EXHIBIT 10.2


 


ESCROW AGREEMENT


 


THIS ESCROW AGREEMENT
(this “Agreement”) is made and entered into as of July 22, 2005 by SPHERIX INCORPORATED, a Delaware
corporation (the “Company”); CORNELL CAPITAL
PARTNERS, LP, a Delaware limited partnership (the “Investor”); and DAVID GONZALEZ, ESQ. (the “Escrow Agent”).


 


BACKGROUND


 


WHEREAS, the Company
and the Investor have entered into a Standby Equity Distribution Agreement (the
“Standby Equity Distribution Agreement”) dated as of the date hereof,
pursuant to which the Investor will purchase the Company’s Common Stock, par
value $0.005 per share (the “Common Stock”), at a price per share equal
to the Purchase Price, as that term is defined in the Standby Equity
Distribution Agreement, for an aggregate price of up to Four Million
Dollars ($4,000,000).  The Standby
Equity Distribution Agreement provides that on each Advance Date the Investor,
as that term is defined in the Standby Equity Distribution Agreement, shall
deposit the Advance pursuant to the Advance Notice in a segregated escrow
account to be held by Escrow Agent and the Company shall deposit shares of the
Company’s Common Stock, which shall be purchased by the Investor as set forth
in the Standby Equity Distribution Agreement, with the Escrow Agent, in order to
effectuate a disbursement to the Company of the Advance by the Escrow Agent and
a disbursement to the Investor of the shares of the Company’s Common Stock by
Escrow Agent at a closing to be held as set forth in the Standby Equity
Distribution Agreement (the “Closing”).


 


WHEREAS, Escrow
Agent has agreed to accept, hold, and disburse the funds and the shares of the
Company’s Common Stock deposited with it in accordance with the terms of this
Agreement.


 


WHEREAS, in order to
establish the escrow of funds and shares to effect the provisions of the
Standby Equity Distribution Agreement, the parties hereto have entered into
this Agreement.


 


NOW THEREFORE, in
consideration of the foregoing, it is hereby agreed as follows:


 


1.                                       Definitions.  The following terms shall have the following
meanings when used herein:


 


a.                                       “Escrow
Funds” shall mean the Advance funds deposited with the Escrow Agent
pursuant to this Agreement.


 


b.                                      “Joint
Written Direction” shall mean
a written direction executed by
the Investor and the Company directing Escrow Agent to disburse all or a
portion of the Escrow Funds or to take or refrain from taking any action
pursuant to this Agreement.


 


c.                                       “Common
Stock Joint Written Direction” shall mean a written direction executed by the Investor and the
Company directing Investor’s Counsel to disburse all or a portion of the shares
of the Company’s Common Stock or to refrain from taking any action pursuant to
this Agreement.


 


 





















 


2.                                       Appointment
of and Acceptance by Escrow Agent.


 


a.                                       The
Investor and the Company hereby appoint Escrow Agent to serve as Escrow Agent
hereunder.  Escrow Agent hereby accepts
such appointment and, upon receipt by wire transfer of the Escrow Funds in
accordance with Section 3 below, agrees to hold, invest and disburse the Escrow
Funds in accordance with this Agreement.


 


b.                                      The
Investor and the Company hereby appoint the Escrow Agent to serve as the holder
of the shares of the Company’s Common Stock which shall be purchased by the
Investor.  The Escrow Agent hereby
accepts such appointment and, upon receipt via D.W.A.C or the certificates
representing of the shares of the Company’s Common Stock in accordance with
Section 3 below, agrees to hold and disburse the shares of the Company’s Common
Stock in accordance with this Agreement.


 


c.                                       The
Company hereby acknowledges that the Escrow Agent is general counsel to the
Investor, a partner in the general partner of the Investor and counsel to the
Investor in connection with the transactions contemplated and referenced herein
and will be acting as the escrow agent for shares of the Company’s Common Stock
as outlined herein.  The Company agrees
that in the event of any dispute arising in connection with this Escrow
Agreement or otherwise in connection with any transaction or agreement
contemplated and referenced herein, the Escrow Agent shall be permitted to
continue to represent the Investor and the Company will not seek to disqualify
such counsel.


