INVESTOR RIGHTS AGREEMENT
 
THIS INVESTOR RIGHTS AGREEMENT (this “IR Agreement”) is made and entered into as
of the _____ day of August, 2010, by and between NCR CORPORATION, a Maryland
corporation (“Investor”), and DOCUMENT CAPTURE TECHNOLOGIES, INC., a Delaware
corporation (“Company”).
 
WITNESSETH:
 
WHEREAS, Company and Investor are parties to that certain Share Purchase
Agreement, of even date herewith (the “Purchase Agreement”), which provides for,
among other things, the issuance and sale by Company to Investor of 3,861,004
shares of Company’s common stock, par value $0.001 per share (the “Shares”) for
an aggregate purchase price of $4,000,000; and
 
WHEREAS, in order to induce Company to enter into the Purchase Agreement and to
induce Investor to invest funds in Company pursuant to the Purchase Agreement,
Company has agreed to provide Investor with, among other things, certain rights
to register the Shares and other shares of common stock of Company issuable to
Investor, to receive certain information from Company, and to acquire up to an
additional $4,000,000 of common stock of Company under certain circumstances;
 
NOW, THEREFORE, for and in consideration of the mutual covenants, agreements and
warranties herein contained, the parties hereby agree as follows:
 
ARTICLE 1
 
CERTAIN DEFINITIONS
 
For purposes of this IR Agreement, the following terms shall have the meanings
specified below:
 
“Additional Shares of Common Stock” means all shares of Common Stock issued by
Company, or deemed issued as provided in Section 4.5(f) and Section 4.7(b),
whether or not subsequently reacquired or retired by Company, other
than:  (a) any shares of Common Stock (or options, warrants or rights therefor)
granted or issued hereafter to employees, officers, directors, contractors,
consultants or advisers to, Company or any subsidiary pursuant to incentive
agreements, stock purchase or stock option plans, stock bonuses or awards,
warrants, contracts or other arrangements that are approved by the Company board
of directors; (b) any shares of Common Stock (or options, warrants or rights
therefor) issued or issuable to parties that are providing Company with
equipment leases, real property leases, loans, credit lines or similar
transactions, under arrangements, in each case, approved by the Company board of
directors; (c) shares of Common Stock issued pursuant to the acquisition of
another corporation or entity by Company pursuant to a consolidation, merger,
purchase of all or substantially all of the assets, or other reorganization in
which Company acquires, in a single transaction or series of related
transactions, all or substantially all of the assets of such other corporation
or entity or more than 50% of the voting power of such other corporation or
entity or more than 50% of the equity ownership of such other entity; provided
that such transaction or series of transactions has been approved by the Company
board of directors; and provided, further, that such other corporation or entity
is not an Affiliate of Company or “controlled” (as such term is used in the
definition of “Affiliate” herein) directly or indirectly by one or more
officers, directors or employees of Company; (d) shares of Common Stock issuable
upon exercise of any options, warrants or rights to purchase any securities of
Company outstanding as of the date hereof; or (e) shares of Common Stock (or
options, warrants or rights therefor) issued by reason of a dividend, stock
split, split-up or other distribution on shares of Common Stock that is covered
by subsections (a) through (d) of Section 4.5.

 
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“Affiliate” means, as to any Person, (a) any subsidiary of such Person, and
(b) any other Person which, directly or indirectly, controls, is controlled by,
or is under common control with, such Person and includes, in the case of a
Person other than an individual, each officer, director, general partner or
member of such Person, and each Person who is the beneficial owner of 5% or more
of such Person’s outstanding stock having ordinary voting power of such
Person.  For the purposes of this definition, “control” means the possession of
the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.
 
“Aggregate Consideration Received” by Company for any issue or sale (or deemed
issue or sale) of securities shall:  (a) to the extent it consists of cash, be
computed at the gross amount of cash received by Company before deduction of any
underwriting or similar commissions, compensation or concessions paid or allowed
by Company in connection with such issue or sale and without deduction of any
expenses payable by Company; (b) to the extent it consists of property other
than cash, be computed at the fair value of that property as determined in good
faith by the Company board of directors; and (c) if Additional Shares of Common
Stock, Convertible Securities (as defined herein) or Rights or Options (as
defined herein) to purchase either Additional Shares of Common Stock or
Convertible Securities are issued or sold together with other stock or
securities or other assets of Company for a consideration which covers both, be
computed as the portion of the consideration so received that may be reasonably
determined in good faith by the Company board of directors to be allocable to
such Additional Shares of Common Stock, Convertible Securities or Rights or
Options.
 
“Business Day” means any day other than a weekend day or any other day on which
commercial banks in the State of New York are authorized or required to close.
 
“Change in Control” means:  (a) the acquisition (other than from Company) by any
Person of beneficial ownership of 50% or more of the combined voting power of
Company’s then-outstanding securities; (b) a merger or consolidation involving
Company if the stockholders of Company, immediately before such merger or
consolidation do not, as a result of such merger or consolidation, own, directly
or indirectly, more than 50% of the combined voting power of the
then-outstanding voting securities of the corporation resulting from such merger
or consolidation in substantially the same proportion as their ownership of the
combined voting power of the voting securities of Company outstanding
immediately before such merger or consolidation; or (c) a complete liquidation
or dissolution of Company or the sale or other disposition of all or
substantially all of the assets of Company.
 
“Common Stock” means the common stock, par value $0.001 per share, of Company.
 
“Convertible Securities” shall mean stock, instruments of indebtedness, or other
securities convertible into or exchangeable for shares of Common Stock.
 
“Damages” means any loss, damage, or liability (joint or several) to which a
party hereto may become subject under the Securities Act, the Exchange Act, or
other federal or state law, insofar as such loss, damage, or liability (or any
action in respect thereof) arises out of or is based upon:  (a) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement of Company, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, other
than a statement that arises out of or is based upon written information
furnished by or on behalf of Investor; (b) an omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading; or (c) any violation or alleged
violation by the indemnifying party (or any of its agents or Affiliates) of the
Securities Act, the Exchange Act, any state securities law, or any rule or
regulation promulgated under the Securities Act, the Exchange Act, or any state
securities law.

 
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“Effective Price” of Additional Shares of Common Stock shall mean the quotient
determined by dividing the total number of Additional Shares of Common Stock
issued or sold, or deemed to have been issued or sold, by Company in connection
with such issuance, into the Aggregate Consideration Received, or deemed to have
been received, by Company as provided herein, for the issue of such Additional
Shares of Common Stock.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
 
“Excluded Registration” means a registration relating to:  (a) the sale of
securities to employees of Company or a subsidiary of Company pursuant to a
stock option, stock purchase, or similar plan; or (b) an SEC Rule 145
transaction.
 
“Form S-1” means such form under the Securities Act as in effect on the date
hereof or any successor registration form under the Securities Act subsequently
adopted by the SEC.
 
