Document:

Exhibit

Exhibit  10.1

THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into this 27th of June 2017, among Powell Industries, Inc., a Delaware corporation (“Borrower”), Powell Electrical Systems, Inc., and Powell Industries International, Inc. (collectively, “Guarantors”), Bank of America, N.A., as Administrative Agent, Swingline Lender and L/C Issuer under the Credit Agreement (in such capacity as administrative agent, together with its successors in such capacity, “Administrative Agent”), and each lender from time to time party to the Credit Agreement (collectively, “Lenders” and individually, a “Lender”).  Capitalized terms used but not defined in this Amendment have the meaning given them in the Credit Agreement (defined below).
RECITALS
A.    Borrower and Guarantors (collectively, the “Loan Parties”), Administrative Agent and Lenders are party to that certain Credit Agreement dated as of December 31, 2013 (as amended by that certain First Amendment to Credit Agreement dated as of March 28, 2014, that certain Second Amendment to Credit Agreement dated as of December 31, 2014, and as further amended, restated or supplemented from time to time, the “Credit Agreement”).  As of the date hereof, Bank of America, N.A. is the sole Lender under the Credit Agreement.
B.    Borrower, Guarantors, Administrative Agent and Lender have agreed to amend the Credit Agreement, subject to the terms and conditions of this Amendment.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the undersigned hereby agree to make the following amendments to the Credit Agreement, which amendments shall be effective as of the Third Amendment Effective Date set forth below:
1.Amendments to Credit Agreement. 
(a)    Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended to amend and restate the definitions of “Applicable Rate” and “Maturity Date” in their entirety as follows:  
“Applicable Rate” means, for any day, the rate per annum set forth below opposite the applicable Level then in effect, it being understood that the Applicable Rate for (a) Revolving Loans that are Base Rate Loans shall be the percentage set forth under the column “Base Rate”, (b) Revolving Loans that are Eurocurrency Rate Loans shall be the percentage set forth under the column “Eurocurrency Rate”, (c) the Letter of Credit Fee shall be the percentage set forth under the column “Letter of Credit Fee”, and (d) the Commitment Fee shall be the percentage set forth under the column “Commitment Fee”:
	
						
	Pricing Level
	Eurocurrency Rate
	Base Rate
	Letter of Credit Fee
	Commitment Fee

	Level I
	1
	%
	-0.50%
	0.875%
	0.20%

	Level II
	1.25
	%
	-0.25%
	1.00%
	0.20%

1

Level I shall apply whenever a Cash Collateral Period is in effect.  If no Cash Collateral Period is in effect, then Level II shall apply.  Level I of the Applicable Rate shall be in effect commencing on the Third Amendment Effective Date. Thereafter, any adjustment to the Applicable Rate shall be made as of the first day of each fiscal quarter for which a Compliance Certificate is delivered pursuant to Section 6.02(a) to the Administrative Agent, based on whether a Cash Collateral Period is in effect for such fiscal quarter.  Any adjustment to the Applicable Rate shall be applicable to all Credit Extensions then existing or subsequently made or issued.  

“Maturity Date” means June 27, 2022, provided, however, that, if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.

(b)    The definition of “Eurocurrency Rate” in Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended to delete the two proviso clauses after clause (b) of such definition, and to replace them with the following:

“provided that (i) to the extent a comparable or successor rate is approved by the Administrative Agent in connection with any rate set forth in this definition, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent, and (ii) if the Eurocurrency Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.”

(c)    Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended to add the new defined terms below in their appropriate alphabetical order:  
“Cash Collateral Period” means each fiscal quarter during which the Borrower has pledged its Level I Cash Collateral Account to the Administrative Agent as security for the Obligations and its Level I Cash Collateral Account complies with the requirements in Section 5.21(c).  The initial Cash Collateral Period is deemed to have commenced as of April 1, 2017, and will terminate on the last day of the fiscal quarter in which the Borrower satisfies the Level II Pricing Covenants in accordance with Section 7.11(c).  Thereafter, each Cash Collateral Period may start on the first day of a fiscal quarter in accordance with Section 7.11, and will end on the last day of a fiscal quarter upon the satisfaction of the Level II Pricing Covenants for such fiscal quarter.  While the initial Cash Collateral Period shall be deemed to have commenced on April 1, 2017, the Borrower’s initial obligation to cause its Level I Cash Collateral Account to comply with the requirements of Section 5.21 shall not commence until June 27, 2017. 

