ex10_28.htm


    
      
        

      

       

      AMENDMENT
        ONE TO

    

     

    MANUFACTURING
      AGREEMENT

     

    This
      is Amendment #1
      (“Amendment”) to the Manufacturing
      Agreement  previously entered into by and between
INTEGRAL TECHNOLOGIES, INC., a Nevada corporation
      (“Integral”) and JASPER RUBBER PRODUCTS, INC.
      (“Jasper”) effective as of November 21, 2006 (the
“Agreement”).  This Amendment is effective as of July
      19, 2007 (“Amendment Effective Date”).

     

    RECITALS

     

    WHEREAS,
      Integral and Jasper desire to amend the Agreement to provide for the sale of
      Products by Jasper on Integral’s behalf; and

     

    WHEREAS,
      Jasper desires to sell the Products;

     

    THEREFORE,
      Integral and Jasper amend the Agreement as follows:

     

    AMENDMENT

     

    
      	
              A.

            	
              Effect
                of Amendment

            


    

     

    This
      Amendment amends the Agreement.  Except as provided in this Amendment,
      all of the terms and conditions of the Agreement remain in full force and
      effect.  To the extent there is a conflict between the terms of this
      Amendment and the Agreement, the terms of this Amendment shall
      control.  Capitalized terms not defined in this Amendment shall have
      the meaning assigned to them in the Agreement.

     

    
      	
              B.

            	
              Amended
                Terms

            


    

     

    
      	
              I.

            	
              The
                following definition is added to Section 1 of the
                Agreement:

            


    

     

    “Initial
      Sales Period” means the period of time beginning on the Amendment
      Effective Date and continuing until the last day of the month during which
      the
      cumulative gross sales of Products reach Seventy-Five Thousand U.S. Dollars
      (US$75,000.00).

     

    
      	
              II.

            	
              The
                following is hereby added as a new Section 2.9 of the
                Agreement:

            


    

     

    
      	
               

            	
              “2.9

            	
              Authorization
                for Jasper to Sell Products.

            


    

     

    
      	
               

            	
              2.9.1

            	
              Authorization.  Subject
                to the terms of this Agreement, Integral grants Jasper the right
                to take
                orders for and sell Products to customers on Integral’s
                behalf.  The parties acknowledge and agree that Integral’s
                obligations under Sections 2.2, 2.3, 2.4, 2.5 and 2.8 shall not apply
                to
                Products sold by Jasper to customers on Integral’s behalf. Nothing in this
                Section 2.9.1 shall limit Integral’s right to authorize other third
                parties to sell the Products, provided that Jasper and Integral will
                mutually agree on the payment terms for any manufacturing services
                provided by Jasper in connection with the sale of Products by such
                third
                party.

            


    


    
      
        
        

      

      
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          1

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              2.9.2

            	
              Pricing.  The
                parties acknowledge and agree that Jasper will not sell Products
                to
                customers for less than Thirty U.S. Dollars (US$30.00) per pound
                unless
                otherwise mutually agreed to in
                writing.

            


    

     

    
      	
               

            	
              2.9.3.

            	
              Warranties.  Jasper
                may not make any warranty or representation about the Products except
                as
                specifically set forth in the materials provided by Integral to Jasper
                or
                otherwise mutually agreed to in
                writing.”

            


    

     

    
      	
              III.

            	
              The
                following is added as a new Section 3.6 of the
                Agreement:

            


    

     

    
      	
               

            	
              “3.6

            	
              Limited
                Authorization to Sell Products.  Notwithstanding anything to
                the contrary in this Section 3, Jasper’s authorization to sell Products
                pursuant to Section 2.9 shall continue until five (5) years after
                the
                Amendment Effective Date, and will extend automatically for successive
                additional periods of five (5) years unless (a) either party provides
                the
                other with written notice of non-renewal at least ninety (90) days
                prior
                to the commencement of the applicable renewal period or (b) the Agreement
                is otherwise terminated as provided
                herein.”

            


    

     

    
      	
              IV.

            	
              Section
                4 of the Agreement is deleted and replaced with the following new
                Section
                4:

            


    

     

    
      	
               

            	
              “4.

