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Clinical Trial Agreement - Aastrom Biosciences Inc. and Loyola University Medical Center Cancer Center

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                            CLINICAL TRIAL AGREEMENT
                            ------------------------

This Clinical Trial Agreement ("Agreement") is entered into as of the 28 day
of August, 1996 (the "Effective Date"), by and among Aastrom Biosciences, Inc.
("Aastrom"), located at 24 Frank Lloyd Wright Dr., Lobby L, Ann Arbor, MI
48105, and Loyola University Medical Center Cancer Center (the "Institution"),
located at 2160 South First Avenue, Maywood, IL  60153.  Definitions shall have
the meaning as set forth in Exhibit A.


                                    RECITALS

     WHEREAS, Aastrom is the developer, manufacturer and/or licensee of medical
devices and materials, such as a Cell Production System ("CPS") device and
related materials and device, which have potential medical application for use
in subjects care and research;

     WHEREAS, Aastrom desires to conduct a human clinical trial ("Study") of the
CPS in subjects in accordance with a protocol entitled "A Pilot Trial of
Autologous Transplantation For Patients With Advanced Breast Cancer Using Marrow
Cells Expanded Ex Vivo" ("Protocol") which is incorporated herein by reference
as Exhibit B attached hereto;

     WHEREAS, the Institution has research, clinical and medical facilities,
technical capabilities and expertise in order to conduct the Study in accordance
with the Protocol;

     WHEREAS, the Study contemplated by this Agreement is of mutual interest and
benefit to the Institution and to Aastrom such that the parties hereto desire to
have the Institution conduct the Study under the qualified direction of Patrick
J. Stiff, M.D. (the "Principal Investigator"); and

     WHEREAS, Aastrom and the Institution agree to conduct the Study in
accordance with the terms and conditions hereinafter set forth.

                                   AGREEMENT

I.   CLINICAL TRIAL DESCRIPTION

     The Institution agrees to undertake and complete the Study described in the
     Protocol (Exhibit B) in compliance with all applicable laws, rules and
     regulations relating to the Study, including without limitation, all laws,
     rules and regulations concerning or promulgated by the Food and Drug
     Administration ("FDA").

     Aastrom agrees to provide the Institution the laboratory and clinical
     equipment listed in the Schedule of Laboratory and Clinical Equipment on
     Exhibit C which are reasonably necessary for the Institution to conduct the
     Study.  Aastrom shall retain title to all such equipment which shall
     promptly be returned to Aastrom upon request by Aastrom.

II.  FUNDING

     Aastrom shall provide payments to the Institution in accordance with the
     terms contained in the Clinical Trial Budget (Exhibit D) and the Schedule
     of Clinical Trial Milestone Payments (Exhibit D) incorporated herein.
<PAGE>
 
III. CONDUCT OF STUDY

     A.   Facilities
          ----------

          The Study shall be conducted only at the following locations:  Loyola
          University Medical Center Cancer Center, 2160 South First Avenue,
          Maywood, IL  60153.  The CPS and other Study materials may not be
          transferred to any other location or to any third party without the
          prior written consent of Aastrom.

     B.   Investigator
          ------------

          The Institution agrees that the Study will be conducted under the
          direction of the Principal Investigator in accordance with the
          Protocol and the Investigator Agreement (see Section 13.0 of the
          Clinical Protocol) and incorporated herein by reference.  The
          Principal Investigator may, subject to the prior written consent of
          Aastrom, designate a clinical coordinator and one or more
          subinvestigators to assist in conducting the Study.  The Institution
          acknowledges that the Principal Investigator and subinvestigators have
          each executed an Investigator Agreement, copies of which are included
          in Exhibit E.  In the event that additional subinvestigators are added
          to the Study, such subinvestigators must execute and deliver an
          Investigator Agreement which shall be deemed incorporated by reference
          into this Agreement.  In the event the Principal Investigator can no
          longer function in such capacity, then Aastrom and the Institution
          shall attempt to agree on a replacement.  If a mutually acceptable
          replacement cannot be agreed upon, this Agreement and the Study at the
          Institution shall terminate.  The Institution agrees that it will use
          its best efforts to recruit qualified subjects for enrollment in the
          Study consistent with the guidelines contained in the Protocol and the
          best interest of the subject; however, no subjects shall be enrolled
          in the Study if they are currently enrolled in another investigational
          study without the prior written consent of Aastrom.

     C.   Compliance with Protocol
          ------------------------

          Any changes to the Protocol may only be made with the prior written
          agreement of Aastrom; provided that during the Study, if the Principal
          Investigator feels that it is necessary to deviate from the Protocol
          in order to protect the life or physical well-being of a Study subject
          before written approval can be obtained, he/she may do so in
          accordance with the procedures detailed in the Protocol.

     D.   Institutional Review Board Approval and Informed Consent
          --------------------------------------------------------

          The Institution will obtain:  (i) the approval of the governing
          Institutional Review Board ("IRB") prior to initiating the Study and
          thereafter as required by applicable laws, rules and regulations; and
          (ii) prior written informed consent of all subjects and/or their legal
          guardians in a form that is substantially the same as provided in the
          Protocol and satisfactory to both the governing IRB and Aastrom and in
          compliance with applicable laws, rules and regulations.

     E.   Adverse Events
          --------------

          The Institution shall immediately notify Aastrom (Thomas E. Muller,
          Ph.D., Vice President Regulatory Affairs at 313/930-5555 and/or by fax
          at 313/930-5520) of any unanticipated adverse effect, whether ascribed
          to the investigational device or not, in accordance with the
          instructions provided in the Protocol.

                                       2
<PAGE>
 
IV.  STUDY MONITORING AND ACCESS TO FACILITIES

     Aastrom's designated representatives and/or authorized representatives of
     regulatory agencies may, at all reasonable times, visit the Institution in
     order to:  (i) determine the adequacy of the facilities, (ii) validate case
     reports against original data in the subject medical records and the files
     of the Principal Investigator, and (iii) monitor the conduct of the Study
     to determine whether the Study is being conducted in compliance with the
     Protocol and all applicable laws, rules and regulations.  The Institution
     agrees to obtain any required subject release(s) to allow Aastrom's
     designated representatives, and/or authorized representatives of regulatory
     agencies, to conduct such review prior to enrolling each subject in the
     Study.

V.   REPORTS

     The Institution agrees to have the Principal Investigator submit reports to
     Aastrom and the reviewing IRB in accordance with the Protocol and all
     applicable laws, rule and regulations.

VI.  PROPRIETARY RIGHTS

     A.   Data and Materials
          ------------------

          The Institution understands and agrees that the underlying rights to
          the CPS and other intellectual property and materials which are the
          subject of the Protocol belong to Aastrom.  The parties agree that the
          Institution shall retain control over the CPS and Study materials, and
          further agree not to allow access to, disclose the existence or nature
          of, or transfer the CPS or Study materials to third parties without
          advance written approval of Aastrom.  Aastrom reserves the right to
          distribute the CPS and Study materials to others and to use them for
          its own purposes.  Title to the CPS and Study materials shall remain
          with Aastrom.  Further, the Institution agrees that data and materials
          derived as a direct result of the Study described in the Protocol
          (hereinafter referred to as "Clinical Trial Information") whether
          generated by the Institution, the Principal Investigator, and/or their
          agents or employees, either solely or jointly with others, is the
          property of Aastrom; provided that the Institution and the Principal
          Investigator may utilize the Clinical Trial Information in furtherance
          of academic publications authorized by this Agreement and for subject
          care purposes.

     B.   Patent Ownership and Related Matters
          ------------------------------------

          The Institution agrees that the Study results and any inventions or
          discoveries by the Institution, the Principal Investigator or their
          agents or employees during the Study that are modifications,
          improvements or new uses applicable to the CPS or that are a direct
          result of the performance of the Study in accordance with the detailed
          testing Protocol provided by Aastrom to Institution and which are
          dependent on, or relate to, the Study, the claims of Aastrom's
          patentable inventions, the use of the cells processed through the CPS
          or Aastrom's Confidential Information shall be the property of
          Aastrom.  Any invention arising out of the work performed under this
          Study solely by the Institution and not covered in the previous
          sentence shall be the exclusive property of the Institution (the
          "Institution Invention") and shall not be considered a part of
          Aastrom's Confidential Information.  The Institution shall promptly
          disclose each such Institution Invention and the terms under which the
          Institution would be prepared to license it.  Aastrom shall have a
          right of first refusal to exclusively develop, license and
          commercialize such Institution Invention.  Aastrom shall have sixty
          (60) days after receipt of such disclosure to exercise its right of
          first refusal, and if so exercised, the parties shall thereafter
          negotiate a mutually acceptable licensing agreement in good faith.  If
          the Institution at any time 

                                       3
<PAGE>
 
          offers such Institution Invention on terms different than those
          disclosed to Aastrom, the Institution shall offer such Institution
          Invention to Aastrom on such different terms in accordance with the
          first right refusal herein. The Institution and Principal Investigator
          shall not obtain, or attempt to obtain, patent coverage on the CPS or
          its use without the express written consent of Aastrom. The
          Institution and the Principal Investigator shall assist Aastrom in
          prosecuting any Aastrom patent applications and shall execute and
          deliver any and all instruments necessary to make, file and prosecute
          all such applications, divisions, continuations, continuations-in-part
          or reissues thereof.

VII.  WARRANTIES AND REPRESENTATIONS

      A.  No Warranties
          -------------

          It is understood that the CPS is experimental in nature, has not been
          approved for commercial distribution and is provided hereunder for
          investigational purposes only.  NEITHER THE INSTITUTION NOR AASTROM
          MAKES ANY REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING
          ANY REPRESENTATION WITH RESPECT TO SAFETY, EFFICACY, MERCHANTABILITY,
          FITNESS FOR ANY PURPOSE OR NON-INFRINGEMENT OF ANY INTELLECTUAL
          PROPERTY RIGHTS, WITH RESPECT TO THE PRODUCT OR INFORMATION PROVIDED
          TO THE OTHER HEREUNDER.

      B.  Representations of the Parties
          ------------------------------

          Each party hereto represents that it has right to enter into and
          perform its respective obligations under this Agreement.

      C.  Representations by the Institution and the Principal Investigator
          -----------------------------------------------------------------

          The Institution represents that: (i) it has adequate facilities and
          staff to conduct the Study in accordance with the Protocol; (ii) the
          governing IRB is qualified to review and approve the Study; and (iii)
          the Principal Investigator is qualified by education and training to
          conduct the Study and has not been disqualified, or otherwise limited,
          as a clinical investigator by the FDA or any other regulatory or
          administrative body.  The Institution represents that the Principal
          Investigator and all other investigators and personnel that may
          perform services hereunder are its employees and shall abide by the
          terms and conditions of this Agreement as if each were a party hereto.

VIII.  LIMITATIONS OF LIABILITY

       In no event shall any party be liable to the other party hereto for any
       incidental, special or consequential damages.

IX.    INDEMNIFICATION

       A. Indemnification of Aastrom
          --------------------------

          Aastrom agrees to indemnify, defend and hold harmless the Institution,
          the Loyola University System, and their Regents, officers, agents and
          employees from and against any and all claims, suits, and liabilities
          (collectively "Liabilities") arising out of or resulting from the
          activities to be carried out pursuant to the obligations of this

                                       4
<PAGE>
 
          Agreement, including but not limited to the use by Aastrom of the
          results of the Study; provided that such Liabilities do not arise
          from:

          i.   a failure to adhere to the Protocol or written instructions
               relative to use of the CPS of other materials utilized in the
               Study;

          ii.  a failure to comply with any applicable law, rule or regulation
               relating to the Study, including without limitation, all FDA
               regulations or other governmental requirements; or

          iii. the negligence or willful misconduct by the regents, officers,
               agents or employees of the Institution or the Loyola University
               System.

     B.   Indemnification by the Institution
          ----------------------------------

          The Institution agrees, to the extent allowed by the Constitution and
          the laws of the State of Illinois, to indemnify, defend and hold
          harmless Aastrom and its directors, officers, agents and employees
          from and against any and all Liabilities they may suffer in connection
          with the Study which arise out of the negligent acts or omissions of
          the Institution, its employees or agents pertaining to the activities
          to be carried out pursuant to the obligations of this Agreement;
          provided, however, that Institution shall not hold Aastrom harmless
          from claims arising out of the negligence or willful malfeasance of
          Aastrom, its directors, officers, agents or employees, or any person
          or entity not subject to Institution supervision or control.

     C.   Notification
          ------------

          The Institution and Aastrom each agree to notify the other in writing
          as soon as they become aware of a claim or action and to, subject to
          the statutory duties of the Illinois Attorney General, cooperate with
          the management and defense of such claim or action.  The indemnifying
          party agrees, at its own expense, subject to the statutory duties of
          the Illinois Attorney General, to provide attorneys of its own
          selection to defend against any actions brought or filed against the
          indemnified party with respect to the subject of indemnity contained
          herein.  The indemnifying party shall, subject to the statutory duties
          of the Illinois Attorney General, control the defense of any action;
          however the indemnified party may, at its own expense, participate by
          providing attorneys of its own selection.  No indemnified party shall
          compromise or settle any claim of action without the prior written
          approval of the indemnifying party.

X.   RESTRICTIONS ON USE; COMPLIANCE WITH LAWS

     The Institution and the Principal Investigator agree that the CPS will be
     used for clinical research purposes only in connection with the Study by
     the Principal Investigator and his/her subinvestigators at the
     facility(ies) described in Section III.A. under suitable containment
     conditions.  Neither the Institution nor the Principal Investigator shall
     use the CPS for any commercial purposes, including screening, production or
     sale.  The CPS will not be used in the treatment or diagnosis of human or
     animals except for the purpose of conducting the Study as described in the
     Protocol.  The Institution agrees to comply with all laws, rules and
     regulations applicable to the Study and the handling, use and disposal of
     any Study materials.  The CPS is to be used with caution and prudence since
     all of its characteristics are not known.

                                       5
<PAGE>
 
XI.  CONFIDENTIALITY

     A.   Treatment of Confidential Information
          -------------------------------------

          The Institution agrees that it will not disclose or use Confidential
          Information for any purpose other than the purpose of conducting the
          Study, obtaining any required review of the Protocol or its conduct,
          or ensuring proper medical treatment of any subject or subjects.  The
          Institution agrees to limit distribution of Aastrom's Confidential
          Information to Institution personnel on a need-to-know basis.  The
          Institution agrees to ensure that its personnel abide by the
          confidentiality obligations as set forth herein in accordance with
          Section VII.C.  The obligations set forth in this Section XI.A. shall
          survive for a period of five (5) years following the termination or
          expiration of this Agreement.

          The term "Confidential Information" shall mean any and all oral,
          written or tangible proprietary or confidential ideas, inventions,
          information, data, plans, materials and know-how or the like owned,
          controlled or developed by Aastrom or developed under the Agreement
          and disclosed to Institution.  Aastrom shall attempt to identify the
          confidential status of Confidential Information disclosed hereunder,
          but the failure to so mark or identify shall not destroy the
          confidential nature of such Confidential Information.  Without
          limiting the generality of the foregoing, Confidential Information
          shall include, without limitation, all clinical trial plans,
          protocols, information, data analyses, proprietary equipment, and
          materials related to the Confidential Information.  Confidential
          Information shall not include any information which the Institution
          can demonstrate:

          i.   Was known to the Institution prior to receipt from Aastrom,
               provided that the Institution promptly notifies Aastrom in
               writing of the same promptly after disclosure by Aastrom;

          ii.  Is or becomes part of the public domain through no act by or on
               behalf of the Institution;

          iii.  Was lawfully received by the Institution or the Principal
               Investigator from a third party who had a legal right to disclose
               the same; or

          iv.  Is required by law or regulation to be disclosed.

          In the event that Confidential Information is required to be disclosed
          pursuant to subsection iv., the Institution will notify Aastrom to
          allow Aastrom to assert whatever exclusions or exemptions may be
          available to it under such law or regulation.

     B.   Publicity
          ---------

          No publicity, new releases, or other public announcement, written or
          oral, relating to the Agreement, to any amendment hereto or to
          performance hereunder or to the existence of an arrangement between
          the parties, shall be originated by either party without the prior
          written approval, such approval not to be unreasonably withheld, of
          the other party except as shall be required by law.

                                       6
<PAGE>
 
      C.  Use of Name
          -----------

          No Party shall use or publicly disclose the name of another party
          hereto without the prior written consent, such consent not to be
          unreasonably withheld, of such other party except that the name of a
          party may be disclosed to regulatory bodies such as the FDA,
          Securities and Exchange Commission or as required by law.

XII.  PUBLICATION RIGHTS

      At least thirty (30) days prior to submission for publication, the
      Institution agrees to provide Aastrom a final draft of any manuscript
      describing the results obtained by the Institution from the Study. Aastrom
      shall be permitted to advise as to the implications of such manuscripts
      upon patentability of any inventions or the potential effects on
      commercialization. The Institution shall, upon Aastrom's request, delete
      any of Aastrom's Confidential Information and shall consider all
      reasonable editorial suggestions based on sound scientific and clinical
      judgment, Aastrom acknowledges that Institution shall have the final
      authority to determine the scope and content of any publication, provided
      that such authority shall be exercised with reasonable regard for the
      commercial interests of Aastrom. Subject to Aastrom's right to delete such
      Confidential Information and to propose mutually agreeable modification of
      such manuscripts, the Institution shall have the right to submit the
      manuscript for publication. However, if Aastrom determines that any
      invention disclosed therein is patentable and that a patent application
      should be filed on such invention, Aastrom shall notify the Institution in
      writing and the Institution shall postpone publication for a period not to
      exceed sixty (60) days from said notice (unless otherwise mutually agreed
      in writing) to provide time for patent applications to be filed.

XIII. TERM AND TERMINATION

      A.  Term
          ----

          Except as otherwise provided in this section, this Agreement shall
          commence on the Effective Date hereof and continue for the period
          necessary to satisfy the requirements of the Protocol.

      B.  Termination
          -----------

          Aastrom and the Institution shall have the right to terminate this
          Agreement at any time without cause upon thirty (30) days prior
          written notice.  Any party may terminate the Study at any time if, in
          its opinion, it is in the best interest of the Study subjects.

      C.  Termination Obligations
          -----------------------

          Any termination of this Agreement shall not relieve any party hereto
          of any obligation or liability accrued hereunder prior to such
          termination, or rescind or give rise to any right to rescind anything
          done hereunder prior to the time such termination becomes effective;
          nor shall such termination relieve any party from any obligation
          which, by its nature, survives termination including the obligations
          set forth in Articles IV through IX and X.D.

          The parties further agree that all Study data and used and unused
          Study equipment, materials and supplies, including the CPS, provided
          to the Institution by Aastrom for the purpose of this Study will be
          returned to Aastrom promptly upon request by Aastrom.

                                       7
<PAGE>
 
XIV.  MISCELLANEOUS

      A.  Independent Contractor
          ----------------------

          The Institution recognizes and agrees that it is operating as an
          independent contractor and not as an agent of Aastrom.  The Agreement
          shall not constitute a partnership or joint venture, and no party may
          be bound by the other to any contract, or make any representations or
          warranties, express or implied, on behalf of another party, or
          otherwise create any liability against another party in any way for
          any purpose.

      B.  Assignment
          ----------

          The rights and obligations of the parties under this Agreement shall
          bind and inure to the benefit of the successors, assigns and
          transferees of the parties; provided, however, this Agreement shall
          not be assignable by either party without the prior written consent of
          the other party.

      C.  Governing Law
          -------------

          This Agreement shall be construed and interpreted in accordance with
          and governed by the laws of the State of Illinois.

      D.  Alternative Dispute Resolution
          ------------------------------

          Any controversy or claim arising out of or relating to this Agreement
          or the breach thereof, including, without limitation, disputes
          relating to patent validity or infringement arising under this
          Agreement, shall be settled through use of an appropriate method of
          Alternative Dispute Resolution, including, without limitations, by
          arbitration in accordance with the rules of the American Arbitration
          Association, and judgment upon an award rendered may be entered in any
          court having jurisdiction thereof.  Notwithstanding the foregoing, the
          parties shall be entitled to petition any court of competent
          jurisdiction in the event of any alleged breach of Article XI.

      E.  Entire Agreement:  Modification
          -------------------------------

          This Agreement contains the entire agreement and understanding between
          the parties and supersedes all prior agreements and understandings
          between them relating to the subject matter hereof.

      F.  Headings
          --------

          The headings of this Agreement are to facilitate reference only, do
          not form a party of this Agreement and shall not effect the
          interpretation thereof.

      G.  Severability
          ------------

          If any provision of this Agreement or portion of this Agreement is
          construed or declared to be invalid, such provision or portion shall
          be deemed reformed to become valid in a manner consistent with the
          parties' intentions under this Agreement, and the validity of the
          remaining portions and provisions of this Agreement shall not be
          affected thereby and shall remain in full force and effect.

      H.  No Waiver
          ---------

          No waiver of a breach by a party of any provision of this Agreement
          shall be construed to be a waiver of any other breach of the same of
          any other provision.

                                       8
<PAGE>
 
      I.  No Implied License
          ------------------

          No right or license to the CPS or to its use is granted by Aastrom or
          implied as a result of the transmission of the CPS to the Institution
          under the supervision of the Principal Investigator, except to the
          limited extent necessary to conduct the Study.  The transfer of the
          CPS provided for herein does not constitute a public disclosure.

      J.  Necessary Acts
          --------------

          At the request of Aastrom, the Institution and the Principal
          Investigator shall execute any documents and take any actions which
          may be necessary, in the opinion of Aastrom, or its legal counsel, to
          evidence or perfect any rights of Aastrom hereunder.

      K.  Counterparts
          ------------

          This Agreement may be executed in counterparts all of which together
          shall constitute one and the same instrument.

      L.  Notices
          -------

          All notices and other communications permitted or required under this
          Agreement shall be in writing and shall be deemed to have been given
          when received at the addresses set forth on the signature page hereof,
          or at such other address as may be specified by one party in writing
          to the other.  Said written notice may be given by mail, telecopy,
          rush delivery service, telegram, telex, personal delivery or any other
          means to the parties at the addresses as follow:

          If to the Institution:

          Lori Burlew                                      ph: (708) 327-3307
          Administrator, Division of Hematology/Oncology   fx: (708) 327-3319
          Loyola University Medical Cancer
          2160 South First Avenue
          Maywood, IL 60153

          If to the Principal Investigator:

          Patrick J. Stiff, M.D.
          Associate Professor of Medicine
          Loyola University Medical Center
          2160 South First Avenue
          Cancer Center - Room 240
          Maywood, IL  60153
          ph:  708-327-3148
          fx:  708-327-3220
 
          If to Aastrom:
 
          Thomas E. Muller, Ph.D.
          Vice President Regulatory Affairs
          24 Frank Lloyd Wright Drive, Lobby L
          Ann Arbor, MI  48105
          ph:  313-930-5573
          fx:  313-930-5520

                                       9
<PAGE>
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date and year first above written.

INSTITUTION:                   AASTROM:

LOYOLA UNIVERSITY              AASTROM BIOSCIENCES, INC.
MEDICAL CENTER


By: /s/                        By: /s/ R. DOUGLAS ARMSTRONG, PH.D.
   ---------------------          --------------------------------------------
                                  Name:  R. Douglas Armstrong, Ph.D.
                                  Title: President and Chief Executive Officer


Date:9/19/96                   Date:  9/3/96
     -------------------              ----------------------------------------

I have read this agreement and
understand my obligations hereunder:


By:  /s/ PATRICK J. STIFF, M.D.
    ---------------------------
     Patrick J. Stiff, M.D.
     Principal Investigator
     Associate Professor of Medicine
     Director, Bone Marrow Transplantation Program

                                       10
<PAGE>
 
                                   EXHIBIT A

                                  DEFINITIONS

1.   Aastrom.  Aastrom shall have the meaning as set forth in the first
     -------- 
     paragraph of this Agreement.
  
2.   Clinical Trial Information.  Clinical Trial Information shall have the
     ---------------------------  
     meaning as set forth in Section VI.A. of this Agreement.

3.   Confidential Information.  Confidential Information shall have the meaning
     -------------------------  
     as set forth in Section XI.A.
     
4.   CPS.  The CPS means the Cell Production System developed by Aastrom for the
     ----  
     ex vivo growth and expansion of human stem and hematopoietic progenitor
     cells. The CPS consists of: (a) a single use Cell Cassette in which the
     growth and expansion of cells takes place; (b) dedicated laboratory
     instruments to facilitate the cell culture process and associated cell
     inoculation and harvest procedures; (c) single use growth medium required
     for the cell culture to which specified growth factors and glutamine are
     added; and (d) single use harvest reagents which facilitate the removal of
     the expanded cells from the Cell Cassette.
     
5.   Effective Date.  The Effective Date shall have the meaning as set forth
     ---------------   
     in the first paragraph of this Agreement.
 
6.   FDA.  FDA shall have the meaning as set forth in Article 1 of this
     ----
     Agreement.

7.   Institution.  Institution shall have the meaning set forth in the first
     ------------  
     paragraph of this Agreement.

8.   Institution Invention.  Institution Invention shall have the meaning set
     ---------------------- 
     forth in paragraph VI.B. of this Agreement.

9.   Principal Investigator.  Principal Investigator shall have the meaning
     -----------------------    
     set forth in the Recitals on page 1 of this Agreement.
 
10.  Protocol.  Protocol shall have the meaning as set forth in the Recitals on
     ---------
     page 1 of this Agreement.

11.  Study.  Study shall have the meaning as set forth in the Recitals on
     ------
     Page 1 of this Agreement.

                                       1

<PAGE>
 
                                   EXHIBIT B

                       LOYOLA UNIVERSITY MEDICAL CENTER

                        BONE MARROW TRANSPLANT PROGRAM

     A PILOT TRIAL OF AUTOLOGOUS TRANSPLANTATION FOR PATIENTS WITH ADVANCED 
     BREAST CANCER USING MARROW CELLS EXPANDED EX VIVO.



