STOCK PURCHASE AGREEMENT
                              (Series E Preferred)

                                    Between

                           AASTROM BIOSCIENCES, INC.

                                      and

                            RHONE-POULENC RORER INC.
<PAGE>
 
                            STOCK PURCHASE AGREEMENT

                               TABLE OF CONTENTS
                               -----------------

 
 
                                                                            Page
                                                                            ----
                                                                          

1.  Definitions                                                               1

2.  [omitted]                                                                 3

3.  [omitted]                                                                 3

4.  Purchase of Termination Shares                                            3

5.  [omitted]                                                                 3

6.  Closing Dates; Delivery                                                   3

7.  [omitted]                                                                 3

8.  [omitted]                                                                 3

9.  Representations and Warranties of the Company                             3
     9.1 to 9.3  [omitted]                                                    3
     9.4  Authorization                                                       3
     9.5  Validity of the Shares                                              4
     9.6 to 9.12  [omitted]................................................   4
     9.13  Compliance with Other Instruments...............................   4
     9.14 to 9.18  [omitted]...............................................   4
     9.19  Governmental Consents...........................................   4
     9.20  Offering........................................................   5
     9.21 [omitted]........................................................   5

10. Representations and Warranties of the Purchaser........................   5
     10.1  Legal Power.....................................................   5
     10.2  [omitted].......................................................   5
     10.3  Investment Representations......................................   5
     10.4  [omitted].......................................................   6

11. Covenants of the Company...............................................   6
     11.1 to 11.5  [omitted]...............................................   6
     11.6  Notification of Registration Under the Exchange Act.............   6
     11.7  Reservation of Shares...........................................   7
     11.8  Repurchase, Redemption and Other Actions........................   7
     11.9 to 11.11  [omitted]..............................................   7
 

                                      -i-
<PAGE>
 

 
                                                                            Page
                                                                            ----
                                                                         
       11.12  Removal of Restrictive Legend................................   7

12.  Stock Registration Rights; Market Stand-off Restrictions; Information
      Rights...............................................................   7

13.  [omitted].............................................................   7

14.  Termination Closing...................................................   7
       14.1  Opinion of the Company's Counsel..............................   7
       14.2  Credit for Purchase Price.....................................   8
       14.3  Delivery of Stock Certificates and Other Documents............   8

15.  [omitted].............................................................   8

16.  Miscellaneous.........................................................   8
       16.1  Governing Law.................................................   8
       16.2  Survival......................................................   8
       16.3  Successors and Assigns........................................   8
       16.4  Entire Agreement..............................................   8
       16.5  Separability..................................................   9
       16.6  Amendment and Waiver..........................................   9
       16.7  Delays or Omissions...........................................   9
       16.8  Notices.......................................................   9
       16.9  Finder's Fees.................................................  10
       16.10  Fees and Expenses............................................  10
       16.11  Information Confidential.....................................  11
       16.12  Titles and Subtitles.........................................  11
       16.13  Counterparts.................................................  11
       16.14  Arbitration..................................................  11


EXHIBITS:

A    Form of Opinion of Counsel, Termination Closing

B    Summary of Series E Preferred Stock

                                     -ii-
<PAGE>
 
                            STOCK PURCHASE AGREEMENT


     This Stock Purchase Agreement (this "Agreement") is made as of November
14, 1996, by and between AASTROM Biosciences, Inc., a Michigan corporation (the
"Company"), and Rhone-Poulenc Rorer Inc., a Delaware corporation (the
"Purchaser"), with respect to the factual recitals set forth below.

     Certain terms used in this Agreement are defined in Section 1 of this
Agreement.

                                    RECITALS
                                    --------

     A.     The Company and the Purchaser have entered into a Governance
Agreement dated as of September 15, 1995 (the "Governance Agreement"), setting
forth, among other things, the terms and conditions of a preliminary research
collaboration between the parties concerning the development and sale of the CPS
for Lymphoid Cell Applications.

     B.     As specified in the Governance Agreement, certain option payments
paid by the Purchaser to the Company in connection with the parties'
collaboration shall be applied toward the purchase by the Purchaser of shares of
the capital stock of the Company.

     C.     As specified in the Governance Agreement, if the Purchaser elects
not to exercise the Third Option, then the Purchaser is obligated to purchase
$3.5 million of the preferred stock of the Company, at $17.00 per share, for a
total of 205,882 shares.

     D.     The Company has previously furnished to the Purchaser (i) a copy of
the Memorandum, (ii) a copy of the Articles, and (iii) a copy of the Bylaws
(collectively, the "Series D Documents").  The Company has also furnished to the
Purchaser a copy of the Form S-1 Registration Statement filed by the Company on
November 1, 1996 with the Securities and Exchange Commission.


     1.  Definitions.
         ----------- 

         "Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

         "Articles" means the Company's Amended and Restated Articles of
Incorporation, as amended to the date hereof, including the Company's Amended
and Restated Articles of Incorporation filed on November 1, 1996, with the State
of Michigan Corporation and Securities Bureau.

                                      -1-
<PAGE>
 
         "Bylaws" means the Company's Amended and Restated Bylaws, as amended to
the date hereof.

         "Commission" means the United States Securities and Exchange
Commission.

         "Common Stock" means shares of Common Stock of the Company, no par
value per share.

         "Conversion Shares" means the shares of Common Stock or other
securities which are issuable upon conversion of any Preferred Stock which may
be purchased hereunder.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "First Option Payment" has the meaning provided in the Governance
Agreement.

