AMENDMENT NO. 3 TO PURCHASE AGREEMENT

Exhibit 10.4

AMENDMENT NO. 3 TO PURCHASE AGREEMENT

          THIS AMENDMENT NO. 3 TO PURCHASE AGREEMENT (the “Amendment”) is made as of the 31^st day of December, 2005, by and between Circle Pines Mainstreet II, LLC, a Minnesota limited liability company (“Seller”), and Northern Technologies International Corporation, a Minnesota corporation (“Buyer”).

RECITALS:

          WHEREAS, Buyer and Seller entered into a certain Purchase Agreement with an Effective Date of June 24, 2005, as amended by Amendment No. 1 to Purchase Agreement dated August 21, 2005, as further amended by Amendment No. 2 to Purchase Agreement dated September 21, 2005 (the “Original Purchase Agreement”) providing for the purchase and sale of certain property located at 22 Village Parkway, Circle Pines, Minnesota (the “Property”);

          WHEREAS, the parties wish to amend the Purchase Price and acknowledge Seller’s survey and title obligations.

          NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

          •     Interpretation.  The Original Purchase Agreement is hereby modified and supplemented.  Wherever there exists a conflict between this Amendment and the Original Purchase Agreement, the provisions of this Amendment shall control.  Except as otherwise indicated, capitalized terms used herein shall be defined in the manner set forth in the Original Purchase Agreement.  Except as modified and supplemented herein, the Original Purchase Agreement is in full force and effect.  From and after the date hereof, the term “Purchase Agreement” shall mean the Original Purchase Agreement as amended hereby.

          •     Purchase Price.  The total Purchase Price is reduced from $1,500,000 to $1,475,000.

          •     Title Issues Contingency.  Seller will address the following issues at (collectively “Remaining Title Issues”):  (A) direct the surveyor to revise the survey to show how (or whether) the following affects the Property: (i) the easement for County Ditch Number 53, as referenced on the Certificate of Title for the Property and (ii) sanitary sewer and storm sewer easements set forth in Document No. 407168 and (B) direct the surveyor to locate the sanitary sewer line servicing the building, as the same may extend from the Property.  If Buyer is not satisfied with issues concerning the Remaining Title Issues or the sanitary sewer line for any reason, then Buyer may terminate the Purchase Agreement on or before January 15, 2006 by sending written notice to Seller, and upon such termination, Buyer shall receive a refund of all Earnest Money, together with interest thereon if any.

          •     Seller’s Title and Survey Obligations.  The Seller acknowledges that it shall perform, or cause to be performed, the following prior to the Closing Date: