Document:

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

  

 

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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.

 

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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.

  
				

 

11EXHIBIT 10.3

 

SPHERIX
INCORPORATED

PLACEMENT
AGENT AGREEMENT

 

Dated as of: July 22, 2005

 

Newbridge Securities Corporation

1451 Cypress Creek Road, Suite 204

Fort Lauderdale, Florida 33309

 

Ladies and Gentlemen:

 

The undersigned, Spherix
Incorporated, a Delaware corporation (the “Company”), hereby agrees with
Newbridge Securities Corporation (the “Placement Agent”), and Cornell
Capital Partners, LP (the “Investor”) as follows:

 

1. Offering.  The Company hereby engages the Placement
Agent to act as its exclusive placement agent in connection with the Standby
Equity Distribution Agreement dated the date hereof between the Company and the
Investor (the “Standby Equity Distribution Agreement”), pursuant to
which the Company shall issue and sell to the Investor, from time to time, and
the Investor shall purchase from the Company (the “Offering”) up to Four
Million Dollars ($4,000,000) (the “Commitment Amount”) of the Company’s
common stock, par value $0.005 per share (the “Common Stock”), at price
per share equal to the Purchase Price, as that term is defined in the Standby
Equity Distribution Agreement.  The
Placement Agent services shall consist of reviewing the terms of the Standby
Equity Distribution Agreement and advising the Company with respect to those
terms.

 

All capitalized terms
used herein and not otherwise defined herein shall have the same meaning
ascribed to them as in the Standby Equity Distribution Agreement.  The Investor will be granted certain
registration rights with respect to the Common Stock as more fully set forth in
the Registration Rights Agreement between the Company and the Investor dated
the date hereof (the “Registration Rights Agreement”).  The documents to be executed and delivered in
connection with the Offering, including, but not limited, to the Company’s
latest Quarterly Report on Form 10-Q as filed with the United States
Securities and Exchange Commission, this Agreement, the Standby Equity
Distribution Agreement, and the Registration Rights Agreement are referred to
sometimes hereinafter collectively as the “Offering Materials.”  The Common Stock purchased by the Investor
under the Standby Equity Distribution Agreement is sometimes referred to
hereinafter as the “Securities.” 
The Placement Agent shall not be obligated to sell any Securities.

 

2. Compensation.

 

A.                                   Upon
the execution of this Agreement, the Company shall issue to the Placement Agent
or its designee shares of the Common Stock in an amount equal to Ten Thousand
Dollars ($10,000) divided by Two Dollars ($2) per share (the agreed upon market
value of the Common Stock on the date hereof) (the “Placement Agent’s Shares”).  The Placement Agent shall be entitled to “piggy-back”
registration rights with respect to the

 

 

Placement
Agent’s Shares, which shall be triggered upon registration of any shares of
Common Stock by the Company pursuant to the Registration Rights Agreement dated
the date hereof.

 

3. Representations,
Warranties and Covenants of the Placement Agent.

 

A.                                   The
Placement Agent represents, warrants and covenants as follows:

 

(i)                                     The
Placement Agent has the necessary power to enter into this Agreement and to
consummate the transactions contemplated hereby.

 

(ii)                                  The
execution and delivery by the Placement Agent of this Agreement and the
consummation of the transactions contemplated herein will not result in any
violation of, or be in conflict with, or constitute a default under, any
agreement or instrument to which the Placement Agent is a party or by which the
Placement Agent or its properties are bound, or any judgment, decree, order or,
to the Placement Agent’s knowledge, any statute, rule or regulation
applicable to the Placement Agent.  This
Agreement when executed and delivered by the Placement Agent, will constitute
the legal, valid and binding obligations of the Placement Agent, enforceable in
accordance with their respective terms, except to the extent that (a) the
enforceability hereof or thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect and
affecting the rights of creditors generally, (b) the enforceability hereof
or thereof is subject to general principles of equity, or (c) the
indemnification provisions hereof or thereof may be held to be in violation of
public policy.

 

(iii)                               Upon
receipt and execution of this Agreement, the Placement Agent will promptly
forward copies of this Agreement to the Company or its counsel and the Investor
or its counsel.

 

(iv)                              The
Placement Agent will not intentionally take any action that it reasonably believes
would cause the Offering to violate the provisions of the Securities Act of
1933, as amended (the “1933 Act”), the Securities Exchange Act of 1934
(the “1934 Act”), the respective rules and regulations promulgated
thereunder (the “Rules and Regulations”) or applicable “Blue Sky”
laws of any state or jurisdiction.

