SECOND AMENDMENT TO CONSTRUCTION LOAN AGREEMENT

EXHIBIT 10.5

SECOND AMENDMENT

TO CONSTRUCTION LOAN AGREEMENT

This SECOND AMENDMENT TO CONSTRUCTION LOAN AGREEMENT (this “ Agreement ”), dated as of December 29, 2005, is entered into by and among the following parties:

(a) TIETEK LLC, a Delaware limited liability company (the “ Borrower ”);

(b) NORTH AMERICAN TECHNOLOGIES GROUP, INC., a Delaware corporation (the “ Company ”), and TIETEK TECHNOLOGIES, INC., a Texas corporation (“ TTT ”) (the Company and TTT shall be collectively referred to as the “ Borrower Affiliates ” and the Borrower Affiliates and the Borrower shall be collectively referred to as the “ Borrower Group ”); and

(c) OPUS 5949 LLC (formerly known as Tie Investors, LLC), a Texas limited liability company (the “ Lender ” and, together with the Borrower Group, the “ Parties ”).

RECITALS

A. The Borrower, the Borrower Affiliates, and the Lender entered into that certain Construction Loan Agreement, dated as of February 5, 2004, as amended by (i) that certain Release, dated February 22, 2005, by and among the Parties, and (ii) that certain Limited Waiver and First Amendment to Construction Loan dated July 7, 2005, by and among the Parties (as so amended, the “ Loan Agreement ”), pursuant to which the Lender agreed to make available to the Borrower Group certain financial accommodations.

B. The Borrower and the Borrower Affiliates have requested that, subject to the terms, conditions, covenants and limitations contained in this Agreement, the Lender amend certain terms and conditions of the Loan Agreement, the Note and certain other Loan Documents as set forth herein to, among other things, permit the Borrower to obtain additional financing that will be subordinate to the Loan (as defined in the Loan Agreement, as amended hereby) on the terms set forth below.

C. The Lender has agreed to the actions described in Paragraph B preceding, in each instance upon and subject to the terms, conditions, covenants and limitations contained in this Agreement.

ACKNOWLEDGEMENTS:

(a) The Borrower and the Borrower Affiliates hereby acknowledge and agree to the accuracy of all Recitals included in this Agreement.

(b) The Borrower and the Borrower Affiliates acknowledge and agree that all amounts advanced to, or for the benefit of, the Borrower, including, but not limited to, the Loan prior to the

date hereof are, and shall continue to be, obligations under the Loan Documents (the “ Obligations ”) and subject to all the terms and conditions in the Loan Agreement and the other Loan Documents, in each instance as amended and modified by this Agreement.

(c) The Borrower and the Borrower Affiliates acknowledge and agree that (i) as of December 29, 2005, the outstanding principal and accrued but unpaid amount of the Obligations is $14,245,000, of which $14,000,000.00 is the amount of outstanding principal of the Note and $245,000 is the amount of accrued but unpaid interest thereon; and (ii) the Obligations are enforceable against the Borrower without offset, reduction, or counterclaim.

AGREEMENTS

NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties hereto, intending to be legally bound, agree to the above Recitals, Acknowledgments and as follows:

1. DEFINITIONS . All capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to them in the Loan Agreement.

2. AMENDMENTS TO LOAN DOCUMENTS .

2.1 The following definitions in Section 1.1 of the Loan Agreement are hereby amended and restated in their entirety to read as follows:

“Debentures” (i) the 7% Convertible Debentures of the Company in the original principal amount of $5,000,000 (hereinafter sometimes referred to as the “July Debentures”), issued pursuant to that certain Securities Purchase Agreement dated as of July 7, 2005 (hereinafter sometimes referred to as the “July Securities Purchase Agreement”) as amended by that certain Consent Waiver and Extension dated as of December 29, 2005; and (ii) the 7% Convertible Debentures of the Company in the original principal amount of up to $6,500,000 (hereinafter sometimes referred to as the “December Debentures”) issued pursuant to that certain Securities Purchase Agreement dated as of December 29, 2005 (hereinafter sometimes referred to as the “December Securities Purchase Agreement”).

