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                                                                    EXHIBIT 10.8


                  CROSSTIE PURCHASE OPTION AND LOAN AGREEMENT

     THIS PURCHASE OPTION AND LOAN AGREEMENT ("Agreement"), dated as of December
29, 1995, is by and between TIETEK, INC., a Texas corporation ("Borrower"),
NORTH AMERICAN TECHNOLOGIES GROUP, INC., a Delaware corporation ("NATK"), and
each of WILLIAM T. ALDRICH, J. DENNY BARTELL and HENRY W. SULLIVAN (Messrs.
Aldrich, Bartell and Sullivan collectively referred to herein as the "TIETEK
Owners").

                                   RECITALS:

     Borrower desires to borrow from NATK, and NATK desires to lend to Borrower,
certain funds to be used by Borrower exclusively for expenses incurred or to be
incurred in connection with the commercial development of railroad crosstie
technology as set out on a budget referred to below.  In exchange for NATK's
agreement to lend the amounts described below, the TIETEK Owners agree to grant
to NATK the Crosstie Purchase Option, as defined below, upon the terms and
conditions of this Agreement.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

                                  ARTICLE ONE
                               THE CROSSTIE LOAN

     1.1  THE CROSSTIE LOAN.

     (a) The Crosstie Loan and Crosstie Note.  Upon the terms and subject to the
conditions of this Agreement, NATK hereby agrees to lend to Borrower from time
to time up to $1,500,000.00 pursuant to this Agreement.  Such loan (the
"Crosstie Loan") shall be evidenced by the execution and delivery by Borrower
and the TIETEK Owners of that certain Promissory Note, Security Agreement and
Pledge, in the form of EXHIBIT A, attached hereto and made a part hereof (the
"Crosstie Note").  The parties acknowledge that certain amounts have already
been advanced by NATK to Borrower as reflected on the Crosstie Note in the form
of Exhibit A, and that the amounts advanced thereunder are to be treated for all
purposes as loaned and borrowed pursuant to the terms of this Agreement,
including without limitation the Crosstie Note.  Notwithstanding anything in
this Agreement or in the Crosstie Note to the contrary, no TIETEK Owner shall be
individually responsible or liable for the payment or performance of Borrower's
obligations under the Crosstie Note to pay any amount of principal, interest or
other payment to NATK, except to the extent of the security interest, lien and
pledge of the TIETEK Owner's Collateral (as defined in the TIETEK Note) granted
or to be granted by such TIETEK Owner pursuant to the TIETEK Note, and NATK
agrees that its sole recourse against any TIETEK Owner in connection with such
payment or performance of Borrower's obligations shall be limited to the extent
of such security interest, lien and pledge of such TIETEK Owner's Collateral
granted or to be granted by such TIETEK Owner pursuant to the TIETEK Note.

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     (b) The Crosstie Budget.  Attached hereto as EXHIBIT B and made a part
hereof is an initial budget prepared by Borrower setting out all currently
intended needs and initial uses of funds for the operation of the Crosstie
Business (as defined in Section 3.2(b) hereof) during the Crosstie Advance
Period (as defined below in Section 1.2(a) hereof).

          (i) Not less than quarterly, and at such times as either Borrower or
NATK shall reasonably request, Borrower shall present to NATK additional,
revised budgets addressing specific business objectives of TIETEK and other
business developments and new information affecting TIETEK and its business, and
Borrower and NATK shall jointly review and revise such budget as appropriate,
all as Borrower and NATK shall reasonably agree.  Without limiting the
generality of the foregoing, the parties agree that anticipated and actual
revenues of Borrower shall not reduce NATK's obligations to fund the Crosstie
Loan; provided, however, that the parties anticipate that any such revenues will
be a factor in the budgeting process and, in particular, the cash flow analysis
used to develop and revise a budget.  Each party agrees to carry out its
obligations under this clause (i) promptly and in good faith.

          (ii) In the event that, after using good faith efforts to resolve any
disagreements the parties may have with respect to any budget, NATK does not
approve of such budget (and regardless of whether such failure to approve of the
budget is based upon NATK's good faith disagreement or disapproval of any
material proposed expenditure, NATK's good faith belief that the Crosstie
Business will not reasonably be expected to develop into an economically viable
enterprise unless more than $1.5 million is invested in the Crosstie Business,
or any other legitimate business reason), NATK shall not have any obligation to
fund additional Crosstie Advances.  The budget referred to in this clause (b),
as revised and supplemented from time to time in accordance with the provisions
of this clause (b), is referred to in this Agreement as the "Crosstie Budget."