 

(v)                                 The
Placement Agent is a member of the National Association of Securities Dealers, Inc.,
and is a broker-dealer registered as such under the 1934 Act and under the
securities laws of the states in which the Securities will be offered or sold
by the Placement Agent unless an exemption for such state registration is
available to the Placement Agent.  The
Placement Agent is in material compliance with the rules and regulations
applicable to the Placement Agent generally and applicable to the Placement
Agent’s participation in the Offering.

 

4. Representations
and Warranties of the Company.

 

A.                                   The
Company represents and warrants as follows:

 

(i)                                     The
execution, delivery and performance of each of this Agreement, the Standby
Equity Distribution Agreement, and the Registration Rights Agreement has been
or will be duly and validly authorized by the Company and is, or with respect
to this

 

2

 

Agreement, the
Standby Equity Distribution Agreement, and the Registration Rights Agreement
will be, a valid and binding agreement of the Company, enforceable in
accordance with its respective terms, except to the extent that (a) the
enforceability hereof or thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect and
affecting the rights of creditors generally, (b) the enforceability hereof
or thereof is subject to general principles of equity or (c) the
indemnification provisions hereof or thereof may be held to be in violation of
public policy.  The Securities to be
issued pursuant to the transactions contemplated by this Agreement and the
Standby Equity Distribution Agreement have been duly authorized and, when
issued and paid for in accordance with this Agreement and the Standby Equity
Distribution Agreement will be valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except to the extent
that (1) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to time in
effect and affecting the rights of creditors generally, and (2) the
enforceability thereof is subject to general principles of equity.  All corporate action required to be taken for
the authorization, issuance and sale of the Securities has been duly and
validly taken by the Company.

 

(ii)                                  The
Company has a duly authorized, issued and outstanding capitalization as set
forth herein and in the Standby Equity Distribution Agreement.  The Company is not a party to or bound by any
instrument, agreement or other arrangement providing for it to issue any
capital stock, rights, warrants, options or other securities, except for this
Agreement, the agreements described herein and as described in the Standby
Equity Distribution Agreement and the agreements described therein.  All issued and outstanding securities of the
Company, have been duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission or preemptive
rights with respect thereto and are not subject to personal liability solely by
reason of being security holders; and none of such securities were issued in
violation of the preemptive rights of any holders of any security of the
Company.

 

(iii)                               The
Common Stock to be issued in accordance with this Agreement and the Standby
Equity Distribution Agreement have been duly authorized and, when issued and
paid for in accordance with this Agreement, the Standby Equity Distribution
Agreement and the certificates/instruments representing such Common Stock will
be validly issued, fully-paid and non-assessable; the holders thereof will not
be subject to personal liability solely by reason of being such holders; such
Securities are not and will not be subject to the preemptive rights of any
holder of any security of the Company.

 

(iv)                              The
Company has good and marketable title to, or valid and enforceable leasehold
estates in, all items of real and personal property necessary to conduct its
business (including, without limitation, any real or personal property stated
in the Offering Materials to be owned or leased by the Company), free and clear
of all liens, encumbrances, claims, security interests and defects of any
material nature whatsoever, other than those set forth in the Offering
Materials and liens for taxes not yet due and payable.

 

(v)                                 There
is no litigation or governmental proceeding pending or, to the best of the
Company’s knowledge, threatened against, or involving the properties or
business of the Company, except as set forth in the Offering Materials.

 

3

 

(vi)                              The
Company is duly organized and validly exists as a corporation in good standing
under the laws of the State of Delaware. 
Except as set forth in the Offering Materials, the Company does not own
or control, directly or indirectly, an interest in any other corporation,
partnership, trust, joint venture or other business entity.  The Company is duly qualified or licensed and
in good standing as a foreign corporation in each jurisdiction in which the
character of its operations requires such qualification or licensing and where
failure to so qualify would have a material adverse effect on the Company.  The Company has all requisite corporate power
and authority, and all material and necessary authorizations, approvals,
orders, licenses, certificates and permits of and from all governmental
regulatory officials and bodies (domestic and foreign) to conduct its
businesses (and proposed business) as described in the Offering Materials. Any
disclosures in the Offering Materials concerning the effects of foreign,
federal, state and local regulation on the Company’s businesses as currently
conducted and as contemplated are correct in all material respects and do not
omit to state a material fact.  The
Company has all corporate power and authority to enter into this Agreement, the
Standby Equity Distribution Agreement, the Registration Rights Agreement, and
to carry out the provisions and conditions hereof and thereof, and all
consents, authorizations, approvals and orders required in connection herewith
and therewith have been obtained.  No
consent, authorization or order of, and no filing with, any court, government
agency or other body is required by the Company for the issuance of the
Securities or execution and delivery of the Offering Materials except for
applicable federal and state securities laws. 
The Company, since its inception, has not incurred any liability arising
under or as a result of the application of any of the provisions of the 1933
Act, the 1934 Act or the Rules and Regulations.

 

(vii)                           There
has been no material adverse change in the condition or prospects of the Company,
financial or otherwise, from the latest dates as of which such condition or
prospects, respectively, are set forth in the Offering Materials, and the
outstanding debt, the property and the business of the Company conform in all
material respects to the descriptions thereof contained in the Offering
Materials.

 

(viii)                        Except as
set forth in the Offering Materials, the Company is not in breach of, or in
default under, any term or provision of any material indenture, mortgage, deed
of trust, lease, note, loan or any other material agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or
instrument to which it is a party or by which it or any of its properties may
be bound or affected.  The Company is not
in violation of any provision of its charter or by-laws or in violation of any
franchise, license, permit, judgment, decree or order, or in violation of any
material statute, rule or regulation. 
Neither the execution and delivery of the Offering Materials nor the
issuance and sale or delivery of the Securities, nor the consummation of any of
the transactions contemplated in the Offering Materials nor the compliance by
the Company with the terms and provisions hereof or thereof, has conflicted
with or will conflict with, or has resulted in or will result in a breach of,
any of the terms and provisions of, or has constituted or will constitute a
default under, or has resulted in or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company
or pursuant to the terms of any indenture, mortgage, deed of trust, note, loan
or any other agreement or instrument evidencing an obligation for borrowed
money, or any other agreement or instrument to which the Company may be bound
or to which any of the property or assets of the Company is subject except (a) where
such default, lien, charge or encumbrance would not have a material adverse
effect on the Company and (b) as described in the Offering Materials; nor
will such action result in any violation of the provisions

 

4

 

of the charter
or the by-laws of the Company or, assuming the due performance by the Placement
Agent of its obligations hereunder, any material statute or any material order,
rule or regulation applicable to the Company of any court or of any
foreign, federal, state or other regulatory authority or other government body
having jurisdiction over the Company.

 

(ix)                                Subsequent
to the dates as of which information is given in the Offering Materials, and
except as may otherwise be indicated or contemplated herein or therein the
Company has not (a) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, or (b) entered into
any transaction other than in the ordinary course of business, or (c) declared
or paid any dividend or made any other distribution on or in respect of its
capital stock.  Except as described in
the Offering Materials, the Company has no outstanding obligations to any
officer or director of the Company other than normal payable in connection with
services provided recently.

 

(x)                                   There
are no claims for services in the nature of a finder’s or origination fee with
respect to the sale of the Common Stock or any other arrangements, agreements
or understandings that may affect the Placement Agent’s compensation, as
determined by the National Association of Securities Dealers, Inc.

 

(xi)                                The
Company owns or possesses, free and clear of all liens or encumbrances and
rights thereto or therein by third parties, the requisite licenses or other
rights to use all trademarks, service marks, copyrights, service names, trade
names, patents, patent applications and licenses necessary to conduct its
business (including, without limitation, any such licenses or rights described
in the Offering Materials as being owned or possessed by the Company) and,
except as set forth in the Offering Materials, there is no claim or action by
any person pertaining to, or proceeding, pending or threatened, which
challenges the exclusive rights of the Company with respect to any trademarks,
service marks, copyrights, service names, trade names, patents, patent
applications and licenses used in the conduct of the Company’s businesses (including,
without limitation, any such licenses or rights described in the Offering
Materials as being owned or possessed by the Company) except any claim or
action that would not have a material adverse effect on the Company; the
Company’s current products, services or processes do not infringe or will not
infringe on the patents currently held by any third party.

 

(xii)                             Subject
to the performance by the Placement Agent of its obligations hereunder the
offer and sale of the Securities complies, and will continue to comply, in all
material respects with the requirements of Rule 506 of Regulation D
promulgated by the SEC pursuant to the 1933 Act and any other applicable
federal and state laws, rules, regulations and executive orders.  Neither the Offering Materials nor any
amendment or supplement thereto nor any documents prepared by the Company in
connection with the Offering will contain any untrue statement of a material
fact or omit to state any 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. 
All statements of material facts in the Offering Materials are true and
correct as of the date of the Offering Materials.