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“Consolidated Current Ratio” means, as of any date of determination, for the Borrower and its Subsidiaries on a Consolidated basis, the ratio of (%4) the aggregate amount of all of assets which would, in accordance with GAAP, be properly defined as current assets, to (%4) the aggregate amount of all current liabilities as determined in accordance with GAAP, but in any event shall include all liabilities except those having a maturity date which is more than one year from the date as of which such computation is being made.

“Level I Cash Collateral Account” means the designated deposit account of the Borrower at Bank of America pledged by the Borrower to the Administrative Agent as collateral and security for the Obligations. 

“Third Amendment Effective Date” means April 1, 2017.

(d)    Section 5.21 (Collateral Representations) of the Credit Agreement is hereby amended to add a new clause (c) at the end of such section as follows:
“(c)  Level I Cash Collateral Account. Commencing on the Third Amendment Effective Date and thereafter at any time that the Borrower is not in compliance with the Level II Pricing Covenants, Borrower represents and warrants that it maintains a cash balance in its Level I Cash Collateral Account equal to (at all times) at least 102% of the Outstanding Amount of all Revolving Loans and L/C Obligations.  Any amounts on deposit in excess of the required Level I Cash Collateral Account amount, will be released to the Borrower by the Agent promptly upon the Borrower’s request, so long as no Event of Default exists and is continuing.”
(e)    Section 7.06 (Restricted Payments) of the Credit Agreement is hereby amended to delete clauses (d) and (e) in their entirety and to replace them with the following clauses (d), (e) and (f):
“(d)     During any Cash Collateral Period, Borrower is only permitted to pay quarterly dividends to its shareholders in cash so long as, the Consolidated Current Ratio for the most recent Measurement Period on a Pro Forma Basis, after giving effect to such dividend, is greater than 1.10 to 1.00;

(e)    If no Cash Collateral Period is in effect, Borrower is only permitted to pay quarterly dividends to its shareholders in cash so long as the Consolidated Leverage Ratio for the most recent Measurement Period on a Pro Forma Basis, after giving effect to such cash dividend, would not exceed 1.75 to 1.00; and

(f)    Borrower may purchase or otherwise acquire shares of its common stock pursuant to share repurchase programs authorized, from time to time, by its board of directors, in an amount not to exceed $35,000,000 in the aggregate, from the Third Amendment Effective Date through the Maturity Date.”

(f)    Section 7.11 (Financial Covenants) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
“7.11  Financial Covenants.  

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	i.
	During any Cash Collateral Period, each of the Loan Parties shall not permit the Consolidated Current Ratio as of the end of any Measurement Period ending as of the end of any fiscal quarter of the Borrower during which a Cash Collateral Period is in effect, to be less than 1.10 to 1.0 (the “Level I Pricing Covenant”).  The failure by the Loan Parties to comply with the Level I Pricing Covenant during any Cash Collateral Period shall constitute an immediate Event of Default.

		
	ii.
	If no Cash Collateral Period is in effect with respect to a fiscal quarter, each of the Loan Parties covenants and agrees to comply as follows (collectively, the “Level II Pricing Covenants”): 

(i)    no Loan Party shall permit the Consolidated Leverage Ratio as of the end of any Measurement Period ending as of the end of any fiscal quarter of the Borrower, to be greater than 2.75 to 1.00; and
(ii)    no Loan Party shall permit the Consolidated Fixed Charge Coverage Ratio as of the end of any Measurement Period ending as of the end of any fiscal quarter of the Borrower, to be less than 1.25 to 1.0.
The failure by the Loan Parties to comply with the Level II Pricing Covenants while no Cash Collateral Period is in effect shall constitute an immediate Event of Default.
		
