EXHIBIT 10.4


 


REGISTRATION RIGHTS
AGREEMENT


 


REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of July 22,
2005, by and between SPHERIX INCORPORATED,
a Delaware corporation (the “Company”), and CORNELL CAPITAL PARTNERS, LP, a Delaware limited partnership (the
“Investor”).


 


WHEREAS:


 


A.                                   In
connection with the Standby Equity Distribution Agreement by and between the
parties hereto of even date herewith (the “Standby Equity Distribution
Agreement”), the Company has agreed, upon the terms and subject to the
conditions of the Standby Equity Distribution Agreement, to issue and sell to
the Investor that number of shares of the Company’s common stock, par value
$0.005 per share (the “Common Stock”), which can be purchased pursuant
to the terms of the Standby Equity Distribution Agreement for an aggregate
purchase price of up to Four Million Dollars ($4,000,000).  Capitalized terms not defined herein shall
have the meaning ascribed to them in the Standby Equity Distribution Agreement.


 


B.                                     To
induce the Investor to execute and deliver the Standby Equity Distribution
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the “Securities
Act”), and applicable state securities laws.


 


NOW,
THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Investor hereby agree as follows:


 


1.                                       DEFINITIONS.


 


As used in this Agreement, the following terms shall
have the following meanings:


 


a.                                       “Person”
means a corporation, a limited liability company, an association, a partnership,
an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.


 


b.                                      “Register,”
“registered,” and “registration” refer to a registration effected
by preparing and filing one or more Registration Statements (as defined below)
in compliance with the Securities Act and pursuant to Rule 415 under the
Securities Act or any successor rule providing for offering securities on
a continuous or delayed basis (“Rule 415”), and the declaration or
ordering of effectiveness of such Registration Statement(s) by the United
States Securities and Exchange Commission (the “SEC”).


 


c.                                       “Registrable
Securities” means the Investor’s Shares, as defined in the Standby Equity
Distribution Agreement and shares of Common Stock issuable to Investors
pursuant to the Standby Equity Distribution Agreement.


 


d.                                      “Registration
Statement” means a registration statement under the Securities Act which
covers the Registrable Securities.


 





















 


2.                                       REGISTRATION.


 


a.                                       Mandatory
Registration.  The Company
shall prepare and file with the SEC a Registration Statement on Form S-2
or on such other form as is available. 
The Company shall cause such Registration Statement to be declared
effective by the SEC prior to the first sale to the Investor of the Company’s
Common Stock pursuant to the Standby Equity Distribution Agreement.


 


b.                                      Sufficient
Number of Shares Registered.  In the event the number of shares available
under a Registration Statement filed pursuant to Section 2(a) is
insufficient to cover all of the Registrable Securities which the Investor has
purchased pursuant to the Standby Equity Distribution Agreement, the Company
shall amend the Registration Statement, or file a new Registration Statement
(on the short form available therefore, if applicable), or both, so as to cover
all of such Registrable Securities which the Investor has purchased pursuant to
the Standby Equity Distribution Agreement as soon as practicable, but in any
event not later than fifteen (15) days after the necessity therefore
arises.  The Company shall use it best
efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof.  For purposes of the foregoing provision, the
number of shares available under a Registration Statement shall be deemed “insufficient
to cover all of the Registrable Securities” if at any time the number of
Registrable Securities issuable on an Advance Notice Date is greater than the
number of shares available for resale under such Registration Statement.


 


3.                                       RELATED
OBLIGATIONS.


 


a.                                       The Company
shall keep the Registration Statement effective pursuant to Rule 415 at
all times until the date on which the Investor shall have sold all the
Registrable Securities covered by such Registration Statement or all such
shares are eligible for resale pursuant to Rule 144(k) (the “Registration
Period”), which Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall 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, in light of
the circumstances in which they were made, not misleading.


 


b.                                      The Company
shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which
prospectus is to be filed pursuant to Rule 424 promulgated under the Securities
Act, as may be necessary to keep such Registration Statement effective at all
times during the Registration Period, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in such Registration Statement.  In the case of amendments and supplements to
a Registration Statement which are required to be filed pursuant to this
Agreement (including pursuant to this Section 3(b)) by reason of the
Company’s filing a report on Form 10-K, Form 10-Q or Form 8-K or
any analogous report under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), the Company shall have incorporated such report by
reference into the Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on the same day on


 


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which the Exchange
Act report is filed which created the requirement for the Company to amend or
supplement the Registration Statement.