 

(xiii)                          All
material taxes which are due and payable from the Company have been paid in
full or adequate provision has been made for such taxes on the books of the
Company, except for those taxes disputed in good faith by the Company

 

5

 

(xiv)                         None of
the Company nor any of its officers, directors, employees or agents, nor any
other person acting on behalf of the Company, has, directly or indirectly,
given or agreed to give any money, gift or similar benefit (other than legal
price concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, or official or
employee of any governmental agency or instrumentality of any government
(domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who is or may be in a position to help or hinder
the business of the Company (or assist it in connection with any actual or
proposed transaction) which (A) might subject the Company to any damage or
penalty in any civil, criminal or governmental litigation or proceeding, or (B) if
not given in the past, might have had a materially adverse effect on the
assets, business or operations of the Company as reflected in any of the
financial statements contained in the Offering Materials, or (C) if not
continued in the future, might adversely affect the assets, business,
operations or prospects of the Company in the future.

 

5. Certain
Covenants and Agreements of the Company.

 

The Company covenants
and agrees at its expense and without any expense to the Placement Agent as
follows:

 

A.                                   To
advise the Placement Agent of any material adverse change in the Company’s
financial condition, prospects or business or of any development materially
affecting the Company or rendering untrue or misleading any material statement
in the Offering Materials occurring at any time as soon as the Company is
either informed or becomes aware thereof.

 

B.                                     To
use its commercially reasonable efforts to cause the Common Stock issuable in
connection with the Standby Equity Distribution Agreement to be qualified or
registered for sale on terms consistent with those stated in the Registration
Rights Agreement and under the securities laws of such jurisdictions as the
Placement Agent shall reasonably request. 
Qualification, registration and exemption charges and fees shall be at
the sole cost and expense of the Company.

 

C.                                     Upon
written request, to provide and continue to provide the Placement Agent copies
of all quarterly financial statements and audited annual financial statements
prepared by or on behalf of the Company, other reports prepared by or on behalf
of the Company for public disclosure and all documents delivered to the Company’s
stockholders.

 

D.                                    To
comply with the terms of the Offering Materials.

 

E.                                      To
ensure that any transactions between or among the Company, or any of its
officers, directors and affiliates be on terms and conditions that are no less
favorable to the Company, than the terms and conditions that would be available
in an “arm’s length” transaction with an independent third party.

 

F.                                      Upon
the effectiveness of a registration statement covering the Securities, the
Company shall promptly provide the Placement Agent shall an opinion of Counsel
to the Company, which opinion shall be in form and substance reasonably
satisfactory to and the Placement Agent.

 

6

 

G.                                     At
or prior to the Closing, the Company shall have been furnished such documents,
certificates and opinions as it may reasonably require for the purpose of
enabling the Placement Agent to review or pass upon the matters referred to in
this Agreement and the Offering Materials, or in order to evidence the
accuracy, completeness or satisfaction of any of the representations,
warranties or conditions herein contained.

 

6. Indemnification
and Limitation of Liability.

 

A.                                   The
Company hereby agrees that it will indemnify and hold the Placement Agent and
each officer, director, shareholder, employee or representative of the
Placement Agent and each person controlling, controlled by or under common
control with the Placement Agent within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act or the SEC’s Rules and
Regulations promulgated thereunder (the “Rules and Regulations”),
harmless from and against any and all loss, claim, damage, liability, cost or
expense whatsoever (including, but not limited to, any and all reasonable legal
fees and other expenses and disbursements incurred in connection with investigating,
preparing to defend or defending any action, suit or proceeding, including any
inquiry or investigation, commenced or threatened, or any claim whatsoever or
in appearing or preparing for appearance as a witness in any action, suit or
proceeding, including any inquiry, investigation or pretrial proceeding such as
a deposition) to which the Placement Agent or such indemnified person of the
Placement Agent may become subject under the 1933 Act, the 1934 Act, the Rules and
Regulations, or any other federal or state law or regulation, common law or
otherwise, arising out of or based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in (a) Section 4
of this Agreement, (b) the Offering Materials (except those written statements
relating to the Placement Agent given by the Placement Agent for inclusion
therein), (c) any application or other document or written communication
executed by the Company or based upon written information furnished by the
Company filed in any jurisdiction in order to qualify the Common Stock under
the securities laws thereof, or any state securities commission or agency; (ii) the
omission or alleged omission from documents described in clauses (a), (b) or
(c) above of a material fact required to be stated therein or necessary to
make the statements therein not misleading; or (iii) the breach of any
representation, warranty, covenant or agreement made by the Company in this
Agreement.  The Company further agrees
that upon demand by an indemnified person, at any time or from time to time, it
will promptly reimburse such indemnified person for any loss, claim, damage,
liability, cost or expense actually and reasonably paid by the indemnified
person as to which the Company has indemnified such person pursuant
hereto.  Notwithstanding the foregoing
provisions of this Paragraph 7(A), any such payment or reimbursement by the
Company of fees, expenses or disbursements incurred by an indemnified person in
any proceeding in which a final judgment by a court of competent jurisdiction
(after all appeals or the expiration of time to appeal) is entered against the
Placement Agent or such indemnified person based upon specific finding of fact
that the Placement Agent or such indemnified person’s gross negligence or
willful misfeasance will be promptly repaid to the Company.