	iii.
	If the Borrower is in compliance with the Level II Pricing Covenants as of the end of any Measurement Period for any two consecutive fiscal quarters (commencing no earlier than the two consecutive fiscal quarters ending September 30, 2017 and December 31, 2017), Administrative Agent agrees to release all of its Liens in the Level I Cash Collateral Account (except for any bankers’ Liens, rights of set-off or other similar Liens associated with deposit accounts in the ordinary course of business to the extent the Borrower maintains such account at its option) and to terminate the Cash Collateral Period effective as of the last day of such fiscal quarter for which Borrower complied with the Level II Pricing Covenants.

		
	iv.
	At any time that the Borrower is not in compliance with the Level II Pricing Covenants, (i) the Borrower covenants and agrees it shall establish, pledge and maintain a cash balance in its Level I Cash Collateral Account equal to (at all times) at least 102% of the Outstanding Amount of all Revolving Loans and L/C Obligations, and (ii) the Borrower shall be required to comply with the Level I Pricing Covenant.

		
	v.
	The foregoing financial covenants, as applicable, shall be reported in each quarterly and annual Compliance Certificate delivered by the Borrower to the Administrative Agent.”

2.    Conditions.  This Amendment shall be effective as of April 1, 2017 (the “Third Amendment Effective Date”) once each of the following have been delivered to Administrative Agent in form and substance satisfactory to Administrative Agent and Lender:

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(a)    this Amendment executed by the Loan Parties, Administrative Agent, and Lender; 
(b)    Officer’s Certificate of the Borrower and each of the Guarantors, certifying as to incumbency of officers, specimen signatures, organizational documents, and resolutions adopted by the board of directors approving this Amendment, and ratifying their respective obligations under the Credit Agreement;
(c)    a duly executed and delivered Security Agreement between the Borrower and the Administrative Agent regarding the Level I Cash Collateral Account;
(d)    evidence that the Borrower has established and funded the Level I Cash Collateral Account;
(e)    payment by the Borrower to Administrative Agent for the account of the Lender, of an upfront/extension fee of $93,750 which fee shall be fully earned and non-refundable upon execution of this Amendment; and
(f)    such other documents as Administrative Agent and Lender may reasonably request. 
3.    Representations and Warranties.  Each Loan Party represents and warrants to Administrative Agent and Lender that (a) it possesses all requisite power and authority to execute, deliver and comply with the terms of this Amendment, (b) this Amendment has been duly authorized and approved by all requisite corporate action on the part of such Loan Party, (c) no other consent of any Person (other than Administrative Agent and Lender) is required for this Amendment to be effective, (d) the execution and delivery of this Amendment does not violate its organizational documents, (e) the representations and warranties in each Loan Document to which it is a party are true and correct in all material respects on and as of the date of this Amendment as though made on the date of this Amendment (except to the extent that such representations and warranties speak to a specific date), (f) it is in full compliance with all covenants and agreements contained in each Loan Document to which it is a party, and (g) no Default or Event of Default has occurred and is continuing.  The representations and warranties made in this Amendment shall survive the execution and delivery of this Amendment.  No investigation by Administrative Agent or Lender is required for Administrative Agent and Lender to rely on the representations and warranties in this Amendment.
4.    Scope of Amendment and Waiver; Reaffirmation; Release.  Except as affected by this Amendment, the Loan Documents are unchanged and continue in full force and effect.  However, in the event of any inconsistency between the terms of the Credit Agreement (as amended by this Amendment) and any other Loan Document, the terms of the Credit Agreement shall control and such other document shall be deemed to be amended to conform to the terms of the Credit Agreement.  Each Loan Party hereby reaffirms its obligations under the Loan Documents to which it is a party and agrees that all Loan Documents to which it is a party remain in full force and effect and continue to be legal, valid, and binding obligations enforceable in accordance with their terms (as the same are affected by this Amendment).  Each Loan Party hereby releases Administrative Agent and Lender from any liability for actions or omissions in connection with the Credit Agreement and the other Loan Documents prior to the date of this Amendment.
5.    Miscellaneous. 
(a)    No Waiver of Defaults.  This Amendment does not constitute (i) a waiver of, or a consent to, (A) any provision of the Credit Agreement or any other Loan Document not expressly referred to in this Amendment, or (B) any present or future violation of, or default under, any provision of 

