<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>6
<FILENAME>v011091_ex10-5.txt
<TEXT>

THIS NOTE AND THE COMMON STOCK  ISSUABLE  UPON  CONVERSION OF THIS NOTE HAVE NOT
BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
NOTE MAY NOT BE SOLD,  OFFERED FOR SALE,  PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN  EFFECTIVE  REGISTRATION  STATEMENT  AS TO THIS  NOTE  UNDER  SAID ACT AND
APPLICABLE   STATE   SECURITIES  LAWS  OR  AN  OPINION  OF  COUNSEL   REASONABLY
SATISFACTORY TO MITEK SYSTEMS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

                          SECURED CONVERTIBLE TERM NOTE

         FOR VALUE RECEIVED,  MITEK SYSTEMS,  INC., a Delaware  corporation (the
"BORROWER"),  hereby  promises  to pay to LAURUS  MASTER  FUND,  LTD.,  a Cayman
Islands  company,  c/o Ironshore  Corporate  Services Ltd.,  P.O. Box 1234 G.T.,
Queensgate  House,  South Church  Street,  Grand Cayman,  Cayman  Islands,  Fax:
345-949-9877 (the "HOLDER") or its registered assigns or successors in interest,
on order,  the sum of Three  Million  Dollars  ($3,000,000),  together  with any
accrued and unpaid interest  hereon,  on June 11, 2007 (the "MATURITY  DATE") if
not sooner paid.

         Capitalized  terms  used  herein  without  definition  shall  have  the
meanings ascribed to such terms in that certain  Securities  Purchase  Agreement
dated as of the date hereof  between the Borrower and the Holder (the  "PURCHASE
AGREEMENT").

The following terms shall apply to this Note:

                                    ARTICLE I
                             INTEREST & AMORTIZATION

         1.1(a) Interest Rate. Subject to Sections 4.11 and 5.6 hereof, interest
payable on this Note  shall  accrue at a rate per annum  (the  "Interest  Rate")
equal to the "prime  rate"  published  in The Wall Street  Journal  from time to
time, plus one percent (1.0%). The prime rate shall be increased or decreased as
the case may be for each  increase  or  decrease  in the prime rate in an amount
equal to such  increase  or  decrease  in the  prime  rate;  each  change  to be
effective  as of the day of the  change  in such  rate.  Interest  shall  be (i)
calculated on the basis of a 360 day year, and (ii) payable monthly, in arrears,
commencing  on July 1, 2004 and on the first  business  day of each  consecutive
calendar month  thereafter  until the Maturity Date (and on the Maturity  Date),
whether by acceleration or otherwise (each, a "REPAYMENT DATE").

         1.1 (b) Interest Rate Adjustment. The Interest Rate shall be calculated
on the last business day of each month hereafter until the Maturity Date (each a
"Determination Date") and shall be subject to adjustment as set forth herein. If
(i) the Borrower shall have registered the shares of the Borrower's common stock
underlying each of the conversion of the Note and that certain warrant issued to
Holder on a  registration  statement  declared  effective by the  Securities and
Exchange  Commission (the "SEC"), and (ii) the market price (the "Market Price")
of the Common Stock as reported by Bloomberg,  L.P. on the Principal  Market (as
defined  below)  for  the  five  (5)  trading  days   immediately   preceding  a
Determination  Date exceeds the then  applicable  Fixed  Conversion  Price by at
least twenty five percent (25%),  the Interest Rate for the succeeding  calendar
month shall  automatically be reduced by 200 basis points (200 b.p.) (2.0.%) for


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<PAGE>

each  incremental  twenty five percent (25%) increase in the Market Price of the
Common  Stock  above the then  applicable  Fixed  Conversion  Price.  If (i) the
Borrower shall not have  registered  the shares of the  Borrower's  common stock
underlying the conversion of the Note and that certain  warrant issued to Holder
on a  registration  statement  declared  effective by the SEC and which  remains
effective,  and (ii)  the  Market  Price of the  Common  Stock  as  reported  by
Bloomberg,  L.P.  on  the  principal  market  for  the  five  (5)  trading  days
immediately  preceding a Determination  Date exceeds the then  applicable  Fixed
Conversion  Price by at least twenty five percent  (25%),  the Interest Rate for
the  succeeding  calendar  month shall  automatically  be decreased by 100 basis
points  (100 b.p.)  (1.0.%)  for each  incremental  twenty  five  percent  (25%)
increase in the Market Price of the Common Stock above the then applicable Fixed
Conversion  Price. In no event shall the Interest Rate be less than zero percent
(0%).

