Document:

EXHIBIT 4.1 

 

SEVENTH SUPPLEMENTAL INDENTURE 

 

between 

 

SACHEM CAPITAL CORP. 

 

and 

 

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION

 

as Trustee 

 

Dated as of August 23, 2022

 

 

 

SEVENTH SUPPLEMENTAL INDENTURE 

 

THIS SEVENTH SUPPLEMENTAL
INDENTURE (this “Seventh Supplemental Indenture”), dated as of August 23, 2022, is between Sachem Capital Corp., a New York
corporation (the “Company”), and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National
Association), as trustee (the “Trustee”). Except as otherwise set forth in this Seventh Supplemental Indenture, all capitalized
terms used herein shall have the meaning set forth in the Base Indenture (as defined below).

 

RECITALS OF THE COMPANY 

 

The Company and the Trustee
executed and delivered an Indenture, dated as of June 21, 2019 (the “Base Indenture” and, as supplemented by this Seventh
Supplemental Indenture, the “Indenture”), to provide for the issuance by the Company from time to time of the Company’s
unsecured debentures, notes or other evidences of indebtedness (the “Securities”), to be issued in one or more series as provided
in the Indenture.

 

The Company desires to issue
and sell up to $35,000,000 aggregate principal amount (or up to $40,250,000 aggregate principal amount if the underwriters’ option
to purchase additional Securities is exercised in full) of the Company’s 8.00% Notes due September 30, 2027 (the “Notes”).

 

The Company previously entered
into the First Supplemental Indenture, dated as of June 21, 2019 (the “First Supplemental Indenture”), the Second Supplemental
Indenture, dated as of November 7, 2019 (the “Second Supplemental Indenture”), the Third Supplemental Indenture, dated as
of September 4, 2020 (the “Third Supplemental Indenture”), the Fourth Supplemental Indenture, dated as of December 20, 2021
(the “Fourth Supplemental Indenture”), the Fifth Supplemental Indenture, dated as of March 9, 2022 (the “Fifth Supplemental
Indenture”) and the Sixth Supplemental Indenture, dated as of May 11, 2022 (the “Sixth Supplemental Indenture”), each
of which amended and supplemented the Base Indenture. None of the First Supplemental Indenture, the Second Supplemental Indenture, the
Third Supplemental Indenture, Fourth Supplemental Indenture, the Fifth Supplemental Indenture or the Sixth Supplemental Indenture are
applicable to the Notes.

 

Sections 901(4) and 901(6)
of the Base Indenture provide that without the consent of Holders of the Securities of any series issued under the Indenture, the Company,
when authorized by or pursuant to a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures
supplemental to the Base Indenture to (i) change or eliminate any of the provisions of the Base Indenture when there is no Security
Outstanding of any series created prior to the execution of the supplemental indenture that is entitled to the benefit of such provision
and (ii) establish the form or terms of Securities of any series as permitted by Section 201 and Section 301 of the Base
Indenture.

 

 

 

    	 	 	 

     

    

 

The Company desires to establish
the form and terms of the Notes and to modify, alter, supplement and change certain provisions of the Base Indenture for the benefit of
the Holders of the Notes (except as may be provided in a future supplemental indenture to the Base Indenture (“Future Supplemental
Indenture”).

 

The Company has duly authorized
the execution and delivery of this Seventh Supplemental Indenture to provide for the issuance of the Notes and all acts and things necessary
to make this Seventh Supplemental Indenture a valid, binding, and legal obligation of the Company and to constitute a valid agreement
of the Company, in accordance with its terms, have been done and performed.

 

NOW, THEREFORE, for and in
consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:

 

ARTICLE I.

 

TERMS OF THE NOTES

 

Section 1.01.  Terms of the Notes.
The following terms relating to the Notes are hereby established:

 

(a)   The Notes shall
constitute a series of Senior Securities having the title “8.00% Notes due September 30, 2027.” The Notes shall bear a CUSIP
number of 78590A 877 and an ISIN of US78590A8779.

 

(b)   The aggregate
principal amount of the Notes that may be initially authenticated and delivered under the Indenture (except for Notes authenticated and
delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305, 306, 906, 1107
or 1305 of the Base Indenture, and except for any Securities that, pursuant to Section 303 of the Base Indenture, are deemed never
to have been authenticated and delivered under the Indenture) shall be up to $35,000,000 (or up to $40,250,000 aggregate principal amount
if the underwriters’ option to purchase additional Securities is exercised in full). Under a Board Resolution, Officers’ Certificate
pursuant to Board Resolutions or an indenture supplement, the Company may from time to time, without the consent of the Holders of Notes,
issue additional Notes (in any such case “Additional Notes”) having the same ranking and the same interest rate, maturity
and other terms as the Notes. Any Additional Notes and the existing Notes will constitute a single series under the Indenture and all
references to the relevant Notes herein shall include the Additional Notes unless the context otherwise requires.

 

(c)   The entire outstanding
principal of the Notes shall be payable on September 30, 2027, unless earlier redeemed or repurchased in accordance with the provisions
of the Indenture.

