**Exhibit 4.2**

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPONAN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPTPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT ORPURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITHAPPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TOTHE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLYACCEPTABLE TO THE COMPANY.  THESE SECURITIESMAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTEREDBROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITEDINVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.

 

**COMMON STOCK PURCHASE WARRANT**

 

No. W-

 

To Purchase           Shares of CommonStock of

 

**MFIC Corporation**

 

THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, forvalue received,             (the “Holder”), is entitled, upon the terms and subject to thelimitations on exercise and the conditions hereinafter set forth, at any timeon or after March 16, 2004 (the “Initial Exercise Date”) and on or priorto the close of business on the fifth anniversary of the Initial Exercise Date(the “Termination Date”) but not thereafter, to subscribe for andpurchase from MFIC Corporation, a Delaware corporation (the “Company”),up to        shares (the “Warrant Shares”)of Common Stock, par value $.01 per share, of the Company (the “Common Stock”).  The purchase price of one share of CommonStock (the “Exercise Price”) under this Warrant shall be **$3.20** subject to adjustment hereunder.  The Exercise Price and the number of WarrantShares for which the Warrant is exercisable shall be subject to adjustment asprovided herein. **Capitalized terms used andnot otherwise defined herein shall have the meanings set forth in those certainSubscription Agreement(s) (the “Subscription Agreement”), dated March16, 2004, between the Company and the original holder hereof.**

 

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# 1.     Title to Warrant.  Prior to the Termination Date and subject tocompliance with applicable laws and Section 7 of this Warrant, this Warrant andall rights hereunder are transferable, in whole or in part, at the office oragency of the Company by the Holder in person or by duly authorized attorney,upon surrender of this Warrant together with the Assignment Form annexed heretoproperly endorsed.  The transferee shallsign an investment letter in form and substance reasonably satisfactory to theCompany.

#  

# 2.     Authorization of Shares.  The Company covenants that all Warrant Shareswhich may be issued upon the exercise of the purchase rights represented bythis Warrant will, upon exercise of the purchase rights represented by thisWarrant, be duly authorized, validly issued, fully paid and nonassessable andfree from all taxes, liens and charges in respect of the issue thereof (otherthan taxes in respect of any transfer occurring contemporaneously with suchissue).

#  

# 3.     Exercise of Warrant.

#  

(a)   Except as provided in Section 4 herein, exerciseof the purchase rights represented by this Warrant may be made at any time ortimes on or after the Initial Exercise Date and on or before the TerminationDate by the surrender of this Warrant and the Notice of Exercise Form annexedhereto duly executed, at the office of the Company (or such other office oragency of the Company as it may designate by notice in writing to theregistered Holder at the address of such Holder appearing on the books of theCompany) and upon payment of the Exercise Price of the shares thereby purchasedby wire transfer or cashier’s check drawn on a United States bank or by meansof a cashless exercise pursuant to Section 3(c), the Holder shall be entitledto receive a certificate for the number of Warrant Shares so purchased.  Certificates for Warrant Shares purchasedhereunder shall be delivered to the Holder within three (3) trading days afterthe date on which this Warrant shall have been exercised as aforesaid. ThisWarrant shall be deemed to have been exercised and such certificate orcertificates shall be deemed to have been issued, and Holder or any otherperson so designated to be named therein shall be deemed to have become aholder of record of such shares for all purposes, as of the date the Warranthas been exercised by payment to the Company of the Exercise Price and alltaxes required to be paid by the Holder, if any, pursuant to Section 5 prior tothe issuance of such shares, have been paid. If the Company fails to deliver to the Holder a certificate or certificatesrepresenting the Warrant Shares pursuant to this Section 3(a) by the thirdtrading day after the date of exercise, then the Holder will have the right torescind such exercise.

 

## (b)   If thisWarrant shall have been exercised in part, the Company shall, at the time ofdelivery of the certificate or certificates representing Warrant Shares,deliver to Holder a new Warrant evidencing the rights of Holder to purchase theunpurchased Warrant Shares called for by this Warrant, which new Warrant shallin all other respects be identical with this Warrant.