Principal Investigator

Patrick J. Stiff, M.D.
Director, BMT Program
Loyola University Medical Center
2160 South First Avenue
Maywood, Illinois 60153
Ph: 708-327-3148
Fax: 708-327-3220


Co-Investigators

BMT Ex Vivo Expansion Team:  Robert Bayer, M.D., David Peace, M.D., Deepak
                             Malhotra, M.D., Bahao Chen, M.D., David Oldenberg

June 21, 1996
REVISED AUGUST 5, 1996

<PAGE>
 
1.0  OBJECTIVES

     1.1  To assess the safety of the mixture of early-, mid-, and late-stage
          bone marrow-derived mononuclear cells produced in the Aastrom Cell
          Production System (CPS) when infused into patients with breast
          cancer.

     1.2  To determine the biological effect in terms of hematopoietic recovery
          after infusion of ex vivo-produced hematopoietic cells following high
          dose chemotherapy as treatment of patients with breast cancer.

     1.3  To record the clinical disease related outcome in these patients with
          advanced breast cancer- clinical tumor response, duration of
          responses, and disease free duration post-high dose chemotherapy.

2.0  BACKGROUND

     2.1  Ex Vivo Expansion: Current Status June 1996
          Autologous bone marrow transplantation has been increasingly employed
          as supportive therapy for subjects undergoing high dose chemotherapy
          or chemoradiotherapy for malignant diseases, including lymphoma,
          leukemia, and breast cancer. Breast cancer is now the most frequent
          indication for autologous bone marrow or blood progenitor cell
          transplantation.

          Despite the use of cytokines such as granulocyte-macrophage colony-
          stimulating factor (GM-CSF) and granulocyte colony-stimulating factor
          (G-CSF) following bone marrow reinfusion, there is an obligate period
          of profound pancytopenia lasting 1-3 weeks, and delayed engraftment
          can occur, resulting in morbidity or mortality.

          The safety, comfort, and cost of stem- and progenitor cell harvest are
          also concerns. The standard techniques employed to harvest bone marrow
          involves obtaining 500-1500 mL of bone marrow from the marrow donor,
          usually under general anesthesia. In addition to the discomfort caused
          by the hundreds of marrow aspirates performed, donors are subject to
          the risks of general anesthesia. Finally, the bone marrow harvest
          procedure is expensive. Alternatively, stem- and progenitor cells can
          be collected from peripheral blood by apheresis, but this requires
          chemotherapy and/or growth factors for mobilization and multiple
          collections are generally necessary, which are costly.

          Recently, novel technology has been developed to produce stem- and
          progenitor cell populations in vitro, commonly referred to as ex vivo
          expansion. Hematopoietic cell expansions achieved with this technology
          are based upon the principles of continuous perfusion culture, a
          bioengineered metabolic environment, augmented by hematopoietic growth
          factors. Through this technology, a small bone marrow or peripheral
          blood mononuclear cell population can be perfused ex vivo so that
          total cell numbers, colony forming units (CFU-S) and long term culture
          initiating cells (LTC-ICs) increase up to 20 fold (1-17). In a
          preliminary study, Brugger et al recently reported that


<PAGE>
 
expanded cells alone can reconstitute hematopoiesis after high dose chemotherapy
(18).

Important differences exist among approaches, systems and devices used for ex
vivo expansion. This study utilizes the Aastrom CPS, which includes a cell
culture device and a biological environment designed to allow the establishment
of a stromal adherent layer, using constant perfusion with medium, and
relatively low concentrations of hematopoietic growth factors. Preliminary
studies at MD Anderson Cancer Center (DM94-127), using transplantation of ex
vivo-produced cells prepared with this system, in combination with a standard
autologous marrow transplant, indicate that ex vivo expansion can be performed
reliably and reproducibly, and that no toxicity occurs with intravenous infusion
(19). Ten patients, age 18-60 years with breast carcinoma, were entered into a
study transplanting bone marrow plus ex vivo-produced cells. Bone marrow was
harvested, collecting greater than 2 x 10/8/ nucleated cells/kg and greater than
0.5 x 10/6/ CD34+ cells/kg. Twelve days prior to the planned bone marrow
transplant, 2.25 x 10/8/ mononuclear cells were inoculated into a cell culture
device, part of the CPS, and continuously perfused with medium containing
PIXY321 (5 ng/mi), Epo (0.1 U/ml) and hydrocortisone (5 x 10-6 M). The expansion
reproducibly increased total nucleated cells, CFU-GM, and long term culture
initiating cells (LTC-IC). Patients received Cyclophosphamide 2.0 g/m2/d:
Thiotepa 240 mg/mi/d: BCNU 150 Mg/M2/d. Days -7, -6, -5, with reinfusion of the
cryopreserved bone marrow on Day 0 plus the ex vivo-produced cells four hours
later. No toxicity was observed from the expanded cell infusion. Nadir WBC was
less than 0.1/ul. All patients engrafted within narrow time ranges, with median
recovery of WBC greater than 200/ul on Day 8 (range 7-8) granulocytes greater
than 500/ul on Day 11 (range 10-13) and platelets greater than 25,000/ul on Day
16 (range 13-21) and greater than 50,000 on Day 20 (range 18-27). A median of 4
(range 1-9) platelet and 4 (range 2-9) RBC transfusions were administered. No
grade greater than 2 toxicity occurred from the chemotherapy or bone marrow
infusions. Four patients had infections unrelated to the infusion of the cells
produced in the CPS. These data compare favorably with 29 historical controls
receiving the same chemotherapy and autoBMT without cell expansion, in which
granulocytes recovered to greater than 500 on Day 11 (range 7-29) and platelets
to greater than 25,000 and greater than 50,000 on Days 24 (range 9-78) and 28
(range 9-147), respectively.

A potential advantage of collecting a relatively small marrow inoculum is that 
the number of contaminating malignant cells is reduced: additionally, growth of 
breast cancer cells is not stimulated under these expansion conditions (Brugger 
et al).

Application of this technology to autologous bone marrow and peripheral stem 
cells transplant offers a potentially attractive means to increase the efficacy 
and safety of autologous transplantation, while reducing its complexity and 
cost. In particular, this technology could eliminate the need for operative bone
marrow 
<PAGE>
 
          harvests, produce more rapid recovery of hematopoiesis post-
          transplant, reduce the length of post-transplant hospitalization, and
          could increase the purity of the stem- and progenitor cells
          transfused. In addition, the inclusion of cytokine-primed progenitors
          could result in accelerated hematopoietic recoveries.

2.2  Previous Pre-Clinical Research

          During hematopoietic expansion culture, total cell numbers increase 8
          to 11-fold over 12 days. This includes nonadherent, loosely adherent,
          and tightly adherent cells. Over 80% of the nucleated cells are
          viable, as shown by exclusion of propidium iodine stain (4) or Trypan
          blue dye. These cells have the morphological distribution of normal
          bone marrow cells, including blast cells and maturing granulocyte
          precursors, maturing erythroid cells, monocytes and macrophages.

          These expanded cells also show typical immunophenotype characteristics
          of normal granulocyte, erythroid, monocyte/macrophage megakaryocytic,
          and blast cells (5). Cell surface antigens identified using this
          technique include CD3, CD11b, CD15, CD20, CD33, CD71, and glycophorin
          A. While there are minor variations in staining patterns from sample
          to sample, the expanded cells are typically less than 3% CD3-.20-50%
          CD11b-, less than 1% CD19-, and 40-70% CD71-. The frequency of mature
          T and B lymphocytes in the expanded cell population is significantly
          reduced.

          As shown in the experiments summarized in the Table below, it was
          shown by Aastrom that varying the standard growth factor combination
          (IL-3-GM-CSF or PIXY321, Epo, SCF and flt3L) had a direct effect on
          the productivity of cells in the CPS, but the relative cell mixture
          composition remained substantially similar. These data were obtained
          in 36-well plate studies. This finding provided the original
          justification for selecting the growth factor combination (Epo -
          PIXY321 - flt3L) for this study to yield the desired relative
          composition and mixture of early-, mid- and late-stage cells produced
          in the pre-clinical experiments.

                                 Product/cm/2/
 
 
Growth Factors              CeilsX10/6/       CFU-GM       LTC-IC       n
                                                         
       None                    0.58             404        yes/3/       7
Epo, GM-CSF, IL-3, SCF         2.35           4,790        48          23
  Epo, GM-CSF, IL-3            1.13          21,060        yes/3/       3
    Epo, PIXY, SCF             1.72          69,960        yes/3/       4
       Epo, PIXY               1.31           3,140        94           3
    Epo, PXY, fit3L            1.57          10,580        11          14


<PAGE>
 
/2/LTC-IC were not evaluated, but in these conditions, 24 week CFU-GM producing 
cultures were obtained, representing an LTC-IC proxy.

Aastrom has projected, based on this pre-clinical research, that clinical-size 
CPSs are expected to yield a mean of 3.0 x 10/9/ cells, 17.7 x 10/6/ CFU-GM and 
6.4 x 10/5/ LTC-IC per patient in this proposed clinical feasibility trial, and 
set the expected minimum per-patient cell yield from the CPS at 1.6 x 10/9/ 
total nucleated cells and 7.0 x 10/10/ CFU-GM.  In an average 70 kg patient, 
this translates to a dose of 2 x 10/5/ CFU-GM/kg.  The clinically standard ABMT 
engraving dose is reported to be 1 x 10/5/ CFU-GM/kg.  Therefore, using the cell
dose and the CFU-GM content in the cells produced in the CPS as a key progenitor
marker, along with the reliable presence of early stage cells (e.g., LTC-IC, 
CD34-lin-), there is an expectation that the CPS-produced cells should provide a
minimum full engraving dose for these subjects, with a greater number expected 
for most patients.  Should the minimum cell number, 1.6 x 10/9/, not be 
attained, the cryopreserved back-up cells will be reconstituted and administered
to a subject on Day 0.

It is anticipated that infusion of ex vivo-produced progenitors generated with
the CPS will enhance engraftment and shorten time to recovery of granulocytes
and platelets and, in so doing, reduce the incidence of infections, febrile
episodes and the need for blood- and platelet transfusions.

Amended August 5, 1996: In several in vitro studies using tumor cells that are
easy to detect in small quantities (neuroblastoma and B-cell CLL), the expansion
process appeared to passively purge tumor cells of slightly less than one log to
greater than three logs. When combined with the smaller inoculum of marrow
needed to initiate the bioreactors as compared to a normal marrow harvest, the
depletions appear to be as high as four to five logs. It is anticipated that
since the marrows must be histologically normal for patients to enter this
trial, i.e., undetectable amount of breast cancer cells, that expansion of tumor
cells will not be important clinically. This is especially true since there is
additional in vitro data to show that the cytokines used do not stimulate the
growth of tumor cells when used whether in vitro or in vivo when used in closely
monitored clinical trials.

The washing of the expanded cell products eliminates the amount of the cytokines
to undetectable levels using a sensitive ELISA method. Only GMP (Good
manufacturing process) cytokines are used for the expansion process, making it
unlikely that any adverse clinical event will occur.

Microbial contamination has not been a problem in the patients treated to date 
and in preliminary studies done preclinically.  This is likely because of the 
closed system setup, growth and collection of the expanded cells, the
 








<PAGE>
 
          use of antibiotics in the growth media, and the assays done 48 hours
          prior to the collection of the expanded cells (day 10).  In addition,
          all patients will be on prophylactic antibiotics at the time of the
          cell infusions as per routine BMTU protocols.

     2.3  High Dose Chemotherapy and Autologous Bone Marrow Transplant Breast
          Cancer

          Breast cancer is responsive to initial combination chemotherapy for
          metastatic disease with a 50-800,10 response rate and a 10-20%
          complete response rate, but few patients are cured and median duration
          of response is generally less than one year (20-24).  Once patients
          relapse, the response to second-line therapy is 20-40% with very few
          complete responses (CR) and a median duration of response of 2-3 
          months and a median survival of 12 months.

          When patients with metastatic breast cancer receive high-dose
          chemotherapy, there is substantially higher complete response rate
          than that can be achieved with conventional treatment (25-38).
          Peters et al (39) used a regimen of Cyclophosphamide, Cisplatin,
          and BCNU or Melphalan in 22 ER-negative patients without prior
          induction chemotherapy, and reported a 54% CR rate and an overall
          response rate of 73% and a median duration of response of 7 months
          from the time of transplant.  Antman et al recently reported similar
          results with a combination of high-dose Carboplatin.  Cyclophosphamide
          and Thiotepa (26); each study reported approximately 20% 5-year 
          disease-free survival.  A recently published study that compared in
          a randomized fashion chemotherapy at conventional doses versus high
          dose therapy with stem cell rescue verified that this high dose
          approach is superior to conventional chemotherapy as measured both by
          progression-free as well as overall survival.  Application of the
          same therapy to patients with Stage II breast cancer with greater than
          10 positive nodes or Stage III disease has resulted in approximately
          70% 5-year disease-free survival, substantially higher than that
          reported with standard adjuvant therapy in such patients.