     1.2  PROCEDURE FOR FUNDING CROSSTIE ADVANCES.

     (a) Documents, Etc.  Borrower may request, from time to time during the
period beginning on the date of this Agreement and continuing until the second
anniversary of the date hereof (the "Crosstie Advance Period"), that NATK fund
an advance (a "Crosstie Advance") under the Crosstie Loan, and NATK agrees to
fund such advance upon the receipt by NATK of:

          (i) Schedule 1 to the Crosstie Note, duly executed by Borrower, which
shall evidence all prior Crosstie Advances made under the Crosstie Loan and the
then-proposed Crosstie Advance;

          (ii) such documentation as NATK may reasonably request which shall
evidence the particular uses of the funds to be included in the requested
Crosstie Advance; and

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          (iii)  such documentation as NATK may reasonably request which shall
evidence the application of funds provided pursuant to all prior Crosstie
Advances in accordance with the Crosstie Budget (as defined below).

     (b) Crosstie Advance Funding.  Each Crosstie Advance shall be made within
five (5) business days of the date that NATK receives the documents referred to
in clause (a) above and the other conditions set out in clause (c) of this
Section have been fulfilled.

     (c) Conditions to Funding Obligations.  It shall be a condition to the
obligation of NATK to fund each Crosstie Advance that:

          (i) at the time of such Crosstie Advance, a Crosstie Budget shall be
in place that was prepared and approved in accordance with the provisions of
Section 1.1(b) of this Agreement;

          (ii) at all times prior to the funding of such Crosstie Advance,
Borrower shall have complied in all material respects with all of its covenants
and agreements set out in this Agreement (except as Borrower and NATK shall
otherwise agree in writing); and

          (iii)  at the time of such funding, NATK shall have sufficient
resources to permit it to fund such Crosstie Advance and to fund its other
financial obligations, in each such case, and such funding shall not result in
NATK violating any financial covenants or agreements by which NATK or any of its
assets are then bound, all as determined in the reasonable, good faith judgment
of NATK.

     (d) How Crosstie Advance is to be Funded.  Upon the fulfillment of the
conditions described in clause (c) above, NATK shall apply the amounts to be
funded pursuant to a Crosstie Advance, such application to be made, at the
option of NATK, either (i) by advancing such amounts to Borrower for payment to
the various third parties entitled thereto the various expenses and other
amounts due such parties (as evidenced by the documents submitted by Borrower to
NATK in requesting such Crosstie Advance) or (ii) by directly paying in a prompt
manner to such third parties such expenses and other amounts due such parties
(as evidenced by the documents submitted by Borrower to NATK in requesting such
Crosstie Advance, and as directed by Borrower) for the account of Borrower.
Copies of the disbursement payments (or reasonable evidence thereof) shall be
made available to both parties at all times.  For purposes of the Crosstie Note,
interest shall be deemed to begin to accrue from the date NATK issues and mails
(or delivers to Borrower) a check or otherwise makes such payment with respect
to an amount paid from a Crosstie Advance.

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                                  ARTICLE TWO
                            CROSSTIE PURCHASE OPTION

     2.1  GRANT OF CROSSTIE PURCHASE OPTION.  Each TIETEK Owner hereby grants to
NATK a right and option (the "Crosstie Purchase Option") to purchase all of the
shares of capital stock of Borrower currently existing or at any time hereafter
outstanding (the "TIETEK Shares") that are owned by such TIETEK Owner, upon the
terms and conditions of this Article Two.

