EXHIBIT 10.19 




 




Engagement letter
agreement dated August 12, 2010 by and between 






Spherix Incorporated and
Rodman & Renshaw, LLC 




 




August 12, 2010 




 




CONFIDENTIAL 




 




Dr. Claire L. Kruger 






Chief Executive Officer 






Spherix Incorporated 






6430 Rockledge Drive 






Suite 503 






Bethesda, MD 20817 




 




Dear Dr. Kruger: 




 




This letter (the “Agreement”)
constitutes the agreement between Rodman & Renshaw, LLC (“Rodman”
or the “Placement Agent”) and Spherix Incorporated (the “Company”),
that Rodman shall serve as the exclusive placement agent for the Company, on a “reasonable
best efforts” basis, in connection with the proposed placement (the “Placement”)
of registered securities of the Company (the “Securities”). The terms of
such Placement and the Securities shall be mutually agreed upon by the Company
and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”)
and nothing herein constitutes that Rodman would have the power or authority to
bind the Company or any Purchaser or an obligation for the Company to issue any
Securities or complete the Placement. This Agreement and the documents executed
and delivered by the Company and the Purchasers in connection with the
Placement shall be collectively referred to herein as the “Transaction  Documents.”  The date of the closing of the Placement
shall be referred to herein as the “Closing Date.”  The Company expressly acknowledges and agrees
that the execution of this Agreement does not constitute a commitment by Rodman
to purchase the Securities and does not ensure the successful placement of the
Securities or any portion thereof or the success of Rodman with respect to
securing any other financing on behalf of the Company. 




 




SECTION 1.           COMPENSATION AND OTHER FEES. 




 




As compensation for the
services provided by Rodman hereunder, the Company agrees to pay to Rodman: 




 




(A)          The fees set forth below
with respect to the Placement: 




 




1.               A cash fee payable
immediately upon the closing of the Placement and equal to 6% of the aggregate
gross proceeds raised in the Placement. 




 




2.     Such number of warrants (the
“Rodman Warrants”) to Rodman or its designees at the Closing to purchase
shares of common stock of the Company (“Shares”) equal to 3% of the aggregate
number of Shares sold in the Placement, plus any Shares underlying any convertible
Securities sold in the Placement to such purchasers.  The Rodman Warrants shall have a term of two (2) years,
and an exercise price of 125% of the public offering price.  The Rodman Warrants shall not have
antidilution protections or be transferable for six months from the date of the
Offering, except as permitted by FINRA Rule 5110, and further, the number
of Shares underlying the Rodman Warrants shall be reduced if necessary to
comply with FINRA rules or regulations. 




 


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(B)           The Company also agrees to
reimburse all of Rodman’s expenses (with supporting invoices/receipts) in
amount equal to 1.5% of the aggregate gross proceeds raised in the placement,
with a maximum payable amount of $45,000. Such reimbursement shall be payable
immediately upon (but only in the event of) the closing of the Placement. 




 




SECTION 2.           REGISTRATION STATEMENT. 




 




The Company represents and warrants to, and agrees with, the Placement
Agent that: 




 




(A)          The Company has filed with the
Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-1 under the Securities Act of 1933, as amended (the “Securities
Act”).  At the time of such filing,
the Company  met the requirements of Form S-1
under the Securities Act.  The Company
will file with the Commission pursuant to Rules 430A and 424(b) under the
Securities Act, and the rules and regulations (the “Rules and
Regulations”) of the Commission promulgated thereunder, a final prospectus
included in such registration statement relating to the placement of the
Securities and the plan of distribution thereof and has advised the Placement
Agent of all further information (financial and other) with respect to the
Company required to be set forth therein. Such registration statement,
including the exhibits thereto, as amended at the date of this Agreement, is
hereinafter called the “Registration Statement”; such prospectus in the
form in which it appears in the Registration Statement is hereinafter called
the “Base Prospectus”; and the amended or supplemented form of
prospectus, in the form in which it will be filed with the Commission pursuant
to Rules 430A and 424(b) (including the Base Prospectus as so amended
or supplemented) is hereinafter called the “Prospectus Supplement.” Any
reference in this Agreement to the Registration Statement, the Base Prospectus
or the Prospectus Supplement shall be deemed to refer to and include the
documents incorporated by reference therein (the “Incorporated Documents”)
pursuant to Item 12 of Form S-1 which will be filed under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), on or before the date of
this Agreement, or the issue date of the Base Prospectus or the Prospectus
Supplement, as the case may be; and any reference in this Agreement to the
terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to
refer to and include the filing of any document under the Exchange Act after
the date of this Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be, deemed to be incorporated therein by
reference. All references in this Agreement to financial statements and
schedules and other information that is “contained,” “included,” “described,” “referenced,”
“set forth” or “stated” in the Registration Statement, the Base Prospectus or
the Prospectus Supplement (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and
other information that is or is deemed to be incorporated by reference in the
Registration Statement, the Base Prospectus or the Prospectus Supplement, as
the case may be.  Following FINRA
approval of the compensation arrangements set forth in Section 1, the
Company has no reason to believe that the Registration Statement will not be
declared effective by the Commission. 