          "Governance Agreement" means the Governance Agreement, dated as of
September 15, 1995, setting forth, among other things, the terms and conditions
of a preliminary research collaboration between the parties.

          "Memorandum" means the Company's Private Placement Memorandum, dated
April 5, 1995, relating to an offering of the Company's Series D Preferred
Stock, which sets forth relevant information concerning the Company.

         "Preferred Stock" means shares of Series E Preferred Stock of the
Company, no par value per share, having the rights, privileges and preferences
set forth on Exhibit B to this Agreement.

         "Second Option Payment" has the meaning provided in the Governance
Agreement.

         "Series D Documents" means the Memorandum, the Articles and the Bylaws.

         "Shares" means the shares of the Company's Series E Preferred Stock to
be purchased by Purchaser hereunder.

         "Termination Closing" means the closing for the purchase and sale of
the Termination Shares, as contemplated by Section 6.2 hereof.

                                      -2-
<PAGE>
 
         "Termination Shares" means the shares of the Company's Series E
Preferred Stock to be purchased by Purchaser pursuant to Section 4 hereof.

         "Third Option" has the meaning provided in the Governance Agreement.

         "1934 Act Registration Statement" means a registration statement filed
pursuant to the requirements of Section 12 of the Exchange Act or pursuant to
any equivalent provision of any similar federal law then in effect.

     2.  [omitted]

     3.  [omitted]

     4.  Purchase of Termination Shares.  Since the Purchaser has elected not to
         ------------------------------                                         
exercise the Third Option, the Company shall, at the Termination Closing, issue
and sell to the Purchaser 205,882 Shares of Series E Preferred Stock having an
aggregate value of $3.5 million, at a purchase price per Share of $17.00.  The
shares purchased pursuant to this Section 4 are referred to herein as the
"Termination Shares."

     5.  [omitted]

     6.  Closing Dates; Delivery.  The closing for the purchase and sale of the
         -----------------------                                               
Termination Shares (the "Termination Closing") shall occur on November 14, 1996.
At the Termination Closing, the parties shall deliver the documents, instruments
and certificates specified in Section 14 hereof.

     7.  [omitted]

     8.  [omitted]

     9.  Representations and Warranties of the Company.  The Company hereby
         ---------------------------------------------                     
represents and warrants to the Purchaser as of the date hereof, the following:

         9.1 to 9.3  [omitted]

         9.4 Authorization. All corporate action on the part of the Company, its
             ------------- 
officers, directors and shareholders necessary for the authorization, execution
and delivery of this Agreement, and the performance of the Company's obligations
under this Agreement, has been taken. At or prior to the Termination Closing,
all corporate action on the part of the Company, its officers, directors and
shareholders necessary for the authorization, issuance, sale and delivery of the
Shares (and the Conversion Shares) will have been taken. This Agreement, when

                                      -3-
<PAGE>
 
executed and delivered by the Company and the Purchaser, shall constitute the
valid and legally binding obligation of the Company, enforceable in accordance
with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors.

         9.5  Validity of the Shares.  The sale of the Shares (including any
              ----------------------                                        
Conversion Shares) is not and will not be subject to any preemptive rights or
rights of first refusal that have not been waived.  When issued, sold and
delivered in compliance with the provisions of this Agreement, the Shares will
be validly issued, fully paid and nonassessable, and will be free of any liens,
encumbrances or, except as set forth in the immediately following sentence,
restrictions.  The Shares may be subject to restrictions on transfer under state
and/or federal securities laws as set forth herein or as otherwise required by
such laws at the time a transfer is proposed.  The voting rights, designations,
preferences, limitations and special rights of the Shares (including the
Conversion Shares), when issued, shall be as fully set forth in the Articles and
Exhibit B attached hereto.  The Company has reserved a sufficient number of
shares of its Common Stock for issuance upon conversion of any Preferred Stock
issued and sold hereunder and such shares of Common Stock, when issued in
accordance with the terms of such Preferred Stock, will be duly authorized,
validly issued, fully paid, non-assessable and free and clear of all
encumbrances, liens or restrictions, except for restrictions on transfer imposed
by applicable securities laws.

         9.6 to 9.12  [omitted]

         9.13 Compliance with Other Instruments. The Company is not in violation
              ---------------------------------
of any term of its Articles or Bylaws or, to the best of the Company's
knowledge, any material mortgage, indenture, contract, agreement, instrument,
judgment, decree, order, statute, rule or regulation applicable to the Company,
except for violations which, in the aggregate, are not material. The execution,
delivery and performance of and compliance with this Agreement, and the issuance
and sale of the Shares pursuant hereto, will not with or without the giving of
notice or the passage of time, or both, result in any such violation, or be in
conflict with or constitute a default under any such term, result in the
creation of any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of the Company or cause the Company to lose the benefit of
any right or privilege it presently enjoys.

         9.14 to 9.18  [omitted]

         9.19  Governmental Consents.  All consents, approvals, orders or
               ---------------------                                     
authorizations of, or registrations, qualifications, designations, declarations
or filings with, any governmental authority, required on the part of the Company
in connection with the valid execution and delivery of this Agreement, the
offer, sale or issuance of the Shares, or the consummation of any other
transaction contemplated by this Agreement, have been obtained, or will be
obtained prior to

                                      -4-
<PAGE>
 
the applicable closing, excepting only for routine blue sky law notices to be
filed with certain state and federal securities commissions after the applicable
closing, which notices or filings will be filed on a timely basis.