     2.2  CROSSTIE PURCHASE OPTION PERIOD.  NATK may exercise the Crosstie
Purchase Option herein granted by delivering written notice to the TIETEK Owners
(and the Escrow Agent, if any, as defined below) at any time after the date
hereof and until the second anniversary date of the date hereof, subject to
extension as provided in Section 2.4 hereof.  The period during which such
written notice may be given (including any extensions thereof) is referred to
herein as the "Crosstie Purchase Option Period."  Notwithstanding anything
herein to the contrary, the Crosstie Purchase Option may not be exercised at any
time that the 90 Day Note (as defined in the Asset Purchase Agreement that is
referred to in the Crosstie Note) is outstanding, or is not otherwise paid in
full.  In the event such written notice is not delivered during the Crosstie
Purchase Option Period, the Crosstie Purchase Option shall automatically expire
and be of no further force or effect.  The date NATK delivers such notice is
referred to herein as the "Option Date."  Such written notice shall specify a
time, which shall be not more than 45 days after the Option Date, and place in
Houston, Texas for the consummation and closing of the exercise of the Crosstie
Purchase Option (the "Option Closing").  In the event that NATK does not
exercise the Crosstie Purchase Option, then upon the request of the Borrower,
NATK agrees promptly to deliver to the Borrower a copy of all accounting,
payroll and other records (and all supporting documentation) then in its
possession relating to the performance by NATK of the accounting, payroll and
other functions described in Section 3.2(d)(iii) of this Agreement.

     2.3  OPTION CLOSING.  At the Option Closing:

     (a) The TIETEK Owners shall (either directly or pursuant to the terms of
the Escrow Agreement, if any, as defined below) sell, transfer, convey, assign
and deliver to NATK all outstanding shares of capital stock of the Borrower
(including all of the TIETEK Shares), free and clear of all liens, claims,
charges, pledges or interests of any other kind or nature;

     (b) NATK shall execute and deliver to the TIETEK Owners (or their
designees) that certain TIETEK Royalty Agreement substantially in the form of
EXHIBIT C, attached hereto and made a part hereof, together with such amendments
and modifications thereto as the TIETEK Owners and NATK shall mutually agree;
and

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     (c) NATK shall also release its security interest in, lien on and pledge of
any of the Collateral (including without limitation the pledged shares of NATK
capital stock, if any) to the extent that such security interest, lien and
pledge was granted in order to secure payment of Borrower's obligations under
the Crosstie Note.

     2.4  EXTENSION OF CROSSTIE PURCHASE OPTION PERIOD.

     (a) NATK may extend the Crosstie Purchase Option Period for one additional
year (i.e., until the third anniversary of the date hereof) if, prior to the
second anniversary of the date hereof, NATK has funded the full amount of the
Crosstie Loan (i.e., $1,500,000).

     (b) If NATK has not funded any amount requested (up to the full amount) of
the Crosstie Loan, then NATK may, at its option, extend the Crosstie Purchase
Option Period for one additional year if, and only if:

          (i)  Either (x) Borrower did not request funding of an amount (up to
the full amount) of the Crosstie Loan or (y) Borrower or one or more of the
TIETEK Owners have failed to fulfill any of such party's obligations under this
Agreement or the Crosstie Note, and such failure would reasonably be expected to
have a material adverse effect on the business or financial condition of the
Borrower or on NATK's ability to receive the benefits of having exercised the
Crosstie Option; provided, however, that in order for NATK to extend the
Crosstie Option for such additional year pursuant to the provisions of this
clause (y), NATK shall have given written prompt notice of any such failure and
shall use its good faith efforts to resolve any dispute or matter that arises in
connection with such failure; and/or

          (ii)  At the second anniversary date hereof, there is no unresolved
material disagreement between NATK and Borrower regarding the legitimate need
for further funding (up to the full amount) of the Crosstie Loan to assure the
timely commercialization of the Crosstie Business; provided, however, that if
Borrower believes, at any time prior to or at such second anniversary, that
there is such a disagreement, it shall give NATK prompt written notice thereof,
and both parties agree to use good faith efforts, and to act reasonably, in
connection with the determination of the matters described in this clause (ii)
and the resolution of any such disagreement.

     (c) NATK's election to extend the Crosstie Purchase Option Period as
provided in this Section 2.4 shall be evidenced by its written notice to
Borrower of such election, such notice to be delivered either (i) if the
Crosstie Loan has been fully funded, then at any time after the Crosstie Loan
has been fully funded, but not later than the second anniversary of the date
hereof, or (ii) if the Crosstie Loan has not been fully funded but NATK is
nonetheless entitled to exercise such election pursuant to the terms of this
Section 2.4, then at any time during the period beginning on the sixtieth (60th)

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day before the second anniversary of the date hereof and ending on the second
anniversary.

