MITEK SYSTEMS, INC. WARRANT
MITEK
SYSTEMS, INC.
NEITHER
THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED WITH THE SEC UNDER SECTION 5 OF THE SECURITIES ACT IN RELIANCE
UPON ONE OR MORE EXEMPTIONS FROM REGISTRATION OR QUALIFICATION AFFORDED BY THE
SECURITIES ACT AND/OR RULES PROMULGATED BY THE SEC PURSUANT THERETO. NEITHER
THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED OR QUALIFIED (AS THE CASE MAY BE) UNDER THE SECURITIES LAWS OF
ANY STATE OR TERRITORY OF THE UNITED STATES, IN RELIANCE UPON ONE OR MORE
EXEMPTIONS FROM REGISTRATION OR QUALIFICATION (AS THE CASE MAY BE) AFFORDED
UNDER SUCH SECURITIES LAWS. THIS WARRANT HAS BEEN ACQUIRED FOR THE HOLDER’S OWN
ACCOUNT FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW FOR RESALE OR
DISTRIBUTION.
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Warrant
Shares:
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[________________]
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Effective
Date:
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December
10, 2009
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THIS
CERTIFIES THAT, for value received, ________________ (“Holder”) is entitled, subject
to the terms and conditions of this Warrant, to purchase from Mitek Systems,
Inc., a Delaware corporation (“Company”), up to ____________
shares of Common Stock (such shares and all other shares issued or issuable
pursuant to this Warrant referred to hereinafter as “Warrant Shares”) at a purchase
price of $0.91 per share (the “Exercise Price”).
1. Term. This Warrant
is exercisable at the option of the Holder, at any time or from time to time, in
whole or in part (but not for a fraction of a share), at any time following the
Effective Date and before 5:30 P.M. San Diego, California time on the earlier to
occur of (a) the five year anniversary of the Effective Date or (b) (i) the
closing of a merger or consolidation of the Company with or into another
corporation where the Company is not the surviving corporation, or a reverse
triangular merger in which the Company is the surviving entity but the shares of
the Company’s capital stock outstanding immediately prior to the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash, or otherwise, or (ii) the closing of the sale of all or
substantially all of the properties and assets of Company, unless the Company’s
shareholders of record prior to such acquisition or sale shall hold at least
fifty percent (50%) of the voting power of the acquiring or surviving entity
immediately after the acquisition or sale (the earlier to occur of (a) or (b),
the “Expiration
Date”). At least 10 days prior to the occurrence of an event
specified in (b) of this Section 1, the Company shall send to Holder notice of
such event and that Holder’s rights under this Warrant shall terminate upon the
occurrence of such event; provided that if the Company sends such notice less
than 10 days prior to the occurrence of such event, ▇▇▇▇▇▇’s right to exercise
this Warrant shall be extended for a period of five days after the date of the
notice, after which time Holder’s rights under this Warrant shall
terminate.
2. Exercise.
2.1 Payment. Subject
to compliance with the terms and conditions of this Warrant and applicable
securities laws, this Warrant may be exercised, in whole or in part at any time
or from time to time, from and after the Effective Date and on or before the
Expiration Date by delivery of:
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(a)
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a
Notice of Exercise duly executed by the Holder to the Company at its
principal office,
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(b)
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this
Warrant to the Company at its principal office,
and
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(c)
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payment
in cash, by check or by wire transfer of an amount equal to the product
obtained by multiplying the number of shares of Warrant Shares being
purchased upon such exercise by the then effective Exercise
Price.
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2.2 Cashless
Exercise. In lieu of the payment methods set forth in Section
2.1(c), this Warrant may also be exercised, in whole or in part at any time or
from time to time, from and after the one year anniversary of the Effective Date
and on or before the Expiration Date, by means of a “cashless exercise” in which
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:
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(A)
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=
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the
Fair Market Value of one share of Common Stock on the Trading Day
immediately preceding the Exercise Date
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(B)
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=
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the
Exercise Price of one share of Warrant Shares (as adjusted to the date of
such calculation)
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(X)
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=
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the
number of Warrant Shares purchasable under this Warrant or, if only a
portion of this Warrant is being exercised, the portion of this Warrant
being canceled (at the date of such
calculation)
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If the
Holder elects to exercise this Warrant as provided in this Section 2.2, the
Holder shall tender this Warrant for the amount being exercised, along with a
Notice of Exercise duly executed by the Holder, to the Company at its then
principal office, and the Company shall issue to the Holder the number of
Warrant Shares computed using the formula above. Notwithstanding anything to the
contrary herein, this Warrant may not be exercised on a cashless exercise basis
if a registration statement registering the resale of the Warrant Shares
issuable upon such exercise is effective as of the Exercise Date.
2.3 Stock Certificates;
Fractional Shares. As soon as practicable on or after any date
of exercise of this Warrant pursuant to this Section 2, the Company shall issue
and deliver to Holder a certificate or certificates for the number of whole
shares of Warrant Shares issuable upon such exercise, together with cash in lieu
of any fraction of a share equal to such fraction of the current Fair Market
Value of one whole share of Warrant Shares as of the date of exercise of this
Warrant. No fractional shares or scrip representing fractional shares
shall be issued upon an exercise of this Warrant.
