8-K

                       Securities and Exchange Commission
                             Washington, D.C. 20549

                      ------------------------------------



                                    FORM 8-K

                                 CURRENT REPORT

       Pursuant to Section 13 or 15(d) of Securities Exchange Act of 1934

        Date of Report (Date of earliest event reported) August 18, 1998


                        NORTH ATLANTIC ACQUISITION CORP.
            --------------------------------------------------------
             (Exact name of registrant as specified in its charter)


             Delaware                                     0-22813
- ---------------------------------------------      ---------------------
(State or other jurisdiction of incorporation)     (Commission File No.)



     5 East 59th Street                                   
     New York, New York                                   10022
- ----------------------------------------               -----------
(Address of principal executive offices)                (Zip Code)


       Registrant's telephone number, including area code: (212) 486-4444







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Item 5.  Other Events

     On  August  18,  1998,  North  Atlantic   Acquisition   Corp.,  a  Delaware
corporation ("NAAC"),  Moto Guzzi Corp., a Delaware corporation ("Guzzi Corp."),
and, for certain provisions,  Trident Rowan Group, Inc., a Maryland  corporation
("TRG"),   entered  into  a  definitive   Agreement   and  Plan  of  Merger  and
Reorganization  ("Merger Agreement"),  pursuant to which Guzzi Corp. would merge
with and into NAAC, with NAAC being the surviving  corporation  ("Merger").  TRG
and its partially owned subsidiary  O.A.M.  S.p.A.  ("OAM") together own all the
outstanding  common  stock of Guzzi  Corp.  The  consummation  of the  Merger is
subject  to the terms and  conditions  of the  Merger  Agreement  which  will be
submitted  to the  stockholders  of NAAC for their  approval  at a  Stockholders
Meeting to be called for the purpose,  among other  things,  of  obtaining  such
approval ("Stockholders Meeting").

     The Merger

     Subject  to the terms and  conditions  of the Merger  Agreement,  NAAC will
issue to the current  holders of the common stock and  preferred  stock of Guzzi
Corp. an aggregate of 3,702,450  shares of Class A Common Stock,  $.01 par value
("Class A Common Stock"),  234,489 shares of Class B Convertible Preferred Stock
and warrants  ("Nominal  Warrants") to purchase such number of shares of Class A
Common  Stock as is equal to  74.05%  of the  number of shares of Class A Common
Stock  which may be  purchased  under the  maximum  number of  Nominal  Warrants
(together "Merger  Consideration").  Simultaneously with the consummation of the
Merger,  TRG and OAM have agreed to contribute to the capital of Guzzi Corp. all
intercompany  debt,  less  $800,000,  between each of those  companies and Guzzi
Corp. in exchange for the issuance of an aggregate of 1,038,040  shares of Class
A Common Stock, 65,743 shares of Class B Preferred Stock and Nominal Warrants to
purchase  20.76% of the  number of shares of Class A Common  Stock  which may be
purchased under the maximum number of Nominal Warrants.  NAAC will also offer to
the holders of the  outstanding  warrants of Guzzi  Corp.,  the  opportunity  to
exchange them for an aggregate of 259,510 shares of Class A Common Stock, 16,436
shares of Class B Preferred Stock and Nominal  Warrants to purchase 5.19% of the
number of  shares  of Class A Common  Stock  which  may be  purchased  under the
maximum number of Nominal Warrants. The Merger Consideration is subject to being
increased  if NAAC has less than  $8,150,000  in cash  assets at the time of the
Merger.  All the Class B Preferred  Stock and  100,000  shares of Class A Common
Stock  issued on the Merger  will be  deposited  in escrow to provide a fund for
indemnification of NAAC in the event of a breach of a representation or warranty
determined after the Merger,  subject to various  limitations before a claim may
be made.  The escrow is for a maximum  period ending  approximately  March 2000,
unless there is an outstanding claim for indemnification.

     The fees and expenses of the transaction  attributable to NAAC will be paid
from the liquid  assets of NAAC and the proceeds of a special  interest  bearing
account with Chase Manhattan Bank, N.A. ("Escrow Fund") established with certain
proceeds of the initial public offering  consummated August 22, 1997 ("IPO"). As
of July 31,  1998 the  Escrow  Fund held  $8,422,500.  TRG will pay the fees and
expenses of the transaction attributable to Guzzi Corp.

     The  consummation of the Merger is conditioned  upon various  matters.  The
obligations  of NAAC,  Guzzi Corp.  and TRG are  subject to various  conditions,
including (i) the  representations  and warranties of NAAC,  Guzzi Corp. and TRG
are  true and  correct  in all  material  respects  (as  defined  in the  Merger
Agreement) at the consummation of the Merger, (ii) performance of and compliance
with covenants,  agreements and conditions,  (iii) absence of any pending claim,




                                        2




action,  suit,  investigation or governmental  proceeding which would render the
Merger  unlawful,  and (iv)  receipt of all  necessary  consents,  approvals  or
waivers.  The  obligation  of NAAC to  consummate  the Merger is also subject to
approval  of various  matters by the  stockholders  of NAAC and  approval by the
security holders of Guzzi Corp.

     The Merger  Agreement may be  terminated by (i) mutual  consent of NAAC and
Guzzi Corp.  and TRG, (ii) by Guzzi Corp. if the cash assets of NAAC at the time
of the Merger are less than  $8,000,000  (after  various cash expenses of NAAC),
(iii) if the Merger is not  consummated by February 18, 1999, (iv) if there is a
breach  of  any  of  the  covenants,  representations  or  warranties  as of the
consummation of the Merger that have not been waived,  or (v) the failure of the
stockholders  of  NAAC  to  approve  the  transaction  or up to 20% of the  NAAC
stockholders  who are  eligible to, and do,  exercise  their right to have their
Class A Common Stock redeemed at the time of the Merger.  The NAAC  stockholders
who own on the record date for the  Stockholders  Meeting  Class A Common  Stock
offered in the IPO ("Public  Stockholders")  have the right to demand redemption
of such  shares  of Class A Common  Stock  into cash  upon  consummation  of the
Merger.  The conversion price per share of Class A Common Stock will be equal to
the net  worth of NAAC as  reflected  in its most  recent  financial  statements
divided by the shares of Class A Common Stock of NAAC eligible to participate in
the distribution from the Escrow Fund. To exercise the right of redemption,  the
Public Stockholders must follow certain procedures.  Based upon the net worth of
NAAC as of May 31,  1998 which was  $8,457,902,  the  conversion  price would be
approximately  $10.57.  On August  18,1998,  the day the  Merger  Agreement  was
executed  the closing bid and asked prices of a share of Class A Common Stock of
NAAC were approximately $8.625 and $9.375.

     Holders of the Class A Common Stock and the Class B Common Stock of NAAC at
the close of business on the record date for the  Stockholders  Meeting ("Record
Date") will be entitled  to notice of and to vote at the  Stockholders  Meeting.
Each  holder of record of the Class A Common  Stock is entitled to cast one vote
for each share held,  and each  holder of record of the Class B Common  Stock is
entitled to cast two votes for each share held.  The  directors  and officers of
NAAC who hold an aggregate of 40,000  shares of Class A Common Stock have agreed
to vote all their shares in accordance with the vote of the majority in interest
of all other NAAC stockholders.

The Parties

     NAAC

     NAAC is a Specialized  Merger and  Acquisition  Allocated Risk  Transaction
company,  the  objective of which is to acquire an operating  business  ("Target
Business").  NAAC  consummated  its IPO on August 22,  1997,  and  received  net
proceeds of  approximately  $8,390,000  after  payment of offering  expenses.  A
substantial  portion of the net proceeds  ($8,000,000)  was placed in the Escrow
Fund,  until the earlier of (i) the  consummation  of a business  combination or
(ii)  liquidation  of NAAC.  The remaining net proceeds of the IPO have been and
are being used to pay for  business,  legal and  accounting,  due  diligence  on
prospective  acquisitions,  and for the general and  administrative  expenses of
NAAC. NAAC has not engaged in any substantive  commercial  business and the sole
activities  of NAAC have been to  evaluate  and  select  an  appropriate  Target
Business and to structure and negotiate the Merger Agreement.




                                        3





     NAAC's initial  business  combination  must be with a Target Business whose
fair  market  value is at least 80% of the net assets of NAAC at the time of the
business   combination.   NAAC  believes  the  proposed  Merger  satisfies  this
requirement.

     If NAAC does not consummate any business combination, including the Merger,
by August 22, 1999,  NAAC will be dissolved  and will  distribute  to all Public
Stockholders  in  proportion  to their  respective  equity  interest in NAAC, an
aggregate sum equal to the amount in the Escrow Fund on that date,  inclusive of
any after tax interest thereon, plus any remaining net assets of NAAC.

     Guzzi Corp.

     Guzzi Corp. was formed in 1996 to acquire Moto Guzzi S.p.A. ("Moto Guzzi"),
the 77-year old Italian manufacturer of performance and luxury motorcycles,  and
Moto America,  Inc., a North Carolina  corporation  ("Moto America,  Inc."), the
exclusive  United  States  importer  -  distributor  of  "Moto  Guzzi(R)"  brand
motorcycles and spare parts.

     Moto Guzzi has a reputation as one of the elite motorcycle manufacturers in
the world, and distributes its products worldwide through a network of wholly or
partially owned importers and independent dealers. For many years, however, Moto
Guzzi  failed to operate  profitably.  In 1994,  then  operating  under the name
G.B.M.  S.p.A.,  Moto  Guzzi  was  mired  in a  cycle  of  declining  sales  and
production,  and of increasing losses,  which threatened its viability.  In that
year,  TRG  brought  outside  temporary  management  services  to Moto Guzzi and
developed  a strategic  plan to restore  its  subsidiary  to  financial  health,
materially  enhance its value and provide liquidity through a public offering of
its shares or by sale to a third party.

     Since  that  intervention,  Moto  Guzzi has  significantly  increased  unit
production and sales to approximately  5,700 units for fiscal 1997,  although it
continues  to  operate  at a  loss.  Moto  Guzzi's  strategic  plan  anticipates
additional  investment  in plant and  equipment  to enable  substantial  further
growth in unit production and sales, a relocation of its principal manufacturing
operations from its original  facility in Mandello del Lario,  Italy, to a newer
facility in Monza, Italy, the introduction of new motorcycle models, redesigning
engines, and an increase in sales in the United States through Moto America.

     Guzzi Corp.  today  manufactures  a high priced  line of  motorcycles,  and
distributes parts and accessories,  under the Moto Guzzi trademark.  Guzzi Corp.
motorcycles vary in engine  displacement  from 350cc to 1,100cc.  Guzzi Corp. in
recent  years,  has  concentrated  development  and sales efforts on its largest
motorcycles,  having engines of 750cc or larger, but as part of its growth plan,
it is planning to re-enter the lower-cost, smaller displacement market.

     All  motorcycle  manufacturing  currently  is  conducted  at a  factory  in
Mandello  del  Lario,  Italy.  Guzzi  Corp.  manufactures  certain  power  train
components,  acquires  certain  other  components  from outside  suppliers,  and
performs finishing work and assembly into motorcycle bodies.

     Guzzi Corp.  maintains a distribution  network throughout Italy of over 120
independent   dealers.   A  single   importer-distributor   acts  as   exclusive
importer-distributor for Guzzi Corp. in each of Argentina,  Australia,  Austria,
Belgium, the Czech Republic,  Denmark,  Finland, France, Greece, Holland, Japan,
Luxembourg,  Malaysia, Malta, New Zealand, Norway, Portugal,  Singapore,  Spain,
Sweden,  Switzerland,  and the United  Kingdom.  Moto  America  is Guzzi  Corp's
exclusive importer- distributor in the United States. Moto Guzzi also owns a 25%
equity  interest in MGI GmbH, a German  corporation  which became the  exclusive
importer-distributor in Germany.



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     The mailing address of the principal executive office of Guzzi Corp. is c/o
Trident Rowan Group,  Inc., Two Worlds Fair Drive,  Somerset,  NJ 08873, and its
telephone number is (908) 868- 9000.

Item 7.  Financial Statement and Exhibits

     (a) The following documents are filed herewith as exhibits:

          2.1  Agreement  and  Plan of  Merger  and  Reorganization  dated as of
               August 18, 1998 (without schedules or exhibits)

          99.1 Press Release dated August 18, 1998

     (b) Financial Statements

          None 

     (c) Pro Forma Financial Information

          None 



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                                    SIGNATURE


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                   NORTH ATLANTIC ACQUISITION CORP.



                                     /s/ David J. Mitchell
                                   ------------------------------------
                                           Name:  David J. Mitchell
                                          Title:   President


Date:  August 24, 1998



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EX-2.1

                 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION



     AGREEMENT  AND PLAN OF MERGER AND  REORGANIZATION,  dated  August __, 1998,
among NORTH ATLANTIC ACQUISITION CORP., a Delaware corporation,  ("North"), MOTO
GUZZI CORP., a Delaware  corporation  ("Motoguzzi")  and, as to those applicable
provisions  of Article II,  Article III,  Article V, Article VI,  Article  VIII,
Article X,  Article XI and Article  XIII hereof,  TRIDENT  ROWAN GROUP,  INC., a
Maryland corporation ("TRG") and significant shareholder of Motoguzzi.

     WHEREAS,  North  was  formed  to serve as a  vehicle  to  effect a  merger,
exchange of capital stock,  acquisition or other  business  combination  with an
operating business;

     WHEREAS, Motoguzzi,  through its wholly and partially owned subsidiaries is
in the business of designing, manufacturing and selling motorcycles, spare parts
and similar products;

     WHEREAS,  subject to the terms and conditions of this Agreement and Plan of
Merger and  Reorganization  ("Agreement"),  the Parties  desire to  consummate a
merger, as contemplated herein,  pursuant to which Motoguzzi will merge with and
into  North,  with  North  being the  surviving  corporation  (North,  after the
consummation of the Merger, the "Surviving Corporation"); and

     WHEREAS, for Federal income tax purposes,  the parties intend, by approving
resolutions   authorizing  this  Agreement,   that  such  merger  qualify  as  a
reorganization under the provisions of Section 368(a)(1)(A) of the United States
Internal Revenue Code of 1986, as amended (the "Code").

     IT IS AGREED:

                                    ARTICLE I
                                   THE MERGER

     SECTION 1.01 Definitions.  Certain capitalized terms used in this Agreement
shall have the meanings specified in Article XII.

     SECTION  1.02 The  Merger.  Upon the terms and  subject  to the  conditions
hereof and in accordance with the relevant provisions of the General Corporation
Law of the State of Delaware  (the "DGCL"),  at the  Effective  Time (as defined
herein) North and Motoguzzi  shall  consummate a merger  ("Merger") of Motoguzzi
with and into  North.  Following  the Merger,  (i) North  shall  continue as the
surviving  corporation  and shall  continue its existence  under the laws of the
State of Delaware and (ii) the separate  corporate  existence of Motoguzzi shall
cease.


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     SECTION 1.03 Effective Time. On the Closing Date, North and Motoguzzi shall
file with the Secretary of State of the State of Delaware in accordance with the
DGCL an  executed  copy of the  Certificate  of Merger in the form of  Exhibit A
hereto (the "Certificate of Merger").  The Merger shall become effective at such
time as the  Certificate  of Merger is filed with the  Secretary of State of the
State of Delaware (the "Effective Time").

     SECTION 1.04  Effects of the Merger.  The Merger shall have the effects set
forth in Section 259 of the DGCL.

     SECTION 1.05 Changes to  Certificate  of  Incorporation  and By-Laws of the
Surviving Corporation. The Certificate of Merger will also amend the Certificate
of Incorporation of the Surviving  Corporation to effect a change in the name of
North from "North Atlantic  Acquisition Corp." to "Moto Guzzi  Corporation",  to
increase the authorized capital stock of the Surviving Corporation, to authorize
the  issuance  of one or more  classes of  preferred  stock and to provide for a
board of directors  with  staggered  terms of three years,  in the form attached
hereto as Exhibit A. The By-Laws of Moto Guzzi Corp. shall be the By-Laws of the
Surviving Corporation.  The Certificate of Incorporation as so modified and such
By-Laws shall be the Certificate of  Incorporation  and By-Laws of the Surviving
Corporation.

     SECTION 1.06 Directors and Officers of the Surviving  Corporation After the
Effective  Time. At the Effective  Time, the Board of Directors of the Surviving
Corporation  shall consist of eight  persons,  of which two will be nominated by
the  management of North,  five will be nominated by Motoguzzi and one will be a
nominee mutually acceptable to both Motoguzzi and North, each to serve until his
successor is elected and qualified.  Such persons, and the classes in which they
shall serve, as well as certain compensation arrangements and certain options to
purchase  shares of Class A Common Stock to be granted to certain  directors and
executive  officers of the Surviving  Corporation (the "Executive  Options") are
listed in  Schedule  1.06.  The  officers of North at the  Effective  Time shall
consist of the persons listed in Schedule  1.06,  each to serve until his or her
successor is elected.  Each of North and Motoguzzi may, at any time prior to the
Effective Time, change their nominees.

     SECTION  1.07 The  Closing.  Subject  to the terms and  conditions  of this
Agreement,   the   consummation  of  the  Merger  and  the  other   transactions
contemplated  by this Agreement shall take place at a closing (the "Closing") to
be held at 10:00 a.m.,  local time, on the third  Business Day after the date on
which the last of the  conditions  to Closing  set forth in Article IX hereof is
fulfilled or waived by the appropriate Party, as the case may be, at the offices
of Graubard Mollen & Miller,  600 Third Avenue,  New York, New York 10016, or at
such other time,  date or place as the  Parties  may agree upon in writing.  The
date on which the Closing occurs is referred to herein as the "Closing Date."


                                        2





     SECTION  1.08 Tax Free  Reorganization.  The  parties  intend to adopt this
Agreement as a tax-free plan of  reorganization  and to consummate the Merger in
accordance  with the provisions of Section  368(a)(1)(A)  of the Code, and shall
not take a position on any tax return inconsistent therewith. In addition, North
represents  now,  and as of the Closing,  that it presently  intends to continue
Motoguzzi's  historic  business  or use a  significant  portion  of  Motoguzzi's
business  assets in a  business,  in each case  within the  meaning of  Treasury
Regulation Section 1.368-1(d).

                                   ARTICLE II
                    CONVERSION OF SHARES AND RELATED MATTERS

     SECTION 2.01 Outstanding  Stock of North.  Upon consummation of the Merger,
the  outstanding  capital  stock of North  shall  continue  to be the issued and
outstanding capital stock of the Surviving Corporation.

     SECTION 2.02 Conversion of Outstanding Stock of Motoguzzi.

     (a) Except as provided in Section 2.03,  upon  consummation  of the Merger,
(i) the shares of common stock,  $.01 par value,  ("Old Motoguzzi Common Stock")
of Motoguzzi  outstanding on the date of this Agreement and immediately prior to
the  Effective  Time and the shares of preferred  stock,  $.01 par value,  ("Old
Motoguzzi  Preferred  Stock")  of  Motoguzzi  outstanding  on the  date  of this
Agreement and immediately  prior to the Effective Time,  shall, by virtue of the
Merger and without any action on the part of the holder thereof,  and subject to
reduction in accordance  with Section 2.03 below and increase in accordance with
Section 2.02(c) below, be converted into and exchanged for (A) 3,702,450  shares
of the Class A Common Stock,  $.01 par value ("Class A Common  Stock") of North,
subject  to  adjustment  as  herein  provided,  (B)  234,489  shares  of Class B
Convertible  Preferred Stock having such rights and preferences as are described
in the amended Certificate of Incorporation of the Surviving Corporation ("Class
B Preferred  Stock"),  and (C) warrants in the form attached as Exhibit B hereto
(the  "Nominal  Warrants")  to purchase  such number of shares of Class A Common
Stock as is equal to  74.05% of the  number  of  shares of Class A Common  Stock
which may be purchased under the "Maximum Nominal  Warrants" (as defined below),
(ii) in consideration of the contribution to the capital of Motoguzzi of certain
intercompany  indebtedness described in Section 2.06(b) there shall be issued to
the  holders  of such  indebtedness  1,038,040  shares of Class A Common  Stock,
65,743 shares of Class B Preferred Stock and Nominal Warrants to purchase 20.76%
of the number of shares of Class A Common Stock which may be purchased under the
Maximum Nominal Warrants,  and (iii) if all outstanding  Warrants to purchase an
aggregate of 1,500,000  shares of Old Motoguzzi  Common Stock at $4.00 per share
(the "Old Motoguzzi  Warrants") are surrendered (as provided in Section 2.06(a))
there shall be issued to such  surrendering  warrant  holders  259,510 shares of
Class A Common  Stock,  16,436  shares of Class B  Preferred  Stock and  Nominal


                                        3




Warrants to purchase 5.19% of the number of shares of Class A Common Stock which
may be purchased under the Maximum Nominal  Warrants.  The Class A Common Stock,
the Class B Preferred  Stock and the Nominal  Warrants are together  referred to
herein as the  "Merger  Consideration".  The  number of shares of Class A Common
Stock, Class B Preferred Stock and the number of Nominal Warrants payable as the
Merger  Consideration shall be rounded up or down to the nearest whole number of
shares or  warrants.  If the  holders  of less than all Old  Motoguzzi  Warrants
surrender same, then the Merger Consideration  described in the preceding clause
(iii) shall be reduced by multiplying the Merger  Consideration  in clause (iii)
by the  percentage  of Old  Motoguzzi  Warrants  so  surrendered  and  each  Old
Motoguzzi Warrant not so surrendered  shall, after the Effective Time, have such
continuing  rights as are  provided  by the  terms  thereof.  The term  "Maximum
Nominal  Warrants" shall mean Nominal Warrants to purchase such number of shares
of Class A Common  Stock as would be  acquired  hereunder  if all Old  Motoguzzi
Warrants are surrendered as provided in Section 2.06(a).

