Exhibit 10.7


 


EMPLOYMENT AGREEMENT


 


BETWEEN


 


NAC DRIVE SYSTEMS INC.


AND


 


VINCENT GENOVESE


(Chief Executive Officer)


 


THIS EMPLOYMENT AGREEMENT
(this “Agreement”), dated as of April 21, 2014 is entered into by and between NAC DRIVE SYSTEMS, a Delaware corporation
(the “Company”), and Vincent Genovese, an individual with a physical address at 472 SHORELINE CIRCLE PONTE VEDRA BEACH,
FLORIDA 32082), (the “Executive”) (collectively, the “Parties,” individually, a “Party”).


 


W I T N E S S E T H:


 


WHEREAS, Employee has substantial
experience in the Corporation’s business and is currently the Corporation’s President and Chief Operating Officer;
and


 


WHEREAS, the Board has
determined that it is in the best interest of the Company, its affiliates, and its stockholders to assure that the Company will
have the continued dedication of the Executive, notwithstanding the possibility, threat, or occurrence of a Change in Control (as
defined in Article Seven herein); and


 


NOW, THEREFORE, in consideration
of the premises and the mutual covenants and agreements set forth herein, the Parties, intending to be legally bound, hereby agree
as follows:


 


ARTICLE ONE


 


DEFINITIONS


 


1.            
Definitions. As used in this Agreement:


 


1.1         The
term “Accrued Obligations,” when used in the case of the Executive’s death or disability shall mean the sum of
(1) the that portion Executive’s Base Salary that was not previously paid to the Executive from the last payment date through
the Date of Termination, and (2) an amount equal 24 months salary at the level of the Executive’s Base Salary then in effect,


 



    	 



    	 



    

 


1.2         The
term “Automatic Extension” shall have the meaning set forth in Section 2.2 herein.


 


1.3         The
term “Base Salary”, shall have the meaning set forth in Section 3.1 herein.


 


1.4       
 The term “Board” shall have the meaning set forth in the recitals.


 


1.5        
The term “Cause” shall have the meaning set forth in Section 4.3 herein.


 


1.6         The
term “Common Stock” shall mean the Common Stock, par value $0.001, of the Company.


 


1.7       
 The term “Compensation Committee” shall mean the Compensation Committee of the Company.


 


1.8        
The term “Corporate Documents” shall mean the Company’s Certificate of Incorporation, as amended and/or its Bylaws,
as amended.


 


1.9        
The term “Effective Date” shall have the meaning set forth in the preamble.


 


1.10       The
term “Good Reason” shall have the meaning set forth in Section 4.4 herein.


 


1.11       The
term “Initial Term” shall have the meaning set forth in Section 2.2 herein.


 


1.12      
The term “Severance Benefit” shall have the meaning set forth in Section 4.7(a)(i) herein.


 


1.13      
The term “Without Cause” shall have the meaning set forth in Section 4.3 herein.


 


1.14      
The term “Without Good Reason” shall have the meaning set forth in Section 4.5 herein.


  



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ARTICLE TWO


 


POSITION & DUTIES


 


2.            
Employment.


 


2.1         Title.
The Executive shall serve as the President and Chief Operating Officer of the Company and agrees to perform services for the Company
and such other affiliates of the Company, as described in Section 3 herein.


 


2.2         Term.
The Executive’s employment shall be for an initial term of three (3) years (“Initial Term”), commencing on
the Effective Date. The Executive’s employment shall be automatically extended on the day after the second year
anniversary of the Effective Date (“Automatic Extension”), and on each anniversary date thereof, for additional
two (2) year periods.


 


2.3         Duties
and Responsibilities. The Executive shall report to the Board and in his capacity as an officer of the Company shall perform such
duties and services as may be appropriate and as are assigned to him by the Board. During the term of this Agreement Executive
shall, subject to the direction of the Board of the Company, oversee and direct the operations of the Company, and shall perform
such duties as are customarily performed by the President and Chief Executive Officer of a company such as the Company or as are
otherwise delegated to him from time to time by the Board.


 


2.4         Performance
of Duties. During the term of the Agreement, except as otherwise approved by the Board or as provided below, the Executive agrees
to devote his full business time, effort, skill and attention to the affairs of the Company and its subsidiaries, will use his
best efforts to promote the interests of the Company, and will discharge his responsibilities in a diligent and faithful manner,
consistent with sound business practices. The foregoing shall not, however, preclude Executive from devoting reasonable time, attention
and energy in connection with the following activities, provided that such activities do not materially interfere with the performance
of his duties and services hereunder:


 


  (a)           serving
as a director or a member of a committee of any company or organization, if serving in such capacity does not involve any conflict
with the business of the Company or any subsidiary and such other company or organization is not in competition, in any manner
whatsoever, with the business of the Company or any of its subsidiaries;


 


  (b)           fulfilling
speaking engagements;


 


  (c)           engaging
in charitable and community activities;


  



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  (d)           managing
his personal business and investments; and


 


  (e)           any
other activity approved of by the Board. For purposes of this Agreement, any activity specifically listed on Schedule A shall be
considered as having been approved by the Board.


 


2.5         Representations
and Warranties of the Executive with Respect to Conflicts, Past Employers and Corporate Opportunities. The Executive represents
and warrants that:


 


   (a)           his
employment by the Company will not conflict with any obligations which he has to any other person, firm or entity;


 


  (b)          he
has not brought to the Company (during the period before the signing of this Agreement) and he will not bring to the Company any
materials or documents of a former or present employer, or any confidential information or property of any other person, firm or
entity; and


 


   (c)           he
will not, without disclosure to and approval of the Board, directly or indirectly, assist or have an active interest in (whether
as a principal, stockholder, lender, employee, officer, director, partner, venturer, consultant or otherwise) in any person, firm,
partnership, association, corporation or business organization, entity or enterprise that competes with or is engaged in a business
which is substantially similar to the business of the Company; provided, however, that ownership of not more than two percent
(2%) of the outstanding securities of any class of any publicly held corporation shall not be deemed a violation of this Section
2.5; provided, further, that any investment specifically listed on Schedule A shall not be deemed a violation of this Section 2.5.
This section does not apply to Conic Systems, Inc., a sister company to NAC Drive Systems with which NAC has a share purchase agreement
in place.


 


2.6         Activities
and Interests with Companies Doing Business with the Company. In addition to those activities and interests of Executive disclosed
on Schedule A attached hereto, Executive shall promptly disclose to the Board, in accordance with the Company’s policies,
full information concerning any interests, direct or indirect, he holds (whether as a principal, stockholder, lender, executive,
director, officer, partner, venturer, consultant or otherwise) in any business which, as reasonably known to Executive, purchases
or provides services or products to, the Company or any of its subsidiaries, provided that the Executive need not disclose any
such interest resulting from ownership of not more than two (2%) of the outstanding securities of any class of any publicly held
corporation.


  



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2.7         Other
Business Opportunities. Nothing in this Agreement shall be deemed to preclude the Executive from participating in other business
opportunities if and to the extent that: (a) such business opportunities are not directly competitive with, similar to the business
of the Company, or would otherwise be deemed to constitute an opportunity appropriate for the Company; (b) the Executive’s
activities with respect to such opportunities do not have a material adverse effect on the performance of the Executive’s
duties hereunder, and (c) the Executive’s activities with respect to such opportunity have been fully disclosed in writing
to the Board.


 


Reporting Location. For
purposes of this Agreement, the Executive’s reporting location shall be Jacksonville, Florida. Additionally, the
executive shall travel as necessary fulfill his duties and responsibilities to other locations including Port Jervis, NY.
Travel requires shall be not more than 50% of the Executive’s time and not more than fourteen (14) continuous days with
the mutual agreement between the Executive and the Company.


 


ARTICLE THREE


 


COMPENSATION


 


3.          
  Compensation.


 


3.1         Base
Salary. Executive shall receive an initial annual base salary of Two Hundred Thousand Dollars ($200,000.00), payable according
to the Company’s normal payroll policies and procedures (the “Base Salary”) and subject to all federal, state,
and municipal withholding requirements. The Base Salary shall be reviewed by the Board annually for adequacy.


 


3.2         Cash
Bonus. The Executive shall be eligible for a cash bonus equal to an amount as determined by the Compensation Committee of the Board
or by the independent directors (as that term is defined by the stock exchange or market on which the Company’s shares may
be the traded).


 



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3.3        
Equity-Based Compensation. The Executive shall be entitled to participate in all equity-based compensation plans offered by the
Company and as determined by the Board of Directors.


 


Upon a Change of Control,
all equity-based compensation will be deemed to have vested as of the Change of Control Effective Date (as defined by Article 7
herein).


 


3.4         Participation
In Benefit Plans.


 


  (a)           Retirement
Plans. Executive shall be entitled to participate, without any waiting or eligibility periods, in all qualified retirement plans
provided to other executive officers and other key employees.


 


  (b)           Taxes.
The Company shall pay, on a grossed-up basis for federal, state, and local income taxes, the amount of any excise tax payable by
Executive as a result of any payments triggered by this Agreement, or other compensation agreements between Executive and the Company,
or any of its subsidiaries and any income tax payable by Executive as a result of any payments in Common Stock triggered by this
Agreement or other compensation agreements between Executive and the Company, or any of its subsidiaries, except as might otherwise
be provided such benefit plan.


 


  (c)           Life
Insurance. The Company will purchase life  insurance on the life of Executive in an amount not less than $3,000,000,
the benefits of which will be payable one-half to the Executive’s beneficiary and one-half to the Company. The  Executive’s
“beneficiary” is the person or persons (who may be designated concurrently, successively or contingently) designated
by the Executive in his last effective writing filed with the Company prior to his death, or if the Executive shall have failed
to make an effective designation, the Executive’s beneficiary is his spouse, if the Executive is married and his spouse is
living at the time of each payment, and otherwise his surviving children. The Executive shall assist the Company in procuring such
insurance by submitting to such examinations and by signing such applications and other instruments as may be reasonable and as
may be required by the insurance carriers to which application is made for any such insurance. The Executive represents that, to
the best of his knowledge, he is currently insurable at standard premium rates for life insurance policies.


  



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   (d)          Employee
Benefit Plans and Insurance. The Executive shall have the right to participate in employee benefit plans and insurance programs
of the Company that the Company may sponsor from time to time and to receive customary Company benefits, if those benefits are
so offered. Nothing herein shall obligate Executive to accept such benefits if and when they are offered.


 


   (e)           Vacation.


 


  (i)           The
Executive shall be entitled to take such vacations, with pay, as are customary among other chief executive officers of organizations
of similar size and nature, which vacation level shall be reviewed by the Compensation Committee from time to time. No more than
1.5 times (1.5x) Executive’s authorized annual vacation allocation may be accrued, at any given time. In the event that Executive
has reached his maximum authorized vacation allocation, accrual will not re-commence until Executive uses some of his paid vacation
credit and thereby brings the balance below his maximum. Accrued paid vacation credit forfeited because of an excess balance can
not be retroactively reapplied.


 


  (ii)           Pay
will only be provided for any unused, accrued paid vacation credit at the time of Executive’s separation from the business
by the Company due to a reduction in force, by Executive upon retirement, or upon the death of an employee, provided that Executive
has been a regular full-time employee for three calendar months prior to such event. Termination of employment for Cause by the
Company, or Executive’s resignation, will result in the forfeiture of any unused paid vacation credit.


 


  (f)           
Paid Holidays. The Executive shall be entitled to such paid holidays as are generally available to all employees.


 


  (g)           Relocation
and Business-related Expenses. In the event that Executive is required to move from his primary residence and consents to such
move, then Executive shall be provided with relocation assistance as provided below:


 



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  (h)           Moving
Costs. The Company acknowledges that, as of the date of this Agreement, the Executive is in the process of moving his primary resident
from Sparta, NJ to the Jacksonville, FL area in anticipation of the Company’s planned expansion in Jacksonville, The Company
will pay the costs, for the Executive’s travel and the cost of transporting the Executive, , furniture, household effects,
and vehicles, to the area in which the Company will be headquartered.


 


  (i)           Maintenance
of NY/NJ area Residence. The Company acknowledges that, as of the date of this Agreement, the Company anticipates the executive
will need to spend considerable time in Port Jervis, NY, especially prior to a new manufacturing and engineering facility in the
Jacksonville, FL area being fully staffed and operational. Therefore, the Company agrees to pay the expenses associated with a
lease on an apartment within reasonable commuting distance to Port Jervis, NY, which expenses shall be coterminous with Executive’s
Base Salary.


 


  (j) 
          Reimbursement. Executive shall be entitled to reimbursement within
a reasonable time for all properly documented and approved expenses for travel. The Company shall reimburse business expenses of
Executive directly related to Company business, including, but not limited to, airfare, lodging, meals, travel expenses, medical
expenses while traveling not covered by insurance, business entertainment, expenses associated with entertaining business persons,
local expenses to governments or governmental officials, tariffs, applicable taxes outside of the United States, special expenses
associated with travel to certain countries, supplemental life insurance or supplemental insurance of any kind or special insurance
rates or charges for travel outside the United States (unless such insurance is being provided by the Company), rental cars and
insurance for rental cars, and any other expenses of travel that are reasonable in nature or that have been otherwise pre-approved.
Executive shall be governed by the travel and entertainment policy in effect at the Company.


 


3.5        
Severance Benefit. In the event that Executive’s employment is terminated, other than for Cause, Executive shall receive
compensation pursuant to Section 4.7 herein.


 



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3.6         Payroll
Procedures and Policies. All payments required to be made by the Company to the Executive pursuant to this Article Three shall
be paid on a regular basis in accordance with the Company’s normal payroll procedures and policies.


 


ARTICLE FOUR


 


TERMINATION OF EMPLOYMENT


 


4.1         Death.
The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Term.


 


4.2         Disability.
If the Company determines in good faith that the Disability (as defined below) of the Executive has occurred during the Employment
Term, the Company may give the Executive notice of its intention to terminate the Executive’s employment. In such event,
the Executive’s employment hereunder shall terminate effective on the 30 th day after receipt of such notice by the Executive
(the “Disability Effective Date”); provided , that , within the 30-day period after such receipt, the
Executive shall not have returned to full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability”
shall mean the absence of the Executive from the Executive’s duties hereunder on a full-time basis for an aggregate of 180
days within any given period of 270 consecutive days (in addition to any statutorily required leave of absence and any leave of
absence approved by the Company) as a result of incapacity of the Executive, despite any reasonable accommodation required by law,
due to bodily injury or disease or any other mental or physical illness, which will, in the opinion of a physician selected by
the Company or its insurers and acceptable to the Executive or the Executive’s legal representative, be permanent and continuous
during the remainder of the Executive’s life. For the purposes of clarity, basic mobility and the ability to travel are required
to full the Executive’s duties.


 


4.3         Termination
by Company.


 


(a)         Termination
for Cause.


 


The Company
may terminate the Executive’s employment hereunder for Cause (as defined below). For purposes of this Agreement, “Cause”
shall mean:


 


  (i)            the
willful and continued failure of the Executive to perform substantially the Executive’s duties hereunder (other than any
such failure resulting from bodily injury or disease or any other incapacity due to mental or physical illness) after a written
demand for substantial performance is delivered to the Executive by the Board or the Chairman of the Company, which specifically
identifies the manner in which the Board or the Chairman of the Company believes the Executive has not substantially performed
the Executive’s duties; or


  



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  (ii)           the
willful engaging by the Executive in illegal conduct or gross misconduct that is materially and demonstrably detrimental to the
Company and/or its affiliated companies, monetarily or otherwise.