 

(d)   The rate at
which the Notes shall bear interest shall be 8.00% per annum. The Interest Payment Dates for the Notes shall be March 30, June 30, September
30 and December 30 of each year, commencing December 30, 2022 (if an Interest Payment Date falls on a day that is not a Business Day,
then the applicable interest payment will be made on the next succeeding Business Day and no additional interest will accrue as a result
of such delayed payment). The initial interest period will be the period from and including August 23, 2022, to, but excluding, December
30, 2022, and the subsequent interest periods will be the periods from and including an Interest Payment Date to, but excluding, the next
Interest Payment Date or the Stated Maturity, as the case may be; the interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date, will be paid to the Person in whose name the Note (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest, which shall be March 15, June 15, September 15, or December 15 (whether
or not a Business Day), as the case may be, immediately preceding such Interest Payment Date. Payment of principal of (and premium, if
any, on) and any such interest on the Notes will be made at the office of the Trustee located at 111 Fillmore Avenue, St. Paul, MN 55107,
Attention: Sachem Capital Corp. (8.00% Notes Due September 30, 2027) (Karen R. Beard, Vice President) or at such other address as designated
by the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public
and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the Security Register; provided, further, however, that
so long as the Notes are registered to Cede & Co., such payment will be made by wire transfer in accordance with the procedures
established by The Depository Trust Company and the Trustee. Interest on the Notes will be computed on the basis of a 360-day year of
twelve 30-day months.

 

    	 	 	 

     

    

 

(e)   The Notes shall
be initially issuable in global form (each such Note, a “Global Note”). The Global Notes and the Trustee’s certificate
of authentication thereon shall be substantially in the form of Exhibit A to this Seventh Supplemental Indenture. Each Global Note
shall represent the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate amount
of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Security
Registrar, in accordance with Sections 203 and 305 of the Base Indenture.

 

(f)    The depositary
for such Global Notes (the “Depositary”) shall be The Depository Trust Company, New York, New York. The Security Registrar
with respect to the Global Notes shall be the Trustee.

 

(g)   The Notes shall
be defeasible pursuant to Section 1402 or Section 1403 of the Base Indenture. Covenant defeasance contained in Section 1403
of the Base Indenture shall apply to the covenants contained in Sections 1006, 1008 and 1009 of the Indenture.

 

(h)   The Notes
shall be redeemable pursuant to Section 1101 of the Base Indenture and as follows:

 

(i)          
The Notes will be redeemable in whole or in part at any time or from time to time, at the option of the Company, on or after August 23,
2024, at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest payments otherwise
payable for the then-current quarterly interest period accrued to, but excluding, the date fixed for redemption.

 

 

(ii)       
Notice of redemption shall be given in writing and mailed, first-class postage prepaid or by overnight courier guaranteeing next-day delivery,
to each Holder of the Notes to be redeemed, not less than thirty (30) nor more than sixty (60) days prior to the Redemption
Date, at the Holder’s address appearing in the Security Register. All notices of redemption shall contain the information set forth
in Section 1104 of the Base Indenture.

 

(iii)     
If the Company elects to redeem only a portion of the Notes, the Trustee will determine the method for selecting the particular Notes
to be redeemed, in accordance with Section 1103 of the Base Indenture and the Investment Company Act and the rules of any national
securities exchange or quotation system on which the Notes are listed, in each case to the extent applicable.

 

(iv)      
Unless the Company defaults in payment of the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the
Notes called for redemption hereunder.

 

(i)     The Notes shall not
be subject to any sinking fund pursuant to Section 1201 of the Base Indenture.

 

(j)     The Notes shall be
issuable in denominations of $25 and integral multiples of $25 in excess thereof.

 

(k)   Holders of the Notes will not
have the option to have the Notes repaid prior to the Stated Maturity.

 

(l)     The Notes are hereby
designated as “Senior Securities” under the Indenture.

 

    	 	 	 

     

    

 

ARTICLE II.

 

COVENANTS

 

Section 2.01.  Except as may be provided
in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture,
whether now or hereafter issued and Outstanding, Article Ten of the Base Indenture shall be amended by adding the following new Sections
1009, and 1010 thereto, each as set forth below:

 

“Section 1009. Asset Coverage Ratio.

 

The Company hereby agrees
that for the period of time during which Notes are Outstanding, the Company will not pay any dividends or make any distributions in excess
of 90% of its taxable income, incur any Indebtedness or purchase any shares of its outstanding capital stock, unless, in every such case,
at the time of the incurrence of such Indebtedness or at the time of any such dividend, distribution or purchase, the Company has an Asset
Coverage of at least 150% after giving effect to the incurrence of such Indebtedness and the application of the net proceeds therefrom
or after deducting the amount of such purchase, price as the case may be. “Asset Coverage” means the ratio (expressed as a
percentage) which the total assets of the Company bears to the aggregate amount of indebtedness (including the aggregate principal amount
of the involuntary liquidation preference of redeemable preferred stock, if any), of the Company. For purposes of the Supplemental Indenture,
 “Indebtedness” means, without duplication: (a) all indebtedness for borrowed money; (b) all obligations evidenced by notes,
bonds, debentures or similar instruments; and (c) any lease of, or other arrangement conveying the right to use, any property by a Person
as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.

 

 “Section 1010. Commission
Reports and Reports to Holders.

  

If, at any time, the Company
is not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act to file any periodic reports with the Commission,
the Company agrees to furnish to the Holders of Notes and the Trustee for the period of time during which the Notes are Outstanding: (i) within
90 days after the end of the each fiscal year of the Company (which fiscal year ends on December 31), audited annual consolidated financial
statements of the Company and (ii) within 45 days after the end of each fiscal quarter of the Company (other than the Company’s
fourth fiscal quarter), unaudited interim consolidated financial statements of the Company. All such financial statements shall be prepared,
in all material respects, in accordance with GAAP.”

 

ARTICLE III.

 

MEETINGS OF HOLDERS OF SECURITIES

 

Section 3.01.  Except as may be provided
in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture,
whether now or hereafter issued and Outstanding, Section 1505 of the Base Indenture shall be amended by replacing clause (c) thereof
with the following:

 

“(c) At any meeting
of Holders, each Holder of a Security of such series or proxy shall be entitled to one vote for each $25.00 principal amount of the Outstanding
Securities of such series held or represented by such Holder; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy.”