 


3.                                       Creation
of Escrow Account/Common Stock Account.


 


a.                                       On
or prior to the date of this Agreement the Escrow Agent shall establish an
escrow account for the deposit of the Escrow Funds entitled as follows: Spherix
Incorporated/Cornell Capital Partners, LP. 
The Investor will wire funds to the account of the Escrow Agent as
follows:


 


	
  Bank:

  	
  Wachovia, N.A. of New Jersey

  
	
   

  	
   

  
	
  Routing #:

  	
  031201467

  
	
   

  	
   

  
	
  Account #:

  	
  2000014931134

  
	
   

  	
   

  
	
  Name on Account:

  	
  David Gonzalez Attorney Trust Account

  
	
   

  	
   

  
	
  Name on Sub-Account:

  	
  Spherix Incorporated/Cornell Capital Partners, LP Escrow account

  



 


2





















 


b.                                      On
or prior to the date of this Agreement the Escrow Agent shall establish an
account for the D.W.A.C. of the shares of Common Stock. The Company will D.W.A.C. shares of the Company’s Common Stock to the
account of the Escrow Agent as follows:


 


	
  Brokerage Firm:

  	
  Sloan Securities Corp.

  
	
  Clearing House:

  	
  Fiserv

  
	
  Account #:

  	
  56887298

  
	
  DTC #:

  	
  0632

  
	
  Name on Account:

  	
  David Gonzalez Escrow Account

  



 


4.                                       Deposits
into the Escrow Account. The Investor agrees that it shall promptly deliver
all monies for the payment of the Common Stock to the Escrow Agent for deposit
in the Escrow Account.


 


5.                                       Disbursements
from the Escrow Account.


 


a.                                       At
such time as Escrow Agent has collected and deposited instruments of payment in
the total amount of the Advance and has received such Common Stock via D.W.A.C
from the Company which are to be issued to the
Investor pursuant to the Standby Equity Distribution Agreement, the Escrow
Agent shall notify the Company and the Investor. The Escrow Agent will continue
to hold such funds until the Investor and Company execute and deliver a Joint
Written Direction directing the Escrow Agent to disburse the Escrow Funds
pursuant to Joint Written Direction at which time the Escrow Agent shall wire
the Escrow Funds to the Company.  In
disbursing such funds, Escrow Agent is authorized to rely upon such Joint
Written Direction from Company and may accept any signatory from the Company
listed on the signature page to this Agreement and any signature from the
Investor that Escrow Agent already has on file. 
Simultaneous with delivery of the executed Joint Written Direction to
the Escrow Agent the Investor and Company shall execute and deliver a Common
Stock Joint Written Direction to the Escrow Agent directing the Escrow Agent to
release via D.W.A.C to the Investor the shares of the Company’s Common
Stock.  In releasing such shares of
Common Stock the Escrow Agent is authorized to rely upon such Common Stock
Joint Written Direction from Company and may accept any signatory from the
Company listed on the signature page to this Agreement and any signature from
the Escrow Agent has on file.


 


In the event the Escrow Agent does not receive the amount of the
Advance from the Investor or the shares of Common Stock to be purchased by the
Investor from the Company, the Escrow Agent shall notify the Company and the
Investor.


 


In the event that the Escrow Agent has not received the Common Stock to
be purchased by the Investor from the Company, in no event will the Escrow
Funds be released to the Company until such shares are
received by the Escrow Agreement. For purposes of this Agreement, the term “Common
Stock certificates” shall mean Common Stock certificates to be purchased
pursuant to the respective Advance Notice pursuant to the Standby Equity Distribution
Agreement.


 


6.                                       Deposit
of Funds. The Escrow Agent is hereby authorized to deposit the wire
transfer proceeds in the Escrow Account.


 


3





















 


7.                                       Suspension
of Performance: Disbursement Into Court.


 


a.                                       Escrow
Agent.  If at any time, there shall
exist any dispute between the Company and the Investor with respect to holding
or disposition of any portion of the Escrow Funds or the Common Stock or any
other obligations of Escrow Agent hereunder, or if at any time Escrow Agent is
unable to determine, to Escrow Agent’s sole satisfaction, the proper
disposition of any portion of the Escrow Funds or Escrow Agent’s proper actions
with respect to its obligations hereunder, or if the parties have not within
thirty (30) days of the furnishing by Escrow Agent of a notice of resignation
pursuant to Section 9 hereof, appointed a successor Escrow Agent to act
hereunder, then Escrow Agent may, in its sole discretion, take either or both
of the following actions:


 


i.                                          Suspend
the performance of any of its obligations (including without limitation any
disbursement obligations) under this Escrow Agreement until such dispute or
uncertainty shall be resolved to the sole satisfaction of Escrow Agent or until
a successor Escrow Agent shall be appointed (as the case may be); provided
however, Escrow Agent shall continue to invest the Escrow Funds in accordance
with Section 8 hereof; and/or


