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                                   EXHIBIT 4.2

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR
OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.

                     SERIES B COMMON STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                     North American Technologies Group, Inc.

          THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") CERTIFIES that, for
value received, _____________ (the "Holder"), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after December ___, 2003 (the "Initial Exercise Date") and on
or prior to the close of business on the fifth anniversary of the Initial
Exercise Date (the "Termination Date") but not thereafter, to subscribe for and
purchase from North American Technologies Group, Inc., a corporation
incorporated in the State of Delaware (the "Company"), up to ____________ shares
(the "Warrant Shares") of Common Stock, par value $0.001 per share, of the
Company (the "Common Stock"). The purchase price of one share of Common Stock
(the "Exercise Price") under this Warrant shall be $0.60 subject to adjustment
hereunder. The Exercise Price and the number of Warrant Shares for which the
Warrant is exercisable shall be subject to adjustment as provided herein.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Securities Purchase Agreement (the "Purchase
Agreement"), dated December 31, 2003, among the Company and the purchasers
signatory thereto.

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          1.   Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

          2.   Authorization of Shares. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).

          3.   Exercise of Warrant.

               (a) Exercise of the purchase rights represented by this Warrant
     may be made at any time or times on or after the Initial Exercise Date and
     on or before the Termination Date by delivery to the Company of a duly
     executed facsimile copy of the Notice of Exercise Form annexed hereto (or
     such other office or agency of the Company as it may designate by notice in
     writing to the registered Holder at the address of such Holder appearing on
     the books of the Company); provided, however, within 5 Trading Days of the
     date said Notice of Exercise is delivered to the Company, the Holder shall
     have surrendered this Warrant to the Company and the Company shall have
     received payment of the aggregate Exercise Price of the shares thereby
     purchased by wire transfer or cashier's check drawn on a United States
     bank. Certificates for shares purchased hereunder shall be delivered to the
     Holder within the earlier of (i) 5 Trading Days after the date on which the
     Notice of Exercise shall have been delivered by facsimile copy or (ii) 3
     Trading Days from the delivery to the Company of the Notice of Exercise
     Form by facsimile copy, surrender of this Warrant and payment of the
     aggregate Exercise Price as set forth above ("Warrant Share Delivery
     Date"); provided, however, in the event the Warrant is not surrendered or
     the aggregate Exercise Price is not received by the Company within 5
     Trading Days after the date on which the Notice of Exercise shall be
     delivered by facsimile copy, the Warrant Share Delivery Date shall be
     extended to the extent such 5 Trading Day period is exceeded. This Warrant
     shall be deemed to have been exercised on the later of the date the Notice
     of Exercise is delivered to the Company by facsimile copy and the date the
     Exercise Price is received by the Company. The Warrant Shares shall be
     deemed to have been issued, and Holder or any other person so designated to
     be named therein shall be deemed to have become a holder of record of such
     shares for all purposes, as of the date the Warrant has been exercised by
     payment to the Company of the Exercise Price and all taxes required to be
     paid by the Holder, if any, pursuant to Section 5 prior to the issuance of
     such shares, have been paid. If the Company fails to deliver to the Holder
     a certificate or certificates representing the Warrant Shares pursuant to
     this Section 3(a) by the third Trading Day following the Warrant Share
     Delivery Date, then the Holder will have the right to rescind such
     exercise.

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     In addition to any other rights available to the Holder, if the Company
     fails to deliver to the Holder a certificate or certificates representing
     the Warrant Shares pursuant to an exercise by the third Trading Day after
     the Warrant Share Delivery Date, and if after such day the Holder is
     required by its broker to purchase (in an open market transaction or
     otherwise) shares of Common Stock to deliver in satisfaction of a sale by
     the Holder of the Warrant Shares which the Holder anticipated receiving
     upon such exercise (a "Buy-In"), then the Company shall (1) pay in cash to
     the Holder the amount by which (x) the Holder's total purchase price
     (including brokerage commissions, if any) for the shares of Common Stock so
     purchased exceeds (y) the amount obtained by multiplying (A) the number of
     Warrant Shares that the Company was required to deliver to the Holder in
     connection with the exercise at issue times (B) the price at which the sell
     order giving rise to such purchase obligation was executed, and (2) at the
     option of the Holder, either reinstate the portion of the Warrant and
     equivalent number of Warrant Shares for which such exercise was not honored
     or deliver to the Holder the number of shares of Common Stock that would
     have been issued had the Company timely complied with its exercise and
     delivery obligations hereunder. For example, if the Holder purchases Common
     Stock having a total purchase price of $11,000 to cover a Buy-In with
     respect to an attempted exercise of shares of Common Stock with an
     aggregate sale price giving rise to such purchase obligation of $10,000,
     under clause (1) of the immediately preceding sentence the Company shall be
     required to pay the Holder $1,000. The Holder shall provide the Company
     written notice indicating the amounts payable to the Holder in respect of
     the Buy-In, together with applicable confirmations and other evidence
     reasonably requested by the Company. Nothing herein shall limit a Holder's
     right to pursue any other remedies available to it hereunder, at law or in
     equity including, without limitation, a decree of specific performance
     and/or injunctive relief with respect to the Company's failure to timely
     deliver certificates representing shares of Common Stock upon exercise of
     the Warrant as required pursuant to the terms hereof.

               (b) If this Warrant shall have been exercised in part, the
     Company shall, at the time of delivery of the certificate or certificates
     representing Warrant Shares, deliver to Holder a new Warrant evidencing the
     rights of Holder to purchase the unpurchased Warrant Shares called for by
     this Warrant, which new Warrant shall in all other respects be identical
     with this Warrant.

               (c) (i) The Company shall not effect any exercise of this
     Warrant, and the Holder shall not have the right to exercise any portion of
     this Warrant, pursuant to Section 3(a) or otherwise, to the extent that
     after giving effect to such issuance after exercise, the Holder (together
     with the Holder's affiliates), as set forth on the applicable Notice of
     Exercise, would beneficially own in excess of 4.99% of the number of shares
     of the Common Stock outstanding immediately after giving effect to such
     issuance. For purposes of the foregoing sentence, the number of shares of
     Common Stock beneficially owned by the Holder and its affiliates shall
     include the number of shares of Common Stock issuable upon exercise of this
     Warrant with respect to which the determination of such sentence is being
     made, but shall exclude the number of shares of Common Stock which would be
     issuable upon (A) exercise of the remaining, nonexercised portion of this
     Warrant beneficially owned by the Holder or any of its affiliates and (B)
     exercise or conversion of the unexercised or nonconverted portion of any
     other securities of the