 


  For purposes
of this provision, no act, or failure to act, on the part of the Executive shall be considered “willful” unless done,
or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission
was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board, upon the instructions of the Chairman or another Board Member of Company, or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company and its affiliated companies. The cessation of employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative
vote of not less than two-thirds of the entire membership of the Board then in office at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.


 


  (iii)           the
Executive’s conviction of, or plea of nolo contendere to, any felony of theft, fraud, embezzlement or violent crime.


 


(b)         Termination
without Cause.


 


All terminations by the Company that are not
for Cause, shall be considered Without Cause.


  



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4.4        
Termination by Executive. The Executive may terminate the Executive’s employment hereunder at any time during the Employment
Term for Good Reason (as defined below) For purposes of this Agreement, “Good Reason” shall mean any of the following
(without the Executive’s express written consent):


 


  (a)           The
assignment to the Executive of any duties inconsistent in any respect with the Executive’s position (including status, offices,
titles and reporting requirements), duties, functions, responsibilities or authority as contemplated by Section 2.3 of this Agreement,
or any other action by the Company that results in a diminution in such position, duties, functions, responsibilities or authority,
excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;


 


  (b)           Any
failure by the Company to comply with any of the provisions of Section 2.3 of this Agreement, other than an isolated, insubstantial
and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given
by the Executive;


 


  (c)      
     The Company’s requiring the Executive to be based at any office or location other than as provided
in Section 2.8 of this Agreement or the Company’s requiring the Executive to travel on the Company’s or its affiliated
companies’ business to a substantially greater extent than during the three-year period immediately preceding the Effective
Date;


 


  (d)           Any
failure by the Company to comply with and satisfy Section 8.1 of this Agreement; or


 


  (e)           Any
purported termination by the Company of the Executive’s employment hereunder otherwise than as expressly permitted by this
Agreement, and for purposes of this Agreement, no such purported termination shall be effective.


 


For purposes of this Section 4.4, any good
faith determination of “Good Reason” made by the Executive shall be conclusive.


  



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4.5        
Notice of Termination. Any termination of the Executive’s employment hereunder by the Company or by the Executive (other
than a termination pursuant to Section 4.1) shall be communicated by a Notice of Termination (as defined below) to the other party
hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which (a) indicates the specific
termination provision in this Agreement relied upon, (b) in the case of a termination for Disability, Cause or Good Reason, sets
forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated, and (c) specifies the Date of Termination (as defined in Section 4.7 below); provided, however,
that notwithstanding any provision in this Agreement to the contrary, a Notice of Termination given in connection with a termination
for Good Reason shall be given by the Executive within a reasonable period of time, not to exceed 120 days, following the occurrence
of the event giving rise to such right of termination. The failure by the Company or the Executive to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Disability, Cause or Good Reason shall not waive any right
of the Company or the Executive hereunder or preclude the Company or the Executive from asserting such fact or circumstance in
enforcing the Company’s or the Executive’s rights hereunder.


 


4.6        
Date of Termination. For purposes of this Agreement, the “Date of Termination” shall mean the effective date of termination
of the Executive’s employment hereunder, which date shall be (a) if the Executive’s employment is terminated by the
Executive’s death, the date of the Executive’s death, (b) if the Executive’s employment is terminated because
of the Executive’s Disability, the Disability Effective Date, (c) if the Executive’s employment is terminated by the
Company (or applicable affiliated company) for Cause or by the Executive for Good Reason, the date on which the Notice of Termination
is given, (d) if the Executive’s employment is terminated pursuant to Section 2.2, the date on which the Employment Term
ends pursuant to Section 2.2 due to a party’s delivery of a Notice of Termination thereunder, and (e) if the Executive’s
employment is terminated for any other reason, the date specified in the Notice of Termination, which date shall in no event be
earlier than the date such notice is given; provided, however, that if within 30 days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date
of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties
or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and
no appeal having been perfected).


  



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                                    4.7        

Obligations of the Company upon Termination.


 


(a)     Good
Reason or Change of Control; Other Than for Cause. If, during the Employment Term, the Company (or applicable affiliated company)
shall terminate the Executive’s employment hereunder other than for Cause or the Executive shall terminate the Executive’s
employment either for Good:


 


(i)        the
Company shall pay to the Executive in a lump sum (A) the sum of (1) Executive’s Base Salary, if any, which has been earned
but not paid through the Termination Date, (2) the product of (x) the Annual Bonus and (y) a fraction, the numerator of which is
the number of days in the current fiscal year through the Termination Date and the denominator of which is 365, and (3) any accrued
vacation or other pay pursuant to the Corporation’s vacation policy, to the extent not previously paid; and (B) an amount
equal to the sum of (1) an amount equal to 36 months of Executive’s Base  Salary and (2) the Annual Bonus multiplied
by a factor of 3


 


(ii)       all
stock options, stock appreciation rights, and restricted stock shall immediately vest;


 


(iii)      all
stock options and stock appreciation rights shall be payable in Common Stock;


 


(iv)     all
performance share shall immediately vest and


 


(v)      the
Company shall pay, on a grossed-up basis (as determined in the same manner as under Section 3.4(b) herein the amount of any excise
and income taxes payable by Executive as a result of any payments in Common Stock triggered by this Agreement, or other agreements
between Executive and the Company, or any of its subsidiaries.


 



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to the extent not theretofore paid or provided,
the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which
the Executive is eligible to receive under any plan, program, policy, practice or arrangement or contract or agreement of the Company
and its affiliated companies (such other amounts and benefits hereinafter referred to as the “Other Benefits”).


 


(b)     Death.
If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Term, this Agreement
shall terminate without further compensation obligations to the Executive’s legal representatives under this Agreement, other
than for (i) payment of Accrued Obligations (which shall be paid to the Executive’s estate or beneficiary, as applicable,
in a lump sum in cash within 90 days of the Date of Termination) and the timely payment or settlement of any other amount pursuant
the Other Benefits and (ii) treatment of all other compensation under existing plans as provided by the terms and rules of those
plans.


 


(c)     Disability.
If the Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Term, this
Agreement shall terminate without further compensation obligations to the Executive, other than for (i) payment of Accrued Obligations
(which shall be paid to the Executive in a lump sum in cash within 90 days of the Date of Termination) and the timely payment or
settlement of any other amount pursuant to the Other Benefits and (ii) treatment of all other compensation under existing plans
as provided by the terms and rules of those plans.


 


(d)     Cause;
Other than for Good Reason. If the Executive’s employment is terminated for Cause during the Employment Term, this Agreement
shall terminate without further compensation obligations to the Executive other than the obligation to pay to the Executive Base
Salary through the Date of Termination plus the amount of any compensation previously deferred by the Executive and any accrued
vacation or other pay pursuant to the Corporation’s vacation policy, in each case to the extent theretofore unpaid. If the
Executive voluntarily terminates the Executive’s employment during the Employment Term, excluding a termination either for
Good Reason or (ii) a Change of Control, this Agreement shall terminate without further compensation obligations to the Executive,
other than for that portion of Executive’s Base Salary that was not previously paid to the Executive from the last payment
date through the effective date of the Executive’s voluntary termination, any accrued vacation or other pay pursuant to the
Corporation’s vacation policy and the timely payment or provision of the Other Benefits, as provided in any applicable plan,
and the Executive shall have no further obligations nor liability to the Company. In such case, any amounts owed to the Executive
shall be paid to the Executive in a lump sum in cash within 90 days of the Date of Termination subject to applicable laws and regulations.


