Exhibit 10.1


 


Amendment to License
Agreement – dated 27 September 1996 – between Spherix Incorporated and Arla
Foods Ingredients amba.


 


WHEREAS,
under a License Agreement dated 27 September 1996 (the ‘License Agreement’),
Spherix Incorporated (‘Spherix’) licensed Arla Foods Ingredients amba (‘Arla’)
the use of certain of Spherix’s patented technology,


 


WHEREAS,
Spherix has initiated arbitration proceedings against Arla under which both
parties have made claims relating to the interpretation and performance under
the License Agreement,


 


WHEREAS,
Arla and Spherix have informed each other of their respective and differing
views on the current market potential and demand for D-tagatose, and


 


WHEREAS,
Spherix and Arla met in London on 31 October 2003 to discuss and outline an
amicable solution,


 


NOW,
THEREFORE Spherix and Arla hereby agree as follows:


 


SPHERIX
shall:


 


1.               Withdraw from the arbitration proceedings
and the claims raised thereunder;


 


2.               At any time refrain from raising a claim
against Arla or its sublicensees or assigned licensees (hereafter referred to
as ‘Arla’) in any respect of performance issues under the License Agreement.
Such claims shall include any repetition of the claims that are hereby
withdrawn and any other claims whether based upon past or future acts or
omissions related thereto. Spherix shall acknowledge that its sole remedy
towards Arla shall be its right to claim for royalty reports, in the presently
agreed form, and payment of royalties and interest thereon in respect of actual
Net Sales achieved by Arla in the event that Arla should have failed to deliver
such reports or make such payments in accordance with the terms of the License
Agreement;


 


3.               Acknowledge that Arla in its sole discretion
decides if and to the extent Arla wishes to make use of the licensed Patents
and Intellectual Property Rights, except as provided for in a supply agreement
to be entered into;


 


4.               Grant to Arla the exclusive worldwide right
to manufacture D-Tagatose for any type of product or purpose as defined in the
License Agreement, which shall include but not be limited to food, cosmetic and
drug products and purposes;


 


5.               Agree and accept that the partnership,
SweetGredients KG, that Arla has established together with Nordzucker AG, are
in accordance with the License Agreement, and that SweetGredients KG has the
right to exercise all rights under the License Agreement;


 


6.               Acknowledge that the License Agreement and
Arla’s obligation to incur royalties under the License Agreement shall
terminate without further notice on the later of 25 August 2016 and the
expiration date of new patent(s) from Spherix, which Arla has decided to make
use of. Should Arla decide not to make use of such new patent(s) then Spherix
can make use of such new patent(s) for which Arla will provide Spherix product
under the supply agreement; and


 












**[CONFIDENTIAL TREATMENT
REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED.  ALL SUCH
OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2.


 


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7.               Permanently waive and give up its rights to
rescind according to clause 10.2 of the License Agreement to pay royalties on a
presumed Net Sale of 10,000 metric tons in each Selected Market. Arla has
consequently fulfilled all its performance obligations under this clause 10.2.


 


ARLA shall:


 


1.               Grant to Spherix an extension of the period
in which Arla will incur royalties to Spherix (per Attachment A) until 25 August
2011 at the currently agreed upon rates and terms and conditions;


 


2.               Grant to Spherix a further extension of the
period from 25 August 2011 to 25 August 2016 in which period Arla will incur to
Spherix the royalties (per Attachment A) at the currently agreed upon rates and
terms and conditions, however, in the event (i) a third party anywhere in the
world excluding any of Arla’s licensees or affiliates of any kind on an annual
basis sell in excess of **[CONFIDENTIAL TREATMENT REQUESTED] tons of
D-Tagatose, or (ii)  Arla stops using
the Licensed Process, then Arla shall only be obliged to pay a royalty rate of
**[CONFIDENTIAL TREATMENT REQUESTED] on Net Sales of D-Tagatose;


 


3.               Give up its rights according to clause 4.5.2
of the Agreement to deduct the pre-paid royalties (USD 1 million) in future
royalties payable to Spherix;


 


4.               Acknowledge that volumes sold for use in
Soft Drinks shall count as volume included in the threshold for setting the
applicable royalty rates; and


 


5.               Withdraw its counterclaims under the
arbitration proceedings.


 


6.               Arla warrants that SweetGredients KG is an
Affiliated Entity under the terms of the License Agreement.


 


Spherix
and Arla agree that the License Agreement and this amendment to the License
Agreement shall be governed by and construed in accordance with English law and
that the courts of England shall have exclusive jurisdiction in the settlement
of any dispute.


 


Arla
and Spherix agree to resume the Advisory Committee meetings as required in the
License Agreement.


 


Spherix
and Arla will no later than 31 March 2004 have entered into a supply agreement
whereby Arla (inter alia) in each of the following 2 years is obligated to sell
upon presentation of bona fide purchase orders to Spherix at least 50 metric
tons at market prices.


 


Spherix
and Arla have jointly worked on the formation and drafting of this amendment to
the License Agreement.


 


COSTS


 


Each
party shall pay its own costs to legal advisors, expert witnesses and other
expenses regarding the arbitration proceedings, however, Spherix will pay all
costs charged by the American Arbitration Association.


 


AGREED
on 13 November 2003


 


	
  For Arla Foods Ingredients amba

  	
  For Spherix Incorporated

  
	
  Signed by

  	
  Signed by

  
	
   

  	
   

  
	
   

  	
   

  
	
  Peter Lauritzen

  	
  Thomas W. Gantt

  
	
  Managing Director

  	
  President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Gilbert V. Levin, Ph.D

  
	
   

  	
  Chairman of the Board

  



 


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ATTACHMENT A


 


**[CONFIDENTIAL
TREATMENT REQUESTED]