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     Company (including, without limitation, any other Warrants) subject to a
     limitation on conversion or exercise analogous to the limitation contained
     herein beneficially owned by the Holder or any of its affiliates. Except as
     set forth in the preceding sentence, for purposes of this Section 3(c)(i),
     beneficial ownership shall be calculated in accordance with Section 13(d)
     of the Exchange Act. To the extent that the limitation contained in this
     Section 3(c)(i) applies, the determination of whether this Warrant is
     exercisable (in relation to other securities owned by the Holder) and of
     which a portion of this Warrant is exercisable shall be in the sole
     discretion of such Holder, and the submission of a Notice of Exercise shall
     be deemed to be such Holder's determination of whether this Warrant is
     exercisable (in relation to other securities owned by such Holder) and of
     which portion of this Warrant is exercisable, in each case subject to such
     aggregate percentage limitation, and the Company shall have no obligation
     to verify or confirm the accuracy of such determination. For purposes of
     this Section 3(c)(i), in determining the number of outstanding shares of
     Common Stock, the Holder may rely on the number of outstanding shares of
     Common Stock as reflected in (x) the Company's most recent Form 10-Q or
     Form 10-K, as the case may be, (y) a more recent public announcement by the
     Company or (z) any other notice by the Company or the Company's Transfer
     Agent setting forth the number of shares of Common Stock outstanding. Upon
     the written or oral request of the Holder, the Company shall within two
     Trading Days confirm orally and in writing to the Holder the number of
     shares of Common Stock then outstanding. In any case, the number of
     outstanding shares of Common Stock shall be determined after giving effect
     to the conversion or exercise of securities of the Company, including this
     Warrant, by the Holder or its affiliates since the date as of which such
     number of outstanding shares of Common Stock was reported. The provisions
     of this Section 3(c)(i) may be waived by the Holder upon, at the election
     of the Holder, not less than 61 days' prior notice to the Company, and the
     provisions of this Section 3(c)(i) shall continue to apply until such
     61/st/ day (or such later date, as determined by the Holder, as may be
     specified in such notice of waiver).

                   (ii) If the Company has not obtained Shareholder Approval if
     required, then the Company may not issue upon exercise of this Warrant in
     the aggregate, in excess of 19.999% of the number of shares of Common Stock
     outstanding on the Trading Day immediately preceding the Closing Date, less
     any shares of Common Stock issued upon prior exercise of this or any other
     Warrant issued pursuant to the Purchase Agreement (such number of shares,
     the "Issuable Maximum"). If on any attempted exercise of this Warrant, the
     issuance of Warrant Shares would exceed the Issuable Maximum, the Company
     shall not have previously obtained Shareholder Approval, if any, as may be
     required by the applicable rules and regulations of the Trading Market (or
     any successor entity) to approve the issuance of shares of Common Stock in
     excess of the Issuable Maximum pursuant to the terms hereof, then the
     Company shall issue to the Holder such Holder's pro rata portion of the
     Issuable Maximum, which shall be equal to the quotient obtained by dividing
     (x) the aggregate number of Shares sold to the Holder on the Closing Date
     by (y) the aggregate number of Shares issued and sold by the Company on the
     Closing Date. If any Holder shall no longer holds any Warrants, then such
     Holder's remaining portion of the Issuable Maximum shall be allocated
     pro-rata among the remaining Holders. If a Holder requesting an exercise of
     this Warrant would exceed such Holder's pro-rata portion (which shall be
     calculated pursuant to the terms hereof)of the

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     Issuable Maximum the Company shall issue such number of Warrant Shares as
     may be issued below the Issuable Maximum and, with respect to the remainder
     of the aggregate number of Warrant Shares, this Warrant shall not be
     exercisable until and unless Shareholder Approval has been obtained.

               (d) If at any time after one year from the date of issuance of
     this Warrant there is no effective Registration Statement registering the
     resale of the Warrant Shares by the Holder, this Warrant may also be
     exercised at such time by means of a "cashless exercise" in which the
     Holder shall be entitled to receive a certificate for the number of Warrant
     Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
     where:

          (A) = the Closing Price on the Trading Day immediately preceding the
                date of such election;

          (B) = the Exercise Price of this Warrant, as adjusted; and

          (X) = the number of Warrant Shares issuable upon exercise of this
                Warrant in accordance with the terms of this Warrant by means of
                a cash exercise rather than a cashless exercise.

          4.   No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

          5.   Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

          6.   Closing of Books. The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

          7.   Transfer, Division and Combination.

               (a) Subject to compliance with any applicable securities laws and
     the conditions set forth in Sections 1 and 7(e) hereof and to the
     provisions of Section 4.1 of the Purchase Agreement, this Warrant and all
     rights hereunder are transferable, in whole or in part, upon surrender of
     this Warrant at the principal office of the Company, together with a
     written assignment of this Warrant substantially in the form attached
     hereto duly executed by the Holder or its agent or attorney and funds
     sufficient to pay any transfer

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     taxes payable upon the making of such transfer. Upon such surrender and, if
     required, such payment, the Company shall execute and deliver a new Warrant
     or Warrants in the name of the assignee or assignees and in the
     denomination or denominations specified in such instrument of assignment,
     and shall issue to the assignor a new Warrant evidencing the portion of
     this Warrant not so assigned, and this Warrant shall promptly be cancelled.
     A Warrant, if properly assigned, may be exercised by a new holder for the
     purchase of Warrant Shares without having a new Warrant issued.

               (b) This Warrant may be divided or combined with other Warrants
     upon presentation hereof at the aforesaid office of the Company, together
     with a written notice specifying the names and denominations in which new
     Warrants are to be issued, signed by the Holder or its agent or attorney.
     Subject to compliance with Section 7(a), as to any transfer which may be
     involved in such division or combination, the Company shall execute and
     deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
     to be divided or combined in accordance with such notice.

               (c) The Company shall prepare, issue and deliver at its own
     expense (other than transfer taxes) the new Warrant or Warrants under this
     Section 7.

               (d) The Company agrees to maintain, at its aforesaid office,
     books for the registration and the registration of transfer of the
     Warrants.

               (e) If, at the time of the surrender of this Warrant in
     connection with any transfer of this Warrant, the transfer of this Warrant
     shall not be registered pursuant to an effective registration statement
     under the Securities Act and under applicable state securities or blue sky
     laws, the Company may require, as a condition of allowing such transfer (i)
     that the Holder or transferee of this Warrant, as the case may be, furnish
     to the Company a written opinion of counsel (which opinion shall be in
     form, substance and scope customary for opinions of counsel in comparable
     transactions and reasonably acceptable to the Company) to the effect that
     such transfer may be made without registration under the Securities Act and
     under applicable state securities or blue sky laws, (ii) that the holder or
     transferee execute and deliver to the Company an investment letter in form
     and substance acceptable to the Company and (iii) that the transferee be an
     "accredited investor" as defined in Rule 501(a) promulgated under the
     Securities Act.

          8.   No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price (or by means of a cashless exercise),
the Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business on the
later of the date of such surrender or payment.

          9.   Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender

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and cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.

          10.  Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.

          11.  Adjustments of Exercise Price and Number of Warrant Shares.

          (a)  Stock Splits, etc. The number and kind of securities purchasable
     upon the exercise of this Warrant and the Exercise Price shall be subject
     to adjustment from time to time upon the happening of any of the following.
     In case the Company shall (i) pay a dividend in shares of Common Stock or
     make a distribution in shares of Common Stock to holders of its outstanding
     Common Stock, (ii) subdivide its outstanding shares of Common Stock into a
     greater number of shares, (iii) combine its outstanding shares of Common
     Stock into a smaller number of shares of Common Stock, or (iv) issue any
     shares of its capital stock in a reclassification of the Common Stock, then
     the number of Warrant Shares purchasable upon exercise of this Warrant
     immediately prior thereto shall be adjusted so that the Holder shall be
     entitled to receive the kind and number of Warrant Shares or other
     securities of the Company which it would have owned or have been entitled
     to receive had such Warrant been exercised in advance thereof. Upon each
     such adjustment of the kind and number of Warrant Shares or other
     securities of the Company which are purchasable hereunder, the Holder shall
     thereafter be entitled to purchase the number of Warrant Shares or other
     securities resulting from such adjustment at an Exercise Price per Warrant
     Share or other security obtained by multiplying the Exercise Price in
     effect immediately prior to such adjustment by the number of Warrant Shares
     purchasable pursuant hereto immediately prior to such adjustment and
     dividing by the number of Warrant Shares or other securities of the Company
     resulting from such adjustment. An adjustment made pursuant to this
     paragraph shall become effective immediately after the effective date of
     such event retroactive to the record date, if any, for such event.

          (b)  Anti-Dilution Provisions. During the Exercise Period, the
     Exercise Price shall be subject to adjustment from time to time as provided
     in this Section 11(b). In the event that any adjustment of the Exercise
     Price as required herein results in a fraction of a cent, such Exercise
     Price shall be rounded up or down to the nearest cent.

               (i)   Adjustment of Exercise Price. If and whenever the Company
          issues or sells, or in accordance with Section 11(b)(ii) hereof is
          deemed to have issued or sold, any shares of Common Stock for an
          effective consideration per share of less than the then Exercise Price
          or for no consideration (such lower price, the "Base Share Price" and
          such issuances collectively, a "Dilutive Issuance"), then, the
          Exercise Price shall be reduced to equal the Base Share Price. Such
          adjustment shall be made whenever shares of Common Stock or Common
          Stock Equivalents are issued.

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               (ii)  Effect on Exercise Price of Certain Events. For purposes of
          determining the adjusted Exercise Price under Section 11(b) hereof,
          the following will be applicable:

                         (A) Issuance of Rights or Options. If the Company in
               any manner issues or grants any warrants, rights or options,
               whether or not immediately exercisable, to subscribe for or to
               purchase Common Stock or Common Stock Equivalents (such warrants,
               rights and options to purchase Common Stock or Common Stock
               Equivalents are hereinafter referred to as "Options") and the
               effective price per share for which Common Stock is issuable upon
               the exercise of such Options is less than the Exercise Price
               ("Below Base Price Options"), then the maximum total number of
               shares of Common Stock issuable upon the exercise of all such
               Below Base Price Options (assuming full exercise, conversion or
               exchange of Common Stock Equivalents, if applicable) will, as of
               the date of the issuance or grant of such Below Base Price
               Options, be deemed to be outstanding and to have been issued and
               sold by the Company for such price per share and the maximum
               consideration payable to the Company upon such exercise (assuming
               full exercise, conversion or exchange of Common Stock
               Equivalents, if applicable) will be deemed to have been received
               by the Company. For purposes of the preceding sentence, the
               "effective price per share for which Common Stock is issuable
               upon the exercise of such Below Base Price Options" is determined
               by dividing (i) the total amount, if any, received or receivable
               by the Company as consideration for the issuance or granting of
               all such Below Base Price Options, plus the minimum aggregate
               amount of additional consideration, if any, payable to the
               Company upon the exercise of all such Below Base Price Options,
               plus, in the case of Common Stock Equivalents issuable upon the
               exercise of such Below Base Price Options, the minimum aggregate
               amount of additional consideration payable upon the exercise,
               conversion or exchange thereof at the time such Common Stock
               Equivalents first become exercisable, convertible or
               exchangeable, by (ii) the maximum total number of shares of
               Common Stock issuable upon the exercise of all such Below Base
               Price Options (assuming full conversion of Common Stock
               Equivalents, if applicable). No further adjustment to the
               Exercise Price will be made upon the actual issuance of such
               Common Stock upon the exercise of such Below Base Price Options
               or upon the exercise, conversion or exchange of Common Stock
               Equivalents issuable upon exercise of such Below Base Price
               Options.

                         (B) Issuance of Common Stock Equivalents. If the
               Company in any manner issues or sells any Common Stock
               Equivalents, whether or not immediately convertible (other than
               where the same are issuable upon the exercise of Options) and the
               effective price per share for which Common Stock is issuable upon
               such exercise, conversion or exchange is less than the Exercise
               Price, then the maximum total number

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               of shares of Common Stock issuable upon the exercise, conversion
               or exchange of all such Common Stock Equivalents will, as of the
               date of the issuance of such Common Stock Equivalents, be deemed
               to be outstanding and to have been issued and sold by the Company
               for such price per share and the maximum consideration payable to
               the Company upon such exercise (assuming full exercise,
               conversion or exchange of Common Stock Equivalents, if
               applicable) will be deemed to have been received by the Company.
               For the purposes of the preceding sentence, the "effective price
               per share for which Common Stock is issuable upon such exercise,
               conversion or exchange" is determined by dividing (i) the total
               amount, if any, received or receivable by the Company as
               consideration for the issuance or sale of all such Common Stock
               Equivalents, plus the minimum aggregate amount of additional
               consideration, if any, payable to the Company upon the exercise,
               conversion or exchange thereof at the time such Common Stock
               Equivalents first become exercisable, convertible or
               exchangeable, by (ii) the maximum total number of shares of
               Common Stock issuable upon the exercise, conversion or exchange
               of all such Common Stock Equivalents. No further adjustment to
               the Exercise Price will be made upon the actual issuance of such
               Common Stock upon exercise, conversion or exchange of such Common
               Stock Equivalents.

                         (C) Change in Option Price or Conversion Rate. If there
               is a change at any time in (i) the amount of additional
               consideration payable to the Company upon the exercise of any
               Options; (ii) the amount of additional consideration, if any,
               payable to the Company upon the exercise, conversion or exchange
               of any Common Stock Equivalents; or (iii) the rate at which any
               Common Stock Equivalents are convertible into or exchangeable for
               Common Stock (in each such case, other than under or by reason of
               provisions designed to protect against dilution), the Exercise
               Price in effect at the time of such change will be readjusted to
               the Exercise Price which would have been in effect at such time
               had such Options or Common Stock Equivalents still outstanding
               provided for such changed additional consideration or changed
               conversion rate, as the case may be, at the time initially
               granted, issued or sold.

                         (D) Calculation of Consideration Received. If any
               Common Stock, Options or Common Stock Equivalents are issued,
               granted or sold for cash, the consideration received therefor for
               purposes of this Warrant will be the amount received by the
               Company therefor, before deduction of reasonable commissions,
               underwriting discounts or allowances or other reasonable expenses
               paid or incurred by the Company in connection with such issuance,
               grant or sale. In case any Common Stock, Options or Common Stock
               Equivalents are issued or sold for a consideration part or all of
               which shall be other than cash, the amount of the consideration
               other than cash received by the Company will be the fair market
               value of such consideration, except where such consideration

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               consists of securities, in which case the amount of consideration
               received by the Company will be the fair market value (closing
               bid price, if traded on any market) thereof as of the date of
               receipt. In case any Common Stock, Options or Common Stock
               Equivalents are issued in connection with any merger or
               consolidation in which the Company is the surviving corporation,
               the amount of consideration therefor will be deemed to be the
               fair market value of such portion of the net assets and business
               of the non-surviving corporation as is attributable to such
               Common Stock, Options or Common Stock Equivalents, as the case
               may be.