 

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## (c)   If at anytime after one year from the date of issuance of this Warrant there is noeffective registration statement registering the resale of the Warrant Sharesby the Holder, this Warrant may also be exercised, in whole or in part, at anytime prior to the Termination Date, by means of a “cashless exercise” in whichthe Holder shall be entitled to receive a certificate for the number of WarrantShares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

#  

(A) = the closing bid price on the tradingday preceding the date of such election;

 

(B) = the Exercise Price of the Warrants, as adjusted; and

 

(X) = the number of Warrant Shares issuableupon exercise of the Warrants in accordance with the terms of this Warrant.

 

In addition to the Warrant Shares issuableupon any such cashless exercise, the Company shall also issue the Holder SeriesB Warrants to purchase that number of shares of Common Stock that would havebeen issuable if this Warrant had been exercised for  cash.

 

# 4.     No Fractional Shares.  No fractional shares shall be issued uponthe exercise of this Warrant.  As to anyfraction of a share which Holder would otherwise be entitled to purchase uponsuch exercise, the Company shall pay a cash adjustment in respect of such finalfraction in an amount equal to such fraction multiplied by the Exercise Price.

#  

# 5.     Charges, Taxes and Expenses.  Issuance of certificates for Warrant Sharesshall be made without charge to the Holder for any issue or transfer tax orother incidental expense in respect of the issuance of such certificate, all ofwhich taxes and expenses shall be paid by the Company, and such certificatesshall be issued in the name of the Holder or in such name or names as may bedirected by the Holder; provided, however, that in the eventcertificates for Warrant Shares are to be issued in a name other than the nameof the Holder, this Warrant when surrendered for exercise shall be accompaniedby the Assignment Form attached hereto duly executed by the Holder; and theCompany may require, as a condition thereto, the payment of a sum sufficient toreimburse it for any transfer tax incidental thereto.

#  

# 6.     Closing of Books.  The Company will not close its stockholderbooks or records in any manner which prevents the timely exercise of thisWarrant, pursuant to the terms hereof.

#  

# 7.     Transfer, Division and Combination.

#  

## (a)   Subject tocompliance with any applicable securities laws and the conditions set forth inSections 1 and 7(e) hereof, this Warrant and all rights hereunder aretransferable, in whole or in part, upon surrender of this Warrant at theprincipal office of the Company, together with a written assignment of thisWarrant substantially in the form attached hereto duly executed by the Holderor its agent or attorney and funds sufficient to pay any transfer taxes payableupon the making of such transfer.  Uponsuch surrender and, if required, such payment, the Company shall execute anddeliver a new

 

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## Warrant or Warrants in the name of the assignee or assignees and in thedenomination or denominations specified in such instrument of assignment, andshall issue to the assignor a new Warrant evidencing the portion of thisWarrant not so assigned, and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned, may beexercised by a new holder for the purchase of Warrant Shares without having anew Warrant issued.

##  

## (b)   ThisWarrant may be divided or combined with other Warrants upon presentation hereofat the aforesaid office of the Company, together with a written noticespecifying the names and denominations in which new Warrants are to be issued,signed by the Holder or its agent or attorney. Subject to compliance with Section 7(a), as to any transfer which may beinvolved in such division or combination, the Company shall execute and delivera new Warrant or Warrants in exchange for the Warrant or Warrants to be dividedor combined in accordance with such notice.

 

## (c)   The Companyshall prepare, issue and deliver at its own expense (other than transfer taxes)the new Warrant or Warrants under this Section 7.

 

## (d)   The Companyagrees to maintain, at its aforesaid office, books for the registration and theregistration of transfer of the Warrants.