3.0  BACKGROUND DRUG AND DEVICE INFORMATION

     3.1  Description of the CPS

          The single-use, sealed, sterile cell culture device in the Aastrom
          CPS consists of three rigid plastic parts separated by a gas-
          permeable, water-impermeable membrane.  The lower cell culture
          chamber is continuously perfused by growth medium.  The cells
          expand in culture on the plastic surface of the cell culture bed.
          The upper cell culture chamber is provided with a constant flow of
          gas, such that oxygenation of the cell culture bed is accomplished
          by diffusion across the membrane and through the culture medium.
          Carbon dioxide is removed by the same mechanism.  The medium used to 
          perfuse the cultured
<PAGE>
 
cells is stored in a closed vessel in an adjacent refrigerator at 4 degrees C 
whose only external connection is by medical grade tubing. A "Y" connector, 
attached to the effluent line, allows sampling of the cell product prior to 
harvest, to test for bacterial and fungal contaminants. A detailed device 
description is provided in the Operators Manual provided by Aastrom. The system 
to be used will include dedicated Aastrom instruments, the Processor and 
incubators which replace standard laboratory equipment and perform all of the 
steps in the cell production automatically and more importantly sterily, and 
in a close system manner, after the initial inoculation of the cells into the 
CPS. The incubator contains a cold compartment for media storage for perfusion 
during the 12 day culture (perfusion begins on Day 3), and a 37 degrees C 
compartment in which the Cell Cassette is placed for the duration of the 
culture.

3.1.1  Cell Culture Conditions

       The hematopoietic cells are suspended in tissue culture medium composed
       of Iscove's Modified Dulbecco's Media supplemented with 10% fetal bovine
       serum, 10% horse serum, hydrocortisone (5x10/-6/ M), PIXY321 (5 ng/mi),
       glutamine (4 mM), Erythropoietin (Epo 0.1 U/ml), flt3L (5 ng/mi),
       gentamicin sulfate (5 Fg/ml), vancomycin (20 Fg/ml), sterile water for
       injection, and are inoculated into the CPS, starting after Day 3. The
       cells are cultured in the CPS for 12 days at 37 degrees C with the tissue
       culture medium continuously replaced with fresh medium. Sampling of the
       culture medium is carried out 48 hours prior to harvest, to allow testing
       for bacterial and fungal contaminants.

       The cell harvest is performed automatically, by a programmed schedule
       with the Processor. In this process, the non-adherent fraction is removed
       from the cell culture device by draining the growth medium from the cell
       culture device into the harvest bag. The chamber is then rinsed with 50
       ml of Hank's Balanced Salt solution (HBSS). This is followed by agitation
       of the cell culture device and collection of the rinse into the harvest
       bag. The adherent layer is detached from the cell culture bed surface by
       injection of 50 ml of Trypsin-EDTA solution. This is also followed by
       agitation of the cell production device and collection of the rinse into
       the harvest bag. The chamber is then given a final rinse by injecting 50
       ml of HBSS. This is followed by agitation of the cell production device
       and collection of the rinse into the harvest bag. Again this is done
       automatically, sterily in a closed system fashion.

       Following collection, the cells are washed free of culture medium as 
       detailed in the Operator's Manual. The final product is suspended in 
       appropriate media for immediate infusion.

<PAGE>
 
3.1.2  Cell Culture Media Information

       Studies by Aastrom and the University of Michigan have shown that, after
       the cell washing regimen, the added growth factors and other reagents are
       below detectable limits, using a very sensitive ELISA assay (R&D Systems,
       Minneapolis, MN, and Immunex Research Corporation, Seattle, WA). These
       levels are well below the level of biological activity. The horse and
       fetal calf sera are tested preclinically for contamination for bacteria,
       fungi, mycoplasma, endotoxin, and viruses. The expanded cell product is
       washed (See Operators Manual) prior to transfusion. Nonetheless, the
       human toxicities and contraindications identified for these drugs are
       included below:

       3.1.2.1       Recombinant Human Epo

                Recombinant Human Erythropoietin: Epoetin Alfa, Procrit, NOC 
                0062-7402-01 Amgen, Thousand Oaks, CA.

                Human Toxicity: Toxicities have included hypertension, headache,
                fever, seizures, and skin rash. The majority of these subjects
                had chronic renal failure, and these adverse events are frequent
                sequelae of chronic renal failure and were not necessarily
                attributable to Epo.

                Contraindications: Epo is contraindicated in subjects with:
                uncontrolled hypertension, known hypersensitivity to mammalian-
                derived products, and known sensitivity to human albumin.

       3.1.2.2       PIXY321

                PIXY321 is a fusion protein of granulocyte-macrophage 
                colony-stimulating factor (GM-CSF) and interleukin 3 (IL-3).

       3.1.2.3       Recombinant GM-CSF

                Human Toxicity: Specific Toxicities include peripheral edema,
                pleural and/or pericardial effusions, fluid retention,
                sequestration of granulocytes in the lung, supraventricular
                arrhythmia, elevation of serum creatinine, and elevation of
                hepatic enzymes.

                Contraindications: GM-CSF is contraindicated in subjects with
                excessive leukemic blasts in the bone marrow or peripheral blood
                (greater than 10%), or with known hypersensitivity to GM-CSF,
                yeast-derived products, or any component of the product.

<PAGE>
 
             3.1.2.4  Flt3 Ligand (flt3L)

                      The manufacturer of flt3L, Immunex Research and
                      Development Corporation, Seattle, WA, has advised that
                      a biologic Master File is in preparation for clinical,
                      in vivo grade flt3L, and that the Master File will be
                      submitted to the FDA in 1996, and will be available as
                      reference for the purposes of this clinical feasibility
                      trial (Letter, Immunex to Aastrom, December 11, 1995).

                      Immunex has also advised that flt3L appeared to be well
                      tolerated when administered to mice and monkeys for 14
                      days, at doses up to 400@g/kg/day.  Based on the safety
                      profile established by Immunex, including the animal
                      data generated to-date, flt3L has no apparent toxicities,
                      and does not stimulate the proliferation and detrimental
                      activation of mast cells.

                      As indicated above, the cells produced in the CPS are
                      washed four times, resulting in a 5-log reduction in the
                      presence of media components, to levels below detectable
                      limits. An ELISA, supplied by Immunex, is used to 
                      determine residual flt3L levels subsequent to cell 
                      washing.

             3.1.2.5         Horse Serum

                      Contraindications: Known hypersensitivity to horse serum.

             3.1.2.6         Fetal Calf Serum
   
                      Contraindications: Known hypersensitivity to bovine serum.

3.2  CHEMOTHERAPY AGENTS AND CYTOKINES

     rhG-CSF (Filgrastim: NSC-614629)

     3.2.1  Chemistry: rhG-CSF is a protein produced in E. Coli into which the
            gene synthesized for high expression in E Coli has been inserted.
            The 175 amino acid protein has a molecular weight of about 18,800
            daltons. rhG-CSF differs from the natural protein (M.W. 19,600
            daltons) in that the N-terminal amino acid is a methionine and is
            not 0-glycosylated.

     3.2.2  Mechanism of Action: rhG-CSF is a hematopoietic regulator which has
            the ability to modulate the growth and maturation of myeloid cells,
            and in particular the proliferation and differentiation of 
            granulocytes both in vitro and in vivo.

     3.2.3  Human toxicity:  Specific toxicities include medullary bone pain.
 
  
<PAGE>
 
            musculoskeletal symptoms (muscle cramps, back and or leg pain);
            exacerbation of preexisting inflammatory conditions (psoriasis,
            arthritis, vasculitis); splenomegaly and hair thinning with
            prolonged administration. Elevated leukocyte alkaline phosphatase,
            uric acid, and lactate dehydrogenase. Progression of patients with
            myelodysplasia to acute myeloid leukemia occurred rarely during
            treatment with this agent.

     3.2.4  Pharmaceutical Data: rhG-CSF is supplied in colorless, glass, single
            use vials containing 1.6 ml of buffered solation at a concentration
            of 0.3 mg/ml. It is formulated as a sterile, colorless liquid in a
            10 mM sodium acetate buffer at pH 4.0.

            Administration: rhG-CSF will be administered in this study
            subcutaneously. It will be undiluted and be drawn into 3 cc
            syringes. To reduce the possibility of bacterial contamination in
            this product which contains no preservatives, the syringes should be
            stored at 2-8 degrees C and used within 24 hours of preparation, 
            rhG-CSF should not be frozen and vials or syringes that have been 
            frozen should not be used.

     3.2.5  Supplier: This agent will be supplied through AMGEN for the trial
            free of charge to the patients.

3.3  Carboplatin (NSC-241240) (CBCDA)

     3.3.1  Human Toxicity: Side effects of Carboplatin (CBDCA) include
            myelosuppression, nausea, vomiting, loss of appetite. Rare
            toxicities include gross hematuria, hyponatremia, ageusia, allergic
            reaction, peripheral neuropathy, veno-occlusive disease, loss of
            hair, liver damage, kidney damage, hearing loss, dizziness and
            blurred vision. Two cases of optic neuritis have been reported in
            patients receiving carboplatin which were thought to be possible
            drug-related events. A single case of severe pulmonary toxicity has
            been reported.

     3.3.2  Pharmaceutical Data: Formulation: CBDCA is supplied as a sterile
            lyophilized powder available in single-dose vials containing 50 mg,
            150 mg and 450 mg of Carboplatin for administration by intravenous
            injection. Each vial contains equal parts by weight of Carboplatin
            and mannitol. Immediately before use, the content of each vial must
            be reconstituted with either Sterile Water for Injection. USP, 5%
            Dextrose in Water, or 0.9% Sodium Chloride Injection, USP, according
            to the insert.

                 Diluent Volume

                  50 mg    5 mL
<PAGE>
 
                          150 mg    15 mL
                          450 mg    45 mL
              
            These dilutions all produce a Carboplatin concentration of 10 mg/ml.
            CBDCA can be further diluted to concentrations as low as 0.5 mg/ml
            with 5% Dextrose in Water or 0.9% Sodium Chloride Injection, USP
            (NS).
   
     3.3.3  Storage & Stability:  Unopened vials of CBDCA for injection are 
            stable for the life indicated on the package when stored at
            controlled room temperature 150 - 300 C. and protected from light.
            When prepared as directed, CBDCA solutions are stable for 8 hours
            at room temperature.  Since no anti-bacterial preservative is
            contained in the formulation, it is recommended that CBDCA solutions
            be discarded 8 hours after dilution. Parenteral drug products should
            be inspected visually for particulate matter and discoloration prior
            to administration.

     3.3.4  Administration:  Intravenous.

     3.3.5  Supplier:  CBDCA is commercially available and will be purchased
            through third party payers.

3.4  Cyclophosphamide (NSC-26271)

     3.4.1  Mechanism of Action:  Cyclophosphamide is a very weak alkylating
            agent, but enzymatic oxidation and a series of undefined subsequent
            reactions produce one or more molecules with alkylating activity. 
            In experimental animals, the first step of activation occurs more
            extensively in the liver than in the neoplasm or other tissues of
            the host.

     3.4.2  Toxicities:  Human toxicity includes alopecia, nausea and vomiting,
            stomatitis, leukopenia, anemia, thrombocytopenia, sterility or
            decreased gonadal function, hemorrhagic cystitis and fibrosis of
            the bladder.

     3.4.3  Pharmaceutical Data:  Formulation:  Cyclophosphamide is supplied in
            100, 200, and 500 mg ampules containing white powder.  The drug can
            be reconstituted in normal saline or 5% dextrose and water.

     3.4.4  Stability:  Store at room temperature.  Do not store at temperatures
            above 90 degrees F.

     3.4.5  Supplier:  This drug is commercially available for purchase by the
            third party.



<PAGE>
 
     3.5  Thiotepa (Triethylene-thiophosphoramide) (NSC-6369)

          3.5.1  Mechanism of Action: Thiotepa is a cytotoxic agent of the
                 polyfunctional alkylating type related chemically and
                 pharmacologically to nitrogen mustard. On the basis of tissue
                 concentration studies, it is reported that Thiotepa has no
                 differential affinity for neoplasms. Most of the drug appears
                 to be excreted unchanged in the urine.

          3.5.2  Human Toxicology: The major side effects of Thiotepa are pain
                 at the site of injection, nausea and vomiting, anorexia,
                 dizziness, headache, amenorrhea and interference with
                 spermatogenesis. Febrile reaction and weeping from a
                 subcutaneous lesion may occur as the result of a breakdown of
                 tumor tissue. Allergic reactions are rare, but hives and skin
                 rash have been noted occasionally. The serious complication of
                 excessive Thiotepa therapy, or sensitivity to the effects of
                 this agent, is bone marrow depression. If proper precautions
                 are not observed, it may cause leukopenia, thrombocytopenia and
                 anemia. The most reliable guide to Thiotepa toxicity is the
                 white blood count.

          3.5.3  Pharmaceutical Data: Formulation: Thiotepa is available in a
                 powder form in 15 mg vials. The powder should be reconstituted
                 in sterile water for injection.

