Ixion Biotechnology Inc · 10QSB/A · For 6/30/99 · EX-10.39

Filed On 8/17/99   ·   SEC File 333-34765   ·   Accession Number 943403-99-14

Amendment to Quarterly Report -- Small Business   ·   Form 10-QSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB/A     Amendment to Quarterly Report -- Small Business       19    102K 
 2: EX-3.5      Certificate of Amendment                               2±    12K 
 3: EX-3.6      Restated Certificate                                   2     17K 
 4: EX-10.39    Agreement With Principle                               3     20K 
 5: EX-10.40    1994 Board Retainer Plan, as Amended                   8±    42K 
 6: EX-27       Article 5 FDS for 2nd Qtr 10-Q                         1      9K 

EX-10.39   ·   Agreement With Principle

EX-10.39
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April 16, 1999

Dr. Bengt Agerup                                                                
Managing Director                                                               
Q-Med AB                                                                        
80 rue Jouffroy d'Abbans                                                        
750 17 Paris, France                                                            

Dear Dr. Agerup:                                                                

This will confirm our agreement in principle pursuant to which Q-Med  
AB (AQ-Med@) or a wholly-owned subsidiary thereof will purchase an initial 50%  
interest in the capital stock of Ixion Biotechnology, Inc. (AIxion@) through the
purchase of newly-issued common stock of Ixion, and will execute a royalty free 
license to its non-animal stabilized hyaluronic acid (ANASHA@) technology in the
field of islet cell encapsulation to Ixion.                                     

 1. The number of shares to be purchased by Q-Med shall be not less than
3,000,000 shares of newly-issued common stock of Ixion for consideration        
consisting of a cash price of $2.00 per share, and a royalty-free license to    
NASHA technology for the field of islet cell encapsulation.                     

2. The agreement set forth in this letter shall be a binding agreement
between us, subject to the following conditions:                                

  (a)  The board of directors of Ixion and the board of directors of
       Q-Med shall have approved the transaction contemplated hereby
          prior to July 15, 1999, unless extended by mutual agreement; and

(b)  A mutually satisfactory formal stock purchase agreement as 
       hereinafter described, shall have been prepared and executed.

3. The stock purchase agreement (which shall be drafted by counsel for
Q-Med) shall contain such representations, warranties, covenants, terms         
and conditions as are mutually acceptable to counsel to the parties             
hereto, specifically including the following:                                   

    (a)  The number of shares to be purchased by Q-Med shall be equal to
           the sum of (i) 2,514,014 (the number of shares outstanding on the
      date hereof; (ii) 100,900 (the number of options to purchase
            shares outstanding on the date hereof; (iii) 23,630 (the number of
     shares issuable upon the exercise of certain stock purchase
       warrants; (iv) 21,513 (the number of shares issuable upon the
         exercise of Charitable Benefit Warrants, after adjustment); (v)
        51,630 (the number of shares to be issued to purchasers in the
     Ixion public offering to adjust the price of their shares);
           288,313 (shares to be reserved for issuance under the Ixion Board
          Retainer Plan and the 1994 Stock Option Plan); and (vi) a number
        of shares equal to the number of shares which are purchased by
          current shareholders of Ixion pursuant to an offer in the nature
             of a preemptive right to be made to current shareholders at a price
of not less than $2.00/share;                         

       (b)   Payment by Q-Med in the amount of $3,300,000 (plus accrued interest
         on the loan described below) shall be made on the Closing Date,
          which shall be September 1, 1999. On that date, Ixion will issue
        the number of shares equal to $3,300,000 plus accrued interest
             divided by $2.00, or approximately 1,650,000 shares. On the Closing
             Date, Ixion shall issue warrants for the remainder of the shares to
        be purchased by Q-Med (not less than 1,350,000 shares) with an
            exercise price of $2.00 per share, expiring on the first anniversary
of the Closing Date.                                  

      (c)    On the Closing Date, Dr. Bengt Agerup will be added to the board of
Ixion as an inside director.                          

    (d)    The closing of the stock purchase agreement will be contingent on
             (i) Q-Med's successful completion of an initial public offering not
           later than July 15, 1999, (ii) the stockholders of Ixion approval
           of an increase in the number of authorized shares of common stock
        as set forth in the preliminary proxy statement filed with the
            Securities and Exchange Commission on April 8, 1999; (iii) Ixion's
            not, since the date hereof, having (a) disposed or made changes in
         its assets or incurred any liability other than in the ordinary
           course of business, (b) made any material changes in its business
   structure, or (c) declared any dividend or made any other
distribution to its shareholders.                     

   (e)    Upon the issuance of shares of newly-issued stock by Ixion after
          the initial Closing Date, Q-Med shall have the right to purchase
             for cash such number of shares, at the same price per share as such
           shares are offered to third parties, as are necessary to maintain
its percentage interest in Ixion.                     

     (f)    Royalty-free license of NASHA for use as an encapsulation material
for Ixion islets.                                     

