prospectus,
or disclosed in the Company’s reports filed with the Commission, there shall not have been any material adverse change, on a consolidated
basis, in the authorized capital stock of the Company or any Material Adverse Effect, or any development that could reasonably be expected
to cause a Material Adverse Effect, or a downgrading in or withdrawal of the rating assigned to any of the Company’s securities
(other than asset backed securities) by any rating organization or a public announcement by any rating organization that it has under
surveillance or review its rating of any of the Company’s securities (other than asset backed securities), the effect of which,
in the case of any such action by a rating organization described above, in the reasonable judgment of the Agent (without relieving the
Company of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with
the offering of the Placement Shares on the terms and in the manner contemplated in the Prospectus.


 


(e)              
Representation Certificate. The Agent shall have received
the certificate required to be delivered pursuant to Section 7(l) on or before the date on which delivery of such certificate
is required pursuant to Section 7(l).


 


(f)               
Legal Opinion. The Agent shall have received the opinions
of Company Special Counsel required to be delivered pursuant to Section 7(m) on or before the date on which such delivery
of such opinion is required pursuant to Section 7(m).


 


(g)              
Comfort Letter. The Agent shall have received the Comfort
Letters required to be delivered pursuant to Section 7(n) on or before the date on which such delivery of such Comfort Letters
is required pursuant to Section 7(n).


 


(h)              
Secretary’s Certificate. On the date of this Agreement,
the Agent shall have received a certificate, signed on behalf of the Company by its corporate Secretary, in form and substance satisfactory
to the Agent and its counsel.


 


(i)                
No Suspension. Trading in the Common Stock shall not
have been suspended on the Exchange, and the Common Stock shall not have been delisted from the Exchange.


 


(j)                
Other Materials. On each date on which the Company is required
to deliver a certificate pursuant to Section 7(l), the Company shall have furnished to the Agent such appropriate further
information, certificates and documents as the Agent may reasonably request. All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof. The Company will furnish the Agent with such conformed copies of such opinions, certificates,
letters and other documents as the Agent shall reasonably request.


 






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(k)              
Securities Act Filings Made. All filings with the Commission
required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice hereunder shall have been
made within the applicable time period prescribed for such filing by Rule 424.


 


(l)                
Approval for Listing. The Placement Shares shall either
have been approved for listing quotation on the Exchange, subject only to notice of issuance, or the Company shall have filed an application
for listing of the Placement Shares on the Exchange at, or prior to, the issuance of any Placement Notice.


 


(m)            
No Termination Event. There shall not have occurred
any event that would permit the Agent to terminate this Agreement pursuant to Section 12(a).


 


10.             
Indemnification and Contribution.


 


(a)              
Company Indemnification. The Company agrees to indemnify
and hold harmless the Agent, its affiliates and their respective partners, members, directors, officers, employees and agents and each
person, if any, who controls the Agent or any affiliate within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act as follows:


 


(i)                
against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto),
or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein
not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact included in any related Issuer Free
Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;


 


(ii)             
against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced
or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission;
provided that (subject to Section 10(d) below) any such settlement is effected with the written consent of the Agent, which
consent shall not unreasonably be delayed or withheld; and


 


(iii)           
against any and all expense whatsoever, as incurred (including the reasonable and documented fees and disbursements of counsel),
reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above, provided,
however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made solely in reliance upon and in conformity with written information
furnished to the Company by the Agent expressly for use in the Registration Statement (or any amendment thereto), or in any related Issuer
Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto).


 






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(b)              
Agent Indemnification. Agent agrees to indemnify and hold
harmless the Company and its directors and each officer of the Company who signed the Registration Statement, and each person, if any,
who (i) controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or
(ii) is controlled by or is under common control with the Company against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 10(a), as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with information relating to the Agent and furnished to the Company in writing
by the Agent expressly for use therein.


