Document:

Exhibit 10.2

                                December 18, 2003

United Natural Foods, Inc.
260 Lake Road
Dayville, CT 06241

Stow Mills, Inc.
70 Stow Drive
Chesterfield, NH  03443

United Natural Foods Pennsylvania, Inc.
70 Stow Drive
Chesterfield, NH  03443

Albert's Organics, Inc.
3268 East Vernon Avenue
Vernon, CA  90058

Attention: Rick Puckett, Chief Financial Officer

      RE: Second Amendment to Term Loan Agreement

Dear Rick:

      Reference is made to that certain Term Loan Agreement dated as of April
28, 2003 as amended by the Amendment to Term Loan Agreement dated August 26,
2003 (the "Loan Agreement") among United Natural Foods, Inc. ("UNFI"), Stow
Mills, Inc. ("SMI"), United Natural Foods Pennsylvania, Inc. ("UNFPA") and
Albert's Organics, Inc. ("Albert's" and together with UNFI, SMI and UNFPA, the
"Borrowers") and Fleet Capital Corporation (the "Lender"). Capitalized terms not
defined herein shall have the meanings ascribed thereto in the Loan Agreement.
This Second Amendment to Term Loan Agreement shall be referred to as the "Second
Amendment".

      The Borrowers have requested that the Lender agree to increase the
principal amount of the Term Loan made pursuant to the Loan Agreement to
$38,833,331.33 and the Lender has agreed to such increase, subject to the terms
and conditions of this Second Amendment to Term Loan Agreement ("Second
Amendment").

      1. Amendments to the Loan Agreement. Subject to the terms and conditions
of this Second Amendment, Borrowers and Lender agree that the Loan Agreement
shall be amended as follows:

            a. The First Recital of the Loan Agreement is deleted and replaced
with the following:

                                      -55-
<PAGE>

            "WHEREAS, the Borrowers have requested that the Lender extend credit
            to the Borrowers in the principal amount of THIRTY-EIGHT MILLION
            EIGHT HUNDRED THIRTY THREE THOUSAND THREE HUNDRED THIRTY-ONE DOLLARS
            AND THIRTY THREE CENTS ($38,833,331.33); and"

            b. Section 1.1.1 of the Loan Agreement is hereby deleted and
replaced with the following:

            "1.1.1 Term Loan. The Lender agrees to make a Term Loan to Borrowers
            on the Second Amendment Closing Date in the principal amount of
            $38,833,331.33, which shall be repayable in accordance with the term
            of the Term Note and shall be secured by all the Collateral."

            c. Appendix A to the Loan Agreement is amended to add the following
defined terms following the definition of "Restricted Investment":

            "Second Amendment - the Second Amendment to Term Loan Agreement
            dated as of December 12, 2003."

            "Second Amendment Closing Date - the date on which all the
            conditions precedent in Section 4 of the First Amendment are
            satisfied and the Term Loan made under the Agreement."

            d. Appendix A to the Loan Agreement is amended to delete the defined
term "Term Note" and the definition thereof and to substitute the following in
place thereof:

            "Term Note - the Amended and Restated Term Promissory Note executed
            by Borrower on the Second Amendment Closing Date in favor of Lender
            to evidence the Term Loan, which shall be in the form of Exhibit A
            to the Second Amendment."

            e. Appendix A to the Loan Agreement is amended to delete the defined
term "Total Credit Facility" and the definition thereof and to substitute the
following in place thereof:

            "Total Credit Facility - $38,833,331.33"

      2. Amendment Commitment Fee. The Borrowers agree to pay to Lender an
amendment commitment fee of $50,000, which fee shall be nonrefundable and due
and payable on the Second Amendment Closing Date.

      3. Representations and Warranties. The Borrowers hereby represent and
warrant as follows:

            a. Power, Authority, Etc. The Borrowers have the power and authority
for the making and performing of this Second Amendment to Loan Agreement. This
Second Amendment to Loan Agreement has been duly executed and delivered by or on
behalf of the Borrowers pursuant to authority legally adequate therefor, and
this Second Amendment to Loan Agreement is in full force and effect and is a
legal, valid and binding obligation of the Borrowers

                                      -56-
<PAGE>

enforceable in accordance with its terms subject to applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws and equitable principles
affecting the enforcement of creditors' rights generally.

            b. Incorporation of Representations and Warranties. The
representations and warranties of the Borrowers contained in the Loan Agreement,
except for any changes resulting only from the passage of time and which do not
otherwise constitute a Default or Event of Default hereunder, are true and
correct on and as of the date hereof as though made on and as of the date hereof
and such representations and warranties are hereto incorporated in this Second
Amendment to Loan Agreement as though fully set forth herein.

      4. Conditions Precedent. Notwithstanding any of the provisions of the Loan
Agreement or any of the other Loan Documents, and without affecting in any
manner the rights of Lender under any other sections of the Loan Agreement or
this Second Amendment, Lender shall not be required to make the Term Loan under
this Second Amendment unless and until each of the following conditions has been
and continues to be satisfied (the date when such conditions are satisfied shall
be the "Second Amendment Closing Date").

            a. Documentation. Lender shall have received, in form and substance
satisfactory to Lender, a duly executed copy of this Second Amendment, the
Amended and Restated Term Promissory Note in substantially the form of Exhibit A
hereto, the amendments to Mortgages, the amendments of collateral assignments
and such additional documents, instructions and certificates as Lender shall
require in connection therewith, all in form and substance satisfactory to
Lender and its counsel.

            b. No Default. No Default or Event of Default shall exist.

            c. Corporate Documents. All requisite corporate action and
proceedings of the Borrowers in connection with this Second Amendment and all
documentation and certificates required by Lender and/or its counsel in
connection therewith shall be satisfactory in form and substance to Lender and
its counsel;

            d. Opinions of Counsel. The receipt by Lender of an opinion, dated
the Second Amendment Closing Date, of (i) Cameron & Mittleman LLP, counsel to
Borrowers and Guarantors covering such matters as the Lender may reasonably
request, and (ii) local counsel of Borrowers in the jurisdictions where the Real
Property is located, covering such matters as the Lender may reasonably request;

            e. Payment of Fees. The payment by Borrowers of such fees as
Borrowers have agreed to pay or deliver to Lender including, without limitation
the amendment commitment fee, the reasonable fees and expenses of Brown Rudnick
Berlack Israels LLP and of other counsel to Lender and all fees and expenses of
title insurance companies;

            f. Title Insurance. Borrowers shall have obtained and delivered to
Lender endorsements to the title insurance policies previously delivered to
Lender, insuring the Mortgages as increased by the Term Loan provided for herein
and as may be requested by Lender for any changes or modifications in the Real
Property, all in form and substance satisfactory to Lender;

                                      -57-
<PAGE>

            g. Participant Consent. Lender shall have received the written
consent of its participant in the increase to the Term Loan pursuant to this
Second Amendment and to the participant's participation therein in form and
substance satisfactory to Lender;

            h. Eighth Amendment. The Required Lenders (as defined in the Working
Capital Facility) shall have consented to the increase in the Term Loan to
$38,833,331.33; and

            i. Other Documents. Such other agreements, instruments, and
documents as Lender may reasonably require in connection with this Second
Amendment.

      5. Miscellaneous.

            a. Counterparts. This Second Amendment to Loan Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one agreement, and any of the parties hereto may execute this Second
Amendment to Loan Agreement by signing any such counterpart.

            b. Force and Effect. The Loan Agreement and each other Loan
Document, as amended by this Second Amendment, are hereby ratified, confirmed
and approved, and shall continue in full force or effect.

            c. Loan Document. This Second Amendment to Loan Agreement and all
other documents executed in connection herewith are "Loan Documents" as such
term is defined in the Loan Agreement. This Second Amendment shall be governed
by the laws of the State of Connecticut. This Second Amendment to Loan Agreement
and the other documents executed and delivered in connection herewith set forth
the entire agreement of the parties with respect to the subject matter thereof
and supersede any prior agreement and contemporaneous oral agreements of the
parties concerning their subject matter.

