Document:

Form of Stock Option Agreement (ISO and Non-Qualified) 2008 Stock Option Plan

 Exhibit 10.16 
 DIGITAL ALLY, INC. 
 2008 STOCK OPTION AND RESTRICTED STOCK PLAN 
 STOCK OPTION AGREEMENT 
 Unless
otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement. 
  

	I.	NOTICE OF STOCK OPTION GRANT 

  

	
	 Optionee’s Name and Address:

 You have been granted an option to purchase Common Stock of the Company, subject to the terms and
conditions of the Plan and this Option Agreement, as follows: 
  

			
	 Date of Grant:
	  	
		
	 Exercise Price per Share:
	  	
		
	 Total Number of Shares Granted:
	  	
		
	 Total Exercise Price:
	  	
		
	 Type of Option:
	  	                      Incentive Stock
Option
                      Nonstatutory Stock
Option

		
	 Term/Expiration Date:
	  	
		
	 Vesting Schedule:
	  	
		
	 Termination Period:
	  	

	II.	AGREEMENT 

 1. Grant of Option. The
Board of Directors of the Company hereby grants to the Optionee named in the Notice of Grant attached as Part I of this Agreement (the “Optionee”), an option (the “Option”) to purchase the number of Shares, as set forth in the
Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the “Exercise Price”), subject to the terms and conditions of the Plan, which are incorporated herein by reference. In the event of a conflict between the
terms and conditions of the Plan and the terms and conditions of this Option Agreement, the terms and conditions of the Plan shall prevail. If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is intended
to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d) it shall be treated as a
Nonstatutory Stock Option (“NSO”). 
 2. Exercise of Option. 
 2.1. Right to Exercise. 
 2.1.1. This Option is exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and the applicable provisions of the Plan and this Option Agreement. In the event of
Optionee’s death, Disability or other termination of Optionee’s employment or consulting relationship, the exercisability of the Option is governed by the applicable provisions of the Plan and this Option Agreement. 
 2.1.2. Should (i) Optionee’s Continuous Status as an Employee be terminated for misconduct (which includes, but is not limited
to, any act of dishonesty, moral turpitude, fraud or embezzlement); (ii) Optionee make any unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary; or (iii) Optionee otherwise act in
such a manner not in the best interests of the Company (as reasonably determined by the Company’s Board of Directors), then, notwithstanding any other provision in this Agreement or the Plan to the contrary, in any such event this Option shall
terminate immediately and cease to be outstanding. 
 2.2. Method of Exercise.  
 2.2.1. This Option is exercisable by delivery of an exercise notice, in the form attached as Exhibit A (the “Exercise Notice”),
which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company. The Exercise Notice shall be accompanied by payment of the aggregate
Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price. 
 2.2.2. No Shares shall be issued pursuant to the exercise of this Option unless such issuance and exercise complies with all relevant
provisions of law and the requirements of any stock exchange or quotation service upon which the Shares are then listed. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the
date the Option is exercised with respect to such Exercised Shares. 
 3. Method of Payment. Payment of the aggregate Exercise Price
shall be by any of the following, or a combination thereof, at the election of the Optionee: 
 3.1. cash; 
 3.2. check; or 

 3.3. delivery of a properly executed exercise notice together with such other
documentation as the Administrator and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the exercise price. 
 4. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 

5. Term of Option. This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option Agreement. 
 6. Registration under the Securities Act of 1933.

 6.1. Registration and Legends. The Optionee understands that (i) the Company has not registered the Option or
the Shares under the Securities Act of 1933, as amended (the “Act”), or the applicable securities laws of any state in reliance on exemptions from registration and (ii) such exemptions depend upon the Optionee’s investment intent
at the time the Optionee acquires the Option or the Shares. The Optionee therefore represents and warrants that Optionee is acquiring the Option, and will acquire the Shares, for the Optionee’s own account for investment and not with a view to
distribution, assignment, resale or other transfer of the Option or the Shares. Because the Option and the Shares are not registered, the Optionee is aware that the Optionee must hold them indefinitely unless they are registered under the Act and
any applicable securities laws or the Optionee must obtain exemptions from such registration. Upon exercise, in part or in whole, of this Option, the Shares shall bear the following legend: 
 The shares of Common Stock represented by this certificate have not been registered under the Securities Act of 1933, as amended, or any applicable state
securities laws, and they may not be offered for sale, sold, transferred, pledged or hypothecated without an effective registration statement under the Act and under any applicable state securities laws, or an opinion of counsel, satisfactory to the
Company, that an exemption from such registration is available. 
 6.2. No-Action Letter. The Company agrees that it will be satisfied
that no post-effective amendment or new registration is required for the public sale of the Shares if it shall be presented with a letter from the Staff of the Securities and Exchange Commission (the “Commission”), stating in effect that,
based upon stated facts which the Company shall have no reason to believe are not true in any material respect, the Staff will not recommend any action to the Commission if such Shares are offered and sold without delivery of a prospectus, and that,
therefore, no Registration Statement under which such Shares are to be registered is required to be filed. 
 7. Entire Agreement;
Governing Law. The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This Option Agreement is governed by
Nevada law except for that body of law pertaining to conflict of laws. 
 8. No Guarantee of Employment. OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE FOR
THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE. 

