TECHNICAL
ASSISTANCE AND

MARKETING SUPPORT AGREEMENT


BY
AND BETWEEN


NORTHERN
TECHNOLOGIES

INTERNATIONAL CORPORATION


AND


ZERUST
(UK) LIMITED


DATED
AS OF 20TH JANUARY 1997












	
  TECHNICAL ASSISTANCE AND MARKETING
  SUPPORT AGREEMENT

  
	
   

	
  THIS AGREEMENT is
  made the 20th day of January 1997

  
	
   

	
  BETWEEN

  
	
   

	
  (1)

  	
  NORTHERN TECHNOLOGIES INTERNATIONAL
  CORPORATION, whose principal office is located in Lino
  Lakes, Minnesota, U.S.A., (hereinafter “NTI”); and

	
   
	
   

	
  (2)
	
  ZERUST (UK) LIMITED
  a company incorporated in England and Wales with registered number 3248266
  whose registered office is at Meadowfield Avenue, Green Lane Industrial
  Estate, Spennymoor, Co. Durham, DLl6 6YJ (hereinafter the “Company”).

	
   
	
   

	
  ARTICLE 1.

	
   

	
  1.
	
  DEFINITIONS

	
   
	
   

	
   
	
  For the purposes of this Agreement, the following
  definitions of terms shall apply:

	
   
	
   

	
  1.1
	
  Ancillary Agreements

	
   
	
   

	
   
	
  The following are the Ancillary Agreements and the
  Parties thereto:

	
   
	
   

	
   
	
  1.1.1
	
  Management and Sales Representation Agreement
  between TP and the Company (“Management Agreement”);

	
   
	
   
	
   

	
   
	
  1.1.2
	
  License Agreement between NTI and the Company
  (“License Agreement”); and

	
   
	
   
	
   

	
   
	
  1.1.3
	
  Technical Assistance and Marketing Support Agreement
  between NTI and the Company (“Technical Assistance Agreement”)

	
   
	
   
	
   

	
   
	
  and “Ancillary Agreement” shall be construed
  accordingly.

	
   
	
   

	
  1.2
	
  At Cost

	
   
	
   

	
   
	
  Without profit component of any kind, direct or
  indirect, to the particular Party in the given case (although nothing herein
  shall preclude such Party from recovering all costs - direct and indirect -
  arising out of any transaction with the prescription “At Cost”).




1











	
  1.3

  	
  Change of Control

  
	
   
	
   

	
   
	
  Any change in ownership, management, control or
  scope of business activities of a Party which could affect the performance of
  the duties and/or obligations of such Party under the Joint Venture Agreement
  or any of the Ancillary Agreements.

  
	
   
	
   

	
  1.4
	
  Company or Joint Venture

	
   
	
   

	
   
	
  Zerust (UK) Limited, being that entity created in
  the Territory by the Parties pursuant to the Joint Venture Agreement to
  conduct the Company’s Business.

	
   
	
   

	
  1.5
	
  Company’s Business

	
   
	
   

	
   
	
  The Company’s Business shall be the manufacturing,
  marketing and distribution of Product in the Territory.

	
   
	
   

	
  1.6
	
  Completion

	
   
	
   

	
   
	
  Means completion of the Joint Venture Agreement in
  accordance with its terms. 
  “Completed” shall be construed accordingly.

	
   
	
   

	
  1.7
	
  Effective Date

	
   
	
   

	
   
	
  The date upon which the Joint Venture Agreement is
  Completed.

	
   
	
   

	
  1.8
	
  Joint Venture Agreement or
  Agreement

	
   
	
   

	
   
	
  That certain Joint Venture Agreement by and between
  Northern Technologies International Corporation, 6680 North Highway 49, Lino
  Lakes, Minnesota 55014, (“NTI”) and TP for the formation and governance of a
  new entity under the laws of England in the form of a company (the
  “Company”), which shall be known as Zerust (UK) Limited.

	
   
	
   

	
  1.9
	
  Knowhow

	
   
	
   

	
   
	
  The technology, formulae, methods and procedures
  developed by NTI at considerable expense over a period of many years, which
  are unique in nature and essential or useful in the proper use and
  application of the Process, together with all improvements and modifications
  with respect thereto.




2











	
  1.10

  	
  Masterbatch

  
	
   
	
   

	
   
	
  Any formulation of the Materials which shall be
  designated by NTI as appropriate to be applied to the specific requirements
  for corrosion protection, as afforded by the Product, of a known customer
  desirous of protecting an identified object (or objects) which are to be
  subjected to an anticipated certain range of corrosive influences.  In addition to Materials, Masterbatch
  shall generally also contain other substances for the purpose of facilitating
  the manufacture of Product utilizing the Process.

  
	
   
	
   

	
  1.11
	
  Materials

	
   
	
   

	
   
	
  The constituent materials and chemicals of one or
  more formulations developed by NTI under strict quality controls which are
  required for utilization of the Process.

	
   
	
   

	
  1.12
	
  Net Sales

	
   
	
   

	
   
	
  The total proceeds from the sale of Product within
  the Territory by the Company in normal, bona fide commercial transactions on
  an arm’s length basis to, by, with, or through an entity which is not
  affiliated to any Party of this Agreement, less the following items:  (i) sales discounts (including sales
  rebates); (ii) sales returns; (iii) shipping and transaction costs, such as
  Value Added Tax, CIF charges and packaging expenses; and (iv) sales commissions
  to third parties.

	
   
	
   

	
  1.13
	
  NTI Affiliates

	
   
	
   

	
   
	
  All entities and/or individuals with which NTI has a
  joint venture relationship, similar in character and style but not
  necessarily identical to the relationship created by the Joint Venture
  Agreement and the Ancillary Agreements, or another form of alliance, for the
  development, manufacture, promotion, marketing, sales and applications
  engineering of the Product, Materials, Knowhow and/or Process anywhere in the
  world and “NTI Affiliate” shall be construed accordingly.

	
   
	
   

	
  1.14
	
  NTI Intellectual Property Rights

	
   
	
   

	
   
	
  The Knowhow, Materials, Process, NTI Trade Secrets,
  Product, Masterbatch and Trademark, collectively, as such currently exist and
  shall hereinafter be modified, developed and/or acquired by NTI.




3











	
  1.15

  	
  NTI Trade Secrets

  
	
   
	
   

	
   
	
  All information deemed and designated confidential,
  both in the Joint Venture Agreement and in the Ancillary Agreements and
  hereafter, including but not limited to information regarding the Product,
  Knowhow, Process, Materials, Masterbatch, technology, customers, research,
  techniques, processes, applications, formulae, cost data, customer lists,
  suppliers, competition, marketing strategy, supply relationships, costs and
  cost accounting, memoranda, diagrams, pictures, computer software and
  programs and records contained therein, sales information, financial
  information, costs, pricing data and profits, relating to the business of
  NTI, the Company and NTI Affiliates (as hereinafter defined) both in the
  Territory and elsewhere.