 


ii.                                       Petition
(by means of an interpleader action or any other appropriate method) any court
of competent jurisdiction in any venue convenient to Escrow Agent, for
instructions with respect to such dispute or uncertainty, and to the extent
required by law, pay into such court, for holding and disposition in accordance
with the instructions of such court, all funds held by it in the Escrow Funds,
after deduction and payment to Escrow Agent of all fees and expenses (including
court costs and attorneys’ fees) payable to, incurred by, or expected to be
incurred by Escrow Agent in connection with performance of its duties and the
exercise of its rights hereunder.


 


iii.                                    Escrow
Agent shall have no liability to the Company, the Investor, or any person with
respect to any such suspension of performance or disbursement into court,
specifically including any liability or claimed liability that may arise, or be
alleged to have arisen, out of or as a result of any delay in the disbursement
of funds held in the Escrow Funds or any delay in with respect to any other
action required or requested of Escrow Agent.


 


8.                                       Investment
of Escrow Funds. The Escrow Agent shall deposit the Escrow Funds in a
non-interest bearing money market account.


 


If Escrow Agent has not received a Joint Written Direction at any time
that an investment decision must be made, Escrow Agent may retain the Escrow
Fund, or such portion thereof, as to which no Joint Written Direction has been
received, in a non-interest bearing money market account.


 


9.                                       Resignation
and Removal of Escrow Agent.  Escrow
Agent may resign from the performance of its duties hereunder at any time by
giving thirty (30) days’ prior written notice to the parties or may be removed,
with or without cause, by the parties, acting jointly, by furnishing a Joint
Written Direction to Escrow Agent, at any time by the giving of ten (10) days’
prior written notice to Escrow Agent as provided herein below.  Upon any such notice of resignation or
removal, the representatives of the Investor and the Company identified in
Sections 13a.(iv) and 13b.(iv), below, jointly shall appoint a successor Escrow
Agent hereunder, which shall be a commercial bank, trust company or other
financial institution with a combined capital and


 


4





















 


surplus in excess of $10,000,000.00.  Upon the acceptance in writing of any
appointment of Escrow Agent hereunder by a successor Escrow Agent, such
successor Escrow Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Escrow Agent, and the
retiring Escrow Agent shall be discharged from its duties and obligations under
this Escrow Agreement, but shall not be discharged from any liability for
actions taken as Escrow Agent hereunder prior to such succession.  After any retiring Escrow Agent’s resignation
or removal, the provisions of this Escrow Agreement shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Escrow Agent
under this Escrow Agreement.  The
retiring Escrow Agent shall transmit all records pertaining to the Escrow Funds
and shall pay all funds held by it in the Escrow Funds to the successor Escrow
Agent, after making copies of such records as the retiring Escrow Agent deems
advisable and after deduction and payment to the retiring Escrow Agent of all
fees and expenses (including court costs and attorneys’ fees) payable to,
incurred by, or expected to be incurred by the retiring Escrow Agent in
connection with the performance of its duties and the exercise of its rights
hereunder.


 


10.                                 Liability
of Escrow Agent.


 


a.                                       Escrow
Agent shall have no liability or obligation with respect to the Escrow Funds
except for Escrow Agent’s willful misconduct or gross negligence. Escrow Agent’s
sole responsibility shall be for the safekeeping, investment, and disbursement
of the Escrow Funds in accordance with the terms of this Agreement.  Escrow Agent shall have no implied duties or
obligations and shall not be charged with knowledge or notice or any fact or
circumstance not specifically set forth herein. 
Escrow Agent may rely upon any instrument, not only as to its due
execution, validity and effectiveness, but also as to the truth and accuracy of
any information contained therein, which Escrow Agent shall in good faith
believe to be genuine, to have been signed or presented by the person or
parties purporting to sign the same and conform to the provisions of this
Agreement.  In no event shall Escrow
Agent be liable for incidental, indirect, special, and consequential or
punitive damages.  Escrow Agent shall not
be obligated to take any legal action or commence any proceeding in connection
with the Escrow Funds, any account in which Escrow Funds are deposited, this
Agreement or the Standby Equity Distribution Agreement, or to appear in,
prosecute or defend any such legal action or proceeding.  Escrow Agent may consult legal counsel
selected by it in the event of any dispute or question as to construction of
any of the provisions hereof or of any other agreement or its duties hereunder,
or relating to any dispute involving any party hereto, and shall incur no
liability and shall be fully indemnified from any liability whatsoever in
acting in accordance with the opinion or instructions of such counsel.  The Company and the Investor jointly and
severally shall promptly pay, upon demand, the reasonable fees and expenses of
any such counsel and Escrow Agent is hereby authorized to pay such fees and
expenses from funds held in escrow.


