Exhibit 10

 

WARRANT EXERCISE AGREEMENT

 

This Warrant Exercise Agreement (the “Agreement”), dated September 24, 2013,
relates to Warrant Numbers [     ] and [     ] dated August 16, 2013 (the
“Warrants”) issued by Aastrom Biosciences, Inc., a Michigan corporation (the
“Company”), to [     ] and [     ] (each a “Holder” and, collectively, the
“Holders”).  Pursuant to the terms of the Warrants, the Holders are entitled to
subscribe for and purchase up to 7,333,000 shares (the “Warrant Shares”) of the
common stock, no par value, of the Company (the “Common Stock”).

 

WHEREAS, the Company wishes to induce the early exercise of the Warrants, and
the Holders wish to exercise the Warrants according to their terms.

 

NOW, THEREFORE, in consideration of the mutual agreements contained in this
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Exercise of the Warrants.  Effective
upon the execution of this Agreement, the Holders shall have been deemed to have
exercised for cash an aggregate number of 7,333,000 Warrants at a negotiated
exercise price of $0.375 (the “Exercises”).  In connection with the Exercises
and concurrently with the execution and delivery of this Agreement, each Holder
shall deliver an executed copy of the Exercise Notice attached to the Warrant
indicating a Cash Exercise of its Warrant.

 

2.                                      Payment of Exercise Price.  The terms of
the Warrants shall remain unchanged.  Upon execution and delivery of the related
exercise notice, the Company shall, in accordance with the terms of the Warrant,
issue a new warrant to the Holders representing the right to purchase the
remaining number of Warrant Shares, if any.  No later than one (1) Business Day
after the execution of this Agreement (the “Payment Date”), the Holders shall
pay the sum equal to the aggregate Exercise Price payable upon exercise of the
Warrants to the Company by wire transfer of immediately available funds to an
account designated by the Company and shall cause their prime broker to deliver
the original Warrants to the Company.  The Company shall endeavor to deliver the
shares of Common Stock set forth above in Section 1 to the Holders on the
Payment Date.

 

3.                                      Cash Inducement Fee.  In consideration
and as an inducement for Holders to engage in the Exercises, the Company hereby
agrees to pay to the Holders in immediately available funds aggregate cash
consideration in the amount of $1,209,945 to be paid as directed and allocated
by Holders no later than one (1) Business Day after the execution of this
Agreement.

 

4.                                      Representations and Warranties of the
Company.  The Company represents, warrants and agrees that:

 

4.1                                                 it has all the requisite
authority and power to enter into and consummate the transactions contemplated
herein and such transactions shall not contravene any organizational documents,
contractual, regulatory, statutory or other obligation or restriction applicable
to the Company;

 

4.2                                                 this Agreement has been duly
and validly authorized, executed and delivered by the Company, and shall
constitute a legal, valid, and binding obligation of the Company, enforceable
against it in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, or similar laws affecting the enforcement of creditors’ rights
generally and general equitable principles whether in a proceeding in equity or
at law;

 

--------------------------------------------------------------------------------

 

4.3                                                 it has a sufficient number
of authorized and unissued shares of voting common stock to consummate the
Exercises of the Warrants;

 

4.4                                                 any shares issued to Holders
pursuant to the Exercise of the Warrant shall be unlegended Common Stock,
validly issued, fully paid and non-assessable and free from all preemptive or
similar rights, taxes, liens, charges and other encumbrances with respect to the
issue thereof, that may be sold into the public market under the Company’s
effective registration statement on Form S-1 (File No. 333-188186) (the
“Registration Statement”, and the prospectus set forth therein, the
“Prospectus”), subject to the accuracy of Holder’s representations below.  Upon
receipt of the shares of Common Stock set forth above in Section 1, the Holders
will have good and marketable title to such shares;

 

4.5                                                 at the time the Registration
Statement and any amendments thereto became effective and as of the date hereof
the Registration Statement and any amendments thereto complied and will comply
in all material respects with the requirements of the Securities Act of 1933, as
amended (the “Securities Act”) and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.  The
Prospectus and any amendments or supplements thereto, at the time the Prospectus
or any amendment or supplement thereto was issued and as of the date hereof,
complied, and will comply, in all material respects with the requirements of the
Securities Act and did not, and will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  The Registration Statement is effective and available for the
issuance of the shares of Common Stock set forth above in Section 1 thereunder
and the Company has not received any notice that the Securities and Exchange
Commission (the “SEC”) has issued or intends to issue a stop-order with respect
to the Registration Statement or that the SEC otherwise has suspended or
withdrawn the effectiveness of the Registration Statement, either temporarily or
permanently, or intends or has threatened in writing to do so. The “Plan of
Distribution” section under the Registration Statement permits the issuance and
sale of the shares of Common Stock set forth above in Section 1 hereunder.  The
Registration Statement and any prospectus included therein, including the
Prospectus, complied in all material respects with the requirements of the 1933
Act and the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder and all other applicable laws and
regulations;

