Exhibit
10.1


 


January
11, 2021


 


Digital
Ally, Inc. 


15612
College Blvd.


Lenexa,
KS 66219


Attention:
Stanton E. Ross, Chairman and Chief Executive Officer


 


Dear
Mr. Ross:


 


This
agreement (the “Agreement”) constitutes the agreement between Kingswood Capital Markets, division of Benchmark
Investments, Inc. (“Kingswood”) (the “Placement Agent”), and Digital
Ally, Inc., a Nevada corporation (the “Company”), pursuant to which Kingswood will act as the placement
agent on a “reasonable best efforts” basis, in connection with the proposed placement (the “Placement”)
of (i) common stock (the “Shares”) of the Company, par value $0.001 per share (the “Common Stock”),
(ii) warrants (“Warrants”) to purchase shares of Common Stock (the “Warrant Shares”) and
(iii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase shares of Common Stock (the “Pre-Funded
Warrant Shares”) in lieu of shares of Common Stock, for any potential investor that determines, in its sole discretion,
that such purchase of Shares would cause it to beneficially own in excess of the Beneficial Ownership Limitation (as defined in
the Purchase Agreement). The Shares, Warrants, Warrant Shares, Pre-Funded Warrants and Pre-Funded Warrant Shares are collectively
referred to herein as the “Securities”. The terms of the Placement and the Securities shall be mutually agreed
upon by the Company and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”)
and nothing herein constitutes that the Placement Agent would have the power or authority to bind the Company or any Purchaser
or an obligation for the Company to issue any Securities or complete the Placement. This Agreement and the documents executed
and delivered by the Company and the Purchasers in connection with the Placement, including but not limited to the Purchase Agreement
(as defined below) collectively referred to herein as the “Transaction Documents.” The date of the closing
of the Placement shall be referred to herein as the “Closing Date.” The Company expressly acknowledges and
agrees that the Placement Agent’s obligations hereunder are on a reasonable best efforts basis only and that the execution
of this Agreement does not constitute a commitment by the Placement Agent to purchase the Securities and does not ensure the successful
placement of the Securities or any portion thereof or the success of the Placement Agent with respect to securing any other financing
on behalf of the Company. The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on
its behalf in connection with the Placement. The sale of the Securities to any Purchaser will be evidenced by a securities purchase
agreement (the “Purchase Agreement”) between the Company and such Purchaser in a form mutually acceptable to
the Company and the Placement Agent. Capitalized terms that are not otherwise defined herein have the meanings given to such terms
in the Purchase Agreement. Prior to the signing of any Purchase Agreement, officers of the Company will be available to answer
inquiries from prospective Purchasers.


 




    	 



     


    

 


SECTION
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY.


 


A.
Representations of the Company. Each of the representations and warranties (together with any related disclosure schedules
thereto) and covenants made by the Company to the Purchasers in the Purchase Agreement in connection with the Placement is hereby
incorporated herein by reference into this Agreement (as though fully restated herein) and is, as of the date of this Agreement
and as of the Closing Date, hereby made to, and in favor of, the Placement Agent. In addition to the foregoing, the Company represents
and warrants that:


 