     (d) The provisions of this Section 2.4 shall relate exclusively to the
provisions of this Agreement governing the extension of the Crosstie Purchase
Option Period and no other purpose.

     2.5  ADDITIONAL OBLIGATIONS RELATING TO PERFECTION OF PLEDGE OF SHARES.
Each of the TIETEK Owners agrees to cause the certificate or certificates
representing his shares of capital stock of Borrower, together with a stock
power executed in blank, to be delivered to an escrow agent ("Escrow Agent"),
pursuant to an escrow agreement ("Escrow Agreement") reasonably satisfactory in
form and substance to NATK and the TIETEK Owners.  Such Escrow Agent shall hold
such documents and instruments as security for the Crosstie Note pursuant to the
terms and provisions of this Agreement and the Crosstie Note, except as
otherwise expressly amended by such Escrow Agreement or the Asset Purchase
Agreement (as that term is defined in the Crosstie Note).  Prior to the
occurrence of an event of default under the Crosstie Note, NATK shall have no
rights to vote any of such shares or to take any other action or receive any
other benefits with respect to such shares, except as provided in the Crosstie
Note.

                                 ARTICLE THREE
                   REPRESENTATIONS, WARRANTIES AND COVENANTS

     3.1  BORROWER'S AND TIETEK OWNER'S REPRESENTATIONS AND WARRANTIES.  The
Borrower and each TIETEK Owner, severally but not jointly, represent and warrant
to NATK those representations and warranties set out in the Crosstie Note and as
follows:

     (a) Organization.  Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Texas. Borrower has
all corporate power and authority to own and operate the Crosstie Business and
all other assets it may own or acquire during the term of this Agreement.
Borrower has delivered a true, correct and complete copy of its Articles of
Incorporation and Bylaws, together with all amendments thereto, as in effect on
the date hereof.  Notwithstanding anything herein to the contrary, the
representations made by a TIETEK Owner in this subsection (a) are limited to the
current actual knowledge of the TIETEK Owner making such representation.

     (b) Capitalization; Ownership of Shares.  The capital stock of Borrower
consists solely of 200,000 shares of common stock, par value $.01 per share, of
which only three shares have been issued, one to each of the three TIETEK
Owners, which three shares constitute all of the TIETEK Shares.  The TIETEK
Shares have been duly authorized, validly issued, are fully paid and non-
assessable.  There are no other securities convertible into or exchangeable for
shares of Borrower's capital stock or any 

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options, warrants or other rights to acquire any shares of its capital stock.
Notwithstanding anything herein to the contrary, the representations made by Mr.
Bartell in this subsection (b) are limited to his current actual knowledge.

     (c) Authorization.  (i)  The Borrower has full right, power and authority
to execute, deliver and perform this Agreement and the Crosstie Note.  All
corporate, shareholder and other approvals required on the part of the Borrower,
any TIETEK Owner or any other party in order for the Borrower or any TIETEK
Owner to enter into and perform such party's obligations under this Agreement
have been obtained on or before the date hereof.  This Agreement and the
Crosstie Note have been duly authorized by all necessary corporate action on
behalf of the Borrower, and have been duly executed and delivered by Borrower.
Each of this Agreement and the Crosstie Note constitutes the valid and binding
obligation of the Borrower, enforceable against it in accordance with the
respective terms thereof.  There are no agreements restricting the ability of
either the Borrower or any TIETEK Owner from entering into or performing such
party's obligations under this Agreement.

          (ii) Each TIETEK Owner has duly executed and delivered this Agreement
and any other document to be delivered by him in connection herewith, and this
Agreement, and any such other document, constitute the valid and binding
obligation of each TIETEK Owner enforceable against him in accordance with their
respective terms.

Notwithstanding anything herein to the contrary, the representations made by a
TIETEK Owner in this subsection (c), as they relate to any other TIETEK Owner or
to the Borrower, are limited to the current actual knowledge of the TIETEK Owner
making such representation.