 

    	 	 	 

     

    

 

ARTICLE IV.

 

MISCELLANEOUS

 

Section 4.01.  This Seventh Supplemental
Indenture and the Notes shall be governed by and construed in accordance with the law of the State of New York, without regard to principles
of conflicts of laws. This Seventh Supplemental Indenture is subject to the provisions of the Trust Indenture Act that are required to
be part of the Indenture and shall, to the extent applicable, be governed by such provisions.

  

Section 4.02.  In case any provision
in this Seventh Supplemental Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 4.03.  This Seventh Supplemental
Indenture may be executed in counterparts, each of which will be an original, but such counterparts will together constitute but one and
the same Seventh Supplemental Indenture. The exchange of copies of this Seventh Supplemental Indenture and of signature pages by facsimile,
..pdf transmission, email or other electronic means shall constitute effective execution and delivery of this Seventh Supplemental Indenture
for all purposes. Signatures of the parties hereto transmitted by facsimile, .pdf transmission, email or other electronic means shall
be deemed to be their original signatures for all purposes.

 

Section 4.04.  The Base Indenture,
as supplemented and amended by this Seventh Supplemental Indenture, is in all respects ratified and confirmed, and the Base Indenture
and this Seventh Supplemental Indenture shall be read, taken and construed as one and the same instrument with respect to the Notes. All
provisions included in this Seventh Supplemental Indenture supersede any conflicting provisions included in the Base Indenture with respect
to the Notes, unless not permitted by law. The Trustee accepts the trusts created by the Base Indenture, as supplemented by this Seventh
Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Base Indenture, as supplemented by this Seventh
Supplemental Indenture.

 

Section 4.05.  The provisions of this
Seventh Supplemental Indenture shall become effective as of the date hereof.

 

Section 4.06.  Notwithstanding anything
else to the contrary herein, the terms and provisions of this Seventh Supplemental Indenture shall apply only to the Notes and shall not
apply to any other series of Securities under the Base Indenture and this Seventh Supplemental Indenture shall not and does not otherwise
affect, modify, alter, supplement or change the terms and provisions of any other series of Securities under the Base Indenture, whether
now or hereafter issued and Outstanding.

 

Section 4.07.For the avoidance of doubt,
all notices, approvals, consents, requests and any communications hereunder or with respect to the Notes must be in writing (provided
that any communication sent to Trustee hereunder must be in the form of a document that is signed manually or by way of a digital signature
provided by DocuSign or Adobe (or such other digital signature provider as specified in writing to Trustee by the authorized representative),
in English.  The Company agrees to assume all risks arising out of the use of using digital signatures and electronic methods to
submit communications to Trustee, including without limitation the risk of Trustee acting on unauthorized instructions, and the risk of
interception and misuse by third parties.

 

Section 4.08.  The recitals contained
herein and in the Notes shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this Seventh Supplemental Indenture, the Notes or any Additional
Notes, except that the Trustee represents that it is duly authorized to execute and deliver this Seventh Supplemental Indenture, authenticate
the Notes and any Additional Notes and perform its obligations hereunder. The Trustee shall not be accountable for the use or application
by the Company of the Notes or any Additional Notes or the proceeds thereof. In acting hereunder and with respect to the Notes, the rights,
privileges, protections, immunities and benefits afforded to the Trustee under the Base Indenture, including, without limitation, its
right to be indemnified, are deemed to be incorporated herein, and shall be enforceable by the Trustee hereunder, in each of its capacities
hereunder as if set forth herein in full.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]  

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF, the parties hereto have caused
this Seventh Supplemental Indenture to be duly executed as of the date first above written.

 

	 	SACHEM CAPITAL CORP.
	 	 	 
	 	By:	 /s/ John L. Villano
	 	Name:	John L. Villano
	 	Title:	Chief Executive Officer
	 	 	 
	 	U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION, as Trustee
	 	 
	 	By:	 /s/ Karen R. Beard
	 	Name:	 Karen R. Beard
	 	Title:	 Vice President

 

[Signature page to Seventh Supplemental
Indenture]

 

    	 	 	 

     

    

 

Exhibit A – Form of Global Note 

 

This Security is a Global
Security within the meaning of the Indenture hereinafter referred to and is registered in the name of The Depository Trust Company or
a nominee thereof. This Security may not be exchanged in whole or in part for a Security registered, and no transfer of this Security
in whole or in part may be registered, in the name of any Person other than The Depository Trust Company or a nominee thereof, except
in the limited circumstances described in the Indenture.

 

Unless this certificate
is presented by an authorized representative of The Depository Trust Company to the issuer or its agent for registration of transfer,
exchange or payment and such certificate issued in exchange for this certificate is registered in the name of Cede & Co., or
such other name as requested by an authorized representative of The Depository Trust Company, any transfer, pledge or other use hereof
for value or otherwise by or to any person is wrongful, as the registered owner hereof, Cede & Co., has an interest herein. 

 

Sachem Capital Corp. 

 

	No.	
    $                    

    CUSIP No.: 78590A 877

    ISIN:  US78590A8779 

 

8.00% Notes due September 30, 2027

 

Sachem Capital Corp., a corporation
duly organized and existing under the laws of New York (herein called the “Company”, which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns,
the principal sum of THIRTY FIVE MILLION AND 00/100 Dollars (U.S. $35,000,000) on September 30, 2027 and to pay interest thereon from
August 23, 2022 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly on March
30, June 30, September 30 and December 30 in each year, commencing December 30, 2022, at the rate of 8.00% per annum, until the principal
hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name this Security is registered at the close of business on
the Regular Record Date for such interest, which shall be March 15, June 15, September 15, or December 15 (whether
or not a Business Day), as the case may be, immediately preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person
in whose name this Security is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided
in said Indenture. This Security may be issued as part of a series.

