LICENSE AGREEMENT


BY AND BETWEEN


NTI ASEAN LLC


AND


TIANJIN ZERUST ANTI-CORROSION TECHNOLOGIES
LTD.


DATED AS OF 1 SEPTEMBER, 1999











TABLE OF CONTENTS


	
  ARTICLE 1

  	
   
	
  DEFINITIONS
	
  1
	
   

	
   
	
  1.1.
	
   
	
  Shareholders Joint Venture Agreement or Agreement.
	
  1
	
   

	
   
	
  1.2.
	
   
	
  Ancillary Agreements.
	
  1
	
   

	
   
	
  1.3.
	
   
	
  Parties.
	
  1
	
   

	
   
	
  1.4.
	
   
	
  CMG.
	
  1
	
   

	
   
	
  1.5.
	
   
	
  NTI.
	
  2
	
   

	
   
	
  1.6.
	
   
	
  Taiyo
	
  2
	
   

	
   
	
  1.7.
	
   
	
  NTI ASEAN.
	
  2
	
   

	
   
	
  1.8.
	
   
	
  NTI and/or NTI ASEAN Affiliates.
	
  2
	
   

	
   
	
  1.9.
	
   
	
  Corporation or Joint Venture
	
  2
	
   

	
   
	
  1.10.
	
   
	
  Corporation’s Business.
	
  2
	
   

	
   
	
  1.11.
	
   
	
  Territory.
	
  3
	
   

	
   
	
  1.12.
	
   
	
  Effective Date
	
  3
	
   

	
   
	
  1.13.
	
   
	
  NTI Intellectual Property Rights.
	
  3
	
   

	
   
	
  1.14.
	
   
	
  Knowhow.
	
  3
	
   

	
   
	
  1.15.
	
   
	
  Materials.
	
  3
	
   

	
   
	
  1.16.
	
   
	
  Process
	
  3
	
   

	
   
	
  1.17.
	
   
	
  Product.
	
  3
	
   

	
   
	
  1.18.
	
   
	
  Masterbatch.
	
  4
	
   

	
   
	
  1.19.
	
   
	
  Trademark.
	
  4
	
   

	
   
	
  1.20.
	
   
	
  NTI and/or NTI ASEAN Trade Secrets.
	
  4
	
   

	
   
	
  1.21.
	
   
	
  Other Agreed Upon Technologies
	
  4
	
   

	
   
	
  1.22.
	
   
	
  Net Sales
	
  4
	
   

	
   
	
  1.23.
	
   
	
  At Cost
	
  5
	
   

	
   
	
  1.24.
	
   
	
  Shareholder
	
  5
	
   

	
   
	
  1.25.
	
   
	
  Equity Interest.
	
  5
	
   

	
   
	
  1.26.
	
   
	
  Transfer of Equity Interest.
	
  5
	
   

	
   
	
  1.27.
	
   
	
  Transferor of Equity Interest.
	
  5
	
   

	
   
	
  1.28.
	
   
	
  Transfer Price for Equity Interest.
	
  5
	
   

	
   
	
  1.29.
	
   
	
  Transferee.
	
  5
	
   

	
   
	
  1.30.
	
   
	
  Change of Control.
	
  5
	
   

	
  ARTICLE 2
	
   
	
  GRANT OF LICENSE BY NTI ASEAN TO TIANJIN ZERUST WITH RESPECT TO
  PRODUCT
	
  6
	
   

	
   
	
  2.1.
	
   
	
  NTI ASEAN’s Representations.
	
  6
	
   

	
   
	
  2.2.
	
   
	
  Grant of License by NTI ASEAN to TIANJIN ZERUST with Respect to
  Product.
	
  6
	
   

	
   
	
  2.3.
	
   
	
  Commitment to NTI ASEAN by TIANJIN ZERUST in Consideration of
  Exclusive License to Intellectual Property Rights in Territory.
	
  6
	
   

	
   
	
  2.4.
	
   
	
  Enlargement of Scope of NTI Intellectual Property Rights Not Subject
  to This License
	
  6
	
   

	
   
	
  2.5.
	
   
	
  Claims Against TIANJIN ZERUST for Infringement.
	
  6
	
   

	
  ARTICLE 3
	
   
	
  IMPROVEMENTS AND MODIFICATIONS TO NTI INTELLECTUAL PROPERTY RIGHTS
	
  7
	
   

	
   
	
  3.1.
	
   
	
  Ongoing Research and Development by NTI.
	
  7
	
   

	
   
	
  3.2.
	
   
	
  Improvements to NTI Intellectual Property Rights by NTI and/or NTI
  ASEAN
	
  7
	
   

	
   
	
  3.3.
	
   
	
  Disclosure of Improvements in and Modifications to the NTI
  Intellectual Property Rights by NTI and/or NTI ASEAN to TIANJIN ZERUST.
	
  7
	
   




i











	
  ARTICLE 4

  	
   
	
  GRANT OF RIGHT AND LICENSE BY TIANJIN ZERUST TO NTI CONCERNING
  IMPROVEMENTS IT MAY ACQUIRE TO NTI INTELLECTUAL PROPERTY RIGHTS
	
  8
	
   

	
   
	
  4.1.
	
   
	
  Disclosure of Improvements to NTI ASEAN by TIANJIN ZERUST.
	
  8
	
   

	
   
	
  4.2.
	
   
	
  Grant of Right and License by TIANJIN ZERUST to NTI and/or NTI ASEAN
	
  8
	
   

	
   
	
  4.3.
	
   
	
  Obligations of TIANJIN ZERUST Concerning the Filing of New Patents.
	
  8
	
   

	
   
	
  4.4.
	
   
	
  Review of Potentially Infringing Technology.
	
  8
	
   

	
  ARTICLE 5
	
   
	
  RESPONSIBILITIES OF NTI ASEAN TO TIANJIN ZERUST WITH RESPECT TO THE
  LICENSING OF OTHER AGREED UPON TECHNOLOGIES
	
  9
	
   

	
   
	
  5.1.
	
   
	
  Agreement of the Parties to Add Other Agreed Upon Technologies to the
  Scope of the Corporation’s Business.
	
  9
	
   

	
   
	
  5.2.
	
   
	
  Search for Other Agreed Upon Technologies.
	
  9
	
   

	
   
	
  5.3.
	
   
	
  Licensing Strategy for Other Agreed Upon Technologies
	
  9
	
   

	
   
	
  5.4.
	
   
	
  Development of the Market for Other Agreed Upon Technologies, Once
  Licensed, in the Territory.
	
  9
	
   

	
  ARTICLE 6
	
   
	
  ROYALTIES
	
  10
	
   

	
   
	
  6.1.
	
   
	
  Basis for Royalties With Respect to Product.
	
  10
	
   

	
   
	
  6.2.
	
   
	
  Royalties Due with Respect to Product
	
  10
	
   

	
   
	
  6.3.
	
   
	
  Royalties Payable to NTI ASEAN With Respect to Other Agreed Upon Technologies.
	
  10
	
   

	
   
	
  6.4.
	
   
	
  No Separate Compensation to NTI ASEAN on Technology Transfer.
	
  11
	
   

	
   
	
  6.5.
	
   
	
  When a Sale is Deemed to Occur.
	
  11
	
   

	
   
	
  6.6.
	
   
	
  License Year
	
  11
	
   

	
   
	
  6.7.
	
   
	
  Statements to NTI ASEAN.
	
  11
	
   

	
   
	
  6.8.
	
   
	
  Books and Records.
	
  12
	
   

	
  ARTICLE 7
	
   
	
  PROTECTION OF NTI AND/OR NTI ASEAN TRADE SECRETS
	
  13
	
   

	
   
	
  7.1.
	
   
	
  Recognition of NTI and/or NTI ASEAN Trade Secrets.
	
  13
	
   

	
   
	
  7.2.
	
   
	
  Protection of NTI and/or NTI ASEAN Trade Secrets.
	
