Document:

Exhibit 4.2

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THESE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED
INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.

 

COMMON STOCK PURCHASE WARRANT

 

No. W-

 

To Purchase
           Shares of Common
Stock of

 

MFIC Corporation

 

THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for
value received,
             
(the “Holder”), is entitled, upon the terms and subject to the
limitations on exercise and the conditions hereinafter set forth, at any time
on or after March 16, 2004 (the “Initial Exercise Date”) and on or prior
to the close of business on the fifth anniversary of the Initial Exercise Date
(the “Termination Date”) but not thereafter, to subscribe for and
purchase 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 Common
Stock (the “Exercise Price”) under this Warrant shall be $3.20 subject to adjustment hereunder.  The Exercise Price and the number of Warrant
Shares for which the Warrant is exercisable shall be subject to adjustment as
provided herein. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth in those certain
Subscription Agreement(s) (the “Subscription Agreement”), dated March
16, 2004, between the Company and the original holder hereof.

 

1

 

1.     Title to Warrant.  Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed.  The transferee shall
sign an investment letter in form and substance reasonably satisfactory to the
Company.

 

2.     Authorization of Shares.  The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by
this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).

 

3.     Exercise of Warrant.

 

(a)   Except as provided in Section 4 herein, exercise
of the purchase rights represented by this Warrant may be made at any time or
times on or after the Initial Exercise Date and on or before the Termination
Date by the surrender of this Warrant and the Notice of Exercise Form annexed
hereto duly executed, at the office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company) and upon payment of the Exercise Price of the shares thereby purchased
by wire transfer or cashier’s check drawn on a United States bank or by means
of a cashless exercise pursuant to Section 3(c), the Holder shall be entitled
to receive a certificate for the number of Warrant Shares so purchased.  Certificates for Warrant Shares purchased
hereunder shall be delivered to the Holder within three (3) trading days after
the date on which this Warrant shall have been exercised as aforesaid. This
Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any other
person so designated to be named therein shall be deemed to have become a
holder of record of such shares for all purposes, as of the date the Warrant
has been exercised by payment to the Company of the Exercise Price and all
taxes required to be paid by the Holder, if any, pursuant to Section 5 prior to
the issuance of such shares, have been paid. 
If the Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 3(a) by the third
trading day after the date of exercise, then the Holder will have the right to
rescind such exercise.

 

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

 

2

 

(c)   If at any
time after one year from the date of issuance of this Warrant there is no
effective registration statement registering the resale of the Warrant Shares
by the Holder, this Warrant may also be exercised, in whole or in part, at any
time prior to the Termination Date, by means of a “cashless exercise” in which
the Holder shall be entitled to receive a certificate for the number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

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

 

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

 

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

 

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

 

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

 

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

 

6.     Closing of Books.  The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

7.     Transfer, Division and Combination.

 

(a)   Subject to
compliance with any applicable securities laws and the conditions set forth in
Sections 1 and 7(e) hereof, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer.  Upon
such surrender and, if required, such payment, the Company shall execute and
deliver a new

 

3

 

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

 

(b)   This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying 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 be
involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.

 

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

 

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

 

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

 

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

 

9.     Loss, Theft, Destruction or Mutilation
of Warrant.  The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon surrender
and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and

 

4

 

deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

 

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

 

11.   Adjustments of Exercise Price and Number
of Warrant Shares.

 

(a)   The number and kind of securities purchasable
upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following.  In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares, (iii) combine its outstanding
shares 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 Common
Stock, then the number of Warrant Shares purchasable upon exercise of this
Warrant immediately prior thereto shall be adjusted so that the Holder shall be
entitled to receive the kind and number of Warrant Shares or other securities
of the Company which it would have owned or have been entitled to receive had
such Warrant been exercised in advance thereof.  Upon each such adjustment of the kind and number of Warrant Shares
or other securities of the Company which are purchasable hereunder, the Holder
shall thereafter be entitled to purchase the number of Warrant Shares or other
securities resulting from such adjustment at an Exercise Price per Warrant
Share or other security obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares
purchasable pursuant hereto immediately prior to such adjustment and dividing
by the number of Warrant Shares or other securities of the Company resulting
from such adjustment.  An adjustment
made pursuant to this paragraph shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.