          9.20 Offering.  Assuming the accuracy of the representations and
               --------                                                   
warranties of the Purchaser contained in Section 10 hereof, the offer, issuance
and sale of the Shares (including any Conversion Shares) are and will be exempt
from the registration and prospectus delivery requirements of the Act and are
exempt from registration and qualification under the registration, permit or
qualification requirements of all applicable state securities laws.

          9.21 [omitted]

     10.  Representations and Warranties of the Purchaser.
          ----------------------------------------------- 

          The Purchaser hereby represents and warrants to the Company as
follows:

          10.1 Legal Power. It has the requisite legal power to enter into this
               -----------
Agreement, to purchase the Shares hereunder and to carry out and perform its
obligations under the terms of this Agreement.

          10.2 [omitted]

          10.3 Investment Representations.
               -------------------------- 

                (a) The Purchaser will be acquiring the Shares for its own
account, not as nominee or agent, for investment and not with a view to, or for
resale in connection with, any distribution or public offering thereof within
the meaning of the Act.

                (b) The Purchaser understands that (i) the Shares have not been
registered under the Act by reason of a specific exemption therefrom, that they
must be held by it indefinitely, and that it must, therefore, bear the economic
risk of such investment indefinitely, unless a subsequent disposition thereof is
registered under the Act or is exempt from such registration; (ii) each
certificate representing the Shares will be endorsed with the following legend:

     "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE 
     SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, 
     PLEDGED, OR OTHERWISE TRANSFERRED UNLESS (A) COVERED BY 
     AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES 
     ACT OF 1933, AS AMENDED, OR (B) THE COMPANY HAS BEEN 
     FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE TO THE 
     COMPANY TO THE EFFECT THAT NO REGISTRATION IS LEGALLY 
     REQUIRED FOR SUCH TRANSFER."

                                      -5-
<PAGE>
 
and (iii) the Company will instruct any transfer agent not to register the
transfer of any of the Shares unless the conditions specified in the foregoing
legend are satisfied.

                (c) The Purchaser has been furnished with such materials and has
been given access to such information relating to the Company as the Purchaser
has requested, and it has been afforded the opportunity to ask questions
regarding the Company and the Shares, all as it has found necessary to make an
informed investment decision.

                (d) By reason of its business or financial experience, it has
the capacity to protect its own interests in connection with this transaction.

                (e) The Purchaser is a corporation, having assets in excess of
$5,000,000, it was not formed for the purpose of acquiring the Shares, and it is
an "accredited investor" as defined in Rule 501 promulgated under the Act.

          10.4  [omitted]

     11.  Covenants of the Company.  From and after the Termination Closing, the
          ------------------------                                              
Company covenants and agrees with the Purchaser as follows:

          11.1 to 11.5  [omitted]

          11.6 Notification of Registration Under the Exchange Act. The Company
               ---------------------------------------------------
will give the holder of record of the Shares prompt written notice of the
effectiveness of any registration statement filed pursuant to the requirements
of Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or pursuant to any equivalent provision of any similar federal law then in
force (a "1934 Act Registration Statement") relating to the Common Stock, and
the number of shares of such class of equity securities outstanding at the time
such registration statement becomes effective. If the Company has filed a 1934
Act Registration Statement or a registration statement on any form other than
Form S-8 (or any successor form serving the same general purpose) pursuant to
the requirements of the Act, the Company further covenants that it will file all
reports required to be filed by it under the Act or the Exchange Act and the
rules and regulations thereunder or, if the Company is not required to file such
reports, it will, upon the request of the holder of record of the Shares, make
publicly available such information as will enable it to sell the Shares without
a registration statement, and will take such further action as such holder may
request, all to the extent required from time to time to enable such holder to
sell the Shares, without registration within the limitations of the exemptions
provided by (i) Rule 144 and Rule 144A adopted by the Commission under the Act,
as such rules may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the Commission.

                                      -6-
<PAGE>
 
         11.7 Reservation of Shares. The Company shall at all times reserve and
              ---------------------
keep available, free from preemptive rights, out of its authorized and unissued
Common Stock the number of shares of Common Stock issuable upon conversion of
the Preferred Shares.

         11.8 Repurchase, Redemption and Other Actions. The Company will give
              ----------------------------------------
the Purchaser at least thirty calendar days notice of any action, whether by
repurchase or redemption of its securities or otherwise, which would cause the
percentage of outstanding voting securities of the Company owned by the
Purchaser to exceed 19.9% of the outstanding voting securities of the Company,
on a fully diluted, as converted basis.

         11.9 to 11.11  [omitted]

         11.12 Removal of Restrictive Legend. The Company shall remove the
               -----------------------------
legend set forth in Section 10.3 from any stock certificate issued to the
Purchaser by delivery of substitute certificate(s) without such legend if the
Purchaser shall have delivered to the Company an opinion of counsel in form and
substance reasonably satisfactory to the Company to the effect that such legend
is not required for purposes of compliance with the Act.

     12.  Stock Registration Rights; Market Stand-off Restrictions; Information
          ---------------------------------------------------------------------
Rights.
------ 

          By its execution and delivery of this Agreement, the Purchaser shall
have the stock registration rights as have been granted by the Company pursuant
to Sections 2.4 through 2.15 of that certain Amended and Restated Investors'
Rights Agreement dated April 7, 1992 by and among the Company and certain
investors and shareholders of the Company, a copy of which has been delivered to
the Purchaser. The Purchaser shall abide by a 180-day "market stand-off"
restriction on the sale of the Shares following the Company's public stock
offering, as applicable to all other holders of the Company's preferred stock,
and/or as required by Section 2.12 of said Investors' Rights Agreement.

