AUDIT
COMMITTEE CHARTER





OF





DOCUMENT
CAPTURE TECHNOLOGIES, INC.





(as
adopted March 31, 2009)





I.
            PURPOSE.





The Audit
Committee is appointed by the Board of Directors (the “Board”) of Document
Capture Technologies, Inc., a Delaware corporation (the “Company”), to assist
the Board in monitoring (i) the integrity of the annual, interim and other
financial statements of the Company, (ii) the independent auditor’s
qualifications and independence, (iii) the performance of the Company’s
independent auditor and (iv) the compliance by the Company with legal and
regulatory requirements. The Audit Committee shall also review and approve all
transactions with related persons, as defined in Item 404 of Regulation S-K and
prepare the report required by the rules of the Securities and Exchange
Commission (the “SEC”) to be included in the Company’s proxy
statements.





II.
            COMPOSITION.





The Audit
Committee shall be comprised of three or more directors as determined by the
Board of Directors.  Each member of the Audit Committee shall meet the
independence and experience requirements of the Nasdaq Stock Market Rules,
Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) and the rules and regulations of the SEC.





The
members of the Audit Committee shall be appointed by the Board. Audit Committee
members may be replaced by the Board. There shall be a Chairman of the Audit
Committee (the “Chairman”), whom shall also be appointed by the Board. The
Chairman shall be a member of the Audit Committee and, if present, shall preside
at each meeting of the Audit Committee. The Chairman shall advise and counsel
with the executives of the Company and shall perform such other duties as may
from time to time be assigned to the Chairman by the Audit Committee or the
Board.





III.
            MEETINGS.





The Audit
Committee shall meet as often as it determines, but no less frequently than
quarterly.  The Audit Committee shall meet periodically with
management and the Company’s independent auditor in separate executive sessions.
The Audit Committee may request any officer or employee of the Company or the
Company’s outside counsel or independent auditor to attend a meeting of the
Audit Committee or to meet with any members of, or consultants to, the Audit
Committee.





IV.
            AUTHORITY AND
      RESPONSIBILITIES.





The Audit Committee shall have the
authority to appoint or replace the Company’s independent auditor, subject to
shareholder approval. The Audit Committee shall be directly responsible for
determining the compensation and oversight of the work of the Company’s
independent auditor (including resolution of disagreements between management
and the Company’s independent auditor regarding financial reporting) for the
purpose of preparing or issuing an audit report or related work. The Company’s
independent auditor shall report directly to the Audit Committee.




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The Audit
Committee shall pre-approve all auditing services and permitted non-audit
services to be performed for the Company by the Company’s independent auditor,
including the fees and terms thereof (subject to the de minimus exceptions for
non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which
are approved by the Audit Committee prior to the completion of the audit). The
Audit Committee may form and delegate authority to subcommittees of the Audit
Committee consisting of one or more Audit Committee members when appropriate,
including the authority to grant pre-approvals of audit and permitted non-audit
services, provided that decisions of such subcommittee to grant pre-approvals
shall be presented to the full Audit Committee at its next scheduled
meeting.





The Audit
Committee shall have the authority, to the extent it deems necessary or
appropriate, to retain independent legal, accounting or other advisors. The
Company shall provide for appropriate funding, as determined by the Audit
Committee, for payment of compensation to (i) the Company’s independent auditor
for the purpose of rendering or issuing an audit report and (ii) any advisors
employed by the Audit Committee.





The Audit
Committee shall make regular reports to the Board. The Audit Committee shall
review and reassess the adequacy of this charter annually and recommend any
proposed changes to the Board for approval. The Audit Committee annually shall
review the Audit Committee’s own performance.





The Audit
Committee shall:





A.
            Financial
      Statement and Disclosure Matters





1.           Meet
with the Company’s independent auditor prior to the audit to review the scope,
planning and staffing of the audit.





2.           Review
and discuss with management and the Company’s independent auditor the Company’s
annual audited financial statements, and recommend to the Board whether the
Company’s audited financial statements should be included in the Company’s
Annual Report on Form 10-K.





3.           Review
and discuss with management and the Company’s independent auditor the Company’s
interim financial statements prior to the filing of the Company’s quarterly
reports on Form 10-Q with the SEC, including the results of the review of the
Company’s interim financial statements by the Company’s independent
auditor.





4.           Discuss
with management and the Company’s independent auditor, as appropriate,
significant financial reporting issues and judgments made in connection with the
preparation of the Company’s financial statements, including:





a.
            any
      significant changes in the Company’s selection or application of
      accounting principles;





b.
            the
      Company’s critical accounting policies and
  practices;




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c.
            all
      alternative treatments of financial information within generally accepted
      accounting principles (“GAAP”) that have been discussed with management
      officials of the Company, ramifications of the use of these alternative
      disclosures and treatments, and the treatment preferred by the independent
      auditor and the reasons for favoring that
  treatment;





d.
            any
      major issues as to the adequacy of the Company’s internal controls and any
      special steps adopted in light of material control deficiencies;
      and





e.
            any
      material written communications between the Company’s independent auditor
      and management, such as any management letter or schedule of unadjusted
      differences.





