Exhibit 10.1


 


AGREEMENT


 


THIS AGREEMENT
(“Agreement”) is made and entered into effective as of the 1st day of
June 2009 (the “Effective Date”) among NORTHERN TECHNOLOGIES INTERNATIONAL
CORPORATION, a Delaware corporation (“NTIC”), and DAK ENGINEERING, LLC, a North
Dakota limited liability company (“DAK”), for consulting with respect to the
expansion of NTIC’s business.


 


RECITALS:


 


A.                                   NTIC is engaged in the business of
owning, developing and distributing certain technologies and products
throughout the world, including, but not limited to, corrosion-inhibiting
technologies and products.  NTIC
commercially exploits its technologies and products through, among other
things, entering into joint ventures throughout the world and licensing such
technologies and products to these joint ventures for ultimate sale.


 


B.                                     DAK provides consulting services in the
area of chemistry, technology development, supplier technical issues,
production issues, product performance characterization, and other forms of
commercializing intellectual property rights.


 


C.                                     Donald A. Kubik, as of the date of this
Agreement, has retired from being an Executive Officer and employee of NTIC,
and is a Principal Officer and sole owner of DAK.


 


D.                                    NTIC desires to engage DAK to render
certain consulting services and DAK desires to accept such engagement, all upon
the terms and conditions set forth herein. 
In performing its services hereunder, DAK will have access to NTIC’s
confidential business and technical information that is being developed by NTIC
at substantial expense, and that NTIC wants reasonable protection of its
confidential business and technical information.


 


NOW, THEREFORE, in
consideration of the mutual covenants and promises contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:


 


1.                                       CONSULTING ARRANGEMENT WITH DAK. 
Commencing as of the Effective Date and continuing until this Agreement
is terminated in accordance with the terms hereof, NTIC hereby engages DAK to
provide consulting services to NTIC and DAK hereby agrees to provide such
services in accordance with and subject to all of the terms and conditions of
this Agreement.  In providing such services,
DAK shall not utilize the services of any other person or entity in providing
unless pre-approved in writing by NTIC. 
NTIC hereby approves Donald A Kubik as pre-approved to perform such
services.


 


2.                                       SERVICES.  DAK shall
provide the expertise of its Principal Officer, Donald A Kubik, to work with
NTIC employees with respect to specific projects designated and approved by
NTIC’s Executive Management and Audit Committee.  DAK shall maintain close contact with NTIC’s
Executive Management and shall provide, at a minimum, quarterly reports of his
activities on behalf of NTIC to NTIC’s Management and Audit Committee. The
initial set of DAK projects and objectives is set forth in Appendix 1. Until
further notice, DAK shall coordinate with and receive instructions from NTIC’s
Zerust® Marketing Manager or such other representative as may be designated by
NTIC with respect to the services to be provided by DAK to NTIC hereunder.


 


3.                                       CONSULTING FEES AND COMMISSIONS TO DAK. 
Commencing on the Effective Date of this Agreement and during the term
of this Agreement until it is terminated pursuant to Section 6 hereof,
NTIC shall pay to DAK a monthly fee (“Monthly Fee”) of seven thousand
two-hundred and fifty and 00/100 Dollars ($7,250.00) in consideration for all
consulting services rendered by DAK hereunder. This Monthly Fee is payable in
advance on the first day of each month in a manner as reasonably designated by
DAK. In the event NTIC requests DAK representatives to travel in furtherance of
the purposes of this Agreement, NTIC shall reimburse DAK for all reasonable
out-of-pocket travel expenses incurred in connection therewith, which expenses
shall be determined and approved in advance by NTIC on a case-by-case
basis.  Any such reimbursements by NTIC
shall be made to DAK upon submission by DAK to NTIC of an expense report with
appropriate receipts, in accordance with customary NTIC policies.


 

















 


In the event that DAK develops new products and/or
technologies which result in commercial technologies and/or products that are
considered “Work for Hire” work product, with all resulting intellectual
property rights (if any) being transferred to the ownership of NTIC pursuant to
Section 8 of this Agreement and otherwise complies with Section 8, 9
and 10 of this Agreement, then, NTIC will pay DAK 2% of any “Net Operating
Profit” (as defined below) generated by NTIC from the sale of any such product
and/or technology as a commission for seven (7) years from the date of
first sale of any such product and/or technology; provided, however, that no
commissions shall be due and payable hereunder unless and until the Net Sales
of any such product and/or technology for any fiscal year exceed $500,000; and
provided, further that no amounts shall be due and payable by NTIC to DAK
hereunder after seven (7) years after the termination of this Agreement.