 




(B)           The Registration Statement
(and any further documents to be filed with the Commission) will contain all
exhibits and schedules as required by the Securities Act. Each of the
Registration Statement and any post-effective amendment thereto, at the time it
becomes effective, will comply in all material respects with the Securities Act
and the Exchange Act and the applicable Rules and Regulations will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Base Prospectus, and the Prospectus Supplement, each as of
its respective date, will comply in all material respects with the Securities
Act and the Exchange Act and the applicable Rules and Regulations. Each of
the Base Prospectus and the Prospectus Supplement, will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the 




 


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circumstances under which they were made, not misleading. The
Incorporated Documents, if any, will conform in all material respects to the
requirements of the Exchange Act and the applicable Rules and Regulations,
and none of such documents will contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein (with
respect to Incorporated Documents incorporated by reference in the Base
Prospectus or Prospectus Supplement), in light of the circumstances under which
they are made not misleading; and any further documents so filed and
incorporated by reference in the Base Prospectus or Prospectus Supplement, when
such documents are filed with the Commission, will conform in all material
respects to the requirements of the Exchange Act and the applicable Rules and
Regulations, as applicable, and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. There are no documents required to be filed with the Commission in
connection with the transaction contemplated hereby that (x) have not been
filed as required pursuant to the Securities Act or (y) will not be filed
within the requisite time period. 




 




(C)           The Company is eligible to
use free writing prospectuses in connection with the Placement pursuant to Rules 164
and 433 under the Securities Act.  Any
free writing prospectus that the Company is required to file pursuant to Rule 433(d) under
the Securities Act will be filed with the Commission in accordance with the
requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. 
Each free writing prospectus that the Company is required to file,
pursuant to Rule 433(d) under the Securities Act or that was prepared by
or behalf of or used by the Company complies or will comply in all material
respects with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. 
The Company will not, without the prior consent of the Placement Agent,
prepare, use or refer to, any free writing prospectus. 




 




(D)          The Company will, as
promptly as practicable, deliver to the Placement Agent complete conformed
copies of the Registration Statement and of each consent and certificate of
experts, as applicable, filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits), the Base Prospectus, and the
Prospectus Supplement, as amended or supplemented, in such quantities and at
such places as the Placement Agent reasonably requests.  Neither the Company nor any of its directors
and officers will distribute, prior to the Closing Date, any offering material
in connection with the offering and sale of the Securities other than the Base
Prospectus, the Prospectus Supplement, the Registration Statement, copies of
the documents incorporated by reference therein and any other materials
permitted by the Securities Act. 




 




SECTION 3.           REPRESENTATIONS AND WARRANTIES. 




 




Except as set forth in the
SEC Reports (as herein defined), the Registration Statement, any Propspectus
Supplement, or under the corresponding section of the Disclosure Schedules,
which shall be deemed a part hereof, the Company hereby makes the
representations and warranties set forth below to the Placement Agent. 




 




(A)          Organization and Qualification. 
All of the direct and indirect subsidiaries (individually, a “Subsidiary”)
of the Company are set forth on Schedule 3(A). 
The Company owns, directly or indirectly, all of the capital stock or
other equity interests of each Subsidiary free and clear of any “Liens” (which
for purposes of this Agreement shall mean a lien, charge, security interest,
encumbrance, right of first refusal, preemptive right or other restriction),
and all the issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive
and similar rights to subscribe for or purchase securities.  The Company and each of the Subsidiaries is
an entity duly incorporated or otherwise organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to 




 


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own
and use its properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any
Subsidiary is in violation or default of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. 
Each of the Company and the Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not have or
reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”) and no “Proceeding” (which for purposes of this Agreement
shall mean any action, claim, suit, investigation or proceeding (including,
without limitation, an investigation or partial proceeding, such as a
deposition), whether commenced or threatened) has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification. 




