SCHMITT INDUSTRIES INC
EXHIBIT 10.2
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<BR></FONT><FONT SIZE=2><B>Exhibit 10.2    <BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp; </FONT> <FONT SIZE=2><B>Agreement  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This agreement was entered into effective December&nbsp;31, 1999 between David W. Case and Schmitt Industries,&nbsp;Inc. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As
David Case was issued 192,500 common stock shares of Schmitt Industries Common Stock on January&nbsp;5, 1999 by way of an exercise of an existing Non-qualified Stock
Option and, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;David
W. Case provided to Schmitt Industries,&nbsp;Inc. at that time a note for $282,975 due January&nbsp;5, 2001 and, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
note received from David W. Case was secured by the shares issued as a result of the exercise of the Non-qualified Stock Options and, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Schmitt
Industries, Inc. holds the certificate evidencing those shares until the note agreement is paid in full. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Now
the parties wish to terminate the transaction, Case wishes to return the shares to Schmitt and Schmitt will cancel and return the note to Case upon receipt of the Shares. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
Company will cancel the shares and it is agreed the option rights of Case have lapsed. </FONT></P>

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<TD WIDTH="46%"><FONT SIZE=2>David W. Case</FONT></TD>
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<TD WIDTH="46%"><FONT SIZE=2>Robert C. Thompson, CFO/Treasurer<BR>
Schmitt Industries, Inc.</FONT></TD>
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