     (d) Assets/Liabilities; No Operations.  On the date hereof, the Borrower
has no liabilities or obligations of any kind or nature other than the
obligation to repay to NATK those Crosstie Advances made on or before the date
hereof, and such other obligations as TIETEK has incurred in the normal course
of pursuing the development and commercialization of the Crosstie Business, none
of which violates any of the provisions of Section 3.2 (except to the extent of
NATK's knowledge of the same on or before the date hereof).  The Borrower has
not conducted any business or other operations prior to the date hereof other
than those operations relating to the Crosstie Business that NATK has been made
aware of on or before the date hereof.  Notwithstanding anything herein to the
contrary, the representations made by a TIETEK Owner in this subsection (d) are
limited to the current actual knowledge of the TIETEK Owner making such
representation.

     3.2  BORROWER'S COVENANTS.  The Borrower covenants and agrees with NATK as
follows (except as NATK and Borrower shall otherwise agree in writing):

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     (a) Expense and Payment Information.  Until the earlier to occur of the
payment in full of all obligations under the Crosstie Note or the exercise of
the Crosstie Option, Borrower shall provide NATK in a timely manner all
information reasonably required by NATK in order to pay any costs, expenses or
other payments from the proceeds of a Crosstie Advance, and shall provide NATK
with reasonable access during normal business hours to the books and records of
the Borrower relating to the Crosstie Business.

     (b) Use of Proceeds of Crosstie Advances.  The proceeds of all Crosstie
Advances shall be use exclusively for expenses incurred or to be incurred in
connection with the commercial development, production, manufacture, marketing
and sale of railroad crosstie technology and business, including without
limitation the production of the railroad crossties themselves (collectively,
the "Crosstie Business"), as set out in the Crosstie Budget, as revised and
supplemented from time to time in accordance with the provisions of Section
1.1(b) hereof.  Upon the request of NATK, Borrower shall provide to NATK
reasonable written documentation to evidence Borrower's compliance with the
terms and provisions of this clause (b).

     (c)  Ownership of Assets.  Until the earlier to occur of the payment in
full of all obligations under the Crosstie Note or the exercise of the Crosstie
Option, all assets purchased with the proceeds of Crosstie Advances, and any and
all other assets currently owned or acquired by Borrower during the term of this
Agreement relating the Crosstie Business, shall be acquired in the name of
Borrower, and Borrower shall remain the sole record and beneficial owner of all
interests in and to such assets, free and clear of all liens, claims, pledges,
security interest and charges, other than any of the same granted in favor of
NATK or any of its affiliates.

     (d) Conduct of Business.  During the Crosstie Purchase Option Period,
Borrower (i) shall, subject to available funds, use its best efforts to develop,
preserve and protect the Crosstie Business, including without limitation the
Maker's Collateral (as defined in the Crosstie Note), and shall conduct its
operations in accordance with sound business practices, (ii) shall not, without
the prior consent of NATK (which consent shall not be unreasonably withheld),
enter into any contract or commitment regarding the performance of any service
or the delivery of any goods to or by Borrower that has a term of more than six
(6) months or that requirements the payment of more than $10,000 in the
aggregate and (iii) shall permit NATK, at the option of NATK, to carry out all
accounting, payroll and other functions relating to the payment and recording of
all costs and expenses incurred by Borrower; provided, however, that NATK shall
provide Borrower with access at all reasonable times to all of NATK's related
records maintained in connection with NATK's performance of such accounting,
payroll and other functions.  In the event NATK elects to carry out such
accounting, payroll and/or other functions, it may allocate to Borrower a
reasonable amount per month to cover the costs of such functions, such amount
not to exceed $2,000 per month.  The terms of this Section 3.2(d) shall cease to
apply upon the expiration of the Crosstie Purchase Option Period.

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     (e) Grant and Protection of Security Interest in Collateral.  Until the
earlier to occur of the payment in full of all obligations under the Crosstie
Note or the exercise of the Crosstie Option, Borrower shall grant, maintain,
preserve and protect the security interest, lien and pledge granted therein, and
all rights and benefits with respect thereto, in favor of NATK with respect to
Maker's Collateral (as defined in the Crosstie Note).