     13.  [omitted]

     14.  Termination Closing.  The Termination Closing shall not be subject to
          -------------------                                                  
any conditions other than as set forth in this Section 14, and the Company shall
have no obligation to make any representations or warranties as of the date of,
and in connection with, the Termination Closing, except as set forth in Section
9.  At the Termination Closing, the following shall occur:

          14.1 Opinion of the Company's Counsel. The Company shall deliver to
               -------------------------------- 
the Purchaser an opinion of counsel to the Company (which counsel shall be
reasonably acceptable to the Purchaser), substantially in the form attached
hereto as Exhibit A, which opinion shall be addressed to the Purchaser and dated

                                      -7-
<PAGE>
 
the date of the Termination Closing.  In rendering the opinion called for under
this Section 14.1, counsel may rely as to factual matters on certificates of
public officials, officers of the Company, and officers of the Purchaser.

          14.2 Credit for Purchase Price. At the Termination Closing, the
               -------------------------
Company shall credit in full payment of the purchase price for the Termination
Shares, the amounts of the First Option Payment ($1.5 million) and the Second
Option Payment ($2.0 million).

          14.3  Delivery of Stock Certificates and Other Documents.  The Company
                --------------------------------------------------              
shall deliver to Purchaser (i) a stock certificate representing the Termination
Shares, and (ii) a copy of the Articles, certified by the Corporations and
Securities Bureau of the Department of Commerce of the State of Michigan, (iii)
a copy of the Bylaws, certified by the Secretary of the Company, and (iv)
evidence reasonably satisfactory to the Purchaser of the adoption by the Board
of actions duly approving this Agreement and the transactions contemplated
hereby.

     15.  [omitted]

     16.  Miscellaneous.
          ------------- 

          16.1 Governing Law. This Agreement shall be governed by and construed
               -------------
under the laws of the State of Michigan as applied to agreements among Michigan
residents, made and to be performed entirely within the State of Michigan.

          16.2 Survival. The representations, warranties, covenants and
               -------- 
agreements made herein shall survive any investigation made by the Purchaser and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder as of the date of such certificate or instrument.

          16.3 Successors and Assigns.  Except as otherwise expressly provided
               ----------------------                                         
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.

          16.4 Entire Agreement.  This Agreement, the Exhibits hereto, the
               ----------------                                           
Memorandum, and the other documents delivered pursuant hereto constitute the
full and entire understanding and agreement among the parties with regard to the
subjects hereof and no party shall be liable or bound to any other party in any
manner by any representations, warranties, covenants or agreements except as
specifically set forth herein or therein.  Nothing in this Agreement, express or

                                      -8-
<PAGE>
 
implied, is intended to confer upon any party, other than the parties hereto and
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.

          16.5  Separability.  In case any provision of this Agreement shall be
                ------------                                                   
invalid, illegal or unenforceable, it shall, to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the parties, and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

          16.6 Amendment and Waiver. Any term of this Agreement may be amended
               --------------------
and the observance of any term of this Agreement may be waived (either generally
or, in a particular instance, either retroactively or prospectively, and either
for a specified period of time or indefinitely), with the written consent of the
Company and the Purchaser. Any amendment or waiver effected in accordance with
this Section 16.6 shall be binding upon each holder of any securities purchased
under this Agreement at the time outstanding (including securities into which
such securities have been converted), each future holder of all such securities,
and the Company. Upon the effectuation of each such amendment or waiver, the
Company shall promptly give written notice thereof to the record holders of the
Shares (including the Conversion Shares) who have not previously consented
thereto in writing.

          16.7 Delays or Omissions. No delay or omission to exercise any right,
               -------------------
power or remedy accruing to the Company or the Purchaser upon any breach,
default or noncompliance of the Purchaser or the Company under this Agreement
shall impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character on the Purchaser's part of any breach, default or
noncompliance under this Agreement, or any waiver on the Company's or the
Purchaser's part of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in such
writing, and that all remedies, either under this Agreement, the Series D
Documents, by law, or otherwise afforded to the Company and the Purchaser, shall
be cumulative and not alternative.

          16.8 Notices. All notices and other communications required or
               -------
permitted hereunder shall be in writing, shall specifically refer to this
Agreement, and shall be sent by (i) hand delivery, (ii) registered mail, return
receipt requested, (iii) overnight delivery services, or (iv) telefacsimile
transmission, and shall be sent or delivered to the respective addresses and
telefacsimile numbers set forth below, unless subsequently changed by written
notice to the other party:

                                      -9-
<PAGE>
 
          If to the
           Company, to:    AASTROM Biosciences, Inc.
                           P.O. Box 376
                           Ann Arbor, MI 48106
                           Attention:  President
                           Fax:  (313) 930-5546

          With a copy to:  T. Knox Bell, Esq.
                           Gray Cary Ware & Freidenrich
                           4365 Executive Drive, Ste. 1600
                           San Diego, CA 92121
                           Fax:  (619) 677-1477

          If to the
           Purchaser, to:  RPR GENCELL
                           Cell and Gene Therapy Division
                           Rhone-Poulenc Rorer Inc.
                           500 Arcola Road
                           P.O. Box 5093
                           Collegeville, PA 19426-0107
                           Attention:  President and General Counsel
                           Fax:  (610) 454-8984 and 454-3808

          16.9  Finder's Fees.
                ------------- 

                (a) The Company (i) represents and warrants that it has retained
no finder or broker in connection with the transactions contemplated by this
Agreement, and (ii) hereby agrees to indemnify and to hold the Purchaser
harmless of and from any liability for any commission or compensation in the
nature of a finder's fee to any broker or other person or firm (and the costs
and expenses of defending against such liability or asserted liability) for
which the Company or any of its employees or representatives is responsible.