 


“Net Operating Profit” is
hereby defined as Net Sales less Cost of Goods Sold, in each case as determined
to the extent practicable in accordance with U.S. generally accepted accounting
principles and in each case as attributed to the products and/or technologies
developed by DAK and assigned to NTIC hereunder.


 


4.                                       INDEPENDENT CONTRACTOR STATUS OF DAK. 
Notwithstanding anything contained herein to the contrary under this
Agreement, DAK is and shall act as, and for all purposes shall be deemed to be,
an independent contractor of NTIC.  No
contract of partnership, joint venture or any other relationship except that of
independent contractor shall be deemed to exist between NTIC and DAK.  Neither DAK nor Donald A. Kubik shall be entitled
or eligible to participate in any benefits or privileges given or extended by
NTIC to its employees, or be deemed an employee of NTIC for purposes of federal
or state withholding taxes, F.I.C.A. taxes or unemployment benefits, or
otherwise, and DAK will make all required F.I.C.A. and unemployment
contributions due on behalf of itself or its employees.  DAK shall have sole and exclusive
responsibility for the payment of all federal, state and local income taxes and
all other taxes with respect to any compensation provided by NTIC to DAK
hereunder. DAK shall not bind NTIC or incur any obligation or liability on
behalf of NTIC, including but not limited to financial obligations, promises of
equity in NTIC technology projects or joint ventures, or hiring of employees.


 


5.                                       RESOURCE AVAILABILITY AND ALLOCATION. In order to facilitate DAK in his
consulting services to NTIC hereunder, NTIC shall grant DAK the use of various
NTIC resources, which shall be subject to change by NTIC without notice to DAK,
at NTIC’s Circle Pines office location in connection with the rendering of
services by DAK to NTIC hereunder:


 


·                  Phone and computer access.


·                  Qualified lab personnel time (specifically Barbara Nygaard) to aid in
the conduct of experiments. Such personnel and time allocation shall be
assigned by NTIC’s Zerust® Industrial Division Technical Director.


·                  NTIC research material, including confidential NTIC documents such as
lab log books, formulations, etc.


·                  Any other resource and expenditure shall be approved on a case by case
basis by NTIC.


 


6.                                       TERM AND TERMINATION. 
This Agreement shall commence on the date hereof and shall continue on a
quarter to quarter basis until either NTIC, on the one hand, or DAK, on the
other hand, gives a written termination notice to the other, which notice shall
be given at least thirty (30) days prior to the end of a given fiscal quarter.  NTIC also may terminate this Agreement
immediately on written notice to DAK for cause, including (without limitation)
(i) dishonesty, fraud, misrepresentation, deliberate injury or attempted
injury, by DAK or any employees or agents of DAK and in each case related to
NTIC or its business, (ii) any unlawful or criminal activity by DAK or any
employees or agents of DAK, (iii) any willful breach of duty or habitual
neglect of duty or (iv) the breach by DAK of any provision of this
Agreement.


 


7.                                       EFFECTIVE ON TERMINATION. 
Except as set forth in this Agreement, upon termination, the parties
shall have no obligations to each other hereunder, other than NTIC’s obligation
to pay any earned but unpaid Monthly Fees as well as any commissions as set
forth in Section 3 above and DAK’s covenants in Sections 8, 9 and 10 of
this Agreement, which provisions shall survive the termination of this
Agreement.


 


8.                                       INVENTIONS.


 


(a)                                  Definition.  “Inventions”
as used in this Section 8, means any inventions, discoveries, improvements,
ideas, concepts, drawings, designs, patents, patent applications,
specifications, trade secrets, 


 

















 


prototypes, techniques,
processes, know-how and documentation (whether or not they are in writing or
reduced to practice) or works of authorship (whether or not they can be
patented or copyrighted) (i) that DAK makes, authors, or conceives (either
alone or with others), within the scope of the services provided to NTIC
hereunder and (ii) that concern or are related to NTIC’s business or to NTIC’s
actual or demonstrably anticipated research and development.