         1.2 Minimum  Monthly  Principal  Payments.  Amortizing  payments of the
aggregate  principal  amount  outstanding  under  this  Note  at any  time  (the
"PRINCIPAL AMOUNT") shall begin on December 1, 2004 and shall recur on the first
business day of each succeeding  month thereafter until the Maturity Date (each,
an  "AMORTIZATION  DATE").  Subject to Article 3 below,  beginning  on the first
Amortization  Date,  the Borrower  shall make monthly  payments to the Holder on
each Repayment Date, each in the amount of $90,909.09, together with any accrued
and unpaid interest to date on such portion of the Principal Amount plus any and
all other amounts which are then owing under this Note,  the Purchase  Agreement
or any  other  Related  Agreement  but  have not been  paid  (collectively,  the
"MONTHLY AMOUNT"). Any Principal Amount that remains outstanding on the Maturity
Date shall be due and payable on the Maturity Date.

                                   ARTICLE II
                              CONVERSION REPAYMENT

         2.1 (a) Payment of Monthly  Amount in Cash or Common Stock.  Each month
by the fifth (5th)  business  day prior to each  Amortization  Date (the "NOTICE
DATE"),  the Holder  shall  deliver to Borrower a written  notice in the form of
Exhibit B attached  hereto  converting  the Monthly  Amount  payable on the next
Repayment Date in either cash or Common Stock, or a combination of both (each, a
"REPAYMENT NOTICE").  If a Repayment Notice is not delivered by the Holder on or
before the  applicable  Notice Date for such Repayment  Date,  then the Borrower
shall pay the Monthly  Amount due on such Repayment Date in cash. Any portion of
the Monthly Amount paid in cash on a Repayment Date, shall be paid to the Holder
an amount equal to 102% of the principal  portion of the Monthly  Amount due and
owing to Holder on the Repayment  Date. If the Holder  converts all or a portion
of the Monthly Amount in shares of Common Stock as provided  herein,  the number
of such shares to be issued by the Borrower to the Holder on such Repayment Date
shall be the number determined by dividing (x) the portion of the Monthly Amount
to be  paid  in  shares  of  Common  Stock,  by (y) the  then  applicable  Fixed
Conversion  Price. For purposes  hereof,  the initial "FIXED  CONVERSION  PRICE"
means $0.70.

         (b) Monthly Amount Conversion  Guidelines.  Subject to Sections 2.1(a),
2.2, and 3.2 hereof,  the Holder  shall  convert all or a portion of the Monthly
Amount  due on each  Repayment  Date in shares of  Common  Stock if the  average
closing  price of the  Common  Stock  as  reported  by  Bloomberg,  L.P.  on the
Principal  Market  for the five (5)  trading  days  immediately  preceding  such


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<PAGE>

Repayment Date was greater than or equal to 110% of the Fixed Conversion  Price,
provided,  however,  that such conversions  shall not exceed twenty five percent
(25%) of the aggregate  dollar  trading  volume of the Common Stock for the five
(5) day trading period immediately  preceding delivery of a Notice of Conversion
to the Borrower. Any part of the Monthly Amount due on a Repayment Date that the
Holder  has not  converted  into  shares  of Common  Stock  shall be paid by the
Borrower in cash on such  Repayment  Date. Any part of the Monthly Amount due on
such Repayment Date which must be paid in cash (as a result of the closing price
of the Common  Stock on one or more of the five (5) trading days  preceding  the
applicable  Repayment Date being less than 110% of the Fixed  Conversion  Price)
shall be paid in cash at the rate of 102% of the Monthly Amount otherwise due on
such Repayment Date, within three (3) business days of the applicable  Repayment
Date.

         2.2 No Effective Registration. Notwithstanding anything to the contrary
herein,  none of the Borrower's  obligations to the Holder may be converted into
Common Stock unless (i) either (x) an effective current  Registration  Statement
(as defined in the Registration  Rights Agreement) covering the shares of Common
Stock to be issued in connection with satisfaction of such obligations exists or
(y) an exemption from  registration of the Common Stock is available to pursuant
to Rule 144 of the Securities Act and (ii) no Event of Default  hereunder exists
and is  continuing,  unless such Event of Default is cured within any applicable
cure period or is otherwise  waived in writing by the Holder in whole or in part
at the Holder's option.

         2.3 Optional  Redemption in Cash.  The Borrower will have the option of
prepaying  this Note  ("OPTIONAL  REDEMPTION")  by paying to the Holder a sum of
money equal to one hundred twenty percent (120%) of the principal amount of this
Note  together  with accrued but unpaid  interest  thereon and any and all other
sums due, accrued or payable to the Holder arising under this Note, the Purchase
Agreement, or any Related Agreement (the "REDEMPTION AMOUNT") outstanding on the
day written notice of redemption  (the "NOTICE OF  REDEMPTION")  is given to the
Holder.  The  Notice of  Redemption  shall  specify  the date for such  Optional
Redemption  (the  "REDEMPTION  PAYMENT  DATE")  which  date  shall be seven  (7)
business  days  after the date of the  Notice  of  Redemption  (the  "REDEMPTION
PERIOD").  A Notice of  Redemption  shall not be  effective  with respect to any
portion  of this Note for which the  Holder  has a pending  election  to convert
pursuant to Section  3.1,  or for  conversions  initiated  or made by the Holder
pursuant to Section 3.1 during the  Redemption  Period.  The  Redemption  Amount
shall be determined as if such Holder's conversion  elections had been completed
immediately  prior to the date of the Notice of  Redemption.  On the  Redemption
Payment Date, the Redemption Amount must be paid in good funds to the Holder. In
the event the  Borrower  fails to pay the  Redemption  Amount on the  Redemption
Payment Date as set forth herein,  then such Redemption  Notice will be null and
void.

                                   ARTICLE III
                                CONVERSION RIGHTS

         3.1. Holder's  Conversion  Rights. The Holder shall have the right, but
not  the  obligation,  to  convert  all or any  portion  of the  then  aggregate


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<PAGE>

outstanding  principal amount of this Note,  together with interest and fees due
hereon,  into shares of Common  Stock  subject to the terms and  conditions  set
forth in this Article III. The Holder may exercise such right by delivery to the
Borrower of a written  notice of  conversion  not less than one (1) day prior to
the date upon which such conversion shall occur.

         3.2 Conversion Limitation. Notwithstanding anything contained herein to
the contrary,  the Holder shall not be entitled to convert pursuant to the terms
of this Note an amount that would be convertible  into that number of Conversion
Shares which would exceed the difference  between the number of shares of Common
Stock  beneficially  owned by such Holder or issuable  upon exercise of warrants
held by such Holder and 4.99% of the  outstanding  shares of Common Stock of the
Borrower.  For the purposes of the immediately  preceding  sentence,  beneficial
ownership  shall be determined in accordance  with Section 13(d) of the Exchange
Act and Regulation  13d-3  thereunder.  The Holder may void the Conversion Share
limitation  described  in this  Section  3.2 upon 75 days  prior  notice  to the
Borrower or without any notice requirement upon an Event of Default.

         3.3 Mechanics of Holder's Conversion.  (a) In the event that the Holder
elects to convert this Note into Common  Stock,  the Holder shall give notice of
such  election by  delivering  an executed and  completed  notice of  conversion
("NOTICE OF  CONVERSION")  to the Borrower and such Notice of  Conversion  shall
provide a  breakdown  in  reasonable  detail of the  Principal  Amount,  accrued
interest  and fees being  converted.  On each  Conversion  Date (as  hereinafter
defined) and in accordance with its Notice of Conversion,  the Holder shall make
the appropriate reduction to the Principal Amount,  accrued interest and fees as
entered in its records and shall provide  written notice thereof to the Borrower
within two (2) business  days after the  Conversion  Date.  Each date on which a
Notice of  Conversion  is delivered or  telecopied to the Borrower in accordance
with the provisions  hereof shall be deemed a Conversion  Date (the  "CONVERSION
DATE").  A form of Notice of  Conversion to be employed by the Holder is annexed
hereto as Exhibit A. (a)