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the Loan Documents, or (ii) a waiver of Administrative Agent’s or Lender’s right to insist upon future compliance with each term, covenant, condition and provision of the Loan Documents.
(b)    Form.  Each agreement, document, instrument or other writing to be furnished to Administrative Agent under any provision of this Amendment must be in form and substance satisfactory to Administrative Agent and its counsel.
(c)    Headings.  The headings and captions used in this Amendment are for convenience only and will not be deemed to limit, amplify or modify the terms of this Amendment, the Credit Agreement, or the other Loan Documents.
(d)    Costs, Expenses and Attorneys’ Fees. The Loan Parties agree to pay or reimburse Administrative Agent on demand for all its reasonable out-of-pocket costs and expenses incurred in connection with the preparation, negotiation, and execution of this Amendment, including, without limitation, the reasonable fees and disbursements of Administrative Agent’s counsel.
(e)    Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of each of the undersigned and their respective successors and permitted assigns. 
(f)    Multiple Counterparts.  This Amendment may be executed in any number of counterparts with the same effect as if all signatories had signed the same document.  All counterparts must be construed together to constitute one and the same instrument.  This Amendment may be transmitted and signed by facsimile and portable document format (PDF).  The effectiveness of any such documents and signatures shall, subject to applicable law, have the same force and effect as manually-signed originals and shall be binding on each Loan Party, Administrative Agent, and Lender.  Administrative Agent may also require that any such documents and signatures be confirmed by a manually-signed original; provided that, the failure to request or deliver the same shall not limit the effectiveness of any facsimile or PDF document or signature.
(g)    Governing Law.  This Amendment and the other Loan Documents must be construed, and their performance enforced, under Texas law.
(h)    Entirety.  THE LOAN DOCUMENTS (AS AMENDED HEREBY) REPRESENT THE FINAL AGREEMENT AMONG EACH LOAN PARTY, ADMINISTRATIVE AGENT, AND LENDER WITH RESPECT TO THE SUBJECT MATTER THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[Signatures appear on the following pages]

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The Amendment is executed on the date first set forth above.

BORROWER:
POWELL INDUSTRIES, INC.
By:    
Don R. Madison
Executive Vice President, Chief Financial and Administrative Officer, Secretary and Treasurer
GUARANTORS:

POWELL INDUSTRIES INTERNATIONAL, INC., a Delaware corporation

By:                             
Don R. Madison
Vice President, Secretary, and Treasurer

POWELL ELECTRICAL SYSTEMS, INC.,
a Delaware corporation

By:                             
Don R. Madison
Vice President, Secretary, and Treasurer

Signature Page to Third Amendment to Credit Agreement (Powell Industries, Inc.)

BANK OF AMERICA, N.A., as Administrative Agent
By:                                 
    Pace Doherty 
    Vice President
BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swingline Lender
By:                                 
    Pace Doherty 
    Vice President

Signature Page to Third Amendment to Credit Agreement (Powell Industries, Inc.)Exhibit 10.5

 

Confidential Information omitted and filed separately with the Securities and Exchange Commission. Five asterisks denote omissions.

 

Palovarotene Program Consultancy AGREEMENT

 

between

 

Clementia Pharmaceuticals Inc., 4150 Ste-Catherine
St West, suite 550,

Montreal Quebec H3Z 2Y5 Canada

 

and

 

Luca Sangiorgi, MD PhD

Vicolo Malgrado 9, 40125 Bologna Italy

 

PREAMBLE

 

This Consultancy Agreement (“Agreement”)
is made by and between Clementia Pharmaceuticals Inc., (hereinafter “CLEMENTIA”), having a principal place of business
at 4150 Ste-Catherine Street West, Suite 550, Montreal, Qc, H3Z 2Y5, Canada and Luca Sangiorgi, MD, PhD (hereinafter “Dr.
Sangiorgi”), with principle address of Vicolo Malgrado 9, 40125 Bologna Italy. This Agreement is effective as of the date
indicated in Article 8 below and is entered into for the purpose of setting forth the exclusive terms and conditions by which CLEMENTIA
will acquire the services of DR. SANGIORGI for a defined scope and time.