            	
              PRICE,
                INVOICING AND PAYMENT

            


    

     

    4.1           Hourly
      Payment.  During the Initial Sales Period,
      Integral will pay Jasper an hourly fee of One Hundred Dollars (US$100.00) per
      hour (“Hourly Rate”) for all manufacturing and sales services
      requested by Integral and performed by Jasper in connection with this Agreement
      (“Fulfillment Services”).  Following the
Initial Sales Period, Integral shall not be required to pay
      the
      Hourly Rate for Fulfillment Services performed by
      Jasper.

     

    4.2           Sales
      Royalty.  During the Initial Sales Period, Jasper will pay
      Integral one hundred percent (100%) of the Gross Margin (as defined below)
      from
      the sale of Products.  Following the expiration of the Initial Sales
      Period, Jasper will pay Integral a royalty equal to seventy-seven and one-half
      percent (77.5%) of the Gross Margin from the sale of Products (the
“Royalty”).

     

    4.3           Gross
      Margin.  For purposes of the Royalty calculation in Section 4.2,
“Gross Margin” means the actual amount paid by customers to Jasper for the
      Product, less the sum of: (i) the materials cost, (ii) the direct labor
      costs   (iii) the overhead costs, and (iv) the selling, general
      and administrative overhead costs, all as used in the manufacture of the
      Products and as set forth in the attached Schedule A, which may be updated
      from
      time to time by mutual written agreement of the parties.

     

    4.4           Jasper
      Manufacturing Costs will be defined as (i) direct labor costs (ii) the
      overhead costs, and (iii) the selling, general and administrative overhead
      costs, all used in the manufacture of the Products and as set forth in the
      attached Schedule A, which may be updated from time to time by mutual consent
      of
      the parties.

     

    4.5           Payment
      Terms.

     

    
      	
               

            	
              4.5.1

            	
              Hourly
                Rate.  Within ten (10) days of the end of each calendar
                month in the Initial Sales Period, Jasper will provide Integral with
                an
                invoice setting forth the number of hours worked by Jasper in connection
                with each delivery of Products during the previous calendar month
                identified by the applicable purchase order, product code, callout
                numbers
                or other applicable reference.  Integral agrees to pay Jasper
                the Hourly Rate (i) net ten (10) days from the date of the invoice
                less a
                one percent (1%) discount on the fee set forth in such invoice or
                (ii) net
                thirty (30) days from the date of the invoice with no
                discount.

            


    


    
      
        
        

      

      
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          2

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              4.5.2

            	
              Royalties.
                Within ten (10) days after the end of each calendar month Jasper
                will
                provide a Royalty Statement to Integral for approval. Such Royalty
                Statement will indicate the
                following:

            


    

     

    (i)
      Sales
      of the Product for the previous month.

     

    (ii)
      Material costs associated with the Product for the previous month.

     

    (iii)
      Jasper Manufacturing Costs associated with the Product Sales for the previous
      month.

     

    Integral
      will provide approval of such Royalty Statement to Jasper within 3 days after
      receipt of such.

     

    
      	
               

            	
              4.5.3

            	
              Payment
                of Royalties. Within ten (10) days after the end of each calendar
                month Jasper will provide a Cash Receipt Statement to Integral for
                approval. Such Cash Receipt Statement will show all cash receipts
                for the
                previous month relating to Product Sales. Such Cash Receipt Statement
                will
                show the proportionate share due to Jasper for Jasper Manufacturing
                Costs
                and the proportionate share due to Integral for Sales
                Royalty.

            


    

     

    Integral
      will provide approval of such Cash Receipt Statement to Jasper within 3 days
      after receipt of such.

     

    Within
      2
      days after receipt of Integral’s approval Jasper will issue payment to
      Integral.

     

    
      	
               

            	
              4.5.3

            	
              General.  If
                the date payment is due is a weekend or is a holiday recognized by
                the
                party sending the payment, the payment will be made on the immediately
                following workday.  The instruction for sending payments to
                Jasper is:

            


    

    


    Jasper
      Rubber Products, Inc.

    P.O.
      Box
      660233

    Indianapolis,
      Indiana  46266-0233

    


    
      	
            	
               

            	
              
                All
                  invoices, reports and payments will be sent to Integral
                  at the
                  following address:

              

            


    

    


    Integral
      Technologies, Inc.

