Exhibit 10.2


 


August 14, 2019


 


Sero Capital LLC


119 Washington Ave, Suite 403


Miami Beach, FL 33139


Attn: David Moradi


 


Dear David:


 


Reference is hereby made to those certain
Amendments to Common Stock Warrants dated as of the date hereof (together, the “Warrant Amendments”), by and
between Sero Capital LLC (the “Stockholder”) and AudioEye, Inc. (the “Company”).


 


In order to induce the Stockholder to enter
into the Warrant Amendments and, immediately thereafter, to exercise the Warrants to Purchase Common Stock that are held by the
Stockholder and subject thereto for cash, and in consideration for the increase resulting therefrom in the voting power of the
issued and outstanding stock of the Company entitled to vote for the election of directors, the Company hereby agrees that, subject
to compliance with the Company’s governing documents and policies (as in effect as of the date hereof) and all applicable
laws, rules and regulations (as then in effect), the Stockholder shall have the right to designate two (2) directors to the board
of directors of the Company (the “Stockholder Director Designees”) for so long as the Stockholder and its affiliates
collectively hold at least 30% of the voting power of the issued and outstanding stock of the Company entitled to vote for the
election of directors; provided, that, in no event shall the number of Stockholder Director Designees pursuant to this letter agreement
constitute fifty percent (50%) or more of the board of directors of the Company. The number of Stockholder Director Designees shall
be reduced from two (2) to one (1) at such time as the Stockholder and its affiliates collectively hold less than 30% of the voting
power of the issued and outstanding stock of the Company entitled to vote for the election of directors, and Stockholder shall,
upon the Company’s request, promptly cause one of such Stockholder Director Designees to resign effective immediately. The
Stockholder shall cease to have the right to designate a Stockholder Director Designee at such time as the Stockholder and its
affiliates collectively hold less than 5% of the voting power of the issued and outstanding stock of the Company entitled to vote
for the election of directors, and Stockholder shall, upon the Company’s request, promptly cause the remaining Stockholder
Director Designee to resign effective immediately.


 


Upon
the Stockholder’s selection and written notification to the Company of the Stockholder Director Designees, any individual
designated by the Stockholder shall execute and deliver to the Company
such agreements, questionnaires and other documents as the Company customarily requires from new nominees for directorships, and
the Company and the board of directors shall be entitled to conduct such customary due diligence regarding such Stockholder Director
Designees as the board of directors determines is necessary or advisable.


 




     

     


    

  


Subject to compliance with the Company’s
governing documents and policies (as then in effect) and all applicable laws, rules and regulations (as then in effect), the Company
shall take all requisite action necessary to cause the Stockholder Director Designees to be appointed to the board of directors
of the Company, including causing the nominating and corporate governance committee of the board of directors and/or the board
of directors, as applicable, to recommend and/or approve, as applicable, any necessary increase in the authorized number of directors
of the Company and to include the Stockholder Director Designees on any slate of directors to be voted on at any annual meeting
for the election of directors.


 


The right of the Stockholder to designate
the Stockholder Director Designees is intended to comply with Nasdaq Listing Rule 5640 (the “Voting Rights Rule”)
and, to the extent necessary, the Stockholder agrees to cooperate with the Company to promptly remedy any non-compliance with the
Voting Rights Rule, including relinquishing its director designation rights set forth herein to ensure compliance with the Voting
Rights Rule.


 


This letter agreement shall be governed
by and construed and enforced in accordance with the laws of the State of Delaware, without regard to its conflict of laws principles.
The Stockholder may not assign the rights set forth herein without the prior written consent of the Company, which the Company
may grant or withhold in its sole discretion. This letter agreement may be executed in counterparts, each of which shall constitute
an original, and together they shall be one and the same instrument. Receipt by telecopy or electronic mail of any executed signature
page to this letter agreement shall constitute effective delivery of such signature page.


 




     

     


    

  


	 	Sincerely,
	 	 	 
	 	AUDIOEYE, INC.
	 	 	 
	 	By:	/s/ Carr Bettis
	 	 	Name: Carr Bettis
	 	 	Title:   Executive Chairman


 


	Acknowledged and Agreed to by:	 
	 	 
	SERO CAPITAL, LLC	 
	 	 
	By:	/s/ David Moradi	 
	Name: David Moradi	 
	Title:   Managing Partner/Owner