<PAGE>

                                                                     EXHIBIT 4.3

     THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE
     NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  EXCEPT
     AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED
     AS OF FEBRUARY 28, 2000, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE
     SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
     STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN
     FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
     TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS
     SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

     Right to Purchase 1,132,075 Shares of Common Stock, no par value per share


                            STOCK PURCHASE WARRANT

     THIS CERTIFIES THAT, for value received, RGC International Investors, LDC
or its registered assigns, is entitled to purchase from Aastrom Biosciences,
Inc., a Michigan corporation (the "Company"), at any time or from time to time
during the period specified in Paragraph 2 hereof, One Million One Hundred
Thirty-Two Thousand Seventy-Five (1,132,075) fully paid and nonassessable shares
of the Company's Common Stock, no par value per share (the "Common Stock"), at
an initial exercise price of  $3.695 per share (the "Exercise Price"); provided,
                                                                       --------
however, on each February 29 and August 29 following the date hereof (each, a
-------
"Reset Date"), commencing August 29, 2000, the Exercise Price then in effect
shall be reset, if lower, to the average of the Closing Bid Prices of the Common
Stock for the five (5) Trading Days ending on the Trading Day immediately
preceding such Reset Date, but in no event shall the Exercise Price be less than
$1.60 (subject to adjustment for stock splits, combinations and similar events)
(the "Floor Price").  If the Exercise Price is reduced as a result of the resets
in the foregoing sentence, the number of shares into which this Warrant is
exercisable shall be proportionately increased in accordance with the provisions
of Section 4(d).  Notwithstanding the foregoing, so long as (A) the Registration
Statement
<PAGE>

(as defined in the Registration Rights Agreement (as defined below)) required to
be filed and to be effective pursuant to the Registration Rights Agreement is
then in effect and has been in effect for at least 30 days prior to the ten (10)
Trading Day period referred to below and sales of all of the Registrable
Securities (as defined in the Registration Rights Agreement) can be made
thereunder, (B) the Company has a sufficient number of shares of Common Stock
reserved for issuance upon full exercise of this Warrant and (C) the shares of
Common Stock issuable upon exercise of this Warrant are traded on the Nasdaq
National Market ("Nasdaq"), the Nasdaq SmallCap Market (the "Nasdaq SmallCap"),
the New York Stock Exchange ("NYSE") or the American Stock Exchange ("AMEX"), if
the average of the Closing Bid Prices of the Common Stock for any ten (10)
consecutive Trading Days exceeds $6.47 (subject to adjustment for stock splits,
combinations and similar events), the Exercise Price then in effect shall not be
subject to further resets pursuant to the proviso in the first sentence of this
paragraph.

     The term "Warrant Shares," as used herein, refers to the shares of Common
Stock purchasable hereunder.  The Warrant Shares and the Exercise Price are
subject to adjustment as provided in Paragraph 4 hereof.  The term Warrants
means this Warrant and the other warrants issued pursuant to that certain
Securities Purchase Agreement, dated February 28, 2000, by and among the Company
and the Buyers listed on the execution page thereof (the "Securities Purchase
Agreement").

     This Warrant is subject to the following terms, provisions, and conditions:

     1.  Manner of Exercise; Issuance of Certificates; Payment for Shares.
         ----------------------------------------------------------------
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant
Shares by the holder is not then registered pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), delivery to the Company of a written notice of an election to
effect a "Cashless Exercise" (as defined in Section 11(c) below) for the Warrant
Shares specified in the Exercise Agreement.  The Warrant Shares so purchased
shall be deemed to be issued to the holder hereof or such holder's designee, as
the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been delivered, and payment shall have been made for such shares (or
an election to effect a Cashless Exercise has been made) as set forth above.
Certificates for the Warrant Shares so purchased, representing the aggregate
number of shares specified in the Exercise Agreement, shall be delivered to the
holder hereof within a reasonable time, not exceeding two (2) business days,
after this Warrant shall have been so exercised.  The certificates so delivered
shall be in such denominations as may be requested by the holder hereof and
shall be registered in the name of such holder or such other name as shall be
designated by such holder.  If

                                      -2-
<PAGE>

this Warrant shall have been exercised only in part, then, unless this Warrant
has expired, the Company shall, at its expense, at the time of delivery of such
certificates, deliver to the holder a new Warrant representing the number of
shares with respect to which this Warrant shall not then have been exercised.