  13
	
   

	
   
	
  7.3.
	
   
	
  Protection of NTI and/or NTI ASEAN Trade Secrets by Agents (as
  hereinafter defined) and Submanufacturers (as hereinafter defined) of TIANJIN
  ZERUST.
	
  13
	
   

	
   
	
  7.4.
	
   
	
  Remedies in the Event of a Violation of Article 7 Hereof.
	
  14
	
   

	
  ARTICLE 8
	
   
	
  COVENANT TO OBSERVE THE DOCTRINE OF “CORPORATE OPPORTUNITY”
	
  15
	
   

	
   
	
  8.1.
	
   
	
  Doctrine of Corporate Opportunity and Observance Thereof.
	
  15
	
   

	
   
	
  8.2.
	
   
	
  Agreement Not to Divert Resources.
	
  15
	
   

	
   
	
  8.3.
	
   
	
  Remedies for Breach of Agreement Not to Divert Resources.
	
  15
	
   

	
  ARTICLE 9
	
   
	
  TERM OF AGREEMENT
	
  16
	
   

	
   
	
  9.1.
	
   
	
  Indefinite Term
	
  16
	
   

	
   
	
  9.2.
	
   
	
  Termination.
	
  16
	
   

	
   
	
  9.3.
	
   
	
  Termination Upon Change of Control of a Party.
	
  17
	
   

	
   
	
  9.4.
	
   
	
  Termination Upon Bankruptcy or Insolvency.
	
  17
	
   

	
   
	
  9.5.
	
   
	
  Payment of Amounts Due.
	
  17
	
   

	
   
	
  9.6.
	
   
	
  Cooperation Upon Termination.
	
  17
	
   

	
   
	
  9.7.
	
   
	
  Non-Release of Obligations.
	
  17
	
   

	
   
	
  9.8.
	
   
	
  Cessation of Rights Upon Termination.
	
  17
	
   




ii











	
  ARTICLE 10

  	
   
	
  DEFAULT
	
  18
	
   

	
   
	
  10.1.
	
   
	
  Event of Default.
	
  18
	
   

	
   
	
  10.2.
	
   
	
  Remedies Upon Default or Breach.
	
  18
	
   

	
   
	
  10.3.
	
   
	
  Non-Waiver of Rights.
	
  18
	
   

	
  ARTICLE 11
	
   
	
  DISPUTE RESOLUTION
	
  19
	
   

	
   
	
  11.1.
	
   
	
  Dispute Resolution by Arbitration.
	
  19
	
   

	
   
	
  11.2.
	
   
	
  Disputes Not Subject to Arbitration.
	
  20
	
   

	
   
	
  11.3.
	
   
	
  Conduct of Arbitration Proceedings
	
  20
	
   

	
   
	
  11.4.
	
   
	
  Designation of the “Prevailing Party”.
	
  20
	
   

	
   
	
  11.5.
	
   
	
  Punitive Damages Excluded
	
  20
	
   

	
  ARTICLE 12
	
   
	
  GENERAL PROVISIONS
	
  20
	
   

	
   
	
  12.1.
	
   
	
  Benefit of Parties.
	
  20
	
   

	
   
	
  12.2.
	
   
	
  Counterparts.
	
  21
	
   

	
   
	
  12.3.
	
   
	
  Cooperation.
	
  21
	
   

	
   
	
  12.4.
	
   
	
  Index, Captions, Definitions and Defined Terms
	
  21
	
   

	
   
	
  12.5.
	
   
	
  Waiver of Compliance.
	
  21
	
   

	
   
	
  12.6.
	
   
	
  Force Majeure.
	
  21
	
   

	
   
	
  12.7.
	
   
	
  Notices
	
  22
	
   

	
   
	
  12.8.
	
   
	
  Entire Agreement.
	
  23
	
   

	
   
	
  12.9.
	
   
	
  Validity of Provisions
	
  23
	
   

	
   
	
  12.10.
	
   
	
  Governmental Filings.
	
  23
	
   

	
   
	
  12.11.
	
   
	
  Payments.
	
  23
	
   

	
   
	
  12.12.
	
   
	
  Derivative Enforcement by CMG.
	
  24
	
   

	
   
	
  12.13.
	
   
	
  Changes Subject to Approval of CMG.
	
  24
	
   




iii










LICENSE AGREEMENT


          This License
Agreement is made and entered into as of this 1 day of September, 1999, by and
between NTI ASEAN, LLC, whose registered office is located in Reno, Nevada,
U.S.A. (hereinafter “NTI ASEAN”) and TIANJIN ZERUST ANTI-CORROSION TECHNOLOGIES
LTD., whose principal office is located at No. 127 Tower 1 Huoju Building,
Huayuan Industrial Zone, Tianjin, P.R.China (hereinafter “TIANJIN ZERUST”). 


ARTICLE 1

DEFINITIONS

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

1.1.    Shareholders Joint Venture
Agreement or Agreement.

          That
certain Shareholders Joint Venture Agreement by and between NTI ASEAN (as
hereinafter defined), and CMG (as hereinafter defined), for the formation and
governance of a new entity under the laws of The People’s Republic of China in
the form of a limited liability company which shall be known as TIANJIN ZERUST
(“TIANJIN ZERUST”). 

1.2.    Ancillary Agreements.

          The
following are the Ancillary Agreements and the Parties thereto: 

	
   
	
  1.2.1.
	
  Consulting
  Services Agreement For Management and Sales Representation between CMG and
  TIANJIN ZERUST (“Consulting Services Agreement”); 

	
   
	
   
	
   

	
   
	
  1.2.2.
	
  License
  Agreement between NTI ASEAN and TIANJIN ZERUST (“License Agreement”); and 

	
   
	
   
	
   

	
   
	
  1.2.3.
	
  Technical
  Assistance and Marketing Support Agreement between NTI ASEAN and TIANJIN
  ZERUST (“Technical Assistance Agreement”). 




1.3.    Parties.

          The Parties
to the Shareholders Joint Venture Agreement and/or the Ancillary Agreements,
their successors and permitted assigns. 


1.4.    CMG.

          CMG, a
limited liability company organized under the laws of The People’s Republic of
China, and the owner of a 50% interest in the Corporation pursuant to the terms
of the Agreement.  The ownership of CMG
is as follows: Container (Beijing) Industrial Company, 20%; Tianjin CNCC Zhi
Hua Trading Ltd., 5%; Ping Shan CNCC Si Qiang Group Company, 66% and CNCC 9%. 

1










1.5.    NTI.

          Northern
Technologies International Corporation, a company organized under the laws of
the State of Delaware, U.S.A. the principal place of business of which is Lino
Lakes, Minnesota, U.S.A.  NTI is the
owner of the NTI Intellectual Property Rights (as hereinafter defined), and of
a 50% in NTI ASEAN (as hereinafter defined). 

1.6.    Taiyo.

          Taiyo
Petroleum Gas Co Ltd. A Kabushiki Kaisha organized under the laws of Japan and
the owner of a 50% interest in Party B (as hereinafter defined). 

1.7.    NTI ASEAN.

          NTI ASEAN,
LLC, a Limited Liability Company, organized under the laws of the State of
Nevada, U.S.A., whose registered office is in Reno, Nevada, U.S.A., to which
NTI has assigned all of its right, title and interest in the NTI Intellectual
Property Rights (as hereinafter defined) for the Territory (as hereinafter
defined), and the owner of a 50% interest in the Corporation pursuant to the
Agreement. 

1.8.    NTI and/or NTI ASEAN
Affiliates.


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

          1.8.1.          NTI
Affiliates.

          The NTI
Affiliates as of the date hereof are set forth in Annex I to the Shareholders
Joint Venture Agreement. 

          1.8.2.          NTI
ASEAN Affiliates.

          The NTI
Asean affiliates as of the date hereof are set forth in Annex II to the
Shareholders Joint Venture Agreement. 