     (b) Except as otherwise  provided in this  Agreement  and except for shares
with respect to which the holder thereof votes against the Merger  ("Dissenter")
and  ultimately  receives  payment  thereon  pursuant to Section 262 of the DGCL
("Dissenter  Securities"),  each share of Old Motoguzzi Common Stock outstanding
on the date hereof and immediately prior to the Effective Time and each share of
Old Motoguzzi  Preferred  Stock  outstanding on the date hereof and  immediately
prior to the  Effective  Time will be  converted  into  .4937  shares of Class A
Common Stock,  .0313 shares of Class B Preferred Stock and Nominal  Warrants for
such number of shares of Class A Common  Stock as equals the number of shares of
Class A Common Stock which may be purchased  under 74.05% of the Maximum Nominal
Warrants  multiplied  by a  fraction,  the  numerator  of  which  is 1  and  the
denominator of which is 7,500,000.

     (c) If  Available  Cash (as  defined  in Section  4.05  below) is less than
$8,150,000  at the  Effective  Time,  the number of shares of Class B  Preferred
Stock issued as part of the Merger Consideration shall be increased by one share
for each  $15 of such  shortfall,  allocable  pro rata as  provided  in  Section
2.02(a).

     SECTION 2.03 Dissenters.

     (a) The Merger  Consideration  will be reduced,  on a pro rata basis,  as a
result of any Dissenter  seeking the appraisal rights pursuant to Section 262 of
the DGCL,  with  respect  to his  shares of Old  Motoguzzi  Common  Stock or Old
Motoguzzi Preferred Stock.

     (b) If after the  Effective  Time a  Dissenter  loses the right to  receive
payment  pursuant to Section 262 of the DGCL, the Dissenter  Securities  held by
the Dissenter  will be treated as if they had been converted as of the Effective
Time into the Merger Consideration.


                                        4





     (c) Motoguzzi will promptly provide North with copies of any written demand
for  payment to be  received  by a  Dissenter,  and North will have the right to
participate in all  negotiations and proceedings with respect to any demand by a
Dissenter. Motoguzzi will not, except with the prior written consent of North or
as may be required by law,  make any payment  prior to the  Effective  Time with
respect  to, or settle  or offer to  settle,  any  demand  of a  Dissenter.  All
Dissenter Securities acquired by Motoguzzi or by the Surviving  Corporation will
be canceled after payment therefor has been made in accordance with the DGCL.

     SECTION 2.04 Surrender and Payment.

     (a) Prior to the Effective Time, North will appoint American Stock Transfer
& Trust  Company,  New York, New York, as its agent  ("Exchange  Agent') for the
purpose of exchanging certificates  representing the Old Motoguzzi Common Stock,
Old  Motoguzzi   Preferred   Stock  and  Old  Motoguzzi   Warrants   ("Motoguzzi
Securities") for  certificates of Class A Common Stock,  Class B Preferred Stock
and  Nominal  Warrants  representing  the  appropriate  portion  of  the  Merger
Consideration.  Promptly after the Effective Time, North will cause the Exchange
Agent to send, to each holder of Motoguzzi  Securities  being exchanged a letter
of  transmittal  for use in the  exchange.  North  will  make  available  to the
Exchange Agent, as needed,  stock certificates and Nominal Warrant  certificates
representing  the Merger  Consideration to be issued in respect of the Motoguzzi
Securities.

     (b) Except as provided in Section 10.02, for each Motoguzzi  Security being
exchanged,  upon the surrender of the certificate or  certificates  representing
them together with a properly  completed letter of transmittal,  the holder will
be  entitled  to  receive  certificates  for the Class A Common  Stock,  Class B
Preferred  Stock and Nominal  Warrants  representing  that portion of the Merger
Consideration  issuable  in  respect  of  the  Motoguzzi  Securities.  Until  so
surrendered, each such certificate will, after the Effective Time, represent for
all  purposes,  only the right to receive a  proportionate  amount of the Merger
Consideration.

     (c) After the  Effective  Time,  there will be no further  registration  of
transfers of Motoguzzi  Securities held prior to the Effective  Time,  except as
may be  permitted  by Section 262 of the DGCL.  After the  Effective  Time,  all
certificates formerly  representing  Motoguzzi Securities which are presented to
North or the Exchange Agent will be canceled and exchanged for the consideration
provided for in this Article II.

     SECTION 2.05 Adjustments.  If, notwithstanding  Section 7.01 hereof, at any
time during the period  between  the date of this  Agreement  and the  Effective
Time,  the  outstanding  shares of the capital  stock of North is changed into a
different number of shares or a different class by reason of any stock dividend,
subdivision, reclassification,  recapitalization, split, combination or exchange


                                        5




of shares, the Merger  Consideration  will be appropriately  adjusted to reflect
such stock dividend,  subdivision,  reclassification,  recapitalization,  split,
combination or exchange of shares.

     SECTION  2.06  Surrender of Old  Motoguzzi  Warrants  and  Contribution  of
Intercompany  Indebtedness.  (a) Each  holder of an Old  Motoguzzi  Warrant  who
wishes to surrender such warrant (a "Surrendered  Warrant") shall do so prior to
the Closing Date by  delivering  same to TRG together  with a Warrant  Surrender
Agreement and such other documents as TRG and North shall reasonably require.

     (b) TRG covenants and agrees that Lit 12,719  million  principal  amount of
indebtedness,  plus interest thereon,  owed by Motoguzzi to TRG and/or to O.A.M.
S.p.A.,  a subsidiary  of TRG ("OAM"),  shall be  contributed  to the capital of
Motoguzzi,  simultaneously  with the  consummation  of the  Merger.  After  such
capital  contribution,  the amount of  indebtedness  owed by  Motoguzzi  and its
subsidiaries to TRG and its subsidiaries  other than Motoguzzi and the Motoguzzi
Subsidiaries at the Effective Time, including all interest,  will not be greater
than  $800,000,  and if  such  indebtedness  exceeds  such  amount,  any  excess
automatically  and  without  any  action  on the  part  of  TRG,  OAM  or  TRG's
subsidiaries  shall be  contributed to the capital of Motoguzzi at the Effective
Time with no  adjustment in the Merger  Consideration  set forth in Section 2.02
(a)(ii) and the Surviving  Corporation will be under no obligation whatsoever to
pay same.  TRG  shall  cause  OAM to  evidence  its  agreement  to such  capital
contribution by executing the form of  acknowledgment  annexed hereto as Exhibit
C.

                                   ARTICLE III
                                 REPRESENTATIONS
                       AND WARRANTIES OF MOTOGUZZI AND TRG

     Motoguzzi represents and warrants to North as follows:

     SECTION 3.01 Organization.

     (a) Motoguzzi.  Motoguzzi is a corporation duly organized, validly existing
and in good  standing  under  the  laws of the  State  of  Delaware.  Except  as
described  on  any  of  the  Motoguzzi  Disclosure  Schedules  attached  hereto,
Motoguzzi  does not own,  directly or  indirectly,  any  capital  stock or other
securities of any issuer or any equity  interest in any other entity,  including
any partnership,  limited partnership, limited liability company, business trust
and any other  business  entity,  and is not a party to any agreement to acquire
any such  securities or interest.  Motoguzzi is qualified to do business in each
state where the nature of the  business it conducts or the  properties  it owns,
leases or  operates  requires  it to so  qualify  (which  states  are  listed in
Schedule 3.01(ii)),  except where the failure to so qualify would not, singly or
in the aggregate,  have a Motoguzzi  Material Adverse Effect.  Motoguzzi has all


                                        6




requisite  corporate power to own, lease and operate its properties and to carry
on its  business  as  now  being  conducted  and as  presently  contemplated  by
Motoguzzi to be conducted in the future.

     (b) Subsidiaries of Motoguzzi.  Each Motoguzzi  Subsidiary is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of its
jurisdiction  of  incorporation.  Each  Motoguzzi  Subsidiary is qualified to do
business in each  jurisdiction  where the nature of the  business it conducts or
the  properties  it owns,  leases or operates  requires it to so qualify  (which
jurisdictions are listed in Schedule 3.01 (iii)), except where the failure to so
qualify would not, singly or in the aggregate, have a Motoguzzi Material Adverse
Effect.  Each  Motoguzzi  Subsidiary has all requisite  corporate  power to own,
lease and  operate  its  properties  and to carry on its  business  as now being
conducted and as presently contemplated by each of the Motoguzzi Subsidiaries in
the future. Motoguzzi owns, directly or indirectly, the shares of each Motoguzzi
Subsidiary as set forth in Schedule 3.01(i) free and clear of any Liens.

     (c) Holding  Company.  Motoguzzi is a holding  company,  the only assets of
which are the shares of the  Motoguzzi  Subsidiaries.  Motoguzzi has no material
liabilities other than the liabilities of the Motoguzzi Subsidiaries.  Motoguzzi
does not  conduct  any  material  business  through  any  entity  other than the
Motoguzzi Subsidiaries.

     SECTION 3.02  Authority;  Corporate  Action.  Motoguzzi  has all  necessary
corporate power and authority to enter into this Agreement and to consummate the
Merger and other  transactions  contemplated  hereby and  thereby.  All  action,
corporate  and  otherwise,  necessary to be taken by Motoguzzi to authorize  the
execution,  delivery and performance of this Agreement and the other  agreements
and  instruments  delivered  by Motoguzzi in  connection  with the  transactions
contemplated  hereby or thereby  has or at the  Closing  will have been duly and
validly taken.  Subject to the terms and conditions  hereof,  this Agreement and
the other  agreements and instruments  delivered by Motoguzzi in connection with
the transactions  contemplated  hereby shall  constitute the valid,  binding and
enforceable  obligation of Motoguzzi  enforceable  against it in accordance with
their respective terms,  except as  enforceability  may be limited by applicable
bankruptcy,  insolvency,  reorganization,  moratorium,  fraudulent  transfer  or
similar laws of general  application  now or hereafter in effect  affecting  the
rights and remedies of creditors and by general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity).

     SECTION 3.03 No Conflict; Required Filings and Consents.

     (a) The execution and delivery of this Agreement (and the other  agreements
contemplated  hereby) by Motoguzzi does not, and the performance by Motoguzzi of
its  obligations  under this  Agreement  (and any other  agreement  contemplated
hereby) will not, (i) conflict with or violate its Certificate of Incorporation,
By-laws or other organizational documents (ii) conflict with or violate any law,
statute,  ordinance,  rule, regulation,  order, judgment or decree applicable to


                                        7




Motoguzzi  or any  Motoguzzi  Subsidiary  or by which  any of  their  respective
properties or assets is bound or affected,  or (iii) result in any breach of, or
constitute  a default  (or an event  which with  notice or lapse of time or both
would  become a default)  under,  or give to others  any rights of  termination,
amendment,  acceleration or cancellation of, or result in the creation of a Lien
on any of the  properties  or assets of  Motoguzzi or any  Motoguzzi  Subsidiary
pursuant to, any note, bond, mortgage,  indenture,  contract,  agreement, lease,
license,  permit, franchise or other instrument or obligation to which Motoguzzi
or any Motoguzzi  Subsidiary  is a party or by which  Motoguzzi or any Motoguzzi
Subsidiary or any of their respective properties or assets is bound or affected,
except,  in the case of clauses (ii) and (iii),  above,  for any such conflicts,
violations,  breaches, defaults or other occurrences that would not have, either
singly or in the aggregate, a Motoguzzi Material Adverse Effect.

     (b) The execution and delivery of this Agreement (and the other  agreements
contemplated  hereby)  by  Motoguzzi  does  not,  and  the  performance  of this
Agreement (and the other agreements  contemplated hereby) by Motoguzzi will not,
require any  consent,  approval,  authorization  or permit of, or filing with or
notification  to, any  Governmental  Entity,  except for (i) compliance with the
applicable  requirements,  if any, of the DGCL and Certificate of  Incorporation
and Bylaws of  Motoguzzi  (including  but not limited  to, the  approval of this
Agreement  and the Merger by the  stockholders  of  Motoguzzi),  (ii) filing and
recordation of appropriate merger documents as required by the laws of the State
of Delaware, (iii) those consents, approvals,  authorizations,  permits, filings
or notifications  applicable to Motoguzzi and the Motoguzzi  Subsidiaries listed
in Schedule 3.03(b), and (iv) where failure to obtain such consents,  approvals,
authorizations or permits,  or to make such filings or notifications,  would not
(a) have either singly or in the aggregate,  a Motoguzzi Material Adverse Effect
or (b)  affect the  ability  of  Motoguzzi  to  consummate  the Merger and other
agreements contemplated by this Agreement.

     SECTION 3.04 Motoguzzi  Capitalization.  The total authorized capital stock
of Motoguzzi  consists of 20,000,000  shares of Old  Motoguzzi  Common Stock and
2,000,000 shares of Old Motoguzzi  Preferred Stock, of which 6,000,000 shares of
Old Motoguzzi Common Stock and 1,500,000 shares of Old Motoguzzi Preferred Stock
are issued and  outstanding.  Except for Old Motoguzzi  Preferred  Stock and Old
Motoguzzi Warrants, there are no existing options,  warrants, calls, commitments
or other rights of any  character  including  conversion  or  preemptive  rights
relating to the  acquisition  of any issued or unissued  capital  stock or other
securities of Motoguzzi.  The outstanding Old Motoguzzi  Warrants have been duly
and  validly  authorized  and  issued.  All of  the  outstanding  shares  of Old
Motoguzzi  Common Stock and Old Motoguzzi  Preferred  Stock are duly and validly
authorized and issued, fully paid and non-assessable. Schedule 3.04(a) correctly
sets forth the  record  owners of all of the Old  Motoguzzi  Common  Stock,  Old
Motoguzzi  Preferred Stock and Old Motoguzzi  Warrants.  Motoguzzi complied with
all applicable  federal and state  securities laws and regulations in connection
with the offer and sale of all of the  outstanding  Old Motoguzzi  Common Stock,
Old  Motoguzzi  Preferred  Stock and Old  Motoguzzi  Warrants,  and there are no
rescission rights relating thereto except for such of the foregoing as would not
have a  Motoguzzi  Material  Adverse  Effect.  There are no  options,  warrants,
convertible  securities  or other rights  permitting  or requiring the Motoguzzi

                                        8




Subsidiaries to issue, or which give anyone the right to purchase any securities
of the  Motoguzzi  Subsidiaries  or rights  convertible  into  securities of the
Motoguzzi  Subsidiaries and the Motoguzzi  Subsidiaries have not agreed to issue
or sell any shares of their capital stock or securities  convertible  into their
capital stock.

     SECTION 3.05 Licenses and Permits;  Compliance with Laws. Each of Motoguzzi
and  the  Motoguzzi  Subsidiaries  hold  all  permits,  licenses  and  approvals
(collectively,  the "Permits")  from all federal,  state and local  governmental
authorities in the United States, Italy, and other countries necessary for it to
own,  lease and operate its  properties  and to carry on its  businesses  as now
being  conducted,  except for such of the foregoing,  the absence of which would
not have a Motoguzzi  Material  Adverse Effect.  Motoguzzi has no knowledge that
any such Permit has been rescinded  and, to its knowledge,  all such Permits are
in full force and effect and listed on Schedule 3.05. Except as set forth in any
of the Motoguzzi  Disclosure  Schedules attached hereto, the business of each of
Motoguzzi  and the  Motoguzzi  Subsidiaries  is being and has been  conducted in
compliance  with the  Permits and all  applicable  laws,  statutes,  ordinances,
regulations  judgments,   orders,   decrees,   concessions,   grants  and  other
authorizations  of any  governmental  authority except where any non compliance,
singly or in the aggregate would not have a Motoguzzi  Material  Adverse Effect.
Neither Motoguzzi nor the Motoguzzi Subsidiaries is in default under any of such
Permits and no event has occurred and no condition exists which, with the giving
of notice,  the passage of time, or both, would constitute a default  thereunder
which would result in a Motoguzzi Material Adverse Effect. Neither the execution
and  delivery  of this  Agreement  or any of the  other  documents  contemplated
hereby, nor the consummation of the transactions contemplated hereby or thereby,
nor  compliance  by Motoguzzi  and the  Motoguzzi  Subsidiaries  with any of the
provisions  hereof  or  thereof,  will  result  in any  suspension,  revocation,
impairment, forfeiture or nonrenewal of any Permit, and all of which shall be in
effect as of the Closing, except for such of the foregoing, the absence of which
would not have a Motoguzzi Material Adverse Effect.

     SECTION 3.06 Financial Statements.

     (a)  Motoguzzi has caused to be delivered to North  consolidated  financial
statements of Motoguzzi  for the years ended  December 31, 1996 and 1997 audited
and reported on by Arthur Andersen,  LLP, and unaudited  consolidated  financial
statements of Motoguzzi  for the year ended  December 31, 1995 and for the three
months  ended  March  31,  1998  and  March  31,  1997  and  summary   unaudited
consolidated financial statements for the three and six month periods ended June
30, 1998 and June 30, 1997 (collectively, the "Motoguzzi Financial Statements").
The Motoguzzi  Financial  Statements,  including all related notes and schedules
thereto,  fairly  present in all material  respects the  consolidated  financial
position of  Motoguzzi  as at the  respective  dates  thereof and the results of
operations  and cash flows of Motoguzzi for the periods  indicated in accordance
with United States generally accepted accounting  principles ("GAAP") applied on
a  consistent  basis  throughout  the periods  involved  (except as may be noted
therein) and subject,  in the case of interim  financial  statements,  to normal
year-end  adjustments,  and in the  case of  summary  financial  statements,  to
omission of certain items customarily included in interim financial statements.

                                        9






     (b)  Except  for  liabilities,   costs,  expenses,  debts,  commitments  or
obligations  arising in  connection  with this  Agreement  and the  transactions
contemplated  hereby,  or resulting  from actions  taken in  furtherance  of the
transactions  identified  in Items 1 through 4 of Schedule 3.08 of the Motoguzzi
Disclosure Schedules attached hereto, to the knowledge of Motoguzzi,  Motoguzzi,
on a consolidated basis, has no debts,  liabilities,  commitments or obligations
(including,   without  limitation,   unasserted  claims),  whether  absolute  or
contingent,  liquidated  or  unliquidated,  or due or to become due or otherwise
except for liabilities and obligations (a) reflected as liabilities on the March
31, 1998 balance sheet ("Balance  Sheet"),  (b) that have arisen since March 31,
1998  in the  ordinary  course  of  business  of  Motoguzzi  and  the  Motoguzzi
Subsidiaries,  (c)  that  are  described  herein  or in  any  of  the  Motoguzzi
Disclosure Schedules attached hereto, or (d) which singly or in the aggregate do
not have a Motoguzzi Material Adverse Effect.

     SECTION 3.07 Real Property.

     (a) Schedule  3.07  contains a true,  correct and  complete  list and brief
description of all real property owned, leased or subleased by Motoguzzi and the
Motoguzzi  Subsidiaries,  all of which are hereinafter  referred to as the "Real
Property."  Motoguzzi  has made  available  to North true,  correct and complete
copies of the deeds and leases of the Real Property.

     (b)  Except  as set  forth  in any of the  Motoguzzi  Disclosure  Schedules
attached hereto, all buildings, structures,  improvements, fixtures, facilities,
equipment,  all components of all buildings,  structures and other  improvements
included  within  the  Real  Property  owned  by  Motoguzzi  and  the  Motoguzzi
Subsidiaries  conforms  in all  material  respects to all  applicable  statutes,
rules, regulations,  ordinances, orders, writs, injunctions, judgments, decrees,
awards and  restrictions of every  governmental  authority  having jurisdic tion
over any of the Real Property owned by Motoguzzi and the Motoguzzi Subsidiaries,
and every  instrumentality  or agency thereof  (including,  without  limitation,
applicable statutes,  rules,  regulations,  orders and restrictions  relating to
zoning, land use, safety, health, environment,  hazardous substances,  pollution
controls,  employment  and employment  practices and access by the  handicapped)
(collectively,  "Laws"),  except where nonconformance would not have a Motoguzzi
Material Adverse Effect.

