________________P.O. Box 376 - Ann Arbor. Michigan 40106 - Ph: 734-93O-5555 -
Fax: 734-665-0485
Located at: Domino's Farms, Lobby L

                                December 5, 2002

Maria Sippola-Thiele, Ph.D.
University of Michigan
Technology Transfer Office
715 East Huron
Suite 2 West
Ann Arbor, MI 48104.

Re: US Patents 5,804,431; 5,654,185; 5,811,274

Dear Maria,

Under the terms of the technology License Agreement ("Agreement") between
Aastrom and the University of Michigan (UM), dated 3-13-92, Aastrom must pay a
royalty on products sold that are based on the above referenced patents. The
royalty can be as much as 2%. The royalty rate was provided in addition to a
large amount of Aastrom stock, which UM has already received. The rate also
recognized that the research leading to this technology would be funded entirely
by Aastrom and largely took place in Aastrom facilities.

The License Agreement allows Aastrom to sublicense rights these patents provided
that the UM royalty provision is maintained. The 2% royalty envisioned
therapeutic, applications of the technology, where large margins and royalties
in the 7 to 10% range are customary. On the other hand, for research products,
royalty rates are customarily in the 1 to 4% range.

Aastrom has the opportunity to sublicense the above patents for research
applications to Coming However, under this proposed agreement, only a 3.5%
royalty will be provided for certain sales of research product. Aastrom would
like to move forward with this sublicense agreement, but request that UM adjust
the 2% royalty payable to UM in the following way for a research product

The following language would be used as an amendment to the Aastrom-UM Agreement
for the above referenced patents;

"Aastrom Biosciences, Inc. (Aastrom) and the University of Michigan (UM) agree
to this amendment of the Technology License Agreement (Agreement) dated 3-13-92,
such that the royalty to be paid to UM resulting from the sublicense for
research products of US patents 5,804,431; 5,654,185; and 5,811,274, will either
be the 2% royalty as described in the Agreement, or an amount equal to 35% of
the royalty payments received by Aastrom, whichever is less."



Maria Sippola-Thiele
December 5, 2002
Page 2

If these terms are acceptable to the University of Michigan, then please so
indicate below, and return one copy of this letter.

Thank you.


/s/ R. Douglas Armstrong

R. Douglas Armstrong, Ph.D.
President and Chief Executive Officer

cc:   Knox Bell, Esq. - Gray Cary Ware Friedenrich
      Alan Wright - Aastrom Biosciences, Inc.


University of Michigan:

/s/ Kenneth J. Nisbet                              Date: 12/10/02

Kenneth J, Nisbat

Executive Director
UM Technology Transfer

Source: OneCLE Business Contracts.