Exhibit 10.2


 


Execution Version


 


ALLARITY THERAPEUTICS, INC.


 


SECURITY AGREEMENT


 


This Security Agreement (this
“Agreement”) is made as of November 23, 2022, by Allarity Therapeutics, Inc, a Delaware corporation (the “Company”),
in favor of 3i, LP a Delaware limited partnership (the “Holder”).


 


RECITAL


 


The Holder and the Company
have executed the Secured Note Purchase Agreement dated on or about the date hereof (the “Purchase Agreement”)
and the Holder has been issued one or more Secured Promissory Notes (as they may be amended from time to time, each, a “Note”
and collectively, the “Notes”) which are part of a series of Notes issued by the Company pursuant to the Purchase
Agreement in the aggregate principal amount of up to $2,666,640. The Notes provide for, among other things, (a) the Holder to loan certain
principal amounts to the Company and (b) the execution and delivery of this Agreement for the purpose of granting the Holder a security
interest in all of the Company’s assets.


 


AGREEMENT


 


NOW THEREFORE, in consideration
of the foregoing, and the representations, warranties and conditions set forth herein, the parties hereto, intending to be legally bound,
hereby agree as follows:


 


 


1. Capitalized
Terms. All terms capitalized but not otherwise defined in this Agreement will have the same meanings in this Agreement as in each
Note.


 


2. Grant
of Security Interest. To secure the complete and timely satisfaction of the payment by the Company, as and when due and payable
(by scheduled maturity, required prepayment, acceleration, demand or otherwise), of all amounts from time to time owing by it in respect
of the Purchase Agreement, this Agreement, the Notes and any other Transaction Documents or other agreements between the Company and the
Holder whether direct or indirect, absolute or contingent, and whether now existing or hereafter incurred (the “Obligations”),
the Company hereby pledges, assigns and grants to the Holder a continuing lien and security interest in all of the Company’s right,
title and interest in, to and under all personal property and assets of the Company, wherever located and whether now or hereafter existing
and whether now owned or hereafter acquired, of every kind, nature and description, whether tangible or intangible (collectively, the
“Collateral”), including, without limitation, the following: 


 


a) One
hundred percent ownership interest in the common stock of the Company’s wholly owned subsidiary, Allarity Therapeutics Acquisition
Subsidiary, Inc., a Delaware corporation (“Allarity Acquisition Sub”) and holder of all of the assets of Allarity
Therapeutics A/S, an Aktieselskab organized under the laws of Denmark
(“Allarity A/S”) pursuant to that certain Amended and Restated Plan of Reorganization and Asset Purchase Agreement between
the Company, Allarity Acquisition Sub and Allarity A/S dated May 20, 2021 as amended on September 23, 2021; 


 


b) any
and all patents and patent applications including, without limitation, the inventions and improvements described and claimed in the Company’s
patents and patent applications and (i) the reissues, divisions, continuations, renewals, extensions and continuations-in-part of those
patents and patent applications, (ii) all income, damages and payments now and in the future due or payable under or with respect to those
patents and patent applications, including, without limitation, damages and payments for past or future infringements, (iii) the right
to sue for past, present and future infringements, and (iv) all rights corresponding to those rights throughout the world (all of the
foregoing patents and applications, together with the items described in clauses (i)-(iv) of this subsection, are sometimes referred to
individually as a “Patent” and, collectively, as the “Patents”);


 






    


     


    

 


c) any
and all trademarks, trademark registrations, trademark applications, trade names and trade styles, service marks, service mark registrations
and service mark applications of the Company and (i) renewals or extensions of those marks, registrations, applications, names and styles,
(ii) all income, damages and payments now and in the future due or payable with respect to marks, registrations, applications, names
and styles, including, without limitation, damages and payments for past or future infringements, (iii) the right to sue for past,
present and future infringements, and (iv) all rights corresponding to those rights throughout the world (all of the foregoing trademarks,
trade names and trade styles, service marks and applications and registrations, together with the items described in clauses (i)-(iv)
of this subsection, are sometimes referred to individually as a “Trademark” and, collectively, as the “Trademarks”);



 


d) the
goodwill of the Company’s business connected with and symbolized by the Trademarks;