 




(B)           Authorization; Enforcement.  The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, its board of directors or its stockholders in connection therewith
other than in connection with the “Required Approvals” (as defined in
subsection 3(D) below).  Each
Transaction Document has been (or upon delivery will have been) duly executed
by the Company and, when delivered in accordance with the terms hereof and
thereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies. 




 




(C)           No Conflicts.  The execution,
delivery and performance of the Transaction Documents by the Company, the
issuance and sale of the Securities and the consummation by the Company of the
other transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both)
of, any agreement, credit facility, debt or other instrument (evidencing a
Company or Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii) subject to the
Required Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except
in the case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse Effect. 




 




(D)          Filings, Consents and Approvals.  The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or 




 


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other
federal, state, local or other governmental authority or other “Person”
(defined as an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind, including, without limitation, any Trading Market) in connection
with the execution, delivery and performance by the Company of the Transaction
Documents, other than such filings as are required to be made under applicable
Federal and state securities laws (collectively, the “Required Approvals”). 




 




(E)           Issuance of the Securities; Registration. 
The Securities will be duly authorized and, when issued and paid for in
accordance with the applicable Transaction Documents, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens imposed by
the Company other than restrictions on transfer provided for in the Transaction
Documents.  The Company has reserved from
its duly authorized capital stock the maximum number of shares of Common Stock
issuable pursuant to the Transaction Documents. 
The issuance by the Company of the Securities will be registered under
the Securities Act and all of the Securities will be freely transferable and
tradable by the Purchasers without restriction (other than any restrictions
arising solely from an act or omission of a Purchaser).  The Securities are being issued pursuant to
the Registration Statement and the issuance of the Securities will be
registered by the Company under the Securities Act.  Prior to the Closing, the Registration
Statement will be effective and available for the issuance of the Securities
thereunder. The “Plan of Distribution” section under the Registration Statement
will permit the issuance and sale of the Securities hereunder.  Upon receipt of the Securities, the
Purchasers will have good and marketable title to such Securities and,
following conversion of the Securities in accordance with the applicable
Transaction Documents, the Shares underlying the Securities will be freely
tradable on the Nasdaq Exchange (the “Trading Market”). 




 




(F)           Capitalization.  The capitalization
of the Company will be set forth in the Registration Statement.  The Company has not issued any capital stock
since its most recently filed periodic report under the Exchange Act, other
than pursuant to the exercise of employee stock options under the Company’s
stock option plans, the issuance of shares of Common Stock to employees
pursuant to the Company’s employee stock purchase plan and pursuant to the
conversion or exercise of securities exercisable, exchangeable or convertible
into Common Stock (“Common Stock Equivalents”). 
No Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. 
Except as a result of the purchase and sale of the Securities, there are
no outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of Common
Stock or Common Stock Equivalents.  The
issuance and sale of the Securities will not obligate the Company to issue shares
of Common Stock or other securities to any Person (other than the Purchasers)
and will not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under such securities. All of
the outstanding shares of capital stock of the Company are validly issued,
fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities.  No further approval
or authorization of any stockholder, the Board of Directors of the Company or
others is required for the issuance and sale of the Securities.  There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders. 




 




(G)           SEC Reports; Financial Statements. 
The Company has complied in all material respects with requirements to
file all reports, schedules, forms, statements and other documents required to
be filed 




 


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by
it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such
shorter period as the Company was required by law to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates,
the SEC Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing.  Such financial statements have
been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. 




 




(H)          Material Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited
financial statements included within the SEC Reports, except as specifically
disclosed in the SEC Reports, (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any
officer, director or “Affiliate” (defined as any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with a Person, as such terms are used in and construed
under Rule 144 under the Securities Act), except pursuant to existing
Company stock option plans.  The Company
does not have pending before the Commission any request for confidential
treatment of information.  Except for the
issuance of the Securities contemplated by this Agreement, no event, liability
or development has occurred or exists with respect to the Company or its
Subsidiaries or their respective business, properties, operations or financial
condition, that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made that has not
been publicly disclosed 1 Trading Day prior to the date that this
representation is made. 