 

(e)   If,at the time of the surrender of this Warrant in connection with any transfer ofthis Warrant, the transfer of this Warrant shall not be registered pursuant toan effective registration statement under the Securities Act and underapplicable state securities or blue sky laws, the Company may require, as acondition of allowing such transfer (i) that the Holder or transferee of thisWarrant, as the case may be, furnish to the Company a written opinion ofcounsel (which opinion shall be in form, substance and scope customary foropinions of counsel in comparable transactions) to the effect that suchtransfer may be made without registration under the Securities Act and underapplicable state securities or blue sky laws, (ii) that the holder ortransferee execute and deliver to the Company an investment letter in form andsubstance acceptable to the Company and (iii) that the transferee be an“accredited investor” as defined in Rule 501(a) promulgated under theSecurities Act.

 

# 8.     No Rights as Shareholder until Exercise.  This Warrant does not entitle the Holder toany voting rights or other rights as a shareholder of the Company prior to theexercise hereof.  Upon the surrender ofthis Warrant and the payment of the aggregate Exercise Price (or by means of acashless exercise), the Warrant Shares so purchased shall be and be deemed tobe issued to such Holder as the record owner of such shares as of the close ofbusiness on the later of the date of such surrender or payment.

#  

# 9.     Loss, Theft, Destruction or Mutilationof Warrant.  The Company covenantsthat upon receipt by the Company of evidence reasonably satisfactory to it ofthe loss, theft, destruction or mutilation of this Warrant or any stockcertificate relating to the Warrant Shares, and in case of loss, theft ordestruction, of indemnity or security reasonably satisfactory to it (which, inthe case of the Warrant, shall not include the posting of any bond), and upon surrenderand cancellation of such Warrant or stock certificate, if mutilated, theCompany will make and

 

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# deliver a new Warrant or stock certificate of liketenor and dated as of such cancellation, in lieu of such Warrant or stockcertificate.

#  

# 10.   Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the takingof any action or the expiration of any right required or granted herein shallbe a Saturday, Sunday or a legal holiday, then such action may be taken or suchright may be exercised on the next succeeding day not a Saturday, Sunday orlegal holiday.

#  

# 11.   Adjustments of Exercise Price and Numberof Warrant Shares.

#  

## (a)   The number and kind of securities purchasableupon the exercise of this Warrant and the Exercise Price shall be subject toadjustment from time to time upon the happening of any of the following.  In case the Company shall (i) pay a dividendin shares of Common Stock or make a distribution in shares of Common Stock toholders of its outstanding Common Stock, (ii) subdivide its outstanding sharesof Common Stock into a greater number of shares, (iii) combine its outstandingshares of Common Stock into a smaller number of shares of Common Stock, or (iv)issue any shares of its capital stock in a reclassification of the CommonStock, then the number of Warrant Shares purchasable upon exercise of thisWarrant immediately prior thereto shall be adjusted so that the Holder shall beentitled to receive the kind and number of Warrant Shares or other securitiesof the Company which it would have owned or have been entitled to receive hadsuch Warrant been exercised in advance thereof.  Upon each such adjustment of the kind and number of Warrant Sharesor other securities of the Company which are purchasable hereunder, the Holdershall thereafter be entitled to purchase the number of Warrant Shares or othersecurities resulting from such adjustment at an Exercise Price per WarrantShare or other security obtained by multiplying the Exercise Price in effectimmediately prior to such adjustment by the number of Warrant Sharespurchasable pursuant hereto immediately prior to such adjustment and dividingby the number of Warrant Shares or other securities of the Company resultingfrom such adjustment.  An adjustmentmade pursuant to this paragraph shall become effective immediately after theeffective date of such event retroactive to the record date, if any, for suchevent.

##  

## (b)   Exercise Price Adjustment.  If the Company at any time while this Warrantis outstanding shall issue, or be deemed to have issued, Additional Shares ofCommon Stock (as hereinafter defined) without consideration or forconsideration per share of Common Stock less than the then applicable ExercisePrice (the “Dilutive Price”) (a “Triggering Issuance”) in effect immediatelyprior to such issuance, then forthwith upon the occurrence of any such event(the “Dilutive Event”) the Exercise Price shall be reduced so that the ExercisePrice in effect immediately following the Dilutive Event will equal theDilutive Price.  Such adjustment shallbe made whenever such shares of Common Stock or Capital Share Equivalents areissued.  For purposes of this Section11(b), “Common Stock Outstanding” as of a given date shall be the number ofshares of Common Stock (excluding treasury shares, if any) issued andoutstanding.