1.9.    Corporation or Joint Venture.

          TIANJIN
ZERUST, that entity created in the Territory by the Parties pursuant to the
Shareholders Joint Venture Agreement to conduct the Corporation’s Business. 

1.10.  Corporation’s Business.

          The
Corporation’s Business shall be the manufacturing, marketing and distribution
of Product, pursuant to NTI Intellectual Property Rights, and any other
technologies as shall be determined by the Parties in writing and made a part
hereof pursuant to Article 1.21 of this Agreement, in the Territory.

2











1.11.  Territory.

          The
People’s Republic of China. 

1.12.  Effective Date.

          The date
upon which all necessary formal approvals from the appropriate authorities of
The People’s Republic of China for the Shareholders Joint Venture Agreement
have been obtained and the Corporation has been duly registered pursuant to the
Shareholders Joint Venture Agreement and the Ancillary Agreements as
appropriate in the Territory. 

1.13.  NTI Intellectual Property Rights.

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

1.14.  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 application of the Process, together with all
improvements and modifications with respect thereto. 

1.15.  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. 

1.16.  Process.

          The
procedure utilizing the Knowhow for the manufacture of polyethylene substances
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 substances, together with future technology,
knowledge and product development which is useful in the manufacture of the
Product. 

1.17.  Product.


          Corrosion
inhibiting polyethylene film and solid substances of polyethylene in the form
of boxes, tubes and other containers, which may include other volatile
corrosion inhibiting host packaging substances such as paper, manufactured by
means of the Process, incorporating the Materials and utilizing the Trademark,
all of which have been developed and are owned by NTI. 

3










1.18.  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. 

1.19.  Trademark.

          The name
and style “ZERUST”, which includes trade literature, technical specifications
and application instructions, and promotional material pertaining thereto,
together with any ancillary trademark registrations, which may differ between
various jurisdictions. 

1.20.  NTI and/or NTI ASEAN Trade Secrets.

          All
information deemed and designated confidential, both in the Shareholders Joint
Venture Agreement and in the Ancillary Agreements and hereafter, including but
not limited to information regarding the Knowhow, Materials, Process, Product
and/or 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 and Intellectual Property Rights of NTI, NTI
ASEAN, the Corporation and NTI and/or NTI ASEAN Affiliates, both in the
Territory and elsewhere. 

1.21.  Other Agreed Upon Technologies.


          In
conformity with the objectives of the Parties hereto to expand the
Corporation’s Business over time, the Parties shall endeavor to identify
products, materials and/or technologies, which are both compatible with the
Corporation’s Business, and susceptible of being profitably marketed through
and/or by the Corporation in the Territory. 
Upon joint agreement of the Parties, in writing, to adopt such new
products, materials and/or technologies within the scope of the Corporation’s
Business, and successful negotiation of requisite commercial rights to
commercialize such new products, materials and/or technologies in the
Territory, such new products, materials and/or technologies shall be deemed to
be incorporated within the Corporation’s Business as “Other Agreed Upon
Technologies” to be treated as set forth in this License Agreement. 

1.22.  Net Sales.

          The total
proceeds from the sale of Product and Other Agreed Upon Technologies sold by
the Corporation in normal, bona fide commercial transactions on an arm’s length
basis to, by, with, or through an entity which is not affiliated with 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.  Sales
made to an entity which is not affiliated with any Party of this Agreement
through an affiliated entity, in accordance with article 4.3 of the Management
and Sales Representation Agreement shall be included in total proceeds for the
purpose of this definition of Net Sales. 

4










1.23.  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 proscription “At Cost”). 

1.24.  Shareholder.


          Any holder,
from time to time, of an Equity Interest in the Corporation and who presently
is a Party to the Shareholders Joint Venture Agreement or who may become a
Party to the Shareholders Joint Venture Agreement in the future. 

1.25.  Equity Interest.

          Any validly
issued Equity Interest in the Corporation owned by any Shareholder pursuant to
the Shareholders Joint Venture Agreement. 

1.26.  Transfer of Equity Interest.

          Any sale,
transfer, assignment, pledge or disposition of Equity Interests in the
Corporation in any way, whether voluntarily or involuntarily, by gift, legal
procedure, operation of law, or any other means. 

1.27.  Transferor of Equity Interest.

          A
Shareholder who declares an intention to Transfer an Equity Interest in the
Corporation and/or initiates the Transfer of an Equity Interest. 

1.28.  Transfer Price for Equity Interest.


          The price
per share for the Equity Interest of the Corporation offered on an arm’s-length
basis by an outside party to the Transferor in a bona fide written offer. 

1.29.  Transferee. 

          Any new
Shareholder, who has heretofore not been a party to the Shareholders Joint
Venture Agreement, who acquires his Equity Interest pursuant to the provisions
of the Shareholders Joint Venture Agreement, and who thereafter signs and becomes
a Party to the Shareholders Joint Venture Agreement. 

1.30.  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 Shareholders Joint Venture Agreement or the Ancillary
Agreements. 

5










ARTICLE 2

GRANT OF LICENSE BY NTI ASEAN TO

TIANJIN ZERUST WITH RESPECT TO PRODUCT

2.1.    NTI ASEAN’s Representations.


          NTI ASEAN
hereby represents to TIANJIN ZERUST that it has been assigned all of NTI’s
Right, Title and Interest in NTI Intellectual Property Rights for the Territory
and that it is free to license and to disclose same to TIANJIN ZERUST. 

2.2.    Grant of License by NTI
ASEAN to TIANJIN ZERUST with Respect to Product.

          NTI ASEAN
hereby grants to TIANJIN ZERUST upon the terms, provisions and conditions set
forth herein, an exclusive, non-transferable right and license to the Knowhow
and Process to make, have made, use, sell or otherwise dispose of Product
incorporating Masterbatch under the Trademark within the Territory.  TIANJIN ZERUST shall not sell, distribute,
promote or solicit customers for Product outside of the Territory including but
not limited to such countries or regions where (i) NTI and/or NTI ASEAN has a
corresponding patent(s) filed and in effect; (ii) NTI and/or NTI ASEAN has
licensed or otherwise authorized the use of the Trademark; (iii) NTI and/or NTI
ASEAN has granted exclusive sales rights to a third party licensee; (iv) NTI
and/or NTI ASEAN has formed an alliance with another NTI and/or NTI ASEAN
Affiliate; or (v) NTI and/or NTI ASEAN engages in the regular sale of Product. 

	
  2.3.

  	
  Commitment to NTI ASEAN by TIANJIN ZERUST in Consideration of
  Exclusive License to Intellectual Property Rights in Territory.




          TIANJIN
ZERUST agrees that during the term of this License Agreement it shall not,
without the prior written consent of NTI ASEAN, enter into a license agreement,
distribution agreement or any other agreement or relationship with any other
party for the use of such party’s processes, knowhow, techniques and procedures
which would in any way conflict with, substitute, displace or impede the
Corporation’s Business within the Territory; and acknowledges that such action
would constitute a violation of Article 8 hereof. 

2.4.    Enlargement of Scope of NTI
Intellectual Property Rights Not Subject to This License.

          It is
recognized that over a period of time the scope of the NTI Intellectual
Property Rights not covered by this License Agreement may expand in related
areas.  The addition of such additional
NTI Intellectual Property Rights under this License Agreement shall be as
mutually agreed by NTI ASEAN and TIANJIN ZERUST, based upon their joint assessment
of the prospective market therefor within the Territory and the suitability of
including such additional NTI Intellectual Property Rights within the
Corporation’s Business. 

2.5.    Claims Against TIANJIN
ZERUST for Infringement.

          Notwithstanding
the provisions of Article 2.1 hereof, in the event that any third party shall
claim that TIANJIN ZERUST is infringing upon its patents or other intellectual
property rights, TIANJIN ZERUST shall promptly notify NTI ASEAN of such claims.
Thereafter, NTI ASEAN and TIANJIN ZERUST shall together determine an
appropriate course of conduct in response to such claims.