 


b.                                      The
Escrow Agent is hereby authorized, in its sole discretion, to comply with
orders issued or process entered by any court with respect to the Escrow Funds,
without determination by the Escrow Agent of such court’s jurisdiction in the
matter.  If any portion of the Escrow
Funds is at any time attached, garnished or levied upon under any court order,
or in case the payment, assignment, transfer, conveyance or delivery of any
such property shall be stayed or enjoined by any court order, or in any case
any order judgment or decree shall be made or entered by any court affecting
such property or any part thereof, then and in any such event, the Escrow Agent
is authorized, in its sole discretion, to rely upon and comply with any such


 


5





















 


order, writ judgment or decree which it is advised by legal counsel
selected by it,  binding
upon it, without the need for appeal or other action; and if the Escrow Agent
complies with any such order, writ, judgment or decree, it shall not be liable
to any of the parties hereto or to any other person or entity by reason of such
compliance even though such order, writ judgment or decree may be subsequently
reversed, modified, annulled, set aside or vacated.


 


11.                                 Indemnification
of Escrow Agent.  From and at all
times after the date of this Agreement, the parties jointly and severally,
shall, to the fullest extent permitted by law and to the extent provided
herein, indemnify and hold harmless Escrow Agent and each director, officer,
employee, attorney, agent and affiliate of Escrow Agent (collectively, the “Indemnified Parties”)
against any and all actions, claims (whether or not valid), losses, damages,
liabilities, costs and expenses of any kind or nature whatsoever (including
without limitation reasonable attorney’s fees, costs and expenses) incurred by
or asserted against any of the Indemnified Parties from and after the date
hereof, whether direct, indirect or consequential, as a result of or arising
from or in any way relating to any claim, demand, suit, action, or proceeding
(including any inquiry or investigation) by any person, including without
limitation the parties to this Agreement, whether threatened or initiated,
asserting a claim for any legal or equitable remedy against any person under
any statute or regulation, including, but not limited to, any federal or state
securities laws, or under any common law or equitable cause or otherwise,
arising from or in connection with the negotiation, preparation, execution,
performance or failure of performance of this Agreement or any transaction
contemplated herein, whether or not any such Indemnified Party is a party to
any such action or proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall have the
right to be indemnified hereunder for liability finally determined by a court of
competent jurisdiction, subject to no further appeal, to have resulted solely
from the gross negligence or willful misconduct of such Indemnified Party.  If any such action or claim shall be brought
or asserted against any Indemnified Party, such Indemnified Party shall
promptly notify the Company and the Investor hereunder in writing, and the
Investor(s) and the Company shall assume the defense thereof, including the
employment of counsel and the payment of all expenses.  Such Indemnified Party shall, in its sole
discretion, have the right to employ separate counsel (who may be selected by
such Indemnified Party in its sole discretion) in any such action and to
participate and to participate in the defense thereof, and the fees and
expenses of such counsel shall be paid by such Indemnified Party, except that
the Investor and/or the Company shall be required to pay such fees and expense
if (a) the Investor or the Company agree to pay such fees and expenses, or (b)
the Investor and/or the Company shall fail to assume the defense of such action
or proceeding or shall fail, in the sole discretion of such Indemnified Party,
to employ counsel reasonably satisfactory to the Indemnified Party in any such
action or proceeding, (c) the Investor and the Company are the plaintiff in any
such action or proceeding or (d) the named or potential parties to any such
action or proceeding (including any potentially impleaded parties) include both
Indemnified Party the Company and/or the Investor and Indemnified Party shall have
been advised by counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the Company
or the Investor.  The Investor and the
Company shall be jointly and severally liable to pay fees and expenses of
counsel pursuant to the preceding sentence, except that any obligation to pay
under clause (a) shall apply only to the party so agreeing.  All such fees and expenses payable by the
Company and/or the Investor pursuant to the foregoing sentence shall be paid
from time to time as incurred, both in advance of and after the final
disposition of such action or claim.  The
obligations of the parties


 


6





















 


under this section shall survive any
termination of this Agreement, and resignation or removal of the Escrow Agent
shall be independent of any obligation of Escrow Agent.


