EXHIBIT 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
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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.
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(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
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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
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