6











ARTICLE 3

IMPROVEMENTS AND MODIFICATIONS TO

NTI INTELLECTUAL PROPERTY RIGHTS 

3.1.    Ongoing Research and
Development by NTI.

          NTI shall
continue its efforts in research and development to improve the NTI
Intellectual Property Rights and NTI ASEAN shall make the results of such
research and development available to TIANJIN ZERUST through this License
Agreement. 

3.2.    Improvements to NTI
Intellectual Property Rights by NTI and/or NTI ASEAN.

          Any and all
improvements or modifications to the NTI Intellectual Property Rights, of
whatever nature and description, made by or through NTI and/or NTI ASEAN, or
acquired by either of them, or coming under their control during the term of
this License Agreement, which relate to the Product and which are suitable and
useful in the Corporation’s Business, shall be deemed to be covered by this
License Agreement and shall be made available to TIANJIN ZERUST without any
royalty payment therefor in addition to the payments provided for in this
License Agreement.  It is understood,
however, that if NTI and/or NTI ASEAN should acquire improvements in or modifications
to the NTI Intellectual Property Rights by means of a license from a third
party, then NTI’s and/or NTI ASEAN’s obligations hereunder shall be subject to
the provisions of such license. 

	
  3.3.
	
  Disclosure of Improvements in and Modifications to the NTI
  Intellectual Property Rights by NTI and/or NTI ASEAN to TIANJIN ZERUST.




          NTI and/or
NTI ASEAN agree to disclose to TIANJIN ZERUST promptly any and all improvements
in or modifications to the NTI Intellectual Property Rights as covered by this
License Agreement, and any and all Knowhow and technical information which NTI
and/or NTI ASEAN may acquire with respect to or relating to any such
improvements or modifications.  Anything
in this License Agreement or the Shareholders Joint Venture Agreement to the
contrary notwithstanding, in the event that: 

	
   
	
  3.3.1.
	
  NTI and/or
  NTI Asean should determine that any such improvements in or modifications to
  the NTI Intellectual Property Rights, which are proprietary to either of
  them, are themselves patentable and the disclosure thereof would in any
  manner adversely affect NTI’s and/or NTI Asean’s ability to obtain a patent
  with respect thereto or would otherwise be adverse to their best interests
  with respect to the protection of the NTI Intellectual Property Rights
  related thereto; and/or 

	
   
	
   
	
   

	
   
	
  3.3.2.
	
  NTI and/or
  NTI Asean intend to file or have filed a patent application with respect
  thereto; then neither NTI nor NTI ASEAN shall be under any obligation to make
  disclosure thereof to TIANJIN ZERUST until they have obtained adequate patent
  protection in the opinion of their patent counsel.  When such patent protection has been obtained, the subject
  improvements or modifications will then be disclosed promptly to TIANJIN
  ZERUST and the same will fall within the scope of the License granted to TIANJIN
  ZERUST pursuant to this License Agreement.




7










ARTICLE 4

GRANT OF RIGHT AND LICENSE BY TIANJIN ZERUST TO NTI

CONCERNING IMPROVEMENTS IT MAY ACQUIRE TO

NTI INTELLECTUAL PROPERTY RIGHTS

4.1.    Disclosure of Improvements
to NTI ASEAN by TIANJIN ZERUST.

          TIANJIN
ZERUST agrees to disclose promptly to NTI ASEAN any improvements in or
modifications to NTI Intellectual Property Rights of whatever nature or
description, which come to be learned by TIANJIN ZERUST or which are made by or
through its efforts, without any obligation by NTI or NTI ASEAN to make payment
therefor. 

4.2.    Grant of Right and License
by TIANJIN ZERUST to NTI and/or NTI ASEAN.


          TIANJIN
ZERUST hereby grants to NTI and/or NTI ASEAN an exclusive, worldwide and fully
paid-up right and license under any intellectual property rights, trade secrets
and knowhow owned, controlled, or acquired by TIANJIN ZERUST or which may
otherwise be transferred or granted to TIANJIN ZERUST during the term of this
License Agreement and for a period of two years following the termination
hereof to make, have made, use, sell or otherwise dispose of products
incorporating any or all improvements in and modifications to NTI Intellectual
Property Rights together with the Knowhow, Materials, Process, Product and/or
Masterbatch, and/or to sublicense third parties to do the same. 

4.3.    Obligations of TIANJIN
ZERUST Concerning the Filing of New Patents.

          TIANJIN
ZERUST agrees that at NTI’s and/or NTI ASEAN’s request and at NTI’s and/or NTI
ASEAN’s cost it will promptly file and diligently prosecute applications for
letters patent in the name of NTI on any and all patentable improvements to NTI
Intellectual Property Rights coming into its purview.  TIANJIN ZERUST further agrees, upon NTI’s and/or NTI ASEAN’s
request and at NTI’s and/or NTI ASEAN’s cost, that it will promptly file and
diligently prosecute corresponding patent applications in the name of NTI in
such other countries outside the Territory as are designated by NTI and/or NTI
ASEAN. 

4.4.    Review of Potentially
Infringing Technology.

          In the
event that TIANJIN ZERUST shall learn of any technology, processes or patents
developed or owned by third parties which may infringe or otherwise be in
conflict with NTI Intellectual Property Rights, then TIANJIN ZERUST shall
forthwith provide NTI and/or NTI ASEAN with whatever information it may have
with respect thereto.  NTI and/or NTI
ASEAN and TIANJIN ZERUST will then consult with one another as to: 

	
   
	
  4.4.1.
	
  Taking
  appropriate legal action against such third party for infringement of NTI
  Intellectual Property Rights together with NTI and/or NTI ASEAN Trade
  Secrets; and/or 

	
   
	
   
	
   

	
   
	
  4.4.2.
	
  Purchasing,
  licensing or otherwise acquiring such technology, processes or patents from
  such third parties, in which event such rights as are acquired shall be
  extended to NTI and/or NTI ASEAN pursuant to Article 4.2 hereof.  In such event, based upon the joint
  decision of the Parties, TIANJIN ZERUST shall exert its best efforts to carry
  out whatever the Parties have determined to be in their mutual best interest.
  




8










ARTICLE 5

RESPONSIBILITIES OF NTI ASEAN TO TIANJIN ZERUST

WITH RESPECT TO THE LICENSING OF

OTHER AGREED UPON TECHNOLOGIES

	
  5.1.
	
  Agreement of the Parties to Add Other Agreed Upon Technologies to
  the Scope of the Corporation’s Business.




          The Parties
to the Shareholders Joint Venture Agreement and to the Ancillary Agreements
agree that it is a stated objective to build TIANJIN ZERUST by adding Other
Agreed Upon Technologies to the Scope of the Corporation’s Business. 

5.2.    Search for Other Agreed
Upon Technologies.


          NTI ASEAN
shall diligently search for Other Agreed Upon Technologies, appropriate for the
Territory, which might reasonably be included within the Scope of the Corporation’s
Business. 

5.3.    Licensing Strategy for
Other Agreed Upon Technologies.

          The Parties
agree to cooperate with each other in evaluating licensing opportunities and in
promulgating strategy with respect to negotiating and concluding license
agreements for Other Agreed Upon Technologies for and on behalf of the
Corporation in the Territory.  Further,
the Parties to this License Agreement and to the Shareholders Joint Venture
Agreement agree that NTI shall take the lead with respect to negotiating the
most favorable terms possible with the owner(s) of the intellectual property
rights with respect to Other Agreed Upon Technologies which the Parties wish to
add to the scope of the Corporation’s Business in the Territory; but that NTI
ASEAN shall not conclude any agreement for such intellectual property rights
for and on behalf of TIANJIIN ZERUST in the Territory, without the express
written approval of CMG and TIANJIN ZERUST, which approval shall not be
unreasonable withheld. 