 


c.                                       The Company
shall furnish to the Investor without charge, (i) at least one copy of
such Registration Statement as declared effective by the SEC and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, all exhibits and each preliminary
prospectus, (ii) ten (10) copies of the final prospectus included in
such Registration Statement and all amendments and supplements thereto (or such
other number of copies as such Investor may reasonably request) and (iii) such
other documents as such Investor may reasonably request from time to time in
order to facilitate the disposition of the Registrable Securities owned by such
Investor.


 


d.                                      The Company
shall use its best efforts to (i) register and qualify the Registrable Securities
covered by a Registration Statement under such other securities or “blue sky”
laws of such jurisdictions in the United States as the Investor reasonably
requests, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary
to maintain such registrations and qualifications in effect at all times during
the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (w) make any change to its
certificate of incorporation or by-laws, (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this Section 3(d),
(y) subject itself to general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction.  The Company shall promptly notify the
Investor of the receipt by the Company of any notification with respect to the
suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or
threat of any proceeding for such purpose.


 


e.                                       As promptly as
practicable after becoming aware of such event or development, the Company
shall notify the Investor in writing of the happening of any event as a result
of which the prospectus included in a Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material, nonpublic
information), and promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and
deliver ten (10) copies of such supplement or amendment to each
Investor.  The Company shall also
promptly notify the Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to the Investor by
facsimile on the same day of such effectiveness), (ii) of any request by
the SEC for amendments or supplements to a Registration Statement or related
prospectus or related information, and (iii) of the Company’s reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate.


 


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f.                                         The Company
shall use its best efforts to prevent the issuance of any stop order or other
suspension of effectiveness of a Registration Statement, or the suspension of
the qualification of any of the Registrable Securities for sale in any
jurisdiction within the United States of America and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify the Investor of the issuance of such
order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.


 


g.                                      The Company
shall make available for inspection by (i) the Investor and (ii) one
firm of accountants or other agents retained by the Investor (collectively, the
“Inspectors”) all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the “Records”),
as shall be reasonably deemed necessary by each Inspector, and cause the
Company’s officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that each Inspector shall
agree, and the Investor hereby agrees, to hold in strict confidence and shall
not make any disclosure (except to an Investor) or use of any Record or other
information which the Company determines in good faith to be confidential, and
of which determination the Inspectors are so notified, unless (a) the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in any Registration Statement or is otherwise required under the
Securities Act, (b) the release of such Records is ordered pursuant to a
final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been
made generally available to the public other than by disclosure in violation of
this or any other agreement of which the Inspector and the Investor has
knowledge.  The Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential.


 


h.                                      The Company
shall hold in confidence and not make any disclosure of information concerning
the Investor provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii) the
disclosure of such information is necessary to avoid or correct a misstatement
or omission in any Registration Statement, (iii) the release of such
information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other agreement.  The Company agrees that it shall, upon
learning that disclosure of such information concerning the Investor is sought
in or by a court or governmental body of competent jurisdiction or through
other means, give prompt written notice to the Investor and allow the Investor,
at the Investor’s expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.


 


i.                                          The Company
shall use its best efforts either to cause all the Registrable Securities
covered by a Registration Statement (i) to be listed on each securities exchange
on which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is then permitted
under the rules of such exchange or to secure the inclusion for quotation
on the National Association of Securities


 


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Dealers, Inc.
OTC Bulletin Board for such Registrable Securities.  The Company shall pay all fees and expenses
in connection with satisfying its obligation under this Section 3(j).


 


j.                                          The Company
shall cooperate with the Investor to the extent applicable, to facilitate the
timely preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Investor may reasonably request and
registered in such names as the Investor may request.


 


k.                                       The Company
shall use its best efforts to cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to consummate
the disposition of such Registrable Securities.


 


l.                                          The Company
shall make generally available to its security holders as soon as practical,
but not later than ninety (90) days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of Rule 158
under the Securities Act) covering a twelve-month period beginning not later
than the first day of the Company’s fiscal quarter next following the effective
date of the Registration Statement.


 


m.                                    The Company
shall otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC in connection with any registration hereunder.