          Notwithstanding anything in this Warrant to the contrary, in no event
shall the holder of this Warrant be entitled to exercise a number of Warrants
(or portions thereof) in excess of the number of Warrants (or portions thereof)
upon exercise of which the sum of (i) the number of shares of Common Stock
beneficially owned by the holder of this Warrant and its affiliates (other than
shares of Common Stock which may be deemed beneficially owned through the
ownership of the unexercised Warrants and the unexercised or unconverted portion
of any other securities of the Company subject to a limitation on conversion or
exercise analogous to the limitation contained herein) and (ii) the number of
shares of Common Stock issuable upon exercise of the Warrants (or portions
thereof) with respect to which the determination described herein is being made,
would result in beneficial ownership by the holder of this Warrant and its
affiliates of more than 9.9% of the outstanding shares of Common Stock.  For
purposes of the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulation 13D-G thereunder, except as otherwise provided
in clause (i) hereof.  Notwithstanding anything else contained herein to the
contrary, this paragraph may not be amended without (i) written consent of the
Company and the holder of this Warrant and (ii) the approval of a majority of
the votes cast by all stockholders holding Common Stock of the Company.

     2.   Period of Exercise.  This Warrant is exercisable at any time or from
          ------------------
time to time on or after the date on which this Warrant is issued and delivered
pursuant to the terms of the Securities Purchase Agreement (the "Issue Date")
and before 5:00 p.m., New York City time on the third (3rd) anniversary of the
Issue Date (the "Exercise Period").  Notwithstanding the foregoing, if, at any
time after February 29, 2001, the Closing Bid Price (as defined below) of the
Common Stock on Nasdaq (or, if the Common Stock is not then traded on Nasdaq,
the principal trading market for the Common Stock on such date) is greater than
$7.39 (subject to adjustment for stock splits, combinations and similar events)
for a period (the "Trading Day Period") of ten (10) consecutive Trading Days (as
defined below), then, so long as (i) all of the shares of Common Stock issuable
upon exercise of or otherwise pursuant to this Warrant are then (x) authorized
and reserved for issuance, (y) registered for re-sale under the Securities Act
by the holder of this Warrant (or may otherwise be able to be resold publicly
without registration or restriction) and (z) eligible to be traded on Nasdaq,
the Nasdaq SmallCap, the NYSE or the AMEX and (ii) there is not then a
continuing Repurchase Event (as defined in the Securities Purchase Agreement),
this Warrant shall expire on the 30th day following the last day of the Trading
Day Period (the "Expiration Date"); provided, however, the Expiration Date shall
be delayed by one (1) Trading Day for each Trading Day occurring prior thereto
and prior to the full exercise of this Warrant that (i) any Registration
Statement (as defined in the Registration Rights Agreement, dated as of February
28, 2000, between the Company and RGC International Investors, LDC (the
"Registration Rights Agreement")) required to be filed and to be effective
pursuant to, and in accordance with the time periods specified in, the
Registration Rights Agreement

                                      -3-
<PAGE>

is not effective or sales of all of the Registrable Securities (as defined in
the Registration Rights Agreement) otherwise cannot be made thereunder during
the Registration Period (as defined in the Registration Rights Agreement)
(whether by reason of the Company's failure to properly supplement or amend the
prospectus included therein in accordance with the terms of the Registration
Rights Agreement or otherwise), (ii) any Repurchase Event (as defined in the
Securities Purchase Agreement) exists, without regard to whether any cure
periods shall have run or (iii) the Company is in breach of any of its
obligations pursuant to Section 4(h) of the Securities Purchase Agreement.

     3.   Certain Agreements of the Company.  The Company hereby covenants and
          ---------------------------------
agrees as follows:

          (a) Shares to be Fully Paid.  All Warrant Shares will, upon issuance
              -----------------------
in accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes, liens, and charges with respect to the
issue thereof.

          (b) Reservation of Shares.  During the Exercise Period, the Company
              ---------------------
shall at all times have authorized, and reserved for the purpose of issuance
upon exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.

          (c) Listing.  The Company shall promptly secure the listing of the
              -------
shares of Common Stock issuable upon exercise of this Warrant upon each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance upon
exercise of this Warrant) and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all shares of Common Stock from
time to time issuable upon the exercise of this Warrant; and the Company shall
so list on each national securities exchange or automated quotation system, as
the case may be, and shall maintain such listing of, any other shares of capital
stock of the Company issuable upon the exercise of this Warrant if and so long
as any shares of the same class shall be listed on such national securities
exchange or automated quotation system.

          (d) Certain Actions Prohibited.  The Company will not, by amendment of
              --------------------------
its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant.  Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

                                      -4-
<PAGE>

          (e) Successors and Assigns.  This Warrant will be binding upon any
              ----------------------
entity succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all the Company's assets.