 

Payment of the principal of
(and premium, if any, on) and any such interest on this Security will be made at the office of the Trustee located at 111 Fillmore Avenue,
St. Paul, MN55107, Attention: Sachem Capital Corp. (8.00% Notes Due September 30, 2027) or at such other address as designated by the
Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the Security Register; provided, further, however, that
so long as this Security is registered to Cede & Co., such payment will be made by wire transfer in accordance with the procedures
established by The Depository Trust Company and the Trustee.

 

Reference is hereby made to
the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.

 

    	 	 	 

     

    

 

Unless the certificate of
authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.

Dated:

 

	 	SACHEM CAPITAL CORP.
	 	 	 
	 	By:	 
	 	Name:
	 	Title:

 

	 	 
	Attest	 
	 	 
	By:	 	 	 
	 	Name:	 
	 	Title:	 

 

[Global Note - Seventh Supplemental Indenture]

 

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.

 

Dated:

 

	 	U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee
	 	 	 
	 	By:	 
	 	Authorized Signatory

 

[Global Note - Seventh Supplemental Indenture]

 

    	 	 	 

     

    

 

Sachem Capital Corp. 

 

8.00% Notes due September 30, 2027

 

This Security is one of a
duly authorized issue of Senior Securities of the Company (herein called the “Securities”), issued and to be issued in one
or more series under an Indenture, dated as of June 21, 2019 (herein called the “Base Indenture”, which term shall have the
meaning assigned to it in such instrument), between the Company and U.S. Bank Trust Company, National Association (as successor in interest
to U.S. Bank National Association), as Trustee (herein called the “Trustee”, which term includes any successor trustee under
the Base Indenture), and reference is hereby made to the Base Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee, and the Holders of the Securities and of the terms upon which the Securities
are, and are to be, authenticated and delivered, as supplemented by the Seventh Supplemental Indenture, dated as of August 23, 2022, by
and between the Company and the Trustee (herein called the “Seventh Supplemental Indenture”; the Seventh Supplemental Indenture
and the Base Indenture collectively are herein called the “Indenture”). In the event of any conflict between the Base Indenture
and the Seventh Supplemental Indenture, the Seventh Supplemental Indenture shall govern and control.

 

This Security is one of the
series designated on the face hereof, which series is initially limited in aggregate principal amount to $35,000,000. Under a Board Resolution,
Officers’ Certificate pursuant to Board Resolutions or an indenture supplement, the Company may from time to time, without the consent
of the Holders of Securities, issue additional Securities of this series (in any such case “Additional Securities”) having
the same ranking and the same interest rate, maturity and other terms as the Securities. Any Additional Securities and the existing Securities
will constitute a single series under the Indenture and all references to the relevant Securities herein shall include the Additional
Securities unless the context otherwise requires. The aggregate amount of outstanding Securities represented hereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.

 

The Securities of this series
are subject to redemption in whole or in part at any time or from time to time, at the option of the Company, on or after August 23, 2024,
at a redemption price per security equal to 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments
otherwise payable for the then-current quarterly interest period accrued to, but excluding, the date fixed for redemption.

 

Notice of redemption shall
be given in writing and mailed, first-class postage prepaid or by overnight courier guaranteeing next-day delivery, to each Holder of
the Securities to be redeemed, not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date, at the
Holder’s address appearing in the Security Register. All notices of redemption shall contain the information set forth in Section 1104
of the Base Indenture.

 

If the Company elects to redeem
only a portion of the Securities, the Trustee will determine the method for selecting the particular Securities to be redeemed, in accordance
with Section 1.01 of the Seventh Supplemental Indenture and Section 1103 of the Base Indenture. In the event of redemption of
this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued
in the name of the Holder hereof upon the cancellation hereof.

 

Unless the Company defaults
in payment of the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the Securities called for redemption.

 

Holders of Securities do not have the option to
have the Securities repaid prior to September 30, 2027.

 

The Indenture contains provisions
for defeasance at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect
to this Security, in each case upon compliance with certain conditions set forth in the Indenture.

 

If an Event of Default with
respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.

 

    	 	 	 

     

    

 

The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the
rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series to
be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities
of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.

 

As provided in and subject
to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the
Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less
than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity, security, or both reasonably satisfactory
to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent
with such request, and shall have failed to institute any such proceeding, for sixty (60) days after receipt of such notice, request
and offer of indemnity and/or security. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

No reference herein to the
Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.

 

As provided in the Indenture
and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender
of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium
and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will
be issued to the designated transferee or transferees.

 

The Securities of this series
are issuable only in registered form without coupons in denominations of $25 and any integral multiples of $25 in excess thereof. As provided
in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering
the same.

 

No service charge shall be
made for any such registration of transfer or exchange, but the Company, the Trustee, or the Security Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of
this Security for registration of transfer, the Company, the Trustee, or the Security Registrar and any agent of the Company, the Trustee,
or the Security Registrar may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether
or not this Security be overdue, and none of the Company, the Trustee, the Security Registrar or any agent thereof shall be affected by
notice to the contrary.

 

All terms used in this Security which are defined
in the Indenture shall have the meanings assigned to them in the Indenture.

 

    	 	 	 

     

    

 

The Indenture and this Security
shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of
laws.