 


(c)              
Procedure. Any party that proposes to assert the right to
be indemnified under this Section 10 will, promptly after receipt of notice of commencement of any action against such party
in respect of which a claim is to be made against an indemnifying party or parties under this Section 10, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying
party will not relieve the indemnifying party from (i) any liability that it might have to any indemnified party otherwise than under
this Section 10 and (ii) any liability that it may have to any indemnified party under the foregoing provision of this
Section 10 unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement,
the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified
party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying
party similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party, and after
notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its
own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party
unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the
indemnified party has reasonably concluded (based on written advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential
conflict exists (based on written advice of counsel to the indemnified party) between the indemnified party and the indemnifying party
(in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party)
or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the reasonable and documented fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties
shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements
and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party
or parties. All such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly after the indemnifying
party receives a written invoice relating to fees, disbursements and other charges in reasonable detail. An indemnifying party will not,
in any event, be liable for any settlement of any action or claim effected without its written consent. No indemnifying party shall,
without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending
or threatened claim, action or proceeding relating to the matters contemplated by this Section 10 (whether or not any indemnified
party is a party thereto), unless such settlement, compromise or consent (1) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation, proceeding or claim and (2) does not include a statement
as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.


 






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(d)              
Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 10 is
applicable in accordance with its terms but for any reason is held to be unavailable from the Company or the Agent, the Company and the
Agent will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, but
after deducting any contribution received by the Company from persons other than the Agent, such as persons who control the Company within
the meaning of the Securities Act, officers of the Company who signed the Registration Statement and directors of the Company, who also
may be liable for contribution) to which the Company and the Agent may be subject in such proportion as shall be appropriate to reflect
the relative benefits received by the Company on the one hand and the Agent on the other hand. The relative benefits received by the Company
on the one hand and the Agent on the other hand shall be deemed to be in the same proportion as the total net proceeds from the sale of
the Placement Shares (before deducting expenses) received by the Company bear to the total compensation received by the Agent (before
deducting expenses) from the sale of Placement Shares on behalf of the Company. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect
not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and
the Agent, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense or damage,
or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by the Company or the Agent, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the
Agent agree that it would not be just and equitable if contributions pursuant to this Section 10(d) were to be determined
by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect
thereof, referred to above in this Section 10(d) shall be deemed to include, for the purpose of this Section 10(d),
any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action
or claim to the extent consistent with Section 10(c) hereof. Notwithstanding the foregoing provisions of this Section 10(d),
the Agent shall not be required to contribute any amount in excess of the commissions received by it under this Agreement and no person
found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 10(d), any person who
controls a party to this Agreement within the meaning of the Securities Act, and any officers, directors, partners, employees or agents
of the Agent, will have the same rights to contribution as that party, and each officer of the Company who signed the Registration Statement
will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution,
promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be
made under this Section 10(d), will notify any such party or parties from whom contribution may be sought, but the omission
to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have
under this Section 10(d) except to the extent that the failure to so notify such other party materially prejudiced the substantive
rights or defenses of the party from whom contribution is sought. Except for a settlement entered into pursuant to the last sentence of
Section 10(c) hereof, no party will be liable for contribution with respect to any action or claim settled without its written
consent if such consent is required pursuant to Section 10(c) hereof.


 






    30 


     


    

 


11.             
Additional Covenants.


 


(a)              
Representations and Covenants of the Agent. The Agent represents
and warrants that it is duly registered as a broker-dealer under FINRA, the Exchange Act and the applicable statutes and regulations of
each state in which the Placement Shares will be offered and sold, except such states in which the Agent is exempt from registration or
such registration is not otherwise required. The Agent shall continue, for the term of this Agreement, to be duly registered as a broker-dealer
under FINRA, the Exchange Act and the applicable statutes and regulations of each state in which the Placement Shares will be offered
and sold, except such states in which the Agent is exempt from registration or such registration is not otherwise required, during the
term of this Agreement. The Agent shall comply with all applicable law and regulations in connection with the transactions contemplated
by this Agreement, including the issuance and sale through the Agent of the Placement Shares.