     (c)  Except  as set  forth  in any of the  Motoguzzi  Disclosure  Schedules
attached  hereto,  the use and operation of the Real Property owned by Motoguzzi
and the Motoguzzi  Subsidiaries is in full compliance with all Laws,  covenants,
conditions, restrictions,  easements, disposition agreements and similar matters
affecting  the Real  Property  except  where  non  compliance  would  not have a
Motoguzzi Material Adverse Effect. Motoguzzi and the Motoguzzi Subsidiaries have
not  received  any  notice  of  any  violation  (or  claimed  violation)  of  or
investigation  regarding  any  Laws  except  where  such  violation  or  claimed
violation would not have a Motoguzzi Material Adverse Effect.


                                       10





     (d)  Except  as set  forth in any of the  Motoguzzi  Disclosure  Schedules,
Motoguzzi  and the  Motoguzzi  Subsidiaries  have not  received  notice  of,  or
otherwise have knowledge of, any condemnation,  fire, health, safety,  building,
environmental, hazardous substances, pollution control, zoning or other land use
regulatory  proceedings,  either  instituted or planned to be instituted,  which
would have an adverse effect on the use and operation of any portion of the Real
Property or the value of any  material  portion of the Real  Property,  nor have
Motoguzzi  and  the  Motoguzzi  Subsidiaries  received  notice  of  any  special
assessment proceedings affecting any of the Real Property except for such of the
foregoing which would not have a Motoguzzi Material Adverse Effect.

     (e) Motoguzzi has made available for inspection by North true,  correct and
complete title policies and surveys with respect to the Real Property.

     SECTION 3.08 Material Contracts.

     (a)  Schedule  3.08(a)  sets  forth  a  complete  and  correct  list of all
agreements,  including without limitation, leases, currently in effect which are
material to the assets, financial condition, business or operations of Motoguzzi
and the Motoguzzi Subsidiaries,  taken as a whole, (collectively,  the "Material
Contracts");  when the  foregoing  representation  is restated as of the Closing
Date,  any  change  to  Schedule  3.08(a)  shall  not be deemed a breach of such
representation,  for  purposes  of Article IX or Article XI hereof,  unless such
change,  either  singly or in the  aggregate,  would cause a Motoguzzi  Material
Adverse  Effect.  True and complete  copies of all Material  Contracts have been
delivered to North or made available for inspection.

     (b)  Except  as set  forth  in any of the  Motoguzzi  Disclosure  Schedules
attached hereto,  all Material  Contracts are valid and in full force and effect
and neither Motoguzzi nor any of the Motoguzzi  Subsidiaries has received notice
from any other party thereto that it has violated any provision of, or committed
or failed to perform any act which with or without notice, lapse of time or both
would  constitute a default  under the  provisions  of, any  Material  Contract,
except for defaults which would not have,  either singly or in the aggregate,  a
Motoguzzi Material Adverse Effect. None of the rights of Motoguzzi or any of the
Motoguzzi  Subsidiaries  under any of the Material  Contracts are subject to any
Liens of record, except for Liens granted in the ordinary course of business and
Liens which,  either singly or in the aggregate do not have a Motoguzzi Material
Adverse  Effect.  Except  as  set  forth  in any  of  the  Motoguzzi  Disclosure
Schedules,  neither  Motoguzzi  nor any of the Motoguzzi  Subsidiaries  received
notice from any other party  thereto that it has breached any express or implied
representations,  warranties  or  covenants  in  connection  with  the  sale  or
provision of its services or goods,  except for breaches that,  either singly or
in the aggregate, will not have a Motoguzzi Material Adverse Effect.


                                       11





     SECTION  3.09  Litigation.  Except  as set  forth  in any of the  Motoguzzi
Disclosure Schedules attached hereto, there are no actions, suits, arbitrations,
mediation or other proceedings pending or, to its knowledge,  threatened against
Motoguzzi or any of the  Motoguzzi  Subsidiaries  at law or in equity before any
court, Federal,  state, municipal or other governmental  department or agency or
other tribunal and neither Motoguzzi nor any of the Motoguzzi Subsidiaries,  nor
any  of  their  respective  properties,  is  subject  to  any  order,  judgment,
injunction or decree;  when the foregoing  representation  is restated as of the
Closing Date, any change to any of the Motoguzzi  Disclosure Schedules shall not
be deemed a breach of such representation, for purposes of Article IX or Article
XI hereof,  unless such change is reasonably likely to have, either singly or in
the aggregate, a Motoguzzi Material Adverse Effect.

     SECTION 3.10 Taxes,  Tax Returns and Audits.  Motoguzzi  and the  Motoguzzi
Subsidiaries have (or, in the case of returns becoming due after the date hereof
and on or before the  Effective  Time,  will have prior to the  Effective  Time)
filed or caused to be filed,  or have  properly  filed  extensions  for, all tax
returns  which are  required  to be filed and have paid or caused to be paid all
taxes required  therein to be paid and all  assessments  received by them to the
extent that such taxes have become due,  except  taxes the validity or amount of
which is being  contested  in good  faith by  appropriate  proceedings  and with
respect to which  adequate  reserves  have been set aside and except for such of
the foregoing as would not cause a Motoguzzi Material Adverse Effect.  Motoguzzi
and the Motoguzzi  Subsidiaries have or will have established  adequate reserves
on its books and records and financial statements  (including the Balance Sheet)
for  such  payment  in  accordance  with  GAAP.   Motoguzzi  and  the  Motoguzzi
Subsidiaries  have  withheld  from each  payment  made to any of its  present or
former employees, officers, directors or other party all amounts required by law
to be withheld  and have,  where  required,  remitted  such  amounts  within the
applicable periods to the appropriate  governmental  authorities.  Motoguzzi and
the Motoguzzi  Subsidiaries  have paid or caused to be paid, or have established
reserves that they reasonably  believe to be adequate in all material  respects,
for all tax  liabilities  applicable to them for all fiscal years which have not
been examined and reported on by the taxing authorities (or closed by applicable
statutes).

     SECTION 3.11 Absence of Certain  Changes.  Since March 31, 1998,  except as
set forth in any of the Motoguzzi  Disclosure  Schedules  attached  hereto,  and
except  for  costs,  expenses  or  liabilities  incurred  or  actions  taken  in
connection with this Agreement and the transactions  contemplated  hereby (which
costs,  expenses  and  liability  are to be paid by  TRG),  or  action  taken in
furtherance of the transactions identified in Items 1 through 4 of Schedule 3.08
of the Motoguzzi Disclosure Schedules attached hereto, neither Motoguzzi nor any
of the Motoguzzi Subsidiaries has:

     (a)  issued,  delivered  or  agreed  to  issue  any  stock,  bonds or other
corporate  securities (whether authorized and unissued or held in the treasury),
or granted or agreed to grant any options  (including  employee stock  options),
warrants or other rights for the issue thereof;


                                       12





     (b) borrowed or agreed to borrow any funds except in the ordinary course of
business consistent with past practices;

     (c) incurred any obligation or liability,  absolute, accrued, contingent or
otherwise,  whether due or to become due, except current liabilities incurred in
the ordinary  course of business  consistent with prior practice and liabilities
to TRG which, together with other liabilities to TRG, OAM and their subsidiaries
(other than Motoguzzi and the Motoguzzi  Subsidiaries) shall not exceed $800,000
in the aggregate as of the Closing Date,  or, when the foregoing  representation
is restated as of the Closing Date,  such  obligations  or liabilities as do not
either singly or in the aggregate, have a Motoguzzi Material Adverse Effect;

     (d) sold, transferred, leased to others or otherwise disposed of any assets
outside of the ordinary  course of business or canceled or compromised  any debt
or claim, or waived or released any right of substantial value;

     (e) received any notice of termination  of any Material  Contract or Permit
or suffered any damage, destruction or loss if not covered by insurance,  which,
as to any of the foregoing, has resulted in a Motoguzzi Material Adverse Effect:

     (f) encountered any labor union organizing activity,  labor disputes or had
any material  change in its relations  with its employees or agents,  clients or
insurance carriers which has resulted in a Motoguzzi Material Adverse Effect;

     (g) paid any monies to TRG or OAM or any of their subsidiaries;

     (h) suffered any Motoguzzi Material Adverse Change.

     SECTION 3.12 Labor  Relations.  Except as set forth in any of the Motoguzzi
Disclosure Schedules attached hereto, neither Motoguzzi nor any of the Motoguzzi
Subsidiaries is a party to any collective bargaining agreement or other contract
or agreement with any labor  organization or other  representative of any of the
employees of Motoguzzi and/or any of the Motoguzzi  Subsidiaries.  Motoguzzi and
the Motoguzzi  Subsidiaries are in compliance in all material  respects with all
laws relating to the employment or the workplace, including, without limitation,
provisions relating to wages, hours,  collective bargaining,  safety and health,
work   authorization,   equal  employment   opportunity,   immigration  and  the
withholding of income taxes, unemployment  compensation,  worker's compensation,
employee  privacy and right to know and social  security  contributions,  except
where  noncompliance  would not have a Motoguzzi Material Adverse Effect.  There
are no pending or, to its knowledge, threatened,  proceedings or grievances with


                                       13




respect to labor matters  concerning  Motoguzzi  and the Motoguzzi  Subsidiaries
which would  have,  either  singly or in the  aggregate,  a  Motoguzzi  Material
Adverse Effect.

     SECTION  3.13  Insurance  Policies;  Claims.  Schedule  3.13 sets forth all
insurance  policies and bonds  maintained  by or on behalf of Motoguzzi  and the
Motoguzzi  Subsidiaries.  There are no unresolved  claims have been made against
Motoguzzi  and/or any of the  Motoguzzi  Subsidiaries  in  respect of  allegedly
defective  products and Motoguzzi does not know of any written  assertion of any
such claim, except for such of the foregoing which, if proven,  would not have a
Motoguzzi Material Adverse Effect.

     SECTION 3.14 Intellectual Property.

     (a) Right, Title and Interest. Motoguzzi and the Motoguzzi Subsidiaries own
or  possess  sufficient  right,  title  and  interest  in and to, or a valid and
enforceable  license in or other right to use all of the  Intellectual  Property
(as defined  below) to entitle them to conduct  their  businesses  as heretofore
conducted  and as presently  intended to be conducted in the future,  except for
such of the foregoing,  the absence of which would not have a Motoguzzi Material
Adverse Effect. To its knowledge,  Motoguzzi and the Motoguzzi Subsidiaries have
not infringed,  misappropriated or otherwise violated any Intellectual  Property
of any  other  person  except  for such of the  foregoing  as  would  not have a
Motoguzzi  Material  Adverse Effect.  To its knowledge,  no person is infringing
upon any Intellectual Property right of Motoguzzi and the Motoguzzi Subsidiaries
except for such of the foregoing as would not have a Motoguzzi  Material Adverse
Effect.

     (b)  "Intellectual  Property" means all patents,  patent  applications  and
patent disclosures; all inventions (whether or not patentable and whether or not
reduced to practice);  all trademarks,  service marks,  trade dress, trade names
and corporate names and all the goodwill  associated  therewith;  all registered
and  unregistered  statutory  and  common  law  copyrights;  all  registrations,
applications  and renewals for any of the foregoing;  all  protocols,  codes and
operating systems; and all trade secrets,  confidential  information,  know-how,
technical and computer data, software,  and related proprietary property. All of
the material Intellectual  Property of Motoguzzi and the Motoguzzi  Subsidiaries
is listed on Schedule 3.14(b) hereto.

     SECTION 3.15 Properties; Assets. Except as provided in any of the Motoguzzi
Disclosure Schedules attached hereto,  Motoguzzi and the Motoguzzi  Subsidiaries
(a) have good and marketable title to all the properties and assets reflected on
the Balance  Sheet as being owned by Motoguzzi  and the  Motoguzzi  Subsidiaries
(except  properties sold or otherwise  disposed of since the date thereof in the
ordinary  course of  business or  properties  sold or disposed of after the date
hereof,  which does not cause a Motoguzzi  Material Adverse  Effect),  and those
properties  acquired after the date thereof and not thereafter disposed of, free
and clear of all Liens,  except (i) statutory  liens  securing  payments not yet
due, and (ii) such  imperfections or  irregularities  of title,  claims,  liens,
charges, security  interests or  encumbrances  which  do  no  materially  affect

                                       14





the use or marketability of the properties or assets subject thereto or affected
thereby or otherwise  materially impair business  operations at such properties,
and (b) is the lessee of all personal property reflected on the Balance Sheet as
being  leased by it as of March 31, 1998 (except for leases that have expired by
their terms since March 31,  1998) and those  properties  leased  after the date
thereof.  Except  as set  forth  in any of the  Motoguzzi  Disclosure  Schedules
attached  hereto,  the assets and  properties  of  Motoguzzi  and the  Motoguzzi
Subsidiaries are in good operating  condition and repair (ordinary wear and tear
excepted)  except for such of the  foregoing  as do not  represent  a  Motoguzzi
Material Adverse Effect, and constitute all of the assets,  right and properties
which are necessary for the businesses and operations of Motoguzzi as a whole to
be  conducted  as  presently  conducted.  There  are no Liens on any  assets  of
Motoguzzi or of any of the Motoguzzi  Subsidiaries  securing indebtedness of TRG
or any subsidiary  thereof  (other than  Motoguzzi or any Motoguzzi  Subsidiary;
"Intercompany Liens").

     SECTION 3.16 Bank Accounts.  Schedule 3.16 sets forth the name of each bank
in which  Motoguzzi  and the  Motoguzzi  Subsidiaries  have an  account  or safe
deposit  box,  vault,  lock-box or other  arrangement,  the  account  number and
description of each account at each bank and the names of all persons authorized
to draw thereon or to have access thereto; and the names of all persons, if any,
holding  tax or other  powers  of  attorney  from  Motoguzzi  and/or  any of the
Motoguzzi Subsidiaries.

     SECTION 3.17 Brokers. No broker, finder or investment banker is entitled to
any  brokerage,  finder's  or other fee or  commission  in  connection  with the
transactions  contemplated by this Agreement based upon  arrangements made by or
on behalf of Motoguzzi.

     SECTION 3.18 Records. The books of account, minute books, stock certificate
books and stock transfer ledgers of Motoguzzi and the Motoguzzi Subsidiaries are
complete and correct in all material  respects,  and there have been no material
transactions  involving  Motoguzzi  and the Motoguzzi  Subsidiaries  of the type
typically recorded in such records which were not so recorded.

     SECTION 3.19 No Illegal or Improper Transactions. Neither Motoguzzi and the
Motoguzzi Subsidiaries nor any officer,  director,  employee, agent or affiliate
of Motoguzzi and the Motoguzzi  Subsidiaries has offered,  paid or agreed to pay
to any person or entity  (including  any  governmental  official) or  solicited,
received  or agreed to  receive  from any such  person or  entity,  directly  or
indirectly, any money or anything of value for the purpose or with the intent of
(i)  obtaining or  maintaining  business  for the benefit of  Motoguzzi  and the
Motoguzzi  Subsidiaries,  (ii) illegally or improperly facilitating the purchase
or sale of any product or service,  or (iii) avoiding the imposition of any fine
or penalty,  in any manner which is in violation  of any  applicable  ordinance,
regulation or law.

     SECTION  3.20  Related  Transactions.  Except  as set  forth  in any of the
Motoguzzi Disclosure Schedules attached hereto, and for compensation and related


                                       15




arrangements with employees or consultants for services rendered consistent with
past  practices,  no  current or former  director,  officer  or, to  Motoguzzi's
knowledge,  employee of Motoguzzi  and/or any of the Motoguzzi  Subsidiaries  is
presently,  or during  the last two  fiscal  years has been,  (a) a party to any
transaction with Motoguzzi and/or any of the Motoguzzi Subsidiaries, (including,
but not limited to, any contract,  agreement or other arrangements providing for
the  furnishing of services by, or rental of real or personal  property from, or
otherwise  requiring  payments  to,  any such  director,  officer,  employee  or
shareholder),  or (b) the direct or, to Motoguzzi's knowledge, indirect owner of
an interest in any corporation, firm, association or business organization which
is a current (or potential) competitor, supplier or customer of Motoguzzi and/or
any of the Motoguzzi Subsidiaries,  nor, to Motoguzzi's knowledge, does any such
person  receive  income from any source other than  Motoguzzi  and/or any of the
Motoguzzi  Subsidiaries  which  relates to the business  of, or should  properly
accrue to, Motoguzzi and/or any of the Motoguzzi Subsidiaries.

     SECTION  3.21  Disclosure.  No  representation  or  warranty  by  Motoguzzi
contained  in this  Agreement  and no  information  contained  in any  schedule,
financial  statement  or  other  instrument  furnished  or  to be  furnished  by
Motoguzzi  to  North  pursuant  to this  Agreement  or in  connection  with  the
transactions  contemplated hereby, contains or will contain any untrue statement
of a material fact or omits or will omit to state a material  fact  necessary in
order to make the statements contained herein or therein not misleading.

     SECTION 3.22 Environmental,  Health and Safety Matters. Except as set forth
in any of the Motoguzzi Disclosure Schedules attached hereto:

     (a)  Motoguzzi  and  the  Motoguzzi  Subsidiaries  are in  compliance  with
Environmental,  Health and Safety Requirements, except for such noncompliance as
would not reasonably be expected to have,  either singly or in the aggregate,  a
Motoguzzi Material Adverse Effect.

     (b) Motoguzzi and the Motoguzzi  Subsidiaries have not received any written
notice,  report or other  information  regarding any actual or alleged  material
violation  of  Environmental,  Health and Safety  Requirements,  or any material
liabilities  or  potential  material  liabilities  (whether  accrued,  absolute,
contingent, unliquidated or otherwise), including any investigatory, remedial or
corrective  obligations,  relating to Motoguzzi or its  property  arising  under
Environmental,  Health,  and Safety  Requirements,  the  subject of which  would
reasonably be expected to have,  either singly or in the aggregate,  a Motoguzzi
Material Adverse Effect.

     SECTION  3.23 Year 2000  Compliance.  Third  parties  have been  engaged by
Motoguzzi to evaluate and, if required,  upgrade, all operating codes, programs,
utilities and other software,  as well as all hardware and systems,  utilized by
Motoguzzi  and  the  Motoguzzi  Subsidiaries  in  their  businesses,  or in  the
provisions of services, or comprising software,  hardware and/or systems sold by
Motoguzzi and the Motoguzzi  Subsidiaries to third parties,  in order to record,


                                       16




store,  process,  and present calendar dates falling on or after January 1, 2000
in the same manner,  and with the same  functionality,  as provided on or before
December 31, 1999.  and Motoguzzi is relying  exclusively  upon the expertise of
such third parties to achieve such operability.

     TRG represent and warrants to North as follows:

     SECTION 3.24 Organization. TRG (i) is a corporation duly organized, validly
existing and in good standing under the laws of Maryland and (ii) owns 1,500,000
shares of Old  Motoguzzi  Common  Stock,  and OAM owns  4,500,000  shares of Old
Motoguzzi  Common  Stock,  representing  25%  and  75%,  respectively,   of  the
outstanding shares on the date hereof of Old Motoguzzi Common Stock.

     SECTION 3.25 Authority;  Corporate Action. TRG has all necessary  corporate
power and authority to enter into this  Agreement and to consummate  such of the
transactions contemplated hereby as are applicable to TRG. All action, corporate
and  otherwise,  necessary  to be taken by TRG for the  execution,  delivery and
performance of this Agreement and the other agreements and instruments delivered
by TRG in connection with the transactions contemplated hereby or thereby has or
at the Closing will have been duly and validly  taken.  Subject to the terms and
conditions  hereof,  this  Agreement and the other  agreements  and  instruments
delivered by TRG in connection with the transactions  contemplated  hereby shall
constitute  the valid,  binding and  enforceable  obligation of TRG  enforceable
against it in accordance with their respective  terms,  except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent  transfer or similar laws of general  application now or hereafter in
effect affecting the rights and remedies of creditors and by general  principles
of equity (regardless of whether enforcement is sought in a proceeding at law or
in equity).

     SECTION 3.26 No Conflict;  Required Filings and Consents. The execution and
delivery of this Agreement (and the other agreements contemplated hereby) by TRG
does not, and the  performance  by TRG of its  obligations  under this Agreement
(and any other  agreement  contemplated  hereby) will not, (i) conflict  with or
violate  its  Certificate  of  Incorporation,  By-laws  or other  organizational
documents  (ii)  conflict  with or violate any law,  statute,  ordinance,  rule,
regulation,  order,  judgment or decree applicable to TRG or by which any of its
properties or assets is bound or affected,  or (iii) result in any breach of, or
constitute  a default  (or an event  which with  notice or lapse of time or both
would  become a default)  under,  or give to others  any rights of  termination,
amendment,  acceleration or cancellation of, or result in the creation of a Lien
on any of the properties or assets of TRG pursuant to, any note, bond, mortgage,
indenture,  contract,  agreement,  lease,  license,  permit,  franchise or other
instrument  or  obligation to which TRG is a party or by which TRG or any of its
properties or assets is bound or affected,  except,  in the case of clauses (ii)
and (iii),  above,  for any such conflicts,  violations,  breaches,  defaults or
other  occurrences  that would not have,  either singly or in the  aggregate,  a
material adverse effect on TRG and its subsidiaries, taken as a whole.