1.
The Company has prepared and filed with the U.S. Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 (Registration No. 333-239419), and amendments thereto, and related preliminary prospectuses, for the registration
under the Securities Act of 1933, as amended (the “Securities Act”), of the Securities, which registration
statement, as so amended (including post-effective amendments, if any) became effective on July 2, 2020. At the time of such filing,
the Company met the requirements of Form S-3 under the Securities Act. Such registration statement meets the requirements set
forth in Rule 415(a)(1)(x) under the Securities Act and complies with said Rule. The Company will file with the Commission pursuant
to Rule 424(b) under the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the
Commission promulgated thereunder, a supplement to the form of prospectus included in such registration statement relating to
the placement of the Securities and the plan of distribution thereof and has advised the Placement Agent of all further information
(financial and other) with respect to the Company required to be set forth therein. Such registration statement, including the
exhibits thereto, as amended at the date of this Agreement, is hereinafter called the “Registration Statement”;
such prospectus in the form in which it appears in the Registration Statement is hereinafter called the “Base Prospectus”;
and the supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant to Rule 424(b) (including
the Base Prospectus as so supplemented) is hereinafter called the “Prospectus Supplement.” Any reference in
this Agreement to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall each be deemed to refer to
and include the documents incorporated by reference therein (the “Incorporated Documents”) pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
on or before the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may
be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement”
with respect to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include
the filing of any document under the Exchange Act after the date of this Agreement, or the issue date of the Base Prospectus or
the Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference. All references in this Agreement
to financial statements and schedules and other information which is “contained,” “included,” “described,”
“referenced,” “set forth” or “stated” in the Registration Statement, the Base Prospectus or
the Prospectus Supplement (and all other references of like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement, the Base
Prospectus or the Prospectus Supplement, as the case may be. No stop order suspending the effectiveness of the Registration Statement
or the use of the Base Prospectus or the Prospectus Supplement has been issued, and no proceeding for any such purpose is pending
or has been initiated or, to the Company’s knowledge, is threatened by the Commission. For purposes of this Agreement, “free
writing prospectus” has the meaning set forth in Rule 405 under the Securities Act and the “Time of Sale Prospectus”
means the preliminary prospectus, if any, together with the free writing prospectuses, if any, used in connection with the Placement,
including any documents incorporated by reference therein.


 




    	 



     


    

 


2.
The Registration Statement (and any further documents to be filed with the Commission) contains all exhibits and schedules as
required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, at the time it became
effective, complied in all material respects with the Securities Act and the Exchange Act and the applicable Rules and Regulations
and did not and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Base Prospectus,
the Time of Sale Prospectus and the Prospectus Supplement, each as of its respective date, comply in all material respects with
the Securities Act and the Exchange Act and the applicable Rules and Regulations. Each of the Base Prospectus, the Time of Sale
Prospectus and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of the date thereof any
untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable Rules and Regulations,
and none of such documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein (with respect to Incorporated Documents incorporated by reference
in the Base Prospectus or Prospectus Supplement), in the light of the circumstances under which they were made not misleading;
and any further documents so filed and incorporated by reference in the Base Prospectus, the Time of Sale Prospectus or Prospectus
Supplement, when such documents are filed with the Commission, will conform in all material respects to the requirements of the
Exchange Act and the applicable Rules and Regulations, as applicable, and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising
after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein
is required to be filed with the Commission. There are no documents required to be filed with the Commission in connection with
the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not be
filed within the requisite time period. There are no contracts or other documents required to be described in the Base Prospectus,
the Time of Sale Prospectus or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement, which
(x) have not been described or filed as required or (y) will not be filed within the requisite time period.


 


3.
The Company is eligible to use free writing prospectuses in connection with the Placement pursuant to Rules 164 and 433 under
the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities
Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to
file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or behalf of or used by the Company complies or
will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the
Commission thereunder. The Company will not, without the prior consent of the Placement Agent, prepare, use or refer to, any free
writing prospectus.


 


4.
There are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the knowledge of the Company,
any five percent (5.0%) or greater stockholder of the Company, except as set forth in the Registration Statement and the other
documents the Company has filed or furnished with the Commission.


 


5.
The Company has delivered, or will as promptly as practicable deliver, to the Placement Agent complete conformed copies of the
Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies
of the Registration Statement (without exhibits), the Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement,
as amended or supplemented, in such quantities and at such places as the Placement Agent reasonably requests. Neither the Company
nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering
material in connection with the offering and sale of the Securities pursuant to the Placement other than the Base Prospectus,
the Time of Sale Prospectus, the Prospectus Supplement, the Registration Statement, copies of the documents incorporated by reference
therein and any other materials permitted by the Securities Act.