     4.   Antidilution Provisions.  During the Exercise Period, the Exercise
          -----------------------
Price and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Paragraph 4.

     In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up to the
nearest cent.

          (a) Adjustment of Exercise Price and Number of Shares upon Issuance of
              ------------------------------------------------------------------
Common Stock.  Except as otherwise provided in Paragraphs 4(c) and 4(e) hereof,
------------
if and whenever on or after the Issue Date of this Warrant, the Company issues
or sells, or in accordance with Paragraph 4(b) hereof is deemed to have issued
or sold, any shares of Common Stock for no consideration or for a consideration
per share (before deduction of reasonable expenses or commissions or
underwriting discounts or allowances in connection therewith) less than the
Exercise Price in effect on the date of issuance (or deemed issuance) of such
Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive
Issuance, the Exercise Price will be reduced to a price determined by
multiplying the Exercise Price in effect immediately prior to the Dilutive
Issuance by a fraction, (i) the numerator of which is an amount equal to the sum
of (x) the number of shares of Common Stock actually outstanding immediately
prior to the Dilutive Issuance, plus (y) the quotient of the aggregate
consideration, calculated as set forth in Paragraph 4(b) hereof, received by the
Company upon such Dilutive Issuance divided by the Exercise Price in effect
immediately prior to the Dilutive Issuance, and (ii) the denominator of which is
the total number of shares of Common Stock Deemed Outstanding (as defined below)
immediately after the Dilutive Issuance.

          (b) Effect on Exercise Price of Certain Events.  For purposes of
              ------------------------------------------
determining the adjusted Exercise Price under Paragraph 4(a) hereof, the
following will be applicable:

              (i)  Issuance of Rights or Options.  If the Company in any manner
                   -----------------------------
issues or grants any warrants, rights or options, whether or not immediately
exercisable, to subscribe for or to purchase Common Stock or other securities
convertible into or exchangeable for Common Stock ("Convertible Securities")
(such warrants, rights and options to purchase Common Stock or Convertible
Securities are hereinafter referred to as "Options") and the price per share for
which Common Stock is issuable upon the exercise of such Options is less than
the Exercise Price in effect on the date of issuance or grant of such Options,
then the maximum total number of shares of Common Stock issuable upon the
exercise of all such Options will, as of the date of the issuance or grant of
such Options, be deemed to be outstanding and to have been issued and sold by
the Company for such price per share.  For purposes of the preceding sentence,
the "price per share for which Common Stock is issuable upon the exercise of
such Options" is determined by dividing (i) the total amount, if any, received
or receivable by the Company as consideration for the issuance or granting of
all such Options, plus the minimum aggregate amount of additional consideration,
if any,

                                      -5-
<PAGE>

payable to the Company upon the exercise of all such Options, plus, in the case
of Convertible Securities issuable upon the exercise of such Options, the
minimum aggregate amount of additional consideration payable upon the conversion
or exchange thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further adjustment to
the Exercise Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.

               (ii)  Issuance of Convertible Securities.  If the Company in any
                     ----------------------------------
manner issues or sells any Convertible Securities, whether or not immediately
convertible (other than where the same are issuable upon the exercise of
Options) and the price per share for which Common Stock is issuable upon such
conversion or exchange is less than the Exercise Price in effect on the date of
issuance of such Convertible Securities, then the maximum total number of shares
of Common Stock issuable upon the conversion or exchange of all such Convertible
Securities will, as of the date of the issuance of such Convertible Securities,
be deemed to be outstanding and to have been issued and sold by the Company for
such price per share.  For the purposes of the preceding sentence, the "price
per share for which Common Stock is issuable upon such conversion or exchange"
is determined by dividing (i) the total amount, if any, received or receivable
by the Company as consideration for the issuance or sale of all such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the conversion or exchange thereof at the time
such Convertible Securities first become convertible or exchangeable, by (ii)
the maximum total number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities.  No further adjustment to the
Exercise Price will be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities.

               (iii) Change in Option Price or Conversion Rate.  If there is a
                     -----------------------------------------
change at any time in (i) the amount of additional consideration payable to the
Company upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the conversion or exchange of
any Convertible Securities; or (iii) the rate at which any Convertible
Securities are convertible into or exchangeable for Common Stock (other than
under or by reason of provisions designed to protect against dilution), the
Exercise Price in effect at the time of such change will be readjusted to the
Exercise Price which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold.

