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ECOLOGY COATINGS, INC.
AUDIT COMMITTEE CHARTER
 This Compensation Committee Charter was adopted by the Board of Directors of Ecology
Coatings, Inc. on October 18, 2007.
 I. Statement of Purpose
  II. Membership
    III. Committee Authority and Responsibilities
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A.
    
    to exercise its ultimate authority over appointment, compensation,
retention, replacement and oversight of the registered public accounting firm
engaged (including resolution of any disagreements between management and the
auditor regarding financial reporting) for the purpose of preparing or issuing an
audit report or performing other audit, review, or attest services for the issuer
and the registered public accounting firm shall report directly to the Committee.
In exercising this authority, the Committee will (A) discuss and consider the
auditors written affirmation that the auditor is in fact independent; (B) discuss
the nature and conduct of the audit process; (C) receive and review all reports;
and (D) provide the independent accountant with full access to the Committee and
the Board to enable him to report on any and all appropriate matters.B.
    
    to approve in advance all auditing services and permitted non-audit
services to be performed by the registered public accounting firm. Under no
circumstances is the Committee allowed to engage the registered public accounting
firm to perform prohibited services as outlined in Securities and Exchange
Commission rules.C.
    
    to establish procedures for the receipt, retention, and treatment of
complaints regarding accounting, internal accounting controls, or auditing matters,
including procedures for the confidential, anonymous submission by employees of
concerns regarding questionable accounting or auditing matters.D.
    
    to establish hiring policies, compliant with governing laws and
regulations, for employees or former employees of the Companys registered public
accounting firm engaged for the purpose of preparing or issuing an audit report or
performing other audit, review, or attest services for the issuer.E.
    
    to discuss with management and the auditors the quality and adequacy of
the Companys internal controls, including managements report on internal controls
and the independent auditors attestation on managements assertions as required by
Securities and Exchange Commission rules.F.
    
    to establish an internal audit function and provide guidance and
oversight to the internal audit function of the Company, including review of the
organization, plans and results of such activity.
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G.
    
    to maintain free and open communication (including private executive
sessions at least annually) with the independent accountants, the internal audit
function and the management of the Company. In discharging this oversight role or
as it otherwise deems necessary or appropriate, the Committee is empowered to
investigate any matter brought to its attention, with full power to retain
independent legal, accounting or other advisors for this purpose.H.
    
    at least annually, to obtain and review a report by the independent
auditor, describing the audit firms internal quality-control procedures; any
material issues raised by the most recent internal quality-control review, or peer
review, of the audit 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, and any steps taken to deal with any
such issues, and delineating all relationships between the outside auditor and the
Company as required by Independent Standards Board Standard No. 1, and also to
present its conclusions with respect to the independent auditor to the full Board.I.
    
    to further seek to ensure that the outside auditor remains independent
by:
 1.
    
    discussing with the outside auditor its independence,
including by regularly engaging the outside auditor in a dialogue regarding
any disclosed relationships or services between the Company and management
which may impact the objectivity and independence of the outside auditor;2.
    
    recommending that the Board take appropriate action in
response to the outside auditors report to satisfy itself of the outside
auditors independence, and;3.
    
    otherwise discussing with the outside auditor all
matters required to be discussed by SAS 61.
 J.
    
    to review and update this Charter at least annually and recommend any
proposed changes to the Board for approval.K.
    
    to discuss with management the status of pending litigation, taxation
matters and other areas of oversight as may be appropriate.L.
    
    to assist the Board in its oversight of the Companys compliance with
legal and regulatory requirements.
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M.
    
    to review the financial statements with management and the independent
auditor, including quarterly reviews. Such reviews should include discussions of
significant accounting policies, estimates and judgments, any changes in the
Companys selection and application of accounting principles and major financial
and accounting risk exposures and the steps management has taken to control them
(including off-balance sheet structures).N.
    
    to make recommendations to the Board as to whether the Companys
audited financial statements should be included in its annual report on Form 10-K
on the basis of (A) the Committees review of such audited financial statements;
(B) its discussion with management regarding such audited financial statements; (C)
its discussion with the outside auditor regarding the independence of the outside
auditor and the matters required to be discussed under SAS 61; and (D) its review
of the outside auditors written statement as required by Independent Standards
Board Standard No. 1.O.
    
    to prepare annually a report for enclosure with the proxy statement
that reports to the shareholders on such matters as are required under the rules of
the Securities and Exchange Commission as in effect from time to time.P.
    
    to monitor and assure that the lead and concurring partner of the
Companys independent auditor complies with the five-year rotation requirements and
the other rotation requirements of the Securities and Exchange Commission.Q.
    
    to evaluate its performance annually and report its findings to the
Board; and
 IV. Committee Meetings and Action
 A.
    
    The Committee, in its entirety, shall meet at least quarterly, or more
frequently as circumstances warrant.B.
    
    The Committee shall meet with the outside auditor and with management
to review the results of the audit of the Companys annual audited financial
statements, including disclosures made in managements discussion and analysis,
prior to the issuance of such annual financial statements to the public; such
review will include a discussion of earnings press releases, including pro-forma or
adjusted non-GAAP information, and other information or earnings guidance given to
analysts and ratings agencies as required by New York Stock Exchange rules.C.
    
    The Committee shall meet with the outside auditor and with management
to review the Companys quarterly reports on Form 10-Q prior to their filing with
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the Securities and Exchange Commission; such review will include a discussion of
earnings press releases, including pro-forma or adjusted non-GAAP information, and
other information or earnings guidance given to analysts and ratings agencies.D.
    
    The Committee shall meet at least once annually or upon the request of
any Board member in separate sessions, with any member of management, the internal
audit function and the outside auditor to discuss any matter brought forth by any
of such parties.E.
    
    In its meetings with the independent auditor, the Committee shall
regularly review with the auditor any audit problems or difficulties encountered in
the course of the audit work, as well as managements response.
 V. Committee Reports
 A.
    
    The Committee shall provide at least one written report annually to the
Board describing:
 1.
    
    the Committees historical and planned activities for
carrying out the Committees duties and responsibilities;2.
    
    appraisal of the financial reporting processes and
systems of internal accounting controls;3.
    
    selection, appointment and engagement of the outside
auditor, and;4.
    
    assessment of the adequacy of this Charter.
 B.
    
    The Committee shall maintain minutes. A summary of the actions taken at
each Committee meeting, which shall be presented to the Board at the next Board
meeting following such Committee meeting.C.
    
    Any other reports which the Board may from time to time specify.
 VI. Duties and Responsibilities of the Board
  A.
    
    elect members to the Committee and conduct oversight of the activities
of the Committee;
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B.
    
    ensure that adequate resources are available to the Committee for
proper discharge of its duties and responsibilities;C.
    
    provide timely written disclosure to the applicable governing or
administrative forums of any determination that the Board has made regarding the
independence of the members of the Committee; the financial literacy of the
members of the Committee; the accounting or related financial management expertise
of the financial expert of the Committee; and the annual review and reassessment of
the adequacy of this Charter as well as an annual self-evaluation.D.
    
    ensure this Charter is posted on the Companys Web site.
 VII. Limitation of Committees Role
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