2.4 Partial Exercise; Effective
Date of Exercise. In case of any partial exercise of this
Warrant, the Company shall cancel this Warrant upon surrender hereof and shall
execute and deliver a new Warrant of like tenor and date for the balance of the
shares of Warrant Shares purchasable hereunder. This Warrant shall be
deemed to have been exercised immediately prior to the close of business on the
date of its surrender for exercise as provided above. Holder shall be
treated for all purposes as the holder of record of the Warrant Shares to which
it is entitled upon exercise of this Warrant as of the close of business on the
date the Holder is deemed to have exercised this Warrant.
2.5 Exercise Price
Adjustment.
(a) The
Exercise Price in effect at any time and the number of Warrant Shares purchased
upon the exercise of this Warrant shall be subject to adjustment from time to
time as follows. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend or otherwise makes a distribution or distributions
payable in shares of Common Stock on shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, (iii)
combines (including by way of a reverse stock split) outstanding shares of
Common Stock into a smaller number of shares or (iv) issues, in the event of a
reclassification of shares of the Common Stock, any shares of capital stock of
the Company, then the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding any
treasury shares of the Company) outstanding immediately before such event and of
which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to this
Section 2.5(a) shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
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(b) Calculations. All
calculations under this Section 2.5 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this
Section 2.5, the number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the number of shares of Common Stock
(excluding any treasury shares of the Company) issued and
outstanding.
(c) Notice to the Holder of
Adjustment to Exercise Price. Whenever the Exercise Price is
adjusted pursuant to any provision of this Section 2.5, the Company shall
deliver to the Holder a notice setting forth the Exercise Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.
(d) Notice to Allow Exercise of
Warrant. If the approval of any stockholders of the Company shall be
required in connection with any consolidation or merger to which the Company is
a party, any sale or transfer of all or substantially all of the assets of the
Company, of any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, then, the Company shall cause to be
delivered to the Holder at its last address as it shall appear upon the books
and records of the Company, at least 15 calendar days prior to the applicable
effective date hereinafter specified, a notice stating the date on which such
consolidation, merger, sale, transfer or share exchange is expected to become
effective, and the date as of which it is expected that holders of the Common
Stock of record shall be entitled to exchange their shares of the Common Stock
for securities, cash or other property deliverable upon such consolidation,
merger, sale, transfer or share exchange, provided that the failure to deliver
such notice or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in such notice.
The Holder is entitled to exercise this Warrant in accordance with the terms of
this Warrant during the 15-day period commencing on the date of such notice
through the effective date of the event triggering such notice.
3. Valid Issuance;
Taxes. All Warrant Shares issued upon the exercise of this
Warrant shall be validly issued, fully paid and non-assessable; provided that
Holder shall pay all taxes and other governmental charges that may be imposed in
respect of the issue or delivery thereof. The Company shall not be
required to pay any tax or other charge imposed in connection with any transfer
involved in the issuance of any certificate representing any Warrant Shares in
any name other than that of the Holder, and in such case the Company shall not
be required to issue or deliver any stock certificate or security until such tax
or other charge has been paid, or it has been established to the Company’s
satisfaction that no tax or other charge is due.
4. Restrictions On
Transfer. This Warrant and the Warrant Shares are subject to
transfer restrictions as set forth in the Purchase Agreement. The Holder, by
acceptance hereof, agrees that, it shall not Transfer any or all of this Warrant
or Warrant Shares, as the case may be, except in compliance with the provisions
set forth in the Purchase Agreement.
5. Definitions: For the purposes
hereof, (i) capitalized terms used and not otherwise defined herein shall have
the meanings set forth in that certain Securities Purchase Agreement dated
December 10, 2009 by and among the Company and the purchasers signatory thereto
(the “Purchase
Agreement”) and (ii) in addition to the terms defined elsewhere in this
Warrant, the following terms shall have the following meanings:
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“Effective Date” means the date
first set forth above.
“Exercise Date” means, in the
case of an exercise pursuant to Section 2.1, the date on which the aggregate
Exercise Price is received by the Company, together with delivery of the Notice
of Exercise and this Warrant, in accordance with Section 2.1, and, in the case
of an exercise pursuant to Section 2.2, the date on which the Notice of Exercise
and this Warrant are delivered to the Company in accordance with Section
2.2.
“Fair Market Value” of a share
of Common Stock as of a particular date means:
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(a)
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If
the Common Stock is then listed or quoted on a Trading Market, the Fair
Market Value shall be deemed to be the average of the closing price of the
Common Stock on such Trading Market over the 10 Trading Days ending on the
Trading Day immediately prior to the Exercise
Date;
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(b)
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If
the Common Stock is not then quoted or listed on a Trading Market and if
prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported;
and
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(c)
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If
the Common Stock is not then quoted or listed on a Trading Market and if
prices for the Common Stock are not then reported in the “Pink Sheets,”
the Fair Market Value shall be the value thereof, as agreed upon by the
Company and the Holder; provided, however, that if the Company and the
Holder cannot agree on such value, such value shall be determined by an
independent valuation firm experienced in valuing businesses such as the
Company and jointly selected in good faith by the Company and the
Holder. Fees and expenses of the valuation firms shall be paid
equally by the Company and the
Holder.