               (iv)  Treatment of Expired Options and Unexercised Convertible
                     --------------------------------------------------------
Securities.  If, in any case, the total number of shares of Common Stock
----------
issuable upon exercise of any Option or upon conversion or exchange of any
Convertible Securities is not, in fact, issued and the rights to exercise such
Option or to convert or exchange such Convertible Securities shall have expired
or terminated, the Exercise Price then in effect will be readjusted to the
Exercise Price which would have been in effect at the time of such expiration or
termination had such Option or

                                      -6-
<PAGE>

Convertible Securities, to the extent outstanding immediately prior to such
expiration or termination (other than in respect of the actual number of shares
of Common Stock issued upon exercise or conversion thereof), never been issued.

               (v)  Calculation of Consideration Received.  If any Common Stock,
                    -------------------------------------
Options or Convertible Securities are issued, granted or sold for cash, the
consideration received therefor for purposes of this Warrant will be the amount
received by the Company therefor, before deduction of reasonable commissions,
underwriting discounts or allowances or other reasonable expenses paid or
incurred by the Company in connection with such issuance, grant or sale.  In
case any Common Stock, Options or Convertible Securities are issued or sold for
a consideration part or all of which shall be other than cash, the amount of the
consideration other than cash received by the Company will be the fair value of
such consideration, except where such consideration consists of securities, in
which case the amount of consideration received by the Company will be the
Market Price thereof as of the date of receipt.  In case any Common Stock,
Options or Convertible Securities are issued in connection with any acquisition,
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be.  The fair value of any consideration other than cash or securities
will be determined in good faith by the Board of Directors of the Company.

               (vi) Exceptions to Adjustment of Exercise Price.  No adjustment
                    ------------------------------------------
to the Exercise Price will be made (i) upon the exercise of any warrants,
options or convertible securities granted, issued and outstanding on the date of
issuance of this Warrant; (ii) upon the grant or exercise of any stock or
options which may hereafter be granted or exercised under any employee benefit
plan of the Company now existing or to be implemented in the future, so long as
the issuance of such stock or options is approved by a majority of the
independent members of the Board of Directors of the Company or a majority of
the members of a committee of independent directors established for such
purpose; (iii) upon the exercise of the Warrants; (iv) upon the issuance of
Common Stock in a firm commitment underwritten public offering led by at least
one of the underwriters listed on Schedule 4(f) of the Registration Rights
Agreement (as defined below); and (v) issuances of securities to any investor
engaged as its principal business in the biotechnology, medical device or
pharmaceutical industry.

          (c)  Subdivision or Combination of Common Stock. If the Company at any
               ------------------------------------------
time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced.  If the Company at
any time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.

                                      -7-
<PAGE>

          (d)  Adjustment in Number of Shares.  Upon each adjustment of the
               ------------------------------
Exercise Price pursuant to the provisions of this Paragraph 4, the number of
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price; provided, however, that no
                                                    --------  -------
adjustment to the number of shares of Common Stock into which this Warrant is
exercisable shall be made pursuant to this Section 4(d) when there are
adjustments to the Exercise Price pursuant to this Section 4 which would cause
the Exercise Price to be less than the Floor Price.

          (e)  Consolidation or Merger.
               -----------------------

               (i)  In case of any consolidation of the Company with, or merger
of the Company into any other corporation, then as a condition of such
consolidation or merger, adequate provision will be made whereby the holder of
this Warrant will have the right to acquire and receive upon exercise of this
Warrant in lieu of the shares of Common Stock immediately theretofore acquirable
upon the exercise of this Warrant, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for the number of shares
of Common Stock immediately theretofore acquirable and receivable upon exercise
of this Warrant had such consolidation or merger not taken place. In any such
case, the Company will make appropriate provision to insure that the provisions
of this Paragraph 4 hereof will thereafter be applicable as nearly as may be in
relation to any shares of stock or securities thereafter deliverable upon the
exercise of this Warrant. Subject to subparagraph (ii) below, the Company will
not effect any consolidation or merger unless prior to the consummation thereof,
the successor corporation (if other than the Company) (the "Surviving Entity")
assumes by written instrument the obligations under this Paragraph 4 and the
obligations to deliver to the holder of this Warrant such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the holder
may be entitled to acquire.