          3.5.4  Storage and Stability: Reconstituted solutions may be kept for
                 five days in a refrigerator without a substantial loss of
                 potency. Vials containing Thiotepa should be stored at 2-8
                 degrees C (35-46 degrees F).

          3.5.5  Administration: The amount of diluent most often used is 1.5 ml
                 resulting in a drug concentration of 5 mg in each 0.5 ml of
                 solution. Thiotepa may be given by rapid intravenous
                 administration or via continuous intravenous infusion.

          3.5.6  Supplier: This drug is commercially available for purchase by
                 the third party.

     3.6  Intended Use

          The intended use of the CPS is to produce human stem- and
          hematopoietic progenitor cells to support subjects with compromised
          hematopoietic systems. A per-patient cell production procedure,
          beginning with 2.25 x 10/8/ nucleated bone marrow cells per device,
          will yield at least 1.6 x 10/9/ cells. The cells will not be infused
          if the cell yield is below this level; the back-up cells will be
          infused in such a case.

4.0  PATIENT ELIGIBILITY

<PAGE>
 
4.1  Patients with histologically confirmed breast cancer with advanced
     disease as defined as high risk Stage II (greater than 10 LN), Stage III or
     stage IV (inflammatory, fixed to chest wall, or fixed axillary lymph nodes)
     or recurrent or metastatic disease.

4.2  Patients with measurable disease must have disease which is responsive to 
     standard dose systemic chemotherapy administered prior to enrollment on
     study.  Patients may have a maximum of two prior chemotherapy regimens for
     their disease.  Patients with metastatic disease (beyond draining lymph 
     nodes) with no evaluable or measurable disease following surgical 
     resection, radiotherapy, or chemotherapy are still eligible.

4.3  Patients must have a Performance status of 0-1 by SWOG criteria (see
     appendix).  As patient weight is used to calculate the minimum safe dose
     of CFU-GM to accomplish a transplant, and given the production capabilities
     of the CPS, patients in this initial trial must be less than 90 kg of 
     actual body weight.

4.4  Patients must have received a cumulative adriamycin dose of less than
     350 mg/m2 with no prior nitrosoureas, platinum or mitomycin C.

4.5  Patients must have recovered from prior therapy with at least 4 weeks since
     the last chemotherapy, 4 weeks since last radiotherapy, and 3 weeks since
     major surgery.

4.6  Patients must have adequate cardiac function as defined by a MUGA with an
     ejection fraction greater than or equal to 45%.  Patients may not have 
     active coronary disease as defined by angina or history of a myocardial
     infarction.  In addition, patients must have no clinically apparent 
     uncorrectable pulmonary disease such as corpulmonale or severe COPD, or
     be requiring oxygen therapy for any reason.

4.7  Patients with a history of or any evidence for brain metastases are
     ineligible.  Head CT or MRI scans are not required if patients are
     asymptomatic.

4.8  Patients must have adequate organ function as defined by the following:
     Serum creatinine less than or equal to 1.5 mg/dl or calculated Cr-CI or
     greater than or equal to 60 ml/min:  Hepatic function as defined by
     Bilirubin less than or equal to 2.0 mg/dl and AST/ALT less than or equal to
     2 x institutional normal values:  hematologic functional as defined by WBC
     greater than or equal to  3400/ul. Hgb greater than or equal to 9.0 gm/dl.
     platelet count greater than or equal to 140,000/ul.

4.9  Exclusion Criteria include:  History of hypersensitivity to horse serum
     or fetal calf serum:  Concurrent involvement in any other clinical trial
     that affects engraftment (e.g. other hematopoietic growth factors); 
     treatment with any growth factors within two weeks; Previous pelvic
     radiotherapy rendering the marrow hypocellular, any co-morbid condition
     which, in the view of the Principal Investigator, renders the patient at
     high risk from treatment complications.
<PAGE>
 
     4.10  Patients must undergo a BM biopsy and BM must be either free of
           disease by standard histologic exam, and a cellularity on biopsy of
           at least 35%.

     4.11  Patients must be less than 65 years of age.

     4.12  Patients must be HIV negative.

     4.13  Pregnant or lactating women may not participate.

     4.14  Patients with prior hemorrhagic cystitis are ineligible.

     4.15  Patients must be free of active systemic infection at the time of
           initiating therapy. Patients must have had no episodes of systemic
           mycotic infections, nor have required Amphotericin B therapy in the
           previous 12 months.

     4.16  Patients must be free of active CNS diseases (seizures, etc.)

     4.17  Patients must have signed an IRB approved consent form prior to trial
           enrollment.

     4.18  Patients may not have an active second malignancy within the previous
           2 years except localized non-melanoma skin cancer or uterine cervical
           cancer in situ.

5.0  TREATMENT PLAN

     5.1   Registration

           All patients must be registered with the Data Management office at
           708-327-3230 for entry on study. A total of 6-10 patients will be
           treated in this pilot study.

     5.2   Bone Marrow Harvest

           Patients will undergo back-up bone marrow harvest at any time prior
           to initiation of the ablative chemotherapy, with cryopreservation,
           using standard techniques. Patients must have greater than 2 x 10/8/
           nucleated cells per kg harvested, including greater than 0.5 x 10/6/
           CD34- cells/kg.

           The bone marrow harvest will be performed by standard technique in an
           operating suite under general or epidural anesthesia. In a standard
           harvest, approximately 500-1500 ml of marrow is withdrawn. Patients
           will have the back-up bone marrow collected simultaneously with the
           cells for ex vivo production. If a sufficient number of cells are
           collected, the bone marrow collected will be processed and a small
           fraction utilized for the ex vivo culture described below, and the
           remainder of the cells will be cryopreserved per


<PAGE>
 
     standard technique and held as a back-up for use if the prescribed number
     of cells is not produced or if graft failure occurs. The cells for the
     expansion will be collected from the posterior iliac crest or from the
     sternum at the initiation of the harvest procedure. No more than 5 cc of
     marrow for the expansion will be aspirated from each bone puncture.
     Approximately 40 ml of marrow will be aspirated in this fashion.

5.3  Ex Vivo Cell Production

     As mentioned in other parts of the Protocol, at the time of bone marrow
     harvest, all harvested marrow will be delivered to the bone marrow
     laboratory for processing. A portion of the harvested marrow will be used
     for cell production in the CPS and balance of the harvested marrow will be
     cryopreserved. Twelve days prior to the scheduled bone marrow transplant,
     2.25 x 10/8/ mononuclear cells from freshly collected marrow will be placed
     into each CPS in the presence of PIXY321 (5 ng/mi), hydrocortisone (final
     concentration 5 x 10/-6/M), glutamine (4 mM), gentamicin sulfate (5 Fg/mi),
     vancomycin (20 Ff/mi), Epo (0.1 U/ml/day) and fit3L (5 ng/ml). The tissue
     culture medium will be supplemented with 1.0% fetal calf serum and 1.0%
     horse serum. All processing will be done using the dedicated CPS
     instrumentation. No standard laboratory equipment will be used for the
     expansion or processing of the cells. A sample of the harvested marrow will
     be sent for bacterial and fungal culture.

     The cell production will be performed in the Aastrom CPS, which is operated
     as a stand alone, dedicated piece of validated laboratory equipment
     (incubator, refrigerator, gas pumps) which provide for constant temperature
     (37C), pH (7.2-7.4), and delivery of sterile air (5% C02) to the
     hematopoietic cells.

     Two days prior to the completion of cell production, the cell culture
     effluent will be sampled to allow for bacterial and fungal testing
     including gram stain, endotoxin testing and mycoplasma. At the completion
     of the cell expansion process (12 days), the non-adherent fraction will be
     removed from the cell culture devices by draining the growth medium from
     the cell culture devices into the harvest bag. The devices will then be
     rinsed by using a syringe to inject 50 ml of an HBSS solution into an
     access port. This is followed by agitation of the cell culture device and
     collection of the rinse into the harvest bag. The adherent layer will be
     detached from the cell culture device surface by injection of 50 ml of
     Trypsin-EDTA solution via an access port. This is again followed by
     agitation of the cell culture device and collection of the rinse into the
     harvest bag. The chamber will be then given a final rinse with 50 ml of
     HBSS, again by injection via an access port. This is followed by agitation
     of the cell culture device and collection of the rinse into the harvest
     bag.

     The expanded cells will be washed according to the procedure outlined in
     the Operators Manual.

     All subjects will receive freshly harvested expanded cells. The expanded
     cells must be greater than 80% viable, as determined by Trypan blue dye,
     and the minimum total cell number, as

<PAGE>
 
          determined by an automated cell counter, will be 1.6 x 10/9/ cells.

          As part of the standard laboratory in this Study, the total cell 
          count, CFU-GM and LTC-IC will be determined for the starting and
          final cell number.  The pre and post expansion sample will be sent
          for cytology and immunocytochemistry for breast cancer cells.

          Pre-transplant Evaluation of the cultured Cells: 48 hours prior to the
          collection of the expanded cells, the effluent from the CPS will be
          tested for bacterial and fungal contamination, as described above. If
          the bone marrow cultures are either visibly contaminated or are
          positively cultured for bacterial or fungal contamination, or if the
          cultures die, the expanded cells will not be returned to the subject,
          who will then simply receive her cryopreserved bone marrow.

          Flow Cytometry: Aliquots of the ex vivo produced cells (approximately
          10 x 1 Or) will be removed at 12 days, placed in a tube containing
          sterile buffered medium, and shipped by overnight mail carrier to 
          Aastrom Biosciences, Inc., Domino's Farms, 24 Frank Lloyd Wright
          Drive, Lobby L., Ann Arbor, MI, 48105.  These cells will be analyzed
          for the presence of several cell surface markers (CD34, CD1 lb, CD15,
          CD33, CD3, CD4, CD8, CD19, CD71 and glycophorin A and other 
          appropriate markers) in the laboratory at Aastrom as potential
          correlates for the cell production process.  The Aastrom Laboratory
          operates under GLP (Good Laboratory Practices) guidelines.

          Release Criteria:  Cells produced in the Aastrom CPS will be 
          considered eligible for release and reinfusion if greater than 1.6 x
          10' nucleated cells/kg are recovered after the expansion period and
          cell washing, and if greater than 80% of the nucleated cells are
          viable as judged by exclusion of Trypan blue dye.  Microbial
          contamination studies collected from the expansion on Day 10 must
          be negative.

          If the expansion is not deemed sufficient, a patient will receive her
          backup marrow instead, without infusion of the expanded cells.

     5.5  Transplant Regimen

          5.4.1  High Dose Chemotherapy (STAMP V Regimen)

                 Chemotherapy will begin a minimum of 48 hours following the
                 last pheresis.  Prior to the administration of chemotherapy,
                 patients will receive anti-emetics including ondansetron and
                 dexamethasone.  Chemotherapy will consist of the following:

                 Cylophosphamide 1500 mg/m2 Q day by continuous infusion (CI)
                 for 4 days (d-7 through d-4) (96 hours) Total dose 6000 mg/m2

                 Thiotepa 125 mg/m2 Q day by CI for 4 days (d-7 through d-4) (96

<PAGE>
 
       hours) Total dose 500 mg/m2.

       Carboplatin 200 mg/m2 Q day CI for 4 days (d-7 through d-4) (96 hours)
       Total Dose 800 mg/m2.

       Supportive Issues:

       All patients will receive therapy through three separate lumens. The
       agents can not be mixed. Vigorous hydration will be included with a
       minimum of 200 cc/hour of IV fluids with diuretics as needed, while the
       chemotherapy is infusing and continuing till stem cell infusion. Patients
       will receive aggressive anti-emetic therapy with ondansetron, lorazepam,
       dexamethasone, etc.

5.4.2  Post-Transplant Growth Factor Support

       G-CSF (10 mcg/k/d) will be administered SQ until granulocytes greater
       than 2.0 x 1 O/9//l or greater than 1.0 x 1 O/9//l for 3 days. If
       granulocytes fall to less than 1.0 x 10/9//l, hematopoietic growth factor
       treatment can be resumed as indicated to maintain an absolute granulocyte
       count greater than 1.0 x 10/9//l. GM-CSF 250 mg/m2/d may be used in
       patients intolerant to G-CSF.

       Patients who require the administration of any myelosuppressive therapy
       in the first 7 days post transplant such as full dose Amphotericin B
       therapy will be required to receive the infusion of their back up marrow
       cells on that date.

5.4.3  Neutrophil Engraftment and Stopping Rules

       Neutrophil engraftment is defined as recovery as granulocytes to 0.5 x
       10/9//l. Back-up autologous bone marrow will be infused intravenously per
       the following stopping rules:

a.     Back-up cells will always be administered to subjects on Day -21 if ANC
       is less than 0.5 x 10/9//l; if back-up cells are administered to a
       subject on Day-21, it is reasonable to assume that an ANC level of 0.5 x
       10/9/ can only be reached between Day -21 and Day -25 if the cells
       produced in the CPS alone contribute to a subject's recovery, because the
       administration of back-up cells would not be expected to impact
       engraftment so rapidly, between Days -21 and-25. It is relevant to point
       out that ANC recovery in the Day -18-25 time frame is often experienced
       in standard bone marrow transplantation.

b.     If the ANC is greater than 500 on Day -28 but the platelet count is less
       than 20,000, the marrow cells will be infused on that date.

c.     If the patient is experiencing a severe infection or uncontrolled 
       bleeding

<PAGE>
 
                at any point during the period of pancytopenia, the back-up
                cells may be administered at the discretion of the investigator.