 



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              4.8  Continuation
of Payments During Disputes. The Parties agree that in the case of:


 


     (a)     termination
which the Company contends is for Cause, but Executive claims is not for Cause; or


 


     (b)     termination
by Executive under Section 4.4 herein,


 


the Company shall continue to pay all compensation
due to Executive hereunder until the resolution of such dispute, but the Company shall be entitled to repayment of all sums so
paid, if it ultimately shall be determined by a court of competent jurisdiction, in a final non-appealable decision, that the termination
was for Cause or such termination by Executive was not authorized under Section 4.4 herein, and all sums so repaid shall bear interest
at the prime rate as published in The Wall Street Journal on the date on which such court makes such determination. Any such reimbursement
of payments by Executive shall not include any legal fees or other loss, costs, or expenses incurred by the Company, notwithstanding
any provision of the Indemnification Agreement, which is attached as Exhibit A and is considered a part of this Agreement.


 


ARTICLE FIVE


 


INDEMNIFICATION


 


5.    Indemnification. 
The Executive shall be indemnified and held harmless pursuant to the terms and conditions set forth in the Indemnification Agreement
substantially in the form attached as Exhibit A hereto.


  



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ARTICLE SIX


 


CONFIDENTIALITY


 


6.     Confidentially;
Non-Competition; and Non-Solicitation.


 


6.1     Confidentiality.
In consideration of employment by the Company and Executive’s receipt of the salary and other benefits associated with Executive’s
employment, and in acknowledgment that (a) the Company is engaged in the oil and gas business, (b) maintains secret and confidential
information, (c) during the course of Executive’s employment by the Company such secret or confidential information may become
known to Executive, and (d) full protection of the Company’s business makes it essential that no employee appropriate for
his or her own use, or disclose such secret or confidential information, Executive agrees that during the time of Executive’s
employment and for a period of two (2) years following the termination of Executive’s employment with the Company, Executive
agrees to hold in strict confidence and shall not, directly or indirectly, disclose or reveal to any person, or use for his own
personal benefit or for the benefit of anyone else, any trade secrets, confidential dealings, or other confidential or proprietary
information of any kind, nature, or description (whether or not acquired, learned, obtained, or developed by Executive alone or
in conjunction with others) belonging to or concerning the Company or any of its subsidiaries, except (i) with the prior written
consent of the Company duly authorized by its Board, (ii) in the course of the proper performance of Executive’s duties hereunder,
(iii) for information (x) that becomes generally available to the public other than as a result of unauthorized disclosure by Executive
or his affiliates or (y) that becomes available to Executive on a non-confidential basis from a source other than the Company or
its subsidiaries who is not bound by a duty of confidentiality, or other contractual, legal, or fiduciary obligation, to the Company,
or (iv) as required by applicable law or legal process.


 


6.2     Non-Competition.
During Executive’s employment with the Company and for so long as Executive receives any Severance Benefit or is receiving
any Severance Amount provided under this agreement in respect of the termination of his employment, Executive shall not be engaged
as an officer or executive of, or in any way be associated in a management or ownership capacity with any corporation, company,
partnership or other enterprise or venture which conducts a business which is in direct competition with the business of the Company;
provided, however , that Executive may own not more than two percent (2%) of the outstanding securities, or equivalent
equity interests, of any class of any corporation, company, partnership, or either enterprise that is in direct competition with
the business of the Company, which securities are listed on a national securities exchange or traded in the over-the-counter market.
For purposes of this Agreement, a lump sum payment equivalent made to Executive shall be judged in relation to his most recent
annual base salary to determine whether Executive is continuing to receive a Severance Benefit or Severance Amount and shall be
measured from the date such payment is received. It is expressly agreed that the remedy at law for breach of this covenant is
inadequate and that injunctive relief shall be available to prevent the breach thereof. Additionally, the Executive specifically
agrees that any intellectual property developed and/or created by the Executive shall be assigned to and become property of the
Company, provided such intellectual property does not have a negative effect on the Company and is reasonably synergistic with
the company’s business scope.


 



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6.3     Non-Solicitation.
Executive also agrees that he will not, directly or indirectly, during the term of his employment or within one (1) year after
termination of his employment for any reason, in any manner, encourage, persuade, or induce any other employee of the Company to
terminate his employment, or any person or entity engaged by the Company to represent it to terminate that relationship without
the express written approval of the Company. It is expressly agreed that the remedy at law for breach of this covenant is inadequate
and that injunctive relief shall be available to prevent the breach thereof.


 


ARTICLE SEVEN


 


CHANGE OF CONTROL


 


7.    Certain Definitions.


 


7.1     Change
of Control Effective Date. The “Change of Control Effective Date” shall mean the first date during the Change of Control
Period (as defined in Section 7.2) on which a Change of Control occurs. Notwithstanding anything in this Agreement to the contrary,
if a Change of Control occurs and if the Executive’s employment with the Company (or applicable affiliated company) is terminated
prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination
of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or
(ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the “Change
of Control Effective Date” shall mean the date immediately prior to the date of such termination of employment.


 



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7.2    
Change of Control Period. The “Change of Control Period” shall mean the period commencing on the date of this Agreement
and ending on the third anniversary of such date; provided, however , that commencing on the date one year after the date
hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof herein referred to as the “Renewal
Date”), the Change of Control Period shall be automatically extended so as to terminate three years after such Renewal Date.


 


7.3    
Change of Control.  For purposes of this Agreement, a “Change of Control” shall mean:


 


  (a)   the
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either (A) the
then outstanding Common Shares the Company (the “Outstanding Shares”) or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting
Securities”); provided, however , that for purposes of this Subsection 7.3(a) the following acquisitions shall not
constitute a Change of Control: (w) Company-sponsored recapitalization that is approved by the Incumbent Board, as defined below;
(x) a capital raise initiated by the Company where the Incumbent Board remains for at least at least 548 days after the closing
date of the raise, or (y) an acquisition of another company or asset(s) initiated by the Company and where the Company’s
shareholders immediately after the transaction own at least 51% of the shares of the combined concern; or


 


  (b)   individuals
who, as of the date of this Agreement, constitute the Company’s Board (the “Incumbent Board”) cease for any reason
to constitute a majority of such Board of Directors; provided, however , that any individual becoming a director of the Company
shareholders subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders was approved
by a vote of a majority of the directors of the Company then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption
of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Company Board; or 


  



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  (c)  
consummation of a reorganization, merger, amalgamation or consolidation of the Company, with or without approval by the shareholders
of the Company, in each case, unless, following such reorganization, merger, amalgamation or consolidation, (i) more than 50% of,
respectively, the then outstanding shares of common stock (or equivalent security) of the company resulting from such reorganization,
merger, amalgamation or consolidation and the combined voting power of the then outstanding voting securities of such company entitled
to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Shares and Outstanding Voting
Securities immediately prior to such reorganization, merger, amalgamation or consolidation in substantially the same proportions
as their ownership, immediately prior to such reorganization, merger, amalgamation or consolidation, of the Outstanding Shares
and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding a parent of the Company that may come into being
after the date of this Agreement through any transaction deliberately undertaken by the Company after an affirmative vote of its
Incumbent Directors and the Company shareholders), any employee benefit plan (or related trust) of the Company or such company
resulting from such reorganization, merger, amalgamation or consolidation, and any Person beneficially owning, immediately prior
to such reorganization, merger, amalgamation or consolidation, directly or indirectly, 15% or more of the Outstanding Shares or
Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, 15% or more of, respectively, the
then outstanding shares of common stock (or equivalent security) of the company resulting from such reorganization, merger, amalgamation
or consolidation or the combined voting power of the then outstanding voting securities of such company entitled to vote generally
in the election of directors, and (ii) a majority of the members of the board of directors of the company resulting from such reorganization,
merger, amalgamation or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement
providing for such reorganization, merger, amalgamation or consolidation; or


 



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  (d)   consummation
of a sale or other disposition of all or substantially all the assets of the Company, with or without approval by the shareholders
of the Company, other than to a corporation, with respect to which following such sale or other disposition, (i) more than 50%
of, respectively, the then outstanding shares of common stock (or equivalent security) of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially all the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Shares and Outstanding Voting Securities immediately prior to such sale or other disposition
in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding
Shares and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding the Company, any employee benefit plan
(or related trust) of the Company or such corporation, and any Person beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, 15% or more of the Outstanding Shares or Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 15% or more of, respectively, the then outstanding shares of common stock (or equivalent
security) of such corporation or the combined voting power of the then outstanding voting securities of such corporation entitled
to vote generally in the election of directors, and (C) a majority of the members of the board of directors of such corporation
were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Incumbent Board providing
for such sale or other disposition of assets of the Company; or


 


  (e)   approval
by the shareholders of the Company of a complete liquidation or dissolution of the Company. ADD LANGUAGE BOTH PROTECT VG ABILITY
TO EXIT AND PROTECT COMPANY IF THE VALUE IS KEEPING VG WITH THE NEW COMPANY.