##  

## (c)   As used herein:

 

 “Additional Shares of CommonStock” shall mean all shares of Common Stock issued or deemed to be issued bythe Company after the date hereof

 

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which represent a Dilutive Issuance. If the Company issues any Options or Convertible Securities (ashereinafter defined), the maximum number of shares of Common Stock issuablethereunder, shall be deemed to be Additional Shares of Common Stock issued asof the time of such issue, if the consideration per share of such AdditionalShares of Common Stock (as hereinafter determined) is less than then-applicableExercise Price, until such time as such Options or Convertible Securities shallterminate or be exercised or converted into Common Stock, upon which time thenumber of shares of Common Stock actually thereupon issued shall be deemed tobe Additional Shares of Common Stock. The Company shall be deemed to have issuedthe maximum number of shares of Common Stock potentially underlying any Optionsor Convertible Securities. Notwithstanding the foregoing, no issuance or deemed issuance nor CommonStock or options or warrants to purchase Common Stock issued to (i) officers,directors or employees of or consultants to the Company pursuant to anycompensation agreement, plan or arrangement or the issuance of Common Stockupon the exercise of any such options or warrants, provided such securitieswere issued prior to the date hereof or pursuant to a stock option plan thatwas approved by the board of directors (ii) upon conversion of existingconvertible securities outstanding as of the date hereof; (iii) upon exerciseof outstanding warrants existing as of the date hereof or this warrant; and(iv) an institution or bank lender in connection with a loan transaction orequipment lease, shall be deemed the issuance of Additional Shares of CommonStock.

 

“Options” shall mean rights, options or warrants to subscribe for, purchaseor otherwise acquire either Common Stock or Convertible Securities.

 

“Convertible Securities” shall mean any evidences of indebtedness,shares (other than Common Stock) or other securities directly or indirectlyconvertible into or exchangeable for Common Stock.

 

(d)           With respect toOptions and Convertible Securities, “Consideration” per share of AdditionalShares of Common Stock shall be determined by adding (x) the aggregateconsideration received upon issuance of the Options or Convertible Securitiesdivided by the number of shares receivable upon the exercise or conversionthereof and (y) the minimum possible consideration per share received per shareupon the exercise, conversion or exchange of such Options or ConvertibleSecurities for shares of Common Stock.

 

## (e)           Numberof Warrant Shares.  Simultaneouslywith any adjustment to the Exercise Price pursuant this Section 11, thenumber of Warrant Shares that may be purchased upon exercise of this Warrantshall be increased or decreased proportionately, so that after such adjustmentthe aggregate Exercise Price payable hereunder for the increased number ofWarrant Shares shall be the same as the aggregate Exercise Price in effectimmediately prior to such adjustment.

 