 

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

 

(c)   As used herein:

 

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

 

5

 

which represent a Dilutive Issuance. 
If the Company issues any Options or Convertible Securities (as
hereinafter defined), the maximum number of shares of Common Stock issuable
thereunder, shall be deemed to be Additional Shares of Common Stock issued as
of the time of such issue, if the consideration per share of such Additional
Shares of Common Stock (as hereinafter determined) is less than then-applicable
Exercise Price, until such time as such Options or Convertible Securities shall
terminate or be exercised or converted into Common Stock, upon which time the
number of shares of Common Stock actually thereupon issued shall be deemed to
be Additional Shares of Common Stock. The Company shall be deemed to have issued
the maximum number of shares of Common Stock potentially underlying any Options
or Convertible Securities. 
Notwithstanding the foregoing, no issuance or deemed issuance nor Common
Stock or options or warrants to purchase Common Stock issued to (i) officers,
directors or employees of or consultants to the Company pursuant to any
compensation agreement, plan or arrangement or the issuance of Common Stock
upon the exercise of any such options or warrants, provided such securities
were issued prior to the date hereof or pursuant to a stock option plan that
was approved by the board of directors (ii) upon conversion of existing
convertible securities outstanding as of the date hereof; (iii) upon exercise
of outstanding warrants existing as of the date hereof or this warrant; and
(iv) an institution or bank lender in connection with a loan transaction or
equipment lease, shall be deemed the issuance of Additional Shares of Common
Stock.

 

“Options” shall mean rights, options or warrants to subscribe for, purchase
or 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 indirectly
convertible into or exchangeable for Common Stock.

 

(d)           With respect to
Options and Convertible Securities, “Consideration” per share of Additional
Shares of Common Stock shall be determined by adding (x) the aggregate
consideration received upon issuance of the Options or Convertible Securities
divided by the number of shares receivable upon the exercise or conversion
thereof and (y) the minimum possible consideration per share received per share
upon the exercise, conversion or exchange of such Options or Convertible
Securities for shares of Common Stock.

 

(e)           Number
of Warrant Shares.  Simultaneously
with any adjustment to the Exercise Price pursuant this Section 11, the
number of Warrant Shares that may be purchased upon exercise of this Warrant
shall be increased or decreased proportionately, so that after such adjustment
the aggregate Exercise Price payable hereunder for the increased number of
Warrant Shares shall be the same as the aggregate Exercise Price in effect
immediately prior to such adjustment.

 

6

 

12.   Reorganization, Reclassification, Merger,
Consolidation or Disposition of Assets. 
In case the Company shall reorganize its capital, reclassify its capital
stock, consolidate or merge with or into another corporation (where the Company
is not the surviving corporation or where there is a change in or distribution
with respect to the Common Stock of the Company), or sell, transfer or
otherwise dispose of all or substantially all its property, assets or business
to another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common 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 of
the Holder, upon exercise of this Warrant, the number of shares of Common Stock
of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and Other Property receivable upon or as a result of
such reorganization, reclassification, merger, consolidation or disposition of
assets by a Holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event.  In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board
of Directors of the Company) in order to provide for adjustments of Warrant
Shares for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 12.  For purposes of this Section 12, “common
stock of the successor or acquiring corporation” shall include stock of such
corporation of any class which is not preferred as to dividends or assets over
any other class of stock of such corporation and which is not subject to
redemption and shall also include any evidences of indebtedness, shares of
stock or other securities which are convertible into or exchangeable for any
such stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe
for or purchase any such stock.  The
foregoing provisions of this Section 12 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.

 

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

 

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

 

7

 

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

 

(a)           the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of
stock of any class or any other securities or property, or to receive any other
right, or

 

(b)           there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all
or substantially all the property, assets or business of the Company to,
another corporation or,

 

(c)           there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;

 

then, in any one or more of such cases (but not in such cases if the
rights of the Holder or holders of Common Stock will not be materially affected
thereby, as for example in the case of a merger to effect a change of
domicile), the Company shall give to Holder (i) at least 20 days’ prior written
notice 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 such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 20 days’ prior
written notice of the date when the same shall take place.  Such notice in accordance with the foregoing
clause also shall specify (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, the date on which the
holders of Common Stock shall be entitled to any such dividend, distribution or
right, and the amount and character thereof, and (ii) the date on which any
such reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and the
time, if any such time is to be fixed, as of which the holders of Common Stock
shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up.  Each such written notice shall be
sufficiently given if addressed to Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with Section
17(d).