 

	1.	Contract field

 

		1.1	DR. SANGIORGI is prepared to work for CLEMENTIA as a clinical consultant support of the palovarotene
development program as described in the Appendix hereto (hereinafter referred to as “CONTRACT FIELD”) according terms
and conditions as set forth in this Agreement.

 

		1.2	DR. SANGIORGI agrees that during the term of this Agreement, and any extension thereof, he will
not become a consultant or provide any services in the CONTRACT FIELD that might conflict with the obligations hereunder for any
individual or organization without the prior written consent of CLEMENTIA.

 

	2.	Best efforts

 

		2.1	CLEMENTIA hereby retains DR. SANGIORGI and DR. SANGIORGI hereby agrees to perform the services
set forth in Appendix A (the “Services”), as requested by CLEMENTIA from time to time and agreed to by DR. SANGIORGI.
The parties may more completely describe the Services in a separate service statement, proposal or other document mutually agreed
to by the parties. DR. SANGIORGI agrees to provide his reasonable best efforts to provide the Services under this Agreement.

    	 

    	

    

		2.2	In connection with his duties under this Agreement, DR. SANGIORGI is ready to undertake travel
that is reasonably necessary in order to render to CLEMENTIA his services in the CONTRACT FIELD, including but not necessarily
limited to travel to meetings.

 

	3.	Intellectual property

 

		3.1	All data and results (including but not limited to copyrights) which arise or are elaborated by
DR. SANGIORGI for CLEMENTIA in the course of rendering services in the CONTRACT FIELD will become the exclusive and unburdened
property of CLEMENTIA; any exploitation of these rights by CLEMENTIA or CLEMENTIA’s designee does not entitle DR. SANGIORGI
to any payment or indemnity other than the compensation described in Article 5 below. Accordingly, DR. SANGIORGI hereby assigns,
and agrees to assign from the time of creation, any right, title and interest he may have in any such data and results and waives
any and all moral rights he may at any time have therein.

 

		3.2	Should any inventions and/or improvements result from the performance of this Agreement, CLEMENTIA
shall be entitled, without any payment or indemnity whatsoever to DR. SANGIORGI other than the compensation described in Article
5 below, to file in its own name relevant patent applications, and the said inventions and improvements will become and remain
the unburdened property of CLEMENTIA. CLEMENTIA has the free right to use such inventions and/or improvements for research or commercial
activities. DR. SANGIORGI agrees to render to CLEMENTIA all requested assistance in this regard, including but not limited to the
execution of the signatures, papers and documents necessary for obtaining such patents.

 

	4.	Confidentiality/Publication

 

		4.1	Except as otherwise required by law or court order, during the validity of this Agreement and for
a period of five (5) years thereafter, DR. SANGIORGI shall keep in strict confidence all scientific, business and other information
received from CLEMENTIA or obtained or elaborated in connection with DR. SANGIORGI’s consultant services under this Agreement
(“Confidential Information”). DR. SANGIORGI will take all reasonable steps to maintain the confidentiality of the Confidential
Information, will not, without the prior written consent of CLEMENTIA, disclose the Confidential Information to any third party
nor use the Confidential Information for any purpose other than rendering the services hereunder in accordance with the provisions
hereof to the benefit of CLEMENTIA, provided that DR. SANGIORGI will not have any obligation to CLEMENTIA with respect to information
which:

 

		a)	is general public knowledge or becomes general public knowledge through no fault of DR. SANGIORGI;

 

		b)	was in DR. SANGIORGI’s possession on a non-confidential basis prior to its receipt thereof;

 

Confidential Information omitted and filed separately with the Securities and Exchange Commission.

Five asterisks denote omissions.

 

    	2

    	

    

		c)	is received by DR. SANGIORGI from any third party for use or disclosure without any obligation
to CLEMENTIA; or

 

		d)	can be shown to have been independently developed by DR. SANGIORGI without the use of any of the
Confidential Information.

 

		4.2	DR. SANGIORGI will not disclose the Confidential Information to any collaborators unless the latter
have a need to know the Confidential Information for the purpose and agree to be bound by obligations regarding the Confidential
Information as least as stringent as those imposed on DR. SANGIORGI hereunder.