                                       17





     SECTION 3.27 Brokers. No broker, finder or investment banker is entitled to
any  brokerage,  finder's  or other fee or  commission  in  connection  with the
transactions  contemplated by this Agreement based upon  arrangements made by or
on behalf of TRG.

     SECTION 3.28 Disclosure.  No representation or warranty by TRG contained in
this Agreement and no information contained in any schedule, financial statement
or other  instrument  furnished or to be  furnished by TRG to North  pursuant to
this  Agreement or in  connection  with the  transactions  contemplated  hereby,
contains or will  contain any untrue  statement  of a material  fact or omits or
will omit to state a material  fact  necessary  in order to make the  statements
contained herein or therein not misleading.

     SECTION 3.29 Voting Agreement. TRG and OAM have each executed and delivered
to North an  agreement in the form of Exhibit D hereto with respect to voting in
favor of the  consummation  of the  Merger at any  meeting  of  shareholders  of
Motoguzzi.

                                   ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF NORTH

     North represents and warrants to Motoguzzi as follows:

     SECTION 4.01 Organization.  North is a corporation duly organized,  validly
existing and in good  standing  under the laws of the State of  Delaware.  North
does not own,  directly or indirectly,  any capital stock or other securities of
any  issuer  or  any  equity  interest  in  any  other  entity,   including  any
partnership,  limited partnership,  limited liability company, business trust or
any other  business  entity,  and is not a party to any agreement to acquire any
such  securities  or  interest.  North is qualified to do business in each state
where the nature of the business it conducts or the  properties it owns,  leases
or operates  requires it to so qualify,  except  where the failure to so qualify
would not,  singly or in the aggregate,  have a North Material  Adverse  Effect.
North has all requisite corporate power to own, lease and operate its properties
and to carry on its business.

     SECTION 4.02 Authority; Corporate Action. North has all necessary corporate
power and  authority  to enter  into  this  Agreement  and the other  agreements
contemplated by this Agreement and to consummate the  transactions  contemplated
hereby and thereby. All action,  corporate and otherwise,  necessary to be taken
by North to authorize the execution,  delivery and performance of this Agreement
and all other  agreements  delivered or to be  delivered by North in  connection
with the transactions contemplated hereby or thereby has, or at the Closing will
have been, duly and validly taken.  Subject to the terms and conditions  hereof,
this  Agreement  and all the other  agreements  contemplated  hereby  constitute
valid,  binding  and  enforceable  obligations  of  North,  as the  case may be,
enforceable  in  accordance  with its  terms,  except as  enforceability  may be
limited  by  applicable  bankruptcy,  insolvency,  reorganization,   moratorium,


                                       18




fraudulent  transfer or similar laws of general  application now or hereafter in
effect affecting the rights and remedies of creditors and by general  principles
of equity (regardless of whether enforcement is sought in a proceeding at law or
in equity).

     SECTION 4.03 No Conflict; Required Filings and Consents.

     (a) The execution and delivery of this Agreement (and the other  agreements
contemplated  hereby) by North  does not,  and the  performance  by North of its
obligations under this Agreement (and any other agreement  contemplated  hereby)
will not, (i) conflict with or violate the Certificate of Incorporation, By-laws
or other  organizational  documents of North,  (ii) conflict with or violate any
law, statute, ordinance, rule, regulation,  order, judgment or decree applicable
to North or by which any of its  properties  or assets is bound or affected,  or
(iii)  result in any breach of or  constitute  a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a Lien on any of the  properties or assets of North  pursuant
to, any note, bond, mortgage,  indenture,  contract,  agreement, lease, license,
permit, franchise or other instrument or obligation to which North is a party or
by which North or any of its properties or assets is bound or affected,  except,
in the  case  of  clauses  (ii)  and  (iii),  above,  for  any  such  conflicts,
violations,  breaches, defaults or other occurrences that would not have, either
singly or in the aggregate, a North Material Adverse Effect.

     (b) The  execution  and  delivery  of  this  Agreement  and  all the  other
agreements  contemplated  hereby by North does not, and the  performance of this
Agreement and all the other  agreements  contemplated  hereby by North will not,
require any  consent,  approval,  authorization  or permit of, or filing with or
notification  to, any  Governmental  Entity,  except for (i) compliance with the
applicable requirements,  if any, of the Certificate of Incorporation and Bylaws
of North (including,  but not limited to, the approval of this Agreement and the
Merger by the  Stockholders  of North),  Exchange  Act,  Securities  Act,  state
securities laws, state takeover laws,  Nasdaq and (ii) filing and recordation of
appropriate  merger  documents as required by the laws of the State of Delaware,
and (iii) where failure to obtain such consents,  approvals,  authorizations  or
permits, or to make such filings or notifications, would not have, either singly
or in the aggregate, a North Material Adverse Effect.

     SECTION  4.04 North  Capitalization.  The number of  authorized  and issued
shares of capital stock of North is set forth on Schedule 4.04 which amount will
be increased on or before the Effective  Time by 30,000 shares of Class B Common
Stock of North upon  exercise of the Class B Options and payment to North of the
aggregate of $300,000  Class B Option  exercise  price;  (such shares of Class B
Common Stock to be converted  into 60,000  shares of Class A Common Stock either
(i) as of the Effective Time if all of the actions described in Section 7.06 are
approved,  or (ii) if not,  within 90 days of the  Effective  Time in accordance
with the  agreement  attached  hereto as  Exhibit  E).  North  does not have any


                                       19




treasury  stock.  Except as set forth on  Schedule  4.04 and  except for (x) the
Executive Options and (y) a warrant to purchase 350,000 shares of Class A Common
Stock to be  issued at the  Effective  Time to Allen &  Company  (the  Executive
Options and such warrant, collectively the "Closing Date Options"), there are no
options, warrants, calls, commitments or other rights of any character including
conversion or preemptive  rights  relating to the  acquisition  of any issued or
unissued  capital  stock or other  securities of North.  All of the  outstanding
shares  of  common  stock  and  preferred  stock of North  are duly and  validly
authorized and issued,  fully paid and  non-assessable.  Schedule 4.04 correctly
sets forth the record owners of all of the options of North.  North has complied
with all  applicable  federal  and  state  securities  laws and  regulations  in
connection with the offer and sale of all of the common stock,  preferred stock,
warrants  and  options  of North  and there are no  rescission  rights  relating
thereto  except  for such of the  foregoing  as would not have a North  Material
Adverse Effect.  Schedule 4.04 sets forth the registration rights of all holders
of securities of North, either on a "demand" or a "piggyback" basis.

     SECTION 4.05 Escrow Account. As of the date hereof and at the Closing Date,
North has and covenants  that it will have no less than  $8,391,000  invested in
government  securities  in an escrow  account with Chase  Manhattan  Bank.  Upon
consummation  of the Merger,  all  conditions  to the release of such funds from
escrow will be satisfied. Immediately prior to the Closing Date, after provision
for (i) all unpaid costs,  expenses and liabilities of North heretofore incurred
or hereafter incurred at any time prior to the Closing Date, all of which (other
than those described in clause (ii) hereof) to the best of North's knowledge are
set forth in  Schedule  4.05  hereto,  and (ii) all  unpaid  costs and  expenses
incurred  by North in  connection  with the  transactions  contemplated  by this
Agreement in an aggregate  amount,  to the extent  payable in cash,  of not more
than $625,000, all of which, or reasonable estimates thereof,  together with all
documentation  in  North's  possession  related  thereto  are also set  forth on
Schedule  4.05 (the net amount of cash so  remaining  is  referred  to herein as
"Available Cash"), North covenants that it will have not less than $8,000,000 of
Available  Cash,  less only such  amounts,  if any,  as North is required to pay
stockholders who are not officers and directors of North who elect to have their
shares  redeemed  in  accordance  with  the  provisions  of the  Certificate  of
Incorporation of North. Schedule 4.05 also lists all costs and expenses incurred
by North in connection with the transactions  contemplated by this Agreement and
paid by North.

     SECTION 4.06 North Securities and Exchange  Commission  Reports;  Financial
Statement.

     (a) North has filed all  forms,  reports,  statements  and other  documents
required to be filed with the Commission  when and as required to be filed,  and
has heretofore made them available to Motoguzzi,  in the same form as filed with
the Commission,  together with any amendments thereto,  copies of its (i) Annual
Report on Form 10-K for the year ended August 31, 1997 and all Quarterly Reports
on Form 10- Q filed  since  August 31,  1997,  and (ii) all  reports on Form 8-K
since  August  31,  1997  (collectively,  the  "North  Reports").  As  of  their
respective  filing  dates,  the North  Reports  (i)  complied  as to form in all
material  respects with the  requirements of the Exchange Act and the Securities
Act and (ii) did not contain any untrue  statement of a material fact or omit to
state a material fact required to  be stated  therein or  necessary  to make the

                                       20





statements  therein,  in the light of the  circumstances  under  which they were
made,  not  misleading.  Except as  disclosed in a filing  subsequently  made in
accordance  with the  requirements  of the Exchange Act prior to the date hereof
and  except  for such  filing  of a report  on Form  8-K as may be  required  to
disclose this Agreement and the  transactions as contemplated by this Agreement,
no event has occurred subsequent to the date of filing of each such North Report
as would make any statement contained therein materially untrue or misleading or
would  make  any  omission  therefrom  materially  misleading  in  light  of the
occurrence of such event.

     (b) The  financial  statements of North for the year ended August 31, 1997,
audited and reported on by BDO Seidman,  LLP and unaudited financial  statements
of North  for the nine  months  ended May 31,  1998  (collectively,  the  "North
Financial  Statements")  are contained in the Annual Report on Form 10-K for the
year ended August 31, 1997 and the Quarterly Report on Form 10-Q for the quarter
ended May 31,  1998,  respectively,  each of which has been  delivered to TRG as
part of the North  Reports.  The North  Financial  Statements  ,  including  all
related notes and schedules thereto, fairly present in all material respects the
consolidated  financial position of North as at the respective dates thereof and
the  consolidated  results of operations and cash flows of North for the periods
indicated in accordance with GAAP applied on a consistent  basis  throughout the
periods  involved  (except as may be noted therein) and subject,  in the case of
interim financial statements, to normal year-end adjustments.

     (c) Other than as set forth on the May 31, 1998 balance sheet  contained in
the North  Financial  Statements  and such of the  following  as are incurred in
connection   with  the  negotiation   and   consummation  of  the   transactions
contemplated  by this  Agreement,  estimates  of which are set forth in Schedule
4.05,  North has, on the date hereof and North covenants that it will have as of
the Closing  Date, no debts,  liabilities,  financial  commitments  or financial
obligations (including, without limitation,  unasserted claims) whether absolute
or contingent, liquidated or unliquidated, or due or to become due or otherwise,
except those incurred in the ordinary  course of business,  consistent with past
practices,  since the date of such balance sheet which are set forth in Schedule
4.05.

     SECTION 4.07 North Material Contracts.

     (a)  Schedule  4.07(a)  sets  forth  a  complete  and  correct  list of all
agreements which are material to the assets,  financial  condition,  business or
operations of North.  True and complete  copies of all Material  Contracts  have
been delivered to Motoguzzi or made available for inspection.

     (b)  Except  as set  forth in any of the North  Disclosure  Schedules,  all
Material  Contracts  are valid and in full  force and  effect  and North has not
received  notice from any other party thereto that it has violated any provision
of, or  committed  or failed to perform  any act which  with or without  notice,
lapse of time or both would  constitute a default under the  provisions  of, any


                                       21




Material Contract,  except for defaults that would not reasonably be expected to
have, either singly or in the aggregate,  a North Material Adverse Effect.  None
of the rights of North  under any of the  Material  Contracts  is subject to any
Liens of record.  Except as set forth in any of the North Disclosure  Schedules,
North has not received  notice from any other party thereto that it has breached
any express or implied  representations,  warranties  or covenants in connection
with such Material Contracts,  except for breaches that, individually and in the
aggregate, will not have a North Material Adverse Effect.

     SECTION  4.08  Litigation.  Other  than as set  forth  on any of the  North
Disclosure Schedules, there are no actions, suits,  arbitrations,  mediations or
other proceedings pending or, to its knowledge,  threatened against North at law
or in equity before any court, Federal,  state,  municipal or other governmental
department  or agency or other  tribunal.  Neither  North  nor its  property  is
subject to any order,  judgment,  injunction  or decree  which could have either
singly or in the aggregate, a North Material Adverse Effect.

     SECTION 4.09 Bank Accounts.  Schedule 4.09 sets forth the name of each bank
in  which  North  has  an  account,  safe  deposit,  vault,  lock-box  or  other
arrangement, the account number and description of each account at each bank and
the names of all persons  authorized  to draw thereon or to have access  thereto
and the names of all  persons,  if any,  holding  powers of  attorney  over such
accounts from North.

     SECTION 4.10 Disclosure.  No  representation or warranty by North contained
in this  Agreement  and no  information  contained  in any  schedule,  financial
statement or other instrument furnished or to be furnished to Motoguzzi by North
pursuant to this Agreement or in connection with the  transactions  contemplated
hereby, when taken together with the North Reports, contains or will contain any
untrue  statement  of a material  fact or omits or will omit to state a material
fact necessary in order to make the statements  contained  herein or therein not
misleading.

     SECTION 4.11 Investment Bankers. Other than fees payable to and expenses of
Allen & Company  Incorporated,  which fees and  expenses  will be paid solely by
North,  in cash and  warrants  as  provided  herein and in the North  Disclosure
Schedules,  no broker, finder or investment banker is entitled to any brokerage,
finder's  or  other  fee  or  commission  in  connection  with  the  transaction
contemplated by this Agreement based upon  arrangements  made by or on behalf of
North.

     SECTION 4.12 Securities Issued as Merger Consideration.  The Class A Common
Stock, Class B Preferred Stock and Nominal Warrants,  when issued as a result of
the Merger shall be duly  authorized  and issued by North and the Class A Common
Stock and Class B Preferred Stock will be fully paid and  non-assessable  shares
of capital stock of North.  The shares of Class A Common Stock  purchasable upon
exercise of the Nominal  Warrants and the  Continuation  Warrants have been duly
reserved  for  issuance  and,  when issued in  accordance  with the terms of the
Nominal  Warrants and the  Continuation  Warrants,  shall be duly authorized and
issued by North and fully paid and non-assessable.

                                       22






     SECTION 4.13 Licenses and Permits;  Compliance  with Laws.  North holds all
permits,  licenses and approvals from all federal,  state and local governmental
authorities,  foreign or domestic, necessary for it to own its properties and to
carry on its business as now being  conducted  except for such of the foregoing,
the absence of which would not have a North Material  Adverse  Effect.  North is
not an "investment  company" within the meaning of the Investment Company Act of
1940,  as  amended  ("Investment  Company  Act")  and is not,  and has not been,
required to register under the Investment Company Act.

     SECTION  4.14  Records.   The  books  of  account,   minutes  books,  stock
certificate  ledger and stock transfer  ledger of North are complete and correct
in all  material  respects  , and  there  have  been  no  material  transactions
involving North of the type typically recorded in such records which were not so
recorded.

     SECTION 4.15 No Illegal or Improper  Transactions.  Neither North,  nor any
officer,  director,  employee, agent or affiliate of North, has offered, paid or
agreed to pay to any person or entity  (including any governmental  official) or
solicited,  received  or  agreed to  receive  from any such  person  or  entity,
directly or  indirectly,  any money or anything of value for the purpose or with
the intent of (i)  obtaining or  maintaining  business for the benefit of North,
(ii) illegally or improperly facilitating the purchase or sale of any product or
service,  or (iii) avoiding the imposition of any fine or penalty, in any manner
which is in violation of any applicable ordinance, regulation or law.

     SECTION 4.16 License  Fee. All fees payable in  connection  with the use of
the "Sma2rt" and or other related trademarks have been paid by North.

     SECTION  4.17  Indemnification  Agreements.  Other than as  provided in the
Certificate of  Incorporation  or By Laws of North,  North is not a party to any
agreement,  undertaking,  understanding  or obligation,  express or implied,  to
indemnify  any current or former  director  of North  arising out of any acts or
events occurring prior the date hereof.

     SECTION 4.18 Taxes,  Tax Returns and Audits.  North has (or, in the case of
returns  becoming due after the date hereof and on or before the Effective Time,
will have  prior to the  Effective  Time)  filed or caused to be filed,  or have
properly  filed  extensions  for, all tax returns which are required to be filed
and have paid or caused to be paid all taxes required therein to be paid and all
assessments  received  by them to the extent  that such taxes have  become  due,
except taxes the validity or amount of which is being contested in good faith by
appropriate  proceedings  and with respect to which adequate  reserves have been
set aside. North has or will have established adequate reserves on its books and
records and financial statements  (including the May 31, 1998 balance sheet) for
such payment in accordance with GAAP.  North has withheld from each payment made
to any of its present or former  employees,  officers,  directors or other party
all amounts  required by law to be withheld and has,  where  required,  remitted


                                       23




such  amounts  within the  applicable  periods to the  appropriate  governmental
authorities.  North has paid or caused to be paid, or has  established  reserves
that it reasonably believes to be adequate in all material respects, for all tax
liabilities  applicable  to it for all fiscal years which have not been examined
and reported on by the taxing authorities (or closed by applicable statutes).

                                    ARTICLE V
                             NATURE AND SURVIVAL OF
                 REPRESENTATIONS AND WARRANTIES OF THE PARTIES.

     SECTION 5.01 Survival. Each statement,  representation,  warranty, covenant
and agreement made by any Party to another under this Agreement  shall remain in
effect  continuously  until the Closing,  and the  representations,  warranties,
covenants,  and  agreements  made by Motoguzzi and TRG shall survive the Closing
and shall  terminate at such time as the right of North to assert claims against
the Remedy Fund (as hereinafter  defined) under such statement,  representation,
warranty, covenant or agreement as provided in Article X so terminates, provided
that such  termination  shall not affect North's rights in respect of any claims
asserted in accordance  with Article X prior to such  termination,  and provided
further  that  nothing  contained  herein  shall  limit any  Party's  rights and
remedies under Article XI.

                                   ARTICLE VI
                         COVENANTS OF MOTOGUZZI AND TRG

     SECTION 6.01 Conduct of Business. Motoguzzi covenants and agrees that, from
the date hereof through the Closing Date, except as otherwise set forth in or as
contemplated  by  this  Agreement,  including  without  limitation  the  actions
described in Section 6.13,  and except for actions taken in  furtherance  of any
transaction  specified in any of the  Motoguzzi  Disclosure  Schedules  attached
hereto, Motoguzzi and the Motoguzzi Subsidiaries shall:

     (a) conduct their  businesses  only in the ordinary  course and in a manner
consistent with the current  practice of such business,  preserve  substantially
intact the business  organization  of Motoguzzi and the Motoguzzi  Subsidiaries,
use their best efforts to preserve the current  relationships  of Motoguzzi  and
the Motoguzzi Subsidiaries with customers and other persons with which Motoguzzi
and the Motoguzzi  Subsidiaries have significant business relations,  taken as a
whole, preserve the goodwill of Motoguzzi and the Motoguzzi Subsidiaries,  taken
as a whole,  and comply with all requirements of law, the violation of which are
reasonably likely to have a Motoguzzi Material Adverse Effect;

     (b) not sell, transfer or dispose of all or any part of its capital stock;


                                       24





     (c)  not (i)  issue  any  shares  of its  capital  stock  nor any  options,
obligations,   rights,   warrants  or  other  securities   convertible  into  or
exchangeable  for its capital  stock or any other class of equity  securities of
Motoguzzi;  or (ii) amend or otherwise  modify the terms of any such securities,
options,  obligations,  rights or  warrants  in a manner  inconsistent  with the
provisions  of this  Agreement  or if the effect  thereof  shall be to make such
terms more favorable to the holders thereof;

     (d) not declare any dividend or make any  distribution in cash,  securities
or  otherwise on the  outstanding  shares of its capital  stock,  or directly or
indirectly  redeem or purchase  any such capital  stock except for  dividends or
distributions  by  a  Motoguzzi  Subsidiary  to  Motoguzzi,  or  redemptions  or
purchases of capital stock of Motoguzzi Subsidiaries;

     (e) not, in any manner whatsoever, advance, transfer (other than in payment
for goods received or services rendered in the ordinary course of business),  or
distribute to any security  holder of Motoguzzi,  including  without  limitation
TRG,  OAM or any of  their  affiliates,  or  otherwise  withdraw,  cash  or cash
equivalents in any manner  inconsistent  with its  established  cash  management
practices,  except to pay existing  obligations  of Motoguzzi  and the Motoguzzi
Subsidiaries in accordance with their terms;

     (f) not change  any of its  methods  of  accounting  in effect at March 31,
1998;

     (g) not prepay, before the scheduled maturity thereof, any of its long-term
debt, or incur any obligation for borrowed money,  whether or not evidenced by a
note, bond, debenture or similar instrument, other than indebtedness incurred in
the  ordinary  course  of  business   consistent  with  past  practices  and  as
contemplated by this Agreement;

     (h) not enter into,  or modify in any  material  respect or  terminate  any
Material  Contract or Permit if same would cause a  Motoguzzi  Material  Adverse
Effect, except as required by applicable law;

     (i) not take any action that will,  or could  reasonably  be  expected  to,
result in any of its  representations and warranties set forth in this Agreement
being  inaccurate  as of the  Closing  Date or in any of the  conditions  to the
Merger not being satisfied,  if such inaccuracy or non-satisfaction of condition
would permit  termination of this Agreement by North in accordance  with Article
IX hereof; or

     (j) not agree in writing or otherwise to do any of the foregoing.