     (f) Capitalization; Certain Corporate Actions.  During the Crosstie
Purchase Option Period, Borrower shall not (i) issue any shares of capital
stock, any securities convertible into or exchangeable for shares of its capital
stock or any options, warrants or other rights to acquire any shares of its
capital stock (except to reflect a transfer of shares of capital stock as
expressly permitted by Section 3.3(a) below); (ii) amend its articles of
incorporation or bylaws; (iii) merge with or consolidate into any other
corporation or other entity; (iv) acquire any shares of capital stock or other
evidences of ownership of any other entity; (v) execute any note, guaranty or
any other evidence of an obligation for borrowed money, or otherwise become
obligated for any other obligation for borrowed money or the payment of any sum
or the performance of any other obligation, including without limitation any
obligation incurred in connection with the purchase of equipment, inventory or
other assets, if such note, guaranty or other obligation involves payments in
excess of $10,000 or, in the aggregate with all other notes, guaranties and
other obligations, in excess of $30,000 (provided, however, that NATK agrees
that it will not unreasonably withhold its consent to any trade credit proposed
to be entered into by Borrower in the ordinary course of Borrower's business in
order to secure supplies, materials or equipment, if the terms of such trade
credit are reasonably determined by both NATK and Borrower to be in the best
interests of Borrower's business); (vi) make any dividend or other distribution,
whether in cash, securities or otherwise, on or with respect to any shares of
capital stock of Borrower or (vii) enter into any other transaction outside the
ordinary course of business or unrelated to the Crosstie Business.  The terms of
this Section 3.2(f) shall cease to apply upon the expiration of the Crosstie
Purchase Option Period.

     (g) Payment and Performance of the Crosstie Note.  During the term of the
Crosstie Note, Borrower shall pay all amounts of principal, interest and other
payments, if any, that may come due thereunder in a timely manner, and shall
perform all of its other obligations thereunder in accordance with the terms of
the Crosstie Note.

     (h) Quarterly Meetings.  During the term of this Agreement, Borrower agrees
to meet not less than once during each quarter with representatives of NATK
selected by NATK to discuss the results of operations and financial condition of
the Crosstie Business.

     (i) Legend on Certificates.  The Borrower agrees to cause the legend
referred to in Section 3.3(d) hereof to be placed and maintained on all
certificates representing the TIETEK Shares in accordance with the provisions of
Section 3.3(d) hereof.

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     (j) Federal Tax Election.  For all periods before and during the Crosstie
Purchase Option Period, the Borrower agrees (x) to make an election or elections
under Section 174(b) of the Internal Revenue Code of 1986, as amended to date,
or any successor provision, as NATK shall instruct (so long as such instruction
is provided in a timely manner and such election is not illegal or unavailable
for Borrower), with respect to qualifying research and experimental costs and
expenditures and (y) for Federal income tax purposes, to treat such research and
experimental costs and expenditures in accordance with such election.

     3.3  TIETEK OWNER'S COVENANTS.  Each TIETEK Owner covenants and agrees
severally but not jointly with NATK as follows (except as NATK and such TIETEK
Owner shall otherwise agree in writing):

     (a) No Transfer of the TIETEK Shares; Certain Other Actions.  Such TIETEK
Owner shall not transfer any of the TIETEK Shares or any interest therein,
except in accordance with the terms and provisions of this Agreement; provided,
however, that NATK agrees that (i) any TIETEK Owner may transfer all or a
portion of his TIETEK Shares to another TIETEK Owner or, upon NATK's receipt of
reasonable documentation evidencing a transferee's agreement to be bound (as a
TIETEK Owner) by the terms and provisions of this Agreement and the Crosstie
Note, to any other party who is (on the date of this Agreement) GAIA Holdings,
Inc., a Delaware corporation, Thor Ventures, L.C., a Texas limited liability
company, a shareholder of GAIA Holdings, Inc., a member of Thor Ventures, L.C.,
a Texas limited liability company, or any trust of which one or more of such
parties or their affiliates are the sole beneficiaries, or any affiliates of the
foregoing, and (ii) upon NATK's receipt of reasonable documentation evidencing a
transferee's agreement to be bound (as a TIETEK Owner) by the terms and
provisions of this Agreement and the Crosstie Note, and so long as NATK's rights
will not be impaired in any material respect (as determined in the reasonable,
good faith judgment of NATK), a TIETEK Owner may transfer all or a portion of
his TIETEK Shares to any other natural person.  Such TIETEK Owner shall not take
any action that would reasonably be expected either to result in a breach of any
covenant or agreement of the Borrower or any TIETEK Owner set out in this
Agreement or that would reasonably be expected to cause NATK not to receive the
benefits and rights offered to it pursuant to this Agreement.