 

16.   Authorized Shares.  The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who
are charged with the duty of executing stock certificates to execute and issue
the necessary certificates for the Warrant Shares upon the exercise of the
purchase rights under this Warrant.  The
Company will take all such reasonable action as may be necessary to assure that
such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the trading market upon
which the Common Stock may be listed.

 

8

 

Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment.  Without
limiting the generality of the foregoing, the Company will (a) not increase the
par value of any Warrant Shares above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (b) take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares upon the exercise
of this Warrant, and (c) use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.

 

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

 

17.           Miscellaneous.

 

(a)   Jurisdiction.  This Warrant shall constitute a contract
under the laws of New York, without regard to its conflict of law, principles
or rules.

 

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

 

(c)   Nonwaiver
and Expenses.  No course of dealing
or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice Holder’s rights,
powers or remedies, notwithstanding all rights hereunder terminate on the
Termination Date.  If the Company
willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to
Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees, including those of
appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

 

(d)   Notices.  Any notice, request or other document
required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Subscription
Agreement.

 

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

 

9

 

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

 

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

 

(g)   Successors
and Assigns.  Subject to applicable
securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company
and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit
of all Holders from time to time of this Warrant and shall be enforceable by
any such Holder or holder of Warrant Shares.

 

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

 

(i)    Severability.  Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be 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
provisions or the remaining provisions of this Warrant.

 

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

 

********************

 

10

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly
authorized.

 

 

	
  Dated:  March 16, 2004

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MFIC
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

11

 

NOTICE OF EXERCISE

 

To:          MFIC Corporation

 

(1)   The undersigned hereby elects to purchase
            Warrant
Shares of MFIC Corporation pursuant to the terms of the attached Warrant (only
if 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 (check
applicable box):

 

o  in lawful money of the United States; or

 

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

 

(3)   Please issue a certificate or certificates
representing said Warrant Shares in the name of the undersigned or in such
other 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:

  	
   

  	
   

  
								

 

 

ASSIGNMENT FORM

 

(To assign the
foregoing warrant, execute

this form and
supply required information.

Do not use
this form to exercise the warrant.)

 

 

FOR VALUE RECEIVED, the
foregoing 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 this
Assignment Form must correspond with the name as it appears on the face of the
Warrant, without alteration or enlargement or any change whatsoever, and must
be guaranteed by a bank or trust company. 
Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.Exhibit 4.3

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THESE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED
INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.

 

COMMON STOCK PURCHASE WARRANT

 

No. W-

 

To Purchase
           Shares of Common
Stock of

 

MFIC Corporation

 

THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for
value received,
               
(the “Holder”), is entitled, upon the terms and subject to the
limitations on exercise and the conditions hereinafter set forth, at any time
on or after March 16, 2004 (the “Initial Exercise Date”) and on or prior
to the close of business on the third anniversary of the Initial Exercise Date
(the “Termination Date”) but not thereafter, to subscribe for and
purchase 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 Common
Stock (the “Exercise Price”) under this Warrant shall be $3.05 subject to adjustment hereunder.  The Exercise Price and the number of Warrant
Shares for which the Warrant is exercisable shall be subject to adjustment as
provided herein. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth in those certain
Subscription Agreement(s) (the “Subscription Agreement”), dated March
    , 2004, between the Company and the original holder
hereof.

 

1

 

1.     Title to Warrant.  Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed.  The transferee shall
sign an investment letter in form and substance reasonably satisfactory to the
Company.

 

2.     Authorization of Shares.  The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).

 

3.     Exercise of Warrant.

 

(a)   Except as provided in Section 4 herein,
exercise of the purchase rights represented by this Warrant may be made at any
time or times on or after the Initial Exercise Date and on or before the
Termination Date by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company) and upon payment of the Exercise Price of the shares thereby purchased
by wire transfer or cashier’s check drawn on a United States bank or by means
of a cashless exercise pursuant to Section 3(c), the Holder shall be entitled
to receive a certificate for the number of Warrant Shares so purchased.  Certificates for Warrant Shares purchased
hereunder shall be delivered to the Holder within three (3) trading days after
the date on which this Warrant shall have been exercised as aforesaid. This
Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any other
person so designated to be named therein shall be deemed to have become a
holder of record of such shares for all purposes, as of the date the Warrant
has been exercised by payment to the Company of the Exercise Price and all
taxes required to be paid by the Holder, if any, pursuant to Section 5 prior to
the issuance of such shares, have been paid. 
If the Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 3(a) by the third
trading day after the date of exercise, then the Holder will have the right to
rescind such exercise.

