EXHIBIT 10.1
STANDBY EQUITY DISTRIBUTION AGREEMENT
THIS AGREEMENT dated as of the 22nd day of July 2005 (the "Agreement") between
CORNELL CAPITAL PARTNERS, LP, a Delaware limited partnership (the "Investor"),
and SPHERIX INCORPORATED, a corporation organized and existing under the laws of
the State of Delaware (the "Company").
WHEREAS, the parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall issue and sell to the Investor, from time to
time as provided herein, and the Investor shall purchase from the Company, up to
Four Million Dollars ($4,000,000) of the Company's common stock, par value
$0.005 per share (the "Common Stock"); and
WHEREAS, such investments will be made in reliance upon the provisions of
Regulation D ("Regulation D") of the Securities Act of 1933, as amended, and the
regulations promulgated thereunder (the "Securities Act"), and or upon such
other exemption from the registration requirements of the Securities Act as may
be available with respect to any or all of the investments to be made hereunder.
WHEREAS, the Company has engaged Newbridge Securities Corporation (the
"Placement Agent"), to act as the Company's exclusive placement agent in
connection with the sale of the Common Stock to the Investor hereunder pursuant
to the Placement Agent Agreement dated the date hereof by and among the Company,
the Placement Agent and the Investor (the "Placement Agent Agreement").
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
CERTAIN DEFINITIONS
SECTION 1.1.
"ADVANCE" SHALL MEAN THE PORTION
OF THE COMMITMENT AMOUNT REQUESTED BY THE COMPANY IN THE ADVANCE NOTICE.
SECTION 1.2.
"ADVANCE DATE" SHALL MEAN THE
DATE THE DAVID GONZALEZ ATTORNEY TRUST ACCOUNT IS IN RECEIPT OF THE FUNDS FROM
THE INVESTOR AND DAVID GONZALEZ, ESQ., IS IN POSSESSION OF FREE TRADING SHARES
FROM THE COMPANY AND THEREFORE AN ADVANCE BY THE INVESTOR TO THE COMPANY CAN BE
MADE AND DAVID GONZALEZ, ESQ. CAN RELEASE THE FREE TRADING SHARES TO THE
INVESTOR. THE ADVANCE DATE SHALL BE THE FIRST (1ST) TRADING DAY AFTER EXPIRATION
OF THE APPLICABLE PRICING PERIOD FOR EACH ADVANCE.
SECTION 1.3.
"ADVANCE NOTICE" SHALL MEAN A
WRITTEN NOTICE TO THE INVESTOR SETTING FORTH THE ADVANCE AMOUNT THAT THE COMPANY
REQUESTS FROM THE INVESTOR AND THE ADVANCE DATE.
SECTION 1.4.
"ADVANCE NOTICE DATE" SHALL MEAN
EACH DATE THE COMPANY DELIVERS TO THE INVESTOR AN ADVANCE NOTICE REQUIRING THE
INVESTOR TO ADVANCE FUNDS TO THE COMPANY, SUBJECT TO THE TERMS OF THIS
AGREEMENT.
NO ADVANCE NOTICE DATE SHALL BE LESS THAN FIVE (5) TRADING DAYS
AFTER THE PRIOR ADVANCE NOTICE DATE.
SECTION 1.5.
"BID PRICE" SHALL MEAN, ON ANY
DATE, THE CLOSING BID PRICE (AS REPORTED BY BLOOMBERG L.P.) OF THE COMMON STOCK
ON THE PRINCIPAL MARKET OR IF THE COMMON STOCK IS NOT
TRADED ON A PRINCIPAL MARKET, THE HIGHEST REPORTED BID PRICE FOR THE COMMON
STOCK, AS FURNISHED BY THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.
SECTION 1.6.
"CLOSING" SHALL MEAN ONE OF THE
CLOSINGS OF A PURCHASE AND SALE OF COMMON STOCK PURSUANT TO SECTION 2.3.