               (ii) In the event of a Qualified Merger Transaction (as defined
below) or a Transfer of Control Transaction (as defined below) and
notwithstanding anything to the contrary contained in this Section 4(e), so long
as on the date the Optional Redemption Notice (as defined below) is delivered
and at all times thereafter up to the Optional Redemption Date (as defined
below) (a) the Registration Statement (as defined in the Registration Rights
Agreement), required to be filed and be effective pursuant to the Registration
Rights Agreement is then in effect and has been in effect for at least 30 days
prior thereto (other than for any period prior to the date of delivery of the
Optional Redemption Notice) and sales of all of the Registrable Securities (as
defined in the Registration Rights Agreement) can be made thereunder, (b) the
Company has a sufficient number of authorized shares of Common Stock reserved
for issuance upon full exercise of this Warrant and (c) the shares of Common
Stock issuable upon exercise of this Warrant are traded on Nasdaq, the Nasdaq
SmallCap, the NYSE or the AMEX, then the Company shall have the right,
exercisable on not less than twenty (20) Trading Days written notice prior to
the consummation of the Qualified

                                      -8-
<PAGE>

Merger Transaction or Transfer of Control Transaction to the holder of this
Warrant (which notice may not be sent to the holder of this Warrant until the
Company is permitted to redeem this Warrant pursuant to this Section 4(e)(ii)
(other than the requirement to deliver such notice) or at any time when there is
material non-public information regarding the Company that has not been publicly
announced or prior to the public announcement of such Qualified Merger
Transaction or Transfer of Control Transaction), to redeem this Warrant
simultaneously with the consummation of the Qualified Merger Transaction or
Transfer of Control Transaction in accordance with this Section 4(e)(ii). A
notice (the "Optional Redemption Notice") of any redemption hereunder (an
"Optional Redemption") shall be delivered to the holder of this Warrant at its
registered address appearing on the books and records of the Company and shall
state (1) that the Company is exercising its right to redeem this Warrant and
(2) the then current projected date of redemption, which date and time shall be
the effective date of the Qualified Merger Transaction (the "Optional Redemption
Date"), provided that the Company shall promptly notify the holder of this
Warrant in writing if the projected date of redemption is changed. On the
Optional Redemption Date, the Company shall make payment of the Optional
Redemption Amount (as defined below) to or upon the order of the holder of this
Warrant as specified by the holder in writing to the Company at least one (1)
business day prior to the Optional Redemption Date. If the Company exercises its
right to redeem this Warrant in accordance with this Section 4(e)(ii), the
Company shall make payment to the holder of this Warrant of an amount in cash
(the "Optional Redemption Amount") equal to 90% of the Black-Scholes Amount (as
defined herein) multiplied by the number of shares of Common Stock for which
this Warrant was exercisable (without regard to any limitations on exercise
herein contained) on the date immediately preceding the date of such Qualified
Merger Transaction or Transfer of Control Transaction. In the case of a
Qualified Merger Transaction, the Company may, at its option, pay the Optional
Redemption Amount in a number of shares of common stock of the Surviving Entity
(the "Survivor Common Stock") equal to the Optional Redemption Amount divided by
95% of the average of the lowest Closing Bid Prices for any five (5) Trading
Days (which need not be consecutive) during the fifteen (15) Trading Day period
ending one Trading Day prior to the Optional Redemption Date; provided that such
                                                              --------
shares of Survivor Common Stock paid to the holder of this Warrant pursuant to
this sentence (i) are traded on Nasdaq, the NYSE or the AMEX and (ii) may be
immediately resold by the holder of this Warrant to the public without
registration or restriction.  Notwithstanding anything to the contrary contained
herein, if, in the case of a Qualified Merger Transaction, the price paid per
share of Common Stock is greater than or equal to 130% of the then effective
Exercise Price (but in no event lower than $2.65 (subject to adjustment for
stock splits, combinations and similar events)), or, in the case of a Transfer
of Control Transaction, the average of the Closing Bid Prices for the twenty
(20) Trading Day notice period during which the Company may give its Optional
Redemption Notice is greater than or equal to 130% of the then effective
Exercise Price (but in no event lower than $2.65 (subject to adjustment for
stock splits, combinations and similar events)), the Company shall not be
permitted to redeem this Warrant pursuant to this Section 4(e)(ii) and this
Warrant shall be exercised simultaneously with the consummation of the Qualified
Merger Transaction or Transfer of Control Transaction, as applicable, in
accordance with the terms of Section 1.  Notwithstanding the delivery of an
Optional Redemption Notice, the holder of this Warrant shall at all times prior
to the Optional Redemption Date maintain the right to exercise all or any
portion of this Warrant in accordance with the terms

                                      -9-
<PAGE>

of Section 1 and any portion so exercised after receipt of an Optional
Redemption Notice and prior to the Optional Redemption Date set forth in such
notice and payment of the aggregate Optional Redemption Amount shall be deducted
from the portion of this Warrant which is otherwise subject to redemption
pursuant to such notice. If the Company delivers an Optional Redemption Notice
and fails to pay the Optional Redemption Amount due to the holder of this
Warrant on the Optional Redemption Date, the Company (or any successor thereto
including the Surviving Entity) shall forever forfeit its right to redeem this
Warrant pursuant to this Section 4(e)(ii).

