Exhibit 10.19


 


EXCHANGE AGREEMENT


 


This EXCHANGE AGREEMENT (this
 “Agreement”) is made and entered into effective as of August 3, 2022, by and between PAXMEDICA, INC., a Delaware corporation
(the “Company”) and BLUE CANE PARTNERS, LLC, a Delaware limited liability company (the “Holder”).


 


W I T N E S S E T H :


 


WHEREAS, the Holder is the
holder of two (2) common stock purchase warrants issued by the Company on October 26, 2020, copies of which are attached as Exhibit
A hereto (the “Holder Warrants”);


 


WHEREAS, in satisfaction in
full of the Obligations, the Holder is willing to accept the Securities (as defined in this Agreement) (the “Exchange”)
pursuant to the terms of this Agreement;


 


WHEREAS, the Exchange is being
made in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act.


 


WHEREAS, the Company and the
Holder desire to enter into this Agreement to evidence and set forth the terms of the Exchange; and


 


WHEREAS,
the Company has filed with the Securities and Exchange Commission a registration statement on Form S-1 (the "Form S-1")
on or around July 18, 2022, with respect to an underwritten public offering by the Company of its shares of Common Stock (as defined in
this Agreement), and, in connection therewith, the Common Stock are to be listed on the Nasdaq Capital Market ( “Nasdaq”
and the offering, the "Nasdaq Offering").


 


NOW, THEREFORE, in consideration
of the mutual covenants herein contained, and intending to be legally bound hereby, the parties hereto, being duly sworn, do covenant,
agree and certify as follows:


 


1.       Recitals.
The parties hereto acknowledge and agree that the foregoing recitals are true and accurate and constitute part of this Agreement to the
same extent as if contained in the body hereof.


 


2.       Definitions.
In addition to the terms defined elsewhere in this Agreement: the following terms have the meanings set forth in this Section 2:


 


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.


 


“Board of Directors”
means the board of directors of the Company.


 






     


     


    

 


“Common Stock”
means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter
be reclassified or changed.


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 


“Securities”
has the meaning set forth in the Preamble of this Agreement.


 


“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


3.       Exchange
and Satisfaction. So long as the Nasdaq Offering is consummated on or before August 17, 2022,
the Holder Warrants shall automatically be surrendered in the entirety by the Holder and, subject to the Beneficial Ownership Limitation
(as defined below),exchanged for 375,000 shares of Common Stock (the “Securities”) on the date that the Nasdaq Offering is
consummated pursuant to the terms of this Agreement.


 


a.               
Notwithstanding anything in this Agreement to the contrary, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”))
shall not have the right to receive, shares of Common Stock to the extent that it would beneficially own in excess of the Beneficial Ownership
Limitation. Except as set forth in the preceding sentence, for purposes of this Section 3, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder
that the Holder is solely responsible for any schedules required to be filed in accordance therewith. In addition, a determination as
to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 5(g), in determining the number of outstanding shares of Common Stock, a Holder may
rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice
by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. The “Beneficial
Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding at the time of the respective calculation
hereunder.


 


b.               To
the extent that a portion of the Securities cannot be issued due to the Beneficial Ownership Limitation described above (the
 “Unissued Portion”), then the Unissued Portion shall be exchanged into shares of the Company’s Series X preferred
stock as follows: the number of shares of Common Stock equal to the Unissued Portion multiplied by 5, divided by 100. By way of
example, if 5,000 shares of Common Stock cannot be issued as described above, then 250 shares of Series X preferred stock shall be
issued in lieu of the Unissued Portion (5,000 x 5 = 25,000, 25,000 / 100 = 250 shares of Series X preferred stock).


 






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c.               
Notwithstanding anything in this Agreement to the contrary, if the Nasdaq Offering is not consummated by August 17, 2022, this
Agreement shall be null and void and of no further force or effect.


 


4.       Representations
and Warranties of the Company. The Company hereby makes the following representations and warranties to Holder:


 


(a)              
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 and thereby 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 or the Company’s
stockholders in connection herewith or therewith. This Agreement have been (or upon delivery will have been) duly executed by the Company
and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of Holders’ 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.


 


(b)              
Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with this Agreement,
will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The shares of Common
Stock underlying the Securities (if any), when issued in accordance with the terms of the Securities, will be validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer required by law. The Holder’s
holding period with respect to such Securities and the Common Stock underlying the Securities shall tack back to the original acquisition
date of the Obligations pursuant to Section 3(a)(9) of the Securities Act.


 


5.       Representations
and Warranties of the Holder. Holder hereby represents and warrants to the Company as follows:


 


(a)       Holder’s
Status. At the time the Holder was offered the Securities, it was, and as of the date hereof it is, an “accredited investor”
as defined in Rule 501(a) under the Securities Act.


 


(b)       Experience
of Holder. Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment. Such Holder is able to bear the economic risk of an
investment in the Securities and, at the present time, is able to afford a complete loss of such investment.


 






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8.       Further
Assurances. The Holder shall hereafter, without further consideration, execute and deliver promptly to the Company such further
consents, waivers, assignments, endorsements and other documents and instruments, and to take all such further actions, as the Company
may from time to time reasonably request with respect to the Exchange and satisfaction of the Obligations and the consummation in full
thereof. The Company shall hereafter, without further consideration, execute and deliver promptly to the Holder such further consents,
waivers, assignments, endorsements and other documents and instruments, and to take all such further actions, as the Holder may from time
to time reasonably request with respect to the Exchange and satisfaction of the Obligations and the consummation in full thereof.


 


9.       Successors
and Assigns. This Agreement is binding upon, and shall inure to the benefit of, the parties hereto and their respective successors
and assigns, provided, however, that any assignment of the rights and benefits hereunder by the Company must be agreed to in a signed
writing by the Holder.


 


10.       Counterparts.
This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which, when taken together,
shall constitute one and the same instrument.


 


11.       Governing
Law; Jurisdiction. This Agreement and its validity, construction and performance shall be governed in all respects by the laws
of the State of Delaware, applicable to agreements to be performed wholly within the State of Delaware. The Company and the Holder hereby
irrevocably consent and submit to the exclusive jurisdiction of any federal or state court located within the State of Delaware over any
dispute arising out of or relating to this Agreement and each party hereby irrevocably agrees that all claims in respect of such dispute
or any legal action related thereto may be heard and determined in such courts. Each of the Company and the Holder hereby irrevocably
waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute.


 


12.       Notice.
Any notice or other communication given hereunder shall be deemed sufficient if in writing and hand delivered or sent by certified mail
(return receipt requested, postage prepaid), or overnight mail or courier, to such address(es) contained in the securities purchase agreement
originally entered into in connection with the Holder Warrants. Notices shall be deemed to have been given on the date of mailing, except
notices of change of address, which shall be deemed to have been given when received.


 


[signature page to follow]


 






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IN WITNESS WHEREOF, the parties
hereto have affixed their hands and seals by signing this Agreement as of the day and year first above written.


 


	 	Company:
	 	 
	 	PAXMEDICA, INC.
	 	 
	 	 
	 	By: 	/s/Howard Weisman
	 	Name: Howard Weisman
	 	Title:   CEO
	 	 
	 	 
	 	Holder:
	 	 
	 	BLUE CANE PARTNERS, LLC
	 	 
	 	 
	 	By:	 /s/Craig Kesselman
	 	Name: Craig Kesselman
	 	Title: Member



 






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