**Exhibit 10.1**

 

**PROMISSORY NOTE MODIFICATIONAGREEMENT**

** **

THIS PROMISSORY NOTE MODIFICATION AGREEMENT (“Modification”)is made and entered into on January 31, 2008 by and among NorthernTechnologies International Corporation (collectively “Borrower”) and NATIONALCITY BANK, A NATIONAL BANKING ASSOCIATION (“Bank”).

 

WHEREAS, Bank agreed to lend to Borrower an amountnot to exceed the sum of Six Hundred Thousand and 00/100 Dollars ($600,000.00)(“Loan”), which Loan was evidenced by a certain Commercial Note: Demand Line ofCredit dated December 14, 2006 in the face amount of Six Hundred Thousandand 00/100 Dollars ($600,000.00) (as extended, amended or otherwise modified todate, the “Note”) (the said Note and any other instrument or document given inconnection with or to secure the Loan being collectively referred to as “LoanDocuments”).

 

WHEREAS, the parties hereto desire to modify the Noteas hereinafter provided.

 

NOW, THEREFORE, in consideration of the foregoingpromises and the covenants contained herein, the parties hereto agree asfollows:

 

Liability of Borrower. Borrower hereby ratifies andreconfirms Borrower’s obligations and all liability to Bank under the terms andconditions of the Loan Documents and acknowledges that Borrower has no defensesto or rights of set-off against Borrower’s obligations and all liability toBank thereunder. Borrower further acknowledges that Bank has performed all ofBank’s obligations under the Loan Documents.

 

Modification. The Note is hereby modified to providethat, effective as of January 31, 2008 the face amount of the Note shallbe permanently increased to the sum of Eight Hundred Thousand and 00/100Dollars ($800,000.00).

 

The next payment is due February 15, 2008 andmonthly thereafter as set forth in the above mentioned note. Payments prior tothe first scheduled payment above have been made as evidenced by the books andrecords of Bank.

 

Ratification of Loan Documents. The Loan Documentsare in all respects ratified and confirmed by the parties hereto and incorporatedby reference herein, and each of the Loan Documents and this Modification shallbe read, taken and construed as one and the same instrument. Capitalized termsused herein and not otherwise defined shall have the meanings given to them inthe Note. In the event of any conflict between the terms and provisions of thisModification and the terms and provisions of the Note, the terms and provisionsof this Modification shall control. NOTWITHSTANDING ANY PROVISION OR INFERENCETO THE CONTRARY HEREIN, BORROWER ACKNOWLEDGES THAT THE NOTE IS A DEMAND NOTEAND THAT BANK SHALL CONTINUE TO HAVE NO OBLIGATION TO EXTEND ANY CREDIT TO ORFOR THE ACCOUNT OF BORROWER BY REASON OF THE NOTE.

 

Confession of Judgment. Borrower hereby authorizesany attorney at law to appear in any state or federal court of record in theUnited States of America after the maturity hereof (whether occurring by lapseof time or acceleration), to waive the issuance and service of process, toadmit the maturity of the Note and the amount then appearing due, to confessjudgment against Borrower in favor of the holder hereof for the amount thenappearing due, together with interest and costs of suit, and thereupon torelease all errors and to waive all rights of appeal and stay of execution. Nojudgment shall bar any subsequent judgment. Should any judgment be vacated forany reason, this warrant of attorney nevertheless may thereafter be used forobtaining additional judgments.

 

IN WITNESS WHEREOF, the undersigned have caused thisModification to be executed as of the day and year first above written.

 

WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHTTO NOTICE AND COURT TRIAL.  IF YOU DO NOTPAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIORKNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESSOF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNEDGOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, ORANY OTHER CAUSE.

 
|   | By:                                                 | Matthew Wolsfeld          |
|--------|-----------------------------------------------------|---------------------------|
|   | Its: CFO                                            |
|   |                                                |
|   | NATIONAL CITY BANK, A  NATIONAL BANKING ASSOCIATION |
|   | By                                                  | Joseph McMullen, Jr. |
|   | Its: VP                                             |

 

 

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