  
	
   
	
   

	
  1.16
	
  Parties

	
   
	
   

	
   
	
  The Parties to the Joint Venture Agreement and/or
  the Ancillary Agreements, their successors and permitted assigns and “Party”
  shall be construed accordingly.

	
   
	
   

	
  1.17
	
  Process

	
   
	
   

	
   
	
  The procedure utilizing the Knowhow for the
  manufacture of polyethylene materials with corrosion inhibiting properties
  derived from the Materials as developed and specified by NTI, together with
  any improvements and modifications of the corrosion inhibiting technology as
  it relates directly to the manufacture of corrosion inhibiting polyethylene
  materials, together with future technology, knowledge and product development
  which is useful in the manufacture of the Product.

	
   
	
   

	
  1.18
	
  Product

	
   
	
   

	
   
	
  Corrosion inhibiting polyethylene film and solid
  material of polyethylene in the form of boxes, tubes and other containers
  manufactured by means of the Process, incorporating the Materials and
  utilizing the Trademark.

	
   
	
   

	
  1.19
	
  Territory

	
   
	
   

	
   
	
  The United Kingdom.




4











	
  1.20

  	
  TP

  
	
   
	
   

	
   
	
  Taylor Packaging (Bishop Auckland) Limited, a
  company incorporated in England and Wales with registered number 01999397
  whose registered office is at Meadowfield Avenue, Green Lane Industrial
  Estate, Spennymoor, Co. Durham, DL16 6YJ.

  
	
   
	
   

	
  1.21
	
  Trademark

	
   
	
   

	
   
	
  The names and style “ZERUST”, “THE ZERUST PEOPLE”,
  and the colour yellow in relation thereto (which, in each case, are the
  subject of Community Trade Mark applications) which includes trade
  literature, technical specifications and application instructions, and
  promotional material pertaining thereto.

	
   
	
   

	
  ARTICLE 2.

	
   

	
  2.
	
  RESPONSIBILITIES OF NTI WITH
  RESPECT TO PROVIDING TECHNICAL ASSISTANCE TO THE COMPANY

	
   
	
   

	
  2.1
	
  Technical Assistance

	
   
	
   

	
   
	
  NTI shall, at the Company’s request, provide the
  Company with technical advice, applications engineering, support in
  manufacturing the Product, and assistance in responding to inquiries and
  problems of customers in the Territory.

	
   
	
   

	
  2.2
	
  Development of New Applications

	
   
	
   

	
   
	
  NTI shall continue its efforts to expand the range
  of applications of the Product and shall make the results of all such efforts
  available to the Company.

	
   
	
   

	
  2.3
	
  Assistance by NTI in the
  Manufacturing of the Product in the Territory

	
   
	
   

	
   
	
  NTI shall provide assistance and training as may
  reasonably be required by the Company to facilitate the manufacture of the
  Product in the Territory.  This shall
  include training of the Company’s Agents or Submanufacturers (as set forth in
  Article 5 hereof) at a location to be mutually determined.




5











	
  2.4

  	
  Source of Materials

  
	
   
	
   

	
   
	
  The parties recognize that the Materials consist of
  a unique, proprietary and secret combination of chemicals which has been
  developed by NTI and which chemicals are prepared, mixed and combined prior
  to shipment in the form of Masterbatch; and that the Masterbatch is essential
  in order for the Process to work safely and effectively.  Accordingly, in order to ensure proper
  quality control, NTI agrees to sell to the Company, at the Company’s request,
  and the Company agrees to purchase from NTI, such Materials and/or
  Masterbatch as may be necessary to carry out the Company’s Business.  Alternatively, the Company may purchase
  Materials and/or Masterbatch from any other NTI Affiliate or external bona
  fide supplier, provided that NTI has approved the quality and reliability of
  such materials and such supplier.

  
	
   
	
   

	
   
	
  2.4.1
	
  Terms of Trade for Materials.  Shipments of the Materials and/or
  Masterbatch by NTI to the Company and the terms of sale thereof will be
  pursuant to and in accordance with the Terms of Sale set forth in Schedule A
  hereto.  The initial price schedule
  for the Materials and Masterbatch is also set forth in Schedule A.  Materials and/or Masterbatch purchased
  from NTI shall be paid at the head office of NTI or at any other place
  designated by NTI in the currency invoiced within thirty (30) days following
  receipt by the Company of such Materials and/or Masterbatch at its principal
  place of business or at such other places in the Territory as shall be
  designated by the Company in the purchase order issued with respect thereto.

	
   
	
   
	
   

	
   
	
  2.4.2
	
  Material Safety Data Sheets.  NTI shall provide the Company with
  Material Safety Data Sheets for all Materials and Masterbatch provided by NTI
  to the Company.

	
   
	
   
	
   

	
   
	
  2.4.3
	
  Product Liability Insurance.  NTI warrants to the Company that NTI
  presently carries product liability insurance (as set out in Schedule B
  hereto).  The product liability
  coverage under the Policy extends solely to the Materials and Masterbatch
  manufactured by NTI and provided by NTI to the Company.  As of the Effective Date hereof, the pro
  rata charge to the Company by NTI for the Product Liability Insurance
  Coverage on the Materials and Masterbatch provided to the Company by NTI
  shall be incorporated within the compensation to be paid to NTI pursuant to
  Article 4.2 hereof for services performed hereunder; any subsequent
  adjustment in the premium of the coverage for Product Liability Insurance
  may, however, necessitate a separate additional charge therefor to the
  Company by NTI in the future.




6











	
  2.5

  	
  Availability of Laboratory Test
  Facilities

  
	
   
	
   

	
   
	
  NTI shall make its Laboratory Test Facilities
  reasonably available to the Company, without charge to the Company, for the
  purposes of analyzing the specific corrosion prevention requirements of
  customers and/or potential customers for the Product, which customers shall
  have been identified by the Company in the Territory, on a schedule to be
  mutually determined.  In the course of
  the technical analysis and testing procedures conducted in the Laboratory
  Test Facilities of NTI, NTI shall use reasonable efforts to determine whether
  the NTI Intellectual Property Rights can be utilized effectively to meet, in
  whole or in part, the specific requirements for corrosion inhibiting
  technology posed by the customers or prospective customers for the
  applications specified.  Various
  different Materials and Masterbatch formulations may be tested in this
  process.  NTI shall inform the Company
  as to the results of the analysis performed and tests conducted in each such
  case as promptly as practicable.  All
  of the concepts, analyses and results of such analyses and testing procedures
  shall be and remain the sole property of NTI, without any additional fee or
  cost to it, subject to the provisions of this Agreement and the License
  Agreement in the event a Product is developed.  Notwithstanding the foregoing, if greater demands on the
  Laboratory Test Facilities of NTI are posed by the Company than demands for
  such support posed by other NTI Affiliates of the same approximate size and
  scope, NTI may not be required to perform the requested services unless the
  Company agrees to the payment of a reasonable charge therefor.