 




    	 



     


    

 


6.
The Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Placement Agent,
it will not, for a period of 90 days after the date of this Agreement (the “Lock-Up Period”), (i) offer, pledge,
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, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the
Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file
or caused to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of
the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (iii)
complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank or
(iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above
is to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise; provided
that the Lock-Up Period shall not be applicable to any transaction for the transfer of the Company’s securities pursuant
to a previously established trading plan of an affiliate of the Company pursuant to Rule 10b5-1 under the Exchange Act at a per
share price equal to or exceeding $5.00 per share, which plan was effective as of the date of this Agreement, or pursuant to any
securities issuable under a Company plan that are registered on a registration statement on Form S-8.


 


SECTION
2. REPRESENTATIONS OF THE PLACEMENT AGENT. The Placement Agent represents and warrants that it (i) is a member in good
standing of FINRA, (ii) is registered as a broker/dealer under the Exchange Act, (iii) is licensed as a broker/dealer under the
laws of the states applicable to the offers and sales of the Securities by the Placement Agent, (iv) is and will be a body corporate
validly existing under the laws of its place of incorporation, and (v) has full power and authority to enter into and perform
its obligations under this Agreement. Each Placement Agent will immediately notify the Company in writing of any change in its
status as such. Each Placement Agent covenants that it will use its reasonable best efforts to conduct the Placement hereunder
in compliance with the provisions of this Agreement and the requirements of applicable law.


 


SECTION
3. COMPENSATION. In consideration of the services to be provided for hereunder, the Company shall pay to the Placement
Agent the following compensation with respect to the Securities which they are placing:


 


A.
A cash fee (the “Cash Fee”) equal to an aggregate of six percent (6%) of the aggregate gross proceeds raised
in the Placement. The Cash Fee shall be paid at the closing of the Placement (the “Closing”).


 


B.
Subject to compliance with FINRA Rule 5110(g)(5), the Company also agrees, in case of Closing of the Placement, to reimburse the
Kingswood for all travel and other out-of-pocket expenses incurred, including the reasonable fees, costs and disbursements of
its legal counsel, in an amount not to exceed an aggregate of $50,000 (against invoices provided to the Company). The Company
will reimburse Kingswood directly upon the Closing of the Placement from the gross proceeds raised in the Placement.


 


C.
The Placement Agent reserves the right to reduce any item of its compensation or adjust the terms thereof as specified herein
in the event that a determination shall be made by FINRA to the effect that the Placement Agent aggregate compensation is in excess
of FINRA rules or that the terms thereof require adjustment.


 


SECTION
4. INDEMNIFICATION. The Company agrees to the indemnification and other agreements set forth in the Indemnification
Provisions (the “Indemnification”) attached hereto as Addendum A, the provisions of which are incorporated
herein by reference and shall survive the termination or expiration of this Agreement.


 




    	 



     


    

 


SECTION
5. ENGAGEMENT TERM. The Placement Agent’s engagement hereunder shall be until the earlier of (i) the final closing
date of the Placement, (ii) the date a party terminates the engagement according to the terms of the next sentence, and (iii)
January 30, 2020 (the period of time during which this Agreement remains in effect is referred to herein as the “Term”).
Notwithstanding anything to the contrary contained herein, the provisions concerning confidentiality and indemnification and contribution
contained herein and the Company’s obligations contained in the Indemnification Provisions will survive any expiration or
termination of this Agreement. The Placement Agent agrees not to use any confidential information concerning the Company provided
to the Placement Agent by the Company for any purposes other than those contemplated under this Agreement.


 


SECTION
6. PLACEMENT AGENT’S INFORMATION. The Company agrees that any information or advice rendered by the Placement
Agent in connection with this engagement is for the confidential use of the Company only in their evaluation of the Placement
and, except as otherwise required by law, the Company will not disclose or otherwise refer to the advice or information in any
manner without the Placement Agent’s prior written consent.


 


SECTION
7. NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not be construed as creating rights enforceable
by any person or entity not a party hereto, except those entitled hereto by virtue of the Indemnification Provisions hereof. The
Company acknowledges and agrees that each Placement Agent is not and shall not be construed as a fiduciary of the Company and
shall have no duties or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this
Agreement or the retention of such Placement Agent hereunder, all of which are hereby expressly waived.