 


(b)              
Representations and Agreements to Survive Delivery. The
indemnity and contribution agreements contained in Section 10 of this Agreement and all representations and warranties of
the Company herein or in certificates delivered pursuant hereto shall survive, as of their respective dates, regardless of (i) any
investigation made by or on behalf of the Agent, any controlling persons, or the Company (or any of their respective officers, directors
or controlling persons), (ii) delivery and acceptance of the Placement Shares and payment therefor or (iii) any termination
of this Agreement.


 






    31 


     


    

 


12.             
Termination.


 


(a)              
The Agent may terminate this Agreement, by written notice to the Company, as hereinafter specified at any time (1) if there
has been, since the time of execution of this Agreement or since the date as of which information is given in the Prospectus, any Material
Adverse Effect, or any development that is reasonably likely to have a Material Adverse Effect or, in the sole judgment of the Agent,
is material and adverse and makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of
the Placement Shares, (2) if there has occurred any material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which
is such as to make it, in the judgment of the Agent, impracticable or inadvisable to market the Placement Shares or to enforce contracts
for the sale of the Placement Shares, (3) if trading in the Common Stock has been suspended or limited by the Commission or the Exchange,
or if trading generally on the Exchange has been suspended or limited, or minimum prices for trading have been fixed on the Exchange,
(4) if any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market shall have occurred
and be continuing, (5) if a major disruption of securities settlements or clearance services in the United States shall have occurred
and be continuing, or (6) if a banking moratorium has been declared by either U.S. Federal or New York authorities. Any such termination
shall be without liability of any party to any other party except that the provisions of Section 8 (Expenses), Section 10
(Indemnification), Section 11 (Survival of Representations), Section 17 (Governing Law and Time; Waiver of Jury
Trial) and Section 18 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination.
If the Agent elects to terminate this Agreement as provided in this Section 12(a), the Agent shall provide the required notice
as specified in Section 13.


 


(b)              
The Company shall have the right, by giving five (5) days’ written notice as hereinafter specified, to terminate this Agreement
in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 8, Section 10, Section 11, Section 17
and Section 18 hereof shall remain in full force and effect notwithstanding such termination.


 


(c)              
The Agent shall have the right, by giving five (5) days’ written notice as hereinafter specified, to terminate this Agreement
in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 8, Section 10, Section 11, Section 17
and Section 18 hereof shall remain in full force and effect notwithstanding such termination.


 


(d)              
Unless earlier terminated pursuant to this Section 12, this Agreement shall automatically terminate upon the issuance
and sale of all of the Placement Shares through the Agent on the terms and subject to the conditions set forth herein; provided that the
provisions of Section 8, Section 10, Section 11, Section 17 and Section 18
hereof shall remain in full force and effect notwithstanding such termination.


 


(e)              
This Agreement shall remain in full force and effect unless terminated pursuant to Sections 12(a), (b), (c),
or (d) above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement
shall in all cases be deemed to provide that Section 8, Section 10, Section 11, Section 17
and Section 18 shall remain in full force and effect.


 






    32 


     


    

 


(f)               
Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however, that
such termination shall not be effective until the close of business on the date of receipt of such notice by the Agent or the Company,
as the case may be. If such termination shall occur prior to the Settlement Date for any sale of Placement Shares, such Placement Shares
shall settle in accordance with the provisions of this Agreement.


 


(g)              
Subject to the additional limitations set forth in Section 8 of this Agreement, in the event of termination of this
Agreement prior to the sale of any Placement Shares, the Agent shall be entitled only to reimbursement of its out-of-pocket expenses actually
incurred.


 


13.             
Notices. All notices or other communications required or
permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing, unless otherwise specified,
and if sent to the Agent, shall be delivered to:


 


Roth Capital Partners, LLC


888 San Clemente


Newport Beach, California 92660


Fax No.: (949) 720-7223


Attention: Alexander Montano


Managing Director


 


with a copy to


 


Jones & Keller, P.C.