     SECTION 6.02 Access to Information; Confidentiality.

     (a) Between the date of this Agreement and the Closing Date, Motoguzzi will
(i)  permit  North and  their  Representatives  reasonable  access to all of the


                                       25




books,  records,  reports  and  other  related  materials,   offices  and  other
facilities  and  properties of Motoguzzi and the  Motoguzzi  Subsidiaries;  (ii)
permit North and their  Representatives to make such inspections thereof as they
may reasonably request;  and (iii) furnish North and their  Representatives with
such financial and operating data (including  without limitation the work papers
of Motoguzzi's  accountants) and other information with respect to Motoguzzi and
the Motoguzzi Subsidiaries as North may from time to time reasonably request.

     (b) TRG and  Motoguzzi  shall hold and shall  cause  their  affiliates  and
Representatives  to hold in strict  confidence,  unless compelled to disclose by
judicial  or  administrative  process  or by  other  requirements  of  law,  all
documents and information  concerning  North furnished to them by North or their
Representatives  in  connection  with  the  transactions  contemplated  by  this
Agreement  (except to the extent that such information can be shown to have been
(i) previously  known by TRG or Motoguzzi,  (ii) in the public domain through no
fault of TRG or Motoguzzi or (iii) later  lawfully  acquired by TRG or Motoguzzi
from  another  source,  which  source  shall not be the agent of North or person
under confidentiality  obligation to North) and, except as otherwise required by
applicable  law, rule or regulation,  neither TRG nor Motoguzzi shall release or
disclose such information to any other person,  except its auditors,  actuaries,
attorneys,  financial  advisors,  bankers and other consultants and advisors who
need to know same in connection with this Agreement.

     SECTION 6.03 Maintenance of Insurance.  Through the Closing Date, Motoguzzi
shall  maintain  insurance   policies  providing   insurance  coverage  for  its
consolidated  business  and the assets of Motoguzzi  of  substantially  the same
kinds,  in  substantially  the same amounts and against  substantially  the same
risks as are in effect on the date  hereof to the extent  that such  coverage is
available at a cost not greater than 200% of the present cost of such coverage.

     SECTION 6.04 No Other  Negotiations.  Unless and until this Agreement shall
have been  terminated  pursuant to its terms,  neither  Motoguzzi nor any of its
Representatives,   officers,   directors  or  affiliates   shall,   directly  or
indirectly,  solicit, institute, initiate, or pursue or respond to any inquiries
or enter into discussions,  proposals or negotiations with any person concerning
any merger, sale of substantial assets, tender offer, sale of shares of stock or
similar  transaction  involving  Motoguzzi  or any of its  assets  or  disclose,
directly  or  indirectly,  other  than to the  shareholders  of  Motoguzzi,  any
information  not  customarily  disclosed  to the  public  or  such  shareholders
concerning  Motoguzzi,  or except as required by law, afford to any other person
access to the properties, books or records of Motoguzzi, or otherwise assist any
person  preparing  to make or who has made  such an  offer,  or  enter  into any
agreement with any third party providing for a business combination transaction,
equity  investment  or sale of  significant  amount of assets  of  Motoguzzi  or
recommend to its  shareholders  any of the foregoing.  Motoguzzi  shall promptly
notify  North of any direct or indirect  inquiries,  discussions,  proposals  or
negotiations.

     SECTION 6.05 No Securities  Transactions.  Neither Motoguzzi nor any of its
affiliates  shall engage in any  transactions  involving the securities of North
prior to the Closing Date.

                                       26






     SECTION 6.06  Fulfillment  of Conditions.  TRG and Motoguzzi  shall use its
respective commercially reasonable efforts to fulfill, or cause to be fulfilled,
the conditions  specified in Articles VIII and IX applicable to it to the extent
that the  fulfillment of such conditions is within its respective  control.  The
foregoing  obligation includes taking or refraining from such reasonable actions
as may be necessary  to fulfill such  conditions  (including  Motoguzzi  and the
Motoguzzi  Subsidiaries  conducting  their businesses in such manner that on the
Closing Date the  representations  and warranties of TRG and Motoguzzi contained
herein  shall be  accurate  as  though  then  made,  except as  contemplated  or
permitted by the terms hereof).

     SECTION 6.07 Disclosure of Certain Matters. During the period from the date
hereof  through the Closing  Date,  each of TRG and  Motoguzzi  shall give North
prompt written  notice of any event or  development  that occurs that (a) had it
existed  or been  known  on the date  hereof  would  have  been  required  to be
disclosed under this Agreement,  (b) would cause its respective  representations
and warranties  contained  herein to be inaccurate or otherwise  misleading in a
material  respect,  (c) could reasonably be expected to give North any reason to
believe  that  any of the  conditions  set  forth  in  Article  IX  will  not be
satisfied,  or (d) is of a nature  that such  constitutes  or may  constitute  a
Motoguzzi Material Adverse Change.

     SECTION  6.08  Assignment  or Transfer of  Contracts,  Leases and  Permits.
Motoguzzi shall, in consultation  with North and its  Representatives,  promptly
take all necessary action to, and shall use its commercially  reasonable efforts
to obtain  consents  under all Material  Contracts and Permits which require the
consent  of any other  party or person to the  assignment  or  transfer  thereof
either  by the  terms  thereof  or as a  matter  of law to the  extent  that any
assignment or transfer  thereof  would be deemed to have occurred  thereunder by
reason of the consummation of the Merger.

     SECTION 6.09 Information for Proxy Statement. Motoguzzi will cooperate with
North in the preparation of North's Proxy and Registration Statement referred to
in Section 7.05 and furnish to North all information  concerning  itself and its
officers and directors as North or its counsel may  reasonably  request and that
is required or customary for inclusion in such Proxy and Registration Statement.
Motoguzzi covenants that all of such information which has been approved by TRG,
Motoguzzi  or their  counsel  (which  approval  will be  evidenced  by a writing
identifying  the document,  by draft date or otherwise,  prior to filing thereof
with the Securities and Exchange  Commission)  and is included in such Proxy and
Registration  Statement and any other written information furnished by Motoguzzi
for  inclusion  in the  Proxy  and  Registration  Statement  will  comply in all
material respects with the applicable  provisions of the Securities Exchange Act
of 1934 ("Exchange  Act") and will not at the time of the  effectiveness  of the
Proxy and  Registration  Statement  and any  amendments  thereof or  supplements
thereto  and at the time of the North  stockholders  meeting  contain any untrue
statement of a material  fact or omit to state any material  fact required to be
stated  therein and necessary in order to make the  statements  therein,  in the
light of the  circumstances  under  which  they were  made,  not  misleading  or
necessary to correct any statement in any earlier  filing with the Commission of


                                       27





such Proxy and Registration Statement or any amendment thereof or any supplement
thereto or any earlier  communication  to the stockholders of North with respect
to the transactions contemplated by this Agreement.

     SECTION 6.10 Cold Comfort  Letter.  Upon North providing  Arthur  Andersen,
LLP,  the  accountants   for  Motoguzzi   ("Motoguzzi   Accountants"),   with  a
representation  letter in accordance with paragraphs 5, 6 and 7 of the Statement
on Auditing Standards regarding Letters for Underwriters,  Motoguzzi shall cause
to be  delivered  to  North a  letter  of  Motoguzzi's  Accountants,  dated  the
effective date of the Proxy and Registration Statement,  and addressed to North,
in form and  substance  satisfactory  to North (with such changes to which North
shall consent,  it being  understood that such consent shall not be unreasonably
withheld), to the effect that:

     (a) they are  independent  certified  public  accountants  with  respect to
Motoguzzi  within the meaning of the  Exchange  Act,  including  the  applicable
published regulations thereunder;

     (b) the consolidated  financial  statements of Motoguzzi  certified by them
and included in the Proxy and  Registration  Statement  comply as to form in all
material  respects with the applicable  accounting  requirements of the Exchange
Act, including the published regulations thereunder; and

     (c) they have carried out procedures to a specified date not more than five
business days prior to the date of the Proxy and Registration  Statement that do
not constitute an audit in accordance  with GAAP of the  consolidated  financial
statements of Motoguzzi, as follows: (i) read the unaudited financial statements
of Motoguzzi  included in the Proxy and  Registration  Statement,  (ii) read the
unaudited consolidated financial statements of Motoguzzi for the period from the
date  of  the  most  recent  financial  statements  included  in the  Proxy  and
Registration  Statement  through  the  date  of  the  latest  available  interim
financial statements, (iii) read the minutes of the meetings of stockholders and
Boards of  Directors  of  Motoguzzi  from the date of the most recent  financial
statements of Motoguzzi included in the Proxy and Registration Statement to such
date not more  than  five  business  days  prior  to the date of the  Proxy  and
Registration  Statement and (iv)  consulted  with certain  officers of Motoguzzi
responsible  for  financial  and  accounting  matters as to  whether  any of the
changes  or  decreases  referred  to  below  has  occurred,  and  based  on such
procedures,  nothing  has come to their  attention  which  would  cause  them to
believe that (A) any unaudited financial statements of Motoguzzi included in the
Proxy  and  Registration  Statement  do not  comply  as to form in all  material
respects with the applicable accounting  requirements of the Exchange Act and of
the published  regulations  thereunder;  (B) such unaudited financial statements
are  not  fairly   presented  in  conformity   with  GAAP  applied  on  a  basis
substantially  consistent  with  that  of  the  audited  consolidated  financial
statements of Motoguzzi included in the Proxy and Registration Statement; (C) as
of such date not more than five business days prior to the date of the Proxy and
Registration  Statement,  there was not, except as set forth in such letter, any
(1) change in capital  stock,  treasury  stock or long-term debt of Motoguzzi or
(2) any  decrease  in  capital in excess of par value,  retained  earnings,  net


                                       28




assets, net current assets or investments of Motoguzzi, in each case as compared
with the amounts shown in the most recent balance sheet of Motoguzzi included in
the Proxy and Registration Statement or (D) for the period from the date of such
balance  sheet to the end of the  month  immediately  preceding  the date of the
Proxy and  Registration  Statement,  there were not, except as set forth in such
letter,  any  decreases,  as  compared  with  the  corresponding  period  in the
preceding  year,  in  revenues  or in the total or per share  amounts  of income
before  extraordinary  items,  income  before  income  taxes  or net  income  of
Motoguzzi.

     SECTION 6.11 Rule 145. Prior to the Closing Date Motoguzzi will identify in
a certificate from its president to North all persons who he reasonably believes
at the  Effective  Time will be deemed to be  "affiliates"  of Motoguzzi for the
purposes of Rule 145 under the Securities Act. The certificates representing any
securities to be issued  pursuant to this  Agreement to such  "affiliates"  will
bear an appropriate legend reflecting the requirements of Rule 145. Prior to the
Closing  Date  Motoguzzi  will use its best efforts to cause each such person to
enter into an agreement in form and  substance  reasonably  acceptable  to North
pursuant to which each such person  acknowledges his or its  responsibilities as
an "affiliate."

     SECTION  6.12  Lock-Up  Agreements.  At the Closing  Date,  Motoguzzi  will
deliver to North  agreements from such of its common  stockholders and preferred
stockholders  as set forth in Schedule 6.12 to the effect that the those persons
will not publicly  sell any of the Class A Common Stock to be received  upon the
Merger or receivable upon conversion of the Class B Preferred Stock for a period
of six months from the  Effective  Time  without the consent of the  Independent
Committee  (as   hereinafter   defined)  of  the  Surviving   Corporation.   The
certificates  representing any securities  subject to these agreements will bear
an appropriate legend reflecting the terms of the agreement.

     SECTION 6.13 Interim  Financing.  Motoguzzi and the Motoguzzi  Subsidiaries
may enter into  negotiations  to obtain  financing  and may enter into such loan
agreements and other agreements  related thereto,  including without  limitation
issuance  of warrants  or other  equity  securities,  as  Motoguzzi  determines,
provided that (i) neither Motoguzzi nor the Motoguzzi  Subsidiaries  shall enter
into any such agreements  unless North has consented  thereto in writing,  which
consent shall not be unreasonably withheld, provided that such consent shall not
be required  for the issuance of (and  notwithstanding  anything to the contrary
provided  in this  Agreement,  Motoguzzi  may issue)  warrants  or other  equity
securities  issued in connection  therewith if such issuance does not reduce the
equity ownership by North's stockholders in the Surviving  Corporation (in which
event appropriate adjustment shall be made to the amount of Merger Consideration
allocated  among  the  holders  of  outstanding  Motoguzzi  securities,  but the
aggregate Merger  Consideration  shall not be increased),  provided further that
North's  consent  shall be required  and same may be  withheld  in North's  sole
discretion,  for the issuance of any warrants or other equity  securities  which
would  reduce the equity  ownership  of North's  stockholders  in the  Surviving
Corporation,  (ii)  such  financing  shall be repaid  by  Surviving  Corporation
contemporaneously  with or promptly following the Closing Date, unless otherwise


                                       29




agreed to by North in writing and (iii) such financing shall not be entered into
after the Proxy and  Registration  Statement  has been  declared  effective  and
mailed to North's Stockholders.

     SECTION 6.14 Lien Search.  Motoguzzi  shall use its best efforts to cause a
search to be made to ascertain  whether there are any Intercompany  Liens on any
assets of any Motoguzzi  Subsidiary in Italy,  provided that such kind of search
is  generally  available  in Italy  and the cost  thereof  is not  greater  than
$10,000.

                                   ARTICLE VII
                               COVENANTS OF NORTH

     SECTION 7.01 North  Conduct of Business.  North  covenants and agrees that,
from the date hereof through the Closing Date,  except as otherwise set forth in
this Agreement, it will:

     (a)  conduct  its  business  only in the  ordinary  course  and in a manner
consistent with the current  practice of such business,  preserve  substantially
intact the business  organization  of North,  keep available the services of the
current employees of North,  preserve the current relationships with which North
has significant  business  relations,  preserve the goodwill of North and comply
with all  requirements  of law,  the  violation  of which  could have a material
adverse  effect  on the  business  or  operation  of  North;  practices  of such
business;

     (b)  except  for the  granting  of the  Closing  Date  Options  and for the
issuance of shares of stock as  described  in Section  4.04,  not pledge,  sell,
transfer,  dispose of, or otherwise encumber or grant any rights or interests to
others of any kind with  respect  to,  all or any part of its  capital  stock or
enter into any discussions or negotiations with any other party to do so;

     (c) not (i) issue any shares of its capital  stock nor any  options  (other
than the Closing  Date  Options and the issuance of shares of stock as described
in Section 4.04), obligations,  rights, warrants or other securities convertible
into or  exchangeable  for its capital stock,  or any other class of securities,
whether debt or equity;  or (ii) amend or otherwise modify the terms of any such
securities,  options,  obligations,  rights or warrants in a manner inconsistent
with the  provisions of this Agreement or if the effect thereof shall be to make
such terms more favorable to the holders thereof;

     (d) not declare any dividend or make any  distribution in cash,  securities
or  otherwise on the  outstanding  shares of its capital  stock,  or directly or
indirectly  redeem or purchase any such  capital  stock or except as required by
the Certificate of  Incorporation  of North in connection with the redemption of
less than 20% of the outstanding shares of Class A Common Stock from persons who
are not directors or officers of North.

                                       30






     (e) not, in any manner whatsoever, advance, transfer (other than in payment
for goods received or services  rendered in the ordinary  course of business and
as set forth on Schedule 4.05),  or distribute to any security  holders of North
or any of their affiliates,  or otherwise withdraw,  cash or cash equivalents in
any manner  inconsistent with established cash management  practices,  except to
pay existing obligations of North in accordance with its terms;

     (f) not change any of its  methods  of  accounting  in effect at August 31,
1997;

     (g) except  pursuant to this  Agreement,  not prepay,  before the scheduled
maturity  thereof,  any of its  long-term  debt,  or incur  any  obligation  for
borrowed money,  whether or not evidenced by a note, bond,  debenture or similar
instrument,  other than indebtedness incurred in the ordinary course of business
consistent with past practices;

     (h) not enter into or modify in any material respect any material  contract
or lease of North;

     (i) not take any action that will,  or could  reasonably  be  expected  to,
result in any of its  representations and warranties set forth in this Agreement
being  inaccurate  as of the  Closing  Date or in any of the  conditions  to the
Merger not being satisfied,  if such inaccuracy or non-satisfaction of condition
would permit  termination  of this  Agreement by Motoguzzi or TRG in  accordance
with Article IX hereof;

     (j) not agree in writing or otherwise to do any of the foregoing; of

     (k) not incur any expenses or liabilities except to the extent contemplated
herein and  described in Schedule  4.05,  without the prior  written  consent of
Motoguzzi.

     SECTION 7.02 Fulfillment of Conditions. North shall use its best efforts to
fulfill the conditions  specified in Articles VIII and IX to the extent that the
fulfillment of such conditions is within its control.  The foregoing  obligation
includes  taking or refraining  from such actions as may be necessary to fulfill
such conditions  (including conducting the business of North in such manner that
on the Closing Date the representations and warranties of North contained herein
shall be accurate as though then made).

     SECTION 7.03 Filing of Initial Listing  Application with Nasdaq. As soon as
practicable after the execution of this Agreement,  North shall file with Nasdaq
an  application  to approve  listing on the Nasdaq Stock Market of the shares of
Class A Common  Stock and North shall take such actions as it  reasonably  deems
appropriate to cause such application to be approved.


                                       31





     SECTION 7.04 Access to Information; Confidentiality.

     (a) Between the date of this Agreement and the Closing Date, North will (i)
permit Motoguzzi and its Representatives  reasonable access to all of the books,
records,  reports and other related materials,  offices and other facilities and
properties of North; (ii) permit Motoguzzi and its  Representatives to make such
inspections thereof as they may reasonably request;  and (iii) furnish Motoguzzi
and its  Representatives  with such  financial  and  operating  data  (including
without limitation the work papers of North's accountants) and other information
with respect to North as Motoguzzi may from time to time reasonably request.

     (b) North  shall  hold and shall  cause  their  Representatives  to hold in
strict  confidence,  unless compelled to disclose by judicial or  administrative
process  or  by  other  requirements  of  law,  all  documents  and  information
concerning  TRG  or  its  affiliates  furnished  to  them  by  Motoguzzi  or its
Representatives  in  connection  with  the  transactions  contemplated  by  this
Agreement  (except to the extent that such information can be shown to have been
(i)  previously  known by North,  (ii) in the public domain  through no fault of
North,  or (iii) later  lawfully  acquired by North from another  source,  which
source  shall  not be  the  agent  of  North  or  person  under  confidentiality
obligation to Motoguzzi or its affiliates) and, except as otherwise  required by
applicable  law,  rule or  regulation,  North shall not release or disclose such
information  to any other  person,  except its auditors,  actuaries,  attorneys,
financial advisors,  bankers and other consultants and advisors who need to know
same in connection with this Agreement.

     SECTION 7.05 Proxy and Registration Statement.

     (a) North will prepare and file with the Securities and Exchange Commission
("Commission")  as soon as reasonably  practicable after the date hereof a proxy
statement  to  be  filed  under  the  Exchange  Act  ("Proxy  and   Registration
Statement") by North,  to be  distributed by North in connection  with the North
stockholder  meeting and may be distributed by Motoguzzi in connection  with the
Motoguzzi   stockholder  meeting  and  to  register  the  Merger  Consideration,
including  shares of Class A Common Stock of North  issuable upon  conversion of
the Class B Preferred  Stock and upon exercise of the Nominal  Warrants.  During
the course of the preparation of the Proxy and Registration Statement, Motoguzzi
will be given  reasonable  opportunity  to review and comment upon drafts of the
Proxy and Registration  Statement and the comments of the Commission thereon and
responses thereto.

