<PAGE>

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED
OR SOLD WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE BORROWER THAT SUCH
TRANSFER OR SALE DOES NOT VIOLATE THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933, OR ANY APPLICABLE STATE SECURITIES LAW.

                                      NOTE

$150,000                                                          Houston, Texas
                                                                 January 1, 2001

          FOR VALUE RECEIVED, NORTH AMERICAN TECHNOLOGIES GROUP, INC., a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
DOUGLAS C. WILLIAMSON, with an address at ____________________________ (the
"Lender"), the principal sum of One Hundred Fifty Thousand Dollars (U.S.
$150,000) payable in accordance with the provisions of that certain Loan
Agreement dated January 1, 2001 between the Borrower and the Lender (as it may
hereafter be amended, restated, modified or supplemented from time to time, the
"Loan Agreement").  All capitalized terms used herein shall, unless otherwise
defined herein, have the same meanings given to such terms in the Loan
Agreement.

          The Borrower shall pay interest on the unpaid principal balance hereof
at the rate of 10% per annum, subject to the provisions of Section 2.4(b) of the
Loan Agreement, at the times and in the manner provided in the Loan Agreement.
Upon the occurrence and during the continuation of an Event of Default, Lender
shall have the right to accelerate payment of the entire unpaid principal and
accrued interest due hereunder and the Borrower shall pay interest on the entire
principal amount of the Loan then outstanding evidenced by this Note at a rate
per annum equal to twelve percent (12%) per annum.  Such interest rate will
accrue before and after any judgment has been entered.  All payments of both
principal and interest shall be made without setoff, counterclaim or other
deduction of any nature to the Lender as provided in the Loan Agreement, in
lawful money of the United States of America in immediately available funds.
The Borrower waives presentment, demand, notice, protest and all other demands
and notices in connection with the delivery, acceptance, performance, default or
enforcement of this Note and the Loan Agreement.  All interest shall be based on
a year of 360 days and actual days elapsed.

          The entire principal amount due hereunder shall be paid on the
Maturity Date or earlier acceleration hereof.  If any payment or action to be
made or taken hereunder shall be stated to be or become due on a day which is
not a Business Day, such payment or action shall be made or taken on the next
following Business Day and such extension of time shall be included in computing
interest or fees, if any, in connection with such payment or action.
<PAGE>

          The principal of this Note and accrued and unpaid interest thereon are
convertible into shares of Common Stock of the Borrower as provided in the Loan
Agreement.

          This Note is the Note referred to in, and is entitled to the benefits
of, the Loan Agreement and other Loan Documents, including the representations,
warranties, covenants and conditions contained therein.  The Loan Agreement,
among other things, contains provisions for redemption, prepayment in full or in
part and for acceleration of the maturity hereof upon the happening of certain
stated events prior to maturity upon the terms and conditions therein specified.

          This Note shall bind the Borrower and its successors and assigns, and
the benefits hereof shall inure to the benefit of the Lender and its successors
and assigns.  All references herein to the "Borrower" and the "Lender" shall be
deemed to apply to the Borrower and the Lender, respectively, and their
respective successors and assigns.

          This Note and any other documents delivered in connection herewith and
the rights and obligations of the parties hereto and thereto shall for all
purposes be governed by and construed and enforced in accordance with the
internal laws of the State of Texas without giving effect to its conflicts of
law principles.

          IN WITNESS WHEREOF, the undersigned, intending to be legally bound
hereby, has executed this Note as of the date first written above with the
intention that this Note shall constitute a sealed instrument.


ATTEST:                             NORTH AMERICAN TECHNOLOGIES,
                                    GROUP, INC.


______________________________  By: /s/ Henry W. Sullivan
Title:                              Henry W. Sullivan
                                    President and Chief Executive Officer
[Corporate Seal]

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