 

To the extent any provision
of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.Exhibit
10.1

 

EXCHANGE
AGREEMENT

 

THIS
EXCHANGE AGREEMENT (the “Agreement”) is dated this 23rd day of August 2022, by and among Digital Ally, Inc., a Nevada
corporation (the “Company”) and [●], a [_____] [corporation] (the “Holder”).

 

WHEREAS,
the Holder beneficially owns and holds the securities of the Company as set forth on Exhibit A hereto (the “Original
Securities”);

 

WHEREAS,
the Holder desires to exchange (the “Exchange”) the Original Securities for 3,037,500 shares (such shares, the “Exchange
Securities”) of common stock of the Company, par value $0.001 (the “Common Stock”), and the Company desires
to convey the Exchange Securities in exchange for the Original Securities and, all on the terms and conditions set forth in this Agreement
in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities
Act”); and

 

WHEREAS,
upon the consummation of the transactions contemplated hereby, the Holder shall no longer own any Original Securities, and the Company
shall cancel the certificate(s) and other physical documents evidencing the ownership of the Original Securities, if any.

 

NOW,
THEREFORE, in consideration of the terms and conditions contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Holder hereby agree as follows:

 

Section
1. Exchange. Subject to and upon the terms and conditions set forth in this Agreement, the Holder agrees to surrender to the Company
the Original Securities and, in exchange therefor, the Company shall convey to the Holder the Exchange Securities.

 

1.1
Closing. On the Closing Date (as defined below), the Company will convey and deliver (or cause to be conveyed and delivered) the
Exchange Securities to the Holder, or in the name of a custodian or nominee of the Holder, or as otherwise requested by the Holder in
writing and, subject to Section 4.1, the Holder will surrender to the Company the Original Securities for cancellation. The closing
of the Exchange shall occur as on the date hereof, or as soon thereafter as the parties may mutually agree in writing (the “Closing
Date”), subject to the provisions of Section 4 and Section 5 herein; provided, however, that the Closing
Date shall occur, and Company shall be obligated to convey and deliver (or cause to be conveyed and delivered) the Exchange Securities
to the Holder as specified in this Section 1.1, no later than the standard settlement period on the Company’s primary Trading Market
with respect to the Common Stock on the date hereof.

 

1.2
Section 3(a)(9). Assuming the accuracy of the representations and warranties of each of the Company and the Holder set forth in
Sections 2 and 3 of this Agreement, the parties hereto acknowledge and agree that the purpose of such representations and
warranties is, among other things, to ensure that the Exchange qualifies as an exchange of securities under Section 3(a)(9) of the Securities
Act.

 

    	1

    	 

    

 

Section
2. Representations and Warranties of the Company. The Company represents and warrants to the Holder that:

 

2.1
Organization and Qualification. The Company is an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use
its properties and assets and to carry on its business as currently conducted. Neither the Company, nor any subsidiary of the Company
(each, a “Subsidiary”) is in violation or default of any of the provisions of its respective certificate or certificates
of incorporation, bylaws or other organizational or charter documents. The Company is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could
not have or reasonably be expected to result in a material adverse effect on the results of operations, assets, business, prospects or
condition (financial or otherwise) of the Company (a “Material Adverse Effect”).

 

2.2
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by
the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company, the Board of Directors of the Company or the Company’s stockholders
in connection herewith. This Agreement has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against it in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally; (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

 

2.3
Issuance of Exchange Securities. The issuance of the Exchange Securities by the Company is duly authorized and, upon conveyance
in accordance with the terms hereof, the Exchange Securities shall be validly issued, fully paid and non-assessable. Upon issuance and
conveyance in accordance herewith, the conveyance by the Company of the Exchange Securities is exempt from the registration requirements
of the Securities Act under Section 3(a)(9) of the Securities Act.

 

    	2

    	 

    

 

2.4
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the consummation by it of the transactions
contemplated hereby do not and will not conflict with or violate any provision of the Company’s certificate of incorporation, bylaws
or other organizational or charter documents.

 

2.5
Acknowledgment Regarding the Exchange. The Company acknowledges and agrees that the Holder is acting solely in the capacity of
an arm’s length third party with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges
the Holder is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement
and the transactions contemplated hereby, and any advice given by the Holder or any of its representatives or agents in connection with
this Agreement is merely incidental to the Exchange.

 

2.6
No Commission; No Other Consideration. The Company has not paid or given, and has not agreed to pay or give, directly or indirectly,
any commission or other remuneration for soliciting the Exchange. The Exchange Securities are being conveyed exclusively for the exchange
of the Original Securities and no other consideration has or will be paid for the Exchange Securities.

 

2.7
3(a)(9) Representation. The Company has not, nor has any person acting on its behalf, directly or indirectly made any offers or
sales of any security or solicited any offers to buy any security under circumstances that would cause the Exchange and the issuance
of the Exchange Securities pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities
Act which would prevent the Company from delivering the Exchange Securities to the Holder pursuant to Section 3(a)(9) of the Securities
Act, nor will the Company take any action or steps that would cause the Exchange, issuance and delivery of the Exchange Securities to
be integrated with other offerings to the effect that the delivery of the Exchange Securities to the Holder would be seen not to be exempt
pursuant to Section 3(a)(9) of the Securities Act.

 

2.8
No Third-party Advisors. Other than legal counsel, the Company has not engaged any third parties to assist in the solicitation
with respect to the Exchange.

 

2.9
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act of 1934, as amended (the “Exchange Act”),
including pursuant to Section 13(a) or 15(d) of the Exchange Act, for the two years preceding the date hereof (or such shorter period
as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such
extension.