 




(I)            Litigation.  There is no action,
suit, inquiry, notice of violation, Proceeding or investigation pending or, to
the knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely
affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  Neither the Company nor
any Subsidiary, nor any director or officer thereof, is or has been the subject
of any Action involving a claim of violation 




 


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of
or liability under federal or state securities laws or a claim of breach of
fiduciary duty.  There has not been, and
to the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company.  The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.  None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship
with the Company, and neither the Company nor any of its Subsidiaries is a
party to a collective bargaining agreement, and the Company and its
Subsidiaries believe that their relationships with their employees are
good.  No executive officer, to the
knowledge of the Company, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment
of each such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing matters.  The Company and its Subsidiaries are in
compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions of
employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. 




 




(J)            Labor Relations.  No material labor
dispute exists or, to the knowledge of the Company, is imminent with respect to
any of the employees of the Company which could reasonably be expected to
result in a Material Adverse Effect. 




 




(K)          Compliance.  Neither the Company
nor any Subsidiary (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or any Subsidiary under), nor
has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any
court, arbitrator or governmental body, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local
laws applicable to its business and all such laws that affect the environment,
except in each case as could not have a Material Adverse Effect. 




 




(L)           Regulatory Permits.  The Company
and the Subsidiaries possess all certificates, authorizations and permits
issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described in
the SEC Reports, except where the failure to possess such permits could not
have or reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice
of proceedings relating to the revocation or modification of any Material
Permit. 




 




(M)         Title
to Assets.  The Company and the
Subsidiaries have good and marketable title in fee simple to all real property
owned by them that is material to the business of the Company and the
Subsidiaries and good and marketable title in all personal property owned by
them that is material to the business of the Company and the Subsidiaries, in
each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries and Liens for the payment of federal, state or other taxes, the payment
of which is neither delinquent nor subject to penalties.  Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases of which the Company and the Subsidiaries are
in compliance. 




 


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(N)          Patents and Trademarks.  The
Company and the Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
trade secrets, inventions, copyrights, licenses and other similar intellectual
property rights necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to
so have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”).  Neither the Company
nor any Subsidiary has received a notice (written or otherwise) that the
Intellectual Property Rights used by the Company or any Subsidiary violates or
infringes upon the rights of any third party. 
To the knowledge of the Company, all such Intellectual Property Rights
are enforceable and there is no existing infringement by another Person of any
of the Intellectual Property Rights of others. 
The Company and its Subsidiaries have taken reasonable security measures
to protect the secrecy, confidentiality and value of all of their intellectual
properties, except where failure to do so could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. 




 




(O)          Insurance.  The Company and the
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which the Company and the Subsidiaries are engaged,
including, but not limited to, directors and officers insurance coverage To the
best knowledge of the Company, such insurance contracts and policies are
accurate and complete.  Neither the
Company nor any Subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost. 




 




(P)           Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports, none
of the officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, other than
(i) for payment of salary or consulting fees for services rendered, (ii) reimbursement
for expenses incurred on behalf of the Company and (iii) for other
employee benefits, including stock option agreements under any stock option plan
of the Company. 




 




(Q)          Sarbanes-Oxley.  The Company is in
material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which
are applicable to it as of the date hereof and of the closing date of the
Placement. 




 




(R)           Certain Fees.  Except as otherwise
provided in this Agreement, no brokerage or finder’s fees or commissions are or
will be payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect
to the transactions contemplated by the Transaction Documents.  The Purchasers shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in connection
with the transactions contemplated by the Transaction Documents. 




 




(S)           Trading Market Rules.  The issuance
and sale of the Securities hereunder does not contravene the rules and
regulations of the Trading Market. 




 


8

















 




(T)           Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.  The
Company shall conduct its business in a manner so that it will not become
subject to the Investment Company Act. 




 




(U)          Registration Rights.  No Person has
any right to cause the Company to effect the registration under the Securities
Act of any securities of the Company. 