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# 12.   Reorganization, Reclassification, Merger,Consolidation or Disposition of Assets. In case the Company shall reorganize its capital, reclassify its capitalstock, consolidate or merge with or into another corporation (where the Companyis not the surviving corporation or where there is a change in or distributionwith respect to the Common Stock of the Company), or sell, transfer orotherwise dispose of all or substantially all its property, assets or businessto another corporation and, pursuant to the terms of such reorganization,reclassification, merger, consolidation or disposition of assets, shares ofcommon stock of the successor or acquiring corporation, or any cash, shares ofstock or other securities or property of any nature whatsoever (includingwarrants or other subscription or purchase rights) in addition to or in lieu ofcommon stock of the successor or acquiring corporation (“Other Property”),are to be received by or distributed to the holders of Common Stock of the Company,then the Holder shall have the right thereafter to receive, at the option ofthe Holder, upon exercise of this Warrant, the number of shares of Common Stockof the successor or acquiring corporation or of the Company, if it is thesurviving corporation, and Other Property receivable upon or as a result ofsuch reorganization, reclassification, merger, consolidation or disposition ofassets by a Holder of the number of shares of Common Stock for which thisWarrant is exercisable immediately prior to such event.  In case of any such reorganization,reclassification, merger, consolidation or disposition of assets, the successoror acquiring corporation (if other than the Company) shall expressly assume thedue and punctual observance and performance of each and every covenant andcondition of this Warrant to be performed and observed by the Company and allthe obligations and liabilities hereunder, subject to such modifications as maybe deemed appropriate (as determined in good faith by resolution of the Boardof Directors of the Company) in order to provide for adjustments of WarrantShares for which this Warrant is exercisable which shall be as nearlyequivalent as practicable to the adjustments provided for in this Section 12.  For purposes of this Section 12, “commonstock of the successor or acquiring corporation” shall include stock of suchcorporation of any class which is not preferred as to dividends or assets overany other class of stock of such corporation and which is not subject toredemption and shall also include any evidences of indebtedness, shares ofstock or other securities which are convertible into or exchangeable for anysuch stock, either immediately or upon the arrival of a specified date or thehappening of a specified event and any warrants or other rights to subscribefor or purchase any such stock.  Theforegoing provisions of this Section 12 shall similarly apply to successivereorganizations, reclassifications, mergers, consolidations or disposition ofassets.

#  

# 13.   Voluntary Adjustment by the Company.  The Company may at any time during the termof this Warrant reduce the then current Exercise Price to any amount and forany period of time deemed appropriate by the Board of Directors of the Company.

#  

# 14.   Notice of Adjustment.  Whenever the number of Warrant Shares ornumber or kind of securities or other property purchasable upon the exercise ofthis Warrant or the Exercise Price is adjusted, as herein provided, the Companyshall give notice thereof to the Holder, which notice shall state the number ofWarrant Shares (and other securities or property) purchasable upon the exerciseof this Warrant and the Exercise Price of such Warrant Shares (and othersecurities or property) after such adjustment, setting forth a brief statementof the facts requiring such adjustment and setting forth the computation bywhich such adjustment was made.

 

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# 15.   Notice of Corporate Action.  If at any time:

#  

(a)           theCompany shall take a record of the holders of its Common Stock for the purposeof entitling them to receive a dividend or other distribution, or any right tosubscribe for or purchase any evidences of its indebtedness, any shares ofstock of any class or any other securities or property, or to receive any otherright, or

 

(b)           thereshall be any capital reorganization of the Company, any reclassification orrecapitalization of the capital stock of the Company or any consolidation ormerger of the Company with, or any sale, transfer or other disposition of allor substantially all the property, assets or business of the Company to,another corporation or,

 

(c)           thereshall be a voluntary or involuntary dissolution, liquidation or winding up ofthe Company;

 

then, in any one or more of such cases (but not in such cases if therights of the Holder or holders of Common Stock will not be materially affectedthereby, as for example in the case of a merger to effect a change ofdomicile), the Company shall give to Holder (i) at least 20 days’ prior writtennotice of the date on which a record date shall be selected for such dividend,distribution or right or for determining rights to vote in respect of any suchreorganization, reclassification, merger, consolidation, sale, transfer,disposition, liquidation or winding up, and (ii) in the case of any suchreorganization, reclassification, merger, consolidation, sale, transfer,disposition, dissolution, liquidation or winding up, at least 20 days’ priorwritten notice of the date when the same shall take place.  Such notice in accordance with the foregoingclause also shall specify (i) the date on which any such record is to be takenfor the purpose of such dividend, distribution or right, the date on which theholders of Common Stock shall be entitled to any such dividend, distribution orright, and the amount and character thereof, and (ii) the date on which anysuch reorganization, reclassification, merger, consolidation, sale, transfer,disposition, dissolution, liquidation or winding up is to take place and thetime, if any such time is to be fixed, as of which the holders of Common Stockshall be entitled to exchange their Warrant Shares for securities or otherproperty deliverable upon such disposition, dissolution, liquidation or windingup.  Each such written notice shall besufficiently given if addressed to Holder at the last address of Holderappearing on the books of the Company and delivered in accordance with Section17(d).

