EXHIBIT 10.3
October                     , 2007
Aastrom Biosciences, Inc.
Domino’s Farms, Lobby K,
24 Frank Lloyd Wright Dr.,
Ann Arbor, MI 48105
Ladies and Gentlemen:
     The undersigned (the “Investor”), hereby confirms and agrees with you as
follows:
     1. This Purchase Agreement (the “Agreement”) is made as the date hereof
between Aastrom Biosciences, Inc., a Michigan corporation (the “Company”), and
the Investor that is a signatory to this Agreement.
     2. The Company has authorized the sale and issuance of up to an aggregate
of 11,842,105 units (the “Units”), each consisting of one share of common stock,
no par value per share (the “Common Stock”), and one warrant to purchase
0.5 shares of the Company’s common stock (the “Warrants”), to certain investors
(the “Offering”), as more fully described in that certain Placement Agency
Agreement (the “Placement Agency Agreement”) dated the date hereof by and
between the Company and BMO Capital Markets Corp. (the “Placement Agent”). The
form of Warrant is attached hereto as Annex I. All defined terms used herein and
not otherwise defined shall have the same meanings ascribed to such terms in the
Placement Agency Agreement.
     3. Subject to execution by the Company and the Placement Agent of the
Placement Agency Agreement and delivery of the free writing prospectus (as that
term is defined in Rule 405 of the Act) dated the date hereof and the base
prospectus and the prospectus supplement relating to the shares, the Company and
the Investor agree that the Investor will purchase from the Company and the
Company will issue and sell to the Investor [                      ] Units at a
purchase price of $1.14 per Unit pursuant to the Terms and Conditions for
Purchase of Units attached hereto as Annex II and incorporated herein by
reference as if fully set forth herein. The Investor acknowledges that the
Offering is not being underwritten by the Placement Agent and that there is no
minimum offering amount. The shares of Common Stock and Warrants are immediately
separable and will be issued separately to the Investor. Shares of Common Stock
will be credited to the Investor using customary book-entry procedures.
     4. The Investor confirms that it has had access and the opportunity to
review all filings made by the Company with the Securities and Exchange
Commission, including the registration statement relating to the shares of
Common Stock and the Warrants, and that it was able to read, review, download
and print each such filing.

 

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     5. No offer by the Investor to buy Units will be accepted and no part of
the purchase price will be delivered to the Company until the Company has
accepted such offer by countersigning a copy of this Agreement, and any such
offer may be withdrawn or revoked, without obligation or commitment of any kind,
at any time prior to the Company (or the Placement Agents on behalf of the
Company) sending (orally, in writing or by electronic mail) notice of its
acceptance of such offer. An indication of interest will involve no obligation
or commitment of any kind until this Agreement is accepted and countersigned by
or on behalf of the Company.

 

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     Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.

                                          AGREED AND ACCEPTED:    
 
                                    Name of Investor:        
 
                       
 
                 
 
Name    
 
                  Title:    
 
                  Address:    
 
                       
 
                  DWAC Number:    
 
                        AASTROM BIOSCIENCES, INC.                    
 
                       
By:
                       
 
 
 
                   
 
                       
Name:
                       
 
 
 
                   
 
                       
Title:
                       
 
 
 
                   
 
                       

 

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ANNEX I
FORM OF WARRANT

 

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ANNEX II
TERMS AND CONDITIONS FOR PURCHASE OF UNITS
     1. Agreement to Sell and Purchase the Units; Subscription Date.
     1.1 Upon the terms and subject to the conditions hereinafter set forth, at
the Closing (as defined in Section 2 below), the Company will sell to the
Investor, and the Investor will purchase from the Company, [     ] Units at the
purchase price of $1.14 per Unit for a total purchase price of $[     ].
     1.2 The Company may enter into agreements similar to this Agreement with
certain other investors (the “Other Investors”) and expects to complete sales of
Units to them. (The Investor and the Other Investors hereinafter collectively
are referred to as the “Investors,” and this Agreement and the agreements
executed by the Other Investors are hereinafter collectively referred to as the
“Agreements”). The Company may accept or reject any one or more Agreements in
its sole discretion.
     1.3 The Investor acknowledges that the Company has agreed to pay BMO
Capital Markets Corp. (the “Placement Agent”) a fee (the “Placement Fee”) in
respect of the sale of Units to the Investor.
     1.4 The Company has entered into a Placement Agency Agreement, dated the
date hereof (the “Placement Agreement”), with the Placement Agent that contains
certain representations, warranties, covenants and agreements of the Company.
     2. Delivery of the Units at Closing. The completion of the purchase and
sale of the Units (the “Closing”) shall take place as provided in Section 2 of
the Placement Agency Agreement.
          The Company’s obligation to issue and sell the Units to the Investor
shall be subject to the accuracy of the representations and warranties made by
the Investor, the fulfillment of those undertakings of the Investor to be
fulfilled prior to the Closing and payment of the purchase price.
          The Investor’s obligation to purchase the Units will be subject to the
condition that the Placement Agent shall not have: (a) terminated the Placement
Agency Agreement pursuant to the terms thereof or (b) determined that the
conditions to the closing in the Placement Agency Agreement have not been
satisfied. The Investor’s obligations are expressly not conditioned on the
purchase by any or all of the Other Investors of the Units that they have agreed
to purchase from the Company.
     3. Representations, Warranties and Covenants of the Company. The Company
hereby represents and warrants to, and covenants with, the Investor, as follows:

 

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     3.1 The Company acknowledges and agrees that the Investor may rely on the
representations, warranties, covenants and agreements made by it to the
Placement Agent in the Placement Agency Agreement to the same extent as if such
representations, warranties, covenants and agreements had been incorporated in
full herein and made directly to or with the Investor.
     3.2 This Agreement constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
     3.3 The Company shall use its commercially reasonable best efforts to
maintain the effectiveness of the Registration Statement until the expiration of
the Warrants.
     3.4 To the Company’s knowledge, all material information provided to the
Investor by the Company has been publicly disclosed.
     3.5 The Company covenants to issue a press release setting forth the
material terms of the Offering promptly after entering into the Agreements with
the Investors.
     3.6 The Company has not entered into any other Agreement with any Other
Investor in connection with this Offering which contains any material terms or
conditions different from those provided to the Investor pursuant to this
Agreement.
     4. Representations, Warranties and Covenants of each Investor.
     4.1 The Investor represents and warrants that it has received the Company’s
base prospectus relating to the Units and the free writing prospectus dated the
date hereof.
     4.2 The Investor further represents and warrants to, and covenants with,
the Company that (i) the Investor has full right, power, authority and capacity
to enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution, delivery
and performance of this Agreement, and (ii) this Agreement constitutes a valid
and binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
     4.3 The Investor represents and warrants to, and covenants with, the
Company that: (i) the Investor is knowledgeable, sophisticated and experienced
in making, and is qualified to make, decisions with respect to investments in
shares representing investment decisions similar to the decision to purchase the
Units, including investments in securities issued by comparable companies; and
(ii) the Investor has, in connection with its decision to purchase the Units
pursuant to the Agreement, relied solely upon the Registration Statement, the
Prospectus, and any amendments or supplements thereto and has not relied upon
any information provided by BMO Capital Markets Corp. in its capacity as
placement agent for the Company.

 

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     4.4 The Investor understands that nothing in the Prospectus and any
supplement thereto, this Agreement or any other materials presented to the
Investor in connection with the purchase and sale of the Units constitutes
legal, tax or investment advice. The Investor has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of Units.
     4.5 From and after obtaining knowledge of the sale of the Units
contemplated hereby, the Investor has not taken, and prior to the public
announcement of the transaction the Investor shall not take, any action that has
caused or will cause the Investor to have, directly or indirectly, purchased or
agreed to purchase (other than pursuant to this Agreement) sold or agreed to
sell any Common Stock, effected any Short Sale, with respect to the Common
Stock, or with respect to any security that includes, relates to or derives any
significant part of its value from the Common Stock, whether or not, directly or
indirectly, in order to hedge its position in the Units. The Investor agrees
that it will not use any of the Units acquired pursuant to this Agreement to
cover any short position in the Common Stock if doing so would be in violation
of applicable securities laws. For purposes hereof, “Short Sales” include,
without limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sales contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in
Rule 16a-1(h) under the Exchange Act) and similar arrangements (including on a
total return basis), and sales and other transactions through non-US broker
dealers or foreign regulated brokers.
     4.6 The Investor represents that it has had no position, office or other
material relationship within the past three years with the Company or persons
known to it to be affiliates of the Company.
     5. Survival of Representations, Warranties and Agreements. Notwithstanding
any investigation made by any party to this Agreement, all covenants,
agreements, representations and warranties made by the Company and the Investor
herein shall survive the execution of this Agreement, the delivery to the
Investor of the Units being purchased and the payment therefor.
     6. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (A) if within domestic United
States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if delivered
from outside the United States, by International Federal Express or facsimile,
and shall be deemed given (i) if delivered by first-class registered or
certified mail domestic, three business days after so mailed, (ii) if delivered
by a nationally recognized overnight carrier, one business day after so mailed,
(iii) if delivered by International Federal Express, two business days after so
mailed, (iv) if delivered by facsimile, upon electronic confirmation of receipt
and shall be delivered as addressed as follows: (a) if to the Company, then as
provided in Section 11 of the Placement Agency Agreement; and (b) if to the
Investor, at its address on the signature page hereto, or at such other address
or addresses as may have been furnished to the Company in writing.

 

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     7. Changes. This Agreement may not be modified or amended except pursuant
to an instrument in writing signed by the Company and the Investor.
     8. Headings. The headings of the various sections of this Agreement have
been inserted for convenience or reference only and shall not be deemed to be
part of this Agreement.
     9. Severability. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
     10. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law.
     11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute one instrument, and shall become effective when
one or more counterparts have been signed by each party hereto and delivered to
the other parties.
     12. Confirmation of Sale. The Investor acknowledges and agrees that the
Investor’s receipt of the Company’s counterpart to this Agreement, together with
the Prospectus Supplement (or the filing by the Company of an electronic version
thereof with the Commission), shall constitute written confirmation of the
Company’s sale of Units to the Investor.
     13. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY AND FOR ANY COUNTERCLAIM RELATING THERETO.