 


(b)                                 NTIC’s Rights. 
DAK agrees that all Inventions (as defined in Section 8(a)), if
any, made by DAK during the term of this Agreement and for six (6) months
thereafter will be NTIC’s sole and exclusive property, and to the extent
applicable, shall be deemed to be “works for hire” under the copyright laws of
the United States.  DAK will, with
respect to any Invention:


 


(i)                                     keep current, accurate, and complete
records, which will belong to NTIC;


 


(ii)                                  promptly and fully disclose the existence
and describe the nature of such Invention to NTIC in writing (and without
request);


 


(iii)                               to the extent exclusive title and/or
ownership rights may not originally vest in NTIC, assign (and DAK does hereby
assign, transfer and convey) to NTIC all of DAK’s rights, title and interest to
such Invention, along with any application DAK makes for patents or copyrights,
and any patents or copyrights granted to DAK in any country, pertaining to such
Invention;


 


(iv)                              acknowledge and deliver promptly to NTIC
any written instruments, and perform any other acts necessary in NTIC’s opinion
to preserve property rights in such Invention against forfeiture, abandonment
or loss and to obtain and maintain patents and/or copyrights on any Inventions
and to vest the entire right and title to such Invention in NTIC.  Such execution and assistance shall be at no
charge to NTIC, but at NTIC’s expense and NTIC shall reimburse DAK for
reasonable out-of-pocket expenses incurred; and


 


(v)                                 perform any other acts necessary in
NTIC’s opinion to preserve property rights in the Invention against forfeiture,
abandonment or loss and to obtain and maintain letters patent and/or copyrights
on the Invention and to vest the entire right and title to such Invention in
NTIC.  With respect to any obligations
performed by DAK under this Section 8 following termination of this
Agreement, NTIC will pay or reimburse all reasonable out-of-pocket expenses.


 


(c)                                  Presumption. 
In the event of any dispute, arbitration or litigation concerning
whether an invention, improvement or discovery made or conceived by DAK is the
property of NTIC, such invention, improvement or discovery will be presumed the
property of NTIC and the DAK will bear the burden of establishing otherwise.


 


(d)                                 Definitions. 
To the extent that any of the Inventions qualifies as “work made for
hire” as defined in 17 U.S.C. §
101 (1976), as amended, such intellectual property will constitute “work made
for hire” and, as such, will be the exclusive property of NTIC.


 


(e)                                  Reversion of Ownership to Certain
Inventions NTIC Decides Not to Pursue. 
If the Chief Executive Officer of NTIC formally decides on behalf of
NTIC not to pursue development or commercialization of a particular unpatented
Invention (as defined in Section 8(a) and assigned to NTIC
hereunder), DAK will have the right to require, upon DAK’s formal request in
writing, that NTIC assign back to DAK such Invention; provided, however, that
in the event NTIC has spent resources in excess of $20,000 pursuing the
development or commercialization of such Invention, NTIC will have the right to
condition any such assignment of such Invention back to DAK upon the payment to
NTIC by DAK of reasonable compensation in consideration for such assignment.


 


9.                                       CONFIDENTIAL INFORMATION. 
For the purposes hereof, the term “Confidential Information” means
information:  (a) disclosed to or
actually known by DAK, (b) not generally known outside NTIC, and
(c) that relates to the business of NTIC or any of its affiliates (including
any joint venture).  The parties agree
that Confidential Information includes, but is not limited to, the products and
services of NTIC or any of its affiliates (including any joint venture), all of
NTIC’s technology and other technical information such as designs, trade
secrets, know-how, methods and materials, all marketing information, business
strategies, pricing information, customer lists, and so forth.  DAK recognizes and acknowledges that NTIC
develops Confidential Information, that DAK may develop Confidential
Information for NTIC, and that DAK has previously learned of and will continue
to learn of the Confidential Information. 
DAK and NTIC further recognize and acknowledge that Confidential 


 

















 


Information is a valuable, special and unique asset of
NTIC and is the sole property of NTIC. 
As a result, both during the term of this Agreement and thereafter, DAK
shall not, without the prior written consent of NTIC, for any reason, either
directly or indirectly, divulge to any third party or use for their own
benefit, or for any other purpose other than the exclusive benefit of NTIC, any
Confidential Information.


