Document:

THIS NOTE AND THE COMMON SHARES  ISSUABLE UPON  CONVERSION OF THIS NOTE HAVE NOT
BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR ANY STATE
SECURITIES  LAWS.  THIS NOTE AND THE COMMON SHARES  ISSUABLE UPON  CONVERSION OF
THIS NOTE MAY NOT BE SOLD,  OFFERED  FOR SALE,  PLEDGED OR  HYPOTHECATED  IN THE
ABSENCE OF AN  EFFECTIVE  REGISTRATION  STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE  STATE  SECURITIES  LAWS OR AN OPINION OF COUNSEL  REASONABLY
SATISFACTORY TO AMERICAN  TECHNOLOGIES GROUP, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.

                         SECURED CONVERTIBLE TERM NOTE B

        FOR VALUE RECEIVED,  each of AMERICAN TECHNOLOGIES GROUP, INC., a Nevada
corporation (the "PARENT"), and the other Companies listed on Exhibit A attached
hereto (such other  companies  together  with the Parent,  each a "COMPANY"  and
collectively, the "COMPANIES"), jointly and severally, promises to pay to LAURUS
MASTER FUND, LTD., c/o M&C Corporate  Services Limited,  P.O. Box 309 GT, Ugland
House,  South Church Street,  George Town,  Grand Cayman,  Cayman Islands,  Fax:
345-949-8080 (the "HOLDER") or its registered assigns or successors in interest,
the sum of Two  Million  Dollars  ($2,000,000),  together  with any  accrued and
unpaid  interest  hereon,  on March 6, 2007 (the "MATURITY  DATE") if not sooner
paid.

        This  Secured  Convertible  Term Note (this  "NOTE") is intended to be a
registered   obligation  within  the  meaning  of  Treasury  Regulation  Section
1.871-14(c)(1)(i)  and each Company (or its agent) shall register this Note (and
thereafter shall maintain such registration) as to both principal and any stated
interest. Notwithstanding any document, instrument or agreement relating to this
Note to the  contrary,  transfer  of this Note (or the right to any  payments of
principal or stated  interest  thereunder) may only be effected by (i) surrender
of this Note and either the  reissuance  by the  Company of this Note to the new
holder or the issuance by the Company of a new instrument to the new holder,  or
(ii)  transfer  through a book entry  system  maintained  by the Company (or its
agent), within the meaning of Treasury Regulation Section 1.871-14(c)(1)(i)(B).

        Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in that certain  Security  Agreement dated as of the date
hereof by and among the  Companies and the Holder (as amended,  modified  and/or
supplemented from time to time, the "SECURITY AGREEMENT").

        The following terms shall apply to this Note:

                                   ARTICLE I
                         CONTRACT RATE AND AMORTIZATION

        1.1 Contract Rate. Subject to Sections 4.2 and 5.10, interest payable on
the outstanding  principal  amount of this Note (the  "PRINCIPAL  AMOUNT") shall
accrue at a rate per annum equal to (the  "CONTRACT  RATE"):  (a) twelve percent
(12%) from the date hereof  through  the date  immediately  preceding  the first
anniversary  of the date hereof and (b)  eighteen  percent  (18%) from the first
anniversary  of the date hereof and at all times  thereafter.  Interest shall be
(i)  calculated  on the basis of a 360 day year,  and (ii) payable  monthly,  in
arrears,  commencing  on  October  1,  2005 on the  first  business  day of each
consecutive  calendar month thereafter  through and including the Maturity Date,
and on the Maturity Date, whether by acceleration or otherwise.

<PAGE>

        1.2 Principal Payments.  The total outstanding Principal Amount together
with any accrued and unpaid  interest and any and all other unpaid amounts which
are then owing by the  Companies  to the Holder  under this Note,  the  Security
Agreement  and/or any other Ancillary  Agreement shall be due and payable on the
Maturity Date.

                                   ARTICLE II
                            CONVERSION AND REDEMPTION

        2.1 Payment of Principal Amount.

        (a)  Payment  in Cash or Common  Stock.  If the  Principal  Amount (or a
portion  of the  Principal  Amount  if not all of the  Principal  Amount  may be
converted into shares of Common Stock pursuant to Section 3.2) is required to be
paid in cash pursuant to Section 2.1(b),  then the Companies shall,  jointly and
severally,  pay the  Holder  an amount  in cash  equal to 100% of the  Principal
Amount  (or such  portion  of the  Principal  Amount to be paid in cash) due and
owing to the Holder on the Maturity Date. If the Principal  Amount (or a portion
of the Principal Amount if not all of the Principal Amount may be converted into
shares of Common Stock pursuant to Section 3.2) is required to be paid in shares
of Common  Stock  pursuant  to Section  2.1(b),  the number of such shares to be
issued by the  Parent to the  Holder on the  Maturity  Date (in  respect of such
portion of the Principal  Amount  converted into shares of Common