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