 

B.                                     The
Placement Agent hereby agrees that it will indemnify and hold the Company and
each officer, director, shareholder, employee or representative of the Company,
and each person controlling, controlled by or under common control with the
Company within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act or the Rules and Regulations, harmless from and against
any and all loss, claim, damage, liability, cost or expense whatsoever
(including, but not limited to, any and all reasonable legal fees and other
expenses

 

7

 

and
disbursements incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding,
including any inquiry, investigation or pretrial proceeding such as a
deposition) to which the Company or such indemnified person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and
Regulations, or any other federal or state law or regulation, common law or
otherwise, arising out of or based upon (i) the material breach of any
representation, warranty, covenant or agreement made by the Placement Agent in
this Agreement, or (ii) any false or misleading information provided to
the Company in writing by one of the Placement Agent’s indemnified persons
specifically for inclusion in the Offering Materials.

 

C.                                     Promptly
after receipt by an indemnified party of notice of commencement of any action
covered by Section 7(A) or (B), the party to be indemnified shall,
within five (5) business days, notify the indemnifying party of the
commencement thereof; the omission by one (1) indemnified party to so
notify the indemnifying party shall not relieve the indemnifying party of its
obligation to indemnify any other indemnified party that has given such notice
and shall not relieve the indemnifying party of any liability outside of this
indemnification if not materially prejudiced thereby.  In the event that any action is brought
against the indemnified party, the indemnifying party will be entitled to participate
therein and, to the extent it may desire, to assume and control the defense
thereof with counsel chosen by it which is reasonably acceptable to the
indemnified party.  After notice from the
indemnifying party to such indemnified party of its election to so assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under such Section 7(A) or (B), for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, but the indemnified party may, at its own expense, participate in such
defense by counsel chosen by it, without, however, impairing the indemnifying
party’s control of the defense.  Subject
to the proviso of this sentence and notwithstanding any other statement to the
contrary contained herein, the indemnified party or parties shall have the
right to choose its or their own counsel and control the defense of any action,
all at the expense of the indemnifying party if (i) the employment of such
counsel shall have been authorized in writing by the indemnifying party in
connection with the defense of such action at the expense of the indemnifying
party, or (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to such indemnified party to have charge of the defense
of such action within a reasonable time after notice of commencement of the
action, or (iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to one or all of the indemnifying parties
(in which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any
of which events such fees and expenses of one additional counsel shall be borne
by the indemnifying party; provided, however, that the indemnifying party shall
not, in connection with any one action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstance, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties.  No settlement of any action or
proceeding against an indemnified party shall be made without the consent of
the indemnifying party.

 

D.                                    In
order to provide for just and equitable contribution in circumstances in which
the indemnification provided for in Section 7(A) or 7(B) is due
in accordance with its

 

8

 

terms but is
for any reason held by a court to be unavailable on grounds of policy or
otherwise, the Company and the Placement Agent shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with the investigation or defense of
same) which the other may incur in such proportion so that the Placement Agent
shall be responsible for such percent of the aggregate of such losses, claims,
damages and liabilities as shall equal the percentage of the gross proceeds
paid to the Placement Agent and the Company shall be responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the 1933 Act
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  For
purposes of this Section 7(D), any person controlling, controlled by or
under common control with the Placement Agent, or any partner, director,
officer, employee, representative or any agent of any thereof, shall have the
same rights to contribution as the Placement Agent and each person controlling,
controlled by or under common control with the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act and each officer of the
Company and each director of the Company shall have the same rights to
contribution as the Company.  Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim for contribution may be made against the other party under this Section 7(D),
notify such party from whom contribution may be sought, but the omission to so
notify such party shall not relieve the party from whom contribution may be
sought from any obligation they may have hereunder or otherwise if the party
from whom contribution may be sought is not materially prejudiced thereby.