                5.4.3.1       Stopping Rules

                         With the above as background, stopping rules will be
                         as follows:  the trial will be stopped and reevaluated
                         if two subjects fail to reach ANC 0.5 x 10/9/v/1 by Day
                         +25, even with the administration of back-up cells on
                         Day +21;

                         The trial will also be stopped and reevaluated if 
                         four of the first five subjects, or if any five of
                         the ten total subjects, required the administration
                         of back-up cells because they failed to reach ANC
                         0.5 x 1 01/1 on or before Day +21.

6.0  PRETREATMENT EVALUATION

     6.1  Complete history and physical examination, including SWOG performance
          status (Appendix C)

     6.2  CBC, diff, and platelet count

     6.3  SMA 12 and electrolytes

     6.4  PT, PTT

     6.5  Cardiac ejection fraction

     6.6  Pulmonary function - DLCO

     6.7  HIV, hepatitis, HTLV-1 (1764 panel)

     6.8  Pregnancy test (in fertile women)

     6.9  Tumor staging as indicated including bone scan with X ray of hot
          spots.  Chest X-Ray, CT scan abdomen, tumor markers, such as CEA
          will be assessed.

     6.10 Bilateral bone marrow aspirate and biopsy

7.0  STUDY PROCEDURES AND EVALUATIONS

     7.1  Interim history, physical examination and toxicity assessment 
          daily while in hospital and at least weekly until WBC greater than
          3000 and platelets greater than 100,000.  Toxicity assessment will be 
          made pre-infusion and 2 and 24 hours post-infusion of both the
          expanded and unexpanded bone marrow cells.


<PAGE>
 
     7.2  CBC, diff, platelet counts daily while hospitalized and at least twice
          per week as an outpatient until WBC greater than 3000/ul and platelets
          greater than 100,000/ul.

     7.3  SMA twice per week while hospitalized. Electrolytes as indicated.

     7.4  Tumor restaging as indicated including bone scan with X ray of hot
          spots, CXR, CT scan of abdomen, and CEA, at day 60. Subsequent follow
          up is as indicated for patients with this malignancy.

     7.5  Criteria for discharge: A study subject will be eligible for discharge
          from the hospital when she meets the following criteria:
          afebrile for 2 or more consecutive days, ANC greater than 500 for 3 
          consecutive days and SWOG status of 0, 1 or 2.

          All study subjects will receive follow-up care and treatment (as
          appropriate) by their physician. The subjects' medical records will be
          available to medical study monitors should additional information be
          required.

8.0  DATA COLLECTION

     8.1  General Information

          Data will be recorded using a standard 'Theredex' reporting system at
          the time of each evaluation. Data must be recorded for all subjects
          from whom an Informed Consent is obtained.

     8.2  Contents
          Data to be collected at each of the study time period is as follows:
                 Pre-treatment Evaluation
                 ------------------------
                 Eligibility criteria
                 Demographic data
                 Medical history
                 Physical examination
                 Laboratory profile
                 Bone marrow biopsy
                 toxicity status

                 Baseline (Day 0)
                 ----------------
<PAGE>
 
               Laboratory profile
               Bone marrow/cultured cell profile
               Transfusion record
               Toxicity assessment
               Vital signs
               Concomitant medication(s)
               Infection reporting and adverse effects greater than grade 3 - 
               report immediately to sponsor as event occurs.

         Daily Evaluations (Post-transplant)
         -----------------------------------

          Laboratory profile
          Transfusion record
          Toxicity assessment (note preinfusion, 2 hour and 24 post infusion
          toxicity assessment above)
          Vital signs
          Concomitant medications

          Infection reporting and grade greater than 2 adverse effects - report 
          immediately to sponsor as event occurs.

              Hospital Discharge (study completion)
              -------------------------------------

          Laboratory profile
          Vital signs

          Toxicity assessment
          Concomitant medications
          Infection reporting and Adverse Effects grade greater than 3 - Report 
          immediately to sponsor as event occurs.

          Early termination or D60
          ------------------------
          Laboratory profile
          Assessment of late toxicity
          Transfusion record
          Vital signs
          Concomitant medications
          Study completion questionnaire

     8.3  Quality System
<PAGE>
 
     Quality system procedures are designed to ensure that complete, timely, and
     accurate data are submitted, that protocol requirements are followed, and
     that complications and/or adverse reactions are immediately identified.

     The study monitors will promptly review all incoming data to identify
     inconsistent or missing data and adverse effects. Data problems will be
     addressed in telephone calls and correspondence to the investigational site
     and during site visits. Clinical monitoring procedures are described in
     Section 12 of this protocol. The Medical Monitor will receive immediate
     notification of adverse reactions Grade greater than 3. Both the site and
                                             --------------
     Aastrom will maintain secure hard copy Case Record Forms and data files.

9.0  ADVERSE EFFECTS

     All adverse effects, whether or not considered anticipated, must be
     recorded on the data sheets. Unanticipated effects, as defined below, must
     be reported promptly to the sponsor for further evaluation and adequate
     required reporting to IRBs and investigators.

     9.1  Anticipated Adverse Effects

          The preliminary clinical experience has not identified any serious
          adverse effects on health or safety caused by or associated with the
          CPS and no adverse effects related to the ex vivo use fit3 ligand are
          anticipated. Patients undergoing high dose chemotherapy are
          anticipated to experience anorexia, nausea, vomiting, mucositis,
          pancytopenia and associated infections while neutropenia. Some
          patients may develop organ toxicities from high dose therapy. The
          anticipated events are therefore those associated with bone marrow
          transplantation and/or chemotherapy.

     9.2  Unanticipated Adverse Effects

          An unanticipated adverse effect is:

          Any serious effect on health or safety or any life-threatening
          problem, or death caused by, or associated with, a device, if that
          effect, problem, or death was not previously identified in nature,
          severity, or degree of incidence in the investigational plan, or any
          other unanticipated serious problem that relates to the rights, safety
          or welfare of subjects. [21 CFR 812.3 (s)]. In particular, any
          unexpected grade III or IV toxicities or any other serious event that
          might be attributable to the infusion of the expanded hematopoietic
          cells.

          Reporting requirements:

<PAGE>
 
           Unanticipated adverse effects should be reported to the Aastrom
           Study Director, Thomas E. Muller, Ph.D., Vice President Regulatory
           Affairs, immediately by the Investigator and subsequently to BRI.

           Aastrom requires an immediate telephone report followed by a written
           report within 5 days.

           An investigator shall submit to Aastrom and the reviewing IRB a
           report of any unanticipated adverse device effect occurring as soon
           as possible, but no later than 10 working days after the
           investigator learns of the effect [21 CFR 812.150 (a) (1)]. Aastrom
           shall immediately conduct an evaluation and report the results of
           the evaluation to FDA and to reviewing IRB's and participating
           investigator(s) within 10 working days after the sponsor first
           receives the notice of the effect [21 CFR 812.150 (b) (1)]. If
           Aastrom determines that an unanticipated adverse effect presents an
           unreasonable risk to subjects, all investigations or parts of
           investigations presenting that risk shall be terminated as soon as
           possible [21 CFR 812.46 (b)].

      9.3  DEPARTURE FROM PROTOCOL

           When a situation occurs which requires a departure from the protocol,
           the Principal Investigator or other physician in attendance will
           contact the Medical Monitor by telephone:

           Thomas E. Muller, Ph.D.
           Vice President Regulatory Affairs
           Aastrom Biosciences, Inc.
           24 Frank Lloyd Wright, Lobby L
           Ann Arbor, MI 48105
           Telephone:  313-930-5555
           Fax:  313-665-0485

           Contact with the Medical Monitor will be made as soon as possible in
           order to discuss the situation and agree on an appropriate course of
           action. The patient's medical records and source documents will
           describe the departure from the protocol and the circumstance
           requiring it.

10.0  STATISTICAL CONSIDERATIONS AND DATA ANALYSIS

      10.1 Evaluation of the Data
<PAGE>
 
            All subjects will be evaluated. Descriptive statistics will be
            presented for demographic variables and baseline characteristics
            such as age, sex, medical history, physical examination results,
            cost information (especially as this relates to morbidity).

            The primary endpoint is the safety of the cells produced in the CPS.
            To assess the hematopoietic recovery post-infusion with ex vivo-
            produced cells, the day of engraftment is defined by the first day
            on which granulocytes less than 0.5 x 10/9//I are observed. Other
            secondary endpoints include nadir WBC and platelet count, febrile
            days, treatment related complications, antitumor response, and
            survival.

            Secondary Endpoints:

            a.  The day of platelet transfusion independence with platelet count
                less than 20,000/MM3, 50,000/MM3 and 100,000/MM3 as defined by
                first of two consecutive time points on which platelet counts
                meet these endpoints not related to transfusion.

            b.  Packed red blood cell transfusion and platelet transfusion 
                requirements.

            c.  Number of documented infections.

            d.  Number of bleeding episodes.
   
            e.  Number of days of hospitalization.

            Tumor response and response duration

            a.  Patient survival at 90 days post transplant.

      10.2  Safety variables

            Safety variables summarized will include incidence of adverse
            effects (including duration, severity, and outcome). Other safety
            variables reported will include the incidence and types of
            laboratory abnormalities. When the frequencies are sufficiently
            large, a Fishers exact test or Chi-square test may be used to
            compare enrolled subjects and historical controls including
            approximately 65 patients receiving autologous bone marrow
            transplants without expansion using the same preparative regimen.

      10.3  Biological Effect Variables

            The following biological effects will be summarized:

            Incidence of febrile neutropenia
            Time to platelet transfusion independence Antibiotic usage:
<PAGE>
 
            Number of days on antibiotics
            Number of total antibiotic days (# antibiotics x days)
            Number of days on antifungals
            Number of days on antivirals
            Number of documented infections
            Time to neutrophil engraftment
            Length of initial hospitalization

11.0  CLINICAL SUPPLIES

      A complete CPS description is provided in the Operators Manual. 1

      11.1  Materials and Supplies

            11.1.1         CPS

                    Aastrom will supply the CPS, which includes the cell culture
                    device. This device consists of three rigid plastic parts
                    (top, cell bed, and base), and a gas-permeable, water-
                    impermeable membrane. Additional components include the
                    means to facilitate air removal, seals to maintain leak-
                    proof integrity, and mechanical fasteners.

            11.1.2         Growth Medium

                    The culture medium is prepared at the clinical site by
                    supplementing a custom medium, produced to Aastrom
                    specifications in a FDA-registered facility in compliance
                    with GMPs (21 CFR 820), with glutamine and growth factors in
                    accordance with a standard operating procedure. Medium
                    components are shipped to or procured by the clinical
                    trial site according to instructions, specifications and
                    acceptance criteria defined by Aastrom.

            11.1.3         Supporting Tubing and Materials

                    Aastrom will supply the supporting tubing, harvest
                    container, and waste container. These components will be
                    supplied in sterile packages (for single use only).

      11.2  Packaging and Labeling

            The package labeling includes the statement "Caution.
            Investigational Device-Limited by United States Law to
            Investigational Use," Lot Number, "Sterile unless unit package is
            opened or damaged," and "Manufactured for Aastrom Biosciences, Inc."

      11.3  Assembly

<PAGE>
 
            Components of the CPS will be received at the clinical test sites
            in sterile packages.  The elements of the system will be connected
            under a laminar flow hood using aseptic technique provided in the
            Instructions for Use.  The instructions for use will be provided
            by Aastrom.
 
      11.4  Storage Requirements

            The devices may be stored indefinitely under typical laboratory
            conditions (50 degrees to 90 degrees F) and may be transported
            at temperatures up to 125 degrees F.

      11.5  Retrieval and/or Disposal of Investigational Materials

            At the completion of the cell production process and harvest,
            the devices will be considered biohazardous waste and disposed
            of in accordance with standard procedures at the test site.
            Record will be made of the date of disposal and initials of the
            individual responsible for their disposition.

12.0  STUDY MONITORING

      12.1  Medical Monitor

            The Medical Monitor will review the investigational plan, review
            adverse - reactions and/or unanticipated device effects as 
            reported by the Investigator and interpret clinical results.
            The Medical Monitor for this study is:

            Thomas E. Muller, Ph.D.
            Vice President Regulatory Affairs
            Aastrom Biosciences, Inc.