“Loan Documents” This Agreement, the Limited Waiver and First Amendment to Construction Loan Agreement dated as of July 7, 2005, this Second Amendment to Construction Loan Agreement dated as of December 29, 2005, the Note, the Deed of Trust, the Security Agreement, the Patent Security Agreement, the Intercreditor Agreement, the Voting Agreement, the Non-Compete Agreement, the NATK Royalty Agreement, the TieTek Royalty Agreement, the Membership Pledge Interest Agreements, the Solvency Certificates, and any other documents to be executed by Borrower or any of their respective shareholders pertaining to the Loan, and as the same may be amended from time to time.

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“Note” collectively, (i) that certain Amended and Restated Promissory Note, dated as of July 7, 2005, in the stated principal amount of $14,000,000, made by TieTek LLC, payable to the order of the Lender, (ii) any other promissory notes evidencing any portion of the Loan, including any instruments amended and restated by the instrument referred to in clause (i) immediately preceding, and (iii) any promissory notes or other agreement evidencing any renewals, extensions, increases, amendments, modifications, restatements or payment-in-kind in respect of any of the foregoing.”

2.2 All references to the “Loan Agreement” or the “Construction Agreement” or other similar terms intended to refer to the Loan Agreement in each of the Loan Documents and in any other documents or agreements by, between or among any of the Borrower Group and their respective affiliates, and or for the benefit of the Lender will from and after the date hereof refer to the Loan Agreement, as amended hereby, and all obligations of the Borrower Group under the Loan Agreement, as amended hereby, shall be secured by and be entitled to the benefits of said Loan Documents and such other documents and agreements. All Loan Documents heretofore executed by all or any of the Borrower Group shall remain in full force and effect to secure the Loan (as defined in the Loan Agreement), and such Loan Documents, as amended hereby, are hereby ratified and affirmed.

3. CONDITIONS PRECEDENT TO EFFECTIVENESS . The effectiveness of this Agreement is subject to the fulfillment of each of the following terms and conditions to the satisfaction of Lender in its sole discretion at or before 2:00 p.m. (Dallas time) December 29, 2005.

3.1. The Lender shall have received fully executed copies of the December Securities Purchase Agreement among the Company and certain purchasers of December Debentures issued pursuant to the December Securities Purchase Agreement, in form and substance satisfactory to Lender.

3.2. The Lender shall have received a legal opinion of the Borrower’s counsel in form and substance satisfactory to the Lender as to such matters as Lender may request with respect to each member of the Borrower Group, this Agreement, the Loan Agreement, the other Loan Documents and each agreement and instrument delivered in connection with, or contemplated by, this Agreement.

3.3. The Lender shall have received evidence satisfactory to the Lender that each Purchaser (as defined in the December Securities Purchase Agreement) funded the Escrow Account (as defined in the December Securities Purchase Agreement).

3.4. The Lender shall have received the First Amendment to Amended and Restated Promissory Note in form of attached hereto as Exhibit A, appropriately executed by TieTek LLC.

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4. LENDER CONSENT . By execution hereof, Lender hereby consents to (i) the extension of the maturity date of the July Debentures from July 7, 2006 until December 31, 2006, and (ii) the issuance of the December Debentures pursuant to the terms of the December Securities Purchase Agreement.

5. RATIFICATIONS, REPRESENTATIONS AND WARRANTIES .

5.1. The terms and provisions set forth in this Agreement shall supersede all inconsistent terms and provisions set forth in the Loan Agreement and, except as expressly set forth in this Agreement, the terms and provisions of the Loan Agreement and each of the other Loan Documents are ratified and confirmed and shall continue in full force and effect. The Parties hereto agree that the Loan Agreement shall continue to be legal, valid, binding and enforceable in accordance with its terms.

5.2. The Borrower and the Borrower Affiliates hereby represent and warrant to the Lender as follows:

(a) the execution, delivery and performance of this Agreement and any and all other agreements executed and/or delivered in connection herewith or therewith have been authorized by all requisite action on the part of the Borrower and the Borrower Affiliates and will not violate (i) the Limited Liability Company Agreement of the Borrower; (ii) the articles of incorporation or bylaws of either of the Borrower Affiliates; or (iii) the operating agreement of any managing member of the Borrower;

(b) the representations and warranties contained in this Agreement, the Loan Agreement and the Loan Documents are true and correct in all material respects on and as of the date hereof as though made on and as of such date;

(c) no Default or Event of Default under the Loan Agreement or the Loan Documents have occurred or are continuing;

(d) the consummation of the transactions contemplated hereby will not (i) violate any provision of the organization