                (b) The Purchaser (i) represents and warrants that it has
retained no finder or broker in connection with the transactions contemplated by
this Agreement, and (ii) hereby agrees to indemnify and to hold the Company
harmless of and from any liability for any commission or compensation in the
nature of a finder's fee to any broker or other person or firm (and the costs
and expenses of defending against such liability or asserted liability) for
which the Purchaser or any of its employees or representatives are responsible.

          16.10 Fees and Expenses. Each party shall bear all of its own fees,
                -----------------
costs and expenses relating to the negotiation and preparation of this Agreement
and the consummation of the transactions contemplated hereby. If legal action is
brought by the Company or by the Purchaser to enforce or interpret

                                     -10-
<PAGE>
 
this Agreement, the prevailing party shall be entitled to recover its attorneys'
fees and legal costs in connection therewith.

          16.11 Information Confidential. The parties shall continue to abide by
                ------------------------ 
all confidentiality agreements and provisions which were previously agreed to
between the parties.

          16.12 Titles and Subtitles.  The titles of the paragraphs and
                --------------------                                   
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.

          16.13 Counterparts.  This Agreement may be executed in counterparts,
                ------------                                                  
including by facsimile, each of which shall be deemed an original, but all of
which together shall constitute one instrument.

          16.14 Arbitration. Any controversy or claim arising out of or relating
                -----------
to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, with the forum for the arbitration proceedings to be
held in Detroit, Michigan if RPR commences the arbitration, and with the forum
for the arbitration proceedings to be held in Philadelphia, Pennsylvania if the
Company commences the arbitration.

     17.  Termination of Existing Stock Purchase Agreement.  The parties agree
          ------------------------------------------------                    
that the Stock Purchase Agreement entered into by the parties as of  September
15, 1995 is hereby terminated, with the exception that the representations and
warranties set forth in Sections 9 and 10 thereof shall remain in full force and
effect as of the date thereof.

      IN WITNESS WHEREOF, this Agreement is hereby executed as of the date set
forth on page 1 of this Agreement.

The Company:                         The Purchaser:

AASTROM BIOSCIENCES, INC.            RHONE-POULENC RORER INC.
Domino's Farms, Lobby L              500 Arcola Road
24 Frank Lloyd Wright Drive          Collegeville, PA 19426-0107
Ann Arbor, MI 48105


By: /s/ R. DOUGLAS ARMSTRONG         By: /s/ K.R. PINA
    -----------------------------        -----------------------------------
Title:  President                    Title: Vice President
Name: R. Douglas Armstrong, Ph.D.    Print Name: K.R. Pina

                                     -11-
<PAGE>
 
                                   EXHIBIT A


                           FORM OF OPINION OF COUNSEL
                              TERMINATION CLOSING
<PAGE>
 
                  [LETTERHEAD OF GRAY CARY WARE FREIDENRICH]


                               November ___, 1996



Rhone-Poulenc Rorer Inc.
Attn:  Robert Werner, Esq.
500 Arcola Road
P. O. Box 5093
Collegeville, PA 19421-0107


Ladies and Gentlemen:

     We have acted as counsel for Aastrom Biosciences, Inc., a Michigan
corporation (the "Company"), in connection with the issuance and sale of shares
of its Series E Preferred Stock pursuant to the Stock Purchase Agreement (Series
E Preferred) dated November ___, 1996 (the "Agreement") by and between the
Company and Rhone-Poulenc Rorer Inc., a Pennsylvania corporation (the
"Purchaser").  This opinion is being rendered to the Purchaser pursuant to
Section 14.1 of the Agreement in connection with the closing of the sale of
shares of the Company's Series E Preferred Stock (the "Shares") thereunder.
Capitalized terms not otherwise defined in this opinion have the meaning given
them in the Agreement.

     In connection with the opinions expressed herein, we have made such
examination of matters of law and of fact as we considered appropriate or
advisable for purposes hereof.  As to factual matters, subject to the further
limitations on the scope of our review and inquiry set forth below, we have
relied solely upon certificates of public officials (as to which we have assumed
the accuracy, completeness and genuineness) and of officers of the Company,
written representations made by the Company, written and oral representations
made to us by officers of the Company, an inquiry of all attorneys within our
firm who regularly perform services for the Company, and an examination of our
files regarding the Company and of documents made available to us by the
Company. We have not undertaken to independently verify the accuracy of the
facts set forth
<PAGE>
 
[LETTERHEAD OF GRAY CARY WARE & FREIDENRICH]

Rhone-Poulenc Rorer Inc.
November __, 1996
Page 2

in such certificates and representations; nothing, however, has come to our
attention which would lead us to believe that such certificates or
representations are inaccurate.