  
	
   
	
   

	
  ARTICLE 3.

	
   

	
  3.
	
  RESPONSIBILITIES OF NTI WITH
  RESPECT TO PROVIDING MARKETING SUPPORT TO THE COMPANY




7











	
  3.1

  	
  Marketing Support

  
	
   
	
   

	
   
	
  NTI shall, at the Company’s request, provide the Company
  with assistance in marketing the Product in the Territory and in responding
  to inquiries and problems of customers.

  
	
   
	
   

	
  3.2
	
  Improvements in Marketing

	
   
	
   

	
   
	
  NTI shall also continue its efforts to improve the
  marketing techniques and the customer base for the Product, and shall make
  any tangible results of all such efforts available to the Company.

	
   
	
   

	
  3.3
	
  Sales Promotion

	
   
	
   

	
   
	
  NTI shall provide support and assistance in the
  sales promotion and advertising efforts of the Company.  NTI shall provide text, photographs,
  artwork and mats NTI has developed for its own proprietary Sales Promotion
  Tools to the Company at cost; upon the Company’s request.

	
   
	
   

	
  3.4
	
  Participation in Trade Fairs

	
   
	
   

	
   
	
  At the Company’s request, and upon mutual agreement
  as to timing, cost and scope, NTI shall provide support to the Company in
  preparing, designing and staffing the Company’s booth at appropriate Trade
  Fairs to promote the Product in the Territory.

	
   
	
   

	
  3.5
	
  Customer Lists

	
   
	
   

	
   
	
  NTI shall identify international companies working
  in the Territory which have become users of the Product in the United States
  and in the respective territories of other NTI Affiliates, and provide such
  customer lists to the Company for use in the Territory.

	
   
	
   

	
  3.6
	
  Joint Sales Calls

	
   
	
   

	
   
	
  Upon mutual agreement, proper advance planning and
  identification of suitable prospects, NTI management shall make sales calls
  in the Territory with the Company’s sales staff to promote the Product.




8











	
  ARTICLE 4.

  
	
   

	
  4.

  	
  PAYMENTS TO NTI FOR TECHNICAL
  ASSISTANCE AND MARKETING SUPPORT TO THE CORPORATION

  
	
   
	
   

	
  4.1

  	
  Basis for Payments

  
	
   
	
   

	
   
	
  The Company shall make payments to NTI which are
  provided for in this Article 4 in consideration of the services performed by
  NTI as set forth in Articles 2 and 3 hereof. 
  Such payments shall be made throughout the full term of this Technical
  Assistance and Marketing Support Agreement as compensation for the services
  set forth above and duly provided by NTI.

  
	
   
	
   

	
  4.2
	
  Amount of Payments

	
   
	
   

	
   
	
  The Company shall pay to NTI an amount equal to seven
  and one-half percent (7.5%) of Net Sales from the Company’s Business.  Payments shall be paid in United States
  Dollars to an account or accounts as may be designated by NTI from time to
  time.

	
   
	
   

	
  4.3
	
  When a Sale is Deemed to Occur

	
   
	
   

	
   
	
  A sale shall be deemed to have occurred when Product
  as been billed, (if applicable) and delivered to and paid for by a customer.

	
   
	
   

	
  4.4
	
  Support Year

	
   
	
   

	
   
	
  The term “Support Year” shall mean any twelve (12)
  month period ending on August 31, except that the first Support Year shall
  commence on the Effective Date.

	
   
	
   

	
  4.5
	
  Statements to NTI

	
   
	
   

	
   
	
  Within thirty (30) days after the last day of each
  quarterly period in each Support Year, the Company shall:

	
   
	
   

	
   
	
  4.5.1
	
  Prepare and deliver to NTI a complete and accurate
  statement setting forth for the quarter just ended and separately and
  cumulatively for and with respect to all elapsed quarterly periods for the
  Support Year:




9











	
   
	
   
	
  4.5.1.1
	
  The total amount of Net Sales (broken down in
  reasonable detail by individual products and customers and showing all costs
  and discounts leading to the establishment of the Net Sales figure for each
  customer); and

	
   
	
   
	
   
	
   

	
   
	
   
	
  4.5.1.2
	
  The total amount of the compensation on such Net
  Sales (computed as hereinbefore provided) payable hereunder to NTI for its
  services with respect to Technical Assistance and Marketing Support.

	
   
	
   
	
   
	
   

	
   
	
  4.5.2
	
  Pay to NTI the full amount of the royalties to which
  it is entitled for and with respect to the period or periods of the Support
  Year covered by the statement(s) provided for in Article 4.5.1 hereof.

	
   
	
   
	
   

	
  4.6
	
  Books and Records

	
   
	
   

	
   
	
  The Company covenants and agrees:

	
   
	
   

	
   
	
  4.6.1
	
  That it will keep complete and accurate records and
  books of account showing the amount of billings to customers and the amount
  of deductions therefrom in arriving at Net Sales and all additional data and
  information which may be reasonably necessary to enable NTI or NTI’s
  independent accountants to verify the completeness and accuracy for each item
  of information which the Company is required to set forth in each of the
  statements referred to in Article 4.5.1;

	
   
	
   
	
   

	
   
	
  4.6.2
	
  That it will keep all such records and books of
  account at its principal office and will preserve each such records and books
  of account for a period of not less than three (3) years from and after the
  date on which such records or the last entry in such books of account was
  made, whichever shall be later; and

	
   
	
   
	
   

	
   
	
  4.6.3
	
  That it will make such records, books of account,
  data and information available to NTI’s representatives and to NTI’s
  independent accountants and will give to such representative or accountants
  free and complete access, at any reasonable time or times, to all such
  records, books of account, data and information, for the purposes of
  examining the same and verifying the completeness and accuracy of each item
  of information which the Company is required to set forth in each of the
  statements referred to in Article 4.5.1 hereof.  In addition, NTI shall have the right to make copies of any of
  the foregoing.  The Company’s auditors
  shall in the ordinary course of business provide written confirmation and
  certification to NTI, at least annually, of the data to be supplied to NTI
  pursuant to Article 4.5.1 hereof.  The
  cost of such reports shall be borne by the Company.  In the event that NTI shall cause its representatives to
  confirm or verify the accuracy of the data supplied by the Company, then the
  costs and fees of such representatives shall be borne by NTI unless such
  representatives shall determine, to the satisfaction of the Company’s
  auditors, that there is an understatement in the reporting of Net Sales of
  five (5%) or more, in which event the costs and fees of NTI’s representatives
  and/or accountants shall be borne by the Company.




10











	
  ARTICLE 5.

  
	
   

	
  5.