         (b)  Pursuant to the terms of the Notice of  Conversion,  the  Borrower
will issue  instructions  to the  transfer  agent  accompanied  by an opinion of
counsel  within one (1)  business day of the date of the delivery to Borrower of
the Notice of  Conversion  and shall cause the  transfer  agent to transmit  the
certificates  representing the Conversion  Shares to the Holder by crediting the
account of the Holder's  designated broker with the Depository Trust Corporation
("DTC") through its Deposit  Withdrawal Agent Commission  ("DWAC") system within
three  (3)  business  days  after  receipt  by the  Borrower  of the  Notice  of
Conversion (the "DELIVERY  DATE"). In the case of the exercise of the conversion
rights set forth herein the  conversion  privilege  shall be deemed to have been
exercised  and the  Conversion  Shares  issuable upon such  conversion  shall be
deemed to have been  issued  upon the date of  receipt  by the  Borrower  of the
Notice of Conversion. The Holder shall be treated for all purposes as the record
holder of such Common  Stock,  unless the Holder  provides the Borrower  written
instructions to the contrary.

         3.4 Conversion Mechanics.

         (a) The  number  of  shares  of  Common  Stock to be  issued  upon each
conversion  of this Note shall be  determined  by dividing  that  portion of the
principal and interest and fees to be converted,  if any, by the then applicable
Fixed Conversion Price. In the event of any conversions of outstanding principal
amount under this Note in part  pursuant to this Article III,  such  conversions
shall be  deemed to  constitute  conversions  of  outstanding  principal  amount
applying to Monthly Amounts for the remaining  Repayment Dates in  chronological
order.  By way of  example,  if the  original  principal  amount of this Note is
$200,000 and the Holder converted $0 of such original  principal amount prior to
the first Repayment  Date,  then (1) the principal  amount of the Monthly Amount
due on the first Repayment Date would equal $0, (2) the principal  amount of the


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<PAGE>

Monthly  Amount  due on the  second  Repayment  Date  would  equal $ and (3) the
principal amount of the Monthly Amount due on the third Repayment Dates would be
$18,181.81.

         (b) The Fixed  Conversion  Price and number and kind of shares or other
securities to be issued upon  conversion  is subject to adjustment  from time to
time upon the occurrence of certain events, as follows:

         A. Stock Splits,  Combinations  and Dividends.  If the shares of Common
Stock are  subdivided or combined into a greater or smaller  number of shares of
Common  Stock,  or if a dividend is paid on the Common Stock in shares of Common
Stock, the Fixed  Conversion Price or the Conversion  Price, as the case may be,
shall be  proportionately  reduced  in case of  subdivision  of  shares or stock
dividend or  proportionately  increased in the case of combination of shares, in
each  such case by the ratio  which the total  number of shares of Common  Stock
outstanding  immediately after such event bears to the total number of shares of
Common Stock outstanding immediately prior to such event.

         B. During the period the  conversion  right  exists,  the Borrower will
reserve from its  authorized  and unissued  Common Stock a sufficient  number of
shares to provide for the issuance of Common Stock upon the full  conversion  of
this Note. The Borrower represents that upon issuance,  such shares will be duly
and validly issued, fully paid and non-assessable.  The Borrower agrees that its
issuance of this Note shall  constitute full authority to its officers,  agents,
and transfer agents who are charged with the duty of executing and issuing stock
certificates  to  execute  and issue the  necessary  certificates  for shares of
Common Stock upon the conversion of this Note.

         C. Share  Issuances.  Subject to the provisions of this Section 3.4, if
the Borrower  shall at any time prior to the  conversion or repayment in full of
the Principal Amount issue any shares of Common Stock or securities  convertible
into Common  Stock to a person  other than the Holder  (except  (i)  pursuant to
Subsections  A  or B  above;  (ii)  pursuant  to  options,  warrants,  or  other
obligations  to issue  shares  outstanding  on the date hereof as  disclosed  to
Holder in writing;  or (iii)  pursuant to options  that may be issued  under any
employee  incentive  stock option and/or any qualified stock option plan adopted
by the Borrower) for a consideration per share (the "Offer Price") less than the
Fixed  Conversion  Price in effect at the time of such issuance,  then the Fixed
Conversion  Price  shall be  immediately  reset to such lower Offer Price at the
time of issuance of such securities.