     (b) Grant and Protection of Security Interest in Collateral.  Until the
earlier to occur of the payment in full of all obligations under the Crosstie
Note or the exercise of the Crosstie Option, such TIETEK Owner shall grant,
maintain, preserve and protect the security interest, lien and pledge granted
therein, and all rights and benefits with respect thereto, in favor of NATK with
respect to the Collateral (as defined in the Crosstie Note) that is owned or
under the control of such TIETEK Owner at any time.

     (c) Capitalization; Certain Corporate Actions.  Without limiting the
generality of the provisions of subsections (a) and (b) above, during the
Crosstie Option Period, 

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such TIETEK Owner shall not vote any of his TIETEK Shares in favor of, or take
any other action that would result in (i) the Borrower's issuance of any shares
of capital stock, any securities convertible into or exchangeable for shares of
its capital stock or any options, warrants or other rights to acquire any shares
of its capital stock (other than solely to evidence a transfer of shares as
expressly permitted by the terms of this Agreement); (ii) any amendment to the
Borrower's articles of incorporation or bylaws; (iii) the Borrower's merger with
or consolidate into any other corporation or other entity; (iv) the Borrower's
acquisition of any shares of capital stock or other evidences of ownership of
any other entity; (v) the Borrower's execution of any note, guaranty or any
other evidence of an obligation for borrowed money, or the Borrower's otherwise
becoming obligated for any other obligation for borrowed money or the payment of
any sum or the performance of any other obligation, including without limitation
any obligation incurred in connection with the purchase of equipment, inventory
or other assets, if such note, guaranty or other obligation involves payments in
excess of $10,000 or, in the aggregate with all other notes, guaranties and
other obligations, in excess of $30,000 (provided, however, that NATK agrees
that it will not unreasonably withhold its consent to any trade credit proposed
to be entered into by Borrower in the ordinary course of Borrower's business in
order to secure supplies, materials or equipment, if the terms of such trade
credit are reasonably determined by both NATK and Borrower to be in the best
interests of Borrower's business); or (vi) the Borrower's entering into any
other transaction outside the ordinary course of business or unrelated to the
Crosstie Business.

     (d)  Legend on Certificates.  Such TIETEK Owner hereby consents to the
placement of a legend or legends, in form and substance reasoanbly satisfactory
to NATK and the Borrower, on each certificate representing his TIETEK Shares,
which legend(s) shall reference the existence of the various obligations of such
TIETEK Owner under this Agreement, such legend to be maintained on such
certificate or certificates during the term of the Crosstie Note.

                                  ARTICLE FOUR
                                 MISCELLANEOUS

     4.1  NOTICES.  All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered personally
or mailed, certified or registered mail with postage prepaid, or sent by telex,
telegram or telecopier, as follows (or at such other address or facsimile number
for a party as shall be specified by like notice):

                                       11
<PAGE>
 
     (a)  if to Borrower or any TIETEK
          Owner, at:                        with a copy to:
 
          TIETEK, Inc.                           Jeffrey Horowitz
          4710 Bellaire Blvd., Suite 301    Crain, Caton & James
          Bellaire, Texas 77401                  909 Fannin, Suite 3300
          Attention:  William T. Aldrich         Houston, Texas 77010
            and Henry W. Sullivan           Fax:  (713) 658-1921
          Fax:  (713) 661-1677
                                            and with a copy to:

                                            J. Denny Bartell
                                            808 Travis, Suite 1001
                                            Houston, Texas 77002

     (b)  if to NATK, at:

          North American Technologies Group, Inc.
          4710 Bellaire Blvd., Suite 301
          Bellaire, Texas 77401
          Attention:  Tim B. Tarrillion
          Fax:  (713) 662-3728

NATK may rely on any notice it receives in accordance with the above provisions
that is signed by any President or Vice President of Borrower as a notice
delivered to it by Borrower and the TIETEK Owners.