     With respect to our opinion in Paragraph 1 as to the qualification of the
Company to do business and good standing, we have relied upon certificates of
public officials of the State of Michigan and upon written representations made
to us by officers of the Company as to the jurisdictions in which the Company's
ownership or lease of the property or conduct of its business requires such
qualification, except for those jurisdictions in which the failure to qualify
the Company to do business would not have a material adverse effect on the
Company.

     With respect to our opinion in Paragraph 3 that all issued and outstanding
shares of capital stock of the Company are fully paid, we have relied upon the
representation concerning receipt by the Company of consideration for such
shares made to us in a certificate executed by officers of the Company.

     In rendering our opinion in Paragraph 5, to the extent that such opinion
relates to laws, rules and regulations, we have not conducted any special
investigation of laws, rules or regulations and our opinion with respect thereto
is limited to such United States and California laws, rules and regulations as
in our experience are normally applicable to transactions of the type
contemplated by the Agreement.  We have assumed, for purposes of this letter and
our opinions set forth herein, that the substantive laws of the State of
Michigan are the same as the substantive laws of the State of California.

     With respect to our opinion in Paragraph 6 concerning pending legal or
governmental proceedings, we have relied upon written representations made to us
by officers of the Company, an inquiry of attorneys within our firm who
regularly perform legal services for the Company, and an examination of our
files regarding the Company and of documents made available to us by the
Company; we have not, however, made any examination of public records
(including, without limitation, the plaintiff or defendant indices of any state
or federal courts).

     In providing our opinion in Paragraph 8 hereof, we have relied upon
representations in a certificate executed by officers of the Company with
respect 
<PAGE>
 
[LETTERHEAD OF GRAY CARY WARE & FREIDENRICH]

Rhone-Poulenc Rorer Inc.
November __, 1996
Page 3


to certain factual information relating to the suitability of offerees
of the Shares.  In addition, with respect to our opinion in Paragraph 8, as such
opinion relates to the securities laws of the Commonwealth of Pennsylvania, we
have based our opinion solely upon our examination of such laws of the
Commonwealth of Pennsylvania and the rules and regulations of the authorities
administering such laws, all as reported in unofficial compilations.

     Where we render our opinion "to our knowledge" or concerning an item "known
to us" or our opinion otherwise refers to our knowledge, it is based solely upon
certificates of public officials (as to which we have assumed the accuracy,
completeness and genuineness) and of officers of the Company, written and oral
representations made to us by officers of the Company, an inquiry of all
attorneys within our firm who regularly perform services for the Company, and an
examination of our files regarding the Company.  Except as set forth herein, we
have not undertaken any independent investigation to determine the existence or
absence of any fact and no inference as to our knowledge of the existence or
absence of any such fact should be drawn merely from our general representation
of the Company with respect to other matters or the rendering of the opinions
set forth below.  Subject to the foregoing, nothing has come to our attention
which would lead us to believe that such representations of officers of the
Company or certificates of public officials are inaccurate.

     In addition, we have assumed that the representations and warranties as to
factual matters made by the Company and the Purchaser in the Agreement are true
and correct.

     We have assumed (i) the genuineness and authenticity of all documents
submitted to us as originals, (ii) the conformity to genuine, authentic
originals of all documents submitted to us as copies, (iii) the competence of
all individuals executing documents, (iv) the due execution and delivery of the
Agreement by the Purchaser when due execution and delivery are a prerequisite to
the effectiveness thereof, and (v) that the Agreement is a binding obligation of
the Purchaser.

     We are admitted to practice law only in the State of California, and,
except with respect to our opinion in Paragraph 8, we express no opinion
concerning any law other than the law of the State of California and the federal
law of the United States. We have not examined the question of what law would
govern the interpretation or enforcement of the Agreement and our 
<PAGE>
 
[LETTERHEAD OF GRAY CARY WARE & FREIDENRICH]

Rhone-Poulenc Rorer Inc.
November __, 1996
Page 4

opinion is based on the assumption that the internal laws of the State of
California and federal law would govern the provisions of the Agreement and the
transactions contemplated thereby. We express no opinion with respect to any
questions of choice of law, choice of venue or conflict of laws.

     We express no opinion with respect to (i) the availability of equitable
remedies, including specific performance of any of the provisions of the
Agreement, (ii) the enforceability of any indemnification and contribution
provisions, (iii) the effect of bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, (iv) the
compliance or noncompliance with the antifraud provisions of state and federal
laws, rules and regulations concerning the issuance of securities, or (v) the
enforceability of any choice of law provisions.

     Based upon our examination of the foregoing, in reliance thereon and
subject thereto, and except as set forth in the Agreement, the Memorandum and
the Company's Form S-1 Registration Statement dated November 1, 1996, we are of
the opinion that:

          1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Michigan and has all necessary
corporate power to own, operate or lease the properties and assets now owned,
operated or leased by it, and to carry on the business of the Company as it has
been and as it is currently conducted. The Company is not qualified to do
business as a foreign corporation in any jurisdiction, and the Company has
represented to us that it has no assets or employees in any state other than
Michigan.

          2. The Company has all requisite corporate power to sell the Shares,
and to carry out and perform its other obligations under the terms of the
Agreement. The Agreement has been duly authorized, executed and delivered, and
is a valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.

