**Exhibit 10.64**

 

## **REGISTRATIONRIGHTS AGREEMENT**

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ThisRegistration Rights Agreement (this “Agreement”) is made and enteredinto asof                         ,2004, among MFIC Corporation, a Delaware corporation (the “Company”),and the purchasers signatory hereto (each such purchaser is a “Purchaser”and all such purchasers are, collectively, the “Purchasers”).

 

This Agreement is made pursuant to theSubscription Agreement(s), dated as of the date hereof among the Company andeach of the Purchasers (the “Subscription Agreement(s)”).  The signature of each Purchaser to his, heror its Subscription Agreement is deemed to be, and is effective as, suchPurchasers’ signature hereto.

 

The Company and the Purchasers hereby agreeas follows

 

## **1.**             Certain Definitions.  Capitalized terms used and not otherwisedefined herein that are defined in the Subscription Agreements shall have themeanings given such terms in the Subscription Agreements.  As used in this Agreement, the followingterms shall have the following respective meanings:

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“Commission” shall mean the Securities and Exchange Commission or anyother federal agency at the time administering the Securities Act.

 

“Exchange Act” shall mean theSecurities Exchange Act of 1934, as amended, or any similar successor federalstatute and the rules and regulations thereunder, all as the same shall be ineffect from time to time.

 

“Holders” shall mean the Purchasersand any holder of Registrable Securities to whom the registration rightsconferred by this Agreement have been transferred.

 

“Registrable Securities” shall mean (i) Common Stock held by the Holders, (ii) theWarrant Shares, (iii) the Common Stock issuable upon exercise of warrantsheld by Casimir Capital L.P. or its assigns or designees, or (iv) anyCommon Stock issued as a dividend or other distribution with respect to or inexchange for or in replacement of the stock referenced in (i), (ii) or(iii) above.

 

The terms “register”, “registered” and “registration” shall refer to aregistration effected by preparing and filing a registration statement incompliance with the Securities Act and applicable rules andregulations thereunder, and the declaration or ordering of the effectiveness ofsuch registration statement.

 

“Registration Expenses” shall mean all expensesincurred by the Company in compliance with the registration obligation of theCompany, including, without limitation, all registration and filing fees,printing expenses, fees and disbursements of counsel for the Company.

 

“Restricted Securities” shall meanthe securities of the Company required to bear or bearing the legend set forthin Section 3 hereof.

 

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“Selling Expenses” shall mean all underwriting discounts, sellingcommissions and expense allowances applicable to the sale of RegistrableSecurities and all fees and disbursements of counsel for any Holder.

 

## **2.**             Restrictions on Transferability.  The Securities and any other securitiesissued in respect of the Securities upon any stock split, stock dividend,recapitalization, merger, consolidation, or similar event, shall not betransferred except upon the conditions specified in this Agreement, whichconditions are intended to ensure compliance with the provisions of theSecurities Act.  Any transferee of suchsecurities shall take and hold such securities subject to the provisions andupon the conditions specified in this Agreement.

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## **3.**             Restrictive Legend.  Each certificate representing the Securities,the shares of Common Stock underlying the Warrants and any other securitiesissued in respect of the Securities upon any stock split, stock dividend,recapitalization, merger, consolidation or similar event, shall (unlessotherwise permitted or unless the securities evidenced by such certificateshall have been registered under the Securities Act) be stamped or otherwiseimprinted with a legend substantially in the following form (in addition to anylegend required under applicable state securities laws):

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THE SECURITIES REPRESENTED BYTHIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTEREDUNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OFSUCH REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITSCOUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT.

 

Uponrequest of Purchaser, the Company shall remove the foregoing legend from thecertificate or issue to such holder a new certificate therefor free of anytransfer legend, if, with such request, the Company shall have received either anopinion of counsel or the “no-action” letterreferred to in Section 4 to the effect that any transfer by such holder of the securitiesevidenced by such certificate will not violate the Securities Act andapplicable state securities laws, unless any such transfer legend may beremoved pursuant to Rule 144 or anysuccessor rule, in which case no such opinion or “no-action” letter shall be required.