 


e) any
and all copyrights and copyright registrations and applications of the Company and (i) renewals, extensions and continuous of those
copyrights, registrations and applications, (ii) all income, damages and payments now and in the future due or payable under or with
respect to those copyrights, registrations and applications, including without limitation, damages and payments for past, present and
future infringements, (iii) the right to sue for past, present and future infringements, and (iv) all rights corresponding to
those rights throughout the world (all of the foregoing copyrights and applications, together with the items described in clauses (i)-(iv)
of this subsection, are sometimes hereafter referred to individually as a “Copyright” and, collectively, as
the “Copyrights”);


 


f) any
and all licenses related to the Patents, Trademarks and Copyrights )the “Licenses” and together with the Patents, Trademarks
and Copyrights, (the “Intellectual Property”) 


 


g) any
and all other property or assets, whether presently existing or hereafter created or acquired, including, without limitation, all accounts,
chattel paper (including tangible and electronic chattel paper), documents (including negotiable documents), instruments (including promissory
notes), letter of credit rights, money, deposit accounts, general intangibles (including intellectual property, patents, trademarks, copyrights,
trade secrets, goodwill, payment intangibles and software), returns, repossessions, investment property and financial assets, insurance
claims and proceeds, books and records relating thereto, and computers and equipment containing such books and records, claims, contracts
and contract rights, and all goods, including, without limitation, fixtures, equipment (including all accessions and additions thereto),
commercial tort claims, and inventory (including all goods held for sale or lease or to be furnished under a contract of service, and
including returns and repossessions) as such terms are defined or otherwise used in the Uniform Commercial Code;


 


h) all
real property, leasehold interests and fixtures; and


 


i) all
proceeds, including cash proceeds and noncash proceeds and products of any of the foregoing items described at subsections 2(a)-(f) (all
of the items referred to at subsections 2(a)-(g), whether presently existing or hereafter created or acquired.


 


“Uniform Commercial
Code” means Articles 8 or 9 of the Uniform Commercial Code as in effect from time to time in the State of Delaware; provided
that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Delaware, “Uniform Commercial Code”
means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating
to such perfection, effect of perfection or non-perfection or priority.


 






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3. Perfection
of Security Interests. At any time and from time to time, upon demand of the Holder, the Company will execute, file, and record
any notice, financing statement, or other instrument, including appropriate financing and continuation statements and collateral agreements
and filings with the Delaware Secretary of State, United States Patent and Trademark Office and the Register of Copyrights, or any other
recording office necessary to create, continue, or perfect the security interest granted by this Agreement or to enable the Holder to
exercise or enforce its rights under this Agreement, all in form and substance satisfactory to the Holder. In connection with the foregoing,
the Company covenants that it will notify the Holder in writing at least thirty (30) days in advance of filing a registration for copyright
and the Company will file such documents and instruments necessary to perfect the security interest granted hereby in such copyright;
provided, however, that the Holder shall take reasonable steps to assist the Company to perfect such security interest at
the time of filing or thereafter. This Agreement creates in favor of the Holder a legal, valid and enforceable Lien on and security interest
in the Collateral, as security for the Obligations. Such Lien and security interest is (or in the case of Collateral in which the Company
obtains any right, title or interest after the date hereof, will be), subject only to Permitted Liens, a first priority, valid, enforceable
and perfected Lien on and security interest in all personal property of the Company.


 


The Company hereby irrevocably
appoints the Holder as its attorney-in-fact and proxy, with full authority in the place and stead of the Company and in the name of the
Company or otherwise, from time to time in the Holder’s discretion, to take any action and to execute any instrument which the Holder
may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to ask, demand, collect,
sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any Collateral,
to file any claims or take any action or institute any action, suit or proceedings which the Holder may deem necessary or desirable for
the collection of any Collateral or otherwise to enforce the rights of the Holder with respect to any Collateral, to execute assignments,
licenses and other documents to enforce the rights of the Holder with respect to any Collateral, and (vi) to verify any and all information
with respect to any and all accounts. This power is coupled with an interest and is irrevocable until all of the Obligations are fully
performed and paid in full.


 


4. Representations
and Warranties. The Company represents and warrants to the Holder that:


 


a) Except
for the security interest granted under this Agreement, the Company is the sole legal and equitable owner of each item of the Collateral
in which it purports to grant a security interest hereunder, having good and marketable title thereto, free and clear of any and all Liens
(as defined below) except for Permitted Liens (as defined below). 


