ii) The representations and warranties set forth in such agreement shall be deemed to be made as of the date of this Letter Agreement and shall be true and correct as of such date.

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                                                                       EXHIBIT 2



                                  May 23, 2000



Avalanche Resources, Ltd.
c/o Avalanche Management, Inc.,
    its general partner
X.X. Xxx 00000
Xxxxxx, Xxxxx  00000

Attention:  Xxxxx Xxxxxx, President

         Re:      Additional Investment in North American Technologies Group,
                  Inc. Common Stock

Dear Xx. Xxxxxx:

         As you know, pursuant to a Securities Purchase Agreement dated May 12,
2000 between North American Technologies Group, Inc. ("NATK") and Avalanche
Resources, Ltd., a Texas limited partnership ("Avalanche"), Avalanche purchased
500,000 shares of NATK Common Stock for an aggregate purchase price of $500,000.

         You have advised us that Avalanche desires to make an additional
investment in NATK at this time, pursuant to which Avalanche would purchase
500,000 shares of NATK Common Stock for an aggregate purchase price of $500,000.

         In making such an investment and by executing this Letter Agreement
where indicated below, Avalanche agrees that all of the terms and conditions of
the Securities Purchase Agreement shall apply to Avalanche's additional
investment hereunder, and Avalanche specifically acknowledges that:

                  (i)      the terms and conditions of the Securities Purchase
                           Agreement, and the representations and warranties of
                           Avalanche set forth therein, shall be incorporated by
                           reference thereto into this Letter Agreement as
                           though fully set forth herein; and

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                  (ii)     The representations and warranties set forth in such
                           agreement shall be deemed to be made as of the date
                           of this Letter Agreement and shall be true and
                           correct as of such date.

         If the foregoing accurately reflects our agreement, please indicate
your agreement where set forth below and return an executed copy of this Letter
Agreement to the undersigned by facsimile at your earliest convenience.

                                             Sincerely,

                                             NORTH AMERICAN TECHNOLOGIES
                                             GROUP, INC.


                                             By: /s/ Xxxxx X. Xxxxxxxx
                                                 ---------------------------
                                                 Xxxxx X. Xxxxxxxx
                                                 President and Chief Executive
                                                 Officer

Acknowledged and Agreed
this 23rd day of May, 2000

AVALANCHE RESOURCES, LTD.

By:      Avalanche Management
         Corporation, its general partner

By:      /s/ Xxxxx X. Xxxxxx
         --------------------------------
         Xxxxx Xxxxxx
         President