         D.  Reclassification,  etc.  If the  Borrower  at any  time  shall,  by
reclassification  or  otherwise,  change  the  Common  Stock  into the same or a
different  number of  securities  of any class or classes,  this Note, as to the
unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed
to evidence the right to purchase an adjusted number of such securities and kind
of  securities  as would have been  issuable  as the result of such  change with
respect to the Common Stock immediately prior to such  reclassification or other
change.

         3.5 Issuance of New Note.  Upon any partial  conversion of this Note, a
new Note  containing  the same date and  provisions  of this Note shall,  at the
request of the Holder, be issued by the Borrower to the Holder for the principal
balance of this Note and interest  which shall not have been  converted or paid.


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<PAGE>

The Borrower will pay no costs,  fees or any other  consideration  to the Holder
for the production and issuance of a new Note.

                                   ARTICLE IV
                                EVENTS OF DEFAULT

           Upon the occurrence and continuance of an Event of Default beyond any
applicable grace period, the Holder may make all sums of principal, interest and
other fees then remaining unpaid hereon and all other amounts payable  hereunder
immediately due and payable.  In the event of such an acceleration,  within five
(5) days after written notice from Holder to Borrower (each  occurrence  being a
"DEFAULT NOTICE PERIOD") the amount due and owing to the Holder shall be 130% of
the outstanding  principal  amount of the Note (plus accrued and unpaid interest
and fees,  if any) (the  "DEFAULT  PAYMENT").  If, with  respect to any Event of
Default,  the Borrower cures the Event of Default,  the Event of Default will be
deemed to no longer  exist and any rights and remedies of Holder  pertaining  to
such Event of Default will be of no further force or effect. The Default Payment
shall be applied  first to any fees due and  payable to Holder  pursuant  to the
Note or the Related  Agreements,  then to accrued and unpaid interest due on the
Note and then to outstanding principal balance of the Note.

         The occurrence of any of the following events set forth in Sections 4.1
through 4.10, inclusive, is an "EVENT OF DEFAULT":

         4.1 Failure to Pay  Principal,  Interest or other  Fees.  The  Borrower
fails to pay when due any  installment  of  principal,  interest  or other  fees
hereon in accordance herewith,  or the Borrower fails to pay when due any amount
due under any other  promissory  note issued by Borrower,  and in any such case,
such failure  shall  continue for a period of three (3) days  following the date
upon which any such payment was due.

         4.2 Breach of  Covenant.  The  Borrower  breaches any covenant or other
term or condition of this Note, the Purchase  Agreement or any Related Agreement
in any material  respect and such breach,  if subject to cure,  continues  for a
period of fifteen (15) days after the occurrence thereof.

         4.3 Breach of  Representations  and Warranties.  Any  representation or
warranty of the Borrower  made  herein,  in the  Purchase  Agreement,  or in any
Related  Agreement  shall be false or misleading in any material  respect on the
date that such representation or warranty was made or deemed made.

         4.4 Receiver or Trustee.  The Borrower shall make an assignment for the
benefit of creditors,  or apply for or consent to the  appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such
a receiver or trustee shall otherwise be appointed.

         4.5 Judgments.  Any money judgment, writ or similar final process shall
be entered or filed  against the Borrower or any of its property or other assets
for more than $50,000,  and shall remain  unvacated,  unbonded or unstayed for a
period of thirty (30) days.


                                       6
<PAGE>

         4.6 Bankruptcy. Bankruptcy,  insolvency,  reorganization or liquidation
proceedings  or other  proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower.