    805
      West
      Orchard Street, #7

    Bellingham,
      Washington  98225

    


     

    
      
        
        

      

      
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          3

        
          

        

      

      
        
        

      

    

     

    
      4.6           Books
        and Accounting.  Jasper will maintain books of accounts relating
        to the Royalties in sufficient detail so as to allow for verification of
        the
        Royalties actually paid.  Integral may, at its expense, have a
        certified public accountant, reasonably acceptable to Jasper, audit these
        books
        solely for the purpose of verifying the accuracy of Royalties paid and
        accompanying royalty statements, and make photocopies of such records for
        the
        certified public accountant’s use, during normal business hours upon thirty (30)
        days prior written notice to Jasper, but no more frequently than once a year
        and
        not later than three (3) years after the statement was rendered.  Any
        costs associated with an audit shall be borne by Integral unless there is
        a
        discrepancy of more than five percent (5%) between Royalties actually paid
        and
        Royalties actually owed in a given month, in which case Jasper will bear
        the
        actual and documented costs of such audit.

       

    

    4.7           Taxes
      and Law Changes.  As between Jasper and Integral, Jasper shall be
      responsible for any sales or use taxes relating to the transfer or sale of
      the
      Products to customers.  If a change in law or regulation affecting the
      price of Jasper Raw Materials or the production or sale of the Products after
      the date hereof shall increase the cost to Jasper, Jasper and Integral shall
      negotiate a mutually agreeable adjustment to the Hourly Rate and/or Royalties
      to
      offset such increased cost from a change in law or regulation.”

     

    [Signature
      Page to Follow]


    
      
        
        

      

      
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    C.           Entire
      Amendment

     

    This
      Amendment and the Agreement constitute the entire agreement between the parties
      with respect to the subject matter hereof and merge all prior and
      contemporaneous communications.  They shall not be further modified
      except by a written agreement dated subsequent to the Amendment Effective Date
      and signed on behalf of Integral and Jasper.

     

    IN
      WITNESS WHEREOF, this Amendment has been executed by the parties as of
      the Amendment Effective Date.

    


    
      	
              INTEGRAL
                TECHNOLOGIES, INC.

            	 	
              JASPER
                RUBBER PRODUCTS, INC.

            
	 	 	 
	 	 	 
	
              BY:
                /s/ W.A. Ince

            	 	
              BY:
                /s/Douglas R. Mathias

            
	 	 	 
	
              ITS:
                President

            	 	
              ITS:
                President & CEO

            


    

     

     

    Before
      me, a Notary Public, in and for said County and State, personally appeared
      the
      within named William A. Ince, President of INTEGRAL TECHNOLOGIES, INC., who
      acknowledged the execution of the foregoing Amendment One to Manufacturing
      Agreement to be their voluntary act and deed and to be the voluntary act and
      deed of said corporation.

    


    WITNESS
      my hand and Notarial Seal this
19 day of July, 2007.

    


    
      	 	
              /s/Rebecca
                K. Howell

            
	 	
              Notary
                Public -

            


    

    


    My
      Commission Expires: March 27, 2010.  My County of Residence is:
      Whatcom

     

    
      
        	
                STATE
                  OF WASHINGTON

              	
                )

              


      

      
        	
                 

              	
                )

              


      

      
        	
                COUNTY
                  OF WHATCOM

              	
                )

              


      

       

    

    Before
      me, a Notary Public, in and for
      said County and State, personally appeared the within named Douglas R. Mathias,
      President & CEO of JASPER RUBBER PROUDUCTS, INC., who acknowledged the
      execution of the foregoing Amendment One to Manufacturing Agreement to be their
      voluntary act and deed and to be the voluntary act and deed of said
      corporation.

    


    WITNESS
      my hand and Notarial Seal this
19th day of July, 2007.

    


    
      	 	
              /s/
                Janelle Durcholz

            
	 	
              Notary
                Public -

            


    

    


    My
      Commission Expires: October 19, 2007. My County of Residence is:
      Dubois

     

    
      
        	
                STATE
                  OF INDIANA

              	
                )

              


      

      
        	
                 

              	
                )

              


      

      
        	
                COUNTY
                  OF DUBOIS

              	
                )

              


      

    

     

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