 

4.6                                                 neither it nor any other
person acting on its behalf has provided the Holders or their agent or counsel
with any information that constitutes or could reasonably be expected to
constitute material, nonpublic information about the Company.  The Company
understands and confirms that the Holders will rely on the foregoing
representations in effecting transactions in securities of the Company.  All
disclosure provided to the Holders regarding the Company or any of its
subsidiaries, their business and the transactions contemplated hereby furnished
by or on behalf of the Company does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.  No event or circumstance has occurred or information
exists with respect to the Company or any of its subsidiaries or its or their
business, properties, prospects, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed; and

 

4.7                              the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court, governmental agency or any regulatory or self-regulatory agency or any
other person, including, without limitation, any other security holders of the
Company, in order for it to execute, deliver or perform any of its obligations
under or contemplated by this Agreement.  All consents, authorizations, orders,
filings and registrations which the Company is required to obtain pursuant to
the preceding sentence have been obtained or effected on or prior to the date
hereof.

 

--------------------------------------------------------------------------------

 

5.                                      Representations and Warranties of the
Holder.  Each Holder represents and warrants that:

 

5.1                                                 it has the authority to
enter into the transactions and consummate the transactions contemplated herein
and such transactions shall not contravene any contractual, regulatory,
statutory or other obligation or restriction applicable to the Holder;

 

5.2                                                 this Agreement has been duly
and validly authorized, executed and delivered by the Holder, and shall
constitute a legal, valid, and binding obligation of the Holder, enforceable
against it in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, or similar laws affecting the enforcement of creditors’ rights
generally and general equitable principles whether in a proceeding in equity or
at law;

 

5.3                                                 it is an “accredited
investor” within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act;

 

5.4                                                 it has sufficient knowledge
and experience in financial and business matters so as to be capable of bearing
the economic risks of participation in this Agreement, and it is capable of
evaluating the merits and risks of participating in this Agreement, including
any risks associated with surrendering certain rights related to the Warrant;

 

5.5                                                 it has received any and all
information requested by the Holder for the Holder to make a decision to enter
into this Agreement and the transactions contemplated hereby. The Holder has had
an opportunity to discuss the Company’s business, management and financial
affairs with the Company and its representatives and has had the opportunity to
review the Company’s operations. The Holder has also had a full opportunity to
ask questions of and receive answers from the Company and its management in
connection with the transactions contemplated hereby. Except as expressly set
forth in this Agreement, the Holder acknowledges and agrees that the Company has
made no other representation or warranty regarding the operations, business,
prospects or condition (financial or otherwise) of the Company or its
affiliates;

 

5.6                                                 it acknowledges that it is
not relying, and has not relied, upon any statement, advice (whether legal, tax,
financial, accounting or other), representation or warranty made by any entity
or person including, without limitation, the Company or any of its affiliates or
representatives, except for (a) the publicly available filings made by the
Company with the Commission under the Exchange Act, and (b) the statements,
representations and warranties made by the Company in this Agreement;

 

5.7                                                 it is the sole legal and
beneficial owner of its Warrant, and has good, valid and marketable title to
such Warrant, free and clear of any mortgage, lien, pledge, charge, security
interest, encumbrance, title retention agreement, option, equity or other
adverse claim thereto.  It has not, in whole or in part, (a) assigned,
transferred, hypothecated, pledged or otherwise disposed of its Warrant or its
rights in the Warrant, or (b) given any person or entity any transfer order,
power of attorney or other authority of any nature whatsoever with respect to
the Warrant; and

 

5.8                                                 it is not an affiliate of
the Company as such term is defined in Rule 144 promulgated under the Securities
Act.

 

6.                                      Miscellaneous.

 

6.1                                                 This Agreement may be
executed in multiple original counterparts, all of which shall constitute one
and the same Agreement.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid

 

--------------------------------------------------------------------------------

 

and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.  This Agreement and all rights,
obligations and liabilities hereunder 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 that would require the application
of the laws of any other jurisdiction.

 

6.2                                                 If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their commercially reasonable efforts to find
and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.

 

6.3                                                 The obligations of each
Holder hereunder are several and not joint with the obligations of any other
Holders hereunder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder hereunder. Nothing contained
herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto, shall be deemed to constitute the
Holders as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Holders are in any way acting in
concert with respect to such obligations or the transactions contemplated by
this Agreement. Each Holder shall be entitled to protect and enforce its rights,
including, but not limited to, the rights arising out of this Agreement, and it
shall not be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.

 

6.4                                                 Capitalized terms used
herein and not otherwise defined shall have the respective meanings set forth in
the Warrant.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

 

COMPANY:

 

 

 

AASTROM BIOSCIENCES, INC.

 

 

 

 

 

By:

/s/ Dominick C. Colangelo

 

 

Name: Dominick C. Colangelo

 

 

Title: President and CEO

 

 

 

HOLDERS:

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------