     (b) North covenants to Motoguzzi that the Proxy and Registration  Statement
will comply in all  material  respects  with the  applicable  provisions  of the
Exchange  Act and will not at the time of the  effectiveness  of the  Proxy  and
Registration  Statement and any amendments thereof or supplements thereto and at
the time of the North  stockholder  meeting  contain any untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein


                                       32




or  necessary  in  order  to  make  the  statements  therein,  in  light  of the
circumstances under which they were made, not misleading or necessary to correct
any  statement  in any  earlier  filing  with the  Commission  of such Proxy and
Registration Statement or any amendment thereof or any supplement thereto or any
earlier  communication  to  the  stockholders  of  North  with  respect  to  the
transactions  contemplated  by  this  Agreement;   provided,  however,  that  no
representation,  covenant  or  agreement  is  made  by  North  with  respect  to
information  supplied or approved by or on behalf of Motoguzzi or its affiliates
for inclusion in the Proxy and  Registration  Statement,  as provided in Section
6.09 hereof.  Subject to the fiduciary  duty of the Board of Directors of North,
the  Proxy  and   Registration   Statement  shall  contain   statements,   where
appropriate,  to the effect that the Board of  Directors  of North has  approved
this Agreement and the Merger and unanimously  recommends that the  stockholders
of North vote in favor of approving  this Agreement and the Merger and the other
proposals presented in the Proxy and Registration Statement.

     SECTION 7.06  Amendments to Certificate of  Incorporation  and Stock Option
Plan.  The Proxy and  Registration  Statement  will include  provisions  for the
adoption of amendments to the  Certificate of  Incorporation  of North to change
the name of  North  from  "North  Atlantic  Acquisition  Corp."  to "Moto  Guzzi
Corporation,"  to increase the authorized  capital stock of North,  to authorize
the  issuance  of one or more  classes of  preferred  stock and to provide for a
board of directors with  staggered  terms of three years (five of whom are to be
nominees of  Motoguzzi,  two of whom are to be nominees of North and one of whom
is to be a nominee mutually  acceptable to both Motoguzzi and North) and for the
approval of one or more stock  option  plans which will include the Closing Date
Options,  conditioned  upon  the  consummation  of the  Merger.  The  Proxy  and
Registration   Statement  will  also  include   provisions  for  the  voting  by
shareholders for the elimination of North's Class B Common Stock, which shall be
recommended by North's Board of Directors,  but the  consummation  of the Merger
shall  not  be   conditioned   upon  such  action  being   approved  by  North's
stockholders.

     SECTION  7.07 No  Securities  Transactions.  Neither  North  nor any of its
Representatives  or affiliates  shall engage in any  transactions  involving the
securities of TRG or Motoguzzi prior to the Closing Date.

     SECTION 7.08 No Other  Negotiations.  Until this Agreement  shall have been
terminated pursuant to its terms,  neither North nor any of its Representatives,
officers,  directors  or  affiliates  shall,  directly or  indirectly,  solicit,
institute,  initiate,  pursue or  respond  to any  inquiries  or enter  into any
discussions,  proposals or negotiations  with any person  concerning any merger,
sale of  substantial  assets,  tender offer,  sale of shares of stock or similar
transaction  involving  North or any of its  assets  or  disclose,  directly  or
indirectly,  other  than to the  shareholders  of  North,  any  information  not
customarily  disclosed to the public or such  shareholders  concerning North, or
except as required by law,  afford to any other person access to the properties,
books or records of North, or otherwise  assist any person  preparing to make or
who has made such an offer,  or enter into any  agreement  with any third  party
providing  for  a  business combination  transaction, equity  investment or sale

                                                        33





of significant amount of assets of North or recommend to its shareholders any of
the foregoing.  North shall promptly notify  Motoguzzi of any direct or indirect
inquiries, discussions, proposals or negotiations.

     SECTION 7.09 Disclosure of Certain Matters. During the period from the date
hereof  through the Closing  Date,  North shall give  Motoguzzi  prompt  written
notice of any event or  development  that occurs that (a) had it existed or been
known on the date hereof  would have been  required to be  disclosed  under this
Agreement,  (b) would cause its of the representations and warranties  contained
herein  to be  inaccurate  or  otherwise  misleading,  (c) could  reasonably  be
expected to give  Motoguzzi any reason to believe that any of the conditions set
forth in Article IX will not be satisfied,  or (d) is of a nature that is or may
be materially  adverse to the operations,  prospects or condition  (financial or
otherwise) of North.

     SECTION  7.10 Blue Sky  Compliance.  North shall make such  filings in each
jurisdiction  wherein  resides a  shareholder  of  Motoguzzi as may be necessary
under  the laws of such  jurisdiction  to  permit  the  issuance  of the  Merger
Consideration  thereto to the extent the laws of such  jurisdiction  permit such
issuance.

     SECTION  7.11  Filing  of  Current  Reports  on Form  8-K.  Promptly  after
execution of this Agreement,  North shall file a Current Report on Form 8-K with
the Commission to report the proposed Merger and the terms thereof.

     SECTION 7.12 Directors' and Officers'  Resignations.  North will obtain the
resignations  of all of the  members  of its Board of  Directors  and all of its
officers, effective at the Effective Time.

     SECTION 7.13 Cold Comfort Letter. Upon Motoguzzi providing BDO Seidman, the
accountants for North ("North  Accountants"),  with a  representation  letter in
accordance  with  paragraphs 5, 6 and 7 of the  Statement on Auditing  Standards
regarding  Letters  for  Underwriters,  North  shall  cause to be  delivered  to
Motoguzzi a letter of North's Accountants, dated the effective date of the Proxy
and Registration  Statement,  and addressed to Motoguzzi,  in form and substance
satisfactory  to Motoguzzi  (with such changes to which Motoguzzi shall consent,
it being  understood that such consent shall not be unreasonably  withheld),  to
the effect that:

     (a) they are independent certified public accountants with respect to North
within the meaning of the  Exchange  Act,  including  the  applicable  published
regulations thereunder;

     (b) the  consolidated  financial  statements of North certified by them and
included  in the  Proxy  and  Registration  Statement  comply  as to form in all
material  respects with the applicable  accounting  requirements of the Exchange
Act, including the published regulations thereunder; and


                                       34





     (c) they have carried out procedures to a specified date not more than five
business days prior to the date of the Proxy and Registration  Statement that do
not constitute an audit in accordance  with GAAP of the  consolidated  financial
statements of North, as follows:  (i) read the unaudited financial statements of
North included in the Proxy and Registration Statement,  (ii) read the unaudited
consolidated  financial  statements of North for the period from the date of the
most  recent  financial  statements  included  in  the  Proxy  and  Registration
Statement through the date of the latest available interim financial statements,
(iii) read the minutes of the meetings of  stockholders  and Boards of Directors
of North from the date of the most recent financial statements of North included
in the Proxy and Registration Statement to such date not more than five business
days  prior  to the  date of the  Proxy  and  Registration  Statement  and  (iv)
consulted  with  certain  officers  of  North   responsible  for  financial  and
accounting  matters as to whether  any of the changes or  decreases  referred to
below has  occurred,  and based on such  procedures,  nothing  has come to their
attention  which would cause them to believe  that (A) any  unaudited  financial
statements  of North  included in the Proxy and  Registration  Statement  do not
comply  as to form in all  material  respects  with  the  applicable  accounting
requirements  of the Exchange Act and of the published  regulations  thereunder;
(B) such unaudited  financial  statements are not fairly presented in conformity
with GAAP applied on a basis  substantially  consistent with that of the audited
consolidated   financial   statements  of  North   included  in  the  Proxy  and
Registration  Statement;  (C) as of such date not more than five  business  days
prior to the date of the Proxy and Registration Statement, there was not, except
as set forth in such letter, any (1) change in capital stock,  treasury stock or
long-term  debt of North or (2) any  decrease in capital in excess of par value,
retained  earnings,  net assets,  net current assets or investments of North, in
each case as compared with the amounts shown in the most recent balance sheet of
North  included in the Proxy and  Registration  Statement  or (D) for the period
from  the  date of  such  balance  sheet  to the  end of the  month  immediately
preceding  the date of the Proxy and  Registration  Statement,  there  were not,
except  as set  forth  in such  letter,  any  decreases,  as  compared  with the
corresponding  period in the preceding  year, in revenues or in the total or per
share amounts of income before  extraordinary  items, income before income taxes
or net income of North.

     SECTION 7.14 Lock-Up Agreements. At the Closing Date, North will deliver to
Motoguzzi  agreements  from all of its officers and directors to the effect that
those  persons will not publicly  sell any of the  securities  of the  Surviving
Corporation  for a period of six months  from the  Effective  Time  without  the
consent of the Surviving Corporation.

                                  ARTICLE VIII
                         JOINT COVENANTS OF THE PARTIES

     SECTION 8.01 Further  Action.  Each of the Parties shall  promptly  execute
such  documents  and  other  papers  and take  such  further  actions  as may be
reasonably  required or  desirable  to carry out the  provisions  hereof and the
transactions  contemplated  hereby. Upon the terms and subject to the conditions
hereof,  each of the Parties  shall use its best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all other  things  necessary,

                                       35





proper or advisable to consummate  and make effective as promptly as practicable
the transactions contemplated by this Agreement.

     SECTION 8.02 Schedules. The Parties shall have the obligation to supplement
or amend the schedules being delivered  concurrently  with the execution of this
Agreement  and annexed  hereto with respect to any matter  hereafter  arising or
discovered which, if existing or known at the date of this Agreement, would have
been required to be set forth or described in the schedules.  Supplementation or
amendment of a representation or warranty that has a Motoguzzi  Material Adverse
Effect  qualifier  shall not create a right to terminate  this  Agreement  under
Section 11.01(b) or 11.01(c) unless such supplementation or amendment reflects a
Motoguzzi  Material  Adverse Effect.  The obligations of the Parties to amend or
supplement the schedules being delivered herewith shall terminate on the Closing
Date.  Notwithstanding  any such amendment or  supplementation,  for purposes of
Article X hereof,  the  representations  and  warranties of the Parties shall be
made with  reference to the  schedules as they exist at the time of execution of
this Agreement.

     SECTION 8.03 Regulatory and Other Authorizations. The Parties will promptly
make  all   necessary   filings  and  use  their  best  efforts  to  obtain  all
authorizations,  consents,  orders and approvals of all Federal, state and other
regulatory  bodies and officials that are required for the  consummation  of the
transactions  contemplated by this  Agreement,  including but not limited to the
Securities  and  Exchange  Commission  and  self-regulatory  agencies,  and will
cooperate fully with each other in connection therewith.

     SECTION 8.04 Committees of the Board of Surviving Corporation. Prior to the
Closing  Date,  the Parties  will  designate  (i) three  persons  from among the
proposed  directors of the  Surviving  Corporation  to be elected to a committee
("Independent   Committee")   of  the  Board  of  Directors  of  the   Surviving
Corporation,  which will have the authority,  among other things to determine if
any action should or should not be instituted to recover Damages from the Remedy
Fund and (ii)  such  other  committees  of the  Board of  Directors  as would be
required  by Nasdaq if the  Class A Common  Stock  were  traded on  Nasdaq.  The
Independent  Committee  shall be  comprised  of persons who are not and have not
been during the ten years prior to the Effective  Time  employed by,  affiliated
with or a shareholder of TRG, OAM, Motoguzzi or any Motoguzzi Subsidiary.


     SECTION 8.05 Indemnification and Director and Officer Liability Insurance.

     (a) North and Motoguzzi agree that all rights to  indemnification  for acts
or omissions  occurring prior to the Effective Time now existing in favor of the
current  directors  and  officers  of North and  Motoguzzi  as  provided  in the
certificate of  incorporation  or bylaws of North and  Motoguzzi,  respectively,
shall  survive  the  Merger  and shall  continue  in full  force  and  effect in
accordance with their terms.


                                       36





     (b) For a period of six (6) years after the Effective  Time,  the Surviving
Corporation  shall  cause to be  maintained  in effect the  current  policies of
directors' and officers' liability insurance maintained by Motoguzzi,  or by TRG
to the extent that such policies  provide  coverage for Motoguzzi  directors and
officers (or policies of at least the same coverage and amounts containing terms
and  conditions  that are no less  advantageous)  with respect to claims arising
from facts or events that occurred before the Effective Time; provided, however,
that the  Surviving  Corporation  shall not be obligated to make annual  premium
payments for such  insurance to the extent that such  premiums  exceed an amount
equal  to 200% of the  annual  premiums  paid as of the  date  hereof  for  such
insurance  and if such  premiums  exceed such amount the  Surviving  Corporation
shall purchase insurance policies in amounts and with coverage as reasonably can
be purchased for such amount.

     (c)  The   Surviving   Corporation   agrees  to  remain   liable   for  any
indemnification  obligations to North's and  Motoguzzi's  current  directors and
officers, in all capacities in which such directors or officers served North and
Motoguzzi  prior to the Effective  Time, as set forth in North's and Motoguzzi's
certificate of incorporation  and bylaws to the extent such  indemnification  by
North and Motoguzzi is permitted under the DGCL.

     (d) In the event the  Surviving  Corporation  or any of its  successors  or
assigns (i)  consolidates  with or merges into any other person and shall not be
the  continuing  or surviving  corporation  or entity of such  consolidation  or
merger,  or (ii) transfers or conveys all or substantially all of its properties
and assets to any person,  then, and in each such case, to the extent necessary,
proper  provision  shall  be made so that  the  successors  and  assigns  of the
Surviving Corporation assume the obligations set forth in this Section 8.05.

     (e) The  provisions of this Section 8.05 are intended to be for the benefit
of, and shall be enforceable by, each indemnified party and his or her heirs and
representatives.

     SECTION 8.06 Payment of Intercompany Indebtedness. All indebtedness owed by
Motoguzzi  and the Motoguzzi  Subsidiaries  to TRG and its  subsidiaries,  up to
$800,000,  remaining  after the actions  described in Section 2.06(b) are taken,
subject to  reduction in  accordance  with  Section  11.01(b),  shall be paid by
Motoguzzi to TRG as soon after the Effective Time as practicable.

                                   ARTICLE IX
                              CONDITIONS TO CLOSING

     SECTION  9.01  Conditions  to  Each  Party's  Obligations.  The  respective
obligations  of each Party to consummate  the Merger and the other  transactions
contemplated by this Agreement shall be subject to the fulfillment, or waiver by
the other Party, at or prior to the Closing Date of the following conditions:

                                       37






     (a)  Approval  by  North's  Stockholders.  This  Agreement  shall have been
approved by a vote of  two-thirds  in  interest of the Class A Common  Stock and
Class B Common  Stock (the  latter of which is entitled to two votes per share),
voting  together  as a  single  class  in  accordance  with  the  DGCL  and  the
Certificate  of  Incorporation  and  By-Laws  of North,  the other  transactions
contemplated  hereby (other than those described in the last sentence of Section
7.06) shall have been  approved by such vote of the Class A Common Stock and the
Class  B  Common  Stock  as is  required  by the  DGCL  and the  Certificate  of
Incorporation  and By-Laws of North, and the aggregate number of shares of Class
A Common Stock of North held by stockholders  who are not officers and directors
of North who  exercise  their  right to have North  redeem the shares of Class A
Common  Stock  owned by them  for cash in  accordance  with the  Certificate  of
Incorporation  of North  shall not be more than 20% of the Class A Common  Stock
owned by such  persons,  outstanding  as of the record date for  approval of the
transaction.

     (b) Approval by Motoguzzi Stockholders.  The Merger will have been approved
and adopted by the holders of the Old  Motoguzzi  Common Stock and Old Motoguzzi
Preferred  Stock,  voting together as a single class in accordance with the DGCL
and Certificate of Incorporation and By-Laws of Motoguzzi.

     (c) Directors and Officers of Surviving Corporation.  The persons listed in
Schedule  1.06 shall have been elected or appointed the directors or officers of
Surviving Corporation, effective upon consummation of the Merger.

     (d) No Governmental  Order or Regulation.  There shall not be in effect any
order,  decree or injunction  (whether  preliminary,  final or  appealable) of a
United  States  Federal  or  state  court  of  competent  jurisdiction,  and  no
regulation shall have been enacted or promulgated by any governmental  authority
or agency, that prohibits consummation of the Merger.

     (e) Dissenters. At the Closing Date, persons who are Dissenters and persons
who reside in  jurisdictions  in which  North may not  legally  offer the Merger
Consideration  will be the holders of such number of issued and  outstanding Old
Motoguzzi  Common Stock and Old Motoguzzi  Preferred Stock as would entitle them
to  receive,  if they  were  not  Dissenters,  no more  than  10% of the  Merger
Consideration.

     (f)  Effectiveness  of Registration  Statement.  The Proxy and Registration
Statement  shall have been declared  effective under the Securities Act, no stop
order suspending the effectiveness of the Proxy and Registration Statement shall
have  been  issued,  and  no  proceedings  for  that  purpose  shall  have  been
instituted.


                                       38





     (g) Blue Sky.  There shall be delivered  to North and  Motoguzzi a Blue Sky
Memorandum prepared by North's counsel indicating the jurisdictions in which the
Merger  Consideration  may be paid to holders of Old Motoguzzi Common Stock, Old
Motoguzzi  Preferred Stock and Old Motoguzzi  Warrants,  based upon, among other
things, their mailing addresses.

     SECTION  9.02   Conditions  to   Obligations  of  Motoguzzi  and  TRG.  The
obligations  of  Motoguzzi  to  consummate  the  Merger and the  obligations  of
Motoguzzi  and TRG to consummate  the other  transactions  contemplated  by this
Agreement shall be subject to the fulfillment or waiver by Motoguzzi and TRG, as
applicable, at or prior to the Closing, of each of the following conditions:

     (a)  Representations  and Warranties;  Covenants.  Without  supplementation
after the date hereof, the  representations and warranties of North contained in
this Agreement  shall be, with respect to those  representations  and warranties
qualified by any  materiality  standard,  true and correct in all respects as of
the Closing Date, and with respect to all other  representations and warranties,
true and correct in all material  respects as of the Closing Date, with the same
force  and  effect  as if made as of the  Closing  Date,  and all the  covenants
contained  in this  Agreement  to be  complied  with by North on or  before  the
Closing  Date  shall  have been  complied  with in all  material  respects,  and
Motoguzzi shall have received a certificate from an appropriate officer of North
to such effect.

     (b) Legal  Opinion.  Motoguzzi  shall have received from Graubard  Mollen &
Miller,  counsel to North, a legal opinion  addressed to Motoguzzi and dated the
Closing Date, in the form of Exhibit F annexed hereto.

     (c) Necessary Proceedings.  All proceedings,  corporate or otherwise, to be
taken  by  North  in  connection  with  the  consummation  of  the  transactions
contemplated  by this  Agreement  shall have been duly and  validly  taken,  and
copies of all documents,  resolutions and certificates  incident  thereto,  duly
certified by officers of North as of the Closing,  shall have been  delivered to
Motoguzzi and TRG.

     (d) Lock-Up  Agreements.  Motoguzzi shall have received from North the lock
up  agreements  from all of North's  officers and  directors  which provide that
their  securities of the Surviving  Corporation may not be publicly sold for six
months  after the  Effective  Time  unless  such  public sale is approved by the
Surviving Corporation.

     (e) Cold Comfort  Letter.  TRG and  Motoguzzi  shall have received the cold
comfort letter referred to in Section 7.13.

     (f) Inducement Letters.  Motoguzzi shall have received from David Mitchell,
in his capacity as Chief  Executive  Officer and Chairman of the Board of North,
and from  each  other  North  director,  acting  in  such  capacity,  a  letter,

                                       39





reasonably  satisfactory  to  Motoguzzi,  to the effect that such person has not
taken any  actions  and is not  aware of any  actions  taken by any other  party
acting  on  behalf  of  North  which  would  cause  any of the  representations,
warranties  and  agreements  of North  contained  herein to be  breached  in any
material respect.

     (g) Tax Opinion. Motoguzzi shall have received an opinion of Morrison Cohen
Singer & Weinstein, LLP to the effect that the Merger will constitute a tax-free
reorganization  pursuant to Code Section 368(a)(1)(A) (and the officers of North
and  Motoguzzi  shall have  delivered to such counsel  customary  representation
certificates of a kind reasonably necessary to support such an opinion).

     SECTION 9.03  Conditions to Obligations of North.  The obligations of North
to  consummate  the  Merger  and the  other  transactions  contemplated  by this
Agreement shall be subject to the fulfillment or waiver by North, at or prior to
the Closing, of each of the following conditions.

     (a)  Representations  and Warranties;  Covenants.  Without  supplementation
after the date hereof,  except as permitted by Section 8.02, the representations
and warranties of TRG and Motoguzzi  contained in this Agreement  shall be, with
respect to those  representations  and warranties  qualified by any  materiality
standard,  true and correct in all  respects as of the  Closing  Date,  and with
respect to all other  representations  and  warranties,  true and correct in all
material  respects as of the  Closing  Date with the same force and effect as if
made as of the Closing Date, and all the covenants and  agreements  contained in
this  Agreement to be complied with by TRG or Motoguzzi on or before the Closing
Date,  shall  have  been  complied  with  in all  material  respects  by TRG and
Motoguzzi, respectively, except that TRG and Motoguzzi shall not be in breach of
their obligation  contained herein as a result of non-compliance with a covenant
or agreement which is substantively  the same as a  representation  and warranty
unless  such  representation  and  warranty  is not true and correct as provided
above,  when  restated as of the  Closing  Date,  and North shall have  received
certificates  from  an  appropriate  officer  of  each  of  TRG  and  Motoguzzi,
respectively, to such effect.

     (b) Legal  Opinion.  North shall have received from Morrison Cohen Singer &
Weinstein,  LLP, counsel to Motoguzzi,  a legal opinion addressed to North dated
the Closing  Date, in the form of Exhibit G-1 annexed  hereto.  North shall have
received from Italian counsel to Motoguzzi,  a legal opinion relating to matters
of Italian law addressed to North dated the Closing Date, in the form of Exhibit
G-2 annexed hereto.  North shall have received a legal opinion  addressed to TRG
and North from  Maryland  counsel to TRG, a copy of which is attached as Exhibit
G-3.

     (c) Consents. Motoguzzi shall have obtained and delivered to North consents
to the Merger of such third  parties,  if any,  as are  necessary  to ensure the
uninterrupted  continuation of the Material  Contracts,  Leases and Permits with
respect to the business of Motoguzzi and the Motoguzzi Subsidiaries.


                                       40





     (d) No Motoguzzi Material Adverse Change. At the Closing,  there shall have
been no Motoguzzi Material Adverse Change.

     (e) Necessary Proceedings.  All proceedings,  corporate or otherwise, to be
taken  by  TRG  and  Motoguzzi  in  connection  with  the  consummation  of  the
transactions  contemplated  by this  Agreement  shall have been duly and validly
taken,  and  copies of all  documents,  resolutions  and  certificates  incident
thereto,  duly certified by the officers of TRG and Motoguzzi as of the Closing,
shall have been delivered to North.

     (f) Rule 145 List.  North shall have  received  from  Motoguzzi the list of
deemed "affiliates" under Rule 145.

     (g) Lock-Up  Agreements.  North shall have received from Motoguzzi the lock
up agreements from the specified  holders of Old Motoguzzi  Common Stock and Old
Motoguzzi Preferred Stock which provides that their Merger Consideration may not
be publicly sold for six months after the Effective Time unless such public sale
is approved by the Independent Committee.

     (h) Cold Comfort  Letter.  North shall have received  from Arthur  Andersen
LLP, the comfort letter referred to in Section 6.10.

     (i)  Fairness  Opinion.  North  shall  have  received  from Allen & Company
Incorporated  a fairness  opinion dated on or prior to the effective date of the
Proxy and Registration Statement in customary form stating in substance that the
terms of the proposed  transaction  are fair, from a financial point of view, to
the holders of North's Class A Common Stock.


                                    ARTICLE X
                       REMEDIES OF NORTH FOLLOWING MERGER

     SECTION  10.01 Scope of Article.  This  Article X shall apply solely in the
event the Merger is consummated in accordance with this Agreement.  This Article
X is the sole and exclusive  remedy for any Damages which may be suffered by any
of the Parties or by the Surviving Corporation in connection with or relating to
this Agreement, from and after consummation of the Merger.

     SECTION  10.02  Establishment  of  Remedy  Fund.  Contemporaneous  with the
consummation  of the Merger,  the Exchange Agent shall deliver in escrow to TRG,
as escrow agent pursuant to the Escrow  Agreement  attached  hereto as Exhibit H
and  subject  to  the  provisions  of  Section  10.03,  below,  (x)  all  of the
certificates for shares of Class B Preferred Stock comprising part of the Merger


                                       41




Consideration,  (the "Preferred Escrow Shares") and (y) certificates for 100,000
shares  of Class A Common  Stock  comprising  part of the  Merger  Consideration
registered  in the name of TRG  (the  "TRG  Escrow  Shares";  together  with the
Preferred  Escrow Shares,  collectively  the "Remedy  Fund").  To facilitate the
transfer of the Preferred Escrow Shares pursuant to the Escrow Agreement, TRG is
hereby designated and appointed by each holder of Class B Preferred Stock as the
agent with irrevocable  power of attorney to execute such stock powers as may be
required to effectuate any transfer of the Preferred  Escrow Shares.  The Remedy
Fund shall also include any and all stock  distributions  made in respect of the
securities  in the Remedy Fund,  such  distributions  to be held pursuant to the
Escrow  Agreement.  Subject  to the  limitations  set forth in this  Article  X,
hereof,  from and after the Effective  Time, (i) the entire Remedy Fund shall be
available to compensate the Surviving  Corporation  for any Damages which may be
sustained,  suffered or  incurred by it,  whether as a result of any Third Party
Claim  or  otherwise,  which  arise  from  or  are  in  connection  with  or are
attributable  to (x)  the  breach  of any  of  the  covenants,  representations,
warranties,  agreements,  obligations or undertakings of Motoguzzi  contained in
this Agreement, or (y) any judgment, order, government notice, government demand
or other government sanction, including any remediation or other action taken in
response  thereto,  arising out of or based upon any  condition  existing at the
Closing Date which is not described in the Ecoservice  Srl report  identified in
the Motoguzzi  Disclosure  Schedules and which violates any Laws,  regardless of
whether the representation in Section 3.07 (b) or (c) is breached,  and (ii) the
TRG Escrow  Shares and such of the  Preferred  Escrow Shares as are owned by TRG
shall also be available to compensate the Surviving  Corporation for any Damages
which may be sustained,  suffered or incurred by it,  whether as a result of any
Third Party Claim or otherwise,  which arise from or are in  connection  with or
are  attributable  to the  breach  of any  of  the  covenants,  representations,
warranties,  agreements,  obligations or  undertakings  of TRG contained in this
Agreement.  Upon final  adjudication or resolution of a claim under this Article
X, TRG shall first deliver to the Surviving Corporation, such full number of the
Preferred  Escrow  Shares  held in the  Remedy  Fund as equals  or  fractionally
exceeds the  adjudicated or resolved  amount of such claim divided by the Market
Price (as  defined  below) of the Class A Common  Stock plus  $1.00,  and if the
claim is not fully  recompensed by the delivery of the Preferred  Escrow Shares,
then,  additionally,  that full  number of TRG Escrow  Shares held in the Remedy
Fund as equals or fractionally  exceeds the amount of such claim remaining after
delivery of the Preferred Escrow Shares divided by the Market Price of the Class
A Common  Stock.  The "Market  Price" of a share of Class A Common Stock will be
deemed to be the  average of the last sales  prices of the Class A Common  Stock
for the ten  business  days  ending  on the day  immediately  prior to the final
adjudication  or  resolution of a claim under this Article X, as reported by The
Nasdaq Stock Market or any other United States stock exchange on which the Class
A Common  Stock is  listed,  or in the  absence  of such  reported  prices,  the
determination  of Market Price shall be made jointly by TRG and the  Independent
Committee.  Any TRG Escrow Shares and Preferred  Escrow Shares  delivered to the
Surviving  Corporation  in  settlement  of a claim under this  Article X will be
canceled  and  returned  to the status of  authorized  and  un-issued  shares of
capital stock of the Surviving  Corporation.  If the Merger is consummated,  TRG
shall not, in any event, have any liability to North, the Surviving Corporation,
their respective  stockholders or any other person for any Damages except to the
extent of its interest in the Remedy Fund.

                                       42






     SECTION 10.03 Claims  Against  Remedy Fund.  TRG is hereby  designated  the
agent of  holders  of Class B  Preferred  Stock  for  purposes  of  prosecuting,
defending or settling any claim  brought  under this Article X. Actions taken or
omitted to be taken,  and or consents  given,  or omitted to be given, by TRG in
connection  with any such claim shall bind the  interests of all of such holders
of Class B Preferred Stock in respect of such claim.  Upon  determination by the
Independent  Committee  that an event giving rise to a claim under Section 10.02
above has occurred,  the Independent  Committee shall give notice to TRG of such
determination,   specifying  (i)  the  covenant,   representation  or  warranty,
agreement,  undertaking or obligation contained herein which it asserts has been
breached,  (ii) in reasonable  detail, the nature and dollar amount of any claim
the Surviving  Corporation may have against the Remedy Fund as a result thereof,
and (iii)  whether  such claim  arises  from the  commencement  of a Third Party
Claim.  The  Independent  Committee  and TRG shall,  in good  faith,  attempt to
resolve any such claim. If, within 30 days of its notification to TRG, any claim
has not been resolved,  the Independent  Committee or TRG,  individually  and as
agent for all holders of Class B Preferred Stock,  shall have the right, but not
the obligation, to seek to have the claim resolved by mediation by submission to
JAMS/Endispute or its successor,  and if the matter is not resolved through such
mediation  process  within the first to occur of (i) the  expiration  of 60 days
from such  submission,  or (ii) the  holding  of two  meetings  of TRG and North
(acting by such independent Committee) with such mediator, then such claim shall
be  submitted  to final and binding  arbitration,  provided,  however,  that (x)
except  for  an  action   arising  out  of  a  breach  by  TRG  of  any  of  the
representations  or warranties  made, or covenants  given, by TRG hereunder,  no
mediation  or  arbitration  shall be brought  against  TRG except  solely in its
capacity as agent for the  holders of Class B Preferred  Stock and (y) any claim
which  arises from a Third Party  Claim  shall not be resolved or  submitted  to
mediation or arbitration until 30 days following  resolution of such Third Party
Claim, and TRG, as agent for the Surviving Corporation, (i) shall have the right
to  assume  the  defense  of such  Third  Party  Claim,  by  counsel  reasonably
acceptable  to the  Independent  Committee,  the cost thereof to be borne by the
Surviving  Corporation,  subject to  reimbursement  if it is determined that the
claim is compensable to the Surviving Corporation as provided in this Article X,
in which event such costs shall  constitute part of the Damages,  recoverable as
and to the extent  provided  in this  Article X and (ii) TRG may settle any such
Third  Party  Claim on  behalf  of the  Surviving  Corporation,  subject  to the
reasonable  approval of the Independent  Committee.  Upon final  adjudication or
settlement of any claim under Section 10.02,  TRG shall deliver to the Surviving
Corporation  that  number of  Preferred  Escrow  Shares  and TRG  Escrow  Shares
sufficient to recompense Surviving  Corporation in satisfaction of such claim as
calculated in Section 10.02 above, from the Remedy Fund; provided, however, that
the TRG  Escrow  Shares  shall not be so  delivered  unless and until all of the
Preferred  Escrow  Shares have been so  delivered.  In any action or  proceeding
between the  Parties  hereto,  each Party shall bear its own costs and  expense,
except as otherwise provided in Section 10.08.

     SECTION 10.04 Duration of Remedy Fund.  Other than claims for breach of the
representations  and warranties  made by Motoguzzi  under  Sections 3.01,  3.02,
3.04,  3.10,  3.22 and the first  sentence of Section 3.15  (collectively  "Core
Claims"), no notice of claim against the  Remedy  Fund  may  be  given and shall

                                       43





not be valid if given,  after the 60th day  following  the mailing by  certified
mail, return receipt requested, or delivery by hand, to each then-serving member
of the Board of Directors of the Surviving  Corporation of the audited financial
statements of the Surviving  Corporation for its fiscal year ending December 31,
1998,  together with the executed report of the auditors,  and on such 60th day,
there shall be released to TRG the TRG Escrow Shares except to the extent of the
amount by which the aggregate  dollar  amount of all claims then asserted  under
this Article X exceeds the value of the Preferred  Escrow Shares then  remaining
in the Remedy Fund as calculated  in Section 10.02 above.  Notice of Core Claims
against the Remedy Fund may not be given, and shall not be valid if given, after
the 60th day following the mailing by certified mail, return receipt  requested,
or delivery by hand,  to each  then-serving  member of the Board of Directors of
the Surviving  Corporation of the audited financial  statements of the Surviving
Corporation  for the fiscal year ending  December  31, 1999,  together  with the
executed  report of the auditors.  Except as provided  hereinabove in respect of
the TRG Escrow  Shares,  the Remedy Fund will remain in place until the later of
(i) the date of final  settlement  or  adjudication  of any pending  claims made
against  the  securities  in the Remedy  Fund and  delivery  of the  appropriate
securities, or (ii) the date after which no notice of claims may be given. After
delivery of securities from the Remedy Fund to the Surviving Corporation in full
settlement of any claims, TRG shall deliver to the registered owners thereof all
shares then held by it in the Remedy Fund.

     SECTION 10.05 Amount of Claim.  No claim may be brought  against the Remedy
Fund  unless,  and then and only to the  extent  that,  the  amount  of  Damages
suffered  in respect of all claims  asserted,  without  duplication,  net of any
offsets pursuant to Section 10.06 below exceeds $750,000.

     SECTION 10.06 Offset.  There shall be offset  against the amount of Damages
otherwise  recoverable  under this Article X, an amount equal to the  difference
obtained (not less than $0) by subtracting (x) the Book Value (as defined below)
of all  Specified  Assets (as  defined  below)  which are sold or disposed of as
provided in clause (y), from (y) the aggregate  consideration paid and agreed to
be paid (after  deduction  for sales  commissions,  sale  expenses and sales and
income taxes and any similar  deductions)  to Motoguzzi  from the sale to a bona
fide,  third party  purchaser in an arms-length  transaction,  of such Specified
Assets or the receipt by  Motoguzzi of  insurance  or  condemnation  proceeds in
respect  of the total or  partial  loss of or  condemnation  in  respect of such
Specified Assets, in all events at any time after December 31, 1997 and prior to
resolution of any claim brought  against the Remedy Fund, less the amount of any
loss  sustained  upon a sale  of a  Specified  Asset  or upon a  destruction  or
condemnation of a Specified  Asset from the Book Value of that Specified  Asset.
The  amount  of such  offset  shall be  further  reduced  by the  amount  of any
consideration  for any Specified Asset agreed to be paid to the extent that such
consideration  must be discounted in accordance with GAAP. In no event shall the
amount of offset  hereunder be less than $0. The Book Value of a Specified Asset
shall be derived from the  Motoguzzi  Consolidated  Balance Sheet as at December
31, 1997,  increased by any amount actually expended by Motoguzzi since December
31, 1997 to improve its cash sale value. The Specified Assets shall include only
those assets of Motoguzzi as of December 31, 1997 in the  following  categories:
real  property, fixtures,  plant,  equipment  and  machinery,  and  those  items

                                       44





comprising  the  Motoguzzi  Museum,  none of which  has been sold as of the date
hereof, except for non-material sales which, in the aggregate,  have resulted in
a gain of not more than $15,000.

     SECTION 10.07 Representations and Warranties.  For purposes of this Article
X, for breach of a  representation  or warranty of a Party under this Agreement,
the  representations  and warranties shall be the representations and warranties
of a Party made herein, on the date hereof, without subsequent  supplementation,
modification or amendment.

     SECTION  10.08  Mediation  and  Arbitration.  Subject to the  provisions of
Section  10.03,  the  Parties  agree  that  any  and  all  disputes,  claims  or
controversies  arising  out of or relating to the Escrow Fund or any other claim
for Damages under this Article X, including  without  limitation the validity of
such claim or the amount of Damages,  if not  resolved by the  Parties,  will be
submitted to JAMS/Endispute,  or its successor, for mediation, and if the matter
is not  resolved  through  mediation,  then it will be  submitted  for final and
binding   arbitration.   Any  such  arbitration   shall  be  final  and  binding
arbitration,  conducted in accordance with the commercial  arbitration  rules of
the American  Arbitration  Association,  and shall be held in New York City. The
costs of  mediation  and  arbitration  shall be  allocated by the mediator or by
order of the arbitrators, as the case may be.

                                   ARTICLE XI
                                   TERMINATION

     SECTION 11.01 Methods of Termination.  The transactions contemplated herein
may be  terminated  and/or  abandoned  at any time prior to the Closing  only as
follows:

     (a) By mutual  written  consent of North on the one hand and  Motoguzzi and
TRG on the other hand;

     (b) By either  Motoguzzi  or TRG on the one hand or North on the other hand
(if the  terminating  party is not then in  material  breach of its  obligations
hereunder) if (i) a material  default or breach shall be made by the other Party
with  respect  to the due and timely  performance  of any of its  covenants  and
agreements contained herein and such default cannot be cured within a reasonable
period of time,  provided,  however,  that with respect to those  covenants  and
agreements  made  by  Motoguzzi  or TRG  which  are  substantively  the  same as
representations  and  warranties  of Motoguzzi or TRG,  the  foregoing  shall be
limited to only those covenants and  agreements,  the  non-performance  of which
also results in such  representation  and warranty not being true and correct as
provided  in  clause  (ii)  hereof,   or  (ii)  if  any  of  the  other  Party's
representations  and warranties (x) made without any materiality  standard,  are
not true and correct in all material respects as of the Closing Date or (y) made
with any materiality standard,  are not true and correct as of the Closing Date.
Notwithstanding   the  foregoing,   if,  on  the  Closing  Date  there  are  any


                                       45




Intercompany  Liens, then (A) if such Intercompany Liens secure  indebtedness in
an aggregate  amount greater than U.S.  $1,500,000 then North may terminate this
Agreement and (B) if such Intercompany Liens secure indebtedness in an aggregate
amount greater than U.S.  $550,000,  then for purposes of this Section  11.01(b)
neither Motoguzzi nor TRG shall be deemed to have breached any representation or
warranty contained in this Agreement,  provided that such indebtedness in excess
of U.S.  $550,000  shall be reduced by reduction  of the  $800,000  intercompany
indebtedness  described in Section 2.06(b),  on a  dollar-for-dollar  basis, and
application  of the amount of such  reduction of  intercompany  indebtedness  to
reduce  the  indebtedness  in  excess  of  $550,000  which  is  secured  by such
Intercompany Liens.

     (c) By North if (i)  Motoguzzi  makes an  amendment  or  supplement  to any
Schedule  hereto in  accordance  with Section 8.02 hereof and such  amendment or
supplement  reflects a Motoguzzi  Material Adverse Effect after the date hereof,
or (ii) a Motoguzzi  Material  Adverse Change shall have occurred after the date
hereof,  or (iii) Motoguzzi  enters into any agreement to effect any transaction
described  in Section  6.04 or  Motoguzzi's  Board of  Directors  withdraws  its
recommendation  of the Merger or  recommends  to  Motoguzzi's  shareholders  the
approval of any such transaction other than the Merger;

     (d) By  Motoguzzi  if (i) North makes an  amendment  or  supplement  to any
schedule  hereto in  accordance  with Section 8.02 hereof and such  amendment or
supplement  reflects a North Material Adverse Effect,  after the date hereof, or
(ii) North  enters into any  agreement  to effect any  transaction  described in
Section 7.08 or North's Board of Directors  withdraws its  recommendation of the
Merger or recommends to North  shareholders the approval of any such transaction
other than the Merger;

     (e) By  Motoguzzi  or TRG on the one hand or North on the other hand if the
Effective  Time has not occurred  within six months  following  the date of this
Agreement  for any reason  unless the Parties  agree to an extension in writing,
provided that the right to terminate  this  Agreement  under this  Paragraph (e)
shall not be  available  to a Party  that is in  breach  of any  representation,
warranty or covenant in this  Agreement,  which breach  would  entitle any other
Party to terminate this Agreement;

     SECTION 11.02 Effect of Termination.  In the event of termination  pursuant
to Section 11.01 hereof,  written notice thereof shall forthwith be given to the
other Parties and all obligations (except as set forth in this Section 11.02) of
the Parties shall  terminate and no Party shall have any right against any other
Party  hereto.  Notwithstanding  the  foregoing,  (i) if  this  Agreement  is so
terminated by any Party under Section 11.01(b),  (c) or (d) above, (other than a
termination  resulting from a breach of a  representation  or warranty which was
true when made, but which cannot subsequently be restated as true as a result of
the occurrence of events or circumstances beyond the control of the representing
Party), it is expressly agreed and understood that the terminating Party's right
to pursue all legal  remedies  for breach of contract or  otherwise,  including,
without  limitation,  Damages (other than consequential  damages,  which damages
shall not be  recoverable),  relating  thereto,  shall survive such  termination
unimpaired, subject however to Section  11.03 and  to  the extent North recovers

                                       46





any Damages against Motoguzzi, TRG will pay such Damages if not paid promptly by
Motoguzzi;  or (ii) if this  Agreement  is  terminated  by North  under  Section
11.01(c)(iii)  and  within  365  days  thereafter   Motoguzzi   consummates  any
transaction described in Section 6.04, or if Motoguzzi refuses to consummate the
Merger  despite the  satisfaction  of all  conditions  precedent to  Motoguzzi's
obligation  to do so, or Motoguzzi  does not in good faith use its  commercially
reasonable efforts to satisfy all the conditions precedent to North's obligation
to consummate the Merger which are within Motoguzzi's control, and provided that
North is not in material breach of its obligations  contained in this Agreement,
Motoguzzi  shall pay to North in lieu of any  other  right or remedy of North or
any claim for any Damages which North might  otherwise  have, the greater of (A)
the sum of  $500,000  as  liquidated  damages  and not as a penalty,  or (B) the
actual documented out-of-pocket expenses of North related solely and directly to
the transaction  contemplated by this Agreement  (such  applicable  amount being
referred to as the "Motoguzzi  Breakup Fee") promptly  following demand therefor
by North and if  Motoguzzi  fails to do so,  then TRG  shall  pay the  Motoguzzi
Break-Up  Fee; or (iii) if this  Agreement  is  terminated  by  Motoguzzi  under
Section  11.01(d)(ii)  or if North refuses to consummate  the Merger despite the
satisfaction  of all  conditions  precedent to North's  obligation  to do so, or
North does not in good faith use its commercially  reasonable efforts to satisfy
all the conditions precedent to Motoguzzi's  obligation to consummate the Merger
which are within North's control, and provided that Motoguzzi is not in material
breach of its  obligations  contained in this  Agreement and if, but only if, in
any such event,  within 365 days  thereafter  North  consummates any transaction
described in Section 7.08, North shall pay to Motoguzzi,  as liquidated  damages
and not as a penalty,  and in lieu of any other right or remedy of  Motoguzzi or
any claim for Damages which  Motoguzzi or TRG might  otherwise  have, the sum of
$500,000 ("North Breakup Fee") promptly  following demand therefor by Motoguzzi.
If the  transactions  contemplated  by  this  Agreement  are  terminated  and/or
abandoned as provided herein:

     (a) Each Party  hereto  will  return all  documents,  work papers and other
material  (and  all  copies  thereof)  of  the  other  Party,  relating  to  the
transactions  contemplated  hereby,  whether  so  obtained  before  or after the
execution hereof, to the Party furnishing the same; and

     (b) All  confidential  information  received  by either  Party  hereto with
respect to the business of the other Party shall be treated in  accordance  with
Sections 6.02(b) and 7.04(b) hereof which sections shall survive termination and
abandonment.