The "Black-Scholes Amount" shall be an amount determined by calculating the
"Black-Scholes" value of an option to purchase one share of Common Stock on the
applicable page on the Bloomberg (as defined below) online page, using the
following variable values:  (i) the current market price of the Common Stock
equal to the closing trade price on the last Trading Day prior to the date the
Optional Redemption Notice is received by the holder of this Warrant; (ii)
volatility of the Common Stock equal to the volatility of the Common Stock
during the one hundred (100) Trading Day period ending on the Trading Day prior
to the date the Optional Redemption Notice is received by the holder of this
Warrant; (iii) a risk free rate equal to the interest rate on the United States
treasury bill or treasury note with a 90-day maturity on the Trading Day prior
to the date the Optional Redemption Notice is received by the holder of this
Warrant; and (iv) an exercise price equal to the Exercise Price on the date the
Optional Redemption Notice is received by the holder of this Warrant.  In the
event such calculation function is no longer available utilizing the Bloomberg
(as defined below) online page, the holder of this Warrant shall calculate such
amount in good faith using the closest available alternative mechanism and
variable values to those available utilizing the Bloomberg (as defined below)
online page for such calculation function and shall provide a copy of such
calculation to the Company.

               (iii)  "Qualified Merger Transaction" shall mean a consolidation
of the Company with, or merger of the Company into any other corporation where
the Company is not the surviving entity and in which the Company is required as
a condition of such transaction to redeem or force the exercise of the Warrants.

               (iv)   "Transfer of Control Transaction" shall mean the sale or
exchange of shares of Common Stock constituting more than fifty percent (50%) of
the total outstanding Common Stock, calculated on a fully diluted basis. For
purposes of such calculation, all shares of Common Stock issuable upon the
conversion, exercise or exchange of any securities of the Company shall be
deemed to be outstanding.

          (f)  Distribution of Assets. In case the Company shall declare or make
               ----------------------
any distribution of its assets (including cash) to holders of Common Stock as a
partial liquidating dividend, by way of return of capital or otherwise, then,
after the date of record for determining shareholders entitled to such
distribution, but prior to the date of distribution, the holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets which would have been

                                      -10-
<PAGE>

payable to the holder had such holder been the holder of such shares of Common
Stock on the record date for the determination of shareholders entitled to such
distribution.

          (g)  Notice of Adjustment.  Upon the occurrence of any event which
               --------------------
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.  Such calculation shall be certified
by the chief financial officer of the Company.

          (h)  Minimum Adjustment of Exercise Price.  No adjustment of the
               ------------------------------------
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

          (i)  No Fractional Shares. No fractional shares of Common Stock are to
               --------------------
be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.

          (j)  Other Notices.  In case at any time:
               -------------

               (i)   the Company shall declare any dividend upon the Common
Stock payable in shares of stock of any class or make any other distribution
(including dividends or distributions payable in cash out of retained earnings)
to the holders of the Common Stock;

               (ii)  the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;

               (iii) there shall be any capital reorganization of the Company,
or reclassification of the Common Stock, or consolidation or merger of the
Company with or into, or sale of all or substantially all its assets to, another
corporation or entity; or

               (iv)  there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the

                                      -11-
<PAGE>

case of any such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up, notice of the date (or, if not then
known, a reasonable approximation thereof by the Company) when the same shall
take place. Such notice shall also specify the date (or if not then known, the
best estimate of such date) on which the holders of Common Stock shall be
entitled to receive such dividend, distribution, or subscription rights or to
exchange their Common Stock for stock or other securities or property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding-up, as the case may be. Such notice
shall be given at least 30 days prior to the record date or the date on which
the Company's books are closed in respect thereto. Failure to give any such
notice or any defect therein shall not affect the validity of the proceedings
referred to in clauses (i), (ii), (iii) and (iv) above.

          (k)  Certain Events.  If any event occurs of the type contemplated by
               --------------
the adjustment provisions of this Paragraph 4 but not expressly provided for by
such provisions, the Company will give notice of such event as provided in
Paragraph 4(g) hereof, and the Company's Board of Directors will make an
appropriate adjustment in the Exercise Price and the number of shares of Common
Stock acquirable upon exercise of this Warrant so that the rights of the holder
of this Warrant shall be neither enhanced nor diminished by such event.