	
  5.4.
	
  Development of the Market for Other Agreed Upon Technologies, Once
  Licensed, in the Territory.




          The Parties
recognize that the structure of the market for Other Agreed Upon Technologies
in the Territory will require a different approach from that required by the
structure of the market of Product. 
There is therefore an element of uncertainty relative to the market for
Other Agreed Upon Technologies for planning purposes.  The Parties agree, however, to cooperate in fulfilling the terms
of such license agreements as may be concluded with the joint approval of the
Parties, for Other Agreed Upon Technologies, which shall generally comport a
“best efforts” commitment by the Parties jointly to maximize the commercial and
financial results for TIANJIN ZERUST of the Corporation’s Business with respect
to Other Agreed Upon Technologies, in accordance with the provisions of the
Shareholders Joint Venture Agreement and the Ancillary Agreements.

9











ARTICLE 6

ROYALTIES

6.1.    Basis for Royalties With
Respect to Product.

          TIANJIN
ZERUST shall pay the royalties to NTI ASEAN with respect to Product which are
provided for in Article 6 of this License Agreement in consideration of the
grant of License as set forth in Article 2 hereof, which includes certain
rights to NTI Intellectual Property Rights, the Knowhow, Materials, Process,
Product, Masterbatch and Trademark, together with the NTI and/or NTI ASEAN
Trade Secrets disclosed herewith or furnished at a later date under this
License Agreement by NTI ASEAN to TIANJIN ZERUST.  Such royalty payments shall be made throughout the entire term of
this License Agreement as compensation in full for the rights set forth above
and duly licensed by NTI ASEAN to TIANJIN ZERUST, provided that NTI, together
with NTI ASEAN maintains diligent, tangible effort to improve the NTI
Intellectual Property Rights licensed to TIANJIN ZERUST hereunder, in
accordance with Articles 3.1 and 3.2 hereof. 

6.2.    Royalties Due with Respect
to Product.

          TIANJIN
ZERUST shall pay to NTI ASEAN a royalty equal to seven and one-half percent
(7.5%) of Net Sales of Product by the Corporation.  Royalties, less applicable withholding tax, shall be paid in U.S.
Dollars to an account or accounts as may be designated by NTI ASEAN from time
to time. 

6.3.    Royalties Payable to NTI
ASEAN With Respect to Other Agreed Upon Technologies.

          Royalties
to be paid by TIANJIN ZERUST to NTI ASEAN with respect to Other Agreed Upon
Technologies shall be as agreed between the Parties on a case-by-case basis.  Upon completion of a satisfactory agreement
to license the rights to include advanced products, materials and/or
technologies, under terms acceptable to the Parties, within the scope of the
Corporation’s Business as an Other Agreed Upon Technology, NTI ASEAN shall
perform substantially the same functions directly and/or cause the performance
of substantially the same functions for the Corporation under this License
Agreement with respect to each Other Agreed Upon Technology, that it does with
respect to NTI Intellectual Property Rights, including but not limited to NTI
and/or NTI ASEAN’s commitment to ongoing research and development of Other
Agreed Upon Technologies as set forth in Articles 3.1 and 3.2 hereof.  Accordingly, the percentage of royalties to
be paid to NTI ASEAN with respect to Net Sales of Other Agreed Upon
Technologies shall, unless otherwise agreed between the Parties, be equal to
the percentage of royalties paid by TIANJIN ZERUST to NTI ASEAN with respect to
Net Sales of Product.

10











6.4.    No Separate Compensation to
NTI ASEAN on Technology Transfer.

          There shall
be no separate compensation to NTI ASEAN for the transfer of technology to
TIANJIN ZERUST with respect to NTI Intellectual Property Rights or rights to
Other Agreed Upon Technologies, beyond the royalty payments payable to NTI
ASEAN on the actual sale of Product and goods based upon Other Agreed Upon
Technologies by the Corporation, as set forth in Articles 6.1., 6.2. and 6.3.
hereof. 

6.5.    When a Sale is Deemed to
Occur.

          A sale
shall be deemed to have occurred when Product or goods based upon Other Agreed
Upon Technologies have been billed, or (if not billed) delivered to and fully
paid for by a customer. 

6.6.    License Year.

          The term
“License Year” shall mean any twelve (12) month period ending on December 31,
except that the first License Year shall commence on the Effective Date, and
end at the next December 31 date. 

6.7.    Statements to NTI ASEAN.

          Within
sixty (60) days after the last day of each quarterly period in each License
Year, TIANJIN ZERUST shall: 

	
   
	
  6.7.1.
	
  Prepare and
  deliver to NTI ASEAN 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 License Year:

	
   
	
   
	
   

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

	
   
	
   
	
   
	
   

	
   
	
   
	
  (ii)
	
  The total
  amount of royalties on such Net Sales of Product (computed as hereinbefore
  provided) payable to NTI Asean. 

	
   
	
   
	
   
	
   

	
   
	
   
	
  (iii)
	
  The total
  amount of Net Sales of Other Agreed Upon Technologies (broken down in reasonable
  detail by individual volumes and customers and showing all costs and
  discounts leading to the establishment of the Net Sales figure for each
  customer); and 

	
   
	
   
	
   
	
   

	
   
	
   
	
  (iv)
	
  The total
  amount of royalties on such Net Sales of Other Agreed Upon Technologies
  (computed as hereinbefore provided) payable to NTI Asean. 

	
   
	
   
	
   
	
   

	
   
	
  6.7.2.
	
  Pay to NTI
  ASEAN the full amount of the royalties to which it is entitled for and with
  respect to the period or periods of the License Year covered by the
  statement(s) provided for in Article 6.7.1 hereof.

					



11










6.8.    Books and Records.


          TIANJIN
ZERUST covenants and agrees: 

	
   
	
  6.8.1.
	
  That it will
  keep complete and accurate commercial and financial records and books of
  account showing the amount of billings to customers and the amount of
  deductions therefrom in arriving at Net Sales of Product and Other Agreed
  Upon Technologies and all additional data and information which may be
  reasonably necessary to enable NTI’s or NTI ASEAN’s independent accountants
  to verify the completeness and accuracy of each item of information which
  TIANJIN ZERUST is required to set forth in each of the statements referred to
  in Article 6.7.1; 

	
   
	
   
	
   

	
   
	
  6.8.2.
	
  That it will
  keep all such commercial and financial records and books of account at its
  principal office and will preserve all 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 

	
   
	
   
	
   

	
   
	
  6.8.3.
	
  That it will
  make such commercial and financial records, books of account, data and
  information available to NTI ASEAN’s representatives and to NTI ASEAN’s
  independent accountants and will give to such representatives 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 TIANJIN ZERUST is required to set forth in each of the
  statements referred to in Article 6.7.1 hereof.  In addition, NTI ASEAN shall have the right to make copies of
  any of the foregoing.  The independent
  accountants of TIANJIN ZERUST shall in the ordinary course of business
  provide written confirmation and certification to NTI ASEAN, at least
  annually, of the data to be supplied to NTI ASEAN pursuant to Article 6.7.1
  hereof.  The cost of such reports
  shall be borne by TIANJIN ZERUST.  In
  the event that NTI ASEAN shall cause its representatives to confirm or verify
  the accuracy of the data supplied by TIANJIN ZERUST, then the costs and fees
  of such representatives shall be borne by NTI ASEAN unless such
  representatives shall determine, to the satisfaction of TIANJIN ZERUST’s
  independent accountants, that there is a variation in the reporting of Net
  Sales of five percent (5%) or more, in which event the costs and fees of NTI
  ASEAN’s representatives and/or accountants shall be borne by TIANJIN ZERUST. 