     4.2  TERM OF AGREEMENT.  Except as otherwise provided herein or in any
Exhibit hereto, this Agreement, and the rights and obligations set out herein,
shall continue in full force and effect until all obligations under the Crosstie
Note have been paid and performed in full, or otherwise forgiven or discharged
by NATK.

     4.3  ENTIRE AGREEMENT; ASSIGNMENT; AND AMENDMENT.

     (a) This Agreement, including all Exhibits and Schedules hereto (which for
all purposes, shall be deemed to be a part of this Agreement), constitutes the
entire agreement among the parties with respect to its subject matter and
supersedes all prior agreements and understandings, both written and oral, among
the parties or any of them with respect to such subject matter.

     (b) This Agreement, including all rights (including without limitation the
Crosstie Option) and obligations hereunder, shall not be assigned by operation
of law or otherwise; provided, however, that subject to any approvals required
by applicable law, NATK may assign its rights and obligations to any majority-
owning or owned, direct or 

                                       12
<PAGE>
 
indirect, parent, subsidiary or subsidiaries of NATK, but no such assignment
shall relieve NATK of its obligations under this Agreement.

     (c) This Agreement may not be amended except by an instrument in writing
signed by each of the parties hereto.

     4.4  BINDING EFFECT; BENEFIT. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
Nothing in this Agreement is intended to confer on any person other than the
parties to this Agreement or their respective successors and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.

     4.5  HEADINGS.  The descriptive headings of the articles, sections,
subsections, Exhibits and Schedules of this Agreement are inserted for
convenience only, do not constitute a part of this Agreement and shall not
affect in any way the meaning or interpretation of this Agreement.

     4.6  COUNTERPARTS.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.

     4.7  GOVERNING LAW.  This Agreement shall be governed by and construed in
accordance with the laws of the state of Texas, without regard to the laws that
might otherwise govern under principles of conflicts of laws applicable thereto.

     4.8  ARBITRATION.  In the event any party believes any other party hereto
has committed a breach of any provision of this Agreement or such parties cannot
agree on an interpretation of one or more of the provisions of this Agreement,
such parties agree to first meet in Houston, Texas, and discuss the same, and
attempt in good faith to resolve such matter.  Any such matter, controversy or
claim arising out of or relating to this Agreement, or the breach of any
provision hereof, that cannot otherwise be resolved between the relevant parties
in such a meeting and discussion shall be settled by arbitration in Houston,
Texas, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association and judgment upon any award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction.  Any award
rendered may include an award of reasonable attorneys' fees, costs and expenses.

     4.9  SEVERABILITY.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void, unenforceable or against its regulatory policy, the remainder of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.

                                       13
<PAGE>
 
     4.10 CERTAIN DEFINITIONS.  As used herein:

     (a)  "affiliate" shall have the meanings ascribed to such term in Rule 12b-
2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended to date (the "Exchange Act");

     (b)  "business day" shall mean any day other than a Saturday, Sunday or a
day on which federally chartered financial institutions are not open for
business in the City of Houston, Texas; and

     (c)  "subsidiary" shall mean, when used with reference to an entity, any
corporation, a majority of the outstanding voting securities of which is owned
directly or indirectly, or a majority of the board of directors of which may be
elected, by such entity.

     IN WITNESS WHEREOF, each of the parties have caused this Agreement to be
duly executed by or on behalf of such party, all as of the date first written
above.


                              NORTH AMERICAN TECHNOLOGIES
                              GROUP, INC.

                              By: /s/ Tim B. Tarrillion

                                 Name: Tim B. Tarrillion

                                 Title: President



                              TIETEK, INC.

                              By: /s/ William T. Aldrich

                                 Name: William T. Aldrich

                                 Title: President



                              WILLIAM T. ALDRICH

                              /s/ William T. Aldrich
                              ____________________________________

                                       14
<PAGE>
 
                              J. DENNY BARTELL

                              /s/ J. Denny Bartell
                              ____________________________________



                              HENRY W. SULLIVAN

                              /s/ Henry W. Sullivan
                              ____________________________________

                                       15
<PAGE>
 
EXHIBIT A      Promissory Note, Security Agreement and Pledge
EXHIBIT B      Initial Crosstie Budget
EXHIBIT C      TIETEK Royalty Agreement

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