September
7, 2014


 


	To:	Bone
    Biologics, Inc. (the “Company”)
	To:	Musculoskeletal
    Transplant Foundation (“MTF”)


 


(each, a
“Party” and together with AFH Holding & Advisory (“AFH Advisory”), the “Parties”)


 


Dear Sirs,


 


Side
Letter Agreement (the “Agreement”) 


 


The
purpose of this Agreement is to set out the terms among the Parties for their relationship in respect of the Company.


 


BACKGROUND


 


	 	A.	The
    Parties entered into that certain Amended and Restated Letter of Intent (the “LOI”) dated May 7, 2014, as amended,
    with respect to the transactions described below wherein it is contemplated that, among other things the Company  shall
    consummate a business combination (the “Business Combination”) with a Delaware corporation (“Acquisition
    Co.”) publicly reporting pursuant to the United States Securities Exchange Act of 1934, as amended (the “Exchange
    Act”), pursuant to a reverse merger or other similar transaction, as agreed to by the parties resulting in the Company
    becoming a public company (“PubCo”).
	 	 	 
	 	B.	Pursuant
    to the terms of the LOI, after the consummation of the Business Combination, AFH Advisory shall use its reasonable best efforts
    to assist Acquisition Co. in certain other transactions, including procuring one or more investors for a private financing,
    whether debt or equity, of a minimum of $2.5 million and up to a maximum of $5.0 million (the “Private Placement”).
	 	 	 
	 	C.	The
    Parties have agreed that AFH Advisory and MTF will receive certain compensation in case certain commercial milestones are
    achieved by specified times following the closing of the Private Placement.


 


AGREEMENT


 


In
consideration of the foregoing, and upon execution of this Agreement, the Parties agree as follows:


 


	1.	MILESTONES
	 	 
	1.1	The
    Company and/or Pubco will use commercially reasonable efforts to achieve the following milestones (the “Milestone
    Targets”) by the specified times (the “Milestone Periods”) following the closing of the Private
    Placement:


 


	 	(i)	Complete
    media screening studies of cell line within two (2) to three (3) months:
	 	 	 
	 	(ii)	Initiate
    manufacturing of master cell bank within three (3) to four (4) months;


 


 


 




    	 



    	 



    

 


 


 


	 	(iii)	Initiate
    formulation studies for the cGMP manufacturing process once sufficient Nell-1 material is available within approximately eight
    (8) to ten (10) months;
	 	 	 
	 	(iv)	Initiate
    a pre-clinical bioreactor production run for toxicology material within nine (9) to twelve (12) months following the closing
    of the Private Placement;
	 	 	 
	 	(v)	Initiate
    pre-clinical toxicology studies to include carcinogenicity and reproductive within approximately eleven (11) to thirteen (13)
    months;
	 	 	 
	 	(vi)	Finalize
    refinement of the manufacturing process within approximately twelve (12) to fourteen (14) months;
	 	 	 
	 	(vii)	Initiate
    cGMP bioreactor run within twelve (12) to fourteen (14) months or after completion of (v), and
	 	 	 
	 	(viii)	Request
    an IDE meeting to review the clinical safety plan within eighteen (18) to twenty (20) months.


 


	2.	COMPENSATION
	 	 
	2.1	AFH
    Advisory and MTF will each receive restricted shares equal to and not to exceed 2.5% of the fully diluted shares of the Company
    at the time of the completion of the Milestone Targets. Notwithstanding anything contained herein to the contrary, it is understood
    that such 2.5% will be aggregated with all other applicable amounts in calculating the 10% of fully diluted shares of the
    Company owed to AFH Advisory in the form of the Advisor Shares (as such term is defined in the LOI).
	 	 
	3.	MISCELLANEOUS
    PROVISIONS
	 	 
	3.1	Governing
    Law, Dispute Resolution and Jurisdiction.  This Agreement shall be governed by and construed in accordance with
    the laws of the State of Delaware without giving effect to the conflicts of laws principles thereof.  Each party
    hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of Delaware
    and of the United States of America located in the State of Delaware for any disputes, controversies, or claims arising out
    of or relating to this Agreement and the transactions contemplated hereby.  The parties hereby irrevocably waive
    any objection to jurisdiction and venue for any action instituted hereunder and shall not assert any defense based on lack
    of jurisdiction or venue or based upon forum non conveniens.  The parties agree to submit to the in personam jurisdiction
    of such courts.  The prevailing party in any such dispute shall be entitled to recover from the other party its
    reasonable attorneys’ fees, costs and expenses.
	 	 
	3.2	Counterparts.  This
    Agreement may be signed in two or more counterparts, each of which shall constitute an original, and all of which together
    shall constitute one and the same agreement.  The exchange of copies of this Agreement and of signature pages by
    facsimile transmission or by email transmission in portable digital format, or similar format, shall constitute effective
    execution and delivery of such instrument(s) as to the parties and may be used in lieu of the original for all purposes.  Signatures
    of the parties transmitted by facsimile or by email transmission in portable digital format, or similar format, shall be deemed
    to be their original signatures.
	 	 
	3.3	Entire
    Agreement.  This Agreement constitutes the complete and entire agreement between the parties pertaining to the
    subject matter contained herein and supersedes all prior and contemporaneous discussions, negotiations, understandings, agreements,
    representations, and understandings of the Parties, whether oral or written, expressed or implied.  Each of the
    Parties acknowledge that no other party, nor any agent or attorney of any other party, has made any promise, representation,
    or warranty whatsoever, express or implied, and not contained herein, concerning the subject matter hereof to induce the party
    to execute or authorize the execution of this Agreement, and acknowledges that the party has not executed or authorized the
    execution of this instrument in reliance upon any such promise, representation, or warranty not contained herein.


 


 


 




    	 



    	 



    

 


 


 


If
you agree to the foregoing, please return a signed copy of this Agreement
to the undersigned no later than September 8, 2014, after
which time this Agreement will expire if not so accepted.


 


Very truly
yours,


 


	AFH
    HOLDING AND ADVISORY, LLC	 
	 	 	 
	By:	/s/
    Amir F. Heshmatpour	 
	Name:	Amir
    F. Heshmatpour	 
	Title:	Managing
    Director	 
	 	 	 
	BONE
    BIOLOGICS, INC.	 
	 	 	 
	By:	/s/
    Michael Schuler	 
	Name:	Michael
    Schuler	 
	Title:	CEO	 
	 	 	 
	THE
    MUSCULOSKELETAL TRANSPLANT FOUNDATION	 
	 	 	 
	By:	/s/
    Michael J. Kawas	 
	Name:	Michael
    J. Kawas	 
	Title:	EVP/CFO