“Form S-3” means such form under the Securities Act as in effect on the date
hereof or any registration form under the Securities Act subsequently adopted by
the SEC that permits incorporation of substantial information by reference to
other documents filed by the Company with the SEC.
 
“Investor Designee” means the member of Company’s board of directors designated
by Investor pursuant to the terms of the Voting Agreement.
 
“Person” means any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust, or
unincorporated association, or any governmental authority, officer, department,
commission, board, bureau or instrumentality thereof.
 
“Registrable Securities” means (a) the Shares and (b) the Common Stock issuable
or issued upon exercise of the Option; excluding in all cases, however, any
Registrable Securities sold by a Person in a transaction in which the applicable
rights under this IR Agreement are not assigned pursuant to Section 6.1, and
excluding for purposes of Article 2 any shares for which registration rights
have terminated pursuant to Section 2.8 of this IR Agreement.
 
“Rights or Options” means warrants, options or other rights to purchase or
acquire shares of Common Stock or Convertible Securities, other than:  (a)
warrants, options or other rights granted or issued hereafter to employees,
officers, directors, contractors, consultants or advisers to, Company or any
Company subsidiary pursuant to incentive agreements, stock purchase or stock
option plans, contracts or other arrangements that are approved by the Company
board of directors; or (b) warrants, options or other rights issued or issuable
to parties that are providing Company with equipment leases, real property
leases, loans, credit lines or similar transactions, under arrangements, in each
case, approved by the Company board of directors.
 
“SEC” means the United States Securities and Exchange Commission.
 
“SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.
 
“SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 
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“Selling Expenses” means all underwriting discounts, selling commissions, and
stock transfer taxes applicable to the sale of Registrable Securities, and fees
and disbursements of counsel for Investor.
 
“Trading Day” means any day on which the Common Sock is traded for any period on
Nasdaq, or on the principal securities exchange or other securities market on
which the Common Stock is then being traded.
 
“Transaction Documents” means the Purchase Agreement, this IR Agreement and any
and all agreements, documents and instruments contemplated hereby or thereby.
 
ARTICLE 2
 
REGISTRATION RIGHTS
 
2.1         Demand Registration.
 
(a)         If at any time after the date of this IR Agreement Company receives
a request from Investor that Company file a Form S-1 registration statement with
respect to at least 500,000 shares of the Registrable Securities (subject to
adjustment for any stock split, stock dividend, recapitalization,
reorganization, or the like), then the Company shall, as soon as practicable,
and in any event within 60 days after the date such request is given by
Investor, file a Form S-1 registration statement under the Securities Act
covering all Registrable Securities that Investor requested to be registered,
subject to the limitations of Section 2.1(c) and Section 2.1(d).
 
(b)         If at any time when it is eligible to use a Form S-3 registration
statement, Company receives a request from Investor that Company file a Form S-3
registration statement with respect to outstanding Registrable Securities of
Investor, then Company shall, as soon as practicable, and in any event within 30
days after the date such request is given by Investor, file a Form S-3
registration statement under the Securities Act covering all Registrable
Securities requested to be included in such registration by Investor, subject to
the limitations of Section 2.1(c) and Section 2.1(d).
 
(c)         If, pursuant to Section 2.1(a) or Section 2.1(b), Investor intends
to distribute the Registrable Securities covered by its request by means of an
underwriting, it shall so advise Company as a part of its request for
registration.  The underwriter(s) will be selected by Investor, subject only to
the reasonable approval of Company.  Investor shall, together with Company as
provided in Section 2.3(e), enter into an underwriting agreement in customary
form with the underwriter(s) selected for such underwriting.  Notwithstanding
any other provision of this Section 2.1(c), if the managing underwriter(s)
advise(s) Investor in writing that marketing factors require a limitation on the
number of shares to be underwritten, then the number of Registrable Securities
that may be included in the underwriting shall be so reduced; provided, however,
that the number of Registrable Securities held by Investor to be included in
such underwriting shall not be reduced unless all other securities are first
entirely excluded from the underwriting.
 
(d)         Notwithstanding the obligations set forth in Section 2.1(a) and
Section 2.1(b), if Company furnishes to Investor a certificate signed by
Company’s chief executive officer stating that in the good faith judgment of
Company’s board of directors it would be materially detrimental to Company and
its stockholders for such registration statement to either become effective or
remain effective for as long as such registration statement otherwise would be
required to remain effective, because such action would (i) materially interfere
with a significant acquisition, corporate reorganization, or other similar
transaction involving Company, (ii) require premature disclosure of material
information that Company has a bona fide business purpose for preserving as
confidential, or (iii) render Company unable to comply with requirements under
the Securities Act or Exchange Act, then Company shall have the right to defer
taking action with respect to such filing for a period of not more than 90 days
after the request of Investor is given; provided, however, that Company may not
invoke this right more than once in any 12-month period; and, provided further,
that Company shall not register any securities for its own account or that of
any other stockholder during such 90-day period other than pursuant to an
Excluded Registration.

 
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2.2         Company Registration.
 
(a)         If Company proposes to register (including, for this purpose, a
registration effected by Company for stockholders other than Investor) any of
its securities under the Securities Act in connection with the public offering
of such securities solely for cash (other than in an Excluded Registration),
Company shall, at such time, promptly give Investor notice of such
registration.  Upon the request of Investor given within 20 days after such
notice is given by Company, Company shall, subject to the provisions of
Section 2.2(b), cause to be registered all of the Registrable Securities that
Investor has requested to be included in such registration.  Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 2.2(a) before the effective date of such registration, whether or not
Investor has elected to include Registrable Securities in such
registration.  The expenses (other than Selling Expenses) of such withdrawn
registration shall be borne by Company in accordance with Section 2.5.
 
(b)         In connection with any offering involving an underwriting of shares
of the Company’s capital stock pursuant to Section 2.2(a), Company shall not be
required to include any of Investor’s Registrable Securities in such
underwriting unless Investor accepts the terms of the underwriting as agreed
upon between Company and its underwriters, and then only in such quantity as the
underwriters in their sole discretion determine will not jeopardize the success
of the offering by Company.  If the total number of Registrable Securities to be
included in such offering exceeds the number of securities to be sold (other
than by Company) that the underwriters in their reasonable discretion determine
is compatible with the success of the offering, then Company shall be required
to include in the offering only that number of Registrable Securities which the
underwriters and Company in their sole discretion determine will not jeopardize
the success of the offering; provided, however, that in no event shall the
number of Registrable Securities included in the offering be reduced unless all
other securities (other than securities to be sold by Company) are first
entirely excluded from the offering.
 