 

The Company acknowledges and agrees that a Purchaser may from time totime pledge pursuant to a bona fide margin agreement or grant a securityinterest in some or all of the Registrable Securities and, if required underthe terms of such arrangement, such Purchaser may transfer pledged or securedRegistrable Securities to the pledgees or secured parties.  If required by the Company’s transfer agentin order to effect a pledge, the Company shall cause its counsel, at no cost tothe Purchasers, to issue an opinion of counsel to the Company’s transferagent.  Further, no notice shall berequired of such pledge.  At theappropriate Purchaser’s expense, the Company will execute and deliver suchreasonable documentation as a pledgee or secured party of Securities mayreasonably request in connection with a pledge or transfer of the RegistrableSecurities, including the preparation and filing of any required prospectussupplement under Rule 424(b)(3) of the Securities Act or other applicableprovision of the Securities Act to appropriately amend the list of sellingstockholders thereunder.

 

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Certificatesevidencing shares of Common Stock (including shares underlying the Warrants)shall not contain any legend (i) while a registration statement covering theresale of such security is effective under the Securities Act, or (ii)following any sale of such shares pursuant to Rule 144, or (iii) if such sharesare eligible for sale under Rule 144(k), or (iv) if such legend is not requiredunder applicable requirements of the Securities Act (including judicialinterpretations and pronouncements issued by the staff of the Commission).  If all or any portion of a Warrant isconverted or exercised at a time when there is an effective registrationstatement to cover the resale of the underlying shares, or if such underlyingshares of Common Stock may be sold under Rule 144 or if such legend is nototherwise required under applicable requirements of the Securities Act(including judicial interpretations thereof) then such underlying shares shallbe issued free of all legends.  TheCompany agrees that following the effective date of the registration statementrequired to be filed hereunder or at such time as such legend is no longerrequired, it will, no later than three trading days following the delivery by aPurchaser to the Company or the Company’s transfer agent of a certificaterepresenting shares of Common Stock issued with a restrictive legend, deliveror cause to be delivered to such Purchaser a certificate representing suchshares that is free from all restrictive and other legends.  The Company may not make any notation on itsrecords or give instructions to any transfer agent of the Company that enlargethe restrictions on transfer set forth in this Section.

 

## **4.**             Notice of Proposed Transfers.  The holder of each certificate representingRestricted Securities by acceptance thereof agrees to comply in all respectswith the provisions of this Section 4. Prior to any proposed transfer of any Restricted Securities, the holderthereof shall give written notice to the Company of such holder’s intention toaffect such transfer.  Each such noticeshall describe the manner and circumstances of the proposed transfer insufficient detail, and shall be accompanied by either (i) if required, awritten opinion of legal counsel to the holder who shall be reasonablysatisfactory to the Company, addressed to the Company, to the effect that theproposed transfer of the Restricted Securities may be effected withoutregistration under the Securities Act or (ii) a “no-action” letter fromthe Commission to the effect that the distribution of such securities withoutregistration will not result in a recommendation by the staff of the Commissionthat action be taken with respect thereto, whereupon the holder of such RestrictedSecurities shall be entitled to transfer such Restricted Securities inaccordance with the terms of the notice delivered by such holder to theCompany. The Company will not require such a legal opinion or “no action”letter (x) in any transaction in compliance with Rule 144 promulgatedunder the Securities Act, (y) in any transaction in which the Purchaserdistributes Restricted Securities solely to its stockholders on a pro ratabasis for no consideration, or (z) in any transaction in which a holder whichis a partnership or limited liability company distributes Restricted Securitiessolely to its partners or members, as applicable, for no consideration;provided that each transferee agrees in writing to be subject to the terms ofthis Section 4.  Each certificateevidencing the Restricted Securities transferred as above provided shall bearthe restrictive legend set forth in Section 3 above.

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## **5.**             Registration.