 


b) No
effective security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any
part of the Collateral exists, except (i) such as may have been filed by the Company for the benefit of the Holder pursuant to this Agreement,
and (ii) for Permitted Liens.


 


For purposes of the foregoing:


 


“Lien”
means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.


 






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“Permitted Lien”
means: (a) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good
faith by appropriate proceedings; (b) Liens (i) upon or in any equipment acquired or held by the Company to secure the purchase price
of such equipment or indebtedness incurred solely for the purpose of financing the acquisition of such equipment or (ii) existing on such
equipment at the time of its acquisition, provided that the Lien is confined solely to the equipment so acquired, improvements thereon
and the proceeds of such equipment; (c) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment
of customs duties in connection with the importation of goods; (d) Liens arising solely by virtue of any statutory or common law provision
relating to banker’s liens, rights of setoff or similar rights and remedies as to deposit accounts or other funds maintained with
a creditor depository institution; and (e) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness
secured by Liens of the type described in clause (b) above, provided that any extension, renewal or replacement Lien shall be limited
to the property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does
not increase.


 


5. Certain
Restrictions on Future Agreements. The Company agrees that until the Obligations have been satisfied in full, the Company will
not sell or assign its interest in, or grant any license under, other than in the ordinary course of business or in connection with a
Permitted Lien, the Collateral, or enter into any other agreement with respect to the Collateral that is inconsistent with the Company’s
obligations under this Agreement, without the Holder’s consent, and the Company further agrees that it will not take any action,
or permit any action to be taken by others subject to its control, including licensees, or fail to take any action, which would affect
the validity or enforcement of the rights transferred to the Holder under this Agreement.


 


6. Term.
Subject to Section 8 below, the term of the security interest granted in this Agreement will extend until the aggregate Obligations to
all of the Notes have been paid in full, at which time the Company and any of its duly appointed officers is hereby authorized to file
any termination statement under the Uniform Commercial Code in effect in any jurisdiction to terminate the financing statements that evidence
the security interest in the Collateral created by this Agreement and the Notes. Upon payment in full of the Obligations, the Holder will
execute and deliver to the Company all deeds, assignments and other instruments, and will take such other actions, as may be necessary
or proper to re-vest in the Company full title to the Collateral, subject to any disposition which may have been made by the Holder pursuant
to this Agreement. The Obligations to the Holder shall be deemed to be paid in full upon conversion or forgiveness of the Notes pursuant
to the terms thereof, and this Agreement shall terminate as of the date of such conversion or forgiveness, provided that the obligations
of the the Holder under this Section 6 shall survive such termination.


 


7. Duties
of the Company; Further Assurances; Future Subsidiaries. Within thirty (30) days of the date hereof, the Company shall cause Allarity
Acquisition Sub to execute a joinder to this Agreement in form and substance reasonably acceptable to Holder, thereby pledging and granting
a security interest in all of its rights title and interest in all of its property and assets as if it were party to this Agreement as
of the date hereof. Company will have the duty to preserve and maintain all rights in the Collateral. Any expenses incurred in connection
with the Company’s obligations under this Section 7 will be borne by the Company. 


 