2.3         Obligations of Company.  Whenever required under this Article 2 to
effect the registration of any Registrable Securities, Company shall, as
expeditiously as reasonably possible:
 
(a)         prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its commercially reasonable efforts to
cause such registration statement to become effective and, upon the request of
Investor, keep such registration statement effective for a period of up to 120
days or, if earlier, until the distribution contemplated in the registration
statement has been completed; provided, however, that (i) such 120-day period
shall be extended for a period of time equal to the period Investor refrains, at
the request of an underwriter of Common Stock (or other securities) of Company,
from selling any securities included in such registration, and (ii) in the case
of any registration of Registrable Securities on Form S-3 that are intended to
be offered on a continuous or delayed basis, subject to compliance with
applicable SEC rules, such 120-day period shall be extended for up to an
additional 60 days, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold;
 
(b)         prepare and file with the SEC such amendments and supplements to
such registration statement, and the prospectus used in connection with such
registration statement, as may be necessary to comply with the Securities Act in
order to enable the disposition of all securities covered by such registration
statement;

 
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(c)         furnish to Investor such numbers of copies of a prospectus,
including a preliminary prospectus, as required by the Securities Act, and such
other documents as Investor may reasonably request in order to facilitate its
disposition of its Registrable Securities;
 
(d)         use its commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue-Sky laws of such jurisdictions as shall be reasonably requested by
Investor; provided that Company shall not be required to qualify to do business
or to file a general consent to service of process in any such states or
jurisdictions unless Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act;
 
(e)         in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the underwriter(s) of such offering;
 
(f)         use its commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be listed on a national
securities exchange or trading system and each securities exchange and trading
system (if any) on which similar securities issued by Company are then listed;
 
(g)         provide a transfer agent and registrar for all Registrable
Securities registered pursuant to this IR Agreement and provide a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such registration;
 
(h)         promptly make available for inspection by Investor, any
underwriter(s) participating in any disposition pursuant to such registration
statement, and any attorney or accountant or other agent retained by any such
underwriter or selected by Investor, all financial and other records, pertinent
corporate documents, and properties of Company, and cause Company’s officers,
directors, employees, and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant, or
agent, in each case, as necessary or advisable to verify the accuracy of the
information in such registration statement and to conduct appropriate due
diligence in connection therewith;
 
(i)         notify Investor, promptly after Company receives notice thereof, of
the time when such registration statement has been declared effective or a
supplement to any prospectus forming a part of such registration statement has
been filed; and
 
(j)         after such registration statement becomes effective, notify Investor
of any request by the SEC that Company amend or supplement, or any determination
or decision by Company to amend or supplement, such registration statement or
prospectus.
 
2.4         Agreement to Furnish Information.  It shall be a condition precedent
to the obligations of Company to take any action pursuant to this Article 2 with
respect to the Registrable Securities of Investor that Investor shall furnish to
Company such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as is reasonably
required to effect the registration of such Registrable Securities.

 
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2.5         Expenses of Registration.
 
(a)         All expenses (other than Selling Expenses) incurred in connection
with registrations, filings, or qualifications pursuant to Article 2, including
all registration, filing, and qualification fees, all printers’ and accounting
fees, all fees and disbursements of counsel for Company, and the reasonable fees
and disbursements of one counsel for Investor (such fees and disbursements of
counsel for Investor being limited to $20,000 in respect of any one
registration), shall be borne and paid by Company; provided, however, that
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 2.1(a) or Section 2.1(b) if the
registration request is subsequently withdrawn at the request of Investor (in
which case Investor shall bear such expenses); provided further that if, at the
time of such withdrawal, Investor shall have learned of a material adverse
change in the condition, business, or prospects of Company from that known to
Investor at the time of its request and has withdrawn the request with
reasonable promptness after learning of such information then Investor shall not
be required to pay any of such expenses.
 
(b)         All Selling Expenses relating to Registrable Securities registered
pursuant to this Article 2 shall be borne and paid by Investor.
 
2.6         Indemnification and Contribution.  If any of Investor’s Registrable
Securities are included in a registration statement under this Article 2:
 
(a)         To the extent permitted by law, Company will indemnify and hold
harmless Investor, the officers, directors, and shareholders of Investor, legal
counsel and accountants for Investor, any underwriter (as defined in the
Securities Act) for Investor, and each Person, if any, who controls Investor or
such underwriter within the meaning of the Securities Act or the Exchange Act,
against any Damages, and Company will pay to Investor and each such underwriter,
controlling Person, or other aforementioned Person any legal or other expenses
reasonably incurred thereby in connection with investigating or defending any
claim or proceeding from which Damages may result, as such expenses are
incurred; provided, however, that the indemnity agreement contained in this
Section 2.6(a) shall not apply to amounts paid in settlement of any such claim
or proceeding if such settlement is effected without the consent of Company,
which consent shall not be unreasonably withheld, nor shall Company be liable
for any Damages to the extent that they arise out of or are based upon actions
or omissions made in reliance upon and in conformity with written information
furnished by or on behalf of Investor or any such underwriter, controlling
Person, or other aforementioned Person expressly for use in connection with such
registration.
 
(b)         To the extent permitted by law, Investor will indemnify and hold
harmless Company, and each of its directors, each of its officers who has signed
the registration statement, each Person (if any), who controls Company within
the meaning of the Securities Act, legal counsel and accountants for Company,
any underwriter (as defined in the Securities Act), any other shareholder of
Company selling securities in such registration statement, and any controlling
Person of any such underwriter or other shareholder, against any Damages, in
each case only to the extent that such Damages arise out of or are based upon
actions or omissions made in reliance upon and in conformity with written
information furnished by or on behalf of Investor expressly for use in
connection with such registration; and Investor will pay to Company and each
other aforementioned Person any legal or other expenses reasonably incurred
thereby in connection with investigating or defending any claim or proceeding
from which Damages may result, as such expenses are incurred; provided, however,
that the indemnity agreement contained in this Section 2.6(b) shall not apply to
amounts paid in settlement of any such claim or proceeding if such settlement is
effected without the consent of Investor, which consent shall not be
unreasonably withheld; and provided, further, that in no event shall the
aggregate amounts payable by Investor by way of indemnity or contribution under
Section 2.6(b) and Section 2.6(d) exceed the proceeds from the offering received
by Investor (net of any Selling Expenses paid by Investor).

 
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(c)         Promptly after receipt by an indemnified party under this
Section 2.6 of notice of the commencement of any action (including any
governmental action) for which a party may be entitled to indemnification
hereunder, such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.6, give the
indemnifying party notice of the commencement thereof; provided, however, that
the failure to so notify the indemnifying party shall not relieve the
indemnifying party from any of its obligations under this Section 2.6 except to
the extent the indemnifying party is materially prejudiced by such failure.  The
indemnifying party shall have the right to participate in such action and, to
the extent the indemnifying party so desires, participate jointly with any other
indemnifying party to which notice has been given, and to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party (together with all other indemnified parties that may
be represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the reasonable fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such action.
 