 


n.                                      Within two (2) business
days after a Registration Statement which covers Registrable Securities is
ordered effective by the SEC, the Company shall deliver, and shall cause legal
counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investor) confirmation that such Registration
Statement has been declared effective by the SEC in the form attached hereto as
Exhibit A.


 


o.                                      The Company
shall take all other reasonable actions necessary to expedite and facilitate
disposition by the Investor of Registrable Securities pursuant to a
Registration Statement.


 


4.                                       OBLIGATIONS OF
THE INVESTOR.


 


The Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section 3(f) or
the first sentence of 3(e), the Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until the Investor’s receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(e) or
receipt of notice that no supplement or amendment is required.  Notwithstanding anything to the contrary, the
Company shall cause its transfer agent to deliver unlegended certificates for
shares of Common Stock to a transferee of the Investor in accordance with the
terms of the Standby Equity Distribution Agreement in connection with any sale
of Registrable Securities with respect to which the Investor has entered into a
contract for sale prior to the Investor’s receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(f) or
the first sentence of 3(e) and for which the Investor has not yet settled.


 


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5.                                       EXPENSES OF
REGISTRATION.


 


All expenses incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers, legal and accounting fees shall be paid by the Company.


 


6.                                       INDEMNIFICATION.


 


With respect to Registrable Securities which are
included in a Registration Statement under this Agreement:


 


a.                                       To the fullest
extent permitted by law, the Company will, and hereby does, indemnify, hold
harmless and defend the Investor, the directors, officers, partners, employees,
agents, representatives of, and each Person, if any, who controls the Investor
within the meaning of the Securities Act or the Exchange Act (each, an “Indemnified
Person”), against any losses, claims, damages, liabilities, judgments,
fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in
settlement or expenses, joint or several (collectively, “Claims”)
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified Damages”), to which any
of them may become subject insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material
fact in a Registration Statement or any post-effective amendment thereto or in
any filing made in connection with the qualification of the offering under the
securities or other “blue sky” laws of any jurisdiction in which Registrable
Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading; or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any other law, including,
without limitation, any state securities law, or any rule or regulation
there under relating to the offer or sale of the Registrable Securities
pursuant to a Registration Statement (the matters in the foregoing clauses (i) through
(iii) being, collectively, “Violations”).  The Company shall reimburse the Investor and
each such controlling person promptly as such expenses are incurred and are due
and payable, for any legal fees or disbursements or other reasonable expenses
incurred by them in connection with investigating or defending any such
Claim.  Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this Section 6(a):
(x) shall not apply to a Claim by an Indemnified Person arising out of or based
upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto; (y) shall not be
available to the extent such Claim is based on a failure of the Investor to
deliver or to cause to be delivered the prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant
to Section 3(e); and (z) shall not apply to amounts paid in settlement of
any Claim if such settlement is effected without


 


6





















 


the prior written
consent of the Company, which consent shall not be unreasonably withheld.  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Person.


 


b.                                      In connection
with a Registration Statement, the Investor agrees to indemnify, hold harmless
and defend, to the same extent and in the same manner as is set forth in Section 6(a),
the Company, each of its directors, each of its officers who signs the
Registration Statement and each Person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act (each an “Indemnified
Party”), against any Claim or Indemnified Damages to which any of them may
become subject, under the Securities Act, the Exchange Act or otherwise,
insofar as such Claim or Indemnified Damages arise out of or is based upon any
Violation, in each case to the extent, and only to the extent, that such
Violation occurs in reliance upon and in conformity with written information furnished
to the Company by the Investor expressly for use in connection with such
Registration Statement; and, subject to Section 6(d), the Investor will
reimburse any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6(b) and the agreement
with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Investor, which consent shall not be
unreasonably withheld; provided, further, however, that the Investor shall be
liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to the Investor as a
result of the sale of Registrable Securities pursuant to such Registration
Statement.  Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf
of such Indemnified Party. 
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect
to any prospectus shall not inure to the benefit of any Indemnified Party if
the untrue statement or omission of material fact contained in the prospectus
was corrected and such new prospectus was delivered to the Investor prior to
the Investor’s use of the prospectus to which the Claim relates.


