**Exhibit 10.3**

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**PROMISSORY NOTE MODIFICATION AGREEMENT**

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THIS PROMISSORY NOTE MODIFICATION AGREEMENT (“Modification”)is made and entered into on April 10, 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 Eight Hundred Thousand and 00/100 Dollars($800,000.00) (“Loan”), which Loan was evidenced by a certain Commercial Note:Demand Line of Credit dated December 14, 2006 in the face amount of SixHundred Thousand and 00/100 Dollars ($600,000.00) (as extended, amended orotherwise modified to date, the “Note”) (the said Note and any other instrumentor document given in connection with or to secure the Loan being collectivelyreferred to as “Loan Documents”) .

 

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 April 10, 2008 the face amount of the Note shall bepermanently increased to the sum of Two Million Three Hundred Thousand and00/100 Dollars ($2,300,000.00).

 

Prior payments have been made as evidenced by thebooks and records of Bank.

 

Ratification of Loan Documents. The Loan Documentsare in all respects ratified and confirmed by the parties hereto andincorporated by reference herein, and each of the Loan Documents and thisModification shall be read, taken and construed as one and the same instrument.Capitalized terms used herein and not otherwise defined shall have the meaningsgiven to them in the Note. In the event of any conflict between the terms andprovisions of this Modification and the terms and provisions of the Note, theterms and provisions of this Modification shall control. NOTWITHSTANDING ANYPROVISION OR INFERENCE TO THE CONTRARY HEREIN, BORROWER ACKNOWLEDGES THAT THENOTE IS A DEMAND NOTE AND THAT BANK SHALL CONTINUE TO HAVE NO OBLIGATION TOEXTEND ANY CREDIT TO OR FOR 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.

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

 

 

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