 

    	3

    	 

    

 

2.10
Filings, Consents and Approvals. Other than for any filings with The Nasdaq Stock LLC, any filings required to be made with the
Securities and Exchange Commission (the “Commission”) pursuant to the Exchange Act or any state securities commission
in connection with the transactions contemplated by this Agreement, the Company is not required to obtain any consent, waiver, authorization
or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority or any natural person, firm, partnership, association, corporation, company, trust business trust or other entity (each, a
“Person”) in connection with the execution, delivery and performance by the Company of this Agreement.

 

2.11
Capitalization. The capitalization of the Company is as set forth in the SEC Reports. No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement.

 

2.12
Shell Company Status. The Company is not currently, and within the past three years has not been, an issuer identified in Rule
144(i)(1) under the Securities Act.

 

2.13
DTC Eligibility. The Company, through the Transfer Agent, currently participates in the DTC Fast Automated Securities Transfer
(FAST) Program and the Exchange Securities can be transferred electronically to third parties via the DTC Fast Automated Securities Transfer
(FAST) Program.

 

2.14
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result
in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to U.S. generally accepted accounting principles or disclosed in filings
made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate (as defined
below), except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for
confidential treatment of information. “Affiliate” means, with respect to any Person, any other Person that directly
or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition
that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary
voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.

 

    	4

    	 

    

 

2.15
Litigation. Other than as set forth in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its properties before
or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of
this Agreement or the Exchange Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result
in a Material Adverse Effect.

 

2.16
Compliance. Except as set forth in the SEC Reports, neither the Company nor any Subsidiary: (i) is in material default under or
in material violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result
in a material default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that
it is in material default under or that it is in material violation of, any indenture, loan or credit agreement or any other agreement
or instrument set forth in the Company’s most recent Annual Report on Form 10-K to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been waived), (ii) is in material violation of any judgment, decree
or order of any court, arbitrator or other governmental authority or (iii) to its knowledge, is or has been in violation of any statute,
rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws
relating to environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except
in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

2.17
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports
(each, a “Material Permit”), except where the failure to possess such Material Permits could not reasonably be expected
to result in a Material Adverse Effect, and neither the Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any Material Permit.

 

2.18
Transactions with Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to
or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any officer, director
or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for: (i)
payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii)
other employee benefits, including stock option agreements under any stock option plan of the Company.

 

    	5

    	 

    

 

2.19
Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiaries to
any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.

 

2.20
No Integrated Offering. Assuming the accuracy of the Holder’s representations and warranties set forth in Section 3,
neither the Company, nor any of its Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under circumstances that would cause the Exchange to be integrated
with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities
under the Securities Act, or (ii) any applicable shareholder approval provisions of any trading markets or exchanges on which the Exchange
Securities are listed, quoted or designated for trading on the date in question (each, a “Trading Market”).

 

2.21
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department.

 

Section
3. Representations and Warranties of the Holder. The Holder represents and warrants to the Company that:

 

3.1
Ownership of the Original Securities. The Holder is the legal and beneficial owner of the Original Securities. The Holder paid
for the Original Securities and has continuously held the Securities since its purchase. The Holder owns the Original Securities outright
and free and clear of any options, contracts, agreements, liens, security interests, or other encumbrances.

 

3.2
No Public Sale or Distribution. The Holder is acquiring the Exchange Securities in the ordinary course of business for its own
account and not with a view toward, or for resale in connection with, the public sale or distribution thereof; provided, however,
that by making the representations herein, the Holder does not agree to hold any of the Exchange Securities, for any minimum or other
specific term and reserves the right to dispose of the Exchange Securities at any time in accordance with an exemption from the registration
requirements of the Securities Act and applicable state securities laws. Except as contemplated herein, the Holder does not presently
have any agreement or understanding, directly or indirectly, with any person to distribute, or transfer any interest or grant participation
rights in, the Original Securities or the Exchange Securities.

 

    	6

    	 

    

 

3.3
Accredited Investor and Affiliate Status. The Holder is an “accredited investor” as that term is defined in Rule 501
of Regulation D under the Securities Act. The Holder is not, and has not been, for a period of at least three months prior to the date
of this Agreement (a) an officer or director of the Company, (b) an “affiliate” of the Company (as defined in Rule 144) or
(c) a “beneficial owner” of more than ten percent (10%) of the common stock of the Company (as defined for purposes of Rule
13d-3 of the Exchange Act).

 

3.4
Reliance on Exemptions. The Holder understands that the Exchange is being made in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of,
and the Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holder
set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to complete the Exchange
and to acquire the Exchange Securities.

 

3.5
Information. The Holder has been furnished with all materials relating to the business, finances and operations of the Company
and materials relating to the Exchange which have been requested by the Holder. The Holder has been afforded the opportunity to ask questions
of the Company. Neither such inquiries nor any other due diligence investigations conducted by the Holder or its representatives shall
modify, amend or affect the Holder’s right to rely on the Company’s representations and warranties contained herein. The
Holder acknowledges that all of the documents filed by the Company with the Commission under Sections 13(a), 14(a) or 15(d) of the Exchange
Act that have been posted on the Commission’s EDGAR site are available to the Holder, and the Holder has not relied on any statement
of the Company not contained in such documents in connection with the Holder’s decision to enter into this Agreement and the Exchange.

 

3.6
Risk. The Holder understands that its investment in the Exchange Securities involves a high degree of risk. The Holder is able
to bear the risk of an investment in the Exchange Securities including, without limitation, the risk of total loss of its investment.
The Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with
respect to the Exchange.

 

3.7
No Governmental Review. The Holder understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement in connection with the Exchange or the fairness or suitability of the
investment in the Exchange Securities nor have such authorities passed upon or endorsed the merits of the Exchange Securities.

