Document:

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                                                                   EXHIBIT 10.41

                          ROYALTY SETTLEMENT AGREEMENT

     This Royalty Settlement Agreement, dated as of June 8, 2000, is made and
entered into by and among TIETEK, INC., a Texas corporation ("TieTek"), GAIA
TECHNOLOGIES, INC., a Texas corporation ("Gaia"), NORTH AMERICAN TECHNOLOGIES
GROUP, INC., a Delaware corporation ("NATK" and together with Gaia and TieTek,
"Payor"), WILLIAM T. ALDRICH, HENRY W. SULLIVAN and J. DENNY BARTELL, AS CO-
TRUSTEES FOR THE BENEFIT OF DUNE HOLDINGS, L.L.C. (assignee of GAIA HOLDINGS,
INC.) and THOR VENTURES, L.L.C. pursuant to that certain Trust Agreement dated
December 29, 1995 ("Payee"); DUNE  HOLDINGS, L.L.C. (assignee of GAIA HOLDINGS,
INC.), a Delaware limited liability company ("Dune"), and THOR VENTURES,
L.L.C., a Texas limited liability company ('"Thor").

                                    RECITALS

        A. Payor and Payee are parties to that certain TieTek Royalty Agreement
dated as of December 30, 1997 (the "Royalty Agreement").

        B. Payor and Payee have been engaged in negotiations regarding the
proper calculation of certain Alternate Minimum Royalty (as defined in the
Royalty Agreement) payments due to Payee under the Royalty Agreement.

        C. Payor and Payee wish to conclusively resolve the amount of Alternate
Minimum Royalty payments due under the Royalty Agreement as of the date hereof,
through December 31, 2000 and thereafter to provide for the payment thereof as
set forth herein.

     NOW THEREFORE, intending to be legally bound hereby, the parties agree as
follows:

1. Dune and Thor, in full and complete compromise and settlement of any claims
   either of them may have against Payor on account of Alternate Minimum Royalty
   payments under the Royalty Agreement due and payable as of the date hereof
   and subsequently accruing from the date hereof through December 31, 2000 and
   thereafter, agree to accept the following consideration from NATK and TieTek:

        (a) An NATK Promissory Note payable to Dune in the amount of $16,670 and
        a like NATK Promissory Note payable to Thor in the amount of $33,330,
        with each note bearing interest of 10% per annum (payable quarterly in
        arrears). Principal payments under the notes shall be made to Dune and
        Thor upon the earlier to occur of (i) NATK's receipt of more than
        $500,000 in cumulative net proceeds from future capital fund raising
        efforts, whether previously or subsequently initiated, or (ii) June 8,
        2002; and

        (b) 152,650 shares of restricted NATK Common Stock to Thor and 76,350
        like shares to Dune, all of which shares will be registered for public
        resale on the next registration statement on Form S-1 filed by NATK with
        the Securities and Exchange Commission.

                                      -1-
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             ROYALTY SETTLEMENT AGREEMENT DATED AS OF JUNE 8, 2000

2. Dune and Thor also agree to release NATK and TieTek from, and to waive the
   right to, any future Alternate Minimum Royalty payments provided that NATK
   and/or TieTek manufactures and ships at least 500 crossties at the Hardy
   Road, Houston plant on or before December 30, 2000.

3. Notwithstanding the foregoing, Dune and Thor shall have the unilateral right
   to revoke the release and waiver set forth in Paragraph 2 and shall be
   entitled to receive from Payee Alternate Minimum Royalty payments for periods
   commencing January 1, 2001, if NATK and TieTek do not fulfill the terms in
   paragraphs 1 and 2 above. Once revived, the payment obligation will continue
   until NATK and/or TieTek has constructed or acquired a manufacturing facility
   having sufficient rated capacity to produce at least 50,000 ties per year and
   has manufactured and shipped at least 500 crossties, at which time Dune's and
   Thor's right to any further Alternate Minimum Royalty payments shall be
   terminated.

        Except as set forth above, this Agreement shall not otherwise alter or
amend the terms of that certain Royalty Agreement dated December 30, 1997 by and
among Payor and Payee, which agreement shall remain in full force and effect.

        IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be
executed by duly authorized persons as of the date first above written.