 

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

 

2

 

(c)   If at any
time after one year from the date of issuance of this Warrant there is no
effective registration statement registering the resale of the Warrant Shares
by the Holder, this Warrant may also be exercised, in whole or in part, at any
time prior to the Termination Date, by means of a “cashless exercise” in which
the Holder shall be entitled to receive a certificate for the number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

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

 

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

 

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

 

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

 

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

 

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

 

6.     Closing of Books.  The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

7.     Transfer, Division and Combination.

 

(a)   Subject to
compliance with any applicable securities laws and the conditions set forth in
Sections 1 and 7(e) hereof, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer.  Upon
such surrender and, if required, such payment, the Company shall execute and
deliver a new

 

3

 

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

 

(b)   This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying 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 be
involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.

 

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

 

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

 

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

 

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

 

9.     Loss, Theft, Destruction or Mutilation
of Warrant.  The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon surrender
and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and

 

4

 

deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

 

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

 

11.   Adjustments of Exercise Price and Number
of Warrant Shares.

 

(a)   The number and kind of securities purchasable
upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following.  In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares, (iii) combine its outstanding
shares 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 Common
Stock, then the number of Warrant Shares purchasable upon exercise of this
Warrant immediately prior thereto shall be adjusted so that the Holder shall be
entitled to receive the kind and number of Warrant Shares or other securities
of the Company which it would have owned or have been entitled to receive had
such Warrant been exercised in advance thereof.  Upon each such adjustment of the kind and number of Warrant
Shares or other securities of the Company which are purchasable hereunder, the
Holder shall thereafter be entitled to purchase the number of Warrant Shares or
other securities resulting from such adjustment at an Exercise Price per
Warrant Share or other security obtained by multiplying the Exercise Price in
effect immediately prior to such adjustment by the number of Warrant Shares
purchasable pursuant hereto immediately prior to such adjustment and dividing
by the number of Warrant Shares or other securities of the Company resulting
from such adjustment.  An adjustment
made pursuant to this paragraph shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.

 

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

 

(c)   As used herein:

 

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

 

5

 

which represent a Dilutive Issuance. 
If the Company issues any Options or Convertible Securities (as
hereinafter defined), the maximum number of shares of Common Stock issuable
thereunder, shall be deemed to be Additional Shares of Common Stock issued as
of the time of such issue, if the consideration per share of such Additional
Shares of Common Stock (as hereinafter determined) is less than then-applicable
Exercise Price, until such time as such Options or Convertible Securities shall
terminate or be exercised or converted into Common Stock, upon which time the
number of shares of Common Stock actually thereupon issued shall be deemed to
be Additional Shares of Common Stock. The Company shall be deemed to have
issued the maximum number of shares of Common Stock potentially underlying any
Options or Convertible Securities. 
Notwithstanding the foregoing, no issuance or deemed issuance nor Common
Stock or options or warrants to purchase Common Stock issued to (i) officers,
directors or employees of or consultants to the Company pursuant to any
compensation agreement, plan or arrangement or the issuance of Common Stock
upon the exercise of any such options or warrants, provided such securities
were issued prior to the date hereof or pursuant to a stock option plan that
was approved by the board of directors (ii) upon conversion of existing
convertible securities outstanding as of the date hereof; (iii) upon exercise
of outstanding warrants existing as of the date hereof or this warrant; and
(iv) an institution or bank lender in connection with a loan transaction or
equipment lease, shall be deemed the issuance of Additional Shares of Common
Stock.

 

“Options” shall mean rights, options or warrants to subscribe for, purchase
or 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 indirectly
convertible into or exchangeable for Common Stock.

 

(d)           With respect to
Options and Convertible Securities, “Consideration” per share of Additional
Shares of Common Stock shall be determined by adding (x) the aggregate
consideration received upon issuance of the Options or Convertible Securities
divided by the number of shares receivable upon the exercise or conversion
thereof and (y) the minimum possible consideration per share received per share
upon the exercise, conversion or exchange of such Options or Convertible
Securities for shares of Common Stock.

 

(e)           Number
of Warrant Shares.  Simultaneously
with any adjustment to the Exercise Price pursuant this Section 11, the
number of Warrant Shares that may be purchased upon exercise of this Warrant
shall be increased or decreased proportionately, so that after such adjustment
the aggregate Exercise Price payable hereunder for the increased number of
Warrant Shares shall be the same as the aggregate Exercise Price in effect
immediately prior to such adjustment.