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(i)            The Companyshall file a registration statement on Form SB-2 or other appropriate registrationdocument under the Securities Act for resale of Common Stock******and shall use its best efforts to maintainthe registration effective**for aperiod of 24 months (or so long

 

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as a Holderis subject to the volume limitations of Rule 144(e) under the Securities Act(the “Effectiveness Period”)).  TheCompany shall file such registration statement as soon as practicable followingthe last closing of the Offering, but in any event no later than thirty (30) daysafter the date of the Final Closing of the Offering, and shall cause suchregistration statement to become effective within the earlier of (i)the fifth trading day followingthe date on which the Company is notified by the Commission that such registrationstatement will not be reviewed or is no longer subject to further review andcomments or (ii) ninety (90) days after the date of such finalclosing of the Offering (120 days in the event of a “full review” by theCommission).

 

(ii)           Notwithstandingthe foregoing, the Company shall not be obligated to take any action pursuantto this Section 5 in any particular jurisdiction in which the Companywould be required to execute a general consent to service of process ineffecting such registration, qualification or compliance unless the Company isalready subject to service in such jurisdiction and except as may be requiredby the Securities Act.

 

(iii)          In theevent that the Company fails to file the registration statement pursuant tothis Section 5 within thirty (30) days after the last closing date or ifsuch registration statement has not been declared effective within ninety(90) days after the date of the Final Closing of the Offering (120 days inthe event of a “full review” by the Commission) (such failure to file or becomeeffective, an “Event”), the Company shall pay to each such Holder uponthe occurrence of each such Event and (y) on each monthly anniversary of thedate of each such Event  (if theapplicable Event shall not have been cured by such date) until the applicableEvent is cured, an amount in cash, as liquidated damages and not as a penalty,equal to 1% of the aggregate purchase price paid by such Holder pursuant to itsSubscription Agreement.  If the Companyfails to pay any liquidated damages pursuant to this Section in full withinseven days after the date payable, the Company will pay interest thereon at arate of 15% per annum (or such lesser maximum amount that is permitted to bepaid by applicable law) to the Holder, accruing daily from the date suchliquidated damages are due until such amounts, plus all such interest thereon,are paid in full.  The liquidateddamages pursuant to the terms hereof shall apply on a pro-rata basis for anyportion of a month prior to the cure of an Event.

 

(iv)          If during theEffectiveness Period, the number of Registrable Securities at any time exceeds100% of the number of shares of Common Stock then registered in a registrationstatement required hereunder, then the Company shall file as soon as reasonablypracticable but in any case prior to the 30th day following the datesuch number is exceeded, an additional registration statement covering theresale of by the Holders of not less than all of such Registrable Securitiesand the Company shall use commercially reasonable efforts to cause suchregistration statement to be declared effective as soon as reasonablypracticable thereafter.

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## **6.**             Expenses of Registration.  The Company shall bear all RegistrationExpenses incurred in connection with any registration, qualification orcompliance pursuant to this Agreement and all underwriting discounts, sellingcommissions and expense allowances applicable to the sale of any securities bythe Company for its own account in any registration.  All Selling Expenses shall be borne by the Holders whosesecurities are included in such registration pro rata on the basis of thenumber of their Registrable Securities so registered.

 

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## **7.**             Indemnification.

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(i)            The Companywill indemnify each Holder, each of its officers, directors, agents, employeesand partners, and each person controlling such Holder, with respect to eachregistration, qualification or compliance effected pursuant to this Agreement,and each underwriter, if any, and each person who controls any underwriter, andtheir respective counsel against all claims, losses, damages and liabilities(or actions, proceedings or settlements in respect thereof) arising out of orbased on any untrue statement (or alleged untrue statement) of a material factcontained in any prospectus, offering circular or other document prepared bythe Company (including any related registration statement, notification or thelike) incident to any such registration, qualification or compliance, or basedon any omission (or alleged omission) to state therein a material fact requiredto be stated therein or necessary to make the statements therein notmisleading, or any violation by the Company of the Securities Act or any ruleor regulation thereunder applicable to the Company and relating to action orinaction required of the Company in connection with any such registration,qualification or compliance, and will reimburse each such Holder, each of itsofficers, directors, agents, employees and partners, and each personcontrolling such Holder, each such underwriter and each person who controls anysuch underwriter, for any legal and any other expenses as they are reasonablyincurred in connection with investigating and defending any such claim, loss,damage, liability or action, provided that the Company will not be liable inany such case to the extent that any such claim, loss, damage, liability orexpense arises primarily and directly out of or is based on any untruestatement (or alleged untrue statement) or omission (or alleged omissions)based upon written information furnished to the Company by such Holder orunderwriter and stated to be specifically for use therein.