1675 Broadway, 26th Floor


Denver, Colorado 80202


Attention: Reid A. Godbolt, Esq.


    Adam J. Fogoros,
Esq.


E-mail: rgodbolt@joneskeller.com


     adamf@joneskeller.com


 


and if to the Company, shall be delivered to:


 


Schmitt Industries, Inc.


2765 N.W. Nicolai Street


Portland, Oregon 97210


Attention: Michael R. Zapata


E-mail: mike@amplehills.com


 






    33 


     


    

 


with a copy to:


 


Olshan Frome Wolosky LLP


1325 Avenue of the Americas


New York, New York 10019


Attention: Kenneth A. Schlesinger,
Esq.


E-mail: kschlesinger@olshanlaw.com


 


Each party to this Agreement
may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose. Each
such notice or other communication shall be deemed given (i) when delivered personally or by verifiable facsimile transmission (with
an original to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the
next succeeding Business Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier and
(iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested,
postage prepaid).


 


An electronic communication
(“Electronic Notice”) shall be deemed written notice for purposes of this Section 13 if sent to the electronic
mail address specified by the receiving party under separate cover. Electronic Notice shall be deemed received at the time the party sending
Electronic Notice receives verification of receipt by the receiving party. Any party receiving Electronic Notice may request and shall
be entitled to receive the notice on paper, in a nonelectronic form (“Nonelectronic Notice”) which shall be sent to
the requesting party within ten (10) days of receipt of the written request for Nonelectronic Notice.


 


14.             
Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Company and the Agent and their respective successors and the affiliates, controlling persons, officers
and directors referred to in Section 10 hereof. References to any of the parties contained in this Agreement shall be deemed
to include the successors and permitted assigns of such party. Nothing in this Agreement, express or implied, is intended to confer upon
any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement, except as expressly provided in this Agreement. Neither party may assign its rights or obligations
under this Agreement without the prior written consent of the other party; provided, however, that the Agent may assign its rights and
obligations hereunder to an affiliate thereof (which is a registered broker-dealer) without obtaining the Company’s consent.


 


15.             
Adjustments for Stock Splits. The parties acknowledge and
agree that all share-related numbers contained in this Agreement shall be adjusted to take into account any stock split, stock dividend
or similar event effected with respect to the Placement Shares.


 


16.             
Entire Agreement; Amendment; Severability. This Agreement
(including all schedules and exhibits attached hereto and Placement Notices issued pursuant hereto) constitutes the entire agreement and
supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard
to the subject matter hereof. Neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed
by the Company and the Agent. In the event that any one or more of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction, then such provision shall be
given full force and effect to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and
provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only
to the extent that giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance with the
intent of the parties as reflected in this Agreement.


 






    34 


     


    

 


17.             
GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS
OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, 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.


 


18.             
CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES
NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT
SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.
EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING
BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES
TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING
CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.


 


19.             
Use of Information. The Agent may not use any information
gained in connection with this Agreement and the transactions contemplated by this Agreement, including due diligence, to advise any party
with respect to transactions not expressly approved by the Company.


 


20.             
Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery
of an executed Agreement by one party to the other may be made by facsimile or by email delivery of an executed Agreement as an attachment
in .pdf format.


 


21.             
Effect of Headings. The section and Exhibit headings
herein are for convenience only and shall not affect the construction hereof.


 






    35 


     


    

 


22.             
Permitted Free Writing Prospectuses. The Company represents,
warrants and agrees that, unless it obtains the prior consent of the Agent, which consent shall not be unreasonably withheld, conditioned
or delayed, and the Agent represents, warrants and agrees that, unless it obtains the prior consent of the Company, which consent shall
not be unreasonably withheld, conditioned or delayed, it has not made and will not make any offer relating to the Placement Shares that
would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined
in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Agent or by the Company,
as the case may be, is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents and warrants
that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,”
as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free
Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.


