Escrow Agreement

Exhibit 10.9


ESCROW AGREEMENT


ESCROW AGREEMENT dated ________, 1998 between NORTH ATLANTIC ACQUISITION CORP., a Delaware corporation ("North"), and TRIDENT ROWAN GROUP, INC, a Maryland corporation ("TRG"), for itself and as escrow agent (the "Escrow Agent") and the persons set forth on Schedule 1 hereto ("Stockholders").


WHEREAS, North, TRG and Moto Guzzi Corp., a Delaware corporation ("Motoguzzi") are the parties to an Agreement and Plan of Merger and Reorganization dated as of_______, 1998 (the "Merger Agreement") pursuant to which Motoguzzi merged into North, with North being the surviving corporation;


WHEREAS, pursuant to the Merger Agreement, a portion of the Merger Consideration is to be placed in an escrow fund ("Escrow Fund") for the indemnification of North, as the surviving corporation, for breaches of the representations and warranties of Motoguzzi and TRG as set forth in the Merger Agreement;


WHEREAS, the parties desire to establish the Escrow Fund as collateral security for the indemnification obligation under Article X of the Merger Agreement.


The parties agree as follows:


1. (a) Capitalized terms used herein which are not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement.


(b) Concurrently with the execution hereof, (i) each of the Stockholders has caused to be delivered to the Escrow Agent the number of shares of Class B Preferred Stock of North set forth against the name of the Stockholder on Schedule 1, representing all the Class B Preferred Stock issued by North to such Stockholders pursuant to the Merger Agreement and (ii) TRG has delivered to the Escrow Agent 100,000 shares of Class A Common Stock of North issued by North to TRG pursuant to the Merger Agreement ("Escrow Stock"). Such Escrow Stock will include any stock dividends and distributions made by North with respect to the Escrow Stock.


(c) The Escrow Agent hereby agrees to act as the escrow agent and to hold, safeguard and disburse the Escrow Fund pursuant to the terms and conditions hereof. Its duties hereunder shall cease upon its distribution of the entire Escrow Fund in accordance with this Agreement.


2. (a) The Independent Committee of the Board of Directors of North may give notice of a claim for indemnification pursuant to Section 10.03 of the Merger Agreement ("Indemnity Claim") and for distribution of Escrow Stock from the Escrow Fund by giving notice (a "Notice") of the claim to TRG on behalf of North, specifying (i) the covenant, representation


or warranty, agreement, undertaking or obligation contained in the Merger Agreement which it asserts has been breached, (ii) in reasonable detail, the nature and dollar amount of any claim which may result in a distribution from the Escrow Fund, and (iii) whether the claim arises from a Third Party Claim.


The procedure for resolving any claim is set forth in paragraphs (b) and (c) below. Any distribution from the Escrow Fund by reason of a claim shall be made in accordance with paragraph (e) below.


(b) After giving of a Notice, the Independent Committee and TRG shall attempt to resolve such dispute by voluntary settlement. If the Independent Committee and TRG reach a settlement with respect to any such dispute, they will jointly execute a written notice of such settlement specifying the terms thereof which shall be deemed an Established Claim (as hereinafter defined). If the Independent Committee and TRG are unable to reach a settlement with respect to a dispute, such dispute shall be resolved in accordance with paragraph (c) below.


(c) (i) North and TRG agree that any and all claims arising out of or relating to Article X of the Merger Agreement that are not Third Party claims which are not resolved in accordance with paragraph (b) above shall be submitted to JAMS/ENDISPUTE, or its successor, for mediation. If the matter is not resolved in mediation after two sessions which must be held within 60 days of the request for mediation, then either party may submit the claim for final and binding arbitration as provided in paragraph (c) (ii) below. Either party may commence mediation by providing to JAMS/ENDISPUTE and the other party with a written request for mediation. The parties will cooperate with JAMS/ENDISPUTE and with one another in selecting a mediator from JAMS/ENDISPUTE's panel of neutral mediators, and in scheduling the mediation proceedings. The parties covenant that they will participate in the mediation in good faith, and that they will share equally in the cost, unless the mediator recommends otherwise. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the parties, their agents, employees, experts and attorneys, and by the mediator or any JAMS/ENDISPUTE employees, are confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation. The mediation may continue after the commencement of arbitration if the parties so desire. Unless otherwise agreed by the parties, the mediator shall be disqualified from serving as arbitrator in the case. The provisions of this paragraph may be enforced in any court of competent jurisdiction and the party seeking enforcement shall be entitled to an award of all costs, fees and expenses, including attorney's fees, to be paid by the party against whom enforcement is ordered.


(ii) For claims that are Third Party Claims or for claims that cannot be resolved in accordance with paragraph (c) (i) above, the resolution thereof shall be by final and binding arbitration before a single arbitrator in New York City in accordance with the commercial arbitration rules of the American Arbitration Association then in effect. The parties shall attempt to agree upon an arbitrator; if the parties are unable to agree upon an arbitrator within 10 days after the proposed list of arbitrators is submitted to the parties, then any of the parties to the arbitration may apply for appointment of an arbitrator by the American Arbitration Association (or any successor thereto). Each party shall pay the fees and expenses of counsel used by it and 50% of


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