(d)         To provide for just and equitable contribution to joint liability
under the Securities Act in any case in which either (i) any party otherwise
entitled to indemnification hereunder makes a claim for indemnification pursuant
to this Section 2.6 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case, notwithstanding the fact that
this Section 2.6 provides for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of any party hereto for
which indemnification is provided under this Section 2.6, then, and in each such
case, such parties will contribute to the aggregate losses, claims, damages,
liabilities, or expenses to which they may be subject (after contribution from
others) in such proportion as is appropriate to reflect the relative fault of
each of the indemnifying party and the indemnified party in connection with the
statements, omissions, or other actions that resulted in such loss, claim,
damage, liability, or expense, as well as to reflect any other relevant
equitable considerations.  In no event shall Investor’s liability pursuant to
this Section 2.6(d), when combined with the amounts paid or payable by Investor
pursuant to Section 2.6(b), exceed the proceeds from the offering received by
Investor (net of any Selling Expenses paid by Investor).
 
(e)         Unless otherwise superseded by an underwriting agreement entered
into in connection with the underwritten public offering, the obligations of
Company and Investor under this Section 2.6 shall survive the completion of any
offering of Registrable Securities in a registration under this Section 2.6, and
otherwise shall survive the termination of this IR Agreement.
 
2.7         Limitations on Subsequent Registration Rights.  From and after the
date of this IR Agreement, Company shall not, without the prior written consent
of Investor, enter into any agreement with any holder or prospective holder of
any securities of Company that would (a) allow such holder or prospective holder
to include such securities in any registration unless, under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that the inclusion of such securities will
not reduce the number of the Registrable Securities of Investor that are
included, or (b) allow such holder or prospective holder to initiate a demand
for registration of any securities held by such holder or prospective holder.

 
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2.8         Termination of Registration Rights.  The right of Investor to
request registration or inclusion of Registrable Securities in any registration
pursuant to Section 2.1 or Section 2.2 shall terminate upon the earliest to
occur of:
 
(a)         the time when all of Investor’s Registrable Securities could be sold
under SEC Rule 144 without the requirement for Company to be in compliance with
the current public information required under SEC Rule 144 as to such
Registrable Securities and without volume or manner-of-sale restrictions; and
 
(b)         the fifth anniversary of the date of this IR Agreement.
 
ARTICLE 3
 
INFORMATION RIGHTS
 
3.1         Delivery of Financial Information.  Company shall deliver the
following financial information to Investor:
 
(a)         as soon as practicable, but in any event within 90 days after the
end of each fiscal year of Company, (i) a balance sheet as of the end of such
year, (ii) statements of income and of cash flows for such year, and (iii) a
statement of stockholders’ equity as of the end of such year, all such financial
statements audited and certified by independent public accountants selected by
Company;
 
(b)         as soon as practicable, but in any event within 45 days after the
end of each of the first three quarters of each fiscal year of Company,
unaudited statements of income and of cash flows for such fiscal quarter, and an
unaudited balance sheet and a statement of stockholders’ equity as of the end of
such fiscal quarter, all prepared in accordance with GAAP (except that such
financial statements may (i) be subject to normal year-end audit adjustments and
(ii) not contain all notes thereto that may be required in accordance with
GAAP);
 
(c)         if requested by Investor, as soon as practicable, but in any event
within 30 days of the end of each month, an unaudited income statement and
statement of cash flows for such month, and an unaudited balance sheet and
statement of stockholders’ equity as of the end of such month, all prepared in
accordance with GAAP (except that such financial statements may (i) be subject
to normal year-end audit adjustments and (ii) not contain all notes thereto that
may be required in accordance with GAAP);
 
(d)         if requested by Investor, as soon as practicable, but in any event
30 days before the end of each fiscal year, an operating budget for the next
fiscal year (the “Budget”), approved by Company’s board of directors and
prepared on a monthly basis, including a forecast of revenues, expenses and cash
position on a month-to-month basis for the next fiscal year; and
 
(e)         such other information relating to the financial condition of
Company as shall be determined by the board in its reasonable discretion.
 
The financial information delivered pursuant to this Section 3.1 shall be the
consolidated and consolidating financial statements of Company and all of its
consolidated subsidiaries.  Company will be deemed to have satisfied its
obligations under clauses (a) and (b) above if such financial information is
included in a report that Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act in respect of the applicable period, and
Company files such report with the SEC through the SEC’s EDGAR database no later
than the time such report is required to be filed with the SEC pursuant to the
Exchange Act (taking into account any applicable grace periods provided
thereunder).

 
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Notwithstanding anything else in this Section 3.1 to the contrary, Company may
cease providing the information set forth in this Section 3.1 during the period
starting with the date 30 days before Company’s good-faith estimate of the date
of filing of a registration statement if it reasonably concludes it must do so
to comply with SEC rules applicable to such registration statement and related
offering; provided that Company’s covenants under this Section 3.1 shall be
reinstated at such time as Company is no longer actively employing its
commercially reasonable efforts to cause such registration statement to become
effective.
 
3.2         Notice of Certain Transactions.  Subject to the fiduciary duties of
Company’s board of directors, Company shall promptly (but in any event, within
72 hours) notify Investor in writing in the event that Company receives any
proposal or offer from any Person or group of Persons that, in the good faith
judgment of the Company’s board of directors is “bona fide,” and that provides
for, directly or indirectly, in a single transaction or a series of related
transactions, (a) a transaction contemplated by subpart (b) or (c) of the
definition of “Change in Control,” or (b) the acquisition of beneficial
ownership of 25% or more of (i) the combined voting power of Company’s
then-outstanding securities or (ii) the value (as determined by Company’s board
of directors) of the consolidated assets of Company and its
Subsidiaries.  Company’s notification to Investor shall include the identity of
such Person or group of Persons and the material details of the proposed
transaction.  Company shall thereafter keep Investor reasonably informed (orally
and in writing) of the status of any such proposed transaction, including the
material terms and conditions thereof and of any material modification thereto.
 
3.3         Right of Inspection.  Company shall permit Investor, at Investor’s
expense and on no fewer than five days’ prior written notice to Company, to
visit and inspect Company’s properties, examine its books of account and
records, and discuss Company’s affairs, finances, and accounts with its
officers, during normal business hours of Company as may be reasonably requested
by Investor; provided, however, that Company shall not be obligated pursuant to
this Section 3.3 to provide access to any information that it reasonably and in
good faith considers to be a trade secret or confidential information (unless
covered by an enforceable confidentiality agreement, in form acceptable to
Company) or the disclosure of which would adversely affect the attorney-client
privilege between Company and its counsel; and provided, further, that Company
may conduct any such visitation, inspection, examination and discussion no more
than once per calendar quarter.
 
3.4         Termination of Information Rights.  The covenants set forth in
Section 3.1, Section 3.2, and Section 3.3 shall terminate and be of no further
force or effect upon the earlier to occur of:  (a) the closing of a Change in
Control of Company; and (b) the date that Investor no longer holds at least 5%
of the Shares acquired by Investor on the date hereof.
 