                              TIETEK, INC.
                              a Texas corporation

                              /s/ Henry W. Sullivan
                              -----------------------------------
                              Henry W. Sullivan
                              President

                              GAIA TECHNOLOGIES, INC.
                              a Texas Corporation

                              /s/ Henry W. Sullivan
                              -----------------------------------
                              Henry W. Sullivan
                              President

                              NORTH AMERICAN TECHNOLOGIES
                              GROUP, INC.
                              a Delaware corporation

                              /s/ Henry W. Sullivan
                              -----------------------------------
                              Henry W. Sullivan
                              President and Chief Executive Officer

                                      -2-
<PAGE>

             ROYALTY SETTLEMENT AGREEMENT DATED AS OF JUNE 8, 2000

                    SIGNATURE CONTINUED FROM PREVIOUS PAGE

                              William T. Aldrich, Henry W. Sullivan and J. Denny
                              Bartell, Co-Trustees for the Benefit of Dune
                              Holdings, L.L.C. (assignee of Gaia Holdings, Inc.)
                              and Thor Ventures, L.L.C. under that certain Trust
                              Agreement dated December 29, 1995 by and amount
                              them.

                              /s/ William T. Aldrich
                              --------------------------------
                              William T. Aldrich
                              Co-Trustee

                              /s/ Henry W. Sullivan
                              --------------------------------
                              Henry W. Sullivan
                              Co-Trustee

                              /s/ J. Denny Bartell
                              --------------------------------
                              J. Denny Bartell
                              Co-Trustee

                              DUNE HOLDINGS, L.L.C. (assignee of GAIA
                              HOLDINGS, INC.)
                              a Delaware limited liability company

                              /s/ Henry W. Sullivan
                              --------------------------------
                              Henry W. Sullivan
                              President

                              THOR VENTURES, L.C.
                              a Texas limited liability company

                              /s/ William T. Aldrich
                              --------------------------------
                              William T. Aldrich
                              Manager

                                      -3-<PAGE>

                                SUPPLY AGREEMENT

                                    BETWEEN

                                     XXXXX

                                      AND

                                  TIETEK, INC.

Confidential treatment has been requested for portions of this exhibit.  The
copy filed here omits the information subject to the confidentiality request.
Omissions are designated as XXXXX.  A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
<PAGE>

                                SUPPLY AGREEMENT

This Supply Agreement is entered into by and between XXXXX and Tietek Inc.
("Buyer") having an office at 14315 West Hardy Road, Houston, TX 77060.  The
Seller hereby agrees to sell and the Buyer agrees to buy Ground High Density
Polyethylene ("Product") that has passed through 15mm screen and meets the
Buyer's Specifications, pursuant to the terms and conditions set forth herein.

For and in consideration of the mutual covenants and obligations set forth
below, Buyer and Seller hereby agree as follows:

                                SECTION 1.  TERM
                                ----------------

This Agreement shall be effective 7/1/2000 and shall remain in effect through
6/30/2003 and shall continue from year to year thereafter: however, either party
may decide not to continue the contract after 6/30/2003 for any reason by giving
written notice at least six (6) months prior to the end of the initial or then
current contract term.

                               SECTION 2.  PRICE
                               -----------------

Buyer agrees to pay to Seller the amount of XXXXX.

                              SECTION 3.  QUANTITY
                              --------------------

(a)  Buyer shall purchase a minimum of 200,000 lbs/week of Product.  Four (4)
     months prior to the end of each twelve-month (12) period, the Buyer shall
     submit to the Seller an updated Exhibit A that indicates the volume
     requirement for the upcoming twelve-month period.  XXXXX.  Each trailer
     will be loaded to capacity.  Seller will at their facility provide
     certified weight tickets to determine the net weight received.  Net weight
     is minus the trailer, super sacks, and pallets.  In the event of any
     conflicting terms of conditions between such orders, shipping forms, or
     other documents accompanying such orders and this Agreement, the terms and
     conditions of this Agreement shall govern.

(b)  [OMITTED IN ITS ENTIRETY]

(c)  Seller's first delivery of product to Buyer shall be no later than sixty
     (60) days after Buyer delivers and installs the Equipment (as defined below
     in Section 5) to Seller's plant in XXXXX.

(d)  Seller shall book shipping containers or vans as needed for shipping
     Product to Buyer.  Buyer shall arrange to be invoiced directly and shall
     pay for all such containers.  Seller shall load containers at Seller's
     expense.
<PAGE>

(e)  Buyer will designate the carrier.

