Exhibit
      10.1

    


    NEITHER
      THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SHARES ISSUABLE UPON
      EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE ASECURITIES
      ACT@)
      OR THE SECURITIES LAWS OF ANY STATE. NEITHER THE SECURITIES REPRESENTED HEREBY
      MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED NOR MAY THE SHARES
      BE
      ISSUED UPON EXERCISE UNLESS SUCH SECURITIES AND SHARES ARE REGISTERED UNDER
      THE
      SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR THE COMPANY RECEIVES
      AN
      OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH SALE, TRANSFER, PLEDGE
      OR
      ISSUANCE IS EXEMPT FROM REGISTRATION.

    


    


    DOCUMENT
      CAPTURE TECHNOLOGIES, INC.

     

    FORM
      OF
      STOCK OPTION AGREEMENT

     

    THIS
      STOCK OPTION AGREEMENT (the AAgreement@),
      is
      made as of this 15th day of July 2008 by and between Document Capture
      Technologies, Inc., a Delaware corporation (the ACompany@),
      and
      Edward M. Straw (AOptionee@).
      

    


    R
      E C I T
      A L

    


    On
      July
      15, 2008, the Company’s Board of Directors authorized the grant to Optionee of
      an option to purchase the number of shares of common stock (the ACommon
      Shares@)
      of the
      Company specified in Paragraph 1 hereof, at the price specified therein, such
      option to be for the term and upon the terms and conditions hereinafter stated.
      The Board of Directors, or such other committee or individual that the Board
      of
      Directors appoints, shall be the “Administrator” for purposes of this
      Agreement.

    


    A
      G R E E
      M E N T

    


    NOW,
      THEREFORE, in consideration of the promises and of the undertakings of the
      parties hereto contained herein, it is hereby agreed: 

    


    1. Number
      of
      Shares; Option Price. Pursuant to said action of the Board of Directors, the
      Company hereby grants to Optionee the option (AOption@)
      to
      purchase, upon and subject to the terms and conditions hereof, 1,000,000 Common
      Shares of the Company at the price of $0.30 per share (“Exercise Price”).


    


    2. Term.
      This Option shall expire on the day before the seventh anniversary of the date
      hereof (the AExpiration
      Date@)
      unless
      such Option shall have been terminated prior to that date in accordance with
      the
      provisions of this Agreement. The term AAffiliate@
      as used
      herein shall have the meaning as set forth in the Federal Securities laws of
      the
      United States. 

    


    3. Shares
      Subject to Exercise. Common Shares subject to exercise shall be one-fourth
      (1/4)
      of such Common Shares on or after July 15, 2009, one-fourth (1/4) of such Common
      Shares on or after July 15, 2010, one-fourth (1/4) of such Common Shares on
      or
      after July 15, 2011, and one-fourth (1/4) of such Common Shares on or after
      July
      15, 2012. All Common Shares shall thereafter remain subject to exercise for
      the
      term specified in Paragraph 2 hereof. Upon the merger or consolidation of the
      Company, or an event in which more than 50% of the Company’s voting capital
      stock is acquired by one or more individuals acting as a “group” within the
      meaning of Section 13 of the Securities Exchange Act of 1934, as amended, then
      all of the Common Shares underlying the Option shall immediately become
      exercisable. 


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     


    4. Method
      and Time of Exercise. The Option may be exercised by written notice delivered
      to
      the Company at its principal executive office stating the number of Common
      Shares with respect to which the Option is being exercised, together with:
      

    


    (A) a
      check
      or money order made payable to the Company in the amount of the exercise price
      and any withholding tax, as provided under Paragraph 5 hereof; or 

    


    (B) if
      expressly authorized in writing by the Administrator, in its sole discretion,
      at
      the time of the Option exercise, the tender to the Company of Common Shares
      owned by Optionee having a fair market value, as determined by the
      Administrator, not less than the exercise price, plus the amount of applicable
      federal, state and local withholding taxes; or

    