 

# 16.   Authorized Shares.  The Company covenants that during the periodthe Warrant is outstanding, it will reserve from its authorized and unissuedCommon Stock a sufficient number of shares to provide for the issuance of theWarrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that itsissuance of this Warrant shall constitute full authority to its officers whoare charged with the duty of executing stock certificates to execute and issuethe necessary certificates for the Warrant Shares upon the exercise of thepurchase rights under this Warrant.  TheCompany will take all such reasonable action as may be necessary to assure thatsuch Warrant Shares may be issued as provided herein without violation of anyapplicable law or regulation, or of any requirements of the trading market uponwhich the Common Stock may be listed.

 

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Except and to the extent as waived or consented to by the Holder, theCompany shall not by any action, including, without limitation, amending itscertificate of incorporation or through any reorganization, transfer of assets,consolidation, merger, dissolution, issue or sale of securities or any othervoluntary action, avoid or seek to avoid the observance or performance of anyof the terms of this Warrant, but will at all times in good faith assist in thecarrying out of all such terms and in the taking of all such actions as may benecessary or appropriate to protect the rights of Holder as set forth in thisWarrant against impairment.  Withoutlimiting the generality of the foregoing, the Company will (a) not increase thepar value of any Warrant Shares above the amount payable therefor upon suchexercise immediately prior to such increase in par value, (b) take all suchaction as may be necessary or appropriate in order that the Company may validlyand legally issue fully paid and nonassessable Warrant Shares upon the exerciseof this Warrant, and (c) use commercially reasonable efforts to obtain all suchauthorizations, exemptions or consents from any public regulatory body havingjurisdiction thereof as may be necessary to enable the Company to perform itsobligations under this Warrant.

 

Before taking any action which would result in an adjustment in thenumber of Warrant Shares for which this Warrant is exercisable or in theExercise Price, the Company shall obtain all such authorizations or exemptionsthereof, or consents thereto, as may be necessary from any public regulatorybody or bodies having jurisdiction thereof.

 

17.           Miscellaneous.

 

## (a)   Jurisdiction.  This Warrant shall constitute a contractunder the laws of New York, without regard to its conflict of law, principlesor rules.

##  

## (b)   Restrictions.  The Holder acknowledges that the WarrantShares acquired upon the exercise of this Warrant, if not registered, will haverestrictions upon resale imposed by state and federal securities laws.

##  

## (c)   Nonwaiverand Expenses.  No course of dealingor any delay or failure to exercise any right hereunder on the part of Holdershall operate as a waiver of such right or otherwise prejudice Holder’s rights,powers or remedies, notwithstanding all rights hereunder terminate on theTermination Date.  If the Companywillfully and knowingly fails to comply with any provision of this Warrant,which results in any material damages to the Holder, the Company shall pay toHolder such amounts as shall be sufficient to cover any costs and expensesincluding, but not limited to, reasonable attorneys’ fees, including those ofappellate proceedings, incurred by Holder in collecting any amounts duepursuant hereto or in otherwise enforcing any of its rights, powers or remedieshereunder.

##  

## (d)   Notices.  Any notice, request or other documentrequired or permitted to be given or delivered to the Holder by the Companyshall be delivered in accordance with the notice provisions of the SubscriptionAgreement.

##  

## (e)   Limitationof Liability.  No provision hereof,in the absence of any affirmative action by Holder to exercise this Warrant orpurchase Warrant Shares, and no

 

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## enumeration herein of the rights or privileges of Holder, shall giverise to any liability of Holder for the purchase price of any Common Stock oras a stockholder of the Company, whether such liability is asserted by the Companyor by creditors of the Company.

##  

## (f)    Remedies.  Holder, in addition to being entitled toexercise all rights granted by law, including recovery of damages, will beentitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damageswould not be adequate compensation for any loss incurred by reason of a breachby it of the provisions of this Warrant and hereby agrees to waive the defensein any action for specific performance that a remedy at law would be adequate.