  	
  PROTECTION OF NTI TRADE SECRETS

  
	
   
	
   

	
  5.1

  	
  Recognition of NTI Trade Secrets

  
	
   
	
   

	
   
	
  The Company acknowledges and agrees that (i) NTI
  Intellectual property Rights; (ii) other information deemed confidential by
  NTI and designated herein and hereafter relating to the business of NTI, of
  the Company, and of NTI Affiliates, both in the Territory and elsewhere,
  including but not limited to applications of NTI Intellectual Property
  Rights, cost data and cost accounting, customer lists, competition, marketing
  strategy, supply relationships, memoranda, diagrams, pictures, computer
  software and programs as well as records contained therein, sales
  information, financial information, pricing data and margins are also
  included within the definition of NTI Trade Secrets set forth in Article 1.15
  hereof and constitute valuable property rights of NTI and NTI Affiliates.

  
	
   
	
   

	
  5.2
	
  Protection of NTI Trade Secrets

	
   
	
   

	
   
	
  The Company agrees that during the term of this
  Agreement, as well as following its termination and for all times thereafter,
  it shall keep secret and confidential all NTI Trade Secrets which it now
  knows or may hereafter come to know as a result of the Joint Venture
  Agreement and Ancillary Agreements. 
  NTI Trade Secrets shall not be disclosed by the Company to third
  parties and shall be kept secret and confidential except (i) to the extent
  that the same have entered into the public domain by means other than the
  improper actions of the Company or (ii) to the extent that the disclosure
  thereof may be required pursuant to the order of any court or other
  governmental body.  If an NTI Trade
  Secret shall be in the public domain as the result of an act by the Company
  or any Agent (as hereinafter defined) thereof, then the Company shall
  nevertheless continue to keep such NTI Trade Secrets secret and inviolate.




11











	
  5.3

  	
  Protection of NTI Trade Secrets by
  Agents (as hereinafter defined) and Submanufacturers (as hereinafter defined)
  of the Company

  
	
   
	
   

	
   
	
  Neither the Company, nor its Agents (as hereinafter
  defined), nor its Submanufacturers (as hereinafter defined) shall at any time
  copy, remove from their proper location, or retain without NTI’s prior
  written consent, the originals or copies of any NTI Trade Secrets or of any
  of the unpublished records, books of account, documents, letters, diagrams, computer
  disks, papers or memoranda of NTI or the Company.  It is understood that from time to time it may be necessary
  that certain of the foregoing items be copied or removed from their location;
  however, this shall be done subject to the requirement of this Article that
  the original material be returned to its proper location as soon as possible
  and that the confidential nature and integrity of the foregoing as NTI Trade
  Secrets be strictly maintained both as to original documents and copies
  thereof.

  
	
   
	
   

	
   
	
  5.3.1
	
  Insofar as the officers, employees and consultants
  of the Company (herein collectively “Agents”) who come in contact with NTI
  Trade Secrets are concerned, the Company shall cause such Agents to enter
  into NTI Trade Secrecy Agreements substantially in the form of Annex II to
  this Agreement.  The Company shall
  exert its best efforts to cause its Agents to adhere to and to abide by the
  provisions, restrictions and limitations of the Trade Secrecy Agreements
  which efforts shall include the institution and prosecution of appropriate
  litigation if such be necessary and desirable.




12











	
   
	
   
	
  5.3.1.1
	
  To the extent that the Company provides Masterbatch
  to Submanufacturers in requisite quantities to allow such Submanufacturers to
  manufacture the Product in the Territory in such volumes and forms as may be
  required for the Company’s Business (“Submanufacturers”), it is understood
  that the Company may find it necessary to disclose certain NTI Trade Secrets
  to such Submanufacturers.

	
   
	
   
	
   
	
   

	
   
	
   
	
  5.3.1.2
	
  NTI Trade Secrets shall be disclosed only to such
  Submanufacturers who have been specifically approved in writing by NTI and
  who have entered into Trade Secrecy Agreements with the Company in a form
  approved by NTI, but substantially in the form of the Trade Secrecy Agreement
  set forth in Annex II hereof.

	
   
	
   
	
   
	
   

	
   
	
   
	
  5.3.1.3
	
  Moreover, only those NTI Trade Secrets which are
  absolutely essential for the manufacturing activities to be carried on by
  such Submanufacturers shall be disclosed to them.

	
   
	
   
	
   
	
   

	
   
	
  5.3.2
	
  The Company shall not transfer ownership, by sale or
  any other means, of Materials or Masterbatch to any Submanufacturers but
  rather shall provide Masterbatch to Submanufacturers without charge for the
  sole purpose of allowing such Submanufacturers to manufacture the Product, incorporating
  Masterbatch, for the account of the Company. 
  Upon completion of any order for the Product by a Submanufacturer, the
  Company shall pay such Submanufacturer for its services and the raw materials
  provided by the Submanufacturer and so take title to the Product, and shall
  require the return of any Masterbatch not utilized in the Process.

	
   
	
   
	
   

	
   
	
  5.3.3
	
  The Parties hereby agree and acknowledge that NTI is
  an intended third party beneficiary of the Trade Secrecy Agreements, and that
  NTI may in its sole discretion, on its own behalf or derivatively and/or on
  behalf of the Company directly enforce the provisions of the Trade Secrecy
  Agreements and/or any breach thereof against any and all Agents (as defined
  in Article 5.3.1 hereof) and/or Submanufacturers (as defined in Article
  5.3.1.1 hereof) who have executed same.




13











	
  5.4

  	
  Remedies in the Event of a
  Violation of Article 5 hereof

  
	
   
	
   

	
   
	
  It is understood and recognized by the Company that
  in the event of any violation by the Company of the provisions of Article 5
  hereof, NTI’s remedy at law will be inadequate and NTI will suffer
  irreparable injury.  Accordingly, the
  Company consents to injunctive and other appropriate equitable relief in any
  court of competent jurisdiction in order to protect the NTI Trade
  Secrets.  Such relief shall be in
  addition to any other relief to which NTI may be entitled at law or in
  equity.

  
	
   
	
   

	
  ARTICLE 6.

	
   

	
  6.
	
  COVENANT TO OBSERVE THE DOCTRINE OF
  “CORPORATE OPPORTUNITY”

	
   
	
   

	
  6.1
	
  Doctrine of Corporate Opportunity
  and Observance Thereof

	
   
	
   

	
   
	
  It is the intent of the Parties to this Agreement,
  the Joint Venture Agreement and to the other Ancillary Agreements to deal
  exclusively with each other with respect to the commercial, technical and
  strategic development of the Company’s Business in the Territory.  Consequently, the Parties to each
  agreement cited above hereby renounce and covenant not to engage in any
  activity which would either (a) negatively impact on the performance of their
  duties under the Joint Venture Agreement or the Ancillary Agreements in the
  Territory, or (b) have the effect of displacing or substituting the Knowhow,
  Materials, Process, Product or Masterbatch in the Territory; except as agreed
  to by the Parties in furtherance of the Company’s Business.