 


10.                                 NON-COMPETITION/NON-SOLICITATION.


(a)                                  Each of Donald A. Kubik and DAK
acknowledge that NTIC devotes substantial resources to develop its business and
its practices, methods, trade secrets, know-how, services, products and
customers.  Each of Donald A. Kubik, DAK
and NTIC further acknowledge that NTIC would be unfairly and irreparably harmed
if Donald A. Kubik and/or DAK competes with NTIC.  Therefore, each of Donald A. Kubik and DAK
agree that during the term of this Agreement and for a period of three
(3) years thereafter, each of Donald A. Kubik and DAK shall not, directly
or indirectly, whether alone or in association with others, whether as
principal, agent, partner, member, manager or in any other capacity:  (a) compete with NTIC or its affiliates
(including any joint venture) in any geographic market in which it has done
business during the term of this Agreement, (b) cause or seek to cause any
client, customer, or supplier of NTIC or any of its affiliates (including any
joint venture) to cease or alter its, or not enter into a, relationship with
NTIC or a NTIC affiliate, or (c) cause or seek to cause any employee, agent,
or contractor of NTIC or any of its affiliates (including any joint venture) to
cease or alter such employee’s, agent’s or contractor’s relationship with NTIC
or its affiliate.  The restricted period
set forth in the preceding sentence will be extended for a period equal to the
duration of any breach of the preceding restrictive covenants.  NTIC recognizes DAK’s right to earn a
living.  Consequently, should the closing
sale price of NTIC’s common stock drop to $2.00 per share (as reported on the
NASDAQ Stock Market or such other principal exchange or market on which NTIC’s
common stock is then listed or traded) or less for a continuous six
(6) month period, then the restrictions stated above in this
Section 10(a) shall be null and void. 
In addition, the restrictions contained in this
Section 10(a) of this Agreement will not prevent DAK or Donald A.
Kubik from accepting employment with a large diversified organization with
separate and distinct divisions that do not compete, directly or indirectly, with
NTIC or any of its affiliates (including any joint venture), as long as prior
to accepting such employment NTIC receives a written assurance from DAK and
Donald A. Kubik, satisfactory to NTIC, to the effect that neither DAK nor
Donald A. Kubik will render any services to any division or business unit that
competes, directly or indirectly, with NTIC or any of its affiliates (including
any joint venture).  During the
restrictive period set forth in Section 10(a), DAK and Donald A. Kubik
will inform any new employer, prior to accepting employment, of the existence
of this Agreement and provide such employer with a copy of this Agreement.  In the event that DAK’s services under the
Agreement terminate for any reason, no additional compensation will be paid for
this non-competition obligation.


 


(b)                                 DAK agrees not to slander or libel NTIC,
its officers, employees, directors or affiliates (including any joint venture)
at any time.


 


11.                                 REMEDIES.  DAK
acknowledges and agrees that by virtue of the special knowledge of NTIC’s business
that DAK shall develop, great loss and irreparable damage would be suffered by
NTIC if DAK should breach or violate any of the terms or provisions of the
covenants and agreements set forth herein. 
DAK further acknowledges and agrees that each such covenant and
agreement is reasonably necessary to protect and preserve NTIC’s
interests.  Therefore, in addition to all
other remedies available at law or in equity, DAK agrees that NTIC shall be
entitled to a temporary restraining order and a permanent injunction (with or
without bond) to prevent a breach of any of the covenants or agreements of DAK
contained herein.


 


12.                                 APPLICATION OF CERTAIN PROVISIONS TO
DAK’S EMPLOYEES AND AGENTS, ETC.  DAK agrees to
inform any of the DAK’s employees, partners, members, owners and affiliates who
provide services to NTIC on behalf of the DAK under this Agreement, of DAK’s
obligations under this Agreement, including, but not limited to, the provisions
of Section 8, 9 and 10, and ensure that all such employees, partners,
members, owners and affiliates have agreed in writing to be bound by the terms
of this Agreement, either by means of an agreement directly with NTIC or
pursuant to an agreement with DAK.


 

















 


13.                                 MISCELLANEOUS.


(a)                                  Compliance with Laws. 
DAK and NTIC will perform their respective obligations under this
Agreement in accordance with all applicable statutes, laws, judgments, writs,
injunctions, decisions, decrees, orders, regulations, ordinances or other
similar authoritative matters of any foreign, federal, state or local
governmental or quasi-governmental, administrative, regulatory or judicial
court, department, commission, agency, board, bureau, instrumentality or other
authority.