 


SECTION
8. CLOSING. The obligations of the Placement Agent, and the closing of the sale of the Securities hereunder are subject
to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company and its subsidiaries
contained herein and in the Purchase Agreement, to the accuracy of the statements of the Company and its subsidiaries made in
any certificates pursuant to the provisions hereof, to the performance by the Company and its subsidiaries of their obligations
hereunder, and to each of the following additional terms and conditions, except as otherwise disclosed to and acknowledged and
waived by the Placement Agent:


 


A.
No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose
shall have been initiated or threatened by the Commission, and any request for additional information on the part of the Commission
(to be included in the Registration Statement, the Base Prospectus, the Prospectus Supplement or otherwise) shall have been complied
with to the reasonable satisfaction of the Placement Agent. Any filings required to be made by the Company in connection with
the Placement shall have been timely filed with the Commission.


 


B.
The Placement Agent shall not have discovered and disclosed to the Company on or prior to the Closing Date that the Registration
Statement, the Base Prospectus, the Prospectus Supplement or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of counsel for the Placement Agent, is material or omits to state any fact which, in the opinion
of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading.


 


C.
All corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each
of this Agreement, the Shares, the Warrants, the Warrant Shares, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Registration
Statement, the Base Prospectus and the Prospectus Supplement and all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Placement Agent, and the Company
shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon
such matters.


 




    	 



     


    

 


D.
On the Closing Date, the Placement Agent shall have received from outside counsel to the Company such counsel’s written
opinions, addressed to the Placement Agent and the Purchasers and dated as of the Closing Date, in form and substance reasonably
satisfactory to the Placement Agent.


 


E.
On the Closing Date, the Placement Agent shall have received a certificate of the chief executive officer of the Company, dated,
as applicable, as of the date of such Closing, to the effect that, as of the date of this Agreement and as of the applicable date,
the representations and warranties of the Company contained herein and in the Purchase Agreement were and are accurate in all
material respects, except for such changes as are contemplated by this Agreement and except as to representations and warranties
that were expressly limited to a state of facts existing at a time prior to the applicable Closing Date, and that, as of the applicable
date, the obligations to be performed by the Company hereunder on or prior thereto have been fully performed in all material respects.


 


F.
On the Closing Date, Placement Agent shall have received a certificate of the Secretary of the Company, dated, as applicable,
as of the date of such Closing, certifying to, among others, the organizational documents, good standing in the state of incorporation
of the Company and board resolutions relating to the Placement of the Securities from the Company.


 


G.
On the Closing Date, Placement Agent shall have received a certificate of the Chief Financial Officer of the Company, dated, as
applicable, as of the date of such Closing, certifying to, among others, financial information.


 


H.
Neither the Company nor any of its subsidiaries (i) shall have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Registration Statement, the Base Prospectus and the Prospectus Supplement, any loss
or interference with its business from fire, explosion, flood, terrorist act or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in or contemplated by
the Registration Statement, the Base Prospectus and the Prospectus Supplement, (ii) since such date there shall not have been
any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the business, general affairs, management, financial position, stockholders’ equity,
results of operations or prospects of the Company and its subsidiaries, otherwise than as set forth in or contemplated by the
Registration Statement, the Base Prospectus and the Prospectus Supplement, and (iii) since such date there shall not have been
any new or renewed inquiries by the Commission, FINRA or any other regulatory body regarding the Company, the effect of which,
in any such case described in clause (i), (ii) or (iii), is, in the judgment of the Placement Agent, so material and adverse as
to make it impracticable or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the manner
contemplated by the Base Prospectus, Time of Sale Prospectus and Prospectus Supplement.


 


I.
The Common Stock is registered under the Exchange Act and, as of the Closing Date, the Shares, the Warrant Shares and the Pre-Funded
Warrant Shares shall be listed and admitted and authorized for trading on the Trading Market or other applicable U.S. national
exchange, or an application for such listing shall have been submitted to the Trading Market, and satisfactory evidence of such
action shall have been provided to the Placement Agent. The Company shall have taken no action designed to, or likely to have
the effect of terminating the registration of the Common Stock under the Exchange Act or delisting or suspending from trading
the Common Stock from the Trading Market or other applicable U.S. national exchange, nor, except as disclosed in the Base Prospectus,
Time of Sale Prospectus and Prospectus Supplement, has the Company received any information suggesting that the Commission or
the Trading Market or other U.S. applicable national exchange is contemplating terminating such registration or listing.