    (C)the
      Optionee may, at its option, elect to exercise this Option, in whole or in
      part
      and at any time or from time to time, on a cashless basis, by surrendering
      this
      Option, with the purchase form attached to this Option as Exhibit A duly
      executed by or on behalf of the Optionee, at the principal office of the
      Company, or at such other office or agency as the Company may designate, by
      canceling a portion of this Option in payment of the Exercise Price payable
      in
      respect of the number of Common Shares purchased upon such exercise. In the
      event of an exercise pursuant to this subsection 4(c), the number of Common
      Shares issued to the Holder shall be determined according to the following
      formula: 

     

    
      
        	X = Y(A-B)	 	 
	
                A

              	 	 	 
	 	 	 	 
	Where: 	
                X
                  =
                  

              	 	
                the
                  number of Common Shares that shall be issued to the Holder;
                  

              
	 	 	 	 
	 	
                Y
                  =

              	 	
                the
                  number of Common Shares for which this Option is being exercised
                  (which
                  shall include both the number of Common Shares issued to the Holder
                  and
                  the number of Common Shares subject to the portion of the Option
                  being
                  cancelled in payment of the Exercise Price); 

              
	 	 	 	 
	 	
                A
                  =

              	 	
                the
                  Fair Market Value (as defined below) of one Common Share;
                  and

              
	 	 	 	 
	 	
                B
                  =

              	 	
                the
                  Exercise Price then in
                  effect.

              


      

    

     

    (ii)
      The
      Fair Market Value per Common Share shall be determined as follows:

     

    (a)
      If
      the Common Shares are listed on a national securities exchange, the Nasdaq
      Stock
      Market, the OTC Bulletin Board or another nationally recognized trading system
      as of the Exercise Date, which shall be deemed to have been effected immediately
      prior to the close of business on the business day on which this option shall
      have been surrendered to the Company as provided in Section 4(c) hereof
      (“Exercise Date”), the Fair Market Value per Common Share shall be deemed to be
      the average of the high and low reported sale prices per Common Share thereon
      on
      the trading day immediately preceding the Exercise Date, as defined below,
      (provided
      that if
      the Common Shares are not so listed on such day, the Fair Market Value per
      Common Share shall be determined pursuant to clause (b) below).

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (b)
      If
      the Common Shares are not listed on a national securities exchange, the Nasdaq
      Stock Market, the OTC Bulletin Board or another nationally recognized trading
      system as of the Exercise Date, as defined below, the Fair Market Value per
      Common Share shall be deemed to be the amount most recently determined by the
      Board of Directors of the Company or an authorized committee of the Board of
      Directors of the Company (the “Board”) to represent the fair market value per
      share of the Common Shares (including without limitation a determination for
      purposes of granting common stock options or issuing common stock under any
      plan, agreement or arrangement with employees of the Company); and, upon request
      of the Optionee, the Board (or a representative thereof) shall, as promptly
      as
      reasonably practicable but in any event not later than 15 days after such
      request, notify the Optionee of the Fair Market Value per Common Share.
      Notwithstanding the foregoing, if the Board has not made such a determination
      within the three-month period prior to the Exercise Date, as defined below,
      then
      (A) the Board shall make, and shall provide or cause to be provided to the
      Optionee notice of, a determination of the Fair Market Value per Common Share
      within 15 days of a request by the Optionee that it do so, and (B) the
      exercise of this Option pursuant to this subsection 4(c) shall be delayed until
      such determination is made and notice thereof is provided to the Optionee.
      

    


    Not
      less
      than 100 shares may be purchased at any one time unless the number purchased
      is
      the total number purchasable under such Option at the time. Only whole shares
      may be purchased. 

    


    5. Tax
      Withholding. As a condition to exercise of this Option, the Company may require
      Optionee to pay over to the Company all applicable federal, state and local
      taxes which the Company is required to withhold with respect to the exercise
      of
      this Option. At the discretion of the Administrator and upon the request of
      Optionee, the minimum statutory withholding tax requirements may be satisfied
      by
      the withholding of Common Shares otherwise issuable to Optionee upon the
      exercise of this Option. 