     SECTION  11.03  Limitation  on  Damages.  Notwithstanding  anything  to the
contrary  elsewhere in this  Agreement,  neither TRG,  Motoguzzi,  any Motoguzzi
Subsidiary or any officers, directors,  affiliates, agents or Representatives of
any of the  foregoing  will make any monetary  claim against North to the extent
that such  claim  would  adversely  affect  the  amount of funds  available  for
distribution to North's Class A stockholders from the escrow funds held by Chase
Manhattan Bank  established  with part of the proceeds of the public offering by
North in  August  1997,  except in the  circumstances  in which  North  would be


                                       47




obligated to pay the North  Breakup Fee (and in such event only to the extent of
such North Breakup Fee).  Notwithstanding  anything to the contrary elsewhere in
this  Agreement,  if the  Merger  is not  consummated,  neither  North,  nor any
officers,  directors,  affiliates,  agents or Representatives of North will make
any monetary claim against  Motoguzzi or TRG in excess of the actual  documented
out-of-pocket  costs  and  expenses  incurred  by North in  connection  with the
transactions  contemplated by this  Agreement,  except in the  circumstances  in
which Motoguzzi would be obligated to pay the Motoguzzi Breakup Fee (and in such
event only to the extent of the Motoguzzi Breakup Fee).

                                   ARTICLE XII
                                   DEFINITIONS

     SECTION  12.01  Certain  Defined  Terms.  As used in  this  Agreement,  the
following terms shall have the following meanings:

     "Business  Day" means a day of the year on which banks are not  required or
authorized to be closed in the City of New York.

     "Damages"  means  the  dollar  amount  of  any  loss,  damage,  expense  or
liability,  including,  without  limitation,   reasonable  attorneys'  fees  and
disbursements incurred by a Party in any action or proceeding between such Party
and the other Party or Parties  hereto or between  such Party and a third party,
which is  determined  (as  provided  in  Article X or  Article  XI) to have been
sustained,  suffered  or  incurred  by a  Party  and to have  arisen  from or in
connection  with an event or state of facts which is subject to claim under such
Article X or  Article  XI; the  amount of  Damages  shall be the amount  finally
determined  by a court of competent  jurisdiction  or  appropriate  governmental
administrative agency (after the exhaustion of all appeals) or the amount agreed
to upon settlement in accordance with the terms of this Agreement.

     "Environmental,  Health, and Safety Requirements" means all federal, state,
local and foreign statutes, regulations, and ordinances concerning public health
and safety,  worker  health and  safety,  and  pollution  or  protection  of the
environment,  including  without  limitation all those relating to the presence,
use,  production,  generation,  handling,  transportation,  treatment,  storage,
disposal,  distribution,  labeling,  testing,  processing,  discharge,  release,
threatened release,  control, or cleanup of any hazardous materials,  substances
or wastes,  as such  requirements  are  enacted and in effect on or prior to the
Closing Date.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Lien"  means  any  lien,  claim,   charge,   option,   security  interest,
restriction or encumbrance.


                                       48





     "Motoguzzi  Material  Adverse Change" means any material  adverse change in
the  condition,   financial  or  otherwise,   of  Motoguzzi  and  the  Motoguzzi
Subsidiaries,  taken as a whole,  from such  condition as it existed at December
31,  1997,  and  as  reflected  in  Motoguzzi's   December  31,  1997  Financial
Statements,  excluding,  however,  (i) any suspension of operations of Motoguzzi
and  the  Motoguzzi  Subsidiaries,  taken  as a  whole  unless  such  suspension
continues for more than 30 consecutive business days, (ii) any decrease in sales
of Motoguzzi  motorcycles to unaffiliated  third parties unless such decrease is
at a rate,  determined  on a  cumulative  basis for the  period  January 1, 1998
through  the  end of the  month  immediately  preceding  the  month  in  which a
determination  is made  (the  "Operating  Period"),  which is  greater  than 900
motorcycles  below the Motoguzzi 1998 motorcycles sales budget for the Operating
Period,  provided  that  motorcycles  which  are  sold at more  than  30% off of
Motoguzzi's suggested retail price shall not be deemed sold for purposes hereof,
(iii) any  recall  of  motorcycles  unless  such  recall is for more than  1,000
motorcycles  and requires  that repairs be made which will cost greater than 20%
of Motoguzzi's suggested retail price of such motorcycles, (iv) any interruption
in  supply  of  material   components  or  other  materials  necessary  for  the
manufacture and assembly of motorcycles, unless such interruption lasts for more
than 60  days  and  results  in a  decrease  in  production  of  more  than  500
motorcycles,  or (v) the  assertion  after the date  hereof of any  claims,  the
incurring after the date hereof of any  liabilities or the occurrence  after the
date  hereof  of  any  other  event  or  circumstance   unless  such  claims  or
liabilities,  or  losses  or costs  related  to such  events  or  circumstances,
individually  or in the aggregate are in excess of $3 million after reduction to
the  extent of any  applicable  insurance  coverage  and (A) if it is a claim or
liability,  it has a manifestly  reasonable likelihood of success, and (B) if it
is a  claim  or  liability  which  results  from  a  notice  or  demand  by  any
governmental   agency,  (x)  such  governmental   agency  shall  have  competent
jurisdiction and (y) the ability of such governmental  agency to enforce against
Motoguzzi  any claim or liability in respect  thereof  would not  terminate as a
result of Motoguzzi  relocating its manufacturing  and assembly  operations away
from its present  premises at  Mondello,  Italy or the  substance  of such claim
would  not be  cured by  Motoguzzi  incurring  capital  expenditures  which  are
included in its capital expenditure budget.

     "Motoguzzi  Material Adverse Effect" means a material adverse effect on the
results of operations,  financial  condition,  business,  assets or prospects of
Motoguzzi and the Motoguzzi  Subsidiaries  (as defined  hereinafter)  taken as a
whole;  provided that if the  foregoing has a financial  effect then a Motoguzzi
Material  Adverse  Effect shall be deemed to exist if such  financial  effect is
greater  than  $750,000;   provided  further,  that  if  the  applicable  event,
circumstance  or occurrence is included in any of clauses (i) through (v) of the
definition  of  Motoguzzi  Material  Adverse  Change,  then only for purposes of
determining  whether the  condition in Section  9.03(a) has been  satisfied  and
whether this  Agreement  may be  terminated  as provided in Section  11.01(b) or
Section  11.01(c),  a  Motoguzzi  Material  Adverse  Effect  shall not be caused
thereby  unless  a  Motoguzzi   Material  Adverse  Change  would  have  resulted
therefrom.

     "Motoguzzi Subsidiaries" means Motoguzzi S.p.A, Moto Guzzi France S.A., and
Moto America, Inc.

                                       49





     "North  Material  Adverse  Effect" means a material  adverse  effect on the
results of operations,  financial  condition,  business,  assets or prospects of
North.

     "Party"  means  each  of  North,  Motoguzzi  and  TRG  (collectively,   the
"Parties").

     "Representatives"   of  either   Party   means  such   Party's   employees,
accountants,   auditors,   actuaries,   counsel,  financial  advisors,  bankers,
investment bankers and consultants.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Tax" or "Taxes" means all income,  gross receipts,  sales, stock transfer,
excise, bulk transfer, use, employment,  franchise,  profits,  property or other
taxes, fees, stamp taxes and duties, assessments,  levies or charges of any kind
whatsoever,  together with any interest and any  penalties,  additions to tax or
additional amounts imposed by any taxing authority with respect thereto.

     "Third Party Claim" means a claim, demand, suit,  proceeding or action by a
person,  firm,  corporation  or  government  entity  other  than a Party  or any
affiliate of such Party.

                                  ARTICLE XIII
                               GENERAL PROVISIONS

     SECTION 13.01 Expenses.  Except as otherwise provided herein, all costs and
expenses,   including,   without   limitation,   fees   and   disbursements   of
Representatives, incurred in connection with this Agreement and the transactions
contemplated  hereby  shall  be paid  by the  Party  incurring  such  costs  and
expenses,  whether or not the Closing shall have occurred.  Notwithstanding  the
foregoing,  if the Closing shall occur, then such costs and expenses incurred by
TRG,  Motoguzzi  and the  Motoguzzi  Subsidiaries  shall  be paid by TRG and the
amount thereof shall be included in the intercompany indebtedness referred to in
Section  8.06.  Motoguzzi  and TRG  acknowledge  and agree that in Schedule 4.05
North has disclosed that it is obligated and will become  further  obligated for
fees and  expenses  (including  without  limitation  the fees  and  expenses  of
Graubard Mollen & Miller, its counsel,  Allen & Company, its investment bankers,
and BDO Seidman, LLP its independent  accountants)  incurred by it in connection
with the  transactions  contemplated  by this  Agreement.  It is understood  and
agreed that,  subject to the  limitations set forth in Sections 4.05 and 7.01(k)
hereof,  certain  of such fees and  expenses  may be paid by North  prior to the
execution of this Agreement.  Motoguzzi and TRG agree to refrain from taking any
action which would  prevent or delay the timely  payment by North of  reasonable
fees duly and lawfully  incurred,  to the extent consistent with the limitations
set  forth in  Article  IV  hereof.  Subject  to the  foregoing,  the  Surviving


                                       50




Corporation shall take all action necessary to pay promptly all of the foregoing
fees and expenses incurred, but not paid, by North prior to the Effective Time.

     SECTION 13.02 Notices.  All notices and other  communications given or made
pursuant  hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered if delivered personally or by telecopy, one day
after delivery to a nationally  recognized courier, or three business days after
mailed by registered mail (postage prepaid,  return receipt requested),  in each
case, to the Parties at the following  addresses (or at such other address for a
Party as shall be specified  by like  notice,  except that notices of changes of
address shall be effective upon receipt):

     (a) If to TRG or Motoguzzi, 
                                c/o Trident Rowan Group,  Inc. 
                                    Two Worlds Fair Drive 
                                    Franklin Township 
                                    Somerset, New Jersey 08873

                              in all cases with a copy to:
                                    Morrison Cohen Singer & Weinstein, LLP
                                    750 Lexington Avenue
                                    New York, New York 10022
                                    Attention: David Lerner, Esq.
                                    Telecopier # 212-735-8708

                  (b)         If to North:
                                    North Atlantic Acquisition Corp.
                                    5 East 59th Street
                                    Third Floor
                                    New York, New York 10022
                                    Attention:  David Mitchell
                                    Telecopier No.:  212-588-0286

                              with a copy to:
                                    Graubard Mollen & Miller
                                    600 Third Avenue
                                    New York, New York  10016
                                    Attention:  David Alan Miller, Esq.
                                    Telecopier No.: 212-818-8881


                                       51





     SECTION 13.03 Press Release; Public Announcements. Promptly after execution
of this  Agreement,  North and TRG may issue press releases in the form attached
hereto as Exhibit I. The Parties  shall not make any other public  announcements
in respect of this  Agreement or the  transactions  contemplated  herein without
prior  consultation  and  approval by the other Party as to the form and content
thereof, which approval shall not be unreasonably withheld.  Notwithstanding the
foregoing,  any  Party may make any  disclosure  which its  counsel  advises  is
required by applicable law or regulation, in which case the other Party shall be
given such reasonable  advance notice as is practicable in the circumstances and
the Parties shall use their best efforts to cause a mutually  agreeable  release
or announcement to be issued.

     SECTION  13.04  Amendment.  This  Agreement  may not be amended or modified
except by an instrument in writing signed by the Parties.

     SECTION  13.05 Waiver.  At any time prior to the Closing,  either Party may
(a) extend the time for the  performance of any of the obligations or other acts
of the other  Party,  (b)  waive any  inaccuracies  in the  representations  and
warranties contained herein or in any document delivered pursuant hereto and (c)
waive compliance with any of the agreements or conditions  contained herein. Any
such  extension or waiver shall be valid only if set forth in an  instrument  in
writing signed by the Party to be bound thereby.

     SECTION 13.06  Headings.  The headings  contained in this Agreement are for
reference  purposes  only  and  shall  not  affect  in any  way the  meaning  or
interpretation of this Agreement.

     SECTION  13.07  Severability.  If any  term  or  other  provision  of  this
Agreement is invalid,  illegal or incapable of being enforced by any rule of law
or public policy,  all other  conditions and provisions of this Agreement  shall
nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the transactions  contemplated hereby is not affected in any manner
adverse to any Party. Upon such  determination  that any term or other provision
is invalid,  illegal or incapable of being enforced, the Parties shall negotiate
in good faith to modify this  Agreement so as to effect the  original  intent of
the  Parties as  closely as  possible  in an  acceptable  manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.

     SECTION  13.08 Entire  Agreement.  This  Agreement  and the  schedules  and
exhibits hereto and the documents executed contemporaneously herewith constitute
the entire agreement and supersede all prior agreements and  undertakings,  both
written and oral,  among the Parties with respect to the subject  matter  hereof
and, except as otherwise  expressly  provided herein, are not intended to confer
upon any other person any rights or remedies hereunder.


                                       52




     SECTION  13.09  Benefit;  Assignment.  This  Agreement  shall  inure to the
benefit of and be  binding  upon the  successors  and  permitted  assigns of the
Parties.  This  Agreement  is not  assignable  by any Party  without the express
written consent of the other Parties.

     SECTION 13.10 Governing Law; Consent to Jurisdiction; Specific Performance.
This Agreement  shall be governed by, and construed in accordance  with, the law
of the State of New York,  regardless  of the laws that might  otherwise  govern
under  applicable  principles of conflicts of law. Each Party hereby  submits to
the exclusive  jurisdiction of the courts (city,  state and federal)  located in
the County of New York,  State of New York, for any action,  proceeding or claim
brought by any other Party  pursuant to this  Agreement or any other  agreement,
instrument or other  document  executed and  delivered in  connection  with this
Agreement or pursuant  hereto and waives any  objection to the venue of any such
suit,  action or  proceeding  and the right to assert  that such  forum is not a
convenient  forum.  Service of process in any such action or proceeding  brought
against a Party may be made by  registered  mail  addressed to such Party at the
address set forth in Section  13.02 or to such other address as such Party shall
notify the other  Party in writing is to be used for such  purpose  pursuant  to
Section  13.02.  Any Party may enforce any right arising  hereunder by action or
other appropriate proceeding,  either in equity or at law, and may seek specific
performance of any of the obligations arising hereunder.

     SECTION 13.11  Counterparts.  This Agreement may be executed in one or more
counterparts,  and by the different  Parties in separate  counterparts,  each of
which  when  executed  shall be deemed to be an  original  but all of which when
taken together shall constitute one and the same agreement.

     IN WITNESS  WHEREOF,  the Parties have caused this Agreement to be executed
as of the date first written above.

MOTO GUZZI CORP.                            NORTH ATLANTIC ACQUISITION CORP.

By:_______________________________          By:_________________________________
     Name:                                       Name:
                                                 Title:

TRIDENT ROWAN GROUP, INC.
(With respect to applicable portions of Articles II, III, V, VI, VIII, X, XI and
XIII only)

By:_________________________________
     Name:
     Title:

                                       53

EX-99.1

FOR IMMEDIATE RELEASE

CONTACT:          David Mitchell
                  Chairman and CEO
                  North Atlantic Acquisition Corp.
                  212- 486-4444



                        NORTH ATLANTIC ACQUISITION CORP.
                      AGREES TO MERGE WITH MOTO GUZZI CORP.




New York, N.Y. -- August 18, 1998. North Atlantic Acquisition Corp. (OTC: NACQA,
NACQB NACQU) today announced the execution of a definitive merger agreement with
Moto Guzzi Corp.,  the U.S.  parent of Moto Guzzi S.p.A.,  the renowned  Italian
manufacturer  of  high-performance  motorcycles.  North  Atlantic will issue 5.0
million shares of its common stock and $4.75 million of 5% preferred  stock that
will be convertible  into common stock at $15.00 per share,  in exchange for the
entire  equity  interest in Moto Guzzi Corp.  While North  Atlantic  will be the
surviving  corporation,   the  current  shareholders  of  Moto  Guzzi  will  own
approximately 79% of the combined company  immediately  following  completion of
the merger.  North  Atlantic  plans to change its name to Moto Guzzi  Corp.  The
consummation  of the  proposed  merger  remains  subject to the  approval of the
shareholders of both companies.

North  Atlantic  was  formed in 1995 for the  express  purpose  of  serving as a
vehicle to effect a merger,  exchange of capital  stock,  asset  acquisition  or
other business  combination  with an operating  company.  North Atlantic  raised
approximately  $8.9 million net of underwriting fees and expenses in August 1997
through an initial public offering of its common stock. David Mitchell, Chairman
and CEO of North  Atlantic  stated  that,  "Moto Guzzi  represents  an excellent
merger candidate for North Atlantic.






The board of directors will recommend to our shareholders to vote positively for
the transaction."

Moto  Guzzi  plans to  utilize  cash  obtained  through  the  merger  with North
Atlantic,  as well as  financing  secured  from other  sources,  to enhance  the
company's  manufacturing  operations,  to fund  research and  development  costs
incurred in connection with the introduction of new motorcycle and scooter lines
and  to  finance  expended  global  marketing  and  promotion  activities,  with
particular  emphasis  on  the  key  U.S.  market.  In  addition,  the  surviving
corporation  may,  under  certain  circumstances,  realize  proceeds  of  up  to
approximately  $15 million  through the  exercise of North  Atlantic's  existing
warrants,  thereby providing Moto Guzzi with additional equity capital that will
be utilized to further  revitalize  and enhance the  company's  brand and market
position.

Mark Hauser,  who will serve as Chairman of Moto Guzzi  following  completion of
the merger,  stated that, "This transaction provides the equity capital required
to start to execute Moto Guzzi's five year business plan, the objective of which
is to return to, and  ultimately  exceed  sales levels of  approximately  25,000
units annually,  which is below the unit volumes  achieved in the late 1960s and
early  1970s."  Mario Tozzi-  Condivi,  the  President  of Moto Guzzi's  Italian
manufacturing  subsidiary,  stated that,  "The investment we will make following
the merger,  combined with the company's potential relocation of the bulk of its
operations to a  state-of-the  art facility in Monza,  Italy,  will provide Moto
Guzzi with a platform to return to its historical position as one of the leading
designers, manufacturers and marketers of heavyweight motorcycles in the world."






Moto Guzzi,  one of the oldest and most storied  motorcycle  manufactures in the
world,  is  headquartered  in  Mandello  del  Lario,  Italy and is  currently  a
subsidiary of Trident Rowan Group,  Inc.  (Nasdaq:  TRGI).  The company produces
several  models  of  heavyweight  high-performance  motorcycles,  including  the
"California," "Nevada Club," "V10 Centauro" and "1100 Sport Corsa." After a 1993
low in  production  of fewer than 3,000  units,  the  company in 1997 sold 5,593
units and generated  85.9 billion Lira  (approximately  U.S.$50  million) in net
sales.

The  information  in this press release may contain  forward-looking  statements
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the  Securities  Exchange  Act of 1934,  and is  subject  to the safe  harbor
created by those sections. These forward-looking statements are subject to known
and unknown risks, uncertainties and other factors that may cause actual results
to be  materially  different  from  those  contemplated  by the  forward-looking
statements.