 




    	 



     


    

 


J.
No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance or sale of the Securities or materially and adversely
affect or potentially and adversely affect the business or operations of the Company; and no injunction, restraining order or
order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance or sale of the Securities or materially and adversely affect or potentially and adversely affect
the business or operations of the Company.


 


K.
The Company shall have prepared and filed with the Commission a Current Report on the Form 8-K with respect to the Placement,
including as an exhibit thereto this Agreement.


 


L.
The Company shall have entered into a Purchase Agreement with each of the Purchasers and such agreements shall be in full force
and effect and shall contain representations, warranties and covenants of the Company as agreed between the Company and the Purchasers.


 


M.
FINRA shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement. In addition,
the Company shall, if requested by the Placement Agent, make or authorize Placement Agent’s counsel to make on the Company’s
behalf, any filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110 with respect to the Placement and
pay all filing fees required in connection therewith.


 


N.
Prior to the Closing Date, the Company shall have furnished to the Placement Agent such further information, certificates and
documents as the Placement Agent may reasonably request.


 


If
any of the conditions specified in this Section 8 shall not have been fulfilled when and as required by this Agreement, or if
any of the certificates, opinions, written statements or letters furnished to the Placement Agent or to Placement Agent’s
counsel pursuant to this Section 8 shall not be reasonably satisfactory in form and substance to the Placement Agent and to Placement
Agent’s counsel, all obligations of the Placement Agent hereunder may be cancelled by the Placement Agent at, or at any
time prior to, the consummation of the Closing. Notice of such cancellation shall be given to the Company in writing or orally.
Any such oral notice shall be confirmed promptly thereafter in writing.


 


SECTION
9. [RESERVED].


 


SECTION
10. GOVERNING LAW; AGENT FOR SERVICE OF PROCESS, ETC. This Agreement will be governed by, and construed in accordance
with, the laws of the State of New York applicable to agreements made and to be performed entirely in such State, without regard
to the conflicts of laws principles thereof. This Agreement may not be assigned by either party without the prior written consent
of the other party. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective
successors and permitted assigns. Any right to trial by jury with respect to any dispute arising under this Agreement or any transaction
or conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought into the courts of the State
of New York or into the federal court located in New York, New York and, by execution and delivery of this Agreement, the Company
hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts.
Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. The Company agrees that a final judgment in any such action, proceeding or counterclaim brought in any such
court shall be conclusive and binding upon the Company and may be enforced in any other courts to the jurisdiction of which the
Company is or may be subject, by suit upon such judgment. If either party shall commence an action or proceeding to enforce any
provisions of a Transaction Document, then the prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.


 




    	 



     


    

 


SECTION
11. ENTIRE AGREEMENT/MISC. This Agreement (including the attached Indemnification Provisions) embodies the entire agreement
and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject
matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination
will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force
and effect. This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by the
Placement Agent and the Company. The representations, warranties, agreements and covenants contained herein shall survive the
closing of the Placement and delivery of the Securities. This 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 both parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile transmission or a .pdf format file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or .pdf signature page were an original thereof.


 


