Form of Lock-Up Agreement

 

Roth Capital Partners, LLC

888 San Clemente

Newport Beach, CA 92660

 

Ladies and Gentlemen:

 

The undersigned understands that you, as the representative (the
“Representative”) of the several underwriters named therein, propose to enter
into an Underwriting Agreement (the “Underwriting Agreement”) with Digital Ally,
Inc., a Nevada corporation (the “Company”), relating to a proposed offering of
securities of the Company (the “Offering”) including shares of the Common Stock,
par value $0.001 per share (the “Common Stock”). Capitalized terms used herein
and not otherwise defined shall have the meanings set forth in the Underwriting
Agreement.

 

In consideration of the foregoing, and in order to induce you to participate the
Offering, and for other good and valuable consideration receipt of which is
hereby acknowledged, the undersigned hereby agrees that, without the prior
written consent of the Representative (which consent may be withheld in its sole
discretion), the undersigned will not, during the period (the “Lock-Up Period”)
beginning on the date hereof and ending on the date sixty (60) days after the
date of the final prospectus relating to the Offering (the “Final Prospectus”),
(1) offer, pledge, announce the intention to sell, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer or dispose
of, directly or indirectly, or file (or participate in the filing of) a
registration statement with the Securities and Exchange Commission (except a
resale registration statement to register currently outstanding convertible
securities) in respect of, any shares of Common Stock in excess of 20,000 shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for shares of Common Stock (including without limitation, shares of
Common Stock which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange
Commission and securities which may be issued upon exercise of a stock option or
warrant), (2) enter into any swap or other agreement that transfers, in whole or
in part, any of the economic consequences of ownership of the shares of, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of shares of Common Stock or such other securities, in cash or
otherwise, (3) make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for shares of Common Stock, or (4) publicly announce
an intention to effect any transaction specific in clause (1), (2) or (3) above.

 

Notwithstanding the foregoing, the restrictions set forth in clause (1) and (2)
above shall not apply to (a) transfers (i) as a bona fide gift or gifts,
provided that the donee or donees thereof agree to be bound in writing by the
restrictions set forth herein, or (ii) to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, provided
that the trustee of the trust agrees to be bound in writing by the restrictions
set forth herein, and provided further that any such transfer shall not involve
a disposition for value, (b) the acquisition or exercise of any stock option
issued pursuant to the Company’s existing stock option plan, including any
exercise effected by the delivery of shares of Common Stock of the Company held
by the undersigned, or (c) the purchase or sale of the Company’s securities
pursuant to a plan, contract or instruction that satisfies all of the
requirements of Rule 10b5-1(c)(1)(i)(B) that was in effect prior to the date
hereof. For purposes of this Lock-Up Agreement, “immediate family” shall mean
any relationship by blood, marriage or adoption, not more remote than first
cousin.

 

The foregoing restrictions are expressly agreed to preclude the undersigned from
engaging in any hedging or other transaction which is designed to or reasonably
expected to lead to or result in a sale or disposition of shares of Common Stock
even if such securities would be disposed of by someone other than the
undersigned. Such prohibited hedging or other transactions would include without
limitation any short sale or any purchase, sale or grant of any right (including
without limitation any put option or put equivalent position or call option or
call equivalent position) with respect to any of the shares of Common Stock or
with respect to any security that includes, relates to, or derives any
significant part of its value from such shares.

 

   

 

 

The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this Lock-Up Agreement. All authority herein
conferred or agreed to be conferred and any obligations of the undersigned shall
be binding upon the successors, assigns, heirs or personal representatives of
the undersigned.

 

The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar or depositary
against the transfer of the undersigned’s shares of Common Stock except in
compliance with the foregoing restrictions.

 

The undersigned understands that, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the securities to be sold thereunder, the undersigned shall be
released from all obligations under this Lock-Up Agreement.

 

This Lock-Up Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflict of laws principles
thereof. The undersigned irrevocably (i) submits to the jurisdiction of the
Supreme Court of the State of New York, Borough of Manhattan and the United
States District Court for the Southern District of New York, for the purpose of
any suit, action, or other proceeding arising out of this Lock-Up Agreement
(each a “Proceeding”), (ii) agrees that all claims in respect of any Proceeding
may be heard and determined in any such court, (iii) waives, to the fullest
extent permitted by law, any immunity from jurisdiction of any such court or
from any legal process therein, (iv) agrees not to commence any Proceeding other
than in such courts, and (v) waives, to the fullest extent permitted by law, any
claim that such Proceeding is brought in an inconvenient forum.

 

  Very truly yours,             Name: