Exhibit 4.3 ----------- AMENDMENT TO

 
                                                                     Exhibit 4.3
                                                                     -----------
                                        
                                  AMENDMENT TO

              AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT OF

                           AASTROM BIOSCIENCES, INC.

 
          This Amendment is made as of April 22, 1997 (the "Effective Date") to
that certain Amended and Restated Investors' Rights Agreement (the "Agreement")
dated April 7, 1992 by and among Aastrom Biosciences, Inc. (the "Company"), H&Q
Life Science Technology Fund I, H&Q London Ventures, the State Treasurer of the
State of Michigan, Brentwood Associates V, L.P., Wind Point Partners II L.P.,
GC&H Partners, Xxxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxxxx X. Xxxxxxx,
Xxxxxxx X. Xxxxxx, R. Xxxxxxx Xxxxxxxxx and the Regents of the University of
Michigan (collectively, the "Investors") is entered into by and among the
Company and the Investors whose signatures appear below.

                                    Recitals
                                    --------

          A.  The Agreement provides, among other things, that:

              (i)     transfers of securities held by the Investors may only 
be made subject to certain conditions (Sections 2.1, 2.2 and 2.3 of the
Agreement);
              (ii)    the Company shall provide certain financial and other 
information to the Investors (Sections 3.1, 3.2 and 3.4 of the Agreement);
              (iii)   the Investors shall have certain rights of inspection 
(Section 3.3 of the Agreement);
              (iv)    the Company shall enter into certain proprietary 
information agreements with its employees (Section 3.6 of the Agreement),
maintain certain insurance (Section 3.7 of the Agreement) and reimburse certain
expenses of directors of the Company (Section 3.8 of the Agreement);
              (v)     the Investors shall have certain registration rights with 
respect to Registrable Securities (as defined in the Agreement) (Sections 2.4
through 2.15, inclusive, of the Agreement) (the "Registration Rights
Provisions"); and
              (vi)    the Investors shall have a right of first refusal to 
purchase a pro rata share of New Securities (as defined in the Agreement) that
may be issued from time to time by the Company (Section 4.1 of the Agreement)
(the "Right of First Refusal").

          B.  On February 7, 1997 and March 10, 1997, the Company issued and
sold an aggregate of 3,250,000 shares of its common stock ("Common Stock") at an
initial offering price per share of $7.00 in a firmly underwritten public
offering registered under the Securities Act of 1933, as amended (the "IPO").

 
          C.  The Right of First Refusal provided that it would terminate upon
the closing of a firmly underwritten public offering of the Common Stock at a
per share price of at least $7.50 (as adjusted to reflect the two-for-three
reverse split of the Common Stock, effective  January 22, 1997).

          D.  In light of the Company's completion of the IPO and in order to
facilitate the Company's access to capital markets, the Company has recommended
to the Investors that it is in the best interests of the Company and its
shareholders to terminate the Right of First Refusal.

          E.  In light of the Company's status as a public company, the Company
has recommended to the Investors that it is in the best interests of the Company
and its shareholders to terminate certain other provisions of the Agreement that
are not necessary or appropriate for a public company.

          F.  Section 6.8 of the Agreement provides that the Agreement may be
amended by the Company and the holders of a majority of the shares of
Registrable Securities outstanding as of the date of such amendment.

          G.  As of the Effective Date, the outstanding Registrable Securities
consist of an aggregate of 5,293,426 shares of Common Stock, which are comprised
of (i) 1,666,666 shares of Common Stock issued upon conversion of shares of the
Company's Series A Preferred Stock, (ii) 2,019,998 shares of Common Stock issued
upon conversion of shares of the Company's Series B Preferred Stock, (iii)
454,545 shares of Common Stock held by the Regents of the University of
Michigan, and (iv) an aggregate of 1,152,217 shares of Common Stock held by
Xxxxxxx X. Xxxxxxx, Xxxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx and R. Xxxxxxx
Xxxxxxxxx.

          H.  Following the effectiveness of this Amendment, the Registration
Rights Provisions, the confidentiality provisions of Section 3.5 of the
Agreement and the miscellaneous provisions of Section 6 of the Agreement shall
remain in full force and effect as the operative provisions of the Agreement.

          I.  Pursuant to that certain Stock Purchase Agreement dated January 8,
1996 by and among the Company, SBIC Partners, L.P. and the State Treasurer of
the State of Michigan (together, the "Series E Purchasers"), the Company agreed
to comply with the covenants of Section 3 of the Agreement (the "Covenants")
with respect to the Series E Purchasers and granted the Series E Purchasers the
rights and benefits of the Right of First Refusal.

          J.  The Company has also recommended to the Series E Purchasers that
the Covenants and Right of First Refusal be terminated.

                                    Agreement
                                    ---------
                                        
          NOW, THEREFORE, in consideration of the foregoing and the anticipated
benefits to the Company and its shareholders, and in consideration of each of
the other undersigned Investors

                                      -2-

 
entering into this Amendment, the undersigned Investors and the Company hereby
agree as follows:

          1.  Termination.  The following provisions of the Agreement shall
              -----------                                                  
terminate immediately and shall have no further force or effect:

              Section 2.1:   Restrictions on Transferability;
              Section 2.2:   Restrictive Legend; 
              Section 2.3:   Notice of Proposed Transfers;
              Section 3.1:   Financial Information;
              Section 3.2:   Other Information;
              Section 3.3:   Inspection Rights;
              Section 3.4:   Assignment of Rights to Information;
              Section 3.6:   Employee Agreements;
              Section 3.7:   Insurance;
              Section 3.8:   Board of Directors; and
              Section 4.1:   Right of First Refusal.

          2.  Effectiveness.  Pursuant to Section 6.8 of the Agreement, upon
              -------------                                                 
execution of this Amendment by the Company and the holders of a majority of the
Registrable Securities outstanding as of the date hereof (i.e., by the holders
of at least 2,646,714 shares of Common Stock), this Amendment shall be binding
upon all parties to the Agreement; provided, however, that this Amendment shall
have no effect unless and until the Company and the Series E Investors execute a
similar agreement amending the Series E Purchase Agreement to terminate the
Covenants and the Right of First Refusal.

                                      -3-

 
          IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
duly executed and delivered as of the date first set forth above.

                                       THE COMPANY:
 
                                       AASTROM BIOSCIENCES, INC.


                                       By:   /s/ R. Xxxxxxx Xxxxxxxxx
                                            --------------------------------
                                            R. Xxxxxxx Xxxxxxxxx, Ph.D.
                                            President and Chief Executive
                                             Officer


 
                                       THE INVESTORS:

                                       H&Q LIFE SCIENCE TECHNOLOGY FUND I


                                       By:  /s/  Xxxxxx Xxxxxxxxxxxx
                                           --------------------------------
                                       Print Name:  Xxxxxx Xxxxxxxxxxxx

                                       Title:  Attorney-in-Fact

 

                                       H&Q LONDON VENTURES

                                       By:  /s/  Xxxxxx Xxxxxxxxxxxx
                                           --------------------------------
                                       Print Name:  Xxxxxx Xxxxxxxxxxxx
                                       Title:  Attorney-in-Fact

                                      -0-

 
                                       XXXXX XXXXXXXXX XX XXX XXXXX XX XXXXXXXX;
                                       CUSTODIAN OF THE MICHIGAN PUBLIC SCHOOL
                                       EMPLOYEES' RETIREMENT SYSTEM, STATE
                                       EMPLOYEES' RETIREMENT SYSTEM, MICHIGAN
                                       STATE POLICE RETIREMENT SYSTEM AND
                                       MICHIGAN JUDGES RETIREMENT SYSTEM


                                       By:   /s/ Xxxxx Xxxx
                                           --------------------------------
                                       Print Name:  Xxxxx Xxxx
                                       Title:  Acting Administrator, 
                                                 Alternative Investments



                                       BRENTWOOD ASSOCIATES V, L.P.
                                       By:  Brentwood Ventures, L.P.
                                            Its General Partner

 
                                       By:   /s/ G. Xxxxxxxx Xxxxx
                                           -------------------------------- 
                                       Print Name:  G. Xxxxxxxx Xxxxx
                                       Title:  General Partner



                                       WIND POINT PARTNERS II, L.P.


                                       By:   /s/ Xxxxxx Xxxxxxxx
                                           --------------------------------
                                       Print Name:  Xxxxxx Xxxxxxxx
                                       Title:  General Partner

                                      -5-

 
                                       GC&H PARTNERS
 
                                       By:   /s/ Xxxx X. Xxxxxxx
                                           --------------------------------
                                       Print Name:  Xxxx X. Xxxxxxx
                                       Title:  Executive Partner


                                       ------------------------------------
                                       Xxxxxxx X. Xxxxxxxx



                                       /s/ Xxxxxxx X. Xxxxxxx
                                       ------------------------------------
                                       Xxxxxxx X. Xxxxxxx, Ph.D.



                                       ------------------------------------ 
                                       Xxxxxxxx X. Xxxxxxx


                                       ------------------------------------
                                       Xxxxxxx X. Xxxxxx



                                       /s/ R. Xxxxxxx Xxxxxxxxx
                                       ------------------------------------
                                       R. Xxxxxxx Xxxxxxxxx, Ph.D.

                                      -6-

 
                                       THE REGENTS OF THE UNIVERSITY OF
                                       MICHIGAN:


                                       By:
                                          ------------------------------------ 
                                       Print Name:
                                                  ---------------------------- 
                                       Title:
                                             ---------------------------------
 

                                      -7-