 



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ARTICLE EIGHT


 


MISCELLANEOUS


 


8.    Miscellaneous.


 


8.1     Benefit.
This Agreement shall inure to the benefit of and be binding upon each of the Parties, and their respective successors. This Agreement
shall not be assignable by any Party without the prior written consent of the other Party. The Company shall require any successor,
whether direct or indirect, to all or substantially all the business and/or assets of the Company to expressly assume and agree
to perform, by instrument in a form reasonably satisfactory to Executive, this Agreement and any other agreements between Executive
and the Company or any of its subsidiaries, in the same manner and to the same extent as the Company.


 


8.2     Governing
Law. This Agreement shall be governed by, and construed in accordance with the laws of the State of DE without resort to any principle
of conflict of laws that would require application of the laws of any other jurisdiction; provided, however , that Delaware
law shall govern with respect to the Executive’s rights under a Change of Control under Article Seven herein.


 


8.3     Counterparts.
This Agreement may be executed in counterparts and via facsimile, each of which shall be deemed to constitute an original, but
all of which together shall constitute one and the same Agreement. Each such counterpart shall become effective when one counterpart
has been signed by each Party thereto.


 


8.4     Headings.
The headings of the various articles and sections of this Agreement are for convenience of reference only and shall not be deemed
a part of this Agreement or considered in construing the provisions thereof.


 


8.5     Severability.
Any term or provision of this Agreement that shall be prohibited or declared invalid or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective only to the extent of such prohibition or declaration, without invalidating the remaining
terms and provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction, and if any
term or provision of this Agreement is held by any court of competent jurisdiction to be void, voidable, invalid or unenforceable
in any given circumstance or situation, then all other terms and provisions hereof, being severable, shall remain in full force
and effect in such circumstance or situation, and such term or provision shall remain valid and in effect in any other circumstances
or situation.


 



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8.6     Construction.
Use of the masculine pronoun herein shall be deemed to refer to the feminine and neuter genders and the use of singular references
shall be deemed to include the plural and vice versa, as appropriate. No inference in favor of or against any Party shall be drawn
from the fact that such Party or such Party’s counsel has drafted any portion of this Agreement.


 


8.7     Equitable
Remedies. The Parties hereto agree that, in the event of a breach of this Agreement by either Party, the other Party, if not then
in breach of this Agreement, may be without an adequate remedy at law owing to the unique nature of the contemplated relationship.
In recognition thereof, in addition to (and not in lieu of) any remedies at law that may be available to the non-breaching Party,
the non-breaching Party shall be entitled to obtain equitable relief, including the remedies of specific performance and injunction,
in the event of a breach of this Agreement, by the Party in breach, and no attempt on the part of the non-breaching Party to obtain
such equitable relief shall be deemed to constitute an election of remedies by the non-breaching Party that would preclude the
non-breaching Party from obtaining any remedies at law to which it would otherwise be entitled.


 


8.8     Attorney’s
Fees. If any Party hereto shall bring an action at law or in equity to enforce its rights under this Agreement, the prevailing
Party in such action shall be entitled to recover from the Party against whom enforcement is sought its costs and expenses incurred
in connection with such action (including fees, disbursements and expenses of attorneys and costs of investigation). [In the event
that Executive institutes any legal action to enforce Executive’s legal rights hereunder, or to recover damages for breach
of this Agreement, Executive, if Executive prevails in whole or in part, shall be entitled to recover from the Company reasonable
attorneys’ fees and disbursements incurred by Executive with respect to the claims or matters on which Executive has prevailed.]


 


8.9     No
Waiver.  No failure, delay or omission of or by any Party in exercising any right, power or remedy upon any breach or default
of any other Party, or otherwise, shall impair any such rights, powers or remedies of the Party not in breach or default, nor shall
it be construed to be a waiver of any such right, power or remedy, or an acquiescence in any similar breach or default; nor shall
any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.
Any waiver, permit, consent or approval of any kind or character on the part of any Party of any provisions of this Agreement must
be in writing and be executed by the Parties and shall be effective only to the extent specifically set forth in such writing.


  



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8.10   Remedies
Cumulative.  All remedies provided in this Agreement, by law or otherwise, shall be cumulative and not alternative.


 


8.11   Amendment.
This Agreement may be amended only by a writing signed by all of the Parties hereto.


 


8.12   Entire
Contract. This Agreement and the documents and instruments referred to herein constitute the entire contract between the parties
to this Agreement and supersede all other understandings, written or oral, with respect to the subject matter of this Agreement.


 


8.13   Survival.
This Agreement shall constitute a binding obligation of the Company and any successor thereto. Notwithstanding any other provision
in this Agreement, the obligations under Articles 5 and 6 shall survive termination of this Agreement.


 


8.14   Savings
Clause. Notwithstanding any other provision of this Agreement, if the indemnification provisions in Exhibit A hereto or any portion
thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify
Executive as to Expenses, judgments, fines, penalties and amounts paid in settlement with respect to any Proceeding to the full
extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the fullest extent permitted
by applicable law.


 


8.15   Modifications
and Waivers.  Notwithstanding any other provision of this Agreement, the indemnification provisions in Exhibit A hereto and
the Change of Control provisions Article Seven herein, may be amended from time to time to reflect changes in Delaware law or for
other reasons.


 



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8.16   Notices. 
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been given (i)
when delivered by hand or (ii) if mailed by certified or registered mail with postage prepaid, on the third day after the date
on which it is so mailed:


 


  (a)   if to
Executive:


 


  Vincent Genovese


  [________]


 


  (b)   if to
the Company:


 


  NAC DRIVE SYSTEMS. INC.


  [________]


 Attn: Chairman, Compensation
Committee


 


or to such other address as may have been furnished
to Executive by the Company or to the Company by Executive, as the case may be.


 


8.17   No
Limitation. Notwithstanding any other provision of this Agreement, for avoidance of doubt, the parties confirm that the foregoing
does not apply to or limit Executive's rights under Delaware law or the Company's Corporate Documents.


 


IN WITNESS WHEREOF,
the parties have set their hands and seals hereunto on the date first above written.


 


	NAC HARMONIC DRIVE, INC.	 	EXECUTIVE
	 	 	 	 	 
	By:	/s/ Edward Haversang	 	By:	/s/ Vincent Genovese
	Name:	EDWARD HAVERSANG	 	Name:	VINCENT GENOVESE
	Title:	Director & Chairman,	 	 	4-23-14
	 	Compensation Committee	 	 	 
	 	4-23-14	 	 	 


 



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SCHEDULE A


 


None


 






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EXHIBIT A 


 


FORM
OF INDEMNIFICATION AGREEMENT


This INDEMNIFICATION
AGREEMENT (the “Agreement”) is dated as of [__] [____] 2014, and is made by and between NAC Drive Systems, Inc. a Delaware
corporation (the “Company”), and Vincent Genovese, the Chief Executive Office of the Company (the “Indemnitee”).