 

3.8
Organization; Authorization. The Holder is duly organized, validly existing and in good standing under the laws of its jurisdiction
of organization or formation, as the case may be, and has the requisite corporate or other power and authority to enter into and perform
its obligations under this Agreement.

 

    	7

    	 

    

 

3.9
Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Holder and
shall constitute the legal, valid and binding obligations of the Holder enforceable against the Holder in accordance with its terms.
The execution, delivery and performance of this Agreement by the Holder and the consummation by the Holder of the transactions contemplated
hereby (including, without limitation, the irrevocable surrender of the Original Securities) will not result in a violation of the organizational
documents of the Holder.

 

3.10
Prior Investment Experience. The Holder acknowledges that it has prior investment experience, including investment in securities
of the type being exchanged, including the Original Securities and the Exchange Securities, and has read all of the documents furnished
or made available by the Company to it and is able to evaluate the merits and risks of such an investment on its behalf, and that it
recognizes the highly speculative nature of this investment.

 

3.11
Tax Consequences. The Holder acknowledges that the Company has made no representation regarding the potential or actual tax consequences
for the Holder which will result from entering into the Agreement and from consummation of the Exchange. The Holder acknowledges that
it bears complete responsibility for obtaining adequate tax advice regarding the Agreement and the Exchange.

 

3.12
No Registration, Review or Approval. The Holder acknowledges, understands and agrees that the Exchange Securities are being exchanged
hereunder pursuant to an exchange offer exemption under Section 3(a)(9) of the Securities Act.

 

Section
4. Conditions Precedent to Obligations of the Company. The obligation of the Company to consummate the transactions contemplated
by this Agreement is subject to the satisfaction of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing the Holder with prior written notice thereof:

 

4.1
Delivery. The Holder shall have delivered to the Company the Original Securities or otherwise acknowledged in writing that it
will deliver the Original Securities within 10 calendar days hereof; provided, however, that the Original Securities shall be treated
as cancelled on the date hereof regardless of the Holder’s ability to deliver them pursuant to this Section 4.1.

 

4.2
No Prohibition. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to
enjoin or restrain any of the transactions contemplated by this Agreement; and

 

    	8

    	 

    

 

4.3
Representations. The accuracy in all material respects when made and on the Closing Date of the representations and warranties
of the Holder contained herein (unless as of a specific date therein).

 

Section
5. Conditions Precedent to Obligations of the Holder. The obligation of the Holder to consummate the transactions contemplated
by this Agreement is subject to the satisfaction of each of the following conditions, provided that these conditions are for the Holder’
sole benefit and may be waived by the Holder at any time in its sole discretion by providing the Company with prior written notice thereof:

 

5.1
No Prohibition. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to
enjoin or restrain any of the transactions contemplated by this Agreement;

 

5.2
Representations. The representations and warranties of the Company shall be true and correct in all material respects when made
and on the Closing Date (unless as of a specific date therein), except for such representations and warranties contained herein that
are qualified by “materiality” or “Material Adverse Effect,” in which case such representations and warranties
of the Company shall be true and correct in all respects when made and on the Closing Date (unless as of a specific date therein);

 

5.3
All Obligations. All obligations, covenants and agreements of the Company required to be performed at or prior to the Closing
Date shall have been performed; and

 

5.3
No Suspension. From the date hereof to the Closing Date, trading in the Exchange Securities shall not have been suspended by the
Commission or any Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg
L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported
by such service, or on any trading market, nor shall a banking moratorium have been declared either by the United States or New York
State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international
calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable
judgment of the Holder makes it impracticable or inadvisable to purchase the Exchange Securities at the closing.

 

Section
6. Other Agreements between the Parties.

 

6.1
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in Section 2 of the Securities Act) that would be integrated with the Exchange of the Original Securities in a manner that
would require the registration under the Securities Act of the sale of the Exchange Securities or that would be integrated with the offer
of the Exchange Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval
prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

 

    	9

    	 

    

 

6.2
Replacement of Securities. If any certificate or instrument evidencing any of the Exchange Securities is mutilated, lost, stolen
or destroyed, the Company shall convey or cause to be conveyed in exchange and substitution for and upon cancellation thereof (in the
case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

 

Section
7. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be construed under the laws of the state of New York,
without regard to principles of conflicts of law or choice of law that would permit or require the application of the laws of another
jurisdiction. The Company and the Holder each hereby agrees that all actions or proceedings arising directly or indirectly from or in
connection with this Agreement shall be litigated only in the Supreme Court of the State of New York or the United States District Court
for the Southern District of New York located in New York County, New York. The Company and the Holder each consents to the exclusive
jurisdiction and venue of the foregoing courts and consents that any process or notice of motion or other application to either of said
courts or a judge thereof may be served inside or outside the State of New York or the Southern District of New York by generally recognized
overnight courier or certified or registered mail, return receipt requested, directed to such party at its or his address set forth below
(and service so made shall be deemed “personal service”) or by personal service or in such other manner as may be permissible
under the rules of said courts. THE COMPANY AND THE HOLDER EACH HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION
PURSUANT TO THIS AGREEMENT.

 

Section
8. Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and
the same agreement and shall become effective when counterparts have been signed by each party hereto and delivered to the other party
hereto; provided that a facsimile or electronic signature shall be considered due execution and shall be binding upon the signatory thereto
with the same force and effect as if the signature were an original, not a facsimile or electronic signature, as applicable.

 

Section
9. Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement.

 

Section
10. Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity
or enforceability of any provision of this Agreement in any other jurisdiction.

 

    	10

    	 

    

 

Section
11. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties hereto
to express their mutual intent, and no rules of strict construction will be applied against any party hereto.

