Preferred Stock Purchase Agreement

Exhibit 10.43

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

AASTROM BIOSCIENCES, INC.



5 1/2% CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT





This 5 1/2% Convertible Preferred Stock Purchase Agreement (the "Agreement") is entered into as of November __, 1997, by and among Aastrom Biosciences, Inc., a Michigan corporation (the "Company"), and each of the purchasers whose name and address is set forth on the Schedule of Purchasers attached hereto as Exhibit A (each, a "Purchaser," and, collectively, the

--------- "Purchasers").



WHEREAS, the Company has filed a registration statement on Form S-1 (File No. 333-37439) (the "Registration Statement") with the Securities and Exchange Commission (the "Commission"), covering two million four hundred thousand (2,400,000) shares (the "Shares") of the Company's 5 1/2% Convertible Preferred Stock, no par value ("Preferred Stock"), and the shares (the "Conversion Shares") of the Company's common stock, no par value ("Common Stock"), issuable upon conversion of the Shares;



WHEREAS, in connection with the offering contemplated by the Registration Statement, the Company has retained Cowen & Company to act, on a best efforts basis, on behalf of the Company as placement agent;



WHEREAS, on November __, 1997, the Commission declared the Registration Statement effective; and



WHEREAS, prior to or concurrent with the execution of this Agreement, each Purchaser has deposited funds in an amount not less than the aggregate Purchase Price (as defined in Section 1.2) of the Shares to be purchased hereunder by such Purchaser (as set forth on Exhibit A attached hereto) with The Chase

--------- Manhattan Bank (the "Escrow Agent") to be held in escrow for the benefit of such Purchaser until the funds are released to the Company upon the Closing (as defined in Section 2.1).



NOW, THEREFORE, the parties hereby agree as follows:



SECTION 1. AUTHORIZATION AND SALE OF SHARES. - --------- --------------------------------



1.1 Authorization of Sale of Shares. Upon the terms and subject to the

------------------------------- conditions of this Agreement, the Company has authorized the issuance and sale of the Shares following effectiveness of the Registration Statement.



1.2 Sale of Shares. At the Closing (as defined in Section 2.1), the

-------------- Company will sell and issue to the Purchasers, and each Purchaser will purchase and acquire from the Company, upon the terms and subject to the conditions hereinafter set forth, the number of Shares set forth opposite such Purchaser's name on Exhibit A attached hereto at a purchase price of $______ per share (the

--------- "Purchase Price").



SECTION 2. CLOSING; DELIVERY. - --------- -----------------



2.1 Closing Date. The closing (the "Closing") of the purchase and sale of

------------ the Shares hereunder shall take place at the offices of Gray Cary Ware & Freidenrich, 400 Hamilton Avenue, Palo Alto, California at 9:00 a.m., California time, on November 26, 1997, or at such other time and place as the Company and the Placement Agent may agree (the "Closing Date").



2.2 Delivery. At the Closing, the Company will deliver to the Placement

-------- Agent for delivery to the Purchasers certificates evidencing the Shares to be purchased by the respective Purchasers, as set forth on Exhibit A attached

--------- hereto, and the Escrow Agent, on behalf of the Purchasers, will deliver the aggregate Purchase Price for the Shares to the Company by wire transfer, as instructed by the Company.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. - --------- ---------------------------------------------



The Company represents and warrants to each Purchaser as follows:



3.1 Organization, Good Standing and Qualification. The Company has been

--------------------------------------------- duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Michigan, with full corporate power and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement, and the Company is duly qualified to do business as a foreign corporation in good standing in each jurisdiction in which the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to so qualify would not have a material adverse effect on the Company.



3.2 Authorization. The Company has full power and authority (corporate

------------- and otherwise) to enter into this Agreement and to perform the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement on the part of the Company, enforceable against the Company in accordance with its terms, except as rights may be limited by applicable laws or equitable principles and except as enforcement hereof may be limited to applicable bankruptcy, insolvency, reorganization or other similar laws relating to or affecting creditors' rights generally or by general equitable principles, and the performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby, including, without limitation, the issuance and sale of the Shares, and the issuance of the Conversion Shares upon conversion of the Shares, will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, (a) any material lease, contract or other agreement or instrument to which the Company is a party or by which its properties are bound, (b) the Restated Articles of Incorporation or Bylaws of the Company, or (c) to the Company's knowledge, any law, order, rule, regulation, writ, injunction or decree of any court or governmental agency or body binding upon the Company. No consent, approval, authorization, order, designation or filing by or with any court or regulatory, administrative or other government agency or body is required for the consummation by the Company of the transactions herein contemplated, except such as may be required under the Securities Act of 1933, as amended (the "Act"), and state securities laws.





3.3 Capitalization. The authorized capital stock of the Company consists

-------------- of 40,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, no par value, 2,400,000 of which are designated as 5 1/2% Convertible Preferred Stock. The rights, preferences, privileges and restrictions of the Preferred Stock are as set forth in the Certificate of Designation attached hereto as Exhibit B (the "Certificate"). The outstanding shares of Common Stock, as set - --------- forth in the Registration Statement, are validly issued, fully paid and non- assessable. As of the date of this Agreement, no shares of the Company's preferred stock are outstanding.