         4.7 Stop Trade.  An SEC stop trade order or  Principal  Market  trading
suspension of the Common Stock shall be in effect for five (5) consecutive  days
or five (5) days during a period of ten (10) consecutive days,  excluding in all
cases a  suspension  of all trading on a  Principal  Market,  provided  that the
Borrower shall not have been able to cure such trading  suspension within thirty
(30) days of the notice  thereof or list the Common  Stock on another  Principal
Market  within sixty (60) days of such notice.  The  "Principal  Market" for the
Common Stock shall include the NASD OTC Bulletin Board,  NASDAQ SmallCap Market,
NASDAQ  National  Market  System,  American  Stock  Exchange,  or New York Stock
Exchange  (whichever  of the  foregoing  is at the  time the  principal  trading
exchange or market for the Common  Stock,  or any  securities  exchange or other
securities market on which the Common Stock is then being listed or traded.

         4.8 Failure to Deliver Common Stock or  Replacement  Note. The Borrower
shall fail (i) to timely deliver  Common Stock to the Holder  pursuant to and in
the form required by this Note, and Section 9 of the Purchase Agreement, if such
failure  to  timely  deliver  Common  Stock  shall not be cured  within  two (2)
business days or (ii) to deliver a  replacement  Note to Holder within seven (7)
business days  following  the required  date of such  issuance  pursuant to this
Note, the Purchase  Agreement or any Related  Agreement (to the extent  required
under such agreements).

         4.9  Default  Under  Related   Agreements  or  Other  Agreements.   The
occurrence  and  continuance  of any Event of Default as defined in the  Related
Agreements   or  any  event  of  default  (or  similar  term)  under  any  other
indebtedness.

         4.10 Change in Control.  The occurrence of a change in the  controlling
ownership of the Company.

                           DEFAULT RELATED PROVISIONS

         4.11 Payment Grace Period.  Following the occurrence and continuance of
an Event of Default beyond any applicable  cure period  hereunder,  the Borrower
shall pay the Holder a default  interest  rate of two percent  (2%) per month on
all amounts  due and owing  under the Note,,  which  default  interest  shall be
payable upon demand.

         4.12  Conversion  Privileges.  The  conversion  privileges set forth in
Article  III shall  remain in full  force and effect  immediately  from the date
hereof and until this Note is paid in full.

         4.13  Cumulative  Remedies.  The  remedies  under  this  Note  shall be
cumulative.

                                    ARTICLE V
                                  MISCELLANEOUS

         5.1 Failure or Indulgence  Not Waiver.  No failure or delay on the part
of the Holder hereof in the exercise of any power, right or privilege  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of


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<PAGE>

any such power, right or privilege preclude other or further exercise thereof or
of any other  right,  power or  privilege.  All  rights  and  remedies  existing
hereunder  are  cumulative  to, and not  exclusive  of,  any rights or  remedies
otherwise available.

         5.2 Notices.  Any notice herein required or permitted to be given shall
be in writing and shall be deemed  effectively given: (a) upon personal delivery
to the party  notified,  (b) when sent by  confirmed  telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day,  (c) five days after  having been sent by  registered  or  certified  mail,
return receipt requested,  postage prepaid,  or (d) one day after deposit with a
nationally  recognized  overnight  courier,  specifying next day delivery,  with
written  verification  of  receipt.  All  communications  shall  be  sent to the
Borrower  at  the  address  provided  in  the  Purchase  Agreement  executed  in
connection  herewith,  and to the Holder at the address provided in the Purchase
Agreement  for such  Holder,  with a copy to John E.  Tucker,  Esq.,  825  Third
Avenue,  14th Floor, New York, New York 10022,  facsimile number (212) 541-4434,
or at such other address as the Borrower or the Holder may designate by ten days
advance written notice to the other parties hereto. A Notice of Conversion shall
be deemed given when made to the Borrower pursuant to the Purchase Agreement.

         5.3 Amendment Provision.  The term "Note" and all reference thereto, as
used  throughout  this  instrument,  shall mean this  instrument  as  originally
executed,  or  if  later  amended  or  supplemented,   then  as  so  amended  or
supplemented,  and any  successor  instrument  issued  pursuant  to Section  3.5
hereof, as it may be amended or supplemented.

         5.4 Assignability. This Note shall be binding upon the Borrower and its
successors  and  assigns,  and shall  inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements of the Purchase  Agreement.  This Note shall not be assigned by the
Borrower without the consent of the Holder.