RECITALS


A.    The Company
is aware that competent and experienced persons are increasingly reluctant to serve as directors or officers of corporations unless
they are protected by comprehensive liability insurance and/or indemnification, due to increased exposure to litigation costs and
risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no reasonable relationship
to the compensation of such directors and officers;


B.    The Board
of Directors of the Company (the “Board”) has concluded that, to retain and attract talented and experienced individuals
to serve as officers and directors of the Company and to encourage such individuals to make the business decisions necessary or
appropriate for the success of the Company, it is necessary for the Company contractually to indemnify its directors and certain
of its officers, and certain of the directors and officers of its Subsidiaries, and to assume for itself maximum permissible liability
for Expenses, losses, liabilities and damages in connection with claims against such officers and directors relating to their service
in such capacities, and has further concluded that the failure to provide such contractual indemnification could result in significant
harm to the Company and its Subsidiaries and the Company’s stockholders;


C.    The statutes
and judicial decisions regarding the duties of directors and officers are often difficult to apply, ambiguous, or conflicting,
and therefore fail to provide such directors and officers with adequate, reliable knowledge of legal risks to which they are exposed
or information regarding the proper course of action to take;


D.    Plaintiffs
often seek damages in such large amounts and the costs of litigation may be so great (whether or not the case is meritorious),
that the defense and/or settlement of such litigation may be beyond the personal resources of directors and officers;


E.    Section 145
of the General Corporation Law of Delaware, under which the Company is organized (the “Law”), empowers the Company
to indemnify by agreement its officers, directors, employees and agents, and persons who serve, at the request of the Company,
as directors, officers, employees or agents of other corporations or enterprises, and expressly provides that the indemnification
provided by the Law is not exclusive; further the provisions of the Amended Certificate of Incorporation of the Company (the “Certificate
of Incorporation”) specifically state that the rights to indemnification and payment of expenses described therein are not
exclusive, and thereby contemplate that contracts with respect to indemnification and payment of Expenses by the Company and similar
obligations of the Company may be entered into by and between the Company and persons entitled to such rights described in the
Certificate of Incorporation; and


F.    The Company
desires and has requested the Indemnitee to serve or continue to serve as a officer of the Company. As an inducement to serve
and in consideration for such service, the Company has agreed to indemnify the Indemnitee for claims for damages arising out of
or related to the performance of such services to the Company in accordance with the terms and conditions set forth in this Agreement.



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NOW, THEREFORE,
the parties hereto, intending to be legally bound, hereby agree as follows:


1.     Definitions.


1.1.     Agent.
For the purposes of this Agreement, “Agent” of the Company means any person who is or at any time was a director or
officer of the Company or a subsidiary of the Company; or is or at any time was serving at the request of, for the convenience
of, or to represent the interest of the Company or a subsidiary of the Company as a director or officer of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise or an affiliate of the Company; or was a director
or officer of another enterprise or affiliate of the Company at the request of, for the convenience of, or to represent the interests
of such predecessor corporation. The term “enterprise” includes any employee benefit plan of the Company, its subsidiaries,
affiliates and predecessor corporations.


1.2.     Change
in Control. “Change in Control” means a change in control of the Company occurring after [ ] [ ], 2014, of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar
item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934 (the “Act”), whether or
not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such
a Change in Control shall be deemed to have occurred if after [ ] [ ], 2014, (i) any “person” (as such term is used
in Sections 13(d) and 14(d) of the Act) other than a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company’s
then outstanding securities without the prior approval of at least two-thirds of the members of the board of directors of the
Company in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the
Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at
least two-thirds of the members of the board of directors of the Company then in office, as a consequence of which members of
the board of directors in office immediately prior to such transaction or event constitute less than a majority of the board of
directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause
(ii) of this subsection (c), individuals who at the beginning of such period constituted the board of directors of the Company
(including for this purpose any new director whose election or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period)
cease for any reason to constitute at least a majority of the board of directors.


1.3.     Company.
As used herein the term “Company” includes all successors and assigns to the Company, including, without limitation,
any corporation or other entity that is a successor to the Company by virtue of a Change in Control.


1.4.     Controlled.
“Controlled” means subject to the power to exercise a controlling influence over the management or policies of a corporation,
partnership, joint venture, trust or other entity.


1.5.     Expenses.
For purposes of this Agreement, “Expenses” includes all direct and indirect costs of any type or nature whatsoever
(including, without limitation, attorneys’ fees and related disbursements and retainers, costs of travel, other out-of-pocket
costs such as fees and disbursements of expert witnesses, private investigators and professional advisors, court costs, transcript
costs, fees of experts, duplicating, printing, and binding costs, telephone and fax transmission charges, postage, delivery services,
secretarial services and other disbursements and expenses and reasonable compensation for time spent by the Indemnitee for which
he is not otherwise compensated by the Company or any third party) actually and reasonably incurred by the Indemnitee in connection
with the investigation, defense or appeal of a proceeding or establishing or enforcing a right to indemnification or advancement
of expenses under this Agreement, Section 145 of the Law or otherwise.


1.6.     Proceeding.
For the purposes of this Agreement, a “Proceeding” means any threatened, pending, or completed action, suit, arbitration,
alternate dispute resolution process, investigation, administrative hearing, appeal, inquiry or other proceeding, whether civil,
criminal, administrative, investigative or any other type whatsoever, whether formal or informal, including a proceeding initiated
by Indemnitee pursuant to Section 9 of this Agreement to enforce Indemnitee’s rights hereunder.



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1.7.     Subsidiary.
For purposes of this Agreement, “Subsidiary” means any corporation, partnership, limited liability company, trust,
joint venture, or other entity of which more than fifty percent (50%) of the outstanding voting securities is owned directly or
indirectly by the Company, by the Company and one or more of its subsidiaries or by one or more of the Company’s subsidiaries.


 


2.     Agreement
to Serve. The Indemnitee agrees to serve and/or continue to serve as an agent of the Company, at the will of the Company (or
under separate agreement, if such agreement exists), in the capacity the Indemnitee currently serves as an agent of the Company,
faithfully and to the best of his ability, so long as he is duly appointed or elected and qualified in accordance with the applicable
provisions of the charter documents of the Company or any Subsidiary of the Company; provided, however, that the Indemnitee may
at any time and for any reason resign from such position (subject to any contractual obligation that the Indemnitee may have assumed
apart from this Agreement), and the Company or any Subsidiary shall have no obligation under this Agreement to continue the Indemnitee
in any such position. For the avoidance of doubt, the Company and Indemnitee each acknowledge and agree that the resignation or
other termination of Indemnitee as an agent of the Company under this paragraph 2 shall not impair any right that Indemnitee may
otherwise have to be indemnified under the terms of this Agreement.


3.     Directors’
and Officers’ Insurance. The Company shall, to the extent that the Board determines it to be economically reasonable,
maintain a policy of directors’ and officers’ liability insurance (“D&O Insurance”), on such terms
and conditions as may be approved by the Board.


4.     Mandatory
Indemnification. Subject to Section 9 below, the Company shall indemnify and hold the Indemnitee harmless to the fullest extent
permitted by the Law. Without limiting the generality of the foregoing, the Company shall indemnify and hold harmless the Indemnitee
as follows:


4.1.     Third
Party Actions. If the Indemnitee is a person who was or is a party or is threatened to be made a party to any proceeding (other
than an action by or in the right of the Company) by reason of the fact that he is or at any time was an agent of the Company,
or by reason of anything done or not done by him in any such capacity, against any and all claims, expenses and liabilities of
any type whatsoever (including, but not limited to, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and
amounts paid in settlement) actually and reasonably incurred by him in connection with the investigation, defense, settlement
or appeal of such proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful; and/or


4.2.     Derivative
Actions. If the Indemnitee is a person who was or is a party or is threatened to be made a party to any proceeding by or in the
right of the Company to procure a judgment in its favor by reason of the fact that he is or at any time was an agent of the Company,
or by reason of anything done or not done by him in any such capacity, against any and all claims, expenses and liabilities, including
without limitation attorneys’ fees, amounts paid in settlement of any such proceeding and all expenses actually and reasonably
incurred by him in connection with the investigation, defense, settlement, or appeal of such proceeding if he acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company; except that no indemnification
under this subsection shall be made in respect of any claim, issue or matter as to which such person shall have been finally adjudged,
in a judgment not subject to appeal, to be liable to the Company by a court of competent jurisdiction due to willful misconduct
of a culpable nature in the performance of his duty to the Company, unless and only to the extent that the Court of Chancery in
Delaware or the court in which such proceeding was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such
amounts which the Court of Chancery or such other court shall deem proper; and/or


4.3.     Exception
for Amounts Covered by Insurance. Notwithstanding the foregoing, the Company shall not be obligated to indemnify the Indemnitee
for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) to the extent such have been paid directly to the Indemnitee by D&O Insurance.