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“Notice of Exercise” means the
form of notice of exercise attached hereto as Exhibit
A.
“Trading Day” means a day on
which the principal Trading Market is open for trading.
“Trading Market” means any of
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the NYSE Amex, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange or the OTC Bulletin Board (or any successors to any of the foregoing);
provided, however, if on the date in question the Common Stock is not listed or
quoted for trading on any of the foregoing markets or exchanges, “Trading
Market” shall mean the New York Stock Exchange.
“Transfer” means any sale,
assignment, transfer, conveyance, pledge, hypothecation or other disposition,
voluntarily or involuntarily, by operation of law, with or without
consideration, or otherwise (including by way of intestacy, will, gift,
bankruptcy, receivership, levy, execution, charging order or other similar sale
or seizure by legal process).
“Warrant” means this Warrant
and any warrant delivered in substitution or exchange therefor as provided
herein.
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6. Miscellaneous.
6.1 Notices. Any
and all notices or other communications or deliveries to be provided by the
Holder hereunder shall be in writing and delivered personally, by facsimile to
the facsimile number of the Company set forth on the signature page hereof, or
sent by a nationally recognized overnight courier service addressed to the
Company at the address set forth above, or such other facsimile number or
address as the Company may specify for such purposes by notice to the Holder
delivered in accordance with this Section 6.1. Any and all notices or
other communications or deliveries to be provided by the Company hereunder shall
be in writing and delivered personally, by facsimile, or sent by a nationally
recognized overnight courier service addressed to the Holder at the facsimile
number or address of the Holder appearing on the books of the Company, or if no
such facsimile number or address appears on the books of the Company, at the
principal place of business of the Holder as set forth in the Purchase
Agreement. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto prior to 5:30
p.m. (Pacific time) on any date, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 5:30 p.m. (Pacific time) on any Trading Day,
(iii) the second Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (iv) upon actual receipt by
the party to whom such notice is required to be given.
6.2 Lost or Mutilated
Warrant. If this Warrant shall be mutilated, lost, stolen or destroyed,
the Company shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Warrant, or in lieu of or in substitution for a
lost, stolen or destroyed Warrant, a new Warrant of like tenor as the lost,
stolen, destroyed or mutilated Warrant, but only upon receipt of an affidavit
and indemnity agreement from the Holder and evidence of such loss, theft or
destruction of this Warrant, and of the ownership hereof, in each case,
reasonably satisfactory to the Company.
6.3 Waiver. Any
waiver by the Company or the Holder of a breach of any provision of this Warrant
shall not operate as or be construed to be a waiver of any other breach of such
provision or of any breach of any other provision of this
Warrant. The failure of the Company or the Holder to insist upon
strict adherence to any term of this Warrant on one or more occasions shall not
be considered a waiver or deprive that party of the right thereafter to insist
upon strict adherence to that term or any other term of this Warrant on any
other occasion. Any waiver by the Company or the Holder must be in
writing.
6.4 Severability. If
any provision of this Warrant is invalid, illegal or unenforceable, the balance
of this Warrant shall remain in effect, and if any provision is inapplicable to
any Person or circumstance, it shall nevertheless remain applicable to all other
Persons and circumstances.
6.5 Headings. The
headings contained herein are for convenience only, do not constitute a part of
this Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
6.6 Amendments. This
Warrant may be modified or amended or the provisions hereof waived with the
prior written consent of the Company and the Holder.
6.7 Saturdays, Sundays and
Holidays. If the Expiration Date falls on any day that is not
a Trading Day, the Expiration Date shall automatically be extended until 5:30
P.M. the next Trading Day.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the undersigned duly authorized representative of the Company
has executed this Warrant as of the day and date first written
above.
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Mitek
Systems, Inc.
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By:
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Agreed
and Accepted:
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Holder:
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EXHIBIT
A
NOTICE
OF EXERCISE
(To
be executed upon exercise of Warrant)
TO: MITEK
SYSTEMS, INC.
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1.
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The
undersigned hereby elects to purchase ________ Warrant Shares of the
Company pursuant to the terms of the attached Warrant, and tenders
herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any. If said number of Warrant Shares shall
not be all the Warrant Shares purchasable under the attached Warrant, a
new Warrant is to be issued in the name of the undersigned for the balance
remaining of the shares purchasable thereunder rounded up to the next
higher whole number of shares.
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2.
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Payment
shall take the form of (check applicable
box):
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[ ]
in lawful money of the United States; or
[ ] the
cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in Section 2.2, to exercise this Warrant with respect
to the maximum number of Warrant Shares purchasable pursuant to the cashless
exercise procedure set forth in Section 2.2.
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Date:
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Holder
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By:
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Its:
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