 


12.                                 Expenses
of Escrow Agent.  Except as set forth
in Section 11 the Company shall reimburse Escrow Agent for all of its reasonable
out-of-pocket expenses, including attorneys’ fees, travel expenses, telephone
and facsimile transmission costs, postage (including express mail and overnight
delivery charges), copying charges and the like as outlined in Section 12.4 of
the Standby Equity Distribution Agreement dated the date hereof.  All of the compensation and reimbursement
obligations set forth in this Section shall be payable by the Company, upon
demand by Escrow Agent.  The obligations
of the Company under this Section shall survive any termination of this
Agreement and the resignation or removal of Escrow Agent.


 


13.                                 Warranties.


 


a.                                       The
Investor makes the following representations and warranties to the Escrow
Agent:


 


i.                                          The
Investor has full power and authority to execute and deliver this Agreement and
to perform its obligations hereunder.


 


ii.                                       This
Agreement has been duly approved by all necessary action of the Investor,
including any necessary approval of the limited partner of the Investor, has
been executed by duly authorized officers of the Investor’s general partner,
enforceable in accordance with its terms.


 


iii.                                    The
execution, delivery, and performance of the Investor of this Agreement will not
violate, conflict with, or cause a default under the agreement of limited
partnership of the Investor, any applicable law or regulation, any court order
or administrative ruling or degree to which the Investor is a party or any of
its property is subject, or any agreement, contract, indenture, or other
binding arrangement.


 


iv.                                   Mark
A. Angelo has been duly appointed to act as the representative of Investor
hereunder and has full power and authority to execute, deliver, and perform
this Agreement, to execute and deliver any Joint Written Direction, to amend,
modify, or waive any provision of this Agreement, and to take any and all other
actions as the Investor’s representative under this Agreement, all without
further consent or direction form, or notice to, the Investor or any other
party.


 


v.                                      No
party other than the parties hereto have, or shall
have, any lien, claim or security interest in the Escrow Funds or any part
thereof.  No financing statement under
the Uniform Commercial Code is on file in any jurisdiction claiming a security
interest in or describing (whether specifically or generally) the Escrow Funds
or any part thereof.


 


vi.                                   All
of the representations and warranties of the Investor contained herein are true
and complete as of the date hereof and will be true and complete at the time of
any disbursement from the Escrow Funds.


 


b.                                      The
Company makes the following representations and warranties to Escrow Agent and
the Investor:


 


7





















 


i.                                          The
Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Delaware, and has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.


 


ii.                                       This
Agreement has been duly approved by all necessary corporate action of the
Company, including any necessary shareholder approval, has been executed by
duly authorized officers of the Company, enforceable in accordance with its
terms.


 


iii.                                    The
execution, delivery, and performance by the Company of this Escrow Agreement is
in accordance with the Standby Equity Distribution Agreement and will not
violate, conflict with, or cause a default under the articles of incorporation
or bylaws of the Company, any applicable law or regulation, any court order or
administrative ruling or decree to which the Company is a party or any of its
property is subject, or any agreement, contract, indenture, or other binding
arrangement.


 


iv.                                   Richard
C. Levin has been duly appointed to act as the representative of the Company
hereunder and has full power and authority to execute, deliver, and perform
this Agreement, to execute and deliver any Joint Written Direction, to amend,
modify or waive any provision of this Agreement and to take all other actions
as the Company’s Representative under this Agreement, all without further
consent or direction from, or notice to, the Company or any other party.


 


v.                                      No
party other than the parties hereto shall have, any
lien, claim or security interest in the Escrow Funds or any part thereof.  No financing statement under the Uniform
Commercial Code is on file in any jurisdiction claiming a security interest in
or describing (whether specifically or generally) the Escrow Funds or any part
thereof.


 


vi.                                   All
of the representations and warranties of the Company contained herein are true
and complete as of the date hereof and will be true and complete at the time of
any disbursement from the Escrow Funds.


 


14.                                 Consent
to Jurisdiction and Venue.  In the
event that any party hereto commences a lawsuit or other proceeding relating to
or arising from this Agreement, the parties hereto agree that the United States
District Court for the District of New Jersey shall have the sole and exclusive
jurisdiction over any such proceeding. 
If all such courts lack federal subject matter jurisdiction, the parties
agree that the Superior Court Division of New Jersey, Chancery Division of
Hudson County shall have sole and exclusive jurisdiction.  Any of these courts shall be proper venue for
any such lawsuit or judicial proceeding and the parties hereto waive any
objection to such venue.  The parties
hereto consent to and agree to submit to the jurisdiction of any of the courts
specified herein and agree to accept the service of process to vest personal
jurisdiction over them in any of these courts.