          3.  The authorized capital stock of the Company consists of 21,500,000
shares of common stock and 12,200,000 shares of preferred stock (of which
2,500,000 shares have been designated as Series A Preferred Stock, 3,030,000
shares have been designated as Series B Preferred Stock,
<PAGE>
 
[LETTERHEAD OF GRAY CARY WARE & FREIDENRICH]

Rhone-Poulenc Rorer Inc.
November __, 1996
Page 5

10,000 shares have been designated as Series C Preferred Stock, 3,000,000 shares
have been designated as Series D Preferred Stock, and 1,617,647 shares have been
designated as Series E Preferred Stock. The Company (i) has issued the shares of
Common Stock and shares of its preferred stock, and (ii) has granted the stock
options and warrants and (iii) has reserved for issuance the Common Stock and
shares of its preferred stock, all as represented by the Company in the Schedule
attached hereto. All previously issued and outstanding shares have been duly
authorized and validly issued, and are fully paid and nonassessable. To the best
of our knowledge, there are no outstanding rights, options, warrants, conversion
rights or agreements for the purchase or acquisition from the Company of any
shares of its capital stock, other than as referenced above.

          4.  The Shares, when issued, sold and delivered in compliance with the
provisions of the Agreement, will be duly authorized, validly issued, fully
paid, and nonassessable, and will be free of any liens or encumbrances, except
that the Shares are subject to restrictions on transfer under state and/or
federal securities laws.  The issuance of the Shares is not subject to any
preemptive rights or, to the best of our knowledge, rights of first refusal
which have not been waived.  The shares of Common Stock issuable upon conversion
of the Preferred Shares (i) have been duly and validly reserved, (ii) are not
subject to any preemptive rights or, to the best of our knowledge, rights of
first refusal, and (iii) upon conversion of the Preferred Shares in accordance
with the Articles and cancellation of the Preferred Shares, will be duly
authorized, validly issued, fully paid, and nonassessable.

          5.  Neither the performance of the Company's obligations under the
Agreement, nor the issuance of the Preferred Shares, nor the issuance of the
Common Stock issuable upon conversion of the Preferred Shares, will violate any
term of the Articles or Bylaws; and such transactions will not, in any material
respect, violate or conflict with or constitute a default under the provisions
of any material contract to our knowledge.

          6.  Except as disclosed in the Memorandum or the Form S-1 Registration
Statement, to the best of our knowledge, no action, suit, proceeding or
investigation is pending or threatened against the Company or its properties or
questions the validity of the Agreement or any action to be taken in connection
therewith.
<PAGE>
 
[LETTERHEAD OF GRAY CARY WARE & FREIDENRICH]

Rhone-Poulenc Rorer Inc.
November __, 1996
Page 6

          7.  All consents, approvals and authorizations of and filings with any
federal or state governmental authority required on the part of the Company, if
any, in connection with the consummation of the transactions contemplated by the
Agreement have been obtained or made, except for the filings which the Company
is making after the Termination Closing as specified under the Securities Act of
1933, as amended (the "Securities Act") and any state securities laws.

          8.  Subject to the accuracy of the Purchaser's representations and
warranties set forth in Section 10 of the Agreement, the offer and sale of the
Shares in conformity with the terms of the Agreement are exempt from the
registration requirements of Section 5 of the Securities Act, as amended and in
compliance with applicable state securities laws.

     This opinion is furnished solely to the Purchaser for its benefit in
connection with the purchase of the Shares, and may not be relied upon by, nor
copies delivered to, any other person or for any other purpose without our prior
written consent.

                                  Very truly yours,

                                  GRAY CARY WARE & FREIDENRICH
                                  A Professional Corporation



TKB/cf
6009466
<PAGE>
 
                                   EXHIBIT B


                      SUMMARY OF SERIES E PREFERRED STOCK
<PAGE>
 
                                   SUMMARY OF
                          SERIES E PREFERRED STOCK OF
                           AASTROM BIOSCIENCES, INC.



I.  TERMS OF PREFERRED STOCK
    ------------------------

     The terms of the Series E Preferred Stock will be substantially the same as
the terms of the Series D Preferred, except as noted herein.  The Series A, B,
C, and D Preferred Stock together with the Series E Preferred Stock, when
treated jointly are referred to herein as the "Preferred."  The following are
the principal terms of the Series E Preferred Stock:


 
                           
A.  Rights, Preferences,           1.  Dividend Provisions.  A holder of
                                       -------------------
    Privileges and            Series E Preferred Stock will be entitled to 
    Restrictions of           receive preference to Series A, B, C, and D 
    Series E Preferred        Preferred Stock and to Common Stock, dividends 
    Stock:                    at the rate of 8% per annum on the liquidation
                              preference amount when and as declared by the
                              Board, if funds are legally available. If
                              dividends are declared on the Common Stock, the
                              holders of Preferred shall be entitled to receive
                              concurrently a dividend of an equal amount per
                              share. Dividends on the Series E Preferred Stock
                              will be noncumulative. No dividends have been paid
                              on the Preferred, and no dividends are likely to
                              be paid in the next few years.

                                   2.  Liquidation Preference.  In the event
                                       ----------------------
                              of any liquidation, dissolution or winding up of
                              the Company, a holder of Series E Preferred Stock
                              will be entitled to receive, in preference to the
                              holders of the Series A, B, C, and D Preferred
                              Stock and Common Stock, an amount equal to $4.25
                              per share, plus any declared but unpaid dividends
                              on the Series E Preferred Stock.