    


    6. Intentionally
      left blank. 

    


    7. Nontransferability.
      Except with the express written approval of the Administrator, this Option
      may
      not be assigned or transferred except by will, qualified domestic relations
      order or by the laws of descent and distribution, and may be exercised only
      by
      Optionee during his lifetime and after his death, by his personal representative
      or by the person entitled thereto under his will or the laws of intestate
      succession. 

    


    8. Optionee
      Not a Shareholder. Optionee shall have no rights as a shareholder with respect
      to the Common Shares of the Company covered by this Option until the date of
      issuance of a stock certificate or stock certificates to him upon exercise
      of
      this Option. No adjustment will be made for dividends or other rights for which
      the record date is prior to the date such stock certificate or certificates
      are
      issued. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    


    9. No
      Right
      to Employment. Nothing in the Option granted hereby shall interfere with or
      limit in any way the right of the Company or of any of its Affiliates to
      terminate Optionee's employment or consulting at any time, nor confer upon
      Optionee any right to continue in the employ of, or consult with, the Company
      or
      any of its Affiliates. 

    


    10. Anti-dilution
      Adjustment. 

    


    10.1
       Stock
      Dividends, Stock Splits, Etc. If the Company declares or pays a dividend on
      its
      Common Stock payable in Common Stock or other securities, or subdivides the
      outstanding Common Stock into a greater amount of Common Stock, then upon
      exercise of this Option, for each Common Share acquired, Optionee shall receive,
      without cost to Optionee, the total number and kind of securities to which
      Optionee would have been entitled had Optionee owned the Common Shares of record
      as of the date the dividend or subdivision occurred. 

    


       10.2 Reclassifications,
      Exchange or Substitution. Upon any reclassification, exchange, substitution,
      or
      other event that results in a change of the number and/or class of the
      securities issuable upon exercise of this Option, Optionee shall be entitled
      to
      receive, upon exercise of this Option, the number and kind of securities and
      property that Optionee would have received for the Common Shares if this Option
      had been exercised immediately before such reclassification, exchange,
      substitution, or other event. The Company or its successor shall promptly issue
      to Optionee a new Option for such new securities or other property. The new
      Option shall provide for adjustments which shall be as nearly equivalent as
      may
      be practicable to the adjustments provided for in this Section 10.2, including,
      without limitation, adjustments to the Exercise Price and to the number of
      securities or property issuable upon exercise of the new Option. The provisions
      of this Section 10.2 shall similarly apply to successive reclassifications,
      exchanges, substitutions, or other events. 

    


    10.3
      Adjustments for Combinations, Etc. If the outstanding shares of Common Stock
      are
      combined or consolidated, by reclassification or otherwise, into a lesser number
      of shares, the Exercise Price shall be proportionately increased.

    


    10.4
      Merger or Consolidation. In case of any consolidation of the Company with,
      or
      merger of the Company into any other corporation, or in the case of any sale
      or
      conveyance of all or substantially all of the assets of the Company other than
      in connection with a plan of complete liquidation of the Company, then as a
      condition of such consolidation, merger or sale or conveyance, adequate
      provision will be made whereby the registered holder of the Option will have
      the
      right to acquire and receive upon exercise of this Option in lieu of the shares
      of Common Stock immediately theretofore subject to acquisition upon the exercise
      of this Option, such shares of stock, securities or assets as may be issued
      or
      payable with respect to or in exchange for the number of shares of Common Stock
      immediately theretofore subject to acquisition and receivable upon exercise
      of
      this Option had such consolidation, merger or sale or conveyance not taken
      place. In any such case, the Company will make appropriate provision to insure
      that the provisions of this Section 10 hereof will thereafter be applicable
      as
      nearly as may be in relation to any shares of stock or securities thereafter
      deliverable upon the exercise of this Option.