ARTICLE 4
 
OPTION TO PURCHASE ADDITIONAL SHARES
 
4.1         Grant of Option; Option Period.  Subject to the terms and conditions
set forth in this Article 4 and elsewhere in the Transaction Documents, Investor
is hereby granted by Company the irrevocable option (the “Option”), exercisable
during the Option Period (as defined below), to purchase, in the sole discretion
of Investor, up to an additional $4,000,000 of Common Stock (the
“Aggregate Option Amount”), at the then-current Exercise Price (as defined
below).  The Option may be exercised at any time or from time to time by
Investor during the period that begins on the date hereof and ends at 5:00 p.m.
(Eastern Time) on the second anniversary of such date (such period, the
“Option Period”).

 
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4.2         Manner of Exercise.  During the Option Period, the Option may be
exercised, in full or in part, upon surrender of the Notice of Exercise attached
hereto as Exhibit A (the “Notice of Exercise”), duly completed and executed,
together with the full Exercise Price for each share of Common Stock as to which
the Option is exercised (in accordance with Section 4.3 below), at the office of
Company (Document Capture Technologies, Inc., 1798 Technology Drive, Suite 178,
San Jose, California 95110; Fax: (408) 436-9888), or at such other office or
agency as Company may designate in writing, by overnight mail.  The
“Date of Exercise” of the Option shall be defined as the date that the Notice of
Exercise attached hereto as Exhibit A, completed and executed, is sent by
facsimile to Company, provided that the original Notice of Exercise is received
by Company and the Exercise Price is satisfied, each as soon as practicable and
in any event within three Business Days thereafter.  Alternatively, the Date of
Exercise shall be defined as the date that both the original Notice of Exercise
and the full Exercise Price for the shares of Common Stock being acquired in
connection with such exercise are received by Company, if Investor has not sent
advance notice by facsimile.  Upon delivery of the duly completed and executed
Notice of Exercise to Company by facsimile or otherwise, and receipt by Company
of the full Exercise Price for the shares of Common Stock being acquired in
connection with such exercise, Investor shall be deemed for all corporate
purposes to have become the holder of record of the shares of Common Stock with
respect to which the Option has been exercised, irrespective of the date such
shares of Common Stock are credited to Investor’s Depository Trust Company
account or the date of delivery of the certificates evidencing such shares, as
the case may be.
 
4.3         Payment of Exercise Price.  Payment of the Exercise Price may be
made by Holder in cash, by bank or cashier’s check or by wire transfer.
 
4.4         Delivery of Common Stock Upon Exercise.  Within three Business Days
after any Date of Exercise (the “Delivery Period”), Company shall issue and
deliver (or cause its transfer agent so to issue and deliver) in accordance with
the terms hereof to or upon the order of Investor that number of shares of
Common Stock (“Exercise Shares”) for the portion of this Option that has been
exercised thereby.  Upon the exercise of this Option or any part thereof,
Company shall, at its own cost and expense, take all necessary action, including
obtaining and delivering an opinion of counsel to ensure that the transfer agent
shall issue stock certificates in the name of Investor or such other persons as
designated by Investor and in such denominations as are specified in the Notice
of Exercise representing the number of shares of Common Stock issuable upon such
exercise.
 
4.5         Adjustments to Exercise Price.  The price per share of Common Stock
for which this Option may be exercised (the “Exercise Price”) is $1.036, subject
to adjustment as follows:
 
(a)         If Company shall, at any time or from time to time after the date
hereof, effect a subdivision of the outstanding Common Stock, the Exercise Price
in effect immediately before that subdivision shall be proportionately
decreased.  Conversely, if Company shall, at any time or from time to time after
the date hereof, combine the outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately before that
combination shall be proportionately increased.  Any adjustment pursuant to this
clause (a) shall become effective at the close of business on the date the
subdivision or combination becomes effective.
 
(b)         If Company, at any time or from time to time after the date hereof,
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, in each such event the Exercise Price that is then in
effect shall be decreased as of the time of such issuance or, in the event such
record date is fixed, as of the close of business on such record date, by
multiplying the Exercise Price then in effect by a fraction (i) the numerator of
which is the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on such
record date, and (ii) the denominator of which is the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or distribution; provided,
however, that if such record date is fixed and such dividend is not fully paid
or if such distribution is not fully made on the date fixed therefor, the
Exercise Price shall be recomputed accordingly as of the close of business on
such record date and thereafter the Exercise Price shall be adjusted pursuant to
this clause (b) to reflect the actual payment of such dividend or distribution.

 
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(c)         If at any time or from time to time after the date hereof, the
Common Stock issuable upon the exercise of the Option is changed into the same
or a different number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than a subdivision or
combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section 4.5), in
any such event Investor shall have the right thereafter to exercise the Option
into the kind and amount of stock and other securities and property receivable
upon such recapitalization, reclassification or other change by holders of the
maximum number of shares of Common Stock for which the Option could have been
exercised immediately prior to such recapitalization, reclassification or
change, all subject to further adjustment as provided herein or with respect to
such other securities or property by the terms thereof.
 
(d)         If at any time or from time to time after the date hereof, there is
a capital reorganization of the Common Stock (other than a recapitalization,
subdivision, combination, reclassification, exchange, or substitution of shares
provided for elsewhere in this Section 4.5), as a part of such capital
reorganization, provision shall be made so that Investor shall thereafter be
entitled to receive upon exercise of the Option the number of shares of stock or
other securities or property of Company to which a holder of the number of
shares of Common Stock deliverable upon exercise would have been entitled on
such capital reorganization, subject to adjustment in respect of such stock or
securities by the terms thereof.  In any such case, appropriate adjustment shall
be made in the application of the provisions of this Section 4.5 with respect to
the rights of Investor after the capital reorganization to the end that the
provisions of this Section 4.5 shall be applicable after that event and be as
nearly equivalent as practicable.
 
(e)         If at any time or from time to time after the date hereof Company
issues or sells, or is deemed by the provisions of this clause (f) to have
issued or sold, Additional Shares of Common Stock, otherwise than in connection
with a stock split or combination as provided in clause (a) above, a dividend or
distribution as provided in clause (b) above, a reclassification, exchange or
substitution as provided in clause (c) above, or a reorganization, merger,
consolidation or sale of assets as provided in clause (d) above, for an
Effective Price that is less than the Exercise Price in effect immediately prior
to such issue or sale (or deemed issue or sale), then, and in each such case,
the then-existing Exercise Price shall be reduced as of the close of business on
the date of such issue or sale to a price equal to the consideration per share
received by Company for such Additional Shares of Common Stock so issued.
 