 


(b)                                 No Conflicts. 
DAK and NTIC represent and warrant each to the other party that neither
the entering into of this Agreement nor the performance of any of the
representing party’s obligations hereunder will conflict with or constitute a
breach under any obligation of the representing party under any agreement or
contract to which the representing party is a party or any other obligation by
which the representing party is bound. 
Without limiting the foregoing, DAK agrees that at no time will it use
any trade secrets or other intellectual property of any third party while
performing services hereunder.


 


(c)                                  NTIC Policies and Procedures. 
In carrying out its duties under this Agreement, DAK agrees that it and
its employees and agents providing services hereunder, including Donald A.
Kubik, will follow without limitation NTIC’s insider trading policy and code of
ethics and conduct, as such policy and code may be amended or supplemented from
time to time and provided by NTIC to DAK.


 


(d)                                 Notices.  All notices,
requests, consents and other communications required or permitted to be given
hereunder, shall be in writing and shall be deemed to have been given if
delivered personally or sent by e-mail, facsimile, telegram, telefax or telex,
or mailed first class, postage prepaid, by registered or certified mail
(notices sent by telegram, telefax, telex or mailed shall be deemed to have
been given on the date sent), to the parties at the following addresses or at
such other address as either party shall designate by notice in writing to the
other in accordance herewith:


 


(i)                                     If to DAK:

c/o Kubik Bogner Ridl & Selinger Law Firm

PO Box 1173

Dickinson, ND 58602-1173


 


(ii)                                  If to NTIC:


Northern Technologies
International Corporation


4201 Woodland Road,
P.O. Box 69


Circle Pines, MN 55014


Attention:  President and Chief Executive Officer


 


(e)                                  Assignment.  This
Agreement is for services to be provided by DAK and may not be assigned or
transferred, or the duties or services of DAK be performed or provided by any
third party without the prior written consent of NTIC.  This Agreement may not be assigned by NTIC
(by operation of law or otherwise) without the prior written consent of DAK.


 


(f)                                    Binding Effect. 
This Agreement shall be binding upon, and shall inure to the benefit of,
NTIC and its officers, directors, successors and assigns, and DAK and its Principal
Officers, administrators, representatives, successors and permitted assigns,
respectively.


 


(g)                                 Governing Law/Jurisdiction. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota, without application to choice of law
principles.  The parties hereto agree
that the Federal and state courts located in Minneapolis, Minnesota shall be
the exclusive venue and shall have jurisdiction with respect to the enforcement
of any right or remedy of any party hereto.


 


(h)                                 Entire Agreement. 
This Agreement sets forth the entire agreement and understanding of the
parties relating to the provision of consulting services by DAK to NTIC, and
supersedes all prior agreements arrangements and understandings, written or
oral, relating to the subject matter hereof.


 

















 


(i)                                     Amendments; Waivers. 
This Agreement may be amended, modified, superseded, canceled, renewed
or extended, and the terms or covenants hereof may be waived, only by a written
instrument executed by all of the parties hereto, or in the case of a waiver,
by the party against whom the waiver is sought to be enforced, which instrument
specifically refers to this Agreement. 
The failure of any party at any time or times to require compliance with
any provision hereof shall in no manner affect the right of such party at a
later time to enforce the same.  No
waiver by either party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach of any term or covenant contained in this Agreement.


 


(j)                                     Headings/Recitals. 
The headings contained herein are for reference only and shall not in
any way affect the meaning or interpretation of this Agreement.  The Recitals to this Agreement are an
integral part of this Agreement and are incorporated herein by reference.


 


IN WITNESS WHEREOF, the
parties have signed this Agreement effective as of the date first above
written.


 


	
   

  	
  NORTHERN TECHNOLOGIES

  
	
   

  	
  INTERNATIONAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. Patrick Lynch

  
	
   

  	
   

  	
  G. Patrick Lynch

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President &
  CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DAK ENGINEERING, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald Kubik

  
	
   

  	
   

  	
  Donald A. Kubik

  



 


INDIVIDUAL
UNDERTAKING


 


I, Donald A. Kubik, an
individual, hereby acknowledge that I have read and understand the foregoing
Agreement.  Further, I agree, as an
individual, to provide for DAK the agreed services and to be bound by all of
the terms and conditions stated in the said Agreement as fully as if I were a
party thereto.  My agreement shall
continue until the Agreement is fully performed or terminated in accordance
with its terms.


 


 


	
   

  	
  /s/ Donald Kubik

  
	
   

  	
  Donald A. Kubik