                         (E) Exceptions to Adjustment of Exercise Price.
               Notwithstanding the foregoing, no adjustment will be made under
               this Section 11(b) in respect of (1) the granting of options to
               employees, officers or directors of the Company pursuant to any
               stock option plan duly adopted by a majority of the non-employee
               members of the Board of Directors of the Company or a majority of
               the members of a committee of non-employee directors established
               for such purpose, (2) upon the exercise of or conversion of any
               Common Stock Equivalents or Options issued and outstanding on the
               Original Issue Date, provided that the securities have not been
               amended since the date of the Purchase Agreement except as a
               result of the Purchase Agreement, (3) the exercise of any
               security issued by the Company in connection with the offer and
               sale of the Company's securities pursuant to the Purchase
               Agreement, or (4) acquisitions or strategic investments, the
               primary purpose of which is not to raise capital.

               (iii) Minimum Adjustment of Exercise Price. No adjustment of the
          Exercise Price shall be made in an amount of less than 1% of the
          Exercise Price in effect at the time such adjustment is otherwise
          required to be made, but any such lesser adjustment shall be carried
          forward and shall be made at the time and together with the next
          subsequent adjustment which, together with any adjustments so carried
          forward, shall amount to not less than 1% of such Exercise Price.

          12.  Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of its property, assets or business to
another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation ("Other Property"), are
to be received by or distributed to the holders of Common Stock of the Company,
then the Holder shall have the right thereafter to receive upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property

                                       10

<PAGE>

receivable upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a Holder of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
event. In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or acquiring corporation
(if other than the Company) shall expressly assume the due and punctual
observance and performance of each and every covenant and condition of this
Warrant to be performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined in good faith by resolution of the Board of Directors
of the Company) in order to provide for adjustments of Warrant Shares for which
this Warrant is exercisable which shall be as nearly equivalent as practicable
to the adjustments provided for in this Section 12. For purposes of this Section
12, "common stock of the successor or acquiring corporation" shall include stock
of such corporation of any class which is not preferred as to dividends or
assets over any other class of stock of such corporation and which is not
subject to redemption and shall also include any evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of this
Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

          13.  Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

          14.  Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.

          15.  Notice of Corporate Action. If at any time:

               (a) the Company shall take a record of the holders of its Common
     Stock for the purpose of entitling them to receive a dividend or other
     distribution, or any right to subscribe for or purchase any evidences of
     its indebtedness, any shares of stock of any class or any other securities
     or property, or to receive any other right, or

               (b) there shall be any capital reorganization of the Company, any
     reclassification or recapitalization of the capital stock of the Company or
     any consolidation or merger of the Company with, or any sale, transfer or
     other disposition of all or substantially all the property, assets or
     business of the Company to, another corporation or,

               (c) there shall be a voluntary or involuntary dissolution,
     liquidation or winding up of the Company;

                                       11

<PAGE>

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 20 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 20
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Holder appearing on the books of the Company and delivered in
accordance with Section 17(d).

          16.  Authorized Shares. The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed.

          Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

               Before taking any action which would result in an adjustment in
the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the

                                       12

<PAGE>

Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

          17.  Miscellaneous.

               (a) Jurisdiction. All questions concerning the construction,
     validity, enforcement and interpretation of this Warrant shall be
     determined in accordance with the provisions of the Purchase Agreement.

               (b) Restrictions. The Holder acknowledges that the Warrant Shares
     acquired upon the exercise of this Warrant, if not registered, will have
     restrictions upon resale imposed by state and federal securities laws.

               (c) Nonwaiver and Expenses. No course of dealing or any delay or
     failure to exercise any right hereunder on the part of Holder shall operate
     as a waiver of such right or otherwise prejudice Holder's rights, powers or
     remedies, notwithstanding all rights hereunder terminate on the Termination
     Date. If the Company willfully and knowingly fails to comply with any
     provision of this Warrant, which results in any material damages to the
     Holder, the Company shall pay to Holder such amounts as shall be sufficient
     to cover any costs and expenses including, but not limited to, reasonable
     attorneys' fees, including those of appellate proceedings, incurred by
     Holder in collecting any amounts due pursuant hereto or in otherwise
     enforcing any of its rights, powers or remedies hereunder.

               (d) Notices. Any notice, request or other document required or
     permitted to be given or delivered to the Holder by the Company shall be
     delivered in accordance with the notice provisions of the Purchase
     Agreement.

               (e) Limitation of Liability. No provision hereof, in the absence
     of any affirmative action by Holder to exercise this Warrant or purchase
     Warrant Shares, and no enumeration herein of the rights or privileges of
     Holder, shall give rise to any liability of Holder for the purchase price
     of any Common Stock or as a stockholder of the Company, whether such
     liability is asserted by the Company or by creditors of the Company.

               (f) Remedies. The Holder, in addition to being entitled to
     exercise all rights granted by law, including recovery of damages, will be
     entitled to specific performance of its rights under this Warrant. The
     Company agrees that monetary damages would not be adequate compensation for
     any loss incurred by reason of a breach by it of the provisions of this
     Warrant and hereby agrees to waive the defense in any action for specific
     performance that a remedy at law would be adequate.

               (g) Successors and Assigns. Subject to applicable securities
     laws, this Warrant and the rights and obligations evidenced hereby shall
     inure to the benefit of and be binding upon the successors of the Company
     and the successors and permitted assigns of Holder. The provisions of this
     Warrant are intended to be for the benefit of all Holders from time to time
     of this Warrant and shall be enforceable by any such Holder or holder of
     Warrant Shares.

                                       13

<PAGE>

               (h) Amendment. This Warrant may be modified or amended or the
     provisions hereof waived with the written consent of the Company and the
     Holder.

               (i) Severability. Wherever possible, each provision of this
     Warrant shall be interpreted in such manner as to be effective and valid
     under applicable law, but if any provision of this Warrant shall be
     prohibited by or invalid under applicable law, such provision shall be
     ineffective to the extent of such prohibition or invalidity, without
     invalidating the remainder of such provisions or the remaining provisions
     of this Warrant.

               (j) Headings. The headings used in this Warrant are for the
     convenience of reference only and shall not, for any purpose, be deemed a
     part of this Warrant.

                              ********************

                                       14

<PAGE>

          IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated: December ___, 2003

                                        NORTH AMERICAN TECHNOLOGIES GROUP, INC.

                                           By:  /s/ Henry W. Sullivan
                                               ---------------------------------
                                               Name:  Henry W. Sullivan
                                               Title: President and CEO

                                       15

<PAGE>

                               NOTICE OF EXERCISE

To:  North American Technologies Group, Inc.

          (1) The undersigned hereby elects to purchase ________ Warrant Shares
of North American Technologies Group, Inc. pursuant to the terms of the attached
Warrant (only if exercised in full), and tenders herewith payment of the
exercise price in full, together with all applicable transfer taxes, if any.

