Exhibit 10.59



 


DIGITAL ALLY, INC.


 


August [__], 2014


 


First American Stock Transfer


4747 North 7th St., Suite 170


Phoenix, AZ 85014


 


  Re:   Digital Ally, Inc. - Lock-Up Agreement




 


Dear Sirs:


 


This Lock-Up Agreement
is being delivered to you in connection with the Securities Purchase Agreement (the “Purchase Agreement”), dated
as of August 25, 2014 by and among Digital Ally, Inc. (the “Company”) and the investors party thereto (the “Buyers”),
with respect to the issuance of (i) senior secured convertible notes of the Company (the “Notes”) pursuant to
which shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) may be issued
and (ii) warrants (the “Warrants”) which Warrants will be exercisable to purchase Common Stock.
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase
Agreement.


 


In order to induce the
Buyers to enter into the Purchase Agreement, the undersigned agrees that, commencing on the date hereof and ending on the date
the Notes are no longer outstanding (the “Lock-Up
Period”), the undersigned will not, and will cause all affiliates (as defined in Rule 144 promulgated under the
Securities Act of 1933, as amended) of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned
not to, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase,
make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any
shares of Common Stock or Common Stock
Equivalents, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder with respect to any shares of Common Stock
or Common Stock Equivalents owned directly by the undersigned (including holding as
a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the Securities
and Exchange Commission (collectively, the “Undersigned’s Shares”), or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any
of the Undersigned’s Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by
delivery of shares of Common Stock or other securities, in cash or otherwise, (iii) make any demand for or exercise any right or
cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of
Common Stock or Common Stock Equivalents
or (iv) publicly disclose the intention to do any of the foregoing.


 


The
foregoing restriction is expressly agreed to preclude the undersigned, and any affiliate of the undersigned and any person
in privity with the undersigned or any affiliate of the undersigned, from engaging in any
hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition
of the Undersigned’s Shares even if the Undersigned’s Shares 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 or call option) with respect to any of the Undersigned’s Shares or with
respect to any security that includes, relates to, or derives any significant part of its value from the Undersigned’s Shares.


 



    	 



    	 



    

 


Notwithstanding
the foregoing, the undersigned may transfer the Undersigned’s Shares (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, (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 or (iii) up to the Release Percentage per month of the Undersigned’s Shares as of the Closing Date to any third
party. For purposes of this Lock-Up Agreement, (x) “immediate family” shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin and (y) “Release Percentage” means, initially, zero
percent (0%), and after the date that is six (6) months immediately following the Closing Date, ten percent (10%). The undersigned
now has, and, except as contemplated by the immediately preceding sentence, for the duration of this Lock-Up Agreement will have,
good and marketable title to the Undersigned’s Shares, free and clear of all liens, encumbrances, and claims whatsoever.
The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent (the
“Transfer Agent”) and registrar against the transfer of the Undersigned’s Shares except in compliance
with the foregoing restrictions.


 


In order to enforce this
covenant, the Company shall impose irrevocable stop-transfer instructions preventing the Transfer Agent from effecting any actions
in violation of this Lock-Up Agreement.


 


The undersigned acknowledges
that the execution, delivery and performance of this Lock-Up Agreement is a material inducement to each Buyer to complete the transactions
contemplated by the Purchase Agreement and that the Company shall be entitled to specific performance of the undersigned’s
obligations hereunder. The undersigned hereby represents that the undersigned has the power and authority to execute, deliver and
perform this Lock-Up Agreement, that the undersigned has received adequate consideration therefor and that the undersigned will
indirectly benefit from the closing of the transactions contemplated by the Purchase Agreement.


 


The
undersigned understands and agrees that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s
heirs, legal representatives, successors, and assigns.


 


This
Lock-Up Agreement may be executed in two counterparts, each of which shall be deemed an original but both of which shall be considered
one and the same instrument.


 


This
Lock-Up Agreement will be governed by and construed in accordance with the laws of the State of New York, without giving effect
to any choice of law or conflicting provision or rule (whether of the State of New York, or any other jurisdiction) that would
cause the laws of any jurisdiction other than the State of New York to be applied. In furtherance of the foregoing, the internal
laws of the State of New York will control the interpretation and construction of this Lock-Up Agreement, even if under such jurisdiction’s
choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.


 


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	 	Very truly yours,
	 	 
	 	 
	 	Exact Name of Shareholder
	 	 
	 	 
	 	Authorized Signature
	 	 
	 	 
	 	Title


 


	Agreed to and Acknowledged:	 
	 	 
	DIGITAL ALLY, INC.	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 




 






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