 


15.                                 Notice.  All notices and other communications
hereunder shall be in writing and shall be deemed to have been validly served,
given or delivered five (5) days after deposit in the United States mail, by
certified mail with return receipt requested and postage prepaid, when


 


8





















 


delivered personally, one (1) day delivery
to any overnight courier, or when transmitted by facsimile transmission and
addressed to the party to be notified as follows:


 


	
  If to Investor, to:

  	
  Cornell Capital Partners, LP

  
	
   

  	
  101 Hudson Street – Suite 3700

  
	
   

  	
  Jersey City, New Jersey 07302

  
	
   

  	
  Attention:

  	
  Mark Angelo

  
	
   

  	
  Facsimile:

  	
  (201) 985-8266

  
	
   

  	
   

  
	
  If to Escrow Agent, to: 

  	
  Troy Rillo, Esq.

  
	
   

  	
  101 Hudson Street – Suite 3700

  
	
   

  	
  Jersey City, NJ 07302

  
	
   

  	
  Telephone:

  	
  (201) 985-8300

  
	
   

  	
  Facsimile:

  	
  (201) 985-8266

  
	
   

  	
   

  
	
  If to Company, to:

  	
  Spherix Incorporated

  
	
   

  	
  12051 Indian Creek Court

  
	
   

  	
  Beltsville, Maryland 20705

  
	
   

  	
  Attention:

  	
  President

  
	
   

  	
  Telephone:

  	
  (301) 419-3900

  
	
   

  	
  Facsimile:

  	
  (301) 210-4908

  
	
   

  	
   

  
	
  With a copy to:

  	
  James E. Baker, Jr., Esq.

  
	
   

  	
  Baxter, Baker, Sidle, Conn & Jones, P.A.

  
	
   

  	
  120 E. Baltimore Street, Suite 2100

  
	
   

  	
  Baltimore, MD 21202

  
	
   

  	
  Facsimile:

  	
  (410) 230-3801

  



 


Or to such other address as each party may designate for itself by like
notice.


 


16.                                 Amendments
or Waiver. This Agreement may be changed, waived, discharged or terminated
only by a writing signed by the parties of the Escrow Agent.  No delay or omission by any party in
exercising any right with respect hereto shall operate as waiver.  A waiver on any one occasion shall not be
construed as a bar to, or waiver of, any right or remedy on any future
occasion.


 


17.                                 Severability.  To the extent any provision of this Agreement
is prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition, or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.


 


18.                                 Governing
Law.  This Agreement shall be
construed and interpreted in accordance with the internal laws of the State of
New Jersey without giving effect to the conflict of laws principles thereof.


 


9





















 


19.                                 Entire
Agreement.  This Agreement
constitutes the entire Agreement between the parties relating to the holding,
investment, and disbursement of the Escrow Funds and sets forth in their
entirety the obligations and duties of the Escrow Agent with respect to the
Escrow Funds.


 


20.                                 Binding
Effect.  All of the terms of this
Agreement, as amended from time to time, shall be binding upon, inure to the
benefit of and be enforceable by the respective heirs, successors and assigns
of the Investor, the Company, or the Escrow Agent.


 


21.                                 Execution
of Counterparts.  This Agreement and
any Joint Written Direction may be executed in counter parts, which when so
executed shall constitute one and same agreement or direction.


 


22.                                 Termination.
Upon the first to occur of the termination of the Standby Equity Distribution
Agreement dated the date hereof or the disbursement of all amounts in the
Escrow Funds and Common Stock into court pursuant to Section 7 hereof, this
Agreement shall terminate and Escrow Agent shall have no further obligation or
liability whatsoever with respect to this Agreement or the Escrow Funds or
Common Stock.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


10





















 


IN WITNESS WHEREOF
the parties to this Escrow Agreement have hereunto set their hands and seals
the day and year above set forth.


 


	
   

  	
  SPHERIX INCORPORATED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Richard C. Levin

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CORNELL CAPITAL PARTNERS, LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Yorkville Advisors, LLC

  
	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Mark A. Angelo

  
	
   

  	
  Title:

  	
  Portfolio Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  David Gonzalez, Esq.

  
				



 


11