(f)         For the purpose of making any adjustment to the Exercise Price
required under this Section 4.5, if Company issues or sells any Rights or
Options or Convertible Securities and if the Effective Price of the shares of
Common Stock issuable upon exercise of such Rights or Options and/or the
conversion or exchange of Convertible Securities (computed without reference to
any additional or similar protective or antidilution clauses) is less than the
Exercise Price then in effect, then Company shall be deemed to have issued, at
the time of the issuance of such Rights, Options or Convertible Securities, that
number of Additional Shares of Common Stock that is equal to the maximum number
of shares of Common Stock issuable upon exercise or conversion of such Rights,
Options or Convertible Securities upon their issuance and to have received, as
the Aggregate Consideration Received for the issuance of such shares, an amount
equal to the total amount of the consideration, if any, received by Company for
the issuance of such Rights or Options or Convertible Securities, plus, in the
case of such Rights or Options, the minimum amounts of consideration, if any,
payable to Company upon the exercise in full of such Rights or Options, plus, in
the case of Convertible Securities, the minimum amounts of consideration, if
any, payable to Company (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) upon the conversion or
exchange thereof; provided that:

 
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(i)         if the minimum amounts of such consideration cannot be ascertained,
but are a function of antidilution or similar protective clauses, then Company
shall be deemed to have received the minimum amounts of consideration without
reference to such clauses;
 
(ii)           if the minimum amount of consideration payable to Company upon
the exercise of Rights or Options or the conversion or exchange of Convertible
Securities is reduced over time or upon the occurrence or non-occurrence of
specified events other than by reason of antidilution or similar protective
adjustments, then the Effective Price shall be recalculated using the figure to
which such minimum amount of consideration is reduced; and
 
(iii)           if the minimum amount of consideration payable to Company upon
the exercise of such Rights or Options or the conversion or exchange of
Convertible Securities is subsequently increased, then the Effective Price shall
again be recalculated using the increased minimum amount of consideration
payable to Company upon the exercise of such Rights or Options or the conversion
or exchange of such Convertible Securities.
 
(g)         No further adjustment of the Exercise Price shall be made as a
result of the actual issuance of shares of Common Stock on the exercise of any
such Rights or Options or the conversion or exchange of any such Convertible
Securities.  If any such Rights or Options or the conversion rights represented
by any such Convertible Securities shall expire without having been fully
exercised, then the Exercise Price as adjusted upon the issuance of such Rights
or Options or Convertible Securities shall be readjusted to the Exercise Price
which would have been in effect had an adjustment been made on the basis that
the only shares of Common Stock so issued were the shares of Common Stock, if
any, that were actually issued or sold on the exercise of such Rights or Options
or rights of conversion or exchange of such Convertible Securities, and such
shares of Common Stock, if any, were issued or sold for the consideration
actually received by Company upon such exercise, plus the consideration, if any,
actually received by Company for the granting of all such Rights or Options,
whether or not exercised, plus the consideration received for issuing or selling
all such Convertible Securities actually converted or exchanged, plus the
consideration, if any, actually received by Company (other than by cancellation
of liabilities or obligations evidenced by such Convertible Securities) on the
conversion or exchange of such Convertible Securities.
 
(h)         No adjustment in the Exercise Price shall be made in respect of the
issuance of Additional Shares of Common Stock unless the consideration per share
for an Additional Share of Common stock issued or deemed to be issued by Company
is less than the Exercise Price in effect immediately prior to such issue.
 
(i)         All calculations under this Section 4.5 shall be made to the nearest
1/100th of a share, as the case may be.
 
4.6         No Fractional Shares.  No fractional shares or scrip representing
fractional shares shall be issuable upon the exercise of the Option, but on
exercise of the Option, Investor may purchase only a whole number of shares of
Common Stock.  If, on exercise of the Option, Investor would be entitled to a
fractional share of Common Stock or a right to acquire a fractional share of
Common Stock, such fractional share shall be disregarded and the number of
shares of Common Stock issuable upon exercise shall be the next higher whole
number of shares.

 
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4.7         Anti-Dilution Protection.
 
(a)         If at any time or from time to time after the date hereof and prior
to the eighteen (18) month anniversary of the date hereof (such period, the
“Common Stock Anti-Dilution Period”), Company issues or sells, or is deemed to
have issued or sold pursuant to Section 4.7(b), Additional Shares of Common
Stock for an Effective Price that is less than $1.036 per share, as adjusted for
any stock splits, stock dividends, stock combinations, mergers, reorganizations
or other actions occurring after the date hereof which generally affect the
number of shares of stock of the Company outstanding, (the “Purchase Price”),
then, and in each such case, the Company shall issue additional shares of Common
Stock to the Investor without further consideration, in an amount equal to the
difference between (x) the number of Shares held, as of the time immediately
prior to such issuance or sale, or deemed issuance or sale, as the case may be,
by Investor (which, in the case of more than one issuance of shares pursuant to
this Section 4.7, may include shares of Common Stock previously received by
Investor pursuant to this Section 4.7) (the “Existing Shares”), and (y) the
number of shares of Common Stock determined in accordance with the following
formula:
 
Number of Shares = (A * B) ÷ C.
 
For purposes of the foregoing formula, the following definitions shall apply:
 

 
 
(i)         “A” shall mean the Existing Shares as defined above;

 
 
(iv)
 “B” shall mean the Purchase Price as defined above; and

 

 
 
(v)        “C” shall mean the Effective Price as defined above.

 
(b)         For purposes of this Section 4.7, if during the Common Stock
Anti-Dilution Period, Company issues or sells any Rights or Options or
Convertible Securities and if the Effective Price of the shares of Common Stock
issuable upon exercise of such Rights or Options and/or the conversion or
exchange of Convertible Securities (computed without reference to any additional
or similar protective or antidilution clauses) is less than the Purchase Price,
then Company shall be deemed to have issued, at the time of the issuance of such
Rights, Options or Convertible Securities, that number of Additional Shares of
Common Stock that is equal to the maximum number of shares of Common Stock
issuable upon exercise or conversion of such Rights, Options or Convertible
Securities upon their issuance and to have received, as the Aggregate
Consideration Received for the issuance of such shares, an amount equal to the
total amount of the consideration, if any, received by Company for the issuance
of such Rights or Options or Convertible Securities, plus, in the case of such
Rights or Options, the minimum amounts of consideration, if any, payable to
Company upon the exercise in full of such Rights or Options, plus, in the case
of Convertible Securities, the minimum amounts of consideration, if any, payable
to Company (other than by cancellation of liabilities or obligations evidenced
by such Convertible Securities) upon the conversion or exchange thereof;
provided that:
 
(i)         if the minimum amounts of such consideration cannot be ascertained,
but are a function of antidilution or similar protective clauses, then Company
shall be deemed to have received the minimum amounts of consideration without
reference to such clauses;

 
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(ii)           if the minimum amount of consideration payable to Company upon
the exercise of Rights or Options or the conversion or exchange of Convertible
Securities is reduced over time or upon the occurrence or non-occurrence of
specified events other than by reason of antidilution or similar protective
adjustments, then the Effective Price shall be recalculated using the figure to
which such minimum amount of consideration is reduced; and
 
(iii)           if the minimum amount of consideration payable to Company upon
the exercise of such Rights or Options or the conversion or exchange of
Convertible Securities is subsequently increased, then the Effective Price shall
again be recalculated using the increased minimum amount of consideration
payable to Company upon the exercise of such Rights or Options or the conversion
or exchange of such Convertible Securities.
 
(c)         No additional shares of Common Stock shall be issued pursuant to
this Section 4.7 as a result of the actual issuance of shares of Common Stock on
the exercise of any such Rights or Options or the conversion or exchange of any
such Convertible Securities.
 