            Domino's Farms
            24 Frank Lloyd Wright Dr., Lobby L
            Ann Arbor, MI 48105
            Telephone: 313-930-5555
            Fax: 313-665-0485
      
      12.2  Clinical Monitor

            Aastrom has designated BRI International, Inc., as Clinical Monitor
            for this study. The Clinical Monitor is qualified by training and
            experience to oversee the conduct of the study.  The Clinical 
            Monitor's responsibilities include maintaining regular contact with
            the investigational site, through telephone contact, correspondence
            and on-site visits, to ensure that the investigational plan and FDA
            regulations are followed, that complete, timely and accurate data 
            are addressed, and that the site facilities continue to be 
            adequate.  Any questions regarding 




<PAGE>
 
      these matters should be addressed to:


      Diane Goleb, Senior Project Director
      BRI International, Inc.
      15825 Shady Grove Road
      Rockville, MD 20850
      Telephone: 301-548-0500
      Fax: 301-548-0519

12.3  Monitoring Procedures

      12.3.1         Preinvestigational Site Visit

              The Preinvestigational Site Visit, conducted by the Clinical
              Monitor, will involve review of relevant FDA regulations and
              inspection procedures, the investigational plan, requirements for
              IRB review and approval, completion and submission of forms,
              record keeping requirements, and administrative reports.

              The adequacy of the facilities, the availability of the
              investigators, the potential number of study participants, and the
              provisions for staff support will also be assessed during the
              Preinvestigational Site Visit.

      12.3.2         Routine Monitoring Visits

              Regular clinical monitoring visits to the investigational site 
              will be conducted by Aastrom and BRI.

              To ensure that the Principal Investigator and his staff understand
              and accept their defined responsibilities, the Clinical Monitor
              will maintain regular correspondence and perform periodic site
              visits during the course of the study to verify the continued
              acceptability of the facilities, compliance with the
              investigational plan and relevant FDA regulations, and the
              maintenance of complete records. Clinical monitoring will include
              review and resolution of missing or inconsistent results and
              source document checks (i.e., comparison of submitted study
              results to original reports) to assure the accuracy of the
              reported data.

              The Clinical Monitor will evaluate and summarize the results of
              each site visit in written reports, identifying any repeated data
              problems with any investigator and specifying recommendations for
              resolution of noted deficiencies.

<PAGE>
 
            12.3.3         Termination/Close-out Procedures

                    The Clinical Monitor, BRI, will notify the investigator in
                    writing of study completion/termination. The letter will
                    include the reason for termination, document unresolved
                    study discrepancies, and remind the investigator of her
                    obligation to retain records according to FDA regulations.

                    BRI will be responsible for meeting the FDA regulations with
                    regards to record keeping and records retention.

                    BRI will conduct a standard closure monitoring site visit.
                    The objectives of the closing visit are:

                    verify compliance with protocol and FDA regulations; ensure
                    accuracy and completeness of subject and administrative
                    files; resolve any outstanding questions/problems; verify
                    accountability for the test devices; ensure the proper
                    disposition of test devices and completed case report forms;
                    confirm the investigator's understanding of his/her
                    regulatory obligations, including record retention
                    requirements.

13.0  INVESTIGATOR OBLIGATIONS

      13.1  Principal Investigator Responsibilities
 
            13.1.1         Compliance

                    The Principal Investigator is responsible for ensuring that
                    the study is conducted according to the signed Investigator
                    Agreement, the investigational plan, and applicable FDA
                    regulations for protecting the rights, safety and welfare of
                    subjects under the Investigators care. The Principal
                    Investigator must follow the Investigator Agreement, the
                    investigational plan, and all conditions of FDA and IRB
                    approval.

            13.1.2         Awaiting Approval

                    Written confirmation of IRB approval must be provided to
                    Aastrom prior to the start of the study. The Principal
                    Investigator may determine whether potential subjects would
                    be interested in participating in a study but may not
                    request signature of the Informed Consent or allow any
                    subject to participate until FDA and the reviewing IRB have
                    approved the study.

            13.1.3  Supervising Device Use
<PAGE>
 
                The Principal Investigator must supervise all use of the CPS
                involving human subjects and may not supply the device to any
                person not specifically authorized to receive it according to
                the investigational plan and applicable regulations.

        13.1.4        Informed Consent

                The Principal Investigator shall make known to each subject the
                nature, expected duration, and purpose of the study; the
                administration and hazards of treatment; and available
                alternative therapy. Signed, written Informed Consent must be
                obtained prior to treatment. The original will be kept by the
                Principal Investigator and will be subject to review by Aastrom.
                Subjects will be informed that their medical records will be
                subject to review by Aastrom and the FDA. Subjects shall be
                informed that they are free to refuse participation in this
                clinical investigation; and if they participate, that they may
                withdraw from the study at any time without prejudicing future
                care.

        13.1.5        Device Disposal

                Upon completion or termination of the study of the Principal
                Investigators participation in the study, or at Aastrom's
                request, the Principal Investigator must return to Aastrom the
                device(s) or otherwise dispose of the device(s) as Aastrom 
                directs.

        13.1.6        Reporting Requirements

                Any life-threatening and/or unexpected serious (grade 3 or 4)
                toxicities will be reported immediately to the Study Chairman
                who, in turn, will notify the IRB (Surveillance Committee) and
                the study sponsor.

        13.1.7        Inspections and Records

                In accordance with the Investigator Agreement, the Principal
                Investigator shall permit authorized FDA employees to enter and
                inspect any site where the device or records pertaining to the
                device are held, and to inspect and copy all records relating
                to an investigation, including subject records.
        
        13.1.8        Investigator Records
        
                The Principal Investigator will maintain complete, accurate and
                current study records, including the following materials:

                Correspondence with FDA, Aastrom, BRI, and the IRB; Record of
                receipt of the device:
<PAGE>
 
                         Instructions for device use;
                         Subject Records, including Informed Consent, copies of
                         Case Report Forms and supporting documents (laboratory
                         reports, medical records, etc.); Log Book;
                         Current study protocol and a log of any significant
                         protocol deviations (e.g., lack of informed consent or
                         treatment of ineligible subjects);
                         Adverse event reports;
                         Certification that the investigational plan has been
                         approved by all of the necessary approving authorities;
                         The approved blank informed consent form and blank
                         subject report forms. Signed Investigator's Agreement
                         with CV's of the Principal Investigator and all
                         participating sub-investigators attached.

                         These records shall be maintained for a period of 2
                         years after the latter of the following two dates: the
                         date on which the investigation is terminated or
                         completed, or the date that the records are no longer
                         required for purposes of supporting a premarket
                         approval application or notice of completion of a
                         product development protocol.

                 13.1.9         Investigator Reports
                         The Principal Investigator will be responsible for the 
                         following reports:
                         13.1.9.1    Unanticipated Adverse Effects
                                     The Investigator will report any serious
                                     adverse effect, death or life-threatening
                                     problems that may reasonably be regarded as
                                     caused by the CPS to Aastrom and the
                                     reviewing IRB as soon as possible but no
                                     later than 10 working days after the event.
                                     All anticipated serious adverse effects
                                     should be documented with an explanation of
                                     any medical treatment administered.

                                     An unanticipated serious adverse effect is
                                     defined as any serious adverse effect on
                                     health or safety, or any life-threatening
                                     problem or death caused by, or associated
                                     with this device, if that effect, problem,
                                     or death was not previously identified in
                                     nature, severity, or degree of incidence in
                                     this investigational plan.

                         13.1.9.2    Withdrawal of IRB Approval
                
                                     The Principal Investigator will immediately
                                     notify to Aastrom (within 5 working days)
                                     if, for any reason, the IRB withdraws
                                     approval to conduct the investigation.

                                     The report will include a complete 
                                     description of the 

<PAGE>
 
                                 reason(s) for which approval was withdrawn.

                     13.1.9.3    Departure from Protocol

                                 The Principal Investigator shall notify Aastrom
                                 and the IRB of any deviation from the
                                 investigational plan made to protect the life
                                 or physical well-being of a subject in an
                                 emergency. A full report should be made as soon
                                 as possible and in no case later than 5 working
                                 days after the emergency. NOTE: Except in such
                                 an emergency, prior approval by Aastrom is
                                 required for changes in, or deviations from,
                                 the investigational plan. If such changes or
                                 deviations may affect the scientific soundness
                                 of the plan or the rights, safety or welfare of
                                 subjects, FDA and IRB approval are also
                                 required.

                     13-1.9.4    Progress Reports

                                 The Principal Investigator is required to
                                 submit progress and administrative reports to
                                 Aastrom, and to the reviewing IRB. Reports will
                                 include the number of study subjects, a summary
                                 of all adverse reactions, and a general
                                 description of the study's progress.

                     13.1.9.5    Final Report
  
                                 The Principal Investigator will submit a final
                                 report to Aastrom within four weeks following
                                 termination of the study or that site's
                                 participation in the study, and within three
                                 months to the IRB.

                     13.1.9.6    Other Reports
 
                                 Upon request, the Principal Investigator will
                                 provide accurate, complete, and current
                                 information to Aastrom Biosciences, Inc., the
                                 FDA, and to the reviewing IRB.

                     13.1.9.7    Investigator Materials Accountability

                                 All devices received and used by the Principal
                                 Investigator will be inventoried and accounted
                                 for throughout the study. The devices will be
                                 stored in a secured area. Upon study
                                 completion, all unused devices will be returned
                                 to Aastrom. A final inventory will then be
                                 performed.

                     13.1.9.8    Laboratory Normal Values
<PAGE>
 
                The investigational site must maintain a current copy of
                normal values used by that site's clinical laboratory.  The
                Principal Investigator must assess the clinical significance
                of all abnormal laboratory values.  All clinically significant
                abnormalities must be characterized by the Principal 
                Investigator as treatment-related, not treatment-related, or
                of uncertain etiology; all abnormalities judged treatment-
                related or of uncertain etiology must be repeated.  Any
                abnormal values that persist should be followed at the
                Principal Investigators discretion.  In some cases, significant
                changes within the normal range will require similar judgment.

      13.1.9.9  Disclosure of Data

                All information concerning this clinical study are considered
                confidential. The Principal Investigator agrees to use this
                information only to accomplish this study and will not use it
                for other purposes without Aastrom's written consent.

                It is understood by the Principal Investigator that the 
                information developed in the clinical study may be disclosed
                as required to the United States Food and Drug Administration.

                In order to allow for the use of the information derived from
                the clinical studies, it is understood that there is an 
                obligation to provide Aastrom with complete test results and
                all data developed in the study.

                Aastrom has no objection to the publication of the results of
                this study by the investigator.  However, a pre-publication
                manuscript must be provided to Aastrom at least 30 days before
                the manuscript is submitted to a publisher.

                Aastrom agrees that before it publishes any results of the 
                study, a pre-publication manuscript will be provided to the
                investigator for review at least 30 days prior to the submission
                to a publisher.

      13.1.10   Records Retention and Access
                
                FDA regulations require that, following completion of a 
                clinical trial, a copy of all subject and administrative
                



 
<PAGE>
 
               records pertaining to that study be maintained by the
               Investigator for 2 years after FDA approval of the
               investigational device, or, if no application for approval is
               filed or intended to be filed, for 2 years after all
               investigations have been completed, terminated, or discontinued,
               whichever time period is longer.

               Completed data records must be made available for review by
               Aastrom, the Clinical Monitor, and FDA. To ensure the accuracy of
               data submitted, it is mandatory that representatives of Aastrom
               and of the FDA have access to source documents (i.e., subject
               medical records, charts, laboratory reports, etc.). Subject
               confidentiality will be protected at all times.

               Aastrom reserves the right to terminate the study for refusal of
               the Principal Investigator to supply source documentation of work
               performed in this study.

14.0  REFERENCES

1.    Traycoff CM, Kosak ST, Grigsby S, Srour EF. Evaluation of ex vivo
expansion potential of cord blood and bone marrow hematopoietic progenitor cells
using cell tracking and limiting dilution analysis. Blood. 1995;85:2059-68.

2.    Sandstrom CE, Bender JG, Papoutsakis ET, Miller WM. Effects of CD34- cell
selection and perfusion on ex vivo expansion of peripheral blood mononuclear
cells. Blood. 1995;86:958-70.

3.    Moore MAS. Expansion of myeloid stem cells in culture. Seminars in 
Hematology. 1995;32:183-200.

4.    Verfaillie CM. Direct contact between human primitive hematopoietic 
progenitors and bone marrow stroma is not required for long-term in vitro 
hematopoiesis. Blood. 1992;79:2821-6.

5.    Koller MR. Paisson MA, Manchel I. Palsson BO. Long-term culture-initiating
cell
<PAGE>
 
expansion is dependent on frequent medium exchange combined with stromal and 
other accessory cell effects. Blood. 1995;86:1784-93.

6.  Koller MR, Bender JG, Papoutsakis ET, Miller WM. Effects of synergistic 
cytokine combinations, low oxygen, and irradiated stroma on the expansion of 
human cord blood progenitors. Blood. 1992;80:403-1 1.

7.  Haylock DN, To LB, Dowse TL, Juttner CA, Simmons PJ. Ex vivo expansion and 
maturation of peripheral blood CD34+ cells into the myeloid lineage. Blood. 
1992;80: I 405-12.