SECTION
12. CONFIDENTIALITY. The Placement Agent (i) will keep the Confidential Information (as such term is defined below)
confidential and will not (except as required by applicable law or stock exchange requirement, regulation or legal process (“Legal
Requirement”), without the Company’s prior written consent, disclose to any person any Confidential Information,
and (ii) will not use any Confidential Information other than in connection with the Placement. The Placement Agent further agree,
severally and not jointly, to disclose the Confidential Information only to its Representatives (as such term is defined below)
who need to know the Confidential Information for the purpose of the Placement, and who are informed by the Placement Agent of
the confidential nature of the Confidential Information. The term “Confidential Information” shall mean, all
confidential, proprietary and non-public information (whether written, oral or electronic communications) furnished by the Company
to the Placement Agent or its Representatives in connection with such Placement Agent’s evaluation of the Placement. Information
communicated orally or otherwise than in writing, shall only be considered Confidential Information if such information is designated
as being confidential at the time of disclosure (or promptly thereafter) and is reduced in writing and identified to the Placement
Agent as being Confidential Information immediately after the initial disclosure. The term “Confidential Information”
will not, however, include information which (i) is or becomes publicly available other than as a result of a disclosure by Placement
Agent or their Representatives in violation of this Agreement, (ii) is or becomes available to the Placement Agent or any of their
Representatives on a non-confidential basis from a third-party, (iii) is known to the Placement Agent or any of its Representatives
prior to disclosure by the Company or any of its Representatives or (iv) is or has been independently developed by the Placement
Agent and/or the Representatives without use of any Confidential Information furnished to it by the Company, or (v) is required
to be disclosed pursuant to applicable legal or regulatory authority. The term “Representatives” shall mean the Placement
Agent’s directors, board committees, officers, employees, financial advisors, attorneys and accountants. This provision
shall be in full force until the earlier of (a) the date that the Confidential Information ceases to be confidential and (b) two
years from the date hereof. Notwithstanding any of the foregoing, in the event that the Placement Agent or any of its Representatives
are required by Legal Requirement to disclose any of the Confidential Information, such Placement Agent and its Representatives
will furnish only that portion of the Confidential Information which such Placement Agent or its Representative, as applicable,
is required to disclose by Legal Requirement as advised by counsel, and will use reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded the Confidential Information so disclosed.


 




    	 



     


    

 


SECTION
13. 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 sent to the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City
time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is sent to
the email address on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York
City time) on any business day, (c) the third business day following the date of mailing, if sent by U.S. internationally recognized
air 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 set forth on the signature pages hereto.


 


SECTION
14. Press Announcements. The Company agrees that the Placement Agent
shall, from and after any Closing, have the right to reference the Placement and the Placement Agent’s role in connection
therewith in the Placement Agent’s marketing materials and on its website and to place advertisements in financial and other
newspapers and journals, in each case at its own expense.


 


[The
remainder of this page has been intentionally left blank.]


 




    	 



     


    

 


Please
confirm that the foregoing correctly sets forth our agreement by signing and returning to the Placement Agent the enclosed copy
of this Agreement.


 


	 	Very truly yours,
	 	 	 
	 	KINGSWOOD CAPITAL MARKETS, division of Benchmark Investments, Inc.






	 	 	 
	 	By:
    	              
	 	Name:	Samuel Fleischman
	 	Title:
    	Supervisory Principal
	 	 	 
	 	Address for notice:
	 	17 Battery Place, Suite 625
	 	New York, NY 10004
	 	Attention: David W. Boral
	 	


Email: dboral@kingswoodcm.com





 


Accepted
and Agreed to as of


the
date first written above:


 


	DIGITAL
    ALLY, INC.  	 
	 	 	 
	By:
    	       	 
	Name:	Stanton
    E. Ross	 
	Title:	Chairman
    and Chief Executive Officer	 


 


Address
for notice:


15612
College Blvd.


Lenexa,
KS 66219


Attention:
Stanton E. Ross


Email:
stan.ross@digitalallyinc.com


 


[Signature
Page to January 2021 Placement Agency Agreement Between 


Kingswood
Capital Market and Digital Ally, Inc.]


 




    	 



     


    

 


ADDENDUM
A


INDEMNIFICATION
PROVISIONS


 


In
connection with the engagement of Kingswood Capital Markets, division of Benchmark Investments, Inc. (the “Placement Agent”),
by Digital Ally, Inc. (the “Company”) pursuant to a placement agency
agreement dated as of the date hereof, between the Company and the Placement Agent, as it may be amended from time to time in
writing (the “Agreement”), the Company hereby agrees as follows:


 


1.
To the extent permitted by law, the Company will indemnify the Placement Agent and its affiliates, directors, officers, employees
and controlling persons (within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities
Exchange Act of 1934) against all losses, claims, damages, expenses and liabilities, as the same are incurred (including the reasonable
fees and expenses of counsel), relating to or arising out of its activities hereunder or pursuant to the Agreement, except, with
regard to the Placement Agent, to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect
thereof) are found in a final judgment (not subject to appeal) by a court of law to have resulted primarily and directly from
the Placement Agent’s willful misconduct or gross negligence in performing the services described herein, as the case may
be.