         5.5  Governing  Law.  This Note shall be governed by and  construed  in
accordance with the laws of the State of New York,  without regard to principles
of  conflicts  of laws.  Any action  brought by either  party  against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York.  Both  parties and the  individual  signing this Note on behalf of the
Borrower  agree to submit to the  jurisdiction  of such courts.  The  prevailing
party  shall  be  entitled  to  recover  from the  other  party  its  reasonable
attorney's  fees and  costs.  In the event  that any  provision  of this Note is
invalid or unenforceable  under any applicable statute or rule of law, then such
provision  shall  be  deemed  inoperative  to the  extent  that it may  conflict
therewith  and shall be deemed  modified to conform with such statute or rule of
law. Any such provision which may prove invalid or  unenforceable  under any law
shall not affect the validity or unenforceability of any other provision of this
Note. Nothing contained herein shall be deemed or operate to preclude the Holder
from  bringing  suit or taking  other legal  action  against the Borrower in any
other  jurisdiction  to  collect on the  Borrower's  obligations  to Holder,  to


                                       8
<PAGE>

realize on any  collateral  or any other  security for such  obligations,  or to
enforce a judgment or other court in favor of the Holder.

         5.6  Maximum  Payments.  Nothing  contained  herein  shall be deemed to
establish  or require  the  payment of a rate of  interest  or other  charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest  required  to be paid or other  charges  hereunder  exceed the  maximum
permitted by such law, any payments in excess of such maximum  shall be credited
against  amounts  owed by the  Borrower  to the Holder and thus  refunded to the
Borrower.

         5.7  Security  Interest.  The  holder of this  Note has been  granted a
security  interest in certain  assets of the Borrower more fully  described in a
Security Agreement dated as of the date hereof.

         5.8  Construction.  Each  party  acknowledges  that its  legal  counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction  that  ambiguities are to be resolved  against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

         5.9 Cost of Collection. If default is made in the payment of this Note,
the  Borrower  shall pay to Holder  reasonable  costs of  collection,  including
reasonable attorney's fees.


       [Balance of page intentionally left blank; signature page follows.]



                                       9

<PAGE>




         IN WITNESS WHEREOF,  the Borrower has caused this Convertible Term Note
to be signed in its name effective as of this 11th day of June, 2004.


                                           MITEK SYSTEMS, INC.


                                           By:
                                              ----------------------------------
                                           Name:
                                                --------------------------------
                                           Title:
                                                 -------------------------------

WITNESS:


-------------------------------



                                       10
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION

 (To be executed by the Holder in order to convert all or part of the Note into
                                  Common Stock

[Name and Address of Holder]


The  Undersigned  hereby  converts  $_________  of the principal due on [specify
applicable  Repayment  Date]  under the  Convertible  Term Note  issued by MITEK
SYSTEMS, INC. dated June __, 2004 by delivery of Shares of Common Stock of MITEK
SYSTEMS,  INC. on and subject to the conditions set forth in Article III of such
Note.

1.       Date of Conversion         _______________________

2.       Shares To Be Delivered:    _______________________


                                           By:
                                              ----------------------------------
                                           Name:
                                                --------------------------------
                                           Title:
                                                 -------------------------------


                                    EXHIBIT B

                                CONVERSION NOTICE

   (To be executed by the Holder in order to convert all or part of a Monthly
                           Amount into Common Stock)

[Name and Address of Holder]


Holder  hereby  converts  $_________  of the  Monthly  Amount  due  on  [specify
applicable  Repayment  Date]  under the  Convertible  Term Note  issued by MITEK
SYSTEMS,  INC.  dated  _______,  200__ by delivery of Shares of Common  Stock of
MITEK SYSTEMS, INC. on and subject to the conditions set forth in Article III of
such Note.


1.       Fixed Conversion Price:    $_______________________

2.       Amount to be paid:         $_______________________



                                       11
<PAGE>

3.       Shares To Be Delivered (2 divided by 1):  _____________________

4.       Cash payment to be made by Borrower :    $_____________________



Date: ____________                         LAURUS  MASTER FUND, LTD.

                                           By:
                                              ----------------------------------
                                           Name:
                                                --------------------------------
                                           Title:
                                                 -------------------------------



                                       1

</TEXT>
</DOCUMENT>