 




(V)           Listing and Maintenance Requirements. 
The Company’s Common Stock is registered pursuant to Section 12(b) or
12(g) of the Exchange Act, and the Company has taken no action designed to, or
which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company
received any notification that the Commission is contemplating terminating such
registration.  The Company has not, in
the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements. 




 




(W)         Application
of Takeover Protections.  The Company and
its Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Certificate of Incorporation (or
similar charter documents) or the laws of its state of incorporation that is or
could become applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including without limitation as a result of the Company’s
issuance of the Securities and the Purchasers’ ownership of the Securities. 




 




(X)          Solvency.  Based on the financial
condition of the Company as of the Closing Date after giving effect to the
receipt by the Company of the proceeds from the sale of the Securities
hereunder, (i) the Company’s fair saleable value of its assets exceeds the
amount that will be required to be paid on or in respect of the Company’s
existing debts and other liabilities (including known contingent liabilities)
as they mature; (ii) the Company’s assets do not constitute unreasonably
small capital to carry on its business for the current fiscal year as now
conducted and as proposed to be conducted including its capital needs taking
into account the particular capital requirements of the business conducted by
the Company, and projected capital requirements and capital availability
thereof; and (iii) the current cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its debt when such amounts are required
to be paid.  The Company does not intend
to incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in respect of its
debt).  The Company has no knowledge of
any facts or circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or reorganization laws of
any jurisdiction within one year from the Closing Date.  The SEC Reports set forth as of the dates
thereof all outstanding secured and unsecured Indebtedness of the Company or
any Subsidiary, or for which the Company or any Subsidiary has
commitments.  For the purposes of this
Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed
money or amounts owed in excess of $50,000 (other than trade accounts payable
incurred in the ordinary course of business), (b) all guaranties,
endorsements and other contingent obligations in respect of Indebtedness of
others, whether or not the same are or should be reflected in the Company’s
balance sheet (or the notes thereto), except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (c) the present value of any lease
payments in excess 




 


9

















 




of
$50,000 due under leases required to be capitalized in accordance with
GAAP.  Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness. 




 




(Y)           Tax Status.  Except for matters
that would not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect, the Company and each
Subsidiary has filed all necessary federal, state and foreign income and
franchise tax returns and has paid or accrued all taxes shown as due thereon,
and the Company has no knowledge of a tax deficiency which has been asserted or
threatened against the Company or any Subsidiary. 




 




(Z)           Foreign Corrupt Practices.  Neither
the Company, nor to the knowledge of the Company, any agent or other person
acting on behalf of the Company, has (i) directly or indirectly, used any
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to
any foreign or domestic political parties or campaigns from corporate funds, (iii) failed
to disclose fully any contribution made by the Company (or made by any person
acting on its behalf of which the Company is aware) which is  in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of
1977, as amended. 




 




(AA)       Accountants.  The Company’s accountants are named in the
Prospectus Supplement.  To the knowledge
of the Company, such accountants, who the Company expects will express their
opinion with respect to the financial statements to be included in the Company’s
next Annual Report on Form 10-K, are a registered public accounting firm
as required by the Securities Act. 




 




(BB)        Regulation
M Compliance.  The Company has not, and to its knowledge no one acting on
its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities (other than for the Placement
Agent’s placement of the Securities), or (iii) paid or agreed to pay to
any person any compensation for soliciting another to purchase any other
securities of the Company. 




 




(CC)        Approvals.  The issuance and listing on the Trading
Market of the Shares requires no further approvals, including but not limited
to, the approval of shareholders. 




 




(DD)       FINRA Affiliations.  There are no affiliations with any FINRA
member firm among the Company’s officers, directors or, to the knowledge of the
Company, any five percent (5%) or greater stockholder of the Company, except as
set forth in the Base Prospectus. 




 




SECTION 4.           ENGAGEMENT TERM. 




 




Rodman’s engagement
hereunder will be for the period of 90 days. The engagement may be terminated
by either the Company or Rodman at any time upon 10 days’ written notice.
Notwithstanding anything to the contrary contained herein, the provisions in
this Agreement concerning confidentiality, indemnification and contribution
will survive any expiration or termination of this Agreement.  Upon any termination of this Agreement, the
Company’s obligation to pay Rodman any fees actually earned on closing of the
Offering and otherwise payable under Section 1(A), shall survive any
expiration or termination of this Agreement, as permitted by FINRA Rule 5110(f)(2)(d).  Upon any termination of this Agreement, the
Company’s obligation to reimburse Rodman for out of pocket accountable expenses
actually incurred by Rodman and reimbursable upon closing of the Offering
pursuant to Section 1(B), if any are otherwise due under Section 1(B) hereof,
will survive any expiration or termination of this Agreement, as permitted by
FINRA Rule 5110(f)(2)(d). 