12










ARTICLE 7

PROTECTION OF NTI AND/OR

NTI ASEAN TRADE SECRETS


7.1.    Recognition of NTI and/or
NTI ASEAN Trade Secrets.


          TIANJIN
ZERUST acknowledges and agrees that (i) NTI Intellectual Property Rights; (ii)
NTI and/or NTI ASEAN Trade Secrets; (iii) the Knowhow, Materials, Process,
Product and Masterbatch; and (iv) other information deemed confidential by NTI
and/or NTI ASEAN and designated herein and hereafter relating to the business
of NTI and/or NTI ASEAN, of the Corporation, and of NTI and/or NTI ASEAN
Affiliates, both in the Territory and elsewhere, including but not limited to
applications of NTI Intellectual Property Rights, cost and cost accounting
data, 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 and/or NTI
ASEAN Trade Secrets set forth in Article 1.20 hereof and constitute valuable
property rights of NTI, NTI ASEAN and NTI and/or NTI ASEAN Affiliates. 

7.2.    Protection of NTI and/or
NTI ASEAN Trade Secrets.

          TIANJIN
ZERUST agrees that during the term of this License Agreement, as well as
following its termination and for all times thereafter, it shall keep secret
and confidential all NTI and/or NTI ASEAN Trade Secrets which it now knows or
may hereafter come to know as a result of the Shareholders Joint Venture
Agreement and Ancillary Agreements.  NTI
and/or NTI ASEAN Trade Secrets shall not be disclosed by TIANJIN ZERUST 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 TIANJIN ZERUST, 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 and/or NTI
ASEAN Trade Secret shall be in the public domain as the result of an act by
TIANJIN ZERUST or any Agent (as hereinafter defined) or Submanufacturer (as
hereinafter defined) thereof, then TIANJIN ZERUST shall nevertheless continue
to keep such NTI and/or NTI ASEAN Trade Secret secret and inviolate. 

	
  7.3.

  	
  Protection of NTI and/or NTI ASEAN Trade Secrets by Agents (as
  hereinafter defined) and Submanufacturers (as hereinafter defined) of TIANJIN
  ZERUST. 




          Neither
TIANJIN ZERUST, 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 ASEAN’s prior written consent, the
originals or copies of any NTI and/or NTI ASEAN Trade Secrets or of any of the
unpublished records, books of account, documents, letters, diagrams, computer
disks, papers or memoranda of NTI and/or NTI ASEAN.  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 and/or NTI
ASEAN Trade Secrets be strictly maintained both as to original documents and
copies thereof. 

13











	
   
	
  7.3.1.
	
  Insofar as
  the officers, employees and consultants of TIANJIN ZERUST (herein
  collectively “Agents”) who come in contact with NTI and/or NTI ASEAN Trade
  Secrets are concerned, TIANJIN ZERUST shall cause such Agents to enter into
  NTI and/or NTI ASEAN Trade Secrecy Agreements substantially in the form of
  Appendix I to this License Agreement. 
  TIANJIN ZERUST shall exert its best efforts to cause its Agents to
  adhere to and to abide by the provisions, restrictions and limitations of the
  NTI and/or NTI ASEAN Trade Secrecy Agreements which efforts shall include the
  institution and prosecution of appropriate litigation if such be necessary
  and desirable.

	
   
	
   
	
   

	
   
	
   
	
  (i)
	
  To the
  extent that TIANJIN ZERUST provides Masterbatch to Submanufacturers in
  requisite quantities to allow such Submanufacturers to manufacture Product in
  the Territory in such volumes and forms as may be required for the
  Corporation’s Business (“Submanufacturers”), it is understood that TIANJIN
  ZERUST may find it necessary to disclose certain NTI and/or NTI ASEAN Trade
  Secrets to such Submanufacturers for such purposes only; 

	
   
	
   
	
   
	
   

	
   
	
   
	
  (ii)
	
  NTI and/or
  NTI ASEAN Trade Secrets shall be disclosed only to such Submanufacturers who
  have been specifically approved in writing by NTI ASEAN and who have entered
  into NTI and/or NTI ASEAN Trade Secrecy Agreements with TIANJIN ZERUST in a
  form approved by NTI ASEAN, but substantially in the form of the NTI and/or
  NTI ASEAN Trade Secrecy Agreement set forth in Appendix I hereof; 

	
   
	
   
	
   
	
   

	
   
	
   
	
  (iii)
	
  Moreover,
  only those NTI and/or NTI ASEAN Trade Secrets which are absolutely essential
  for the functions to be performed by such Submanufacturers shall be disclosed
  to them. 

	
   
	
   
	
   
	
   

	
   
	
  7.3.2.
	
  TIANJIN
  ZERUST 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 apply the Process with respect to Product, incorporating
  Masterbatch, for the account of TIANJIN ZERUST.  Upon completion of any order for such Process of Product by a
  Submanufacturer, TIANJIN ZERUST shall pay such Submanufacturer for its
  services and the raw materials provided by the Submanufacturer in the Process
  and so take title to the Product, and shall require the return by the
  Submanufacturer of any Materials or Masterbatch not utilized in the Process.

	
   
	
   
	
   

	
   
	
  7.3.3.
	
  The Parties
  hereby agree and acknowledge that NTI and/or NTI ASEAN are intended third
  party beneficiaries of the NTI and/or NTI ASEAN Trade Secrecy Agreements, and
  that NTI and/or NTI ASEAN may each, in its sole discretion, on its own behalf
  or derivatively and/or on behalf of the Corporation directly enforce the
  provisions of the NTI and/or NTI ASEAN Trade Secrecy Agreements and/or any
  breach thereof against any and all Agents (as defined in Article 7.3.1
  hereof) and/or Submanufacturers (as defined in Article 6.3.1(i) hereof) who
  have executed same.

					



7.4.    Remedies in the Event of a
Violation of Article 7 Hereof.

          It is
understood and recognized by TIANJIN ZERUST that in the event of any violation
by TIANJIN ZERUST and/or its Agents of the provisions of Article 7 hereof, NTI
‘s and/or NTI ASEAN’s remedy at law will be inadequate and NTI and NTI ASEAN
will suffer irreparable injury. 
Accordingly, TIANJIN ZERUST consents to injunctive and other appropriate
equitable relief upon the institution of legal proceedings therefor by NTI
and/or NTI ASEAN and in any court of competent jurisdiction to protect NTI
and/or NTI ASEAN Trade Secrets.  Such
relief shall be in addition to any other relief to which NTI and/or NTI ASEAN
may be entitled at law or in equity, which shall include but not be limited to
the right of immediate termination of this License Agreement. 


14










ARTICLE 8

COVENANT TO OBSERVE THE

DOCTRINE OF “CORPORATE OPPORTUNITY”

8.1.    Doctrine of Corporate
Opportunity and Observance Thereof.

          It is the
intent of the Parties to this License Agreement, the Shareholders Joint Venture
Agreement and to the other Ancillary Agreements to deal solely with each other
with respect to the commercial, technical and strategic development of the
Corporation’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 the performance of their duties under the Shareholders Joint Venture
Agreement or the Ancillary Agreements in the Territory, or (b) have the effect
of displacing or substituting Net Sales of Product and/or of Other Agreed Upon
Technologies and/or the applications of NTI Intellectual Property Rights, in
the Territory; except as specifically agreed to by the Parties in furtherance
of the Corporation’s Business (“Corporate Opportunity”). 

8.2.    Agreement Not to Divert Resources.

          TIANJIN
ZERUST and NTI ASEAN agree that during the term of this License 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 Product and/or of Other Agreed Upon Technologies from the Corporation
within the Territory except through the Corporation in furtherance of the
Corporation’s Business.  During said
term NTI ASEAN shall not 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
Corporation.  In the event that this
License Agreement is terminated: (i) because of a material Breach of the
Shareholders 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 9 hereof; (iv)
pursuant to Article 10 hereof; or (v) upon a Breach of Articles 7 or 8 hereof,
then the Party in Breach or subject to such adverse condition shall continue to
be bound by the provisions of Article 8 of this License Agreement for a period
of three years following the date of termination, but shall at no time be
permitted to use NTI and/or NTI ASEAN Trade Secrets for any activity outside
the Corporation. 