 

E.                                      The
indemnity and contribution agreements contained in this Section 7 shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified person or any termination of this
Agreement.

 

F.                                      The
Company hereby waives, to the fullest extent permitted by law, any right to or
claim of any punitive, exemplary, incidental, indirect, special, consequential
or other damages (including, without limitation, loss of profits) against the
Placement Agent and each officer, director, shareholder, employee or
representative of the placement agent and each person controlling, controlled
by or under common control with the Placement Agent within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act or the Rules and
Regulations arising out of any cause whatsoever (whether such cause be based in
contract, negligence, strict liability, other tort or otherwise).  Notwithstanding anything to the contrary
contained herein, the aggregate liability of the Placement Agent and each
officer, director, shareholder, employee or representative of the Placement
Agent and each person controlling, controlled by or under common control with
the Placement Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act or the Rules and Regulations shall not exceed the
compensation received by the Placement Agent pursuant to Section 2
hereof.  This limitation of liability
shall apply regardless of the cause of action, whether contract, tort
(including, without limitation, negligence) or breach of statute or any other
legal or equitable obligation.

 

7. Payment
of Expenses.

 

The Company hereby
agrees to bear all of the expenses in connection with the Offering, including,
but not limited to the following: filing fees, printing and duplicating costs,
advertisements, postage and mailing expenses with respect to the transmission
of Offering

 

9

 

Materials, registrar and
transfer agent fees, escrow agent fees and expenses, fees of the Company’s
counsel and accountants, issue and transfer taxes, if any.

 

8. Termination.

 

This Agreement shall be
co-terminus with, and terminate upon the same terms and conditions as those set
forth in the Standby Equity Distribution Agreement.

 

9. Miscellaneous.

 

A.                                   This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all which shall be deemed to be one and the same
instrument.

 

B.                                     Any
notice required or permitted to be given hereunder shall be given in writing
and shall be deemed effective when deposited in the United States mail, postage
prepaid, or when received if personally delivered or faxed (upon confirmation
of receipt received by the sending party), addressed as follows to such other
address of which written notice is given to the others):

 

	
  If to Placement Agent, to:

  	
   

  	
  Newbridge
  Securities Corporation

  
	
   

  	
   

  	
  1451 Cypress
  Creek Road, Suite 204

  
	
   

  	
   

  	
  Fort
  Lauderdale, Florida 33309

  
	
   

  	
   

  	
  Attention:

  	
  Doug
  Aguililla

  
	
   

  	
   

  	
  Telephone:

  	
  (954) 334-3450

  
	
   

  	
   

  	
  Facsimile:

  	
  (954) 229-9937

  
	
   

  	
   

  	
   

  
	
  If to the
  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

  

 

C.                                     This
Agreement shall be governed by and construed in all respects under the laws of
the State of New Jersey, without reference to its conflict of laws rules or
principles.  Any suit, action, proceeding
or litigation arising out of or relating to this Agreement shall be brought and
prosecuted in such federal or state court or courts located within the State of
Florida as provided by law.  The parties
hereby irrevocably and unconditionally consent to the jurisdiction of each such
court or courts located within the State of Florida and to service of process
by registered or certified mail, return receipt requested, or by any other
manner provided by applicable law, and hereby irrevocably and unconditionally
waive any right to claim that any suit, action, proceeding or litigation so
commenced has been commenced in an inconvenient forum.

 

10

 

D.                                    This
Agreement and the other agreements referenced herein contain the entire
understanding between the parties hereto and may not be modified or amended
except by a writing duly signed by the party against whom enforcement of the
modification or amendment is sought.

 

E.                                      If
any provision of this Agreement shall be held to be invalid or unenforceable,
such invalidity or unenforceability shall not affect any other provision of
this Agreement.

 

[REMAINDER
OF PAGE INTENTIALLY LEFT BLANK]

 

11

 

IN WITNESS WHEREOF,
the parties hereto have executed this Placement Agent Agreement as of the date
first written above.

 

	
   

  	
  SPHERIX INCORPORATED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NEWBRIDGE SECURITIES CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Guy S. Amico

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CORNELL CAPITAL PARTNERS, LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Yorkville Advisors, LLC

  
	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Mark A. Angelo

  
	
   

  	
  Title:

  	
  Portfolio Manager

  
					

 

12

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