Strategic Planning Consulting Services

EXHIBIT 10.41





STRATEGIC PLANNING CONSULTING SERVICES

AND COLLABORATION AGREEMENT



This Agreement is made as of October 7, 1997 (the "Effective Date"), by and between AASTROM BIOSCIENCES, INC., a Michigan corporation ("Aastrom"), and BURRILL & COMPANY, LLC, a California limited liability company ("Burrill").



A. Burrill is a merchant bank engaged in the business, among other things, of identifying and creating strategic alliances between companies.



B. Aastrom is a medical and biological products and technology company, and Aastrom desires to obtain one or more strategic alliances ("Strategic Alliances") with one or more companies in the pharmaceutical, biotechnology or medical device industry ("Strategic Partners"), and Aastrom wishes to engage the services of Burrill to assist Aastrom with planning and entering into Strategic Alliances.



NOW THEREFORE, the parties agree as follows:



1. Definitions.

-----------



Board is defined in Section 3.1.

-----



Effective Date shall mean the date first written above.

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



Initial Warrant is defined in Section 4.3.1.

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



Monthly Retainer is defined in Section 4.1.

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



Percentage Success Fee is defined in Section 4.2.

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



Potential Partners are defined in Section 3.1.

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



Proceeds shall mean the aggregate of the net cash received by Aastrom

-------- from Strategic Partners in connection with a Strategic Alliance prior to the fifth anniversary of the effective date of the Strategic Alliance for licensing fees, milestone payments, research and development funding, equity and like payments. Said proceeds to not include loan proceeds (other than loans which are converted into equity securities of Aastrom prior to the fifth anniversary of the effective date of the Strategic Alliance), royalties, or proceeds from any sale of the Aastrom products. (For a Strategic Alliance which does not include "Proceeds" but which does include some unique value to Aastrom, which unique value does not come within the definition of "Proceeds," Aastrom will give good faith consideration to placing a fair and reasonable monetary value on said unique value so that it can be treated as "Proceeds" pursuant to this Agreement.)



Services are defined in Section 3.

--------





Strategic Alliance shall mean any transaction or series or combination

------------------ of transactions whereby one or more Strategic Partners enters into a transaction with Aastrom with the assistance of Burrill, pursuant to which transaction the Strategic Partner invests in Aastrom equity securities, or the Strategic Partner enters into an agreement with Aastrom in the form of a major license, collaboration, joint venture, partnership, merger, acquisition, or similar arrangement. Excluded from this Strategic Alliance definition are minor license agreements for technology, customary manufacturing or supply agreements that do not involve equity investment in Aastrom, and any performance pursuant to Cobe's existing agreements with Aastrom. (For avoidance of doubt, if Aastrom and Cobe enter into a new transaction, as distinguished from implementing or making minor modifications, to any of their existing agreements, then such a new transaction is included as a Strategic Alliance.)



Strategic Partners are defined in Recital B.

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



Strategic Plan is defined in Section 3.1.

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



Success Warrant is defined in Section 4.3.3.

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



Term is defined in Section 2.

----



Term Sheet means the term sheet, letter of intent or memorandum of

---------- understanding signed by Aastrom and the Strategic Partner for a particular Strategic Alliance.



Vesting Warrant is defined in Section 4.3.2.

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



2. Term. The term of this Agreement shall commence on the Effective Date

---- and shall continue until this Agreement is terminated as specified herein (the "Term"). Upon the expiration of the Term, this Agreement and all rights and obligations hereunder shall terminate (except the rights and obligations contained in Sections 5.2 and 6.)



3. Burrill's Services. Aastrom hereby retains Burrill, commencing as of

------------------ the Effective Date, to provide to Aastrom those services typically provided by Burrill (the "Services") including, but not limited to, the services set forth in this Section 3. The Services shall include the following:



3.1. Planning for Strategic Alliances. Burrill shall review and

-------------------------------- evaluate Aastrom's current status and prospects, and Burrill shall directly work with Aastrom to develop a plan for Aastrom's potential Strategic Alliances, which plan shall include a list of companies which Burrill believes qualify as potential partners (the "Potential Partners") for a Strategic Alliance with Aastrom. Burrill will assist Aastrom in the implementation of the plan, including coordinating contacts with the Potential Partners, preparation of appropriate materials, negotiations for term sheets and definitive agreements, and proceeding with activities necessary to close the Strategic Alliance. Burrill shall facilitate meetings, communications and interactions between the Potential Partners and Aastrom to pursue negotiations, to make presentations, and to assist Aastrom in responding to "due diligence" requests. Burrill shall also, where necessary, based on the type of Strategic Alliance proposed, provide the Aastrom Board of Directors (the "Board") and/or shareholders with recommendations regarding any proposed Strategic Alliance.