 


10






 












 




SECTION 5.           RODMAN INFORMATION. 




 




The Company agrees that any
information or advice rendered by Rodman in connection with this engagement is
for the confidential use of the Company only in their evaluation of the
Placement and, except as otherwise required by law, the Company will not
disclose or otherwise refer to the advice or information in any manner without
Rodman’s prior written consent. 




 




SECTION 6.           NO FIDUCIARY RELATIONSHIP. 




 




This Agreement does not
create, and shall not be construed as creating rights enforceable by any person
or entity not a party hereto, except those entitled hereto by virtue of the
indemnification provisions hereof.  The
Company acknowledges and agrees that Rodman is not and shall not be construed
as a fiduciary of the Company and shall have no duties or liabilities to the
equity holders or the creditors of the Company or any other person by virtue of
this Agreement or the retention of Rodman hereunder, all of which are hereby
expressly waived. 




 




SECTION 7.           CLOSING. 




 




The obligations of the
Placement Agent and the Purchasers, and the closing of the sale of the
Securities hereunder are subject to the accuracy, when made and on the Closing
Date, of the representations and warranties on the part of the Company and its
Subsidiaries contained herein, to the accuracy of the statements of the Company
and its Subsidiaries made in any certificates pursuant to the provisions
hereof, to the performance by the Company and its Subsidiaries of their
obligations hereunder, and to each of the following additional terms and
conditions: 




 




(A)          No stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
Commission, and any request for additional information on the part of the
Commission (to be included in the Registration Statement, the Base Prospectus
or the Prospectus Supplement or otherwise) shall have been complied with to the
reasonable satisfaction of the Placement Agent. 




 




(B)           The Placement Agent shall
not have discovered and disclosed to the Company on or prior to the Closing
Date that the Registration Statement, the Base Prospectus or the Prospectus
Supplement or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of counsel for the Placement Agent, is material
or omits to state any fact which, in the opinion of such counsel, is material
and is required to be stated therein or is necessary to make the statements
therein not misleading. 




 




(C)           All corporate proceedings
and other legal matters incident to the authorization, form, execution,
delivery and validity of each of this Agreement, the Securities, the
Registration Statement, the Base Prospectus and the Prospectus Supplement and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects
to counsel for the Placement Agent, and the Company shall have furnished to
such counsel all documents and information that they may reasonably request to
enable them to pass upon such matters. 




 




(D)          The Placement Agent shall
have received from outside counsel to the Company such counsel’s written
opinion, addressed to the Placement Agent and the Purchasers dated as of the
Closing Date, in form and substance reasonably satisfactory to the Placement
Agent. 




 


11

















 




(E)           Neither the Company nor any
of its Subsidiaries shall have sustained (i) since the date of the latest
audited financial statements included or incorporated by reference in the Base
Prospectus, any loss or interference with its business from fire, explosion,
flood, terrorist act or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth in or contemplated by the Base Prospectus and (ii) since
such date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its Subsidiaries or any change, or any
development involving a prospective change, in or affecting the business,
general affairs, management, financial position, stockholders’ equity, results
of operations or prospects of the Company and its Subsidiaries, otherwise than
as set forth in or contemplated by the Base Prospectus, the effect of which, in
any such case described in clause (i) or (ii), is, in the judgment of the
Placement Agent, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Securities on the terms
and in the manner contemplated by the Base Prospectus and the Prospectus
Supplement. 




 




(F)           The Shares are registered
under the Exchange Act and, as of the Closing Date, the Shares shall be listed and
admitted and authorized for trading on the Trading Market, and satisfactory
evidence of such actions shall have been provided to the Placement Agent.  The Company shall have taken no action
designed to, or likely to have the effect of terminating the registration of
the Common Stock under the Exchange Act or delisting or suspending from trading
the Common Stock from the Trading Market, nor has the Company received any
information suggesting that the Commission or the Trading Market is
contemplating terminating such registration or listing. 