                              SECTION 4.  PAYMENT
                              -------------------

(a)  Buyer shall pay for Product deliveries by wire transfer to Seller's account
     upon presentation of bill of lading, weight tickets, and invoice.

                             SECTION 5.  EQUIPMENT
                             ---------------------

(a)  Seller agrees to purchase and ship to Seller's facility, XXXXX, the
     equipment listed in Exhibit B attached hereto (herein referred to as the
     "Equipment").  Seller shall operate, service, and maintain the equipment at
     Seller's sole cost and expense subject to agreed upon standards between the
     Buyer and the Seller.

(b)  Buyer agrees to lend without interest to Seller and Seller agrees to borrow
     the amount of the equipment, installation, and start-up expenses as set
     forth on Exhibit B (total $117,000), to finance the acquisition,
     installation, and start-up of the Equipment by Seller.  Seller hereby
     agrees that the equipment shall be pledged to Buyer to secure the amount of
     the loan.  Seller agrees that a UCC form will be filed placing a lien on
     the equipment in favor of Buyer.

(c)  Seller agrees to repay the loan as follows: The Seller will issue a credit
     to the Buyer's account on every tenth XXXXX delivery until the obligation
     is satisfied.

(d)  Upon completion by the Seller of the repayment of the loan the Buyer will
     release the lien.  The Equipment shall be deemed free and clear of any
     liens, security interest and claims of any type.

(e)  Buyer and Seller agree not to sell Equipment or transfer title thereto to
     any third party during the term of this Agreement.

                            SECTION 6.  TERMINATION
                            -----------------------

The parties may terminate this agreement upon sixty (60) days prior written
notice as follows:

(a)  Buyer may terminate this agreement in the event that the Seller fails to
     deliver at least 75% of the machine's capability in any calendar month
     XXXXX.

(b)  Seller may terminate this Agreement in the event that the Buyer is unable
     to pay for material as indicated in Section 4.

                       SECTION 7.  EFFECTS OF TERMINATION
                       ----------------------------------

(a)  In the event of termination of this Agreement by the Buyer, full title to
     the Equipment shall remain the Buyer's.  The Buyer shall remove the
     Equipment from the Seller's plant no later than thirty (30) days after the
     effective date of the termination.  Buyer shall pay

                                      -2-
<PAGE>

     for Product delivered by Seller to Buyer that has not been paid. Seller
     shall have no further right to purchase the Equipment from the Buyer.

(b)  In the event of termination of this Agreement by the Seller, Seller has the
     first option to purchase the Equipment by paying off any unpaid balance due
     the Buyer.  This amount will be determined by taking the total Equipment
     and installation cost in Exhibit A and subtracting the credits issued over
     the repayment schedule.  If the Seller exercises this option, title of the
     Equipment shall be transferred to the Seller free and clear of any liens,
     security interests and claims of any type after the final has been made to
     the Buyer.  If the Seller does not exercise the purchase option for the
     Equipment, the Buyer shall remove the Equipment from the Seller's plant no
     later than thirty (30) days after the effective date of the termination.
     Buyer shall pay for any Product delivered by Seller to Buyer that has not
     been paid.

                           SECTION 8.  PENALTY CLAUSE
                           --------------------------

In the event the Seller does not deliver to Buyer an average of 85% of the
Product based on the volume projections in Exhibit A over a period of 12
consecutive months commencing from the date of the Seller's first delivery of
Product, at the end of such 12 month period, Seller shall rebate to Buyer an
amount equal to three (3) percent of the purchase price for Product delivered to
and paid for by Buyer.

                           SECTION 9.  FORCE MAJEURE
                           -------------------------

(a)  Except for the payment obligations of the Buyer, neither party shall be
     liable to the other hereunder for any failure or breach of performance
     under this Agreement which failure or breach is caused by a "force majeure
     cause."  In the event any obligations imposed upon either party hereto can
     not be performed on account of a "force majeure cause" that party shall
     give notice and details thereof in writing by the fastest means of
     communications available and shall do all things reasonably possible to
     remove the cause of such interference.