 


c.                                       Promptly after
receipt by an Indemnified Person or Indemnified Party under this Section 6
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person
or Indemnified Party shall, if a Claim in respect thereof is to be made against
any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof, and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume control of the defense thereof with counsel mutually satisfactory to
the indemnifying party and the Indemnified Person or the Indemnified Party, as
the case may be; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain its own counsel with the fees and expenses
of not more than one counsel for such Indemnified Person or Indemnified Party
to be paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing  interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. The Indemnified Party or Indemnified Person shall cooperate fully
with the indemnifying party in connection with any negotiation or defense of
any such action or claim by the indemnifying party and shall furnish to


 


7





















 


the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or claim.  The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto.  No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected
without its prior written consent, provided, however, that the indemnifying
party shall not unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without the
prior written consent of the Indemnified Party or Indemnified Person, consent
to entry of any judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party or Indemnified Person of a release from all
liability in respect to such claim or litigation.  Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties,
firms or corporations relating to the matter for which indemnification has been
made.  The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability
to defend such action.


 


d.                                      The
indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred.


 


e.                                       The indemnity
agreements contained herein shall be in addition to (i) any cause of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.


 


7.                                       CONTRIBUTION.


 


To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that: (i) no seller of Registrable Securities
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any seller of
Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution
by any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities.


 


8.                                       REPORTS UNDER
THE EXCHANGE ACT.


 


With a view to making available to the Investor the
benefits of Rule 144 promulgated under the Securities Act or any similar rule or
regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration (“Rule 144”)
the Company agrees to:


 


a.                                       make and keep
public information available, as those terms are understood and defined in Rule 144;


 


8





















 


b.                                      file with the
SEC in a timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act so long as the Company remains
subject to such requirements (it being understood that nothing herein shall
limit the Company’s obligations under Section 6.3 of the Standby Equity
Distribution Agreement) and the filing of such reports and other documents is
required for the applicable provisions of Rule 144; and


 


c.                                       furnish to the
Investor so long as the Investor owns Registrable Securities, promptly upon
request, (i) a written statement by the Company that it has complied with
the reporting requirements of Rule 144, the Securities Act and the
Exchange Act, (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested to permit the Investor to sell
such securities pursuant to Rule 144 without registration.


 


9.                                       AMENDMENT OF
REGISTRATION RIGHTS.


 


Provisions of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only by a written agreement between
the Company and the Investor.  Any
amendment or waiver effected in accordance with this Section 9
shall be binding upon the Investor and the Company.  No consideration shall be offered or paid to
any Person to amend or consent to a waiver or modification of any provision of
any of this Agreement unless the same consideration also is offered to all of
the parties to this Agreement.


 


10.                                 MISCELLANEOUS.


 


a.                                       A Person is
deemed to be a holder of Registrable Securities whenever such Person owns or is
deemed to own of record such Registrable Securities.  If the Company receives conflicting
instructions, notices or elections from two or more Persons with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.


 


b.                                      Any notices,
consents, waivers or other communications required or permitted to be given
under the terms of this Agreement must be in writing and will be deemed to have
been delivered:  (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after
deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same.  The addresses and facsimile numbers for such
communications shall be:


 


	
  If to the
  Company, to:

  	
   

  	
  Spherix
  Incorporated

  
	
   

  	
   

  	
  12051 Indian
  Creek Court

  
	
   

  	
   

  	
  Beltsville,
  Maryland 20705

  
	
   

  	
   

  	
  Attention:

  	
  President

  
	
   

  	
   

  	
  Telephone:

  	
  (301) 419-3900

  
	
   

  	
   

  	
  Facsimile:

  	
  (301) 210-4908

  



 


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  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

  
	
   

  	
   

  	
   

  
	
  If to the
  Investor, to:

  	
   

  	
  Cornell Capital
  Partners, LP

  
	
   

  	
   

  	
  101 Hudson
  Street – Suite 3700

  
	
   

  	
   

  	
  Jersey City, New
  Jersey 07302

  
	
   

  	
   

  	
  Attention:

  	
  Mark Angelo

  
	
   

  	
   

  	
   

  	
  Portfolio
  Manager

  
	
   

  	
   

  	
  Telephone:

  	
  (201) 985-8300

  
	
   

  	
   

  	
  Facsimile:

  	
  (201) 985-8266

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Cornell Capital
  Partners, LP

  
	
   

  	
   

  	
  101 Hudson
  Street – Suite 3700

  
	
   

  	
   

  	
  Jersey City, NJ
  07302

  
	
   

  	
   

  	
  Attention:

  	
  Troy J. Rillo, Esq.