	
   
	
   

	
  6.2
	
  Agreement Not to Divert Resources

	
   
	
   

	
   
	
  The Company and NTI agree that during the term of
  this Agreement they shall not, directly or indirectly, in any capacity
  whatsoever, engage in, own, manage, operate, control, act as a consultant to,
  have a financial interest in, or otherwise participate in the ownership,
  licensing, management, operation or control of, a business which would
  impede, substitute, displace or divert Net Sales of the Product from the
  Company within the Territory except through the Company in furtherance of the
  Company’s Business.  During said term
  neither of such Parties shall in any way, directly or indirectly, divert,
  take away or interfere with or attempt to divert, take away or interfere
  with, any of the customers, accounts, suppliers, employees, representatives
  or patronage of the Company.  In the
  event that this Agreement is terminated: (i) because of a material Breach of
  the Joint Venture Agreement by a Party; or (ii) because of a material Breach
  of any Ancillary Agreement by a Party; (iii) upon the bankruptcy or other
  adverse condition of a Party as described in Article 7 hereof; (iv) pursuant
  to Article 8 hereof; (v) or upon a Breach of Articles 5 or 6 hereof, then the
  Party in Breach or subject to such adverse condition shall continue to be bound
  by the provisions of this Article 6 for a period of two years following the
  date of termination, but shall at no time be permitted to use NTI Trade
  Secrets, as the case may be, for any activity outside the Company.




14











	
  6.3

  	
  Remedies for Breach of Agreement
  Not to Divert Resources

  
	
   
	
   

	
   
	
  It is understood and recognized by the Parties that
  in the event of a violation of the provisions of Article 6 hereof by a Party,
  the remedy at taw will be inadequate and the Company and the other Parties to
  the Joint Venture and the Ancillary Agreements shall suffer irreparable
  injury.  Accordingly, each Party to
  this Agreement consents to injunctive or other appropriate equitable relief
  upon the institution of legal proceedings therefor by a non-violating
  Party.  Such relief shall be in
  addition to any other relief to which a Party may be entitled at law in
  equity, which shall include but not be limited to the right of immediate
  termination of this Agreement.

  
	
   
	
   

	
  ARTICLE 7.

	
   

	
  7.
	
  TERM OF AGREEMENT

	
   
	
   

	
  7.1
	
  Indefinite Term

	
   
	
   

	
   
	
  This Agreement shall become effective on the
  Effective Date and shall, unless otherwise terminated in accordance with the
  provisions hereof, continue in effect indefinitely unless:

	
   
	
   




15











	
   
	
  7.1.1
	
  terminated by either Party in accordance with the
  provisions of Articles 13, 14 and/or 15 hereof;

	
   
	
   
	
   

	
   
	
  7.1.2
	
  terminated by either Party by reason of a Default of
  this Agreement by the other Party which has not been cured or remedied in
  accordance with Article 18 hereof; or

	
   
	
   
	
   

	
   
	
  7.1.3
	
  any of the Ancillary Agreements or the Joint Venture
  Agreement shall be terminated by a Party in accordance with its terms.  In such event this Agreement shall
  likewise terminate on the same date, without any further act or notice given
  by a Party hereto.

	
   
	
   
	
   

	
  7.2
	
  Payment of Amounts Due

	
   
	
   

	
   
	
  In the event of termination, each Party shall pay to
  each other Party all amounts due and owing pursuant to this Agreement prior
  to the effective date of termination.

	
   
	
   

	
  7.3
	
  Non-Release of Obligations

	
   
	
   

	
   
	
  The termination of this Agreement shall not release
  the Parties from their obligations to settle all financial accounts between
  themselves in cash forthwith. 
  Notwithstanding the termination hereof, each Party shall be
  responsible for the performance of all of its obligations and responsibilities
  hereunder up to the effective date of termination.  As provided in Article 5 hereof, upon termination of this
  Agreement NTI Trade Secrets shall continue to be kept secret and
  confidential.

	
   
	
   

	
  ARTICLE 8.

	
   

	
  8.
	
  DEFAULT

	
   
	
   

	
  8.1
	
  Default

	
   
	
   

	
   
	
  A Default (“Default”) hereunder shall exist in the
  event of:

	
   
	
   

	
   
	
  8.1.1
	
  Non-payment of funds by one Party to another Party
  when due and owing; and/or

	
   
	
   
	
   

	
   
	
  8.1.2
	
  A material breach (“Breach”) of any provision of the
  Joint Venture Agreement or the Ancillary Agreements other than Articles 5 or
  6 hereof;




16











	
   
	
  8.1.3
	
  A breach of Articles 5 or 6 hereof.

	
   
	
   
	
   

	
  8.2
	
  Remedies upon Default

	
   
	
   

	
   
	
  The remedies available to each Party in an instance
  of Default by another Party shall be as follows:

	
   
	
   

	
   
	
  8.2.1
	
  If a Party shall fail to make any payments required
  hereunder after the same are due, (other than due to governmental delays) or
  if it shall commit a Breach in the performance of, or by failure to observe
  and comply with, any other material term or provision of this Agreement or any
  of the Ancillary Agreements to be performed, observed or complied with by it,
  then the other Party shall have the right to declare a Default and terminate
  this Agreement unless the Party in Default shall cure such failure to pay,
  and/or Breach or Default, or cause the same to be cured, within thirty (30)
  days (fifteen (15) days in case of monetary default) after receipt of written
  notice from the other Party) provided, however, that if the Party in
  such Breach commences to cure same within the curative period specified
  herein, then the right of termination shall be held in abeyance for a
  reasonable period of time so long as the Party in such Breach proceeds to
  cure such Default with due diligence. 
  A Party’s right of termination shall be in addition to and not in
  limitation of any of his other rights at law or in equity based upon the
  other Party’s Breach or Default.  Any
  notice of termination shall stipulate the effective date of termination which
  shall be not less than three (3) months nor more than six (6) months
  following the date that such notice is given.

	
   
	
   
	
   

	
   
	
  8.2.2
	
  Notwithstanding the forgoing, in the event of a
  violation of Articles 5 or 6 hereof by a Party hereto, each other Party may
  at its sole discretion terminate this Agreement with immediate effect upon
  giving notice to the other Parties as provided herein.

	
   
	
   
	
   

	
  8.3
	
  Non-Waiver of Rights

	
   
	
   

	
   
	
  A Party’s failure to terminate this Agreement on
  account of any Breach or Default by the other Party as provided in Article
  8.1 or 8.2 hereof shall in no event constitute or be deemed to constitute a
  waiver by such Party of its right to terminate this Agreement at any time
  while any such Breach or Default continues (subject to the provisions of
  Article 8.2 hereof), or on account of any subsequent Breach or Default by a
  Party.




17











	
  ARTICLE 9.

  
	
   

	
  9.