 




(G)           Subsequent to the execution
and delivery of this Agreement, there shall not have occurred any of the
following: (i) trading in securities generally on the New York Stock Exchange,
the Nasdaq National Market or the NYSE Alternext US or in the over-the-counter
market, or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum or maximum prices
or maximum ranges for prices shall have been established on any such exchange
or such market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by federal or state authorities or a material disruption
has occurred in commercial banking or securities settlement or clearance
services in the United States, (iii) the United States shall have become
engaged in hostilities in which it is not currently engaged, the subject of an
act of terrorism, there shall have been an escalation in hostilities involving
the United States, or there shall have been a declaration of a national
emergency or war by the United States, or (iv) there shall have occurred
any other calamity or crisis or any change in general economic, political or
financial conditions in the United States or elsewhere, if the effect of any
such event in clause (iii) or (iv) makes it, in the sole judgment of
the Placement Agent, impracticable or inadvisable to proceed with the sale or
delivery of the Securities on the terms and in the manner contemplated by the
Base Prospectus and the Prospectus Supplement. 




 




(H)          No action shall have been
taken and no statute, rule, regulation or order shall have been enacted,
adopted or issued by any governmental agency or body which would, as of the
Closing Date, prevent the issuance or sale of the Securities or materially and
adversely affect or potentially and adversely affect the business or operations
of the Company; and no injunction, restraining order or order of any other
nature by any federal or state court of competent jurisdiction shall have been
issued as of the Closing Date which would prevent the issuance or sale of the
Securities or materially and adversely affect or potentially and adversely affect
the business or operations of the Company. 




 




(I)            The Company shall have
entered into subscription agreements with each of the Purchasers and such
agreements shall be in full force and effect and shall contain representations
and warranties of the Company as agreed between the Company and the Purchasers.





 


12

















 




(J)            FINRA shall have raised no
objection to the fairness and reasonableness of the terms and arrangements of
this Agreement.  In addition, the Company
shall, if requested by the Placement Agent, make or authorize Placement Agent’s
counsel to make on the Company’s behalf, an Issuer Filing with FINRA pursuant
to FINRA Rule 5110 with respect to the Registration Statement and pay all
filing fees required in connection therewith. 




 




(K)          Prior to the Closing Date,
the Company shall have furnished to the Placement Agent such further
information, certificates and documents as the Placement Agent may reasonably
request. 




 




All opinions, letters,
evidence and certificates mentioned above or elsewhere in this Agreement shall
be deemed to be in compliance with the provisions hereof only if they are in
form and substance reasonably satisfactory to counsel for the Placement Agent. 




 




SECTION 8.           INDEMNIFICATION. 




 




(A)          To the extent permitted by
law, the Company will indemnify Rodman and its affiliates, stockholders,
directors, officers, employees and controlling persons (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) against all losses,
claims, damages, expenses and liabilities, as the same are incurred (including
the reasonable fees and expenses of counsel), relating to or arising out of its
activities hereunder or pursuant to this engagement letter, except to the
extent that any losses, claims, damages, expenses or liabilities (or actions in
respect thereof) are found in a final judgment (not subject to appeal) by a
court of law to have resulted primarily and directly from Rodman’s willful
misconduct or gross negligence in performing the services described herein. 




 




(B)           Promptly after receipt by
Rodman of notice of any claim or the commencement of any action or proceeding
with respect to which Rodman is entitled to indemnity hereunder, Rodman will
notify the Company in writing of such claim or of the commencement of such
action or proceeding, and the Company will assume the defense of such action or
proceeding and will employ counsel reasonably satisfactory to Rodman and will
pay the fees and expenses of such counsel. 
Notwithstanding the preceding sentence, Rodman will be entitled to
employ counsel separate from counsel for the Company and from any other party
in such action if counsel for Rodman reasonably determines that it would be
inappropriate under the applicable rules of professional responsibility
for the same counsel to represent both the Company and Rodman.  In such event, the reasonable fees and
disbursements of no more than one such separate counsel will be paid by the
Company.  The Company will have the
exclusive right to settle the claim or proceeding provided that the Company
will not settle any such claim, action or proceeding without the prior written
consent of Rodman, which will not be unreasonably withheld. 