3.4 Valid Issuance. The Shares have been duly authorized for issuance

-------------- and, when issued and delivered to the Purchasers by the Company against payment therefor in accordance with the terms of this Agreement, will be duly and validly issued and fully paid and nonassessable. The Conversion Shares have been duly authorized for issuance and, when issued upon conversion of the Shares in accordance with the provisions of the Certificate, will be duly and validly issued and fully paid and nonassessable.



3.5 No Changes. Subsequent to the respective dates as of which

---------- information is given in the Registration Statement, there has not been (a) any material adverse change, or any development which, in the Company's reasonable judgment, is likely to cause a material adverse change, in the business, properties or assets described or referred to in the Registration Statement, or the results of operations, condition (financial or otherwise), business or operations of the Company, (b) any transaction which is material to the Company, except transactions in the ordinary course of business, (c) any obligation, direct or contingent, which is material to the Company, incurred by the Company, except obligations incurred in the ordinary course of business, (d) any material change in the capital stock or outstanding indebtedness of the Company, or (e) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company.



3.6 Nasdaq National Market. The Common Stock is registered pursuant to

---------------------- Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is listed on the Nasdaq National Market. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the Nasdaq National Market, nor has the Company received any notification that the Commission or the National Association of Securities Dealers, Inc. is contemplating any termination of such registration or listing.



3.7 Effective Registration Statement. The Registration Statement has been

-------------------------------- declared effective by the Commission, and the Company has not received, and has no notice of, any order of the Commission preventing or suspending the effectiveness of the Registration Statement or any proceedings instituted for that purpose.



3.8 Securities Act Compliance. The Registration Statement, as of its

------------------------- effective date, and the final prospectus contained therein, as of its date, complied as to form in all material respects with the requirements of the Act and the published rules and regulations of the Commission thereunder. As of its effective date, the Registration Statement did 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.



SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. - --------- ------------------------------------------------



Each Purchaser, severally and not jointly, hereby represents and warrants to the Company that this Agreement has been duly authorized, executed and delivered by the Purchaser and constitutes a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, except as may be limited by applicable laws or equitable principles and except as enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or affecting creditors' rights generally or by general equitable principles.



SECTION 5. CONDITIONS TO CLOSING OF PURCHASERS. - --------- -----------------------------------



The Purchasers' obligation to purchase the Shares at the Closing is subject to fulfillment or waiver as of the Closing Date of the following conditions:



5.1 Accuracy of Representations and Warranties. The representations and

------------------------------------------ warranties made by the Company in Section 3 hereof shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of such date.



5.2 Conditions. All covenants, agreements and conditions contained in this

---------- Agreement to be performed by the Company on or prior to the Closing Date shall have been performed or complied with in all material respects.



5.3 Satisfaction of Placement Agent. The conditions contained in Section

------------------------------- 9 of the Placement Agreement by and between the Company and the Placement Agent, dated as of the effective date of the Registration Statement, shall have been fulfilled to the reasonable satisfaction of or waived by the Placement Agent.



5.4 Effective Registration Statement. The Registration Statement shall

-------------------------------- continue to be effective, and no stop order suspending the effectiveness thereof shall have been issued and no proceeding for that purpose shall have been initiated or, to the knowledge of the Company, threatened, by the Commission.

SECTION 6. CONDITIONS TO CLOSING OF COMPANY. - --------- --------------------------------



The Company's obligation to sell and issue the Shares at the Closing is subject to the fulfillment or waiver as of the Closing date of the following conditions:



6.1 Accuracy of Representations and Warranties. The representations and

------------------------------------------ warranties made by each Purchaser in Section 4 hereof shall be true and correct when made, and shall be true and correct on the Closing Date with the same force and effect as if they had been made on and as of such date.



6.2 Conditions. All covenants, agreements and conditions contained in the

---------- Agreement to be performed by the Purchasers on or prior to the Closing Date shall have been performed or complied with in all material respects.





6.3 Effective Registration Statement. The Registration Statement shall

-------------------------------- continue to be effective, and no stop order suspending the effectiveness thereof shall have been issued and no proceeding for that purpose shall have been initiated or, to the knowledge of the Company, threatened, by the Commission.

SECTION 7. REGISTRATION RIGHTS. - --------- -------------------



7.1 Definitions. As used in this Agreement, the following terms shall

----------- have the following respective meanings:



(a) The terms "register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act of 1933, as amended (the "Securities Act"), and the declaration or ordering of the effectiveness of such registration statement.



(b) The term "Registrable Securities" means (i) the Conversion Shares, but only in the event that counsel for one or more Purchasers reasonably determines that the Conversion Shares are not freely tradable in the public market and, therefore, registration is necessary to effect a resale of such shares, (ii) any and all shares of Common Stock issued or issuable to the Purchasers in lieu of cash dividends on the Preferred Stock, and (iii) shares of capital stock of the Company issued in respect of the shares referred to in (i) or (ii) as a result of a stock split, stock dividend, recapitalization or the like.



(c) The terms "Holder" or "Holders" means Purchasers or qualifying transferees under subsection 7.8 hereof who hold Registrable Securities.



(d) The term "Initiating Holde ...