(d)         Investor shall have the right to waive the receipt or issuance of
additional shares of Common Stock which would otherwise be issuable to it
pursuant to this Section 4.7.
 
4.8         No Rights as Stockholder.  Nothing in this Article 4 shall be
construed as conferring upon Investor any rights as a stockholder of Company.
 
ARTICLE 5
 
OTHER COVENANTS
 
5.1         Restrictions on Transfer.
 
(a)         The Registrable Securities may only be disposed of pursuant to an
effective registration statement under the Securities Act, to Company, to an
Affiliate, or pursuant to an available exemption from or in a transaction not
subject to the registration requirements of the Securities Act, and in
compliance with any applicable federal and state securities laws.  Until such
time as the Registrable Securities can be freely transferred in a public sale
without registration under the Securities Act, in connection with any transfer
of any such securities, other than pursuant to an effective registration
statement, to an Affiliate or to Company, an opinion of counsel will be required
to the effect that such transfer does not require registration of such
transferred securities under the Securities Act.  Any such transferee shall
agree in writing to be bound by the terms of this IR Agreement and shall have
the obligations of Investor hereunder.
 
(b)         Investor agrees to the imprinting, so long as is required by this
Section 5.1, of the following legend on any certificates representing
Registrable Securities:
 
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”).  THESE SECURITIES ARE “RESTRICTED” AND MAY NOT BE OFFERED OR
SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT, OR ELIGIBLE TO BE
OFFERED OR SOLD PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT, AND, EXCEPT WITH RESPECT TO A TRANSFER TO AN AFFILIATE
OF HOLDER OR TO COMPANY, COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL OR
OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
EXEMPTIONS ARE AVAILABLE.

 
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(c)         Certificates representing Registrable Securities shall not be
required to contain any restrictive legend:  (i) while a registration statement
covering the resale of such securities is effective under the Securities Act;
(ii) following any sale of such securities pursuant to SEC Rule 144 under the
Securities Act; (iii) if such securities are eligible for sale under SEC Rule
144 without the requirement for Company to be in compliance with the current
public information required under SEC Rule 144 as to such Registrable Securities
and without volume or manner-of-sale restrictions; or (iv) if such legend is not
required under applicable law, or, in the opinion of the Company’s counsel, in
accordance with the requirements of the Securities Act, or other interpretations
and pronouncements of the SEC.  Upon request of Investor, Company shall cause
its counsel to issue a legal opinion to Company’s transfer agent promptly to
effect the removal of such legend pursuant to the foregoing sentence.  If the
Option is exercised at a time when (x) there is an effective registration
statement covering the resale under the Securities Act of the Registrable
Securities issued in connection therewith, (y) such Registrable Securities may
be sold under SEC Rule 144 without the requirement for Company to be in
compliance with the current public information required under SEC Rule 144 as to
such Registrable Securities and without volume or manner-of-sale restriction, or
(z) such legend is not otherwise required under applicable law, then the
certificate(s) evidencing such Registrable Securities shall be issued free of
all restrictive legends.  Company agrees that at such time as such restrictive
legend is not required as provided in this Section 5.1(c), it will, as soon as
practicable following the delivery by Investor to Company’s transfer agent of
certificates representing the Registrable Securities, as the case may be,
deliver or cause to be delivered to Investor replacement certificates free from
all restrictive legends.  Unless otherwise required by law or judicial order,
Company shall not make any notation on its records or give any instructions to
its transfer agent that enlarge the restrictions on transfer set forth in this
IR Agreement.
 
5.2         Listing of Registrable Securities.  If, after the date hereof,
Company shall list its Common Stock on any of the New York Stock Exchange, NYSE
AMEX, or the NASDAQ Stock Market (each, a “Subsequent Market”), then Company
shall include in such listing for the benefit of Investor all Registrable
Securities.  If the number of Registrable Securities issuable upon exercise in
full of the Option exceed the number of Registrable Securities previously listed
on account thereof with a Subsequent Market, then Company shall take the
necessary actions to immediately list a number of Registrable Securities equal
to such difference.
 
5.3         Reports.  With a view to making available to Investor the benefits
of SEC Rule 144 and any other rule or regulation of the SEC that may at any time
permit Investor to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, Company shall:
 
(a)         make and keep available adequate current public information, as
those terms are understood and defined in SEC Rule 144, at all times after the
date hereof;
 
(b)         timely file (or obtain extensions in respect thereof and file within
the applicable grace period) with the SEC all reports and other documents
required of Company under the Securities Act and the Exchange Act (including
Section 13(a) and 15(d) thereof); and
 
(c)         furnish to Investor, so long as Investor owns any Registrable
Securities, forthwith upon request:  (i) to the extent accurate, a written
statement by Company that it has complied with the reporting requirements of SEC
Rule 144, the Securities Act, and the Exchange Act, or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any time
after the Company so qualifies); (ii) a copy of the most recent annual or
quarterly report of Company and such other reports and documents so filed by
Company; and (iii) such other information as may be reasonably requested in
availing Investor of any rule or regulation of the SEC that permits the selling
of any such securities without registration (including causing its attorneys to
render and deliver any legal opinion required in order to permit Investor to
receive Registrable Securities free of all restrictive legends and to
subsequently sell Registrable Securities under SEC Rule 144 upon receipt of a
notice of an intention to sell or other form of notice having a similar effect)
or pursuant to Form S-3 (at any time after Company so qualifies to use such
form).

 
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Without limiting the generality of clause (a) above, if at any time Company is
not required to file reports pursuant to Section 13(a) or 15(d) the Exchange
Act, it will, at its expense, prepare and furnish to Investor and make publicly
available in accordance with SEC Rule 144 such information as is required for
Investor to sell Registrable Securities under SEC Rule 144.
 
5.4         Directors’ Liability; Indemnification; Insurance.
 
(a)         Company’s certificate of incorporation and bylaws shall provide
(i) for elimination of the liability of directors to the maximum extent
permitted by law and (ii) for indemnification of directors for acts on behalf of
Company to the maximum extent permitted by law.  In addition, Company shall
enter into and use its best efforts to at all times maintain indemnification
agreements with each of its directors to indemnify such directors to the maximum
extent permissible under applicable law.
 
(b)         If Company or any of its successors or assignees consolidates with
or merges into any other Person and is not the continuing or surviving
corporation or entity of such consolidation or merger, then to the extent
necessary, proper provision shall be made so that the successors and assignees
of Company assume the obligations of Company with respect to indemnification of
members of the board of directors as in effect immediately before such
transaction, whether such obligations are contained in Company’s bylaws, its
certificate of incorporation, or elsewhere, as the case may be.
 