8.3.    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 8 hereof by a Party, the remedy at law will be
inadequate and that the other Party to this License Agreement shall suffer
irreparable injury.  Accordingly, each
Party to this License Agreement consents to injunctive or other appropriate
equitable relief upon the institution of legal proceedings therefor by the
non-violating Party.  Such relief shall
be in addition to any other relief to which a Party may be entitled at law or
in equity, which shall include but not be limited to the right of immediate
termination of this License Agreement. 

15











ARTICLE 9

TERM OF AGREEMENT

9.1.    Indefinite Term.

          This
License Agreement shall become effective on the Effective Date and shall,
unless otherwise terminated in accordance with the provisions hereof, continue
in effect for an indefinite term of years. 

9.2.    Termination.

          This
License Agreement, having become effective as of the Effective Date hereof,
shall continue in effect unless:

	
   
	
  9.2.1.
	
  Terminated
  by either Party in accordance with the provisions of Articles 7 or 8 hereof; 

	
   
	
   
	
   

	
   
	
  9.2.2.
	
  Terminated
  in accordance with Article 9.3 and/or Article 9.4 hereof; 

	
   
	
   
	
   

	
   
	
  9.2.3.
	
  Terminated
  by either Party by reason of a material Breach or Default of this License
  Agreement by the other Party which has not been cured or remedied in
  accordance with Article 10 hereof; or 

	
   
	
   
	
   

	
   
	
  9.2.4.
	
  Terminated
  automatically, in conjunction with the termination of the Shareholders Joint
  Venture Agreement or any of the other Ancillary Agreements by a Party thereto
  by reason of a material Breach (as therein defined) or Default (as therein
  defined) of any such agreement by a Party thereto, which Breach or Default
  has not been cured or remedied in accordance with the curative provisions
  thereof.  In such event this License
  Agreement shall likewise terminate on the same date, without any further act
  or notice given by a Party hereto. 




16










9.3.    Termination Upon Change of
Control of a Party.


          In the
event that a Change of Control of a Party hereto shall occur, then the other
Party or Parties may, upon six (6) months prior written notice given to such
Party, terminate this License Agreement, unless the Change of Control of such
Party shall have been effected upon prior notification and with the written
understanding of the other Party. 

9.4.    Termination Upon Bankruptcy
or Insolvency.

          If a Party
hereto shall become bankrupt or insolvent or shall file any debtor relief
proceedings, or if there shall be filed in Court against a Party legal
proceedings or bankruptcy or insolvency or reorganization or for the
appointment of a receiver or trustee of all or a portion of such Party’s
property, or if a Party makes an assignment for the benefit of creditors or
petitions for or enters into an arrangement for debtor relief and such proceedings
as are described aforesaid are not dismissed within a period of ninety (90)
days after the institution thereof, then, at the option of the other Party,
this License Agreement shall forthwith terminate by written notice given to the
Party who has filed, instituted or against whom any of the proceedings
aforesaid have been brought; provided that if a stay has been granted by a
Trustee or Judge in Bankruptcy by virtue of which this License Agreement is to
be deemed an executory contract, then the other Party shall continue to perform
under the terms of this License Agreement if: 

	
   
	
  9.4.1.
	
  Payments due
  under this License Agreement for past obligations are rendered in full; 

	
   
	
   
	
   

	
   
	
  9.4.2.
	
  Payments due
  under this License Agreement for present obligations are rendered pursuant to
  a payment schedule acceptable to the other Party; and 

	
   
	
   
	
   

	
   
	
  9.4.3.
	
  All other
  provisions of this License Agreement are complied with fully. 




9.5.    Payment of Amounts Due.

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


9.6.    Cooperation Upon Termination.

          Upon
termination of this License Agreement, the Corporation shall cooperate with CMG
in transferring CMG Trade Secrets to CMG or its designated assignee; and CMG
and Corporation shall cooperate with NTI and NTI ASEAN in transferring NTI
Intellectual Property Rights together with NTI and/or NTI ASEAN Trade Secrets,
to NTI, NTI ASEAN or their designated assignee. 

9.7.    Non-Release of Obligations.

          The
termination of this License 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 7,
upon termination of this License Agreement, NTI and/or NTI ASEAN Trade Secrets
shall continue to be kept secret and confidential by TIANJIN ZERUST.

9.8.    Cessation of Rights Upon
Termination.

          Upon the
termination of this License Agreement, for reason of Default or Breach of this
License Agreement or of the Shareholders Joint Venture Agreement or of any
Ancillary Agreement, all rights which the Defaulting Party may have under or
pursuant to this License Agreement shall forthwith cease and terminate.  If a dispute as to whether a Default or
Breach exists is submitted to Arbitration under Article 11 hereof, the Parties
shall jointly appoint a trustee or agent to oversee the execution of the duties
hereunder and the protection of the rights hereunder of the Party allegedly in
Default and/or Breach.  If the Parties
cannot agree on a trustee or agent for such purposes, the Arbitration Panel
shall forthwith appoint same. 

17











ARTICLE 10

DEFAULT

10.1.  Event of Default.

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

	
   
	
  10.1.1.
	
  Non-payment
  of funds by one Party to another Party when due and owing; and/or 

	
   
	
   
	
   

	
   
	
  10.1.2.
	
  A material
  Breach (“Breach”) of any provision of this License Agreement other than
  Articles 7 and/or 8 hereof, of the Shareholders Joint Venture Agreement, or
  any of the other Ancillary Agreements; and or 

	
   
	
   
	
   

	
   
	
  10.1.3.
	
  A Breach of
  Articles 7 and/or 8 hereof 




10.2.  Remedies Upon Default or Breach.

          The
remedies available to each Party in an instance of Default or Breach by the
other Party shall be as follows: 

	
   
	
  10.2.1.
	
  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 Default or
  Breach in the performance of, or by failure to observe and comply with, any
  other material term or provision of this License Agreement to be performed,
  observed or complied with by it, then the other Party shall have the right to
  declare a Default and terminate this License Agreement unless the Party in
  Default or Breach 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 Default or 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 Default or Breach proceeds to cure such Default or Breach
  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 Default or
  Breach.  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. 

	
   
	
   
	
   

	
   
	
  10.2.2.
	
  Notwithstanding
  the foregoing, in the event of a violation of Articles 7 and/or 8 hereof by a
  Party hereto, the other Party may at its sole discretion terminate this
  License Agreement with immediate effect upon giving notice to the Party in
  Default or Breach of Article 7 and/or 8 hereof as provided herein. 




10.3.  Non-Waiver of Rights.

          A Party’s
failure to terminate this License Agreement on account of any Breach or Default
by the other Party as provided in Article 10.1 or 10.2 hereof shall in no event
constitute or be deemed to constitute a waiver by such Party of its right to
terminate this License Agreement at any time while any such Breach or Default
continues (subject to the provisions of Article 10.2 hereof), or on account of
any subsequent Breach or Default by a Party. 


18










ARTICLE 11

DISPUTE RESOLUTION

11.1.  Dispute Resolution by Arbitration.

          Any and all
disputes, except as excluded under Article 11.2 hereof, which may arise between
the Parties during the term of this License Agreement, after the termination
thereof, or following the liquidation or dissolution of TIANJIN ZERUST, upon
failure by the Parties to amicably resolve same after mutual good faith
negotiations, shall be exclusively settled by arbitration, including but not
limited to the following: 

	
   
	
  11.1.1.
	
  A dispute as
  to whether a Default exists; 

	
   
	
   
	
   

	
   
	
  11.1.2.
	
  A dispute as
  to whether a Default entitles the non-defaulting Party to terminate this
  License Agreement; 

	
   
	
   
	
   

	
   
	
  11.1.3.
	
  A dispute as
  to the validity of this Article 11; 

	
   
	
   
	
   

	
   
	
  11.1.4.
	