 


23.             
Absence of Fiduciary Relationship.


 


The Company acknowledges and
agrees that:


 


(a)              
the Agent is acting solely as agent in connection with the public offering of the Placement Shares and in connection with each
transaction contemplated by this Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between
the Company or any of its respective affiliates, stockholders (or other equity holders), creditors or employees or any other party, on
the one hand, and the Agent, on the other hand, has been or will be created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether or not the Agent has advised or is advising the Company on other matters, and the Agent has no obligation
to the Company with respect to the transactions contemplated by this Agreement except the obligations expressly set forth in this Agreement;


 


(b)              
it is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions
contemplated by this Agreement;


 


(c)              
the Agent has not provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this
Agreement and it has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;


 


(d)              
it is aware that the Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ
from those of the Company and the Agent has no obligation to disclose such interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship or otherwise; and


 


(e)              
it waives, to the fullest extent permitted by law, any claims it may have against the Agent for breach of fiduciary duty or alleged
breach of fiduciary duty in connection with the sale of Placement Shares under this Agreement and agrees that the Agent shall not have
any liability (whether direct or indirect, in contract, tort or otherwise) to it in respect of such a fiduciary duty claim or to any person
asserting a fiduciary duty claim on its behalf or in right of it or the Company, employees or creditors of Company, other than in respect
of the Agent’s obligations under this Agreement and to keep information provided by the Company to the Agent and the Agent’s
counsel confidential to the extent not otherwise publicly-available.


 






    36 


     


    

 


24.             
Definitions.


 


As used in this Agreement,
the following terms have the respective meanings set forth below:


 


“Applicable Time”
means (i) each Representation Date, (ii) the time of each sale of any Placement Shares pursuant to this Agreement, and (iii) each
Settlement Date.


 


“Business Day”
shall mean any day on which the Exchange and commercial banks in the City of New York are open for business.


 


“Issuer Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Placement Shares
that (1) is required to be filed with the Commission by the Company, (2) is a “road show” that is a “written
communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission, or (3) is
exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Placement Shares or of the offering that
does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be
filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities Act Regulations.


 


“Rule 172,”
“Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),” “Rule 430B,”
and “Rule 433” refer to such rules under the Securities Act Regulations.


 


“Trading Day”
means any day on which shares of Common Stock are purchased and sold on the Exchange.


 


All references in this Agreement
to financial statements and schedules and other information that is “contained,” “included” or “stated”
in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information that is incorporated by reference in the Registration Statement or the Prospectus,
as the case may be.


 


All references in this Agreement
to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy
filed with the Commission pursuant to EDGAR; all references in this Agreement to any Issuer Free Writing Prospectus (other than any Issuer
Free Writing Prospectuses that, pursuant to Rule 433, are not required to be filed with the Commission) shall be deemed to include
the copy thereof filed with the Commission pursuant to EDGAR; and all references in this Agreement to “supplements” to the
Prospectus shall include, without limitation, any supplements, “wrappers” or similar materials prepared in connection with
any offering, sale or private placement of any Placement Shares by the Agent outside of the United States.


 


[Signature Page Follows]


 






    37 


     


    

 


If the foregoing correctly
sets forth the understanding between the Company and the Agent, please so indicate in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement between the Company and the Agent.


 


	 	 	Very truly yours,
	 	 	 	 
	 	 	SCHMITT INDUSTRIES, INC.
	 	 	 	 