 

(ii)           Each Holderwhose Registrable Securities are included in any registration, qualification orcompliance effected pursuant to this Agreement will indemnify the Company, eachof its directors and officers and each underwriter, if any, of the Company’s securities covered by such aregistration statement, each person who controls the Company or suchunderwriter within the meaning of the Securities Act and the rules andregulations thereunder, each other such Holder and each of their officers,directors and partners, and each person controlling such Holder, and theirrespective counsel against all claims, losses, damages and liabilities (oractions in respect thereof) arising primarily and directly out of or based onany untrue statement (or alleged untrue statement) of a material fact containedin any such registration statement, prospectus, offering circular or otherdocument, or any omission (or alleged omission) to state therein a materialfact required to be stated therein or necessary to make the statements thereinnot misleading, and will reimburse the Company and such Holders, directors,officers, partners, persons, underwriters or control persons for any legal orany other expenses as they are reasonably incurred in connection withinvestigating or defending any such claim, loss, damage, liability or action,in each case to the extent, but only to the extent, that such untrue statement(or alleged untrue statement) or omission (or alleged omission) is made in suchregistration statement, prospectus, offering circular or other document inreliance upon and in conformity with written information furnished to theCompany by such Holder and stated to be specifically for use therein; provided,however, that the obligations of such Holders hereunder shall be limitedto an amount equal to the net proceeds to each such Holder sold under suchregistration statement, prospectus, offering circular or other document ascontemplated herein.

 

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(iii)          Each partyentitled to indemnification under this Section 7 (the “Indemnified Party”) shall give notice to theparty required to provide indemnification (the “Indemnifying Party”) promptlyafter such Indemnified Party has actual knowledge of any claim as to whichindemnity may be sought, and shall permit the Indemnifying Party to assume thedefense of any such claim or any litigation resulting therefrom, provided thatcounsel for the Indemnifying Party, who shall conduct the defense of such claimor any litigation resulting therefrom, shall be approved by the IndemnifiedParty (whose approval shall not unreasonably be withheld), and the IndemnifiedParty may participate in such defense at such party’s expense; and provided further that ifany Indemnified Party reasonably concludes that there may be one or more legaldefenses available to it that are not available to the Indemnifying Party, orthat such claim or litigation involves or could have an effect on mattersbeyond the scope of this Agreement, then the Indemnified Party may retain itsown counsel at the expense of the Indemnifying Party; and provided further thatthe failure of any Indemnified Party to give notice as provided herein shallnot relieve the Indemnifying Party of its obligations under this Agreementunless and only to the extent that such failure to give notice results inmaterial prejudice to the Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation,shall, except with the consent of each Indemnified Party, consent to entry ofany judgment or enter into any settlement which does not include as an unconditionalterm thereof the giving by the claimant or plaintiff to such Indemnified Partyof a release from all liability in respect to such claim or litigation.  Each Indemnified Party shall furnish suchinformation regarding itself or the claim in question as an Indemnifying Partymay reasonably request in writing and as shall be reasonably required inconnection with defense of such claim and litigation resulting therefrom.

 

(iv)          If the indemnificationprovided for in this Section 7 is held by a court of competentjurisdiction to be unavailable to an Indemnified Party with respect to anyloss, liability, claim, damage or expense referred to herein, then theIndemnifying Party, in lieu of indemnifying such Indemnified Party hereunder,shall contribute to the amount paid or payable by such Indemnified Party as aresult of such loss, liability, claim, damage or expense in such proportion asis appropriate to reflect the relative fault of the Indemnifying Party on theone hand and of the Indemnified Party on the other in connection with thestatements or omissions which resulted in such loss, liability, claim, damageor expense as well as any other relevant equitable considerations.  The relative fault of the Indemnifying Partyand of the Indemnified Party shall be determined by reference to, among otherthings, whether the untrue or alleged untrue statement of a material fact orthe omission to state a material fact relates to information supplied by theIndemnifying Party or by the Indemnified Party and the parties’ relativeintent, knowledge, access to information and opportunity to correct or preventsuch statement or omission.