 

		4.3	DR. SANGIORGI will, upon CLEMENTIA’s request, promptly return or destroy all Confidential
Information and documents made available to or elaborated by DR. SANGIORGI.

 

		4.4	The provisions of this Article 4 shall survive termination of this Agreement.

 

	5.	Compensation, Expenses, and Payment Terms

 

		5.1	CLEMENTIA undertakes to compensate DR. SANGIORGI for providing the services under this Agreement
a fee of [******] per hour. It is anticipated that DR. SANGIROGI will provide a maximum of 80 hours of consulting time per year
to this project. Time above 80 hours per year will require prior approval. DR. SANGIORGI shall submit to CLEMENTIA a compensation
Invoice at the end of each month that will include a summary description of the work performed for the month invoiced (a “Compensation
Invoice”). Each Compensation Invoice shall be accompanied by whatever supporting documentation is reasonably necessary to
aid CLEMENTIA in its review of such Compensation Invoice.

 

		5.2	CLEMENTIA shall pay each of DR. SANGIORGI’s correct Compensation Invoices within thirty (30)
days of receipt of such Invoice.

 

		5.3	It is anticipated that DR. SANGIORGI will incur normal expenses during the ·period of this
Agreement that are reasonably necessary to allow DR. SANGIORGI to render the services in the CONTRACT FIELD including, but not
limited to, travel (economy flight for domestic travel ≤ 6 hours, business or equivalent class for domestic travel greater than
6 hours and all international travel, taxi to and from the airport/railway station, accommodation), dining, and other reasonable
out-of-pocket expenses, which expenses shall be preapproved by CLEMENTIA. DR. SANGIORGI shall submit to CLEMENTIA an Invoice at
the end of each month that will include a summary description of the expenses DR. SANGIORGI incurred for the month invoiced in
connection with the provision of services hereunder (each, an “Expense Invoice”). Each Expense Invoice shall be accompanied
by whatever supporting documentation is reasonably necessary to aid CLEMENTIA in its review of such Expense Invoice.

 

		5.4	CLEMENTIA shall pay each of DR. SANGIORGI’s correct Expense Invoices within thirty (30) days
of receipt of such Invoice.

 

Confidential Information omitted and filed
separately with the Securities and Exchange Commission.

Five asterisks denote omissions.

 

    	3

    	

    

		5.5	All invoices and correspondence should be addressed to:

 

Clementia Pharmaceuticals Inc.

Accounts Payable

4150 Ste-Catherine Street West

Suite 550

Montreal, Qc, H3Z 2Y5, Canada

 

and quoting the purchase order
number and line item.

 

		5.6	Upon receipt of proper documentation (Compensation Invoice and signed expense form including receipts),
Clementia will pay the invoice within thirty (30) days via check. All payments and correspondence to DR. SANGIORGI should be addressed
to:

 

Dr. Luca Sangiorgi

Vicolo Malgrado 9, 40125 Bologna Italy

 

		5.7	Any obligation of CLEMENTIA to make a payment to DR. SANGIORGI which arises prior to any termination
or expiration date of this Agreement shall survive termination of this Agreement.

 

	6.	Competence

 

		6.1	DR. SANGIORGI herewith declares that its activities under this Agreement and the Agreement itself
are not and will not at any time during the term of this Agreement be in violation with any rules, laws or the terms of any other
agreement previously entered into between DR. SANGIORGI and any third party.

 

	7.	General Terms

 

		7.1	DR. SANGIORGI’s status with CLEMENTIA shall be at all times during the term of this Agreement
that of an independent contractor and nothing in this Agreement should be construed to create a partnership, joint venture, or
employer-employee relationship. Further, DR. SANGIORGI is not an agent of CLEMENTIA and is not authorized to make any representation,
warranty, contract, and/or commitment on behalf of CLEMENTIA. No party shall have the authority to bind or obligate the other party
to this Agreement in any matter without the other party’s written approval.

 

		7.2	DR. SANGIORGI agrees that it, nor an employee of DR. SANGIORGI will receive any compensation or
assistance from any government, firm, person, or entity other than CLEMENTIA for the services DR. SANGIORGI renders in the CONTRACT
FIELD.