  	
  ARBITRA TION

  
	
   
	
   

	
  9.1

  	
  Arbitration Mandatory

  
	
   
	
   

	
   
	
  Any of the following disputes which may arise
  between the Parties during the term of this Agreement, after the termination
  thereof, or following the liquidation or dissolution of the Company, upon
  failure by the Parties to amicably resolve same after mutual good faith
  negotiations, shall be exclusively settled by arbitration:

  
	
   
	
   

	
   
	
  9.1.1
	
  a dispute as to whether a Default exists;

	
   
	
   
	
   

	
   
	
  9.1.2
	
  a dispute as to whether a Default entitles the
  non-defaulting Party to terminate this Agreement;

	
   
	
   
	
   

	
   
	
  9.1.3
	
  a dispute as to the validity of this Article 9;

	
   
	
   
	
   

	
   
	
  9.1.4
	
  a dispute relating to the construction, meaning,
  interpretation, application or effect of this Agreement or anything contained
  herein;

	
   
	
   
	
   

	
   
	
  9.1.5
	
  a dispute as to the rights, obligations or
  liabilities of the Parties hereunder.

	
   
	
   
	
   

	
   
	
  Such arbitration proceedings shall be conducted in
  English and shall be carried on in the City of Brussels or any other place
  mutually agreeable to the Parties, under the UNCITRAL Arbitration Rules.  In such proceedings, the laws of England
  shall apply.  Judgement upon the award
  rendered by the arbitrator, including an award concerning the payment of
  costs, attorneys’ fees, and expenses of the arbitration proceedings, may be
  entered in any court of competent jurisdiction.  Notwithstanding anything to the contrary set forth in this
  Agreement, no matter shall be referred to or settled by Arbitration which is:




18











	
   
	
  (a)
	
  based upon a Party’s violation of the provisions of
  this Agreement relating to NTI Trade Secrets or Corporate Opportunity, the
  remedies for which are set forth in Articles 5 and 6 hereof.

	
   
	
   
	
   

	
   
	
  (b)
	
  expressed in this Agreement to be agreed upon by or
  determined with the consent or approval of both Parties.

	
   
	
   
	
   

	
  9.2
	
  Punitive Damages Excluded

	
   
	
   

	
   
	
  Notwithstanding the foregoing, the prevailing Party
  in an arbitration proceeding convened hereunder shall be entitled to recover
  all reasonable damages plus documented costs incurred in pursuing its
  arbitration claim, including but not limited to legal fees and travel
  expenses, but shall not be entitled to exemplary or punitive damages.

	
   
	
   

	
  ARTICLE 10.

	
   

	
  10.
	
  GENERAL PROVISIONS

	
   
	
   

	
  10.1
	
  Benefit of Parties

	
   
	
   

	
   
	
  All of the terms and provisions of this Agreement,
  and of the Joint Venture Agreement and of the other Ancillary Agreements
  shall be binding upon the Parties executing same and their respective
  permitted successors and assigns. 
  Except as expressly provided herein, a Party may not assign its rights
  and obligations to a third party without the written consent of the other
  Party; provided, however, that a Party may assign this Agreement and all of
  its rights hereunder (or a portion of this Agreement and the rights hereunder
  relating thereto) to, or provide for the performance of all or part of its
  obligations hereunder by, a Party which controls, is controlled by or is
  under common control with such Party. 
  In such event, (i) the assignor shall unconditionally guarantee the
  performance and obligations of the assignee and shall not be released of its
  liabilities, obligations and responsibility hereunder and (ii) the assignee
  shall expressly assume in writing and agree to perform such obligations,
  liabilities and responsibilities of the assignor.




19











	
  10.2

  	
  Counterparts

  
	
   
	
   

	
   
	
  This Agreement may be executed simultaneously 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.

  
	
   
	
   

	
  10.3
	
  Cooperation

	
   
	
   

	
   
	
  During the term of this Agreement, each Party shall
  cooperate with and assist the other Party in taking such acts as may be
  appropriate to enable all Parties to effect compliance with the terms of the
  Joint Venture Agreement and the Ancillary Agreements and to carry out the
  true intent and purpose thereof.

	
   
	
   

	
  10.4
	
  Index and Captions

	
   
	
   

	
   
	
  The captions of the Articles of this Agreement and
  subsections thereof are solely for convenient reference and shall not be
  deemed to affect the meaning or interpretation of any provisions hereof.  Notwithstanding the foregoing, the
  Definitions set forth in Article 1 hereof shall be incorporated herein as
  written and made a part hereof.

	
   
	
   

	
  10.5
	
  Waiver of Compliance

	
   
	
   

	
   
	
  The Party for whose benefit a warranty,
  representation, covenant or condition is intended may in writing waive any
  inaccuracies in the warranties and representations contained in this
  Agreement or waive compliance with any of the covenants or conditions
  contained herein and so waive performance of any of the obligations of the
  other Parties hereto, and any Breach or Defaults hereunder; provided,
  however, that such waiver shall not affect or impair the waiving Party’s
  rights in respect to any other covenants, condition, Breach or Default
  hereunder.

	
   
	
   

	
  10.6
	
  Force Majeure

	
   
	
   

	
   
	
  In the event that a Party is prevented or delayed
  from performing, fulfilling or completing an obligation provided for in this
  Agreement as a result of delays caused by strikes, lock-outs, unavailability
  of materials, acts of God, acts of any national, state or local governmental
  agency or authority of a foreign government, war, insurrection, rebellion,
  riot, civil disorder, fire, explosion or the elements, then the time for
  performance, fulfillment or completion shall be extended for a period not exceeding
  the number of days by which the same was so delayed.  If a force majeure event shall be in
  existence for one year or more, then either Party shall have the right to
  terminate this Agreement at any time thereafter by giving at least thirty
  (30) days written notice of termination to the other Party, provided that the
  force majeure event continues to be in effect as of the date that such notice
  is given.




20











	
  10.7

  	
  Notices

  
	
   
	
   

	
   
	
  All notices, requests, demands or other
  communications which are required or may be given pursuant to the terms of
  this Agreement shall be in writing and delivery shall be effective in all
  respects if delivered (i) by telefax promptly confirmed by letter, (ii)
  personally, (iii) by registered or certified air mail, postage prepaid, or
  (iv) by neutral, commercial courier service such as Federal Express, DHL or
  equivalent, as follows:

  






	
  If to NTI, to:
	
  Northern Technologies

	
   
	
  International Corporation

	
   
	
  6680 North highway 49

	
   
	
  Lino Lakes, MN 55014

	
   
	
  Attention: President

	
   
	
  Tel: 612-784-1250

	
   
	
  Fax: 612-784-2902

	
   
	
   

	
  Copy to:
	
  Philip M. Lynch

	
   
	
  One Commerce Park Square

	
   
	
  23200 Chagrin Blvd., Suite 107

	
   
	
  Beachwood, OH 44122

	
   
	
  Tel: 216-595-1740

	
   
	
  Fax: 216-595-1741




21











	
  If to Company, to:

  	
  Zerust (UK) Limited

	
   
	
  Meadowfield Avenue

	
   
	
  Green Lane Industrial Estate

	
   
	
  Spennymoor

	
   
	
  Co. Durham

	
   
	
  DLl6 6YJ

	
   
	
  Attention: Company Secretary

	
   
	
  Tel: 01388 420 555

	
   
	
  Fax: 01388 420 777

	
   
	
   

	
  Copy to:
	
  Taylor Packaging (Bishop Auckland) Limited

	
   
	
  Meadowfield Avenue

	
   
	
  Green Lane Industrial Estate

	
   
	
  Spennymoor

	
   
	
  Co. Durham

	
   
	
  DLl6 6YJ

	
   
	
  Tel: 01388 420 555

	
   
	
  Fax: 01388 420 777







	
   
	
  or to such other address as may be specified in
  writing by any of the above.