 




(C)           The Company agrees to notify
Rodman promptly of the assertion against it or any other person of any claim or
the commencement of any action or proceeding relating to a transaction
contemplated by this engagement letter. 




 




(D)          If for any reason the
foregoing indemnity is unavailable to Rodman or insufficient to hold Rodman
harmless, then the Company shall contribute to the amount paid or payable by
Rodman as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect not only the relative benefits received
by the Company on the one hand and Rodman on the other, but also the relative
fault of the Company on the one hand and Rodman on the other that resulted in
such losses, claims, damages or liabilities, as well as any relevant equitable
considerations.  The amounts paid or
payable by a party in respect of losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees and
expenses incurred in defending any litigation, proceeding or other action or
claim.  Notwithstanding the provisions
hereof, Rodman’s share of the liability hereunder shall 




 


13

















 




not be in excess of the amount of fees actually received, or to be
received, by Rodman under this engagement letter (excluding any amounts
received as reimbursement of expenses incurred by Rodman). 




 




(E)           These indemnification
provisions shall remain in full force and effect whether or not the transaction
contemplated by this engagement letter is completed and shall survive the
termination of this engagement letter, and shall be in addition to any
liability that the Company might otherwise have to any indemnified party under
this engagement letter or otherwise. 




 




SECTION 9.           GOVERNING LAW. 




 




This Agreement will be
governed by, and construed in accordance with, the laws of the State of New
York applicable to agreements made and to be performed entirely in such
State.  This Agreement may not be
assigned by either party without the prior written consent of the other
party.  This Agreement shall be binding
upon and inure to the benefit of the parties hereto, and their respective
successors and permitted assigns. Any right to trial by jury with respect to
any dispute arising under this Agreement or any transaction or conduct in
connection herewith is waived.  Any
dispute arising under this Agreement may be brought into the courts of the
State of New York or into the Federal Court located in New York, New York and,
by execution and delivery of this Agreement, the Company hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of aforesaid courts.  Each
party hereto hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by delivering a
copy thereof via overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner
permitted by law. If either party shall commence an action or proceeding to
enforce any provisions of a Transaction Document, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding. 




 




SECTION 10.         ENTIRE AGREEMENT/MISC. 




 




This Agreement embodies the
entire agreement and understanding between the parties hereto, and supersedes
all prior agreements and understandings, relating to the subject matter
hereof.  If any provision of this
Agreement is determined to be invalid or unenforceable in any respect, such
determination will not affect such provision in any other respect or any other
provision of this Agreement, which will remain in full force and effect.  This Agreement may not be amended or otherwise
modified or waived except by an instrument in writing signed by both Rodman and
the Company.  The representations,
warranties, agreements and covenants contained herein shall survive the closing
of the Placement and delivery and/or exercise of the Securities, as
applicable.  This Agreement may be
executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party,
it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered
by facsimile transmission or a .pdf format file, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or
..pdf signature page were an original thereof. 




 




SECTION 11.         NOTICES. 




 




Any and all notices or other
communications or deliveries required or permitted to be provided hereunder shall
be in writing and shall be deemed given and effective on the earliest of (a) the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified 




 


14

















 




on the signature pages attached hereto prior to 6:30 p.m.
(New York City time) on a business day, (b) the next business day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number on the signature pages attached hereto
on a day that is not a business day or later than 6:30 p.m. (New York City
time) on any business day, (c) the business day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages hereto. 




 




Please confirm that the
foregoing correctly sets forth our agreement by signing and returning to Rodman
a copy of this Agreement. 




 




	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RODMAN &
  RENSHAW, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for notice:

  
	
   

  	
   

  	
  1251 Avenue of the Americas, 20th Floor

  
	
   

  	
   

  	
  New York, NY, 10020

  
	
   

  	
   

  	
  Fax (646) 841-1640

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted and Agreed to as of

  	
   

  	
   

  
	
  the date first written above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SPHERIX INCORPORATED

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Dr. Claire L. Kruger

  	
   

  	
   

  
	
   

  	
  Title: Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for notice:

  
	
  6430 Rockledge Drive

  
	
  Suite 503

  
	
  Bethesda, MD 20817 Fax:
  (301) 897-2567 Attention: Dr. Claire L. Kruger

  





 


15