 [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 

 By your signature and the signature of the Company’s representative below, you and the Company agree
that this Option is granted under and governed by the terms and conditions of the Plan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Option Agreement and fully understands all provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors upon any
questions relating to the Plan and Option Agreement. Optionee further agrees to notify the Company upon any change in the residence address indicated below. 
  

									
	OPTIONEE:	 		 	DIGITAL ALLY, INC.
				
	 	 		 	By:	 	 
	Signature	 		 		 	Signature
			
	 	 		 	 
	 	 		 	Print Name
				
	 	 		 	Title:	 	 
	Residence Address	 		 		 	

 CONSENT OF SPOUSE 
 The undersigned spouse of Optionee has read and hereby approves the terms and conditions of the Plan and this Option Agreement. In consideration of the Company’s granting his or her spouse the right to purchase
Shares as set forth in the Plan and this Option Agreement, the undersigned hereby agrees to be irrevocably bound by the terms and conditions of the Plan and this Option Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned’s spouse as attorney-in-fact for the undersigned with respect to any amendment or exercise of rights under the Plan or this Option Agreement. 
  

	
	
	  
	Spouse of OptioneePromissory Note with Enterprise Bank dated February 13, 2008

 EXHIBIT 10.17 
 PROMISSORY NOTE 
  

															
	Principal	  	 Loan Date
	  	 Maturity
	  	 Loan No
	  	 Call / Coll

	  	 Account
	  	 Officer

	  	 Initials

	$1,500,000.00	  	02-13-2008	  	02-13-2009	  	8126863	  	20	  		  	TDM	  	

 References in the boxes above are for Lender’s use only and do not limit the applicability of
this document 
 to any particular loan or item. 
 Any item above containing “***” has been omitted due to text length limitations. 
  

							
	Borrower:	  	 DIGITAL ALLY, INC. (TIN: 20-0064269)
 7311 WEST
130TH STREET,
 SUITE 170
 OVERLAND PARK, KS
66213
	  	Lender:	  	 Enterprise Bank & Trust
 E Jackson /
Independence
 12695 Metcalf Avenue
 P.O. Box
25250
 Shawnee Mission, KS 66225

  

					
	Principal Amount: $1,500,000.00	  	Initial Rate: 5.500%	  	Date of Note: February 13, 2008

 PROMISE TO PAY. DIGITAL ALLY, INC. (“Borrower”) promises to pay to Enterprise
Bank & Trust (“Lender”), or order, in lawful money of the United States of America, the principal amount of One Million Five Hundred Thousand & 00/100 Dollars ($1,500,000.00) or so much as may be outstanding, together
with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance. 
 PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on February 13, 2009. In addition, Borrower will pay regular monthly payments of all
accrued unpaid interest due as of each payment date, beginning March 13, 2008, with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will be
applied first to any accrued unpaid Interest; then to principal; then to any unpaid collection costs; and then to any late charges. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as
Lender may designate in writing. 
 VARIABLE INTEREST RATE. The Interest rate on this Note is subject to change from time to time
based on changes in an index which is the Enterprise Bank Prime Rate (the “Index”). The Index is not necessarily the lowest rate charged by Lender on its loans and is set by Lender in its sole discretion. If the Index becomes unavailable
during the term of this loan, Lender may designate a substitute Index after notifying Borrower. Lender will tell Borrower the current index rate upon Borrower's request. The interest rate change will not occur more often than each day. Borrower
understands that Lender may make loans based on other rates as well. The Index currently is 6.000% per annum. The interest rate to be applied to the unpaid principal balance during this Note will be at a rate of 0.500 percentage points under
the Index, resulting in an initial rate of 5.500% per annum. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. 
 PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to
by Lender in writing, relieve Borrower of 

 
Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower
agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights under this Note, and Borrower
will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment Instrument that indicates that the payment constitutes “payment in full” of the
amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Enterprise Bank & Trust, 1281 North Warson Road St. Louis, MO 63132. 
 LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment or
$100.00, whichever is greater. 
 INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest
rate on this Note shall be increased by adding a 3.000 percentage point margin (“Default Rate Margin”). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no default.
However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law. 
 DEFAULT. Each of the
following shall constitute an event of default (“Event of Default”) under this Note: 
 Payment Default. Borrower fails to make any payment
when due under this Note. 
 Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained
in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 
 False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. 
 Insolvency. The dissolution or
termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 
 Creditor or Forfeiture Proceedings. Commencement of
foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan any suit or arbitration proceeding
is commenced against Borrower, or any judgment or arbitration award is entered against Borrower. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if
there Is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits
with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. 

 Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or
accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this
Note. 
 Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower. 
 Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is
impaired. 
 Insecurity. Lender in good faith believes itself insecure. 
 LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid Interest immediately due, and then Borrower will pay that amount. 
 ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower Will pay Lender that
amount. This includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses whether or not there is a lawsuit, including attorneys’ fees and expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or Injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. 
 GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Missouri
without regard to Its conflicts of law provisions. This Note has been accepted by Lender In the State of Missouri. 
 CHOICE OF VENUE. Borrower agrees
that the sole jurisdiction of any lawsuit arising hereunder shall be the state or federal courts having jurisdiction over any county in which the Lender has an office. 
 DISHONORED ITEM FEE. Borrower wilt pay a fee to Lender of $20.00 if Borrower makes a payment on Borrower’s loan and the check or
preauthorized charge with which Borrower pays is later dishonored. 
 RIGHT OF SETOFF. To the extent permitted by applicable law,
Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether checking, savings, or some other account). This includes ail accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect Lender’s charge and setoff rights provided in this paragraph. 
 COLLATERAL. Borrower acknowledges this Note is secured by a Commercial Security Agreement on all Corporate Assets. Failure to identify collateral
for this note shall not constitute a waiver of such collateral. 
 LINE OF CREDIT. This Note evidences a revolving line of credit.
Advances under this Note, as well as directions for payment from Borrower's accounts, may be requested orally or in writing by Borrower or by an authorized person. Lender may, but need not, require that all oral requests be confirmed in writing.
Borrower agrees to be liable for all sums either: (A) advanced in accordance 

 
with the instructions of an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid principal balance owing on this
Note at any time may be evidenced by endorsements on this Note or by Lender’s internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor is in
default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing business or Is insolvent;
(C) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor’s guarantee of this Note or any other loan with Lender; (D) Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender; or (E) Lender in good faith believes itself insecure. 
 SUCCESSOR INTERESTS. The terms of this
Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors and assigns, and shall Inure to the benefit of Lender and its successors and assigns. 
 GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon
any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security Interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. Alt such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under
this Note are joint and several. 
 FAILURE TO PROVIDE INSURANCE. Borrower agrees to deliver to Lender by the loan closing date
evidence of the required insurance as set forth in the security documents for the loan. Unless Borrower provides evidence of the insurance coverage required by Lender, Lender may purchase insurance at Borrower’s expense to protect Lender’s
interest in the collateral. This insurance may, but need not, protect Borrower’s interest. The coverage that Lender purchases may not pay any claim that Borrower makes, or any claim that is made against Borrower in connection with the
collateral. Borrower may later cancel any insurance purchased by Lender, but only after providing evidence that Borrower has obtained Insurance as required by Lender. if Lender purchases insurance for the collateral, Borrower will be responsible for
the cost of that Insurance, including the insurance premium, interest and any other charges Lender may impose in connection with placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The cost of the
insurance may be more than the cost of insurance Borrower may be able to obtain on Borrower’s own. In addition, the insurance may not provide any public liability or property damage indemnification and may not meet the requirements of any
financial responsibility laws. 
 ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO 'THE CREDIT AGREEMENT, TO PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR
DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE 

 
CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY
IT. 
 JURY WAIVER. Borrower hereby waives the right to any jury trial In any action, proceeding, or counterclaim brought by
either Lender or Borrower against the other. 
 PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE
VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. 
 BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY
NOTE. 
  

			
	DIGITAL ALLY, INC.
		
	By:	 	 
		 	STANTON E. ROSS, Chairman and CEO of DIGITAL
ALLY, INC.

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