 


2.
Promptly after receipt by the Placement Agent of notice of any claim or the commencement of any action or proceeding with respect
to which the Placement Agent is entitled to indemnity hereunder, the Placement Agent will notify the Company in writing of such
claim or of the commencement of such action or proceeding, and the Company will assume the defense of such action or proceeding
and will employ counsel reasonably satisfactory to the Placement Agent and will pay the fees and expenses of such counsel. Notwithstanding
the preceding sentence, the Placement Agent will be entitled to employ counsel separate from counsel for the Company and from
any other party in such action if counsel for the Placement Agent reasonably determines that it would be inappropriate under the
applicable rules of professional responsibility for the same counsel to represent both the Company and the Placement Agent. In
such event, the reasonable fees and disbursements of no more than one such separate counsel will be paid by the Company. The Company
will have the exclusive right to settle the claim or proceeding provided that the Company will not settle any such claim, action
or proceeding without the prior written consent of the Placement Agent, which will not be unreasonably withheld.


 


3.
The Company agrees to notify the Placement Agent promptly of the assertion against it or any other person of any claim or the
commencement of any action or proceeding relating to a transaction contemplated by the Agreement.


 


4.
If for any reason the foregoing indemnity is unavailable to the Placement Agent or insufficient to hold the Placement Agent harmless,
then the Company shall contribute to the amount paid or payable by the Placement Agent, as the case may be, as a result of such
losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received
by the Company on the one hand, and the Placement Agent on the other, but also the relative fault of the Company on the one hand
and the Placement Agent on the other that resulted in such losses, claims, damages or liabilities, as well as any relevant equitable
considerations. The amounts paid or payable by a party in respect of losses, claims, damages and liabilities referred to above
shall be deemed to include any legal or other fees and expenses incurred in defending any litigation, proceeding or other action
or claim. Notwithstanding the provisions hereof, the Placement Agent’s share of the liability hereunder shall not be in
excess of the amount of fees actually received, or to be received, by the Placement Agent under the Agreement (excluding any amounts
received as reimbursement of expenses incurred by the Placement Agent).


 


5.
These Indemnification Provisions shall remain in full force and effect whether or not the transaction contemplated by the Agreement
is completed and shall survive the termination of the Agreement, and shall be in addition to any liability that the Company might
otherwise have to any indemnified party under the Agreement or otherwise.


 


[The
remainder of this page has been intentionally left blank.]


 




    	A-1



     


    

 


	 	Very truly yours,
	 	 	 
	 	KINGSWOOD CAPITAL MARKETS, division of Benchmark Investments, Inc.






	 	 	 
	 	By:
     	                     
	 	Name:	Samuel
    Fleischman
	 	Title:	Supervisory
    Principal
	 	 	 
	 	Address for notice:
	 	17 Battery Place, Suite 625
	 	New York, NY 10004
	 	Attention: David W. Boral
	 	


Email: dboral@kingswoodcm.com





 


Accepted
and Agreed to as of


the
date first written above:


 


	DIGITAL
    ALLY, INC.	 
	 	 	 
	By:
    	 	 
	Name:	Stanton
    E. Ross	 
	Title:	Chairman
    and Chief Executive Officer	 


 


Address
for notice:


15612
College Blvd.

Lenexa, KS 66219


Attention:
Stanton E. Ross


Email:
stan.ross@digitalallyinc.com


 


[Signature
Page to Indemnification Provisions


Pursuant
to January 2021 Placement Agency Agreement


between
Kingswood Capital Markets and Digital Ally, Inc.]