          (2) Payment shall take the form of (check applicable box):

                    [ ] in lawful money of the United States; or

                    [ ] the cancellation of such number of Warrant Shares as is
                    necessary, in accordance with the formula set forth in
                    subsection 3(d), to exercise this Warrant with respect to
                    the maximum number of Warrant Shares purchasable pursuant to
                    the cashless exercise procedure set forth in subsection
                    3(d).

          (3) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

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

The Warrant Shares shall be delivered to the following:

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

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

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

          (4) Accredited Investor. The undersigned is an "accredited investor"
as defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

                                        [PURCHASER]

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                                        Dated:
                                              ----------------------------------

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

          FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_____________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

                                        Dated:
                                               ____________,______

                 Holder's Signature:
                                     ---------------------------

                 Holder's Address:
                                     ---------------------------

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

Signature Guaranteed:
                      -----------------------------------------

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.<PAGE>

                                   EXHIBIT 4.3

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR
OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.

                     SERIES B COMMON STOCK PURCHASE WARRANT

                  To Purchase 416,667 Shares of Common Stock of

                     North American Technologies Group, Inc.

          THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") CERTIFIES that, for
value received, CD Investment Partners, Ltd. (the "Holder"), is entitled, upon
the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after December 31, 2003 (the "Initial
Exercise Date") and on or prior to the close of business on the five (5) year
anniversary of the Initial Exercise Date (the "Termination Date") but not
thereafter, to subscribe for and purchase from North American Technologies
Group, Inc., a corporation incorporated in the State of Delaware (the
"Company"), up to 416,667 shares (the "Warrant Shares") of common stock, par
value $0.001 per share, of the Company (the "Common Stock"). The purchase price
of one share of Common Stock (the "Exercise Price") under this Warrant shall be
$0.60 subject to adjustment hereunder. The Exercise Price and the number of
Warrant Shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the "Purchase Agreement"), dated December 31, 2003, by and between
the Company and the Holder.

          1.   Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

                                        1

<PAGE>

          2.   Authorization of Shares. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).

          3.   Exercise of Warrant.

               (a)  Exercise of the purchase rights represented by this Warrant
     may be made at any time or times on or after the Initial Exercise Date and
     on or before the Termination Date by delivery to the Company of a duly
     executed facsimile copy of the Notice of Exercise Form annexed hereto (or
     such other office or agency of the Company as it may designate by notice in
     writing to the registered Holder at the address of Holder appearing on the
     books of the Company); provided, however, within 5 Trading Days of the date
     said Notice of Exercise is delivered to the Company, the Holder shall have
     surrendered this Warrant to the Company and the Company shall have received
     payment of the aggregate Exercise Price of the shares thereby purchased by
     wire transfer or cashier's check drawn on a United States bank.
     Certificates for shares purchased hereunder shall be delivered to the
     Holder within the earlier of (i) 5 Trading Days after the date on which the
     Notice of Exercise shall have been delivered by facsimile copy or (ii) 3
     Trading Days from the delivery to the Company of the Notice of Exercise
     Form by facsimile copy, surrender of this Warrant and payment of the
     aggregate Exercise Price as set forth above ("Warrant Share Delivery
     Date"); provided, however, in the event the Warrant is not surrendered or
     the aggregate Exercise Price is not received by the Company within 5
     Trading Days after the date on which the Notice of Exercise shall be
     delivered by facsimile copy, the Warrant Share Delivery Date shall be
     extended to the extent such 5 Trading Day period is exceeded. This Warrant
     shall be deemed to have been exercised on the later of the date the Notice
     of Exercise is delivered to the Company by facsimile copy and the date the
     Exercise Price is received by the Company. The Warrant Shares shall be
     deemed to have been issued, and Holder or any other person so designated to
     be named therein shall be deemed to have become a holder of record of such
     shares for all purposes, as of the date the exercise is deemed to have
     occurred in accordance with the foregoing. If the Company fails to deliver
     to the Holder a certificate or certificates representing the Warrant Shares
     pursuant to this Section 3(a) by the third Trading Day following the
     Warrant Share Delivery Date, then the Holder will have the right to rescind
     such exercise. In addition to any other rights available to the Holder, if
     the Company fails to deliver to the Holder a certificate or certificates
     representing the Warrant Shares pursuant to an exercise by the third
     Trading Day after the Warrant Share Delivery Date, and if after such day
     the Holder is required by its broker to purchase (in an open market
     transaction or otherwise) shares of Common Stock to deliver in satisfaction
     of a sale by the Holder of the Warrant Shares which the Holder anticipated
     receiving upon such exercise (a "Buy-In"), then the Company shall (1) pay
     in cash to the Holder the amount by which (x) the Holder's total purchase
     price (including brokerage commissions, if any) for the shares of Common
     Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
     number of Warrant Shares that the Company was required to deliver to the
     Holder in connection with the exercise at issue times (B) the

                                        2

<PAGE>

     price at which the sell order giving rise to such purchase obligation was
     executed, and (2) at the option of the Holder, either reinstate the portion
     of the Warrant and equivalent number of Warrant Shares for which such
     exercise was not honored or deliver to the Holder the number of shares of
     Common Stock that would have been issued had the Company timely complied
     with its exercise and delivery obligations hereunder. For example, if the
     Holder purchases Common Stock having a total purchase price of $11,000 to
     cover a Buy-In with respect to an attempted exercise of shares of Common
     Stock with an aggregate sale price giving rise to such purchase obligation
     of $10,000, under clause (1) of the immediately preceding sentence the
     Company shall be required to pay the Holder $1,000. The Holder shall
     provide the Company written notice indicating the amounts payable to the
     Holder in respect of the Buy-In, together with applicable confirmations and
     other evidence reasonably requested by the Company. Nothing herein shall
     limit Holder's right to pursue any other remedies available to it
     hereunder, at law or in equity including, without limitation, a decree of
     specific performance and/or injunctive relief with respect to the Company's
     failure to timely deliver certificates representing shares of Common Stock
     upon exercise of the Warrant as required pursuant to the terms hereof.

               (b)  If this Warrant shall have been exercised in part, the
     Company shall, at the time of delivery of the certificate or certificates
     representing Warrant Shares, deliver to the Holder a new Warrant evidencing
     the rights of the Holder to purchase the unpurchased Warrant Shares called
     for by this Warrant, which new Warrant shall in all other respects be
     identical with this Warrant.

               (c)  The Company shall not effect any exercise of this Warrant,
     and the Holder shall not have the right to exercise any portion of this
     Warrant, pursuant to Section 3(a) or otherwise, to the extent that after
     giving effect to such issuance after exercise, the Holder (together with
     the Holder's affiliates and any other person or entity acting as a group
     together with Holder or any of Holder's affiliates) would beneficially own
     in excess of 4.99% (the "Applicable Percentage") of the number of shares of
     the Common Stock outstanding immediately after giving effect to such
     issuance. For purposes of the foregoing sentence, the number of shares of
     Common Stock beneficially owned by the Holder and its affiliates shall
     include the number of shares of Common Stock issuable upon exercise of this
     Warrant with respect to which the determination of such sentence is being
     made, but shall exclude the number of shares of Common Stock which would be
     issuable upon (A) exercise of the remaining, nonexercised portion of this
     Warrant beneficially owned by the Holder or any of its affiliates and (B)
     exercise or conversion of the unexercised or nonconverted portion of any
     other securities of the Company (including, without limitation, any other
     Warrants) subject to a limitation on conversion or exercise analogous to
     the limitation contained herein beneficially owned by the Holder or any of
     its affiliates. Except as set forth in the preceding sentence, for purposes
     of this Section 3(c), beneficial ownership shall be calculated in
     accordance with Section 13(d) of the Exchange Act and the rules and
     regulations promulgated thereunder. In addition, a determination as to any
     group status as contemplated above shall also be determined in accordance
     with Section 13(d) of the Exchange Act and the rules and regulations
     promulgated thereunder. For purposes of this Section 3(c), in determining
     the number of outstanding shares of Common Stock, the Holder may rely on
     the number of

                                        3

<PAGE>

     outstanding shares of Common Stock as reflected in (x) the Company's most
     recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public
     announcement by the Company or (z) any other notice by the Company or the
     Company's Transfer Agent setting forth the number of shares of Common Stock
     outstanding. Upon the written or oral request of the Holder, the Company
     shall within two Trading Days confirm orally and in writing to the Holder
     the number of shares of Common Stock then outstanding. In any case, the
     number of outstanding shares of Common Stock shall be determined after
     giving effect to the conversion or exercise of securities of the Company,
     including this Warrant, by the Holder or its affiliates since the date as
     of which such number of outstanding shares of Common Stock was reported.
     The provisions of this paragraph shall be implemented in a manner otherwise
     than in strict conformity with the terms this Section 3(c) to correct this
     paragraph (or any portion hereof) which may be defective or inconsistent
     with the intended Applicable Percentage beneficial ownership limitation
     herein contained or to make changes or supplements necessary or desirable
     to properly give effect to such Applicable Percentage limitation. The
     limitations contained in this paragraph shall apply to a successor holder
     of this Warrant. The holders of Common Stock of the Company shall be third
     party beneficiaries of this Section 3(c) and the Company may not waive this
     Section 3(c) without the consent of holders of a majority of its Common
     Stock.

               (d)  If at any time after one (1) year from the date of issuance
     of this Warrant there is no effective Registration Statement registering
     the resale of the Warrant Shares by the Holder, this Warrant may also be
     exercised at such time by means of a "cashless exercise" in which the
     Holder shall be entitled to receive a certificate for the number of Warrant
     Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
     where:

          (A) = the Closing Price on the Trading Day immediately preceding the
                date of such election;

          (B) = the Exercise Price of this Warrant, as adjusted; and

          (X) = the number of Warrant Shares issuable upon exercise of this
                Warrant in accordance with the terms of this Warrant by means of
                a cash exercise rather than a cashless exercise.

          4.   No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price.

          5.   Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event

                                        4

<PAGE>

certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

          6.   Closing of Books. The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

          7.   Transfer, Division and Combination.

               (a)  Subject to compliance with any applicable securities laws
     and the conditions set forth in Sections 1 and 7(e) hereof and to the
     provisions of Section 4.1 of the Purchase Agreement, this Warrant and all
     rights hereunder are transferable, in whole or in part, upon surrender of
     this Warrant at the principal office of the Company, together with a
     written assignment of this Warrant substantially in the form attached
     hereto duly executed by the Holder or its agent or attorney and funds
     sufficient to pay any transfer taxes payable upon the making of such
     transfer. Upon such surrender and, if required, such payment, the Company
     shall execute and deliver a new Warrant or Warrants in the name of the
     assignee or assignees and in the denomination or denominations specified in
     such instrument of assignment, and shall issue to the assignor a new
     Warrant evidencing the portion of this Warrant not so assigned, and this
     Warrant shall promptly be cancelled. A Warrant, if properly assigned, may
     be exercised by a new holder for the purchase of Warrant Shares without
     having a new Warrant issued.

               (b)  This Warrant may be divided or combined with other Warrants
     upon presentation hereof at the aforesaid office of the Company, together
     with a written notice specifying the names and denominations in which new
     Warrants are to be issued, signed by the Holder or its agent or attorney.
     Subject to compliance with Section 7(a), as to any transfer which may be
     involved in such division or combination, the Company shall execute and
     deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
     to be divided or combined in accordance with such notice.

               (c)  The Company shall prepare, issue and deliver at its own
     expense (other than transfer taxes) the new Warrant or Warrants under this
     Section 7.

               (d)  The Company agrees to maintain, at its aforesaid office,
     books for the registration and the registration of transfer of the
     Warrants.

               (e)  If, at the time of the surrender of this Warrant in
     connection with any transfer of this Warrant, the transfer of this Warrant
     shall not be registered pursuant to an effective registration statement
     under the Securities Act and under applicable state securities or blue sky
     laws, the Company may require, as a condition of allowing such transfer (i)
     that the Holder or transferee of this Warrant, as the case may be, furnish
     to the Company a written opinion of counsel (which opinion shall be in
     form, substance and scope customary for opinions of counsel in comparable
     transactions and reasonably acceptable to the Company) to the effect that
     such transfer may be made without

                                        5

<PAGE>

     registration under the Securities Act and under applicable state securities
     or blue sky laws, (ii) that the holder or transferee execute and deliver to
     the Company an investment letter in form and substance acceptable to the
     Company and (iii) that the transferee be an "accredited investor" as
     defined in Rule 501(a) promulgated under the Securities Act.

          8.   No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price (or by means of a cashless exercise),
the Warrant Shares so purchased shall be and be deemed to be issued to the
Holder as the record owner of such shares as of the close of business on the
later of the date of such surrender or payment.

          9.   Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

          10.  Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.

          11.  Adjustments of Exercise Price and Number of Warrant Shares.

               (a)  Stock Splits, etc. The number and kind of securities
     purchasable upon the exercise of this Warrant and the Exercise Price shall
     be subject to adjustment from time to time upon the happening of any of the
     following. In case the Company shall (i) pay a dividend in shares of Common
     Stock or make a distribution in shares of Common Stock to holders of its
     outstanding Common Stock, (ii) subdivide its outstanding shares of Common
     Stock into a greater number of shares, (iii) combine its outstanding shares
     of Common Stock into a smaller number of shares of Common Stock, or (iv)
     issue any shares of its capital stock in a reclassification of the Common
     Stock, then the number of Warrant Shares purchasable upon exercise of this
     Warrant immediately prior thereto shall be adjusted so that the Holder
     shall be entitled to receive the kind and number of Warrant Shares or other
     securities of the Company which it would have owned or have been entitled
     to receive had such Warrant been exercised in advance thereof. Upon each
     such adjustment of the kind and number of Warrant Shares or other
     securities of the Company which are purchasable hereunder, the Holder shall
     thereafter be entitled to purchase the number of Warrant Shares or other
     securities resulting from such adjustment at an Exercise Price per Warrant
     Share or other security obtained by multiplying the Exercise Price in
     effect immediately prior to such adjustment by the number of Warrant Shares
     purchasable pursuant hereto immediately prior to such adjustment and
     dividing by the number of Warrant Shares or other securities of the Company
     resulting from such adjustment. An

                                       6

<PAGE>

     adjustment made pursuant to this paragraph shall become effective
     immediately after the effective date of such event retroactive to the
     record date, if any, for such event.

          (b)  Anti-Dilution Provisions. During the Exercise Period, the
     Exercise Price shall be subject to adjustment from time to time as provided
     in this Section 11(b). In the event that any adjustment of the Exercise
     Price as required herein results in a fraction of a cent, such Exercise
     Price shall be rounded up or down to the nearest cent.

               (i)   Adjustment of Exercise Price. If and whenever the Company
          issues or sells, or in accordance with Section 11(b)(ii) hereof is
          deemed to have issued or sold, any shares of Common Stock for a
          consideration per share of less than the then Exercise Price or for no
          consideration (such lower price, the "Base Share Price" and such
          issuances collectively, a "Dilutive Issuance"), then, the Exercise
          Price shall be reduced to equal the Base Share Price. Such adjustment
          shall be made whenever shares of Common Stock or Common Stock
          Equivalents are issued.

               (ii)  Effect on Exercise Price of Certain Events. For purposes of
          determining the adjusted Exercise Price under Section 11(b) hereof,
          the following will be applicable:

                         (A) Issuance of Rights or Options. If the Company in
               any manner issues or grants any warrants, rights or options,
               whether or not immediately exercisable, to subscribe for or to
               purchase Common Stock or Common Stock Equivalents (such warrants,
               rights and options to purchase Common Stock or Common Stock
               Equivalents are hereinafter referred to as "Options") and the
               effective price per share for which Common Stock is issuable upon
               the exercise of such Options is less than the Exercise Price
               ("Below Base Price Options"), then the maximum total number of
               shares of Common Stock issuable upon the exercise of all such
               Below Base Price Options (assuming full exercise, conversion or
               exchange of Common Stock Equivalents, if applicable) will, as of
               the date of the issuance or grant of such Below Base Price
               Options, be deemed to be outstanding and to have been issued and
               sold by the Company for such price per share and the maximum
               consideration payable to the Company upon such exercise (assuming
               full exercise, conversion or exchange of Common Stock
               Equivalents, if applicable) will be deemed to have been received
               by the Company. For purposes of the preceding sentence, the
               "effective price per share for which Common Stock is issuable
               upon the exercise of such Below Base Price Options" is determined
               by dividing (i) the total amount, if any, received or receivable
               by the Company as consideration for the issuance or granting of
               all such Below Base Price Options, plus the minimum aggregate
               amount of additional consideration, if any, payable to the
               Company upon the exercise of all such Below Base Price Options,
               plus, in the case of Common Stock Equivalents issuable upon the
               exercise of such Below Base Price Options, the minimum aggregate
               amount of additional consideration payable upon the exercise,

                                        7

<PAGE>

               conversion or exchange thereof at the time such Common Stock
               Equivalents first become exercisable, convertible or
               exchangeable, by (ii) the maximum total number of shares of
               Common Stock issuable upon the exercise of all such Below Base
               Price Options (assuming full conversion of Common Stock
               Equivalents, if applicable). No further adjustment to the
               Exercise Price will be made upon the actual issuance of such
               Common Stock upon the exercise of such Below Base Price Options
               or upon the exercise, conversion or exchange of Common Stock
               Equivalents issuable upon exercise of such Below Base Price
               Options.

                         (B) Issuance of Common Stock Equivalents. If the
               Company in any manner issues or sells any Common Stock
               Equivalents, whether or not immediately convertible (other than
               where the same are issuable upon the exercise of Options) and the
               effective price per share for which Common Stock is issuable upon
               such exercise, conversion or exchange is less than the Exercise
               Price, then the maximum total number of shares of Common Stock
               issuable upon the exercise, conversion or exchange of all such
               Common Stock Equivalents will, as of the date of the issuance of
               such Common Stock Equivalents, be deemed to be outstanding and to
               have been issued and sold by the Company for such price per share
               and the maximum consideration payable to the Company upon such
               exercise (assuming full exercise, conversion or exchange of
               Common Stock Equivalents, if applicable) will be deemed to have
               been received by the Company. For the purposes of the preceding
               sentence, the "effective price per share for which Common Stock
               is issuable upon such exercise, conversion or exchange" is
               determined by dividing (i) the total amount, if any, received or
               receivable by the Company as consideration for the issuance or
               sale of all such Common Stock Equivalents, plus the minimum
               aggregate amount of additional consideration, if any, payable to
               the Company upon the exercise, conversion or exchange thereof at
               the time such Common Stock Equivalents first become exercisable,
               convertible or exchangeable, by (ii) the maximum total number of
               shares of Common Stock issuable upon the exercise, conversion or
               exchange of all such Common Stock Equivalents. No further
               adjustment to the Exercise Price will be made upon the actual
               issuance of such Common Stock upon exercise, conversion or
               exchange of such Common Stock Equivalents.

                         (C) Change in Option Price or Conversion Rate. If there
               is a change at any time in (i) the amount of additional
               consideration payable to the Company upon the exercise of any
               Options; (ii) the amount of additional consideration, if any,
               payable to the Company upon the exercise, conversion or exchange
               of any Common Stock Equivalents; or (iii) the rate at which any
               Common Stock Equivalents are convertible into or exchangeable for
               Common Stock (in each such case, other than under or by reason of
               provisions designed to protect against dilution), the Exercise
               Price in effect at the time of such change will be readjusted to
               the

                                       8

<PAGE>

               Exercise Price which would have been in effect at such time had
               such Options or Common Stock Equivalents still outstanding
               provided for such changed additional consideration or changed
               conversion rate, as the case may be, at the time initially
               granted, issued or sold.

                         (D) Calculation of Consideration Received. If any
               Common Stock, Options or Common Stock Equivalents are issued,
               granted or sold for cash, the consideration received therefor for
               purposes of this Warrant will be the amount received by the
               Company therefor, before deduction of reasonable commissions,
               underwriting discounts or allowances or other reasonable expenses
               paid or incurred by the Company in connection with such issuance,
               grant or sale. In case any Common Stock, Options or Common Stock
               Equivalents are issued or sold for a consideration part or all of
               which shall be other than cash, the amount of the consideration
               other than cash received by the Company will be the fair market
               value of such consideration, except where such consideration
               consists of securities, in which case the amount of consideration
               received by the Company will be the fair market value (closing
               bid price, if traded on any market) thereof as of the date of
               receipt. In case any Common Stock, Options or Common Stock
               Equivalents are issued in connection with any merger or
               consolidation in which the Company is the surviving corporation,
               the amount of consideration therefor will be deemed to be the
               fair market value of such portion of the net assets and business
               of the non-surviving corporation as is attributable to such
               Common Stock, Options or Common Stock Equivalents, as the case
               may be.