 



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5.     Partial
Indemnification and Contribution.


5.1.     Partial
Indemnification. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some
or a portion of any expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) incurred by him in the investigation, defense, settlement, or appeal of a proceeding
but is not entitled, however, to indemnification for all of the total amount thereof, then the Company shall nevertheless indemnify
the Indemnitee for such total amount except as to the portion thereof to which the Indemnitee is not entitled to indemnification.


5.2.     Contribution.
If the Indemnitee is not entitled to the indemnification provided in Section 4 for any reason other than the statutory limitations
set forth in the Law, then in respect of any threatened, pending or completed proceeding in which the Company is jointly liable
with the Indemnitee (or would be if joined in such proceeding), the Company shall contribute to the amount of Expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by
the Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand
and the Indemnitee on the other hand from the transaction from which such proceeding arose and (ii) the relative fault of the
Company on the one hand and of the Indemnitee on the other hand in connection with the events which resulted in such Expenses,
judgments, fines or settlement amounts, as well as any other relevant equitable considerations. The relative fault of the Company
on the one hand and of the Indemnitee on the other hand shall be determined by reference to, among other things, the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such Expenses,
judgments, fines or settlement amounts. The Company agrees that it would not be just and equitable if contribution pursuant to
this Section 5 were determined by pro rata allocation or any other method of allocation, which does not take account of the foregoing
equitable considerations.


6.     Mandatory
Advancement of Expenses.


6.1.     Advancement.
Subject to Section 9 below, the Company shall advance all expenses incurred by the Indemnitee in connection with the investigation,
participation, defense, settlement or appeal of any proceeding to which the Indemnitee is a party or is threatened to be made
a party by reason of the fact that the Indemnitee is or at any time was an agent of the Company or by reason of anything done
or not done by him in any such capacity. The Indemnitee hereby undertakes promptly to repay such amounts advanced only if, and
to the extent that, it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by the Company under
the provisions of this Agreement, the Certificate of Incorporation, or Bylaws of the Company, the Law or otherwise. The advances
to be made hereunder shall be paid by the Company to the Indemnitee within thirty (30) days following delivery of a written request
therefor by the Indemnitee to the Company.


6.2.     Exception.
Notwithstanding the foregoing provisions of this Section 6, the Company shall not be obligated to advance any expenses to the
Indemnitee arising from a lawsuit filed directly by the Company against the Indemnitee if an absolute majority of the members
of the Board reasonably determines in good faith, within thirty (30) days of the Indemnitee’s request to be advanced expenses,
that the facts known to them at the time such determination is made demonstrate clearly and convincingly that the Indemnitee acted
in bad faith. If such a determination is made, the Indemnitee may have such decision reviewed by another forum, in the manner
set forth in Sections 8.3, 8.4 and 8.5 hereof, with all references therein to “indemnification” being deemed to refer
to “advancement of expenses,” and the burden of proof shall be on the Company to demonstrate clearly and convincingly
that, based on the facts known at the time, the Indemnitee acted in bad faith. The Company may not avail itself of this Section
6.2 as to a given lawsuit if, at any time after the occurrence of the activities or omissions that are the primary focus of the
lawsuit, the Company has undergone a change in control. For this purpose, a change in control shall mean a given person or group
of affiliated persons or groups increasing their beneficial ownership interest in the Company by at least fifteen (15) percentage
points without advance Board approval.



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7.     Notice
and Other Indemnification Procedures.


7.1.     Promptly
after receipt by the Indemnitee of notice of the commencement of or the threat of commencement of any proceeding, the Indemnitee
shall, if the Indemnitee believes that indemnification with respect thereto may be sought from the Company under this Agreement,
notify the Company of the commencement or threat of commencement thereof.


7.2.     If,
at the time of the receipt of a notice of the commencement of a proceeding pursuant to Section 7.1 hereof, the Company has D&O
Insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action
to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with
the terms of such D&O Insurance policies.


7.3.     In
the event the Company shall be obligated to advance the expenses for any proceeding against the Indemnitee, the Company, if appropriate,
shall be entitled to assume the defense of such proceeding, with counsel approved by the Indemnitee (which approval shall not
be unreasonably withheld), upon the delivery to the Indemnitee of written notice of its election to do so. After delivery of such
notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the Company will not be liable
to the Indemnitee under this Agreement for any fees of counsel subsequently incurred by the Indemnitee with respect to the same
proceeding, provided that: (a) the Indemnitee shall have the right to employ his own counsel in any such proceeding at the Indemnitee’s
expense; (b) the Indemnitee shall have the right to employ his own counsel in connection with any such proceeding, at the expense
of the Company, if such counsel serves in a review, observer, advice, and counseling capacity and does not otherwise materially
control or participate in the defense of such proceeding; or (c) if (i) the employment of counsel by the Indemnitee has been previously
authorized by the Company, (ii) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between
the Company and the Indemnitee in the conduct of any such defense or (iii) the Company shall not, in fact, have employed counsel
to assume the defense of such proceeding, then the fees and expenses of the Indemnitee’s counsel shall be at the expense
of the Company.


8.     Determination
of Right to Indemnification.


8.1.     To
the extent the Indemnitee has been successful on the merits or otherwise in defense of any proceeding referred to in Section 4.1
or 4.2 of this Agreement or in the defense of any claim, issue or matter described therein, the Company shall indemnify the Indemnitee
against expenses actually and reasonably incurred by him in connection with the investigation, defense or appeal of such proceeding,
or such claim, issue or matter, as the case may be, including without limitation Indemnitee’s attorneys’ fees.


8.2.     In
the event that Section 8.1 is inapplicable, or does not apply to the entire proceeding, the Company shall nonetheless indemnify
the Indemnitee unless the Company shall prove by clear and convincing evidence to a forum listed in Section 8.3 below that the
Indemnitee has not met the applicable standard of conduct required to entitle the Indemnitee to such indemnification.


8.3.     The
Indemnitee shall be entitled to select the forum in which the validity of the Company’s claim under Section 8.2 hereof that
the Indemnitee is not entitled to indemnification will be heard from among the following:


(a)     a
quorum of the Board consisting of directors who are not parties to the proceeding for which indemnification is being sought;


(b)     the
stockholders of the Company, provided however that the Indemnitee can select a forum consisting of the stockholders of the Company
only with the approval of the Company;


(c)     legal
counsel mutually agreed upon by the Indemnitee and the Board, which counsel shall make such determination in a written opinion;


(d)     a
panel of three arbitrators, one of whom is selected by the Company, another of whom is selected by the Indemnitee and the last
of whom is selected by the first two arbitrators so selected; or


(e)     the
Court of Chancery of Delaware or other court having jurisdiction of subject matter and the parties.



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8.4.     As
soon as practicable, and in no event later than thirty (30) days after the forum has been selected pursuant to Section 8.3 above,
the Company shall, at its own expense, submit to the selected forum its claim that the Indemnitee is not entitled to indemnification,
and the Company shall act in the utmost good faith to assure the Indemnitee a complete opportunity to defend against such claim.