  A dispute
  relating to the construction, meaning, interpretation, application or effect
  of this License Agreement or anything contained herein; 

	
   
	
   
	
   

	
   
	
  11.1.5.
	
  A dispute as
  to the rights, obligations or liabilities of the Parties hereunder. 




19










11.2.  Disputes Not Subject to Arbitration.


          Notwithstanding
anything to the contrary set forth in this License Agreement:

	
   
	
  11.2.1.
	
  Arbitration
  may not be invoked regarding matters expressed in this License Agreement to
  be agreed upon by or determined with the consent or approval of both Parties.
  

	
   
	
   
	
   

	
   
	
  11.2.2.
	
  Arbitration
  may not be invoked if a Party violates the provisions of this License
  Agreement relating to NTI and/or NTI Asean Trade Secrets, or Corporate
  Opportunity.  In such event, the
  remedies set forth in Articles 7, 8 and/or 10 hereof shall apply. 




11.3.  Conduct of Arbitration Proceedings.

          Such
arbitration proceedings shall be conducted in English and shall be carried on
at the Arbitration Commission of the International Chamber of Commerce of
Singapore, under the UNCITRAL Arbitration Rules.  With respect to the interpretation of this License Agreement, the
laws of the People’s Republic of China shall apply.  Judgment 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
and assets may be attached in any country in the world pursuant to such
judgment. 

11.4.  Designation of the “Prevailing Party”.


          In each
case in which arbitration is invoked under this License Agreement, the
Shareholders Joint Venture Agreement or any of the other Ancillary Agreements,
the arbitration panel shall be required to designate one or the other Party as
the Prevailing Party (“Prevailing Party”).

11.5.  Punitive Damages Excluded. 

          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. 

20










ARTICLE 12

GENERAL PROVISIONS

12.1.  Benefit of Parties.

          All of the
terms and provisions of this License Agreement, the Shareholders 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 License Agreement and all of its rights hereunder (or a portion
of this License 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 responsibilities
hereunder and (ii) the assignee shall expressly assume in writing and agree to
perform such obligations, liabilities and responsibilities of the assignor. 

12.2.  Counterparts.


          This
License 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. 

12.3.  Cooperation.

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

12.4.   Index, Captions, Definitions and
Defined Terms.

          The
captions of the Articles of this License 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, together with any other defined terms in this License Agreement, as
identified by their insertion in parentheses and quotation marks (“Defined
Terms”), shall be incorporated herein as written, made a part hereof, and
govern the interpretation of the text of this License Agreement, irrespective
of whether such Definitions or Defined Terms appear in the text of this
Agreement before or after they are defined. 

12.5.  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 License 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 Default 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. 

12.6.  Force Majeure.


          In the
event that a Party is prevented or delayed from performing, fulfilling or
completing an obligation provided for in this License 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 License 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.

21










12.7.  Notices.

          All
notices, requests, demands or other communications which are required or may be
given pursuant to the terms of this License 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, UPS or equivalent as follows: 

	
  If to
  Tianjin Zerust, to:
	
   

	
   
	
  Tianjin
  Zerust Anti-Corrosion Technologies Ltd.

	
   
	
  No. 127
  Tower 1 Huoju Building Huayuan Industry Zone,

	
   
	
  Tianjin

	
   
	
  Attention:
  Mr. Meng Tao

	
   
	
  Telefax: 86
  022 2367 0120

	
   
	
   

	
  Copy to:
	
   

	
   
	
  Mr. Zhang
  Binhua

	
   
	
  Tianjin
  China March Group Ltd.

	
   
	
  Huoju
  Building Huayuan Industry Zone, Tianjin

	
   
	
  Telefax: 86
  022 2367 0120

	
   
	
   

	
  If to NTI
  ASEAN, to:
	
  NTI ASEAN
  LLC

	
   
	
  c/o Northern
  Technologies International Corporation

	
   
	
  Attention:
  President

	
   
	
  6680 North
  Highway 49

	
   
	
  Lino Lakes,
  MN 55014

	
   
	
  Telefax:
  1-612-784-2902

	
   
	
   

	
  Copy to:
	
  Mr.
  Yoshiharu Rikuta

	
   
	
  Mr. Haruhiko
  Rikuta

	
   
	
  Taiyo
  Petroleum Gas Co., LTD.

	
   
	
  4-9
  Nihonbashi-honcho 1-chome

	
   
	
  Chuo-ku
  Tokyo 103

	
   
	
  Japan

	
   
	
  Telefax: 81
  33 242 0986

	
   
	
   

	
  Copy to:
	
  Northern
  Technologies International Corporation

	
   
	
  Attention:
  Chairman

	
   
	
  One Commerce
  Park Square

	
   
	
  23200
  Chagrin Blvd., Suite 107

	
   
	
  Beachwood,
  OH 44122

	
   
	
  Telefax:
  1-216-595-1741




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

22











12.8.  Entire Agreement.

          This
License Agreement, together with the Shareholders Joint Venture Agreement and
the other Ancillary Agreements, contain the entire understanding of the Parties
as of the date of execution of each such agreement.  There are no representations, promises, warranties, covenants,
agreements or undertakings other than those expressly set forth or provided for
in this License Agreement, the Shareholders 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 License Agreement.  It is the intent of the Parties to develop the relationship
established hereunder, however, and to amend and supplement this License
Agreement so as to provide for expansion both of Net Sales of Product and of
the scope of the Corporation’s Business with Other Agreed Upon
Technologies.  Any amendment or
supplement to this License Agreement, the Shareholders Joint Venture Agreement
and the other Ancillary Agreements must, however, be clearly identified as such
and set forth in writing (“Supplemental Documents”).  Supplemental Documents may include Corporate Resolutions and/or
other written exchanges between Parties, but must be manually signed, in the
original, by duly authorized representatives of the Parties to constitute valid
Supplemental Documents for purposes hereof. 

12.9.  Validity of Provisions.

          Should any
part of this License Agreement, the Shareholders 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 License Agreement, the
Shareholders 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.


12.10. Governmental Filings.


          TIANJIN
ZERUST shall be responsible for the preparation and filing of all necessary
reports relating to this License 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 ASEAN shall provide whatever information
and documentation reasonably required of and available to it in connection with
the preparation and filing of such reports. 

12.11. Payments.

          Any payment
to be made by TIANJIN ZERUST to NTI ASEAN pursuant to any provision of this
License 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 ASEAN.  NTI ASEAN shall have the right to specify in
writing any bank account to which payments due shall be made. 

23










12.12. Derivative Enforcement by CMG.

          CMG may,
derivatively for and on behalf of TIANJIN ZERUST, enforce the terms hereof
against NTI ASEAN in the event of a material Breach or Default of this
Agreement by NTI ASEAN.  In the event of
derivative enforcement hereunder, the matter shall be adjudicated in accordance
with the provisions of Article 11 hereof 

12.13. Changes Subject to Approval of CMG.

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

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

	
  NTI ASEAN, LLC

  	
   
	
  TIANJIN ZERUST ANTI-CORROSION

  TECHNOLOGIES LTD.

  
	
   
	
   
	
   
	
   
	
   

	
   
	
   
	
   
	
   
	
   

	
  By

  	
  /s/
	
   
	
  By
	
  /s/

	
   
	
  



  	
  



  	
   
	
   
	
  



  	
  



  
							



APPROVAL OF CMG

          By its
signature hereto CMG approves and agrees to the terms and provisions of this
License Agreement and of the form of the NTI and/or NTI ASEAN 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 CMG
shall also have a direct right of action in its own name for the enforcement of
the provisions of this License Agreement. 

	
  TIANJIN CHINA MARCH GROUP LTD.

  	
   
	
   

	
   
	
   
	
   
	
   

	
  By

  	
  /s/
	
   
	
  Date

	
   
	
  



  	
  



  	
   
	
   
	
  



  
						



1/9/99

24