          (l)  Certain Definitions.
               -------------------

               (i)  "Common Stock Deemed Outstanding" means the number of shares
                     -------------------------------
of Common Stock actually outstanding (not including shares of Common Stock held
in the treasury of the Company), plus (x) pursuant to Paragraph 4(b)(i) hereof,
the maximum total number of shares of Common Stock issuable upon the exercise of
Options, as of the date of such issuance or grant of such Options, if any, and
(y) pursuant to Paragraph 4(b)(ii) hereof, the maximum total number of shares of
Common Stock issuable upon conversion or exchange of Convertible Securities, as
of the date of issuance of such Convertible Securities, if any.

               (ii) "Market Price," as of any date, (i) means the average of the
                     ------------
last reported sale prices for the shares of Common Stock on Nasdaq for the five
(5) Trading Days immediately preceding such date as reported by Bloomberg
Financial Markets or an equivalent reliable reporting service mutually
acceptable to and hereafter designated by the holder of this Warrant and the
Company ("Bloomberg"), or (ii) if Nasdaq is not the principal trading market for
the shares of Common Stock, the average of the last reported sale prices on the
principal trading market for the Common Stock during the same period as reported
by Bloomberg, or (iii) if market value cannot be calculated as of such date on
any of the foregoing bases, the Market Price shall be the fair market value as
reasonably determined in good faith by (a) the Board of Directors of the Company
or (b) at the option and expense of a majority-in-interest of the holders of the
outstanding Warrants, by an independent investment bank of nationally recognized
standing in the valuation of businesses similar to the business of the Company.
The manner of determining the Market Price of the Common Stock set forth in the
foregoing definition shall apply with respect to any other security in respect
of which a determination as to market value must be made hereunder.

                                      -12-
<PAGE>

               (iii) "Common Stock," for purposes of this Paragraph 4, includes
                      ------------
the Common Stock, no par value per share, and any additional class of stock of
the Company having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this Warrant shall
include only shares of Common Stock, no par value per share, in respect of which
this Warrant is exercisable, or shares resulting from any subdivision or
combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character referred to in
Paragraph 4(e) hereof, the stock or other securities or property provided for in
such Paragraph.

               (iv)  "Closing Bid Price" means, for any security as of any date,
                      -----------------
the closing bid price on Nasdaq as reported by Bloomberg or, if Nasdaq is not
the principal trading market for such security, the closing bid price of such
security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or, if no closing bid
price of such security is available in any of the foregoing manners, the average
of the bid prices of any market makers for such security that are listed in the
"pink sheets" by the National Quotation Bureau, Inc. If the Closing Bid Price
cannot be calculated for such security on such date in the manner provided
above, the Closing Bid Price shall be the fair market value as mutually
determined by the Company and the holder of this Warrant.

               (v)   "Trading Day" means any day on which the Common Stock is
                      -----------
traded for any period on Nasdaq, or on the principal securities exchange or
other securities market on which the Common Stock is then being traded.

     5.   Issue Tax.  The issuance of certificates for Warrant Shares upon the
          ---------
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

     6.   No Rights or Liabilities as a Shareholder.  This Warrant shall not
          -----------------------------------------
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company.  No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

     7.   Transfer, Exchange, and Replacement of Warrant.
          ----------------------------------------------

                                      -13-
<PAGE>

          (a) Restriction on Transfer.  This Warrant and the rights granted to
              -----------------------
the holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Paragraph 7(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Paragraph 7(f) hereof and to the applicable
provisions of the Securities Purchase Agreement.  Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary.
Notwithstanding anything to the contrary contained herein, the registration
rights described in Paragraph 8 are assignable only in accordance with the
provisions of the Registration Rights Agreement.

          (b) Warrant Exchangeable for Different Denominations.  This Warrant is
              ------------------------------------------------
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Paragraph 7(e) below, for new Warrants of
like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of shares as shall be
designated by the holder hereof at the time of such surrender.

          (c) Replacement of Warrant.  Upon receipt of evidence reasonably
              ----------------------
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

          (d) Cancellation; Payment of Expenses.  Upon the surrender of this
              ---------------------------------
Warrant in connection with any transfer, exchange, or replacement as provided in
this Paragraph 7, this Warrant shall be promptly canceled by the Company.  The
Company shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the holder of this
Warrant or transferees) and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Paragraph 7.

          (e) Register.  The Company shall maintain, at its principal executive
              --------
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferee and each prior
owner of this Warrant.