8.5.     If
the forum selected in accordance with Section 8.3 hereof is not a court, then after the final decision of such forum is rendered,
the Company or the Indemnitee shall have the right to apply to the Court of Chancery of Delaware, the court in which the proceeding
giving rise to the Indemnitee’s claim for indemnification is or was pending or any other court having jurisdiction of subject
matter and the parties, for the purpose of appealing the decision of such forum, provided that such right is executed within sixty
(60) days after the final decision of such forum is rendered. If the forum selected in accordance with Section 8.3 hereof is a
court, then the rights of the Company or the Indemnitee to appeal any decision of such court shall be governed by the applicable
laws and rules governing appeals of the decision of such court.


8.6.     Notwithstanding
any other provision in this Agreement to the contrary, the Company shall indemnify the Indemnitee against all Expenses incurred
by the Indemnitee in connection with any hearing or proceeding under this Section 8 involving the Indemnitee and against all Expenses
incurred by the Indemnitee in connection with any other proceeding between the Company and the Indemnitee involving the interpretation
or enforcement of the rights of the Indemnitee under this Agreement unless a court of competent jurisdiction finds that each of
the material claims and/or defenses of the Indemnitee in any such proceeding was frivolous or not made in good faith.


9.     Exceptions.
Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:


9.1.     Claims
Initiated by Indemnitee. To indemnify or advance expenses to the Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by the Indemnitee and not by way of defense, except with respect to proceedings specifically authorized by
the Board or brought to establish or enforce a right to indemnification and/or advancement of Expenses arising under this Agreement,
the charter documents of the Company or any Subsidiary or any statute or law or otherwise, but such indemnification or advancement
of Expenses may be provided by the Company in specific cases if the Board finds it to be appropriate; or


9.2.     Unauthorized
Settlements. To indemnify the Indemnitee hereunder for any amounts paid in settlement of a proceeding unless the Company consents
in advance in writing to such settlement, which consent shall not be unreasonably withheld; or


9.3.     Securities
Law Actions. To indemnify the Indemnitee on account of any suit in which judgment is rendered against the Indemnitee for an accounting
of profits made from the purchase or sale by the Indemnitee of securities of the Company pursuant to the provisions of Section
l6(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory
law; or


9.4.     Unlawful
Indemnification. To indemnify the Indemnitee if a final decision by a court having jurisdiction in the matter, in a judgment not
subject to appeal, shall determine that such indemnification is not lawful. In this respect, the Company and the Indemnitee have
been advised that the Securities and Exchange Commission takes the position that indemnification for liabilities arising under
the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should
be submitted to appropriate courts for adjudication.



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10.     Non-Exclusivity.



THE PROVISIONS FOR
INDEMNIFICATION AND ADVANCEMENT OF EXPENSES SET FORTH IN THIS AGREEMENT SHALL NOT BE DEEMED EXCLUSIVE OF ANY OTHER RIGHTS WHICH
THE INDEMNITEE MAY HAVE UNDER ANY PROVISION OF LAW, THE COMPANY’S CERTIFICATE OF INCORPORATION OR BYLAWS, THE VOTE OF THE
COMPANY’S STOCKHOLDERS OR DISINTERESTED DIRECTORS, OTHER AGREEMENTS OR OTHERWISE, BOTH AS TO ACTION IN THE INDEMNITEE’S
OFFICIAL CAPACITY AND TO ACTION IN ANOTHER CAPACITY WHILE OCCUPYING HIS POSITION AS AN AGENT OF THE COMPANY, AND THE INDEMNITEE’S
RIGHTS HEREUNDER SHALL CONTINUE AFTER THE INDEMNITEE HAS CEASED ACTING AS AN AGENT OF THE COMPANY AND SHALL INURE TO THE BENEFIT
OF THE HEIRS, EXECUTORS AND ADMINISTRATORS OF THE INDEMNITEE.


11.     Burden
of Proof. In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity
making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement, and the Company shall
have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination
contrary to that presumption.


12.     Duration
of Agreement.


This Agreement shall continue
until and terminate upon the later of: (a) 10 years after the date that the Indemnitee shall have ceased to serve as a director
and/or officer of the Company or director, officer, employee or agent of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which the Indemnitee served at the request of the Company; or (b) one year after the
final, nonappealable termination of any Proceeding then pending in respect of which the Indemnitee is granted rights of indemnification
or advancement of Expenses hereunder and of any proceeding commenced by the Indemnitee pursuant to Section 10 of this Agreement
relating thereto.


 


13.     General
Provisions.


13.1.     Interpretation
of Agreement. It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification
and advancement of expenses to the Indemnitee to the fullest extent now or hereafter permitted by law, except as expressly limited
herein. 


13.2.     Severability.
If any provision or provisions of this Agreement shall be held to be invalid, illegal, or unenforceable for any reason whatsoever,
then:


(a)     the
validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, all portions
of any paragraphs of this Agreement containing any such provision held to be invalid, illegal, or unenforceable that are not themselves
invalid, illegal, or unenforceable) shall not in any way be affected or impaired thereby; and 


(b)     to
the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraphs of
this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal
or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable
and to give effect to Section 13.1 hereof.


13.3.     Modification
and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of
the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.



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13.4.     Subrogation.
In the event of full payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of the Indemnitee, who shall execute all documents required and shall do all acts that may be necessary or desirable
to secure such rights and to enable the Company effectively to bring suit to enforce such rights.


13.5.     Counterparts.
This Agreement may be executed in one or more counterparts and via facsimile, each of which shall constitute an original, but all
of which when taken together shall constitute a single agreement.


13.6.     Successors
and Assigns. The terms of this Agreement shall bind, and shall inure to the benefit of, the successors and assigns of the parties
hereto.


13.7.     Notice.
All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given:
(a) if delivered by hand and signed for by the party addressee; or (b) if mailed by certified or registered mail, with postage
prepaid, on the third business day after the mailing date. Addresses for notices to either party are as shown on the signature
page of this Agreement or as subsequently modified by written notice.


13.8.     Gender.
The masculine, feminine or neuter pronouns used herein shall be interpreted without regard to gender, and the use of the singular
or plural shall be deemed to include the other whenever the context so requires.


13.9.     Governing
Law. This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely within Delaware.


If the General
Corporation Law of the State of Delaware (the “Delaware Law”) or any other applicable law is amended after the date
hereof to permit the Company to indemnify Indemnitee for Expenses or liabilities, or to indemnify Indemnitee with respect to any
action or Proceeding, not contemplated by this Agreement, then this Agreement (without any further action be either party hereto)
shall automatically be deemed to be amended to require that the Company indemnify Indemnitee to the fullest extent permitted by
the Delaware Law.


13.10.     Consent
to Jurisdiction. The Company and the Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State
of Delaware for all purposes in connection with any action or proceeding, which arises out of or relates to this Agreement.


13.11.     Attorneys’
Fees. In the event Indemnitee is required to bring any action to enforce rights under this Agreement (including, without limitation,
the payment or reimbursement of expenses of any proceeding described in Section 4), the Indemnitee shall be entitled to all reasonable
fees and expenses in bringing and pursuing such action, unless a court of competent jurisdiction finds each of the material claims
of the Indemnitee in any such action was frivolous and not made in good faith.


[Balance of
the Page Intentionally Left Blank]



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IN WITNESS WHEREOF,
the parties hereto have entered into this Agreement effective as of the date first written above.  





	NAC DRIVE SYSTEMS, INC.	 
	 	 
	By:	 	 
	Name:  	 	 
	Title:	 	 
	 	 	 
	Date: [____] [__________] 2014	 
	 	 	 
	 	 
	VINCENT GENOVESE	 
	 	 	 
	Date: [____] [__________] 2014	 
	 	 	 
	Address:		 







 


 


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