5.           Discuss
with management the Company’s earnings press releases generally, including the
use of “pro forma” or “adjusted” non-GAAP information, and any financial
information and earnings guidance provided to analysts and/or rating agencies.
Such discussion may be general and include the types of information to be
disclosed and the types of presentations to be made.





6.           Discuss
with management and the independent auditor the effect on the Company’s
financial statements of (i) regulatory and accounting initiatives and (ii)
off-balance sheet structures.





7.           Discuss
with management the Company’s major financial risk exposures and the steps
management has taken to monitor and control such exposures, including the
Company’s risk assessment and risk management policies.





8.           Discuss
with the Company’s independent auditor the matters required to be discussed by
Statement on Auditing Standards No. 61 relating to the conduct of the audit,
including any difficulties encountered in the course of the audit work, any
restrictions on the scope of activities or access to requested information, and
any significant disagreements with management.





9.           Review
disclosures and certifications made by the Company’s Chief Executive Officer and
Chief Financial Officer (or individuals performing similar functions) during
their certification process for the Company’s Annual Report on Form 10-K and
quarterly reports on Form 10-Q under Sections 302 and 906 of the Sarbanes-Oxley
Act of 2002 about any significant deficiencies and material weaknesses in the
design or operation of the Company’s internal control over financial reporting
and any fraud involving management or other employees who have a significant
role in the Company’s internal control over financial reporting.





B.
            Oversight
      of the Company’s Relationship with the Independent
  Auditor





1.           At
least annually, obtain and review a report from the Company’s independent
auditor, consistent with Independence Standards Board Standard 1, regarding (i)
the internal quality-control procedures of the Company’s independent auditor;
(ii) any material issues raised by the most recent internal quality-control
review, or peer review, of the firm, or by any inquiry or investigation by
governmental or professional authorities within the preceding five years
respecting one or more independent audits carried out by the firm; (iii) any
steps taken to deal with any such issues; and (iv) all relationships between the
Company’s independent auditor and the Company.




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2.           Actively
engage in a dialogue with the independent auditor with respect to any disclosed
relationships or services that may impact the objectivity and independence of
the auditor and take, or recommend that the Board of Directors take, appropriate
action to oversee the independence of the Company’s independent
auditor.





3.           Evaluate
the qualifications, performance and independence of the Company’s independent
auditor, including whether the independent auditor’s quality controls are
adequate and the provision of permitted non-audit services is compatible with
maintaining the auditor’s independence, taking into account the opinions of
management and the internal auditor. The Audit Committee shall present its
conclusions with respect to the Company’s independent auditor to the
Board.





4.           Verify
the rotation of the lead (or coordinating) audit partner having primary
responsibility for the audit and the audit partner responsible for reviewing the
audit as required by law. Consider whether, in order to assure continuing
auditor independence, it is appropriate to adopt a policy of rotating the
Company’s independent auditing firm on a regular basis.





5.           Oversee
the Company’s hiring of employees or former employees of the Company’s
independent auditor who participated in any capacity in the audit of the
Company.





6.           Be
available to the Company’s independent auditor during the year for consultation
purposes.





C.
            Compliance
      Oversight Responsibilities





1.           Obtain
assurance from the Company’s independent auditor that Section 10A(b) of the
Exchange Act has not been implicated.





2.           Review
and approve all related party transactions.





3.           Inquire
and discuss with management the Company’s compliance with applicable laws and
regulations and with the Company’s Code of Conduct and Ethics in effect at such
time, if any, and, where applicable, recommend policies and procedures for
future compliance.





4.           Establish
procedures (which may be incorporated in the Company’s Code of Conduct and
Ethics, in effect at such time, if any) for the receipt, retention and treatment
of complaints received by the Company regarding accounting, internal accounting
controls or reports which raise material issues regarding the Company’s
financial statements or accounting policies.





5.           Discuss
with management and the Company’s independent auditor any correspondence with
regulators or governmental agencies and any published reports that raise
material issues regarding the Company’s financial statements or accounting
policies.





6.           Discuss
with the Company’s counsel legal matters that may have a material impact on the
Company’s financial statements or the Company’s compliance
policies.





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D.
            General





1.           Review
and reassess the adequacy of this charter on an annual basis and submit any
proposed changes to the Board for approval.





2.           Maintain
minutes or other records of meetings and activities of the Audit
Committee.





3.           Consider
such other matters in relation to the financial affairs of the Company and its
accounts and in relation to the internal and external audit of the Company as
the Audit Committee may, in its discretion, determine to be
advisable.





V.
            LIMITATION
      OF AUDIT COMMITTEE’S ROLE





While the
Audit Committee has the responsibilities and powers set forth in this charter,
it is not the duty of the Audit Committee to plan or conduct audits or to
determine that the Company’s financial statements and disclosures are complete
and accurate and are in accordance with GAAP and applicable rules and
regulations. These are the responsibilities of management and the Company’s
independent auditor.





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