(c)         Company has, from financially sound and reputable insurers,
Directors and Officers liability insurance in an amount and on terms and
conditions satisfactory to the board of directors with total limits of $5
million of “Side A” and “Side B” coverage, and will use reasonable best efforts
to cause such insurance policy to be maintained at all times during the term of
that certain Voting Agreement, of even date herewith, among Company, Investor
and the stockholders of Company whose names are set forth on the signature pages
thereto (the “Voting Agreement”).  In addition, the policy shall not be
cancelable by Company without prior approval by the board of directors,
including the Investor Designee.
 
5.5         Termination of Covenants.  The covenants set forth in this
Article 5, except for Section 5.1 and Section 5.4(b), shall terminate and be of
no further force or effect upon the earlier to occur of:  (a) the closing of a
Change in Control of Company; and (b) the date that Investor no longer owns,
beneficially or of record, any Registrable Securities.
 
5.6         Confidential Treatment.  In the event that Company is required by
law or stock market or trading facility regulation to file with the SEC as an
exhibit to any filing under the Exchange Act or the Securities Act all or any
portion of that certain Strategic Supplier Master Procurement Agreement between
Company and Investor (including, without limitation, any portion of the
amendment thereto of even date herewith), or any other commercial agreement
between Company and Investor, Company shall use its best efforts to seek
confidential treatment under applicable securities laws of such portions of such
agreement(s) as may reasonably be available, and shall consult with Investor in
connection therewith.

 
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ARTICLE 6
 
MISCELLANEOUS
 
6.1         Successors and Assigns.  The rights under this IR Agreement may be
assigned (but only with all related obligations) by Investor to a transferee in
connection with a transfer of the Registrable Securities that is permissible
under the terms of the Transaction Documents; provided, however, that
(a) Company is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee and, if applicable,
the Registrable Securities with respect to which such rights are being
transferred; and (b) such transferee agrees in a written instrument delivered to
Company to be bound by and subject to the terms and conditions of this
IR Agreement.  The terms and conditions of this IR Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties.  Nothing in this IR Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this IR Agreement, except as expressly provided in this
IR Agreement.
 
6.2         Governing Law.  All questions concerning the construction, validity,
enforcement and interpretation of this IR Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof.
 
6.3         Execution.  This IR Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that all
parties need not sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
 
6.4         Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section at or prior to 5:00 p.m. (Eastern
Time) on a Business Day, (b) the Business Day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this IR Agreement later than 5:00 p.m. (Eastern
Time) on any date and earlier than 11:59 p.m. (Eastern Time) on such date,
(c) the Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given.  The address for such notices and
communications shall be as follows:
 
If to Investor, to:
 
NCR Corporation
3097 Satellite Boulevard
Duluth, GA 30096
Attn:  General Counsel
Fax:  (404) 487-8949

 
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with a copy (if such notice is being provided pursuant to Section 3.2 hereof)
to:
 
NCR Corporation
7 World Trade Center
250 Greenwich Street
New York, NY 10007
Attn:  Chief Financial Officer
Fax:  (513) 719-6990
 
If to Company, to:
 
Document Capture Technologies, Inc.
1798 Technology Drive
Suite 178
San Jose, California 95110
Attn:  Chief Executive Officer
Fax:  (408) 436-9888
 
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
 
6.5         Amendments; Waivers.  No provision of this IR Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by Company and Investor or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought.  No waiver of any default
with respect to any provision, condition or requirement of this IR Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
 
6.6         Delays or Omissions.  No delay or omission to exercise any right,
power or remedy accruing to any party under this IR Agreement, upon any breach
or default of any other party under this IR Agreement, shall impair any such
right, power or remedy of such non-breaching or non-defaulting party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring.
 
6.7         Severability.  Any provision of this IR Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this IR Agreement, and any such
prohibition or unenforceability in any jurisdiction will not invalidate or
render unenforceable such provision in any other jurisdiction.  To the extent
permitted by law, each party hereto hereby waives any provision of law that
renders any such provision prohibited or unenforceable in any respect.
 
6.8         Entire Agreement.  This IR Agreement and the other Transaction
Documents, together with the Exhibits and Schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.
 
6.9         Specific Performance.  In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages,
Investor and Company will be entitled to specific performance of each other’s
obligations under this IR Agreement.  The parties agree that monetary damages
may not be adequate compensation for any loss incurred by reason of any breach
of obligations described in the foregoing sentence and hereby agree to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

 
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6.10           Remedies Cumulative.  No right, remedy, or election given by any
term of this IR Agreement shall be deemed exclusive, but each shall be
cumulative with all other rights, remedies, and elections available at law or in
equity.
 
6.11           Further Assurances.  At any time or from time to time after the
date hereof, the parties agree to cooperate with each other, and at the request
of any other party, to execute and deliver any further instruments or documents
and to take all such further action as the other party may reasonably request in
order to evidence or effectuate the consummation of the transactions
contemplated hereby and to otherwise carry out the intent of the parties
hereunder.
 
6.12           Costs of Enforcement.  If any party to this IR Agreement seeks to
enforce its rights under this IR Agreement by legal proceedings, the
non-prevailing party shall pay all costs and expenses incurred by the prevailing
party, including, without limitation, all reasonable attorneys’ fees.
 
[signatures on following page]

 
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IN WITNESS WHEREOF, the parties have executed and caused this IR Agreement to be
executed and delivered on the date first above written.

NCR Corporation
     
By:
   
Name:
   
Title:
 

Document Capture Technologies, Inc.
     
By:
   
Name:
   
Title:
 

[Signature Page to Investor Rights Agreement]

 
 

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EXHIBIT A
 
NOTICE OF EXERCISE
 
TO:  DOCUMENT CAPTURE TECHNOLOGIES, INC.
 
The undersigned hereby irrevocably exercises the right to purchase
_______________ of the shares of Common Stock (the “Common Stock”) of DOCUMENT
CAPTURE TECHNOLOGIES, INC., a Delaware corporation (“Company”), evidenced by the
option granted to the undersigned by Company under Article 4 of that certain
Investor Rights Agreement, dated _______________, 2010, between Company and NCR
Corporation, a Maryland corporation (the “IR Agreement”), to which this Notice
of Exercise is attached (the “Option”), and herewith makes payment of the
Exercise Price with respect to such shares in full, all in accordance with the
conditions and provisions of said Option.
 
The undersigned agrees not to offer, sell, transfer or otherwise dispose of any
of the Common Stock obtained on exercise of the Option, except in accordance
with the provisions of the Transaction Documents (as such term is defined in the
IR Agreement).
 
The undersigned requests that any stock certificates for such shares be issued
free of any restrictive legend, if permitted by the terms of the IR Agreement.
 
Please issue a certificate or certificates representing the shares of Common
Stock acquired hereby in the name of the undersigned or in such other name as is
specified below:
 

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The shares of Common Stock acquired hereby shall be delivered to the following
DWAC Account Number or by physical delivery of a certificate to:
 

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The undersigned is an “accredited investor” as defined in Regulation D
promulgated under the Securities Act of 1933, as amended.

  [NAME OF ENTITY]         
By:
     
Name:
     
Title:
     
Date:
 

[Notice of Exercise]

 
 

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