 

6

 

12.   Reorganization, Reclassification, Merger,
Consolidation or Disposition of Assets. 
In case the Company shall reorganize its capital, reclassify its capital
stock, consolidate or merge with or into another corporation (where the Company
is not the surviving corporation or where there is a change in or distribution
with respect to the Common Stock of the Company), or sell, transfer or
otherwise dispose of all or substantially all its property, assets or business
to another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common 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 of
the Holder, upon exercise of this Warrant, the number of shares of Common Stock
of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and Other Property receivable upon or as a result of
such reorganization, reclassification, merger, consolidation or disposition of
assets by a Holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event.  In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board
of Directors of the Company) in order to provide for adjustments of Warrant
Shares for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 12.  For purposes of this Section 12, “common
stock of the successor or acquiring corporation” shall include stock of such
corporation of any class which is not preferred as to dividends or assets over
any other class of stock of such corporation and which is not subject to
redemption and shall also include any evidences of indebtedness, shares of
stock or other securities which are convertible into or exchangeable for any
such stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe
for or purchase any such stock.  The
foregoing provisions of this Section 12 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.

 

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

 

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

 

7

 

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

 

(a)           the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of
stock of any class or any other securities or property, or to receive any other
right, or

 

(b)           there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all
or substantially all the property, assets or business of the Company to,
another corporation or,

 

(c)           there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;

 

then, in any one or more of such cases (but not in such cases if the
rights of the Holder or holders of Common Stock will not be materially affected
thereby, as for example in the case of a merger to effect a change of
domicile), the Company shall give to Holder (i) at least 20 days’ prior written
notice 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 such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 20 days’ prior
written notice of the date when the same shall take place.  Such notice in accordance with the foregoing
clause also shall specify (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, the date on which the
holders of Common Stock shall be entitled to any such dividend, distribution or
right, and the amount and character thereof, and (ii) the date on which any
such reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and the
time, if any such time is to be fixed, as of which the holders of Common Stock
shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up.  Each such written notice shall be
sufficiently given if addressed to Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with Section
17(d).

 

16.   Authorized Shares.  The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who
are charged with the duty of executing stock certificates to execute and issue
the necessary certificates for the Warrant Shares upon the exercise of the
purchase rights under this Warrant.  The
Company will take all such reasonable action as may be necessary to assure that
such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the trading market upon
which the Common Stock may be listed.

 

8

 

Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment.  Without
limiting the generality of the foregoing, the Company will (a) not increase the
par value of any Warrant Shares above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (b) take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares upon the exercise
of this Warrant, and (c) use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.

 

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

 

17.           Miscellaneous.

 

(a)   Jurisdiction.  This Warrant shall constitute a contract
under the laws of New York, without regard to its conflict of law, principles
or rules.

 

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

 

(c)   Nonwaiver
and Expenses.  No course of dealing
or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice Holder’s rights,
powers or remedies, notwithstanding all rights hereunder terminate on the
Termination Date.  If the Company
willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to
Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees, including those of
appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

 

(d)   Notices.  Any notice, request or other document
required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Subscription
Agreement.

 

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

 

9

 

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

 

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

 

(g)   Successors
and Assigns.  Subject to applicable
securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company
and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit
of all Holders from time to time of this Warrant and shall be enforceable by
any such Holder or holder of Warrant Shares.

 

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

 

(i)    Severability.  Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be 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
provisions or the remaining provisions of this Warrant.

 

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

 

********************

 

10

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly
authorized.

 

 

	
  Dated:  March 16, 2004

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MFIC
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

11

 

NOTICE OF EXERCISE

 

To:          MFIC Corporation

 

(1)   The undersigned hereby elects to purchase
            Warrant
Shares of MFIC Corporation pursuant to the terms of the attached Warrant (only
if 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 (check
applicable box):

 

o  in lawful money of the United States; or

 

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

 

(3)   Please issue a certificate or certificates
representing said Warrant Shares in the name of the undersigned or in such
other 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:

  	
   

  	
   

  
								

 

 

ASSIGNMENT FORM

 

(To assign the
foregoing warrant, execute

this form and
supply required information.

Do not use
this form to exercise the warrant.)

 

 

FOR VALUE RECEIVED, the
foregoing 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 this Assignment Form must correspond with the
name as it appears on the face of the Warrant, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and
those acting in a fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing Warrant.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}]]