     

    11. Restrictions
      on Sale of Common Shares. Optionee represents and agrees that upon his exercise
      of this Option, in whole or in part, unless there is in effect at that time
      under the Securities Act a registration statement relating to the Common Shares
      issued to him, he will acquire the Common Shares issuable upon exercise of
      this
      Option for the purpose of investment and not with a view to their resale or
      further distribution, and that upon such exercise thereof he will furnish to
      the
      Company a written statement to such effect, satisfactory to the Company in
      form
      and substance. Optionee agrees that any certificates issued upon exercise of
      this Option may bear a legend indicating that their transferability is
      restricted in accordance with applicable state and federal securities law.
      Any
      person or persons entitled to exercise this Option under the provisions of
      Paragraphs 5 and 6 hereof shall, upon each exercise of this Option under
      circumstances in which Optionee would be required to furnish such a written
      statement, also furnish to the Company a written statement to the same effect,
      satisfactory to the Company in form and substance. 


    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    12. Notices.
      All notices to the Company shall be addressed to the Chief Financial Officer
      at
      the principal executive office of the Company, and all notices to Optionee
      shall
      be addressed to Optionee at the address of Optionee on file with the Company
      or
      its subsidiary, or to such other address as either may designate to the other
      in
      writing. A notice shall be deemed to be duly given if and when enclosed in
      a
      properly addressed sealed envelope deposited, postage prepaid, with the United
      States Postal Service. In lieu of giving notice by mail as aforesaid, written
      notices under this Agreement may be given by personal delivery to Optionee
      or to
      the Chief Financial Officer (as the case may be). 

    


    13. Sale
      or
      Other Disposition. If Optionee at any time contemplates the disposition (whether
      by sale, gift, exchange, or other form or transfer) of any Shares acquired
      by
      exercise of this Option, he or she shall first notify the Company in writing
      of
      such proposed disposition and cooperate with the Company in complying with
      all
      applicable requirements of law, which, in the judgment of the Company, must
      be
      satisfied prior to such disposition.  

    


    


    


    


    


    [SIGNATURE
      PAGE FOLLOWS]


    
      
         

      

      
        5

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      and year first above written. 

    
 

    
      
        	 	
                DOCUMENT
                  CAPTURE TECHNOLOGIES, INC.

              
	 	
                 

              	 
	 	
                 

              	 
	 	
                By
                  :

              	
                                                                
                  

              
	 	
                Name:

              	
                David
                  P. Clark

              
	 	
                Title:

              	
                Chief
                  Executive Officer

              


      

      


       

    

    OPTIONEE

     

     

    
      By:                                                 
        

    

    Name:
      Edward M. Straw

    


    Address:

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    


    EXHIBIT
      A

    


    PURCHASE
      FORM

     

    
      
        	
                To: Document Capture Technologies, Inc.

              	
                Dated:____________

              


      

    

     

    The
      undersigned, pursuant to the provisions set forth in the attached option, hereby
      elects to purchase (check
      applicable box):

     

    _________
      shares of the Common Stock of Document Capture Technologies, Inc. covered by
      such Option; or 

    


    the
      maximum number of shares of Common Stock covered by such Option pursuant to
      the
      cashless exercise procedure set forth in subsection 4(c).

    


    The
      undersigned herewith makes payment of the full Exercise Price for such shares
      at
      the price per share provided for in such Option. Such payment takes the form
      of
(check
      applicable box or boxes):

     

    $______
      in lawful money of the United States; and/or

    


    the
      cancellation of such portion of the attached Option as is exercisable for a
      total of _____ Common Shares (using a Fair Market Value of $_____ per share
      for
      purposes of this calculation) ; and/or

    


    the
      cancellation of such number of Option Shares as is necessary, in accordance
      with
      the formula set forth in subsection 4(c), to exercise this Option with
      respect to the maximum number of Option Shares purchasable pursuant to the
      cashless exercise procedure set forth in subsection 4(c).

     

    
      
        	 
	
                 

              
	
                Print
                  or Type Name

              
	 
	
                 

              


      

      (Signature
        must conform in all respects to name of holder as specified on the face of
        the
        Option)

       

      
        	
                 

              
	
                (Street
                  Address)

              
	 
	
                 

              
	
                (City)    
                  (State)    (Zip
                  Code)

              


      

    

     

      
        
           

        

        
          7