 

8.             Transfer orAssignment of Rights. The benefits to the Holder hereunder may betransferred or assigned by a Holder to a transferee or assignee of any of theRestricted Securities, provided that the Company is given written notice priorto the time that such right is exercised, stating the name and address of saidtransferee or assignee and identifying the securities with respect to whichsuch registration rights are being transferred or assigned; provided furtherthat the transferee or assignee of such rights assumes in writing theobligations of the Holder under this Agreement.

 

9.             RegistrationProcedures.  In the case of theregistration effected by the Company pursuant to this Agreement, the Companywill keep each Holder who is entitled to registration benefits

 

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hereunder advised in writing asto the initiation of each registration and as to the completion thereof.  At its expense, the Company will:

 

(i)            Prepare and file withthe Commission such amendments and supplements to such registration statementand the prospectus used in connection with such registration statement as may benecessary to comply with the provisions of the Securities Act with respect tothe disposition of securities covered by such registration statement;

 

(ii)           Respond as promptly asreasonably possible, and in any event within ten days, to any comments receivedfrom the Commission with respect to a registration statement or any amendmentthereto.

 

(iv)          Notify the Holders aspromptly as reasonably possible and (if requested by any such person) confirmsuch notice in writing no later than one trading day following the day (i)(A)when a Prospectus or any Prospectus supplement or post-effective amendment to aregistration statement is proposed to be filed and (B) with respect to aregistration statement or any post-effective amendment, when the same hasbecome effective;

 

(v)           Furnish such number ofprospectuses and other documents incident thereto, including supplements andamendments, as a Holder may reasonably request; and

 

(vi)          Furnish to each sellingHolder, upon request, a copy of all documents filed with and all correspondencefrom or to the Commission in connection with any such registration statementother than nonsubstantive cover letters and the like.

 

(vii)         Use its best efforts toavoid the issuance of, or, if issued, obtain the withdrawal of (i) any ordersuspending the effectiveness of a registration statement, or (ii) anysuspension of the qualification (or exemption from qualification) of any of theRegistrable Securities for sale in any jurisdiction, at the earliestpracticable moment.

 

(viii)        Comply with all applicablerules and regulations of the Commission.

 

(ix)           The Company may requireeach selling Holder to furnish to the Company a certified statement as to thenumber of shares of Common Stock beneficially owned by such Holder and, ifrequested by the Commission, the controlling person thereof.

 

10.           Rule 144Reporting.  With a view to makingavailable the benefits of certain rules and regulations of the Commission whichmay permit the sale of the Restricted Securities to the public withoutregistration, the Company agrees to:

 

(i)            Make and keep publicinformation available, as those terms are understood and defined inRule 144 under the Securities Act; and

 

(ii)           Use its reasonable bestefforts to file with the Commission in a timely manner all reports and otherdocuments required of the Company under the Securities Act and the ExchangeAct.

 

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11.           Reporting Under the Exchange Act.The Company agrees to take no action designed to, or with theeffect of, causing the Company to cease to be subject to the reportingrequirements of the Exchange Act for so long as a registration statement underthis Agreement is required to be filed or caused to be effective, or shall berequired to be or remain effective.

 

12.           Miscellaneous.

 

(i)            Neither the Companynor any of its security holders (other than the Holders in such capacitypursuant hereto) may include securities of the Company in the registrationstatement required to be filed hereunder other than the Registrable Securities,and the Company shall not after the date hereof enter into any agreementproviding any such right to any of its security holders.  The Company shall not file any otherregistration statement until the initial registration statement required hereunderis declared effective by the Commission.

 

(ii) Compliance.Each Holder covenants and agrees that it will comply with the prospectusdelivery requirements of the Securities Act as applicable to it in connectionwith sales of Registrable Securities pursuant to the registration statementrequired hereunder.