##  

## (g)   Successorsand Assigns.  Subject to applicablesecurities laws, this Warrant and the rights and obligations evidenced herebyshall inure to the benefit of and be binding upon the successors of the Companyand the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefitof all Holders from time to time of this Warrant and shall be enforceable byany such Holder or holder of Warrant Shares.

##  

## (h)   Amendment.  This Warrant may be modified or amended orthe provisions hereof waived with the written consent of the Company and theHolder.

##  

## (i)    Severability.  Wherever possible, each provision of thisWarrant shall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Warrant shall be prohibited by orinvalid under applicable law, such provision shall be ineffective to the extentof such prohibition or invalidity, without invalidating the remainder of suchprovisions or the remaining provisions of this Warrant.

##  

## (j)    Headings.  The headings used in this Warrant are forthe convenience of reference only and shall not, for any purpose, be deemed apart of this Warrant.

 

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IN WITNESS WHEREOF, theCompany has caused this Warrant to be executed by its officer thereunto dulyauthorized.

 

 
| Dated:  March 16, 2004 |                  |   |
|-----------------------------|-----------------------|--------|
|                        |                  |   |
|                        | **MFIC  CORPORATION** |
|                        |                  |   |
|                        |                  |   |
|                        | By:                   |   |   |
|                        |                  | Name:  |
|                        |                  | Title: |

 

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**NOTICE OF EXERCISE**

 

To:          MFIC Corporation

 

(1)   The undersigned hereby elects to purchase            WarrantShares of MFIC Corporation pursuant to the terms of the attached Warrant (onlyif exercised in full), and tenders herewith payment of the exercise price,together with all applicable transfer taxes, if any.

 

(2)   Payment shall take the form of (checkapplicable box):

 

o  in lawful money of the United States; or

 

o  the cancellation of such number of WarrantShares as is necessary, in accordance with the formula set forth in subsection3(c), to exercise this Warrant with respect to the maximum number of WarrantShares purchasable pursuant to the cashless exercise procedure set forth insubsection 3(c).

 

(3)   Please issue a certificate or certificatesrepresenting said Warrant Shares in the name of the undersigned or in suchother name as is specified below:

 
| Name:      |   |   |   |
|------------|--------|--------|--------|
|       |   |   |
|       |   |   |
| Address:   |   |   |
|       |   |   |
| SS or Tax  |   |   |
| ID number: |   |   |

 

The Warrant Shares shall be delivered to the following:

 
|   |   |
|--------|--------|
|   |
|   |   |
|   |
|   |   |

 
|   |   | [Warrant holder] |
|--------|--------|------------------|
|   |   |             |   |
|   |   |             |   |
|   |   | By:              |   |   |
|   |   |             | Name: |   |   |
|   |   |             | Title: |
|   |   |             |   |
|   |   | Dated:           |   |   |
|        |        |                  |  |  |  |  |  |

 

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**ASSIGNMENT FORM**

 

(To assign theforegoing warrant, execute

this form andsupply required information.

Do not usethis form to exercise the warrant.)

 

 

FOR VALUE RECEIVED, theforegoing Warrant and all rights evidenced thereby are hereby assigned to

 

 

whose address is

 

.

 

 

 
|                  | Dated:                   |   | ,      |   |   |   |
|-----------------------|--------------------------|--------|--------|--------|--------|--------|
|                  |
|                  | Holder’s Signature: |   |   |
|                  |
|                  | Holder’s Address:   |   |   |
|                  |
|                  |                     |   |
|                  |
|                  |
| Signature Guaranteed: |                     |   |
|                       |                          |        |        |        |        |        |  |  |  |  |  |

 

 

NOTE:  The signature to thisAssignment Form must correspond with the name as it appears on the face of theWarrant, without alteration or enlargement or any change whatsoever, and mustbe guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representativecapacity should file proper evidence of authority to assign the foregoingWarrant.

 

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