 
                                      -1-
<PAGE>
 
                                   3. Voluntary Conversion. A holder of Series E
                                      -------------------- 
                              Preferred Stock will have the right to convert the
                              Series E Preferred Stock, at the option of the
                              holder, at any time, into shares of Common Stock.
                              The total number of shares of Common Stock into
                              which Series E Preferred Stock may be converted
                              will be determined by dividing the liquidation
                              preference ($4.25) by the conversion price. The
                              initial conversion price will be $4.25, resulting
                              in a one-for-one conversion, unless and until
                              there is a change in the conversion price.

                                   4. Automatic Conversion. Series E Preferred
                                      --------------------
                              Stock will be converted automatically into Common
                              Stock, at the then applicable conversion price,
                              immediately upon the closing of a firm commitment
                              underwritten public offering of shares of the
                              Common Stock of the Company at a public offering
                              price per share (prior to underwritings,
                              commissions and offering expenses) equal to or
                              exceeding $6.50 per share in an offering resulting
                              in gross proceeds to the Company which exceed
                              $12,500,000.

                                   5. Anti-Dilution. Series E Preferred Stock
                                      -------------
                              has weighted average antidilution rights if the
                              Company sells additional stock in the future for
                              less than $4.25 per share, subject to certain
                              exceptions.

                                   6. Voting Rights.  A holder of Series E
                                      -------------  
                              Preferred Stock will have the right to that number
                              of votes equal to the number of shares of Common
                              Stock issuable upon conversion of its Series E
                              Preferred Stock at the then applicable conversion
                              price. The Preferred shall vote with the Common
                              Stock on all matters except as specifically
                              provided herein or as otherwise required by law.

                                      -2-
<PAGE>
 
 
                            
                                    7. Protective Provisions. Changes to the
                                       ---------------------
                              rights, preferences or privileges of a series of
                              Preferred Stock must be approved by the holders of
                              at least 66-2/3% of the affected series of
                              Preferred. Consent of the holders of at least 66-
                              2/3% of each series of Preferred Stock is required
                              to approve any amendment to the Company's articles
                              of incorporation. Additionally, consent of 51% of
                              the Series E Preferred Stock is required for stock
                              redemptions, sale or merger, liquidation,
                              amendment to Articles, and alter rights of
                              Preferred Stock.

B.  Registration Rights:            1. Demand Right. Beginning one year after 
                                       ------------         
                              the Company's initial public offering, holders of
                              at least 50% of the Preferred (or Common Stock
                              issued upon conversion of the Preferred or a
                              combination of such Common and Preferred) may
                              request registration by the Company of Common
                              Stock covering at least 20% of their registrable
                              securities, or a lesser percentage if the
                              aggregate offering price would exceed $2,000,000.
                              Prior to the Company's initial public offering,
                              such holders may request such registration if the
                              aggregate offering price would exceed $5,000,000.
                              The Company shall not be obligated to effect
                              registration under this demand right provision
                              more than once.

                                    2. Piggy-Back Registration.  At any time
                                       -----------------------
                              after the Company's initial public offering,
                              holders of Preferred shall be entitled to "piggy-
                              back" registration rights at the time that the
                              Company has a further registration; subject to the
                              rights, however, of the Company and its
                              underwriters to reduce the number of shares
                              proposed to be registered in view of market
                              conditions.
 
                                      -3-
<PAGE>
 
                                     3.  S-3 Rights.  Holders of Preferred
                                         ----------
                              shall be entitled to an unlimited number of demand
                              registrations on Form S-3 (if available to the
                              Company) so long as each of such registered
                              offerings is in excess of $500,000; provided,
                              however, that the Company shall only be required
                              to file one Form S-3 Registration Statement on
                              demand every twelve (12) months.

                                     4.  Expenses.  The Company shall bear
                                         -------- 
                              all registration expenses (including the fees of
                              one counsel for the selling shareholders, but
                              excluding underwriting discounts and commissions)
                              of one demand registration and two piggy-back
                              registrations.
 
                                     5.  Assignability of Rights.  The
                                         -----------------------
                              registration rights may be assigned to an assignee
                              who agrees in writing to be bound by the terms and
                              conditions of the Amended and Restated Investors'
                              Rights Agreement and who (a) after such transfer
                              owns at least 100,000 shares of Preferred or
                              Common Stock issued upon conversion thereof, (b)
                              is an option holder, (c) is a holder of
                              registrable securities of the Company or a family
                              member of the transferor, or (d) is a trust for
                              the benefit of an option holder or a family
                              member, in a private transaction in which such
                              transferee will own not less than 20,000 shares of
                              Preferred or Common Stock issued upon conversion
                              thereof.

                                     6.  Termination of Registration Rights.
                                         ----------------------------------
                              Registration rights shall terminate as to any
                              particular shares of Preferred Stock when such
                              shares may be lawfully sold by the holder pursuant
                              to Rule 144 under the Securities Act of 1933.

                                      -4-
<PAGE>
 
                                     7.  Other Provisions.  The registration
                                         ----------------
                               rights provisions of the Amended and Restated
                               Investors' Rights Agreement contains other
                               customary provisions with respect to registration
                               rights, including cross-indemnification, the
                               Company's ability to delay the filing of demand
                               registrations for a period of at least 150 days,
                               the period of time in which the Registration
                               Statement shall be kept effective, underwriting
                               arrangements and the like.

 
II.  ADDITIONAL INFORMATION
     ----------------------
 
A.   Right of First Refusal:   None.
 
B.   Redemption Rights:        None.

                                      -5-

Source: OneCLE Business Contracts.