	 	 	By:	/s/ Philip Bosco
	 	 	 	Name: Philip Bosco
	 	 	 	Title: Chief Financial Officer & Treasurer
	 	 	 	 
	ACCEPTED as of the date first-above written:	 	 
	 	 	 	 
	ROTH CAPITAL PARTNERS, LLC	 	 
	 	 	 	 
	By:	/s/ Alexander G. Montano	 	 
	 	Name: Alexander G. Montano	 	 
	 	Title: Managing Director	 	 



 






    [Signature
                                            page to Sales Agreement]


     


    

 


Schedule
1 


 


________________________


 


FORM OF PLACEMENT NOTICE


__________________________


 


	From:	SCHMITT INDUSTRIES, INC.
	 	 
	To:	ROTH CAPITAL PARTNERS, LLC
	 	 
	Attention:	RothECM@roth.com
	 	Energy@roth.com
	 	 
	Subject:	Placement Notice
	 	 
	Date:	[●], 20[●]



 


Gentlemen:


 


Pursuant to the terms and
subject to the conditions contained in the Sales Agreement between Schmitt Industries, Inc., an Oregon corporation (the “Company”),
and Roth Capital Partners, LLC (the “Agent”), dated May 20, 2022,
the Company hereby requests that the Agent sell up to [●] shares of the Company’s common stock, no par value per share, at
a minimum market price of $[●] per share, during the time period beginning at [●]:00 a.m. Eastern time on [●],
20[●], and ending [●]:00 p.m. Eastern time on [●], 20[●].


 



     


     


    

 


Schedule
2 


 


__________________________


 


Compensation


__________________________


 


The Company shall pay to the Agent in cash, upon
each sale of Placement Shares pursuant to this Agreement, an amount equal to 3.0% of the gross proceeds from each sale of Placement Shares.


 






     


     


    

 


Schedule
3 


 


__________________________


 


Notice
Parties


 


__________________________


 


The Company


 


mike@amplehills.com


 


pbosco@schmitt-ind.com


 


azyngier@batutaadvisors.com


 


The Agent


 


RothECM@roth.com


 


Energy@roth.com


 






     


     


    

 


Exhibit 7(l)


 


Form of Representation Date Certificate


 


[●], 20[●]


 


This Representation Date Certificate
(this “Certificate”) is executed and delivered in connection with Section 7(l)
of the Sales Agreement (the “Agreement”), dated May 20, 2022,
and entered into between Schmitt Industries, Inc., an Oregon corporation (the “Company”), and Roth Capital Partners,
LLC. All capitalized terms used but not defined herein shall have the meanings given to such terms in the Agreement.


 


The undersigned, a duly appointed
and authorized officer of the Company, having made all necessary inquiries to establish the accuracy of the statements below and having
been authorized by the Company to execute this certificate, hereby certifies as follows:


 


1.                 
As of the date of this Certificate: (i) the Registration Statement does not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; (ii)
neither the Registration Statement nor the Prospectus contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading; and (iii) no event has occurred as a result of which it is necessary to amend or supplement the Prospectus in order
to make the statements therein not untrue or misleading.


 


2.                 
Each of the representations and warranties of the Company contained in the Agreement were, when originally made, and are, as of
the date of this Certificate, true and correct in all material respects.


 


3.                 
Each of the covenants required to be performed by the Company in the Agreement on or prior to the date of the Agreement, this Representation
Date, and each such other date as set forth in the Agreement, has been duly, timely and fully performed in all material respects and each
condition required to be complied with by the Company on or prior to the date of the Agreement, this Representation Date, and each such
other date as set forth in the Agreement or in the Waivers has been duly, timely and fully complied with in all material respects.


 


4.                 
Subsequent to the date of the most recent financial statements in the Prospectus, there has been no Material Adverse Effect.


 


5.                 
No stop order suspending the effectiveness of the Registration Statement or of any part thereof has been issued, and no proceedings
for that purpose have been instituted or are pending or threatened by any securities or other governmental authority (including, without
limitation, the Commission).


 






     


     


    

 


The undersigned has executed
this Representation Date Certificate as of the date first written above.


 


	 	Schmitt Industries, Inc.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:



 


 


[Signature page to Representation Date Certificate]