	
   
	
   

	
  10.8
	
  Entire Agreement

	
   
	
   

	
   
	
  This Technical Assistance and Marketing Support
  Agreement, together with the Joint Venture Agreement and the other Ancillary
  Agreements and any other documents now or subsequently referred to herein or
  attached hereto which form a part of this Agreement, contain the entire
  understanding of the parties hereto. 
  There are no prior representations, promises, warranties, covenants,
  agreements or undertakings other than those expressly set forth or provided
  for in this Agreement, the Joint Venture Agreement and the other Ancillary
  Agreements, and the same supersede all prior agreements and understandings
  between the Parties with respect to the relationships and transactions
  contemplated by this Agreement.




22











	
  10.9
	
  Validity of Provisions

	
   
	
   

	
   
	
  Should any part of this Agreement, the Joint Venture
  Agreement, or the other Ancillary Agreements be declared by any court of
  competent jurisdiction to be invalid, such decision shall not affect the
  validity of the remaining portion, which remaining portion shall continue in
  full force and effect as if such instrument had been executed with the
  invalid portion thereof eliminated therefrom, it being the intent of the
  Parties that they would have executed the remaining portion without including
  any such part or portion which may for any reason be declared invalid.  In the event that a provision of this
  Agreement, the Joint Venture Agreement, or any other Ancillary Agreement
  shall be declared to be invalid, then the Parties agree that they shall, in
  good faith, negotiate with one another to replace such invalid provision with
  a valid provision as similar as possible to that which had been held to be
  invalid, giving due recognition to the reason for which such provision had
  been held invalid.

	
   
	
   

	
  10.10
	
  Governmental Filings

	
   
	
   

	
   
	
  The Company shall be responsible for the preparation
  and filing of all necessary reports relating to this Agreement and the
  transactions contemplated hereby with each appropriate government agency in
  the Territory, and shall maintain all required governmental filings and
  permits current.  NTI shall provide whatever
  material and information required of and available to it in connection with
  the preparation and filing of such reports.

	
   
	
   

	
  10.11
	
  Payments

	
   
	
   

	
   
	
  Any payment to be made by the Company to NTI
  pursuant to any provision of this Agreement shall be made by means of a wire
  transfer or by means of a deposit to a bona fide bank account as designated
  by NTI.  NTI shall have the right to
  specify in writing any bank account to which payments due shall be made.




23











	
  10.12

  	
  Derivative Enforcement

  
	
   
	
   

	
   
	
  TP may, derivatively for and on behalf of the
  Company, enforce the terms hereof against NTI in the event of a material
  Breach or Default of this Agreement by NTI. 
  In the event of derivative enforcement hereunder, the matter shall be
  submitted to arbitration in accordance with the provisions of Article 9 hereof.

  
	
   
	
   

	
  10.13
	
  Changes Subject to Approval of

	
   
	
   

	
   
	
  The parties to this Agreement shall not change,
  modify or amend this Agreement in any respect without the prior written
  consent of TP.

	
   
	
   

	
  10.14
	
  Applicable Law

	
   
	
   

	
   
	
  This Agreement shall be read and construed in
  accordance with and be governed by the laws of England.

	
   
	
   

	
  10.15
	
  RTPA

	
   
	
   

	
   
	
  No provision of this Agreement, or of any
  arrangement of which it forms part, by virtue of which such agreement or
  arrangement is subject to registration under the Restrictive Trade Practices
  Act 1976, shall take effect until the day after particulars of such agreement
  or arrangement have been furnished to the Director General of Fair Trading
  pursuant to that Act.  Particulars
  shall, if necessary, be furnished to the Director General of Fair Trading
  within three months of the date of this Agreement.




IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above
written.

	
   
	
  NORTHERN TECHNOLOGIES

	
   
	
   

	
   
	
  INTERNATIONAL CORPORATION

	
   
	
   

	
   
	
  By /s/ Philip M. Lynch

	
   
	
   

	
   
	
  ZERUST (UK) LIMITED

	
   
	
   

	
   
	
  By  /s/




24










ANNEX I

APPROVAL
OF TAYLOR P ACKAGING (BISHOP AUCKLAND) LIMITED

By its signature hereto
Taylor Packaging (Bishop Auckland) Limited approves and agrees to the terms and
provisions of this Technical Assistance and Marketing Support Agreement and the
Trade Secrecy Agreement attached hereto, and agrees to be bound thereto to the
extent that such terms and provisions are applicable to it, it being understood
that Taylor Packaging (Bishop Auckland) Limited shall also have a direct right
of action in its own name for the enforcement of the provisions of this
Agreement.

	
   
	
  TAYLOR PACKAGING (BISHOP AUCKLAND) LIMITED

	
   
	
   

	
   
	
   

	
   
	
  By  /s/




25










SCHEDULE
A


MASTERBATCH
PRICING & TERMS OF TRADE


as of 20 November,
1996


	
  Masterbatch
	
   
	
  Color
	
   
	
  Protection
	
   
	
  J.V. Price
	
   

	
  



  	
   
	
  



  	
   
	
  



  	
   
	
  



  	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
  PAY4733
	
   
	
  Yellow
	
   
	
  Ferrous Metals
	
   
	
  US$7.06/lb
	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
  CLR10227
	
   
	
  Clear
	
   
	
  Ferrous Metals
	
   
	
  US$7.06/lb
	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
  MM61453
	
   
	
  Clear
	
   
	
  Multimetal
	
   
	
  US$11.06/lb
	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  (w/o Sodium Nitrite)
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
  MM62321
	
   
	
  Clear
	
   
	
  Multimetal
	
   
	
  US$11.06/lb
	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
  (low odor)
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
   
	
   
	
   
	
   

	
  NFC60222
	
   
	
  Clear
	
   
	
  Nonferrous Metals
	
   
	
  US$11.06/lb
	
   




Masterbatches are
packaged in 40 lb bags.

Trade terms are net 30
days.


Notice of changes
contemplated by NTI for masterbatch prices will be sent to all joint ventures
prior to effecting the change.

26










SCHEDULE
B

27










FOREIGN
LIABILITY POLICY

General Liability and Automobile
Coverage Section

	
  Insurance Company:
	
  CIGNA

	
   
	
   

	
  Policy Number
	
  PHF018946

	
   
	
   

	
  Policy Period
	
  4/23/96 – 4/23/97

	
   
	
   

	
  Named Insured:
	
  Northern Technologies International

     Corporation

  Northern Instruments Corporation

  Micro Sensors, Inc.