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The Company will, at its expense,
at any time and from time to time, promptly execute and deliver all further instruments and documents and take all further action that
the Holder may reasonably request in order to: (i) perfect and protect the Lien and security interest of the Holder created hereby;
(ii) enable the Holder to exercise and enforce its rights and remedies hereunder in respect of the Collateral, including, without
limitation, the deposit accounts; or (iii) otherwise effect the purposes of this Agreement, including, without limitation: (A) marking
conspicuously all chattel paper and each License and, at the request of the Holder, each of its records pertaining to the Collateral with
a legend, in form and substance satisfactory to the Holder, indicating that such chattel paper, License or Collateral is subject to the
Lien and security interest created hereby, (B) delivering and pledging to the Holder each promissory note, security, chattel paper
or other instrument, now or hereafter owned by any Company, duly endorsed and accompanied by executed instruments of transfer or assignment,
all in form and substance satisfactory to the Holder, (C) executing and filing (to the extent, if any, that the Company’s signature
is required thereon) or authenticating the filing of, such financing or continuation statements, or amendments thereto, as may be necessary
or that the Holder may reasonably request in order to perfect and preserve the security interest created hereby, (D) furnishing to
the Holder from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection
with the Collateral in each case as the Holder may reasonably request, all in reasonable detail, (E) if any Collateral shall be in
the possession of a third party, notifying such Person of the Holder’s security interest created hereby and obtaining a written
acknowledgment from such Person, in form and substance satisfactory to the Holder, that such Person holds possession of the Collateral
for the benefit of the Holder, (F) if at any time after the date hereof, the Company acquires or holds any commercial tort claim,
promptly notifying the Holder in a writing signed by the Company setting forth a brief description of such Commercial Tort Claim and granting
to the Holder a Lien and security interest therein and in the Proceeds thereof, which writing shall incorporate the provisions hereof
and shall be in form and substance satisfactory to the Holder, (G) upon the acquisition after the date hereof by the Company of any
motor vehicle or other Equipment subject to a certificate of title or ownership (other than a motor vehicle or Equipment that is subject
to a purchase money security interest), causing the Holder to be listed as the lienholder on such certificate of title or ownership and
delivering evidence of the same to the Holder in accordance with this Agreement and (H) taking all actions required by the Code or
by other law, as applicable, in any relevant Code jurisdiction, or by other law as applicable in any foreign jurisdiction.


 


If the Company hereafter creates
or acquires any subsidiary, simultaneously with the creation or acquisition of such subsidiary, such Company shall deliver to the Holder
the stock certificates representing all of the capital stock of such subsidiary, along with undated stock powers for each such certificates,
executed in blank (or, if any such shares of capital stock are uncertificated, confirmation and evidence reasonably satisfactory to the
Holder that the security interest in such uncertificated securities has been transferred to and perfected by the Holder, in accordance
with Sections 8-313, 8-321 and 9-115 of the Code or any other similar or local or foreign law that may be applicable). The Company agree
that the pledge of the shares of capital stock acquired by a Company of foreign subsidiary may be supplemented by one or more separate
pledge agreements, deeds of pledge, share charges, or other similar agreements or instruments, executed and delivered by the Company in
favor of the Holder, which pledge agreements will provide for the pledge of such shares of capital stock in accordance with the laws of
the applicable foreign jurisdiction. With respect to such shares of capital stock, the Holder may, at any time and from time to time,
in its sole discretion, take actions in such foreign jurisdictions that will result in the perfection of the Lien created in such shares
of capital stock.


 


8. Rights
and Remedies Upon Default.


 


Beginning on the date on which any Event of Default
shall have occurred, and while such Event of Default is continuing:


 


(i) The
Holder may exercise in addition to all other rights and remedies granted to it under this Agreement, all rights and remedies of a secured
party under the Uniform Commercial Code.


 


(ii) The
Company hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection
with this Agreement or any Collateral.


 






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(iii) The
Company shall, at the request of the Holder, assemble the Collateral at such place or places as may be reasonably designated by the Holder.


 


(iv) The
Holder may, in its sole discretion, in its name or in the name of the Company or otherwise, demand, sue for, collect or receive any money
or property at any time payable or receivable on account of or in exchange for any of the Collateral, but shall be under no obligation
to do so.


 


(v) The
Holder may take immediate possession and occupancy of any premises owned, used or leased by Company and exercise all other rights and
remedies of an assignee which may be available to a secured party.


 


(vi) The
Holder may, upon ten (10) days’ prior written notice to the Company of the time and place (which notice the Company hereby agrees
is commercially reasonable notification for purposes hereof), with respect to the Collateral or any part thereof which shall then be or
shall thereafter come into the possession, custody or control of the Holder, sell lease, assign or otherwise dispose of all or any part
of such Collateral, at such place or places as the Holder deems best, and for cash or for credit or for future delivery (without thereby
assuming any credit risk), at public or private sale, without demand of performance or notice of intention to effect any such disposition
or of the time or place thereof (except such notice as is required above or by applicable statute and cannot be waived), and the Holder
or anyone else may be the purchaser, lessee, assignee or recipient of any or all of the Collateral so disposed of at any public sale (or,
to the extent permitted by law, at any private sale) and thereafter hold the same absolutely, free from any claim or right of whatsoever
kind, including any right or equity of redemption (statutory or otherwise), of the Company, any such demand, notice and right or equity
being hereby expressly waived and released. The Holder may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any
time or place to which the sale may be so adjourned.