 

		7.3	This Agreement embodies the entire understanding among the parties hereto. This Agreement may not
be waived, assigned, amended, changed, modified, or altered unless mutually agreed upon in writing by both parties.

 

		7.4	In the event any provision of this Agreement is found to be legally unenforceable, such unenforceability
shall not prevent enforcement of any other provision of the Agreement.

 

Confidential Information omitted and filed
separately with the Securities and Exchange Commission.

Five asterisks denote omissions.

 

    	4

    	

    

		7.5	Any notices required or permitted hereunder shall be provided as follows:

 

		a)	To CLEMENTIA:

Clementia Pharmaceuticals, Inc.

Attn: Donna Roy Grogan, MD, CMO

4150 Ste-Catherine St West, Suite 550,

Montreal, Quebec H3Z 2Y5 Canada

Fax: 514-940-3620

Email: dgrogan@clementiapharma.com

 

		b)	Dr. Luca Sangiorgi

Vic9lo Malgrado 9, 40125 Bologna Italy

Email: luca.sangiorgi@ior.it

 

		c)	Such notice shall be deemed to have been given when delivered or, if earlier (i) three (3) business
days after mailing by United States certified or registered mail, return receipt requested, postage prepaid, or (ii) one day after
it has been faxed or emailed with confirmation of delivery, in either case, addressed as required in this section.

 

		7.6	CLEMENTIA shall indemnify DR. SANGIORGI from any third party claim resulting from the provision
by DR. SANGIORGI of all services rendered in the CONTRACT FIELD for the term of this Agreement and any extension thereof, unless
such claim results from the negligence or wilful misconduct of DR. SANGIORGI.

 

	8.	Term and Termination

 

		8.1	The present Agreement shall come into force as from September 18, 2015 and shall remain in force
until September 18, 2018. Thereafter it can be extended by mutual written agreement.

 

		8.2	Either CLEMENTIA or DR. SANGIORGI may terminate this Agreement in the event of a material breach
of the Agreement by the other party that is not cured within thirty (30) days of written notice to the other party of such breach.
In addition, either party may terminate this Agreement for convenience with fifteen (15) days’ prior written notice to the
other party. If this Agreement is terminated for convenience with notice by CLEMENTIA, DR. SANGIORGI shall complete its present
work and CLEMENTIA shall compensate DR. SANGIORGI for such work.

 

	9.	Applicable Law and Jurisdiction

 

This Agreement shall be interpreted
and construed in accordance with the laws of Massachusetts. In case of controversies that cannot be settled amicably, the matter
shall be brought before the competent courts of Massachusetts, which shall have the exclusive jurisdiction.

 

Confidential Information omitted and filed
separately with the Securities and Exchange Commission.

Five asterisks denote omissions.

 

    	5

    	

    

	10.	Benefit of the Agreement

 

This Agreement shall ensure to
the benefit of and be binding upon the parties’ respective heirs, executors, administrators, other legal representatives,
successors and assigns.

 

**REMAINDER OF PAGE INTENTIONALLY LEFT BLANK**

 

**SIGNATURES APPEAR ON FOLLOWING PAGE**

 

Confidential Information omitted and filed
separately with the Securities and Exchange Commission.

Five asterisks denote omissions.

 

    	6

    	

    

	Montreal, 18 September 2015	
        Clementia Pharmaceuticals Inc.

       
	 	 
	 	        /Clarissa
                       Desjardins/

	 	        Clarissa Desjardins, PhD, CEO

	 	 
	Bologna, Italy 18 September 2015	

       
	 	 
	 	        /Luca
        Sangiorgi/

	 	        Luca Sangiorgi, MD, PhD

 

APPENDIX A

 

Contract Field.

 

DR. SANGIORGI will provide clinical consulting services in support
of CLEMENTIA’s palovarotene development program, and the potential role of palovarotene as a treatment for hereditary multiple
exostoses.

 

Confidential Information omitted and filed
separately with the Securities and Exchange Commission.

Five asterisks denote omissions.

 

    	7

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