 

(iii) Piggy-BackRegistrations. If at any time during the Effectiveness Period there is notan effective registration statement covering all of the Registrable Securitiesand the Company shall determine to prepare and file with the Commission aregistration statement relating to an offering for its own account or theaccount of others under the Securities Act of any of its equity securities,other than on Form S-4 or Form S-8 (each as promulgated under the SecuritiesAct) or their then equivalents relating to equity securities to be issuedsolely in connection with any acquisition of any entity or business or equitysecurities issuable in connection with stock option or other employee benefitplans, then the Company shall send to each Holder written notice of suchdetermination and, if within fifteen days after receipt of such notice, anysuch Holder shall so request in writing, the Company shall include in suchregistration statement all or any part of such Registrable Securities suchholder requests to be registered; provided, that, the Company shall not berequired to register any Registrable Securities pursuant to this Section thatare eligible for resale pursuant to Rule 144(k) promulgated under theSecurities Act.

 

(iv)          Notices. Any andall notices or other communications or deliveries required or permitted to beprovided hereunder shall be delivered as set forth in the SubscriptionAgreement(s).

 

(v)           Successors andAssigns. This Agreement shall inure to the benefit of and be binding uponthe successors and permitted assigns of each of the parties and shall inure tothe benefit of each Holder. The Company may not assign its rights orobligations hereunder without the prior written consent of all of the Holdersof the then-outstanding Registrable Securities. Each Holder may assign theirrespective rights hereunder in the manner and to the persons as permitted underthe Subscription Agreement(s) provided that no Holder may transfer or assignits rights hereunder to any person unless such person agrees in writing to bebound by and to perform all of the terms and conditions of this Agreement.

 

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(vi)          Counterparts.This Agreement may be executed in any number of counterparts, each of whichwhen so executed shall be deemed to be an original and, all of which takentogether shall constitute one and the same Agreement. In the event that anysignature is delivered by facsimile transmission, such signature shall create avalid binding obligation of the party executing (or on whose behalf suchsignature is executed) the same with the same force and effect as if suchfacsimile signature were the original thereof.

 

(vii)         Governing Law. Allquestions concerning the construction, validity, enforcement and interpretationof this Agreement shall be governed by and construed and enforced in accordancewith the internal laws of the State of New York, without regard to theprinciples of conflicts of law thereof.

 

(viii)        Severability. Ifany term, provision, covenant or restriction of this Agreement is held by acourt of competent jurisdiction to be invalid, illegal, void or unenforceable,the remainder of the terms, provisions, covenants and restrictions set forthherein shall remain in full force and effect and shall in no way be affected,impaired or invalidated, and the parties hereto shall use their reasonableefforts to find and employ an alternative means to achieve the same orsubstantially the same result as that contemplated by such term, provision,covenant or restriction. It is hereby stipulated and declared to be theintention of the parties that they would have executed the remaining terms,provisions, covenants and restrictions without including any of such that maybe hereafter declared invalid, illegal, void or unenforceable.

 

(ix)           Headings. Theheadings in this Agreement are for convenience of reference only and shall notlimit or otherwise affect the meaning hereof.

 

(x)            Independent Natureof Purchasers’ Obligations and Rights. The obligations of each Purchaserhereunder is several and not joint with the obligations of any other Purchaserhereunder, and no Purchaser shall be responsible in any way for the performanceof the obligations of any other Purchaser hereunder. Nothing contained hereinor in any other agreement or document delivered at any closing, and no actiontaken by any Purchaser pursuant hereto or thereto, shall be deemed toconstitute the Purchasers as a partnership, an association, a joint venture orany other kind of entity, or create a presumption that the Purchasers are inany way acting in concert with respect to such obligations or the transactionscontemplated by this Agreement. Each Purchaser shall be entitled to protect andenforce its rights, including without limitation the rights arising out of thisAgreement, and it shall not be necessary for any other Purchaser to be joinedas an additional party in any proceeding for such purpose.

 

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IN WITNESS WHEREOF, the parties have executedthis Registration Rights Agreement as of the date first written above.

 

 
|   | **MFIC CORPORATION** |   |
|--------|----------------------|--------|
|   |                 |   |
|   |                 |   |
|   | By:                  |   |   |   |
|   |                 | Name:  |   |
|   |                 | Title: |   |
|        |                      |        |  |  |

 

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