8.  Rafii S, Shapiro F, Pettengell R, et al. Human bone marrow microvascular 
endothelial cells support long-term proliferation and differentiation of myeloid
and megakaryocytic progenitors. Blood. 1995;86:3353-63.

9.  McKenna HJ, De Vries P, Brasel K, Lyman SD, Williams DE. Effect of flt3 
ligand on the ex vivo expansion of human CD34+ hematopoietic progenitor cells. 
Blood. 1995;86:3413-20.

10. Srour EF, Brandt JE, Bdddell RA, Grigsby S, Leemhuis T, Hoffman R. Long-term
generation and expansion of human primitive hematopoietic progenitor cells in 
vitro. Blood. 1993;81:661-9.

11. Koller MR, Bender JG, Miller WM, Papoutsakis ET. Expansion of primitive 
human hematopoietic progenitors in a perfusion bioreactor system with IL-3, 
IL-6, and stem cell factor. Sio Technology. 1993;1 1:358-63.

12. Brandt JE, Briddel RA, Srour EF, Leemhuis TS, Hoffman R. Role of c-kit 
ligand in the expansion of human hematopoietic progenitor cells. Blood. 
1992;79:634.

13. Brugger W. Macklin W. Heimfeld S. Berenson RJ. Merteismann R. Kanz L. Ex 
vivo expansion of enriched peripheral blood CD34+ progenitor ce(Is by stem cell 
factor, interleukin-l b (IL-1 b), IL-6, IL-3, interferon-gamma, and 
erythropoietin. Blood. 1993;81:2579-84.

<PAGE>
 
14.  Killer MR, Emerson SG, Paisson BO. Large-scale expansion of human stem and 
progenitor cells from bone marrow mononuclear cells in continuous perfusion 
cultures. Blood. 1993;82:378-84.

15.  Verfaillie CM, Catanzarro PM, Li W. Macrophage inflammatory protein la, 
interleukin 3 and diffusible marrow stromal factors maintain human hematopoietic
stem cells for at least eight weeks in vitro. J Exp Med. 1994; 1 79:643-9.

16.  Coutinho LH, Will A, Radford J, Schiro R, Testa NG, Dexter TM. Effects of 
recombinant human granulocyte colony-stimulating factor (CSF), human granulocyte
macrophage-CSF, and Gibbon interleukin-3 on hematopoiesis in human long-term 
bone marrow culture. Blood. 1990;75:2118-29.

17.  Shapiro F, Yao T-J, Raptis G, Reich L, Norton L, Moore MAS. Optimization of
conditions for ex vivo expansion of CD34- cells from patients with stage IV 
breast cancer. Blood. 1994;84:3567-74.

18.  Brugger W. Heimfeld S, Berenson RJ, Merteismann R, Kanz L. Reconstitution 
of hematopoiesis after high-dose chemotherapy by autologous progenitor cells 
generated ex vivo. NEJM. 1995;333:283-7.

19.  Champlin RE, Mehra R, Gajewski J. et al. Ex vivo expanded progenitor cell 
transplantation in patients with breast cancer. Blood. 1995;(in press):(abs)

20.  Hortobagyi GN, Bodey GP, Buzdar AU, et al. Evaluation of high dose versus 
standard FAC chemotherapy for advanced breast cancer in protected environment 
unit: a prospective randomized study. J Clin Oncol. 1987;5:354-64.

21.  Hortobagyi GN. Multidisciplinary management of advanced primary and 
metastatic breast cancer. Cancer. 1994:74 Suppi.416-23.
<PAGE>
 
22.  Aisner J, Cirrincione C, Perloff M, et al.  Combination chemotherapy for 
metastatic or recurrent carcinoma of the breast - A randomized phase III trial
comparing CAF versus VATH versus VATH alternating with CMFVP:  Cancer and
Leukemia Group B Study 8281.  J Clin Oncol. 1995; 13:1443-52.

23.  Hayes DF, Henderson IC, Shapiro CL.  Treatment of metastatic breast 
cancer:  Present and future prospects.  Semin Oncol. 1995; 22 Suppl. 5:5-21.

24.  Henderson IC.  Chemotherapy for advanced disease.  In:  Harris JR, Hellman 
S, Henderson IC, Kinne DW, eds.  Breast Diseases.  Philadelphia:  JB Lippincott;
1987:428-79.

25.  Cheson BD. Bone marrow transplant trials for breast cancer.  Oncology. 
1991; 5:55-62.

26.  Antman K, Ayash L. Elias A, et al.  A phase 11 study of high-dose 
cyclophosphamide, thiotepa, and carboplatin with autologous marrow support in 
women with measurable advanced breast cancer responding to standard-dose 
therapy. J Clin Oncol. 1992:10:102-10.

27.  Eddy DM. High-dose chemotherapy with autologous bone marrow 
transplantation for the treatment of metastatic breast cancer.  J. Clin Oncol. 
1992: 10:657-70.

28.  Broun ER, Sridhara R. Sledge GW, et al. Tandem autotransplantation for the 
treatment of metastatic breast cancer.  Journal of Clinical Oncology. 1995: 
13:2050-5.

29.  Antman K, Corringhman R, De Vries E., et al.  Dose intensive therapy in 
breast cancer.  Bone Marrow Transplant. 1.092;10 Suppl. 1:67-73.

30.  Bezwoda WR, Seymour L, Dansey RD.  High-dose chemotherapy with 
hematopoietic
<PAGE>
 
rescue as primary treatment for metastatic breast cancer: A randomized trial. 
Journal of Clinical Oncology. 1995;13:2483-9.

31.  Rosti G, Lasset C, Albertazzi L, et al. The EBMT data on high-dose 
chemotherapy in breast cancer. Bone Marrow Transplant. 1992;10 Suppi. 2:37.

32.  Hryniuk WM, Bush H. The importance of dose intensity in chemotherapy of 
metastatic breast cancer. J Clin Oncol. 1984;2:1281-7.

33.  Peters WP, Ross M. Vredenburgh JJ, et al. High-dose chemotherapy and 
autologous bone marrow support as consolidation after standard-dose adjuvant for
high-risk primary breast cancer. J Clin Oncol. 1993;1 1:1 132-43.

34.  Vaughan WP. Autologous bone marrow transplantation in the treatment of 
breast cancer: Clinical and technologic strategies. Semin Oncol. 1993;20 Suppi. 
6:55-8.

35.  Ayash LJ, Elias A. Wheeler C, et al. Double dose-intensive chemotherapy
with autologous marrow and pedpheral-blood progenitor-cell support for
metastatic breast cancer: A feasibility study. J Clin Oncol. 1994;12:37-44.

36.  Crown J. Vahdat L. - Fennelly D, et al. High-intensity chemotherapy with 
hematopoietic support in breast cancer. Ann NY Acad Sci. 1993;698:378-88.

37.  Dunphy FR, Spitzer G, Buzdar AU, et al. Treatment of estrogen 
receptor-negative or hormonally refractory breast cancer with double high-dose 
chemotherapy intensification and bone marrow support. J Clin Oncol. 
1990;8:1207-16.

38.  Hortobagyi GN, Dunphy F. Buzdar AU, Spitzer G. Dose intensity studies in 
breast cancer-Autologous bone marrow transplantation. Prog Clin Biol Res. 
1990;354B:1 95-209.

<PAGE>
 
39.  Peters WP, Shpall EJ, Jones RB, et al. High dose combination alkylating 
agents with bone marrow support as initial treatment for metastatic breast 
cancer. J Clin Oncol. 1998;6:1368-76.

40.  Teicher S, Cucchi C, Lee J, et al. Alkylating agents. In vitro studies of 
cross-resistence patterns in human tumor cell lines. Cancer Res. 1986;46: 
4379-83.

41.  Williams SF, Bitran JD, Kaminer 1, et al. A phase 1-11 study of bialkylator
chemotherapy high-dose thioptepa and cyclophosphamide with autologous bone 
marrow reinfusion in patients with advanced cancer. J Clin Oncol. 1987;5:260-5.

42.  Eder JP, Antman K, Elias A, et al. Cyclophosphamide and thiotepa with 
autologous bone marrow transplantation in patients with solid tumors. JNCI. 
1988;80:1221-6.
<PAGE>
 
LOYOLA UNIVERSITY MEDICAL CENTER                                       EXHIBIT C
                

                Schedule of Laboratory and Clinical Equipment


 
 
                                                                                            
------------------------------------------------------------------------------------------------------------------------------------
Item                                        Supplier    Cat. No.   UNIT QTY:   UNIT/PKG:   PKG:    COST/PKG:   Total Cost:
------------------------------------------------------------------------------------------------------------------------------------
EQUIPMENT:
------------------------------------------------------------------------------------------------------------------------------------
18 degrees C to 50 degrees C thermometer       SP                      2           1        2         $36.00        $72.00
------------------------------------------------------------------------------------------------------------------------------------
neg 5 degrees C to 20 degrees C thermometer    SP                      2           1        2         $21.91        $43.82
------------------------------------------------------------------------------------------------------------------------------------
P-1000 Pipetman                              Gilson                    1           1        1        $219.50       $219.50
------------------------------------------------------------------------------------------------------------------------------------
P-200 Pipetman                               Gilson                    1           1        1        $219.50       $219.50
------------------------------------------------------------------------------------------------------------------------------------
P-20 Pipetman                                Gilson                    1           1        1        $219.50       $219.50
------------------------------------------------------------------------------------------------------------------------------------
Repeater Pipet                              Eppendorf                  1           1        1        $350.00       $350.00
------------------------------------------------------------------------------------------------------------------------------------
CPS Processor                                Aastrom                   1           1        1     $26,940.00    $26,940.00
------------------------------------------------------------------------------------------------------------------------------------
CPS Incubator                                Aastrom                   5           1        5     $15,518.00    $77,590.00
------------------------------------------------------------------------------------------------------------------------------------
Interim Monitor                              Aastrom                   1           1        1      $3,000.00     $3,000.00
------------------------------------------------------------------------------------------------------------------------------------
Gas Regulator Assembly                       Aastrom                   3           1        3        $360.00     $1,080.00         
------------------------------------------------------------------------------------------------------------------------------------
Tubing Heat Sealer                            Sebra                    1           1        1      $3,298.00     $3,298.00
------------------------------------------------------------------------------------------------------------------------------------
Incubator Rack                                Metro                    2           1        2        $346.00       $692.00
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               $113,724.32
------------------------------------------------------------------------------------------------------------------------------------
 

 
<PAGE>
 
                                   EXHIBIT D
                       SCHEDULE OF CLINICAL TRIAL BUDGET




 
 
Item                                   Cost per patient
----                                   ---------------- 
                                    
Supplies                                      $  190.00
Reagents                                         167.52
Bone Marrow Transplant Laboratory                630.00
Other                                            128.00
Labor and fringes                              2,454.45
                                              ---------
          Subtotal                             3,569.97
Indirect                                         680.03
                                              ---------
          Total                               $4,250.00
                                              =========


Institution shall invoice Aastrom on a monthly basis as patient marrows are
harvested and expansion is initiated.

                                       1

<PAGE>
 
                                   EXHIBIT D
                         SCHEDULE OF MILESTONE PAYMENTS


COMPENSATION AMOUNT AND SCHEDULE
--------------------------------

1.   COMPENSATION AMOUNT
     -------------------

     Aastrom agrees to provide, according to the terms and conditions set
     forth herein, and contingent upon the conducting of the Study as specified
     by the Protocol, a total compensation of Forty Two Thousand Five Hundred US
     Dollars ($42,500), or Four Thousand Two Hundred Fifty US Dollars ($4,250)
     per subject according to the compensation schedule set forth below in
     Section 2 of this Exhibit D.  The $4,250 per subject compensation
     represents any and all compensations associated with the Study.  The total
     compensation amount is based upon the actual number of subjects to be
     completed and may be adjusted based upon the actual number of subjects
     actually completed.  If a subject is removed from the Study for any reason,
     payment for that subject will be prorated.

2.   COMPENSATION SCHEDULE
     ---------------------

     The payee identified in Section 3 of this Exhibit D below will be
     remunerated according to the following schedule:


 
                                               Percentage       Amount
                                               -----------   ------------
                                                       
                                                             (US DOLLARS)
 
          Initial Payment                              25%    $10,625.00
 
          50% Subjects Completed                       25%    $10,625.00
 
          All Subjects Completed                       25%    $10,625.00
 
          100% Subjects Case Report Forms
          Completed and Submitted                      15%    $ 6,375.00
 
          Final Report                                 10%    $ 4,250.00


3.   NAME AND ADDRESS OF PAYEE
     -------------------------
 
             Payment made to:      Loyola University Medical Center
                                   Dr. Patrick Stiff
                                   Division of Hematology/Oncology
                                   2160 South First Avenue
                                   Cancer Center - Room 240
                                   Maywood, IL  60153

4.   TERMINATED STUDY - PAYMENT OBLIGATIONS
     --------------------------------------

     If either the Institution of Aastrom terminates the Study prior to its
     originally planned termination date, Aastrom shall compensate the
     Institution based upon the portion of the Study completed at the date of
     termination.  This partial payment will be prorated according to the number
     of satisfactorily completed subject visits.

                                       2