                  [remainder of page intentionally left blank]

                                      -58-
<PAGE>

                            Signature Page to Second Amendment to Loan Agreement

      IN WITNESS WHEREOF, the parties have executed this Second Amendment to
Loan Agreement as of the date first above written.

BORROWERS:                             UNITED NATURAL FOODS, INC.

                                       By: /s/ Rick D. Puckett
                                           -------------------------
                                           Name:  Rick D. Puckett
                                           Title: Vice President and Treasurer

                                       STOW MILLS, INC.

                                       By: /s/ Rick D. Puckett
                                           -------------------------
                                           Name:  Rick D. Puckett
                                           Title: Vice President and Treasurer

                                       UNITED NATURAL FOODS
                                       PENNSYLVANIA, INC.

                                       By: /s/ Rick D. Puckett
                                           -------------------------
                                           Name:  Rick D. Puckett
                                           Title: Vice President and Treasurer

                                       ALBERT'S ORGANICS, INC.

                                       By: /s/ Rick D. Puckett
                                           -------------------------
                                           Name:  Rick D. Puckett
                                           Title: Vice President and Treasurer

LENDER:                                FLEET CAPITAL CORPORATION

                                       By: /s/ Kim B. Bushey
                                           -----------------------
                                           Name:  Kim B. Bushey
                                           Title: Senior Vice President

                                      -59-
<PAGE>

                       RATIFICATION OF GUARANTY AGREEMENT

      The undersigned Guarantors acknowledge receipt of the foregoing Second
Amendment to Term Loan Agreement ("Second Amendment") and hereby (a) accept and
agree to the terms and provisions of the Second Amendment including, without
limitation, to the increase in the Term Loan to $38,833,331.33 and (b) ratify,
confirm, and approve all of the terms and conditions of each of the Guaranty
Agreements.

      IN WITNESS WHEREOF, the parties have executed the Ratification of Guaranty
Agreement on this 18th day of December, 2003.

                                       NATURAL RETAIL GROUP, INC.

                                       By: /s/ Rick D. Puckett
                                           -------------------------
                                           Name:  Rick D. Puckett
                                           Title: Vice President and Treasurer

                                       UNITED NATURAL TRADING CO.

                                       By: /s/ Rick D. Puckett
                                           -------------------------
                                           Name:  Rick D. Puckett
                                           Title: Vice President and Treasurer

                                       MOUNTAIN PEOPLE'S WAREHOUSE
                                       INCORPORATED

                                       By: /s/ Rick D. Puckett
                                           -------------------------
                                           Name:  Rick D. Puckett
                                           Title: Vice President and Treasurer

                                       NUTRASOURCE, INC.

                                       By: /s/ Rick D. Puckett
                                           -------------------------
                                           Name:  Rick D. Puckett
                                           Title: Vice President and Treasurer

                                       RAINBOW NATURAL FOODS, INC.

                                       By: /s/ Rick D. Puckett
                                           -------------------------
                                           Name:  Rick D. Puckett
                                           Title: Vice President and Treasurer

                                       UNITED NORTHEAST, LLC

                                       By: /s/ Rick D. Puckett
                                           -------------------------
                                           Name:  Rick D. Puckett
                                           Title: Vice President and Treasurer

                                      -60-<PAGE>

                                   EXHIBIT 4.1

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 A COMMON STOCK PURCHASE WARRANT

                 To Purchase 4,166,667 Shares of Common Stock of

                     North American Technologies Group, Inc.

          THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") CERTIFIES that, for
value received, Crestview Capital Master LLC (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 6 month
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 4,166,667 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, among the Company
and the purchasers signatory thereto.

                                        1

<PAGE>

          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.

                                        2

<PAGE>

     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

                                        3

<PAGE>

     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

                                        4

<PAGE>

     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 five months from the Initial Exercise
     Date 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

                                        5

<PAGE>

     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 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

                                        6

<PAGE>

(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: Stock
Splits. 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.

          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 a Holder of
the number of shares of Common Stock for which this

                                        7

<PAGE>

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;

                                        8

<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

                                        9

<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.

                                       10

<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.

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

                                       11

<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

                                       12

<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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