3.2. Strategic Counsel to Aastrom's Board of Directors. At Aastrom's

------------------------------------------------- request, Steven Burrill shall attend meetings of the Board and/or Aastrom's senior management to discuss the performance of Burrill's services under this Agreement and to consult with the Board and senior management on strategies for achieving a desirable Strategic Alliance.



3.3. Advisory Boards. Burrill shall also provide Aastrom's President

--------------- with periodic access to Burrill's Business Advisory Board and/or Scientific Advisory Board, to the same general extent and nature as for Burrill's other client companies.



3.4. Involvement of Steven Burrill. G. Steven Burrill shall (i) be

----------------------------- Aastrom's principal contact at Burrill, (ii) remain the principal Burrill employee involved with Aastrom matters, and (iii) be the principal Burrill employee to direct or coordinate interactions by Burrill with Potential Partners, the Board and senior management of Aastrom throughout the Term of this Agreement.



4. Compensation Payable to Burrill.

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



4.1. Monthly Retainer. For the duration of the Term, Aastrom shall pay

---------------- to Burrill a monthly retainer (the "Monthly Retainer") in the sum of Ten Thousand Dollars ($10,000) cash, payable within ten (10) calendar days after the beginning of each month during the Term.



4.2. Percentage Success Fee. Following the closing of any Strategic

---------------------- Alliance for which a Term Sheet was signed by both the Strategic Partner and Aastrom during the Term (or signed within six (6) months after the Term as to a Proposed Partner with whom Burrill was actively involved during the Term on behalf of a potential Strategic Alliance with Aastrom), Aastrom shall pay to Burrill a Percentage Success Fee equal to four percent (4%) of the Proceeds actually received by Aastrom in connection with such Strategic Alliance prior to the fifth anniversary of the effective date of the Strategic Alliance. Aastrom shall pay said Percentage Success Fee by either of the following alternative methods, at Burrill's option: (i) cash, or (ii) Aastrom Common Stock, with such stock valued at the average of the closing sale price of Aastrom Common Stock on the Nasdaq National Market System for the twenty (20) trading days (on which Aastrom Common Stock actually traded) prior to the date of the closing of such Strategic Alliance. Percentage Success Fee shall be paid in increments as Aastrom receives the Proceeds from the Strategic Partner.



4.2.1. Adjustments.

-----------

(a) If the Proceeds of the first two (2) Strategic Alliances

entered into by Aastrom do not exceed fifteen million dollars ($15,000,000)

within eighteen (18) months after the first closing of the first Strategic

Alliance, then the Percentage Success Fee shall be increased to seven and

one-half percent (7.5%) of the Proceeds from such Strategic Alliance and

Burrill shall not be entitled to any Success Warrants as provided in

Section 4.3.3 herein.



(b) In the event that the first Strategic Alliance is for less

than fifteen million dollars ($15,000,000) of Proceeds within the eighteen

(18) months specified in Section 4.2.1(a), and Aastrom pays the seven and

one-half percent (7.5%) Percentage Success





Fee for said first Strategic Alliance, but thereafter within the eighteen

(18) months specified in Section 4.2.1(a) a second Strategic Alliance is

closed which causes the aggregate Proceeds to exceed fifteen million

dollars ($15,000,000) within the eighteen (18) months specified in Section

4.2.1(a), such that the Percentage Success Fee is to be only four percent

(4%), then Burrill and Aastrom shall make such adjustments, payments or

refunds as may be needed so that only the four percent (4%) Success Fee is

paid on the aggregate Proceeds from the first and second Strategic

Alliances received by Aastrom within the 18 months specified in Section

4.2.1(a). Further, once said fifteen million dollar ($15,000,000) level is

reached, the Success Warrant earned pursuant to Section 4.3.3 hereof shall

be issued.



(c) If Aastrom enters into a Strategic Alliance that includes (i) the

merger or consolidation of Aastrom with or into another corporation

pursuant to which the shareholders of Aastrom immediately prior to such

Strategic Alliance shall own less than 50% of the voting securities of the

surv ...