  Special Control Systems, Inc.

	
   
	
   

	
  Liability Limits:
	
   

	
   
	
   

	
       Each Occurrence:
	
  $3,000,000

	
       Products/Completed
  Operations:
	
  $3,000,000

	
       Personal Injury &
  Advertising:
	
  $3,000,000

	
       Fire Legal Liability:
	
  $3,000,000

	
       Contingent Automobile:
	
  $3,000,000

	
       Employee Benefits –
  Each claim
	
  $3,000,000

	
            Annual
  Aggregate
	
  $3,000,000

	
   
	
   

	
  Minimum Premium (Flat):
	
  $6,350




This policy provides
foreign liability coverage anywhere in the world excluding the United States,
Canada, Puerto Rico, Cuba, Kampuchea, North Korea, Vietnam, Libya and
Iran.  Your activities taking place in
international waters or airspace are covered except those occurring between two
destinations of the United States, its territories, Canada or Puerto Rico.  Should a claim take place in jurisdictions
overseas where the foreign law prohibits CIGNA from defending or paying a claim
on behalf of Northern Technologies International Corporation, CIGNA will
reimburse Northern Technologies International Corporation for those claims and
expenses you are required to pay, including the cost of your defense.

This policy provides
protection for Northern Technologies International Corporation, Northern
Instruments Corporation, Micro Sensors, Inc. and Special Control Systems, Inc.
as entities and also for the interest the Corporations may have in any joint
ventures if damages arise out of the operations of those joint ventures.  The purpose is not to protect the joint
venture itself, but to protect the interest of Northern Technologies
International Corporation, Northern Instruments, Inc., Micro Sensors, Inc. and
Special Control Systems, Inc. solely. 
Coverage is limited to the percentage of interest that you have in the
Joint Venture.


28










FOREIGN LIABILITY POLICY
- continued

The Automobile section of
this policy provides Automobile Liability coverage for owned, leased, hired or
borrowed vehicles you may operate in a foreign country.  It should be noted there is no Automobile
Physical Damage coverage on this policy. 
If you rent vehicles in foreign countries, we need to address the
Physical Damage coverage.

The policy is primary
coverage where no primary policy exists in a foreign country.  The policy is excess and contingent coverage
over any local foreign insurance.  All
claims paid by this policy will be paid in U.S. dollars.  In countries where this would not be
acceptable, the current dollar rate of exchange will prevail as of the date of
loss.

The policy is written on
a flat charge basis.  This means the
policy is not subject to audit.  The
premium is also the minimum premium, so if the policy is canceled prior to
expiration, there would be no return premium.

29










ANNEX II

TRADE
SECRECY AGREEMENT

THIS
AGREEMENT, dated this [         ] day of [                    ]

BETWEEN:-

	
  (1)

  	
  ZERUST (UK) LIMITED
  a company incorporated under the laws of England and Wales with number
  3248266 and whose registered office is at Meadowfield Avenue, Green Lane
  Industrial Estate, Spennymoor, Co Durham. 
  DLl6 6YT (“the Company”);

	
   
	
   

	
  (2)
	
  [                              ]
  (“the Agent”); and

	
   
	
   

	
  (3)
	
  NORTHERN TECHNOLOGIES INTERNATIONAL
  CORPORATION, a company organised under the laws of the
  State of Delaware, USA (“NTI”) the principal place of business of which is
  Lino Lakes, Minnesota, USA.




WHEREAS, the Company is
engaged in the development, manufacture, and sale of various products and
services and in research work and, in such activities, utilizes secret and
confidential techniques, methods, processes, equipment, formulae, customer
lists and information;

WHEREAS, the Company
receives Technical Assistance and Marketing Support from Northern Technologies
International Company (“NTI”) for the Promotion, Sale and Application of
polyethylene film and solid material of polyethylene substance in the form of
boxes, tubes and other containers utilizing the trademark “ZERUST” in the
Territory (the “Product”); and

WHEREAS, the Company and
NTI have expended and will continue to expend substantial sums of money to
train the Agent in the Company’s business including but not limited to
marketing the Product, and without which expenditures the Agent would have no
such training in the Company’s business and marketing the Product; and

30











WHEREAS, the Company and
NTI have imparted and will continue to impart to the Agent in the course of his
employment and training information pertaining to the Product, certain
processes, technical knowhow, marketing and sales techniques, customer
identities and other confidential information not now known to the general
public, which knowhow and information constitute valuable, proprietary and
confidential trade secrets of the Company and NTI;

NOW THEREFORE, in
consideration of the employment of the Agent by the Company, the special
training with respect to the Company’s buisness and the Product to be provided
to him, and the salary to be paid to the Agent by the Company during the term
of his employment, it is agreed as follows:

	
  1.
	
  The Agent agrees that during his employment by the
  Company and for so long thereafter as the same has not (other than a result
  of disclosure by the Company) entered the public domain, he will not, without
  the prior written consent of the Company and NTI, (i) use outside of the
  service of the Company or (ii) disclose or divulge to anyone other than
  persons designated by the Company, any of the following:

	
   
	
   

	
   
	
  a.
	
  any knowledge or information of a confidential
  nature acquired by him with respect to the trade secrets of NTI including,
  but not limited to, process, techniques, research, methods technology,
  equipment, formulae, pricing, cost data, technical knowhow, memoranda,
  marketing/sales strategy, promotion, suppliers and customers which he now
  knows or other confidential information of the Company or NTI, knowledge of
  which is acquired by the Agent during the term of his employment by the
  Company (collectively, “Trade Secrets”).

	
   
	
   
	
   

	
   
	
  b.
	
  any of the unpublished records, books of account,
  documents, letters, diagrams, computer disks, papers or memoranda of NTI or
  (collectively “Internal Data”).

	
   
	
   
	
   

	
  2.
	
  The Agent shall at no time copy, remove from their
  proper location, or retain without the Company’s prior written consent, the
  originals or copies of such Trade Secrets or Internal Data.

	
   
	
   

	
  3.
	
  The Agent shall not, for a period of three (3) years
  subsequent to the termination of his employment with the Company for any
  reason, compete, directly or indirectly (whether as an employee, partner,
  investor, shareholder or director), or accept any employment with any person
  or company competing with the Company in the marketing, sale of manufacturing
  of the Product or products similar thereto in any place in the Territory
  which are competitive in nature to the business of the Company, if such
  employment would in its inherent nature require the Agent to utilize any of
  the Trade Secrets, Internal Data or portions thereof.




31











	
  4.

  	
  The Agent and the Company hereby agree and
  acknowledge that NTI is an intended beneficiary of this Trade Secrecy
  Agreement and that NTI shall have the incontroversible right to enforce this
  Trade Secrecy Agreement independently of the Company, if NTI, in its sole
  judgement, chooses to do so, and may proceed directly against the Agent for
  any breach of the Agent’s obligations hereunder to the full extent of the
  law.





IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as a Deed on the day and year first above written.


32