 


9. Expenses.
All fees, costs and expenses, of whatever kind or nature, including reasonable attorneys’ and paralegals’ fees and legal expenses,
incurred by the Holder in connection with the filing or recording of any documents (including all taxes in connection therewith) in public
offices, the payment or discharge of any taxes, counsel fees, maintenance fees, encumbrances or otherwise in protecting, maintaining or
preserving the Collateral will be borne by and paid by the Company on demand by the Holder. If any suit or action is instituted to enforce
any provision of this Agreement, the substantially prevailing party in such dispute shall be entitled to recover from the losing party
such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses
of appeals.


 


10. Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision
in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a)
such provision shall be excluded from this Agreement, (b) the balance of this Agreement shall be interpreted as if such provision were
so excluded, and (c) the balance of this Agreement shall be enforceable in accordance with its terms.


 


11. Waiver
and Amendment; Entire Agreement. Any provision of this Agreement may be amended, waived or modified only by an instrument in writing
signed by the Company and the Holder. This Agreement, the Note and the other Transaction Documents represent the final agreement of the
Company and the Holder as to all matters addressed herein and supersede all previous agreements, negotiations, and discussions by the
parties regarding the subject matters addressed herein. 


 






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12. Successors
and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.


 


13. Governing
Law. This Agreement shall be governed by the laws of the State of Delaware, without reference to principles of choice of law.



 


14. Cumulative
Remedies. All of Holder’s rights and remedies with respect to the Collateral whether established hereby, by a Note, by any
other agreements or by law will be cumulative and may be exercised singularly or concurrently. The Company acknowledges and agrees that
this Agreement is not intended to limit or restrict in any way the rights and remedies of Holder under a Note but rather is intended to
facilitate the exercise of such rights and remedies. Holder will have, in addition to all other rights and remedies given them by the
terms of this Agreement and the Notes, all rights and remedies allowed by law and the rights and remedies of a secured party under the
Uniform Commercial Code as enacted in any jurisdiction in which Collateral may be located. 


 


15. Mailing
of Notices. Any notice required or permitted pursuant to this Agreement shall be in writing and shall be deemed sufficient upon
receipt, when delivered personally or sent by courier, overnight delivery service or confirmed facsimile, or forty-eight (48) hours after
being deposited in the regular mail, as certified or registered mail (airmail if sent internationally), with postage prepaid, addressed
(a) if to a Holder, to the address of the Holder most recently furnished in writing to the Company and (b) if to the Company, to the address
set forth below or subsequently modified by written notice to the Holder.


 


16. Headings;
Interpretation. Paragraph headings used in this Agreement are for convenience only and will not modify the provisions that they
precede. The term “including” shall be interpreted to mean “including but not limited to.”


 


17. Further
Assurances. The Company agrees to execute and deliver such further agreements, instruments and documents, and to perform such
further acts, as the Holder reasonably requests from time to time in order to carry out the purpose of this Agreement and agreements set
forth in this Agreement.


 


18. Counterparts.
This Agreement may be executed in any number of counterparts, all of which shall constitute but one and the same instrument. 


 


[Signatures pages follow.]


 






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IN WITNESS WHEREOF, the parties
have caused this Security Agreement to be duly executed and delivered by their proper and duly authorized officers as of the date and
year first written above.


 


	 	COMPANY:
	 	 	 
	 	Allarity Therapeutics, Inc.
	 	 	 
	 	By:	/s/ James G. Cullem 
	 	Name:	James G. Cullem
	 	Title:	CEO
	 	 	 
	 	Address: 	24 School Street, 2nd Floor
	 	 	Boston, MA 02108



 






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IN WITNESS WHEREOF, the parties
have caused this Security Agreement to be duly executed and delivered by their proper and duly authorized officers as of the date and
year first written above.


 


	 	HOLDER:
	 	 	 
	 	3i, LP
	 	 	 
	 	By:	/s/ Maier Tarlow
	 	Name:	Maier Tarlow
	 	Title:	Manager of the GP
	 	 	 
	 	Address: 	140 Broadway Floor 38
	 	 	New York, NY 10005



 


 


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