Unassociated Document


    SECOND
      WAIVER AND EXTENSION AGREEMENT

    


    October
      30, 2007

    


    Reference
      is hereby made to (a) that certain Security Agreement dated as of September
      7,
      2005 (the “Security
      Agreement”)
      by and
      among Laurus Master Fund, Ltd. (“Laurus”),
      American Technologies Group, Inc. (the “ATEG”)
      and
      the other subsidiaries of ATEG named therein or which thereafter became a party
      thereto (such subsidiaries and ATEG, each a “Company”
and
      collectively, the “Companies”),
      (b)
      that certain Amended and Restated Secured Convertible Term Note B amended and
      restated on March 23, 2007 and effective as of September 7, 2007 (the
“Existing
      Note”)
      made
      by the Companies in favor of Laurus in the original principal amount of
      $2,000,000 (c) the Ancillary Agreements (as defined in the Security Agreement)
      and that certain Extension Agreement executed by the parties hereto on March
      23,
      2007 (the “First
      Extension”)
      (the
      Security Agreement, the Existing Note the Ancillary Agreements, and the First
      Extension as each may be amended, restated, supplemented and modified from
      time
      to time, the “Agreements”).
      Capitalized terms used but not defined herein shall have the meanings given
      them
      in the Security Agreement.

    


    WHEREAS,
      ATEG filed a Registration Statement (as defined in the Registration Rights
      Agreement) covering the Registrable Securities with the SEC on January 31,
      2007;

    


    WHEREAS,
      the Registration Statement, pursuant to the First Extension was required to
      be
      declared effective by the SEC no later than May 7, 2007 (the “Effectiveness
      Date”);
      

    


    WHEREAS,
      an Event of Default has occurred under Section 19(a) of the Security Agreement
      (the “Existing
      Default”)
      as a
      result of the failure by the Companies to pay in full all amounts owing under
      the Existing Note on the Maturity Date (as defined in the Existing Note and
      as
      extended by agreement of the parties); and

    


    WHEREAS,
      the Companies have requested that Laurus (a) extend the Effectiveness Date,
      (b)
      waive the Existing Default and (c) extend the Maturity Date of the Existing
      Note, and Laurus has agreed to do so on the terms and conditions set forth
      in
      this Waiver and Extension Agreement (this “Agreement”).

    


    NOW,
      THEREFORE, in consideration of the above, and for other good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged,
      the
      parties hereto agree as follows:

    


    1.  Laurus
      hereby extends the Effectiveness Date from May 7, 2007 to December 31, 2007.
      ATEG hereby agrees that it shall cause the Registration Statement to
      be
      declared effective under the Securities Act on
      or
      prior to December 31, 2007. Each Company hereby acknowledges that the breach
      of
      this covenant shall constitute an automatic Event of Default and no cure or
      grace period shall be applicable thereto notwithstanding any other provision
      of
      the Agreements to the contrary.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.  Subject
      to Section 3 hereof, Laurus hereby waives the Existing Default and agrees to
      extend the date upon which all amounts due under the Existing Note and the
      First
      Extension are payable from May 7, 2007 to December 31, 2007. Each Company hereby
      acknowledges, ratifies and confirms that the Companies shall, jointly and
      severally, make interest payments to Laurus in accordance with the terms of
      the
      Existing Note and a principal payment to Laurus in an amount equal to the unpaid
      principal balance of the Existing Note on the Maturity Date (as defined in
      the
      Existing Note), together with any accrued and unpaid interest
      thereon.

    


    3.  The
      Agreement shall be effective upon the execution by each Company and Laurus
      of
      this Agreement and the receipt by Laurus of each Company’s duly executed
      counterpart to this Agreement.

    


    4.  Each
      Company hereby represents and warrants to Laurus that, on the date hereof,
      after
      giving effect to this Agreement, (a) no Event of Default exists, (b) all
      representations, warranties and covenants made by such Company in connection
      with the Agreements are true, correct and complete and (c) all of such Company’s
      covenant requirements under the Agreements have been met.

    


    5.  Except
      as
      expressly described herein, this Agreement shall not constitute (a) a
      modification or an alteration of any of the terms, conditions or covenants
      of
      the Agreements, all of which remain in full force and effect, or (b) a waiver,
      release or limitation upon Laurus’ exercise of any of its rights and remedies
      thereunder, all of which are hereby expressly reserved. This Agreement shall
      not
      relieve or release any Company in any way from any of its duties, obligations,
      covenants or agreements under the Agreements or from the consequences of any
      Events of Default thereunder, except as expressly described above.

    


    6.  This
      Agreement shall be governed by and construed under the laws of the State of
      New
      York as applied to agreements among New York residents entered into and to
      be
      performed entirely within New York. Provisions hereof shall inure to the benefit
      of, and be binding upon, the successors, assigns, heirs, executors, and
      administrators of the parties hereto. This Agreement constitutes the full and
      entire understanding and agreement between the parties with regard to the
      subjects hereof. This Agreement may be executed in any number of counterparts,
      each of which shall be an original, but all of which together shall constitute
      one instrument.

    


    [Signature
      Page Follows]


    
      
         

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Waiver and Extension
      Agreement to be signed by their respective representatives thereunto duly
      authorized, all as of the date first written above.

    
      	 	COMPANIES:  
	 	 	
            
	 	
              AMERICAN
                TECHNOLOGIES GROUP, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Thomas E. Durkin, III
	 	
              
President
	 	 


    

     

    
      	 	 	 
	 	NORTH
              TEXAS STEEL
              COMPANY, INC.
	 
 	 
 	 
 
	
            	By:  	/s/
              Thomas E. Durkin, III
	 	
              
Authorized
              Representative
	 	 


    

     

    
      	 	 	 
	 	OMAHA
              HOLDINGS
              CORP.
	 
 	 
 	 
 
	
            	By:  	/s/
              Thomas E.
              Durkin, III
	 	
              
Authorized
              Representative


    

     

    
      	 	 	 
	 	LAURUS:
	 
 	  
LAURUS
              MASTER FUND, LTD. 
	
            	      	 
	 	 	 
	 	By: Laurus Capital Management,
              LLC, as
              investment manager 
	 	Name: Patrick
              Regan 
	 	
              Title: Senior
                Marketing Director 

            


    

     

    
      
         

      

      
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