   4.  Each party agrees to proceed in good faith and with all due diligence
to enter into the formal stock purchase agreement and to close the transaction  
contemplated hereby. In the event that such stock purchase agreement is not     
executed on or prior to June 15, 1999, either party may terminate this agreement
by giving written notice to the other. Between the date hereof and the date of  
any such notice, Ixion will not entertain or accept any offers for the purchase 
of its stock and shall suspend its public offering of stock pursuant to its     
current registration statement.                                                 

 5.  In connection with of the closing of the stock purchase transaction
contemplated by this agreement, Ixion shall have the right to make an offer to  
its current shareholders permitting them to purchase a number of shares at a    
price of $2.00 per share equal to the number of shares held by them (or equal   
to the number of shares which they may purchase through the exercise of options 
or warrants) such that they may substantially protect their current percentage  
ownership of Ixion. Ixion may cancel and reissue all options issued at a price  
greater than $4.00 per share with a new exercise price of $4.00 per share.      

 6.  Upon the execution of the stock purchase agreement, Ixion will make
the following offer to holders of its unsecured convertible debentures: (a) All 
holders will be given 60 days from the Closing Date to elect to convert their   
debentures at the price of $2.00 per share;                                     

EX-10.39
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   (b)  Q-Med will offer to redeem, at the maturity date, from all
             holders electing not to convert at such date, all variable rate
             unsecured debt at a price equal to par, plus an amount equal to
    accrued interest at 10% for the life of the debenture.

6    The parties agree to consult with each other regarding any press 
releases or other public disclosures related to this agreement in principal or  
the transactions contemplated hereby.  Q-Med understands that the U.S. federal  
securities laws will apply to disclosures required to be made by Ixion.         

   7.   In consideration for Ixion's agreeing to not entertain or accept any
offers between the date hereof and June 15, 1999, and its agreement to suspend  
its public offering, Q-Med shall lend Ixion $300,000 payable upon execution of  
this letter, for the purpose of purchasing certain equipment and funding Ixion's
operating costs. The terms of the loan are set forth in the promissory note     
attached hereto as Annex A. The terms of the loan shall survive termination of  
this agreement.                                                                 

     If the foregoing correctly sets forth our agreement, please sign and return
to us the copy of this letter enclosed for the purpose, at which time this      
letter shall become a binding agreement between us.                             

Sincerely yours,    

     Ixion Biotechnology, Inc.

        By:     /s/ Weaver H. Gaines

Weaver H. Gaines    
                Chairman and Chief Executive Officer

Q-Med AB                                                                        

By: /s/ Bengt  Agerup                                                           
Bengt Agerup                                                            
Managing Director                                                       

EX-10.39
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Exhibit A                                                                       

Unsecured Convertible Promissory Note 

                                                              April 16, 1999

$300,000.00                                                                     
Alachua, Florida                                                                

    1. FOR VALUE RECEIVED, Ixion Biotechnology, Inc., a Delaware
corporation (the "Maker") hereby promises to pay to the order of Q-Med AB, on   
September 1, 1999, the amount of $300,000, together with interest accruing from 
the date hereof on the unpaid principal amount of this Note.                    

  2. Interest shall be set at the prime rate in effect at the beginning of
each month and on the date hereof, as set forth in the Wall Street Journal, plus
3%. Interest will be computed on the basis of a 360-day year, 30 day month.     

    3. Maker shall accrue interest on this Note monthly on the last day of the
month for such month. Interest shall not be paid in cash but shall be added to  
the principal of the Note on the date interest is due.                          

   4. If suit is instituted to collect this Note or any portion thereof, the
Maker hereby promises to pay to the holder, in addition to the principal and    
interest due hereunder, all costs of collection hereof, together with such      
amount as any court of competent jurisdiction may adjudge reasonable as said    
holder's attorney's fees in said suit.                                          

5. Accrued interest shall be entered by the Maker on the Schedule   
attached to the copy of the Note held at the Maker's principal offices. Holder  
shall be entitled to a copy of the Schedule, certified by the Treasurer as of a 
particular date, upon written request.                                          

6. On September 1, 1999, this Note may be converted, at Maker's sole
election, into common stock of the Maker for the account of Holder at a price of
$2.00 per share. Fractional shares shall not be issued but shall be paid to     
Holder in cash. Notice of such election must be in writing and may be given at  
any time prior to the maturity date hereof.                                     

  7. This Note shall be construed in accordance with and governed by the
laws of the State of Florida.                                                   

    8. The Maker hereby waives presentment and demand for payment, notice of
dishonor, protest, and any and all other notices or demands in connection with  
the delivery, acceptance, performance, default or enforcement of this Note.     

     Ixion Biotechnology, Inc.

By                  
Weaver H. Gaines    
                Chairman and Chief Executive Officer

Attest:                                                                         

Mary Trew, Secretary                                                            

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 10QSB/A Filing		Date		First		Last			Other Filings
		4/8/99		1					PRE 14A
		4/16/99		1		3			8-K
		6/15/99		1		2
For The Period Ended		6/30/99							10QSB
		7/15/99		1
Filed On / Filed As Of		8/17/99							10QSB
		9/1/99		1		3
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