(b)  As used in this Agreement, "force majeure" means any circumstance beyond
     the control of the party affected including, but not limited to, labor
     disputes, strikes, lockouts, accidents at Company's factory, shortages of
     raw materials, acts of God, riots, quarantine, epidemic, war (declared or
     undeclared), blockage, civil disturbance, insurrection, fire, severe storms
     beyond normal weather conditions and acts of interference (actual or
     threatened) of any governmental authority including without limitation,
     confiscation, expropriation, revocation or denial of import or export
     authorization, nationalization or seizure.

                            SECTION 10.  WARRANTIES
                            -----------------------

Seller warrants that it will convey good title to the Product and that it will
be free from any lawful security interest.

                                      -3-
<PAGE>

                          SECTION 11.  APPLICABLE LAW
                          ---------------------------

(a)  This Agreement shall be governed by and construed in accordance with the
     laws of the State of Texas and applicable federal laws of the United States
     of America.

(b)  Seller and Buyer agree that any disputes arising out of or relating to this
     Agreement, or the breach thereof, and which cannot be resolved within
     twenty (20) days from the initial date of such dispute, shall be settled by
     arbitration administered by the American Arbitration Association under its
     commercial arbitration rules, and judgment on the award rendered by the
     arbitrator(s) may be entered in any court having jurisdiction.  Either
     party may give the other party written notice of intent to settle the
     dispute by arbitration.

(c)  The number of arbitrators shall be three (3).

(d)  The place of arbitration shall be Houston, Texas.

                              SECTION 12.  NOTICES
                              --------------------

Any notices required or permitted hereunder shall be made in writing and shall
be deemed effective when received by the party to whom the notice is intended.
Notice must be given by means of personal delivery or mailed by Registered Mail
to the following address:

To Buyer:  Tietek Inc.                  To Seller:  XXXXX
           Attn:  Stephen DiPietro                  XXXXX
           14315 West Hardy Road                    XXXXX
           Houston, TX  77060                       XXXXX

                            SECTION 13.  ASSIGNMENT
                            -----------------------

Neither party hereto shall assign this Agreement or an of its rights hereunder
without the express written consent of the other party hereto.

                            SECTION 14.  NON-WAIVER
                            -----------------------

A party's failure to require performance by the other party of any provision
hereof shall in no way be deemed a waiver or affect the rights to require such
performance at any time thereafter.

                         SECTION 15.  ENTIRE AGREEMENT
                         -----------------------------

This agreement supersedes any prior agreements and discussions between
distributor and company and can not be altered or amended except by agreement in
writing and signed by duly authorized representative of the parties hereto.

                                      -4-
<PAGE>

In witness whereof, the Parties hereto have duly executed this Agreement as of
the date first mentioned above.

XXXXXXXXXXXXXXXXXXXXX                       TIETEK INC.

By:  /S/  XXXX                         By:  /S/ Henry Sullivan
     -----------------------------          ------------------------------------
     XXXXX                                  Henry Sullivan
     XXXXX                                  President and CEO

                                      -5-
<PAGE>

                                 EXHIBIT A - 1

                                   EXHIBIT A
                                   ---------

                                 TIETEK, INC.,
                          ESTIMATED VOLUME PROJECTION

                                     XXXXX

For: XXXXX

--------------------------------------------------------------------------------
                 MONTH                  |                VOLUME (XXXXX)
                                        |
----------------------------------------|---------------------------------------
                 July                   |                    XXXXX
----------------------------------------|---------------------------------------
                August                  |                    XXXXX
----------------------------------------|---------------------------------------
               September                |                    XXXXX
----------------------------------------|---------------------------------------
                October                 |                    XXXXX
----------------------------------------|---------------------------------------
                November                |                    XXXXX
----------------------------------------|---------------------------------------
                December                |                    XXXXX
----------------------------------------|---------------------------------------
                January                 |                    XXXXX
----------------------------------------|---------------------------------------
                February                |                    XXXXX
----------------------------------------|---------------------------------------
                  March                 |                    XXXXX
----------------------------------------|---------------------------------------
                  April                 |                    XXXXX
----------------------------------------|---------------------------------------
                   May                  |                    XXXXX
----------------------------------------|---------------------------------------
                   June                 |                    XXXXX
----------------------------------------|---------------------------------------
                  TOTAL                 |                    XXXXX
--------------------------------------------------------------------------------

*XXXXX

                                 EXHIBIT A - 1
<PAGE>

                                   EXHIBIT B

                           [DELETED IN ITS ENTIRETY]

                                 EXHIBIT B - 1

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