                         (E) Exceptions to Adjustment of Exercise Price.
               Notwithstanding the foregoing, no adjustment will be made under
               this Section 11(b) in respect of (1) the granting of options to
               employees, officers or directors of the Company pursuant to any
               stock option plan duly adopted by a majority of the non-employee
               members of the Board of Directors of the Company or a majority of
               the members of a committee of non-employee directors established
               for such purpose, (2) upon the exercise of or conversion of any
               Common Stock Equivalents or Options issued and outstanding on the
               Original Issue Date, provided that the securities have not been
               amended since the date of the Purchase Agreement except as a
               result of the Purchase Agreement, (3) the exercise of any
               security issued by the Company in connection with the offer and
               sale of the Company's securities pursuant to the Purchase
               Agreement or (4) acquisitions or strategic investments, the
               primary purpose of which is not to raise capital.

               (iii) Minimum Adjustment of Exercise Price. No adjustment of the
          Exercise Price shall be made in an amount of less than 1% of the
          Exercise Price in effect at the time such adjustment is otherwise
          required to be made, but any such lesser adjustment shall be carried
          forward and shall be made at the time and together with the next
          subsequent adjustment which, together with any

                                       9

<PAGE>

          adjustments so carried forward, shall amount to not less than 1% of
          such Exercise Price.

          12.  Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of its property, assets or business to
another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation ("Other Property"), are
to be received by or distributed to the holders of Common Stock of the Company,
then the Holder shall have the right thereafter to receive upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by the Holder
of the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

          13.  [Intentionally Omitted]

          14.  Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.

          15.  Notice of Corporate Action. If at any time:

                                       10

<PAGE>

               (a)  the Company shall take a record of the holders of its Common
     Stock for the purpose of entitling them to receive a dividend or other
     distribution, or any right to subscribe for or purchase any evidences of
     its indebtedness, any shares of stock of any class or any other securities
     or property, or to receive any other right, or

               (b)  there shall be any capital reorganization of the Company,
     any reclassification or recapitalization of the capital stock of the
     Company or any consolidation or merger of the Company with, or any sale,
     transfer or other disposition of all or substantially all the property,
     assets or business of the Company to, another corporation or,

               (c)  there shall be a voluntary or involuntary dissolution,
     liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to the Holder (i)
at least 20 days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 20
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to the Holder at
the last address of the Holder appearing on the books of the Company and
delivered in accordance with Section 17(d).

          16.  Authorized Shares. The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed.

          Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of

                                       11

<PAGE>

any of the terms of this Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such actions as may
be necessary or appropriate to protect the rights of the Holder as set forth in
this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any Warrant Shares
above the amount payable therefor upon such exercise immediately prior to such
increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

               Before taking any action which would result in an adjustment in
the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

          17.  Miscellaneous.

               (a)  Jurisdiction. All questions concerning the construction,
     validity, enforcement and interpretation of this Warrant shall be
     determined in accordance with the provisions of the Purchase Agreement.

               (b)  Restrictions. The Holder acknowledges that the Warrant
     Shares acquired upon the exercise of this Warrant, if not registered, will
     have restrictions upon resale imposed by state and federal securities laws.

               (c)  Nonwaiver and Expenses. No course of dealing or any delay or
     failure to exercise any right hereunder on the part of the Holder shall
     operate as a waiver of such right or otherwise prejudice Holder's rights,
     powers or remedies, notwithstanding all rights hereunder terminate on the
     Termination Date. If the Company willfully and knowingly fails to comply
     with any provision of this Warrant, which results in any material damages
     to the Holder, the Company shall pay to the Holder such amounts as shall be
     sufficient to cover any costs and expenses including, but not limited to,
     reasonable attorneys' fees, including those of appellate proceedings,
     incurred by the Holder in collecting any amounts due pursuant hereto or in
     otherwise enforcing any of its rights, powers or remedies hereunder.

               (d)  Notices. Any notice, request or other document required or
     permitted to be given or delivered to the Holder by the Company shall be
     delivered in accordance with the notice provisions of the Purchase
     Agreement.

               (e)  Limitation of Liability. No provision hereof, in the absence
     of any affirmative action by the Holder to exercise this Warrant or
     purchase Warrant Shares, and no enumeration herein of the rights or
     privileges of the Holder, shall give rise to any liability of the Holder
     for the purchase price of any Common Stock or as a stockholder of

                                       12

<PAGE>

     the Company, whether such liability is asserted by the Company or by
     creditors of the Company.

               (f)  Remedies. The Holder, in addition to being entitled to
     exercise all rights granted by law, including recovery of damages, will be
     entitled to specific performance of its rights under this Warrant. The
     Company agrees that monetary damages would not be adequate compensation for
     any loss incurred by reason of a breach by it of the provisions of this
     Warrant and hereby agrees to waive the defense in any action for specific
     performance that a remedy at law would be adequate.

               (g)  Successors and Assigns. Subject to applicable securities
     laws, this Warrant and the rights and obligations evidenced hereby shall
     inure to the benefit of and be binding upon the successors of the Company
     and the successors and permitted assigns of the Holder. The provisions of
     this Warrant are intended to be for the benefit of all Holders from time to
     time of this Warrant and shall be enforceable by the Holder or holder of
     Warrant Shares.

               (h)  Amendment. This Warrant may be modified or amended or the
     provisions hereof waived with the written consent of the Company and the
     Holder.

               (i)  Severability. Wherever possible, each provision of this
     Warrant shall be interpreted in such manner as to be effective and valid
     under applicable law, but if any provision of this Warrant shall be
     prohibited by or invalid under applicable law, such provision shall be
     ineffective to the extent of such prohibition or invalidity, without
     invalidating the remainder of such provisions or the remaining provisions
     of this Warrant.

               (j)  Headings. The headings used in this Warrant are for the
     convenience of reference only and shall not, for any purpose, be deemed a
     part of this Warrant.

                              ********************

                                       13

<PAGE>

          IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated:  December 31, 2003

                                        NORTH AMERICAN TECHNOLOGIES GROUP, INC.

                                        By: /s/ Henry W. Sullivan
                                            Name: Henry W. Sullivan
                                            Title: Chief Executive Officer

                                       14

<PAGE>

                               NOTICE OF EXERCISE

To:  North American Technologies Group, Inc.

          (1)  The undersigned hereby elects to purchase ________ Warrant Shares
of North American Technologies Group, Inc. pursuant to the terms of the attached
Warrant (only if exercised in full), and tenders herewith payment of the
exercise price in full, together with all applicable transfer taxes, if any.

          (2)  Payment shall take the form of (check applicable box):

                    [ ] in lawful money of the United States; or

                    [ ] the cancellation of such number of Warrant Shares as is
                    necessary, in accordance with the formula set forth in
                    subsection 3(d), to exercise this Warrant with respect to
                    the maximum number of Warrant Shares purchasable pursuant to
                    the cashless exercise procedure set forth in subsection
                    3(d).

          (3)  Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

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

The Warrant Shares shall be delivered to the following:

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

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

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

          (4)  Accredited Investor. The undersigned is an "accredited investor"
as defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

                                        [PURCHASER]

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                                        Dated:
                                               -----------------------------

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

          FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

_________________________________________________________________.

_________________________________________________________________

                                             Dated:____________,______

                 Holder's Signature:
                                     ----------------------------
                 Holder's Address:
                                     ----------------------------

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

Signature Guaranteed:
                     --------------------------------------

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

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