  
	
   

  	
   

  	
  Telephone:

  	
  (201) 985-8300

  
	
   

  	
   

  	
  Facsimile:

  	
  (201) 985-8266

  



 


Any party may change its
address by providing written notice to the other parties hereto at least five
days prior to the effectiveness of such change. 
Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a courier or overnight courier service
shall be rebuttable evidence of personal service, receipt by facsimile or
receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.


 


c.                                       Failure of any
party to exercise any right or remedy under this Agreement or otherwise, or
delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.


 


d.                                      The corporate
laws of the State of New Jersey shall govern all issues concerning the relative
rights of the Company and the Investor. 
All other questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of
the State of New Jersey, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New Jersey or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New Jersey.  Each
party hereby irrevocably submits to the non-exclusive jurisdiction of the
Superior Courts of the State of New Jersey, sitting in Hudson County, New
Jersey and the Federal District Court for the District of New Jersey sitting in
Newark, New Jersey, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of


 


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any such court,
that such suit, action or proceeding is brought in an inconvenient forum or
that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for
such 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 any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction.  EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.


 


e.                                       This Agreement,
the Standby Equity Distribution Agreement, the Escrow Agreement, and the
Placement Agent Agreement constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
and therein.  This Agreement, the Standby
Equity Distribution Agreement, the Escrow Agreement, and the Placement Agent
Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.


 


f.                                         This Agreement
shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.


 


g.                                      The headings in
this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.


 


h.                                      This Agreement
may be executed in identical counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, may
be delivered to the other party hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.


 


i.                                          Each party
shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order
to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.


 


j.                                          The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent and no rules of strict construction will be
applied against any party.


 


k.                                       This Agreement
is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.


 


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IN
WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be duly executed as of day and year first above written.


 


	
   

  	
  COMPANY:

  
	
   

  	
  SPHERIX
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Richard C. Levin

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INVESTOR:

  
	
   

  	
  CORNELL
  CAPITAL PARTNERS, LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Yorkville
  Advisors, LLC

  
	
   

  	
  Its:

  	
  General
  Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Mark Angelo

  
	
   

  	
  Title:

  	
  Portfolio
  Manager

  
					



 


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EXHIBIT A


FORM OF NOTICE OF
EFFECTIVENESS

OF REGISTRATION STATEMENT


 


Attention:


 


Re:                               SPHERIX INCORPORATED


 


Ladies
and Gentlemen:


 


We are counsel to Spherix Incorporated (the “Company”),
and have represented the Company in connection with that certain Standby Equity
Distribution Agreement (the “Standby Equity Distribution Agreement”)
entered into by and between the Company and Cornell Capital Partners, LP (the “Investor”)
pursuant to which the Company issued to the Investor shares of its Common
Stock, par value $0.005 per share (the “Common Stock”).  Pursuant to the Standby Equity Distribution
Agreement, the Company also has entered into a Registration Rights Agreement
with the Investor (the “Registration Rights Agreement”) pursuant to
which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement) under the
Securities Act of 1933, as amended (the “Securities Act”).  In connection with the Company’s obligations
under the Registration Rights Agreement, on                            
           , the Company
filed a Registration Statement on Form                
(File No. 333-                        )
(the “Registration Statement”) with the Securities and Exchange
Commission (the “SEC”) relating to the Registrable Securities which
names the Investor as a selling stockholder thereunder.


 


In connection with the foregoing, we advise you that a
member of the SEC’s staff has advised us by telephone that the SEC has entered
an order declaring the Registration Statement effective under the Securities
Act at [ENTER TIME OF EFFECTIVENESS]
on [ENTER DATE OF EFFECTIVENESS]
and we have no knowledge, after telephonic inquiry of a member of the SEC’s
staff, that any stop order suspending its effectiveness has been issued or that
any proceedings for that purpose are pending before, or threatened by, the SEC
and the Registrable Securities are available for resale under the Securities
Act pursuant to the Registration Statement.


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  



 


cc:                       Cornell Capital Partners, LP


 


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