          (f) Exercise or Transfer Without Registration.  If, at the time of the
              -----------------------------------------
surrender of this Warrant in connection with any exercise, transfer, or exchange
of this Warrant, this Warrant (or, in the case of any exercise, the Warrant
Shares issuable hereunder), shall not be registered under the Securities Act and
under applicable state securities or blue sky laws, the Company may require, as
a condition of allowing such exercise, transfer, or exchange, (i) that the
holder or transferee of this

                                      -14-
<PAGE>

Warrant, as the case may be, furnish to the Company a written opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.

     8.  Registration Rights.  The initial holder of this Warrant (and certain
         -------------------
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in Section 2 of the Registration
Rights Agreement.

     9.  Notices.  All notices, requests, and other communications required or
         -------
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder.  All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 24 Frank Lloyd Wright
Drive, P.O. Box 376, Ann Arbor, Michigan 48106, Attention: Chief Executive
Officer, or at such other address as shall have been furnished to the holder of
this Warrant by notice from the Company.  Any such notice, request, or other
communication may be sent by facsimile, but shall in such case be subsequently
confirmed by a writing personally delivered or sent by certified or registered
mail or by recognized overnight mail courier as provided above.  All notices,
requests, and other communications shall be deemed to have been given either at
the time of the receipt thereof by the person entitled to receive such notice at
the address of such person for purposes of this Paragraph 9, or, if mailed by
registered or certified mail or with a recognized overnight mail courier upon
deposit with the United States Post Office or such overnight mail courier, if
postage is prepaid and the mailing is properly addressed, as the case may be.

     10. Governing Law.  THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
         -------------
ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF MICHIGAN (WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS).  BOTH PARTIES IRREVOCABLY CONSENT TO THE JURISDICTION OF THE
UNITED STATES FEDERAL COURTS AND THE STATE COURTS LOCATED IN DELAWARE WITH
RESPECT TO ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER THIS AGREEMENT, THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE

                                      -15-
<PAGE>

TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN SUCH COURTS.
BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-
APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY
BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER.

     11.  Miscellaneous.
          -------------

          (a) Amendments.  This Warrant and any provision hereof may only be
              ----------
amended by an instrument in writing signed by the Company and the holder hereof.

          (b) Descriptive Headings.  The descriptive headings of the several
              --------------------
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.

          (c) Cashless Exercise.  Notwithstanding anything to the contrary
              -----------------
contained in this Warrant, if the resale of the Warrant Shares by the holder is
not then registered pursuant to an effective registration statement under the
Securities Act, this Warrant may be exercised by presentation and surrender of
this Warrant to the Company at its principal executive offices with a written
notice of the holder's intention to effect a cashless exercise, including a
calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a "Cashless Exercise").  In the
event of a Cashless Exercise, in lieu of paying the Exercise Price in cash, the
holder shall surrender this Warrant for that number of shares of Common Stock
determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price per share of the Common Stock
and the Exercise Price, and the denominator of which shall be the then current
Market Price per share of Common Stock.


                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -16-
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer.

                                    AASTROM BIOSCIENCES, INC.


                                    By:  /s/ R. Douglas Armstrong, Ph.D.
                                         -----------------------------------
                                         R. Douglas Armstrong, Ph.D.
                                         President & Chief Executive Officer



                                    Dated as of February 29, 2000

                                      -17-
<PAGE>

                          FORM OF EXERCISE AGREEMENT


                                                        Dated: ________ __, ____


To: Aastrom Biosciences, Inc.


     The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________.  Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:


                                   Name: _______________________________________

                                   Signature: __________________________________
                                   Address:   __________________________________
                                              __________________________________


                                   Note:  The above signature should correspond
                                          exactly with the name on the face of
                                          the within Warrant.

and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.

     The above signatory represents and warrants that all offers and sales by
the above signatory of the securities issuable to the above signatory upon
exercise of this Warrant shall be made pursuant to registration of the
securities under the Securities Act of 1933, as amended (the "Act"), or pursuant
to an exemption from registration under the Act.
<PAGE>

                              FORM OF ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

Name of Assignee                   Address                          No of Shares
----------------                   -------                          ------------



, and hereby irrevocably constitutes and appoints ______________ _______________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.


Dated: ________ __, ____

In the presence of:


_________________________

                                   Name: _______________________________________

                                   Signature: __________________________________

                                   Title of Signing Officer or Agent (if any):

                                   Address: ____________________________________
                                            ____________________________________
                                            ____________________________________

                                   Note: The above signature should correspond
                                         exactly with the name on the face of
                                         the within Warrant.