 

Section
12. Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Holder, the
Company, their Affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement contains
the entire understanding of the parties hereto with respect to the matters covered herein. No provision of this Agreement may be amended
other than by an instrument in writing signed by the Company and the Holder. No provision hereof may be waived other than by an instrument
in writing signed by the party against whom enforcement is sought.

 

Section
13. Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon receipt,
when sent by facsimile or electronically (provided confirmation of transmission is mechanically or electronically generated and kept
on file by the sending party); or (c) one calendar day (excluding Saturdays, Sundays, and national banking holidays) after deposit with
an overnight courier service, in each case properly addressed to the party to receive the same.

 

The
addresses and email addresses for such communications shall be:

 

If
to the Company:

 

Digital
Ally, Inc.

Attn:
Stanton E. Ross, Chief Executive Officer

14001
Marshall Drive, Lenexa, KS 66215

Email:
[Redacted] 

 

If
to the Holder:

 

to
the address set forth on its signature page to this Agreement.

 

or
to such other address, email address and/or facsimile number and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five (5) calendar days prior to the effectiveness of such change.

 

Section
14. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, including any purchasers of the Exchange Securities. Subject to its compliance with applicable federal and state
securities laws, the Holder may assign some or all of its rights hereunder without the consent of the Company, in which event such assignee
shall be deemed to be the Holder hereunder with respect to such assigned rights.

 

    	11

    	 

    

 

Section
15. No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

Section
16. Survival of Representations. The representations and warranties of the Company and the Holder contained in Sections 2
and 3, respectively, will survive the closing of the transactions contemplated by this Agreement.

 

Section
17. Securities Law Disclosure; Publicity. The Company shall, by 5:30 pm (New York City Time) on the date hereof, issue a press
release and/or file a Current Report on Form 8-K disclosing the material terms of the transactions contemplated hereby. From and after
the release of such disclosure, the Company represents to the Holder that it shall have publicly disclosed all material, non-public information
delivered to the Holder by the Company. In addition, effective upon the issuance of such disclosure, the Company acknowledges and agrees
that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, on the one
hand, and the Holder or any of their Affiliates on the other hand, shall terminate and be of no further force or effect. The Company
understands and confirms that the Holder shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

Section
18. Standstill. From the date hereof until 60 days after the date hereof, neither the Company nor any Subsidiary shall (i) issue,
enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents
or (ii) file any registration statement or any amendment or supplement thereto. The provisions of this Section 18 shall not apply
in respect of any issuance, agreement to issue, announcement or the filing of any registration statement or any amendment or supplement
thereto, in each case, involving: (a) shares of Common Stock or other equity securities to employees, officers or directors of the Company
or consultants to the Company pursuant to any stock or option plan or other written agreement duly adopted for such purpose, by the Board
of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered
to the Company; (b) securities issued upon the exercise or exchange of or conversion of any Exchange Securities issued hereunder, any
securities issued upon exchange of warrants outstanding on the date hereof and pursuant to an agreement executed on the date hereof that
provides for terms identical to those afforded to the Holder under this Agreement and otherwise issued in compliance with Section
19 of this Agreement, and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in
connection with stock splits or combinations) or to extend the term of such securities; (c) the issuance of shares of preferred stock
or shares of Common Stock issued upon conversion of such preferred stock, including, without limitation, the issuance of redeemable preferred
stock whose primary purpose is not for capital raising; and (d) securities issued in connection with any merger between the Company and
one or more of its Subsidiaries. “Common Stock Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock,
right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles
the holder thereof to receive, Common Stock.

 

    	12

    	 

    

 

Section
19. Most Favored Nation. The Company hereby represents and warrants as of the date hereof and covenants and agrees from and after
the date hereof until three months following the date hereof (the “MFN Period”), that none of the terms offered to
any other holder of the Company’s warrants pursuant to any other warrant exchange agreement (or any amendment, modification or
waiver thereof including other warrant exchange agreements signed concurrently with this Agreement), is or will be more favorable to
such other holder(s) of the Company’s Warrants than those of the Holder and this Agreement. If, and whenever on or after the date
hereof during the MFN Period, the Company enters into another Exchange Agreement (or any amendment, modification or waiver with any other
holder of warrants) , then (i) the Company shall provide notice thereof to the Holder promptly following the occurrence thereof and (ii)
the terms and conditions of this Agreement shall be, without any further action by the Holder or the Company, automatically amended and
modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable terms
and/or conditions (as the case may be) set forth in such other Agreement, provided that upon written notice to the Company at any time
the Holder may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition
contained in this Agreement shall apply to the Holder as it was in effect immediately prior to such amendment or modification as if such
amendment or modification never occurred with respect to the Holder. For the avoidance of doubt, this provision shall not apply to any
new classes of warrants issued after the date of this Agreement nor to any other securities that are outstanding or may become outstanding
after the date of this Agreement.

 

Section
20. Further Assurances. Each party hereto shall do and perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party hereto may reasonably
request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

[Signature
Pages Follow]

 

    	13

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Exchange Agreement as of the date first written above.

 

	Digital Ally, Inc.	 
	 	 	 
	By:	 	 
	Name:	Stanton
    Ross	 
	Title:	President
    Chief Executive Officer	 

 

[Company
signature page to the Exchange Agreement]

 

    	14

    	 

    

 

AGREED
TO AND ACCEPTED:

 

	[●]	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

Address
for Notice to Holder: [●]

 

[Holder
signature page to the Exchange Agreement]

 

    	15

    	 

    

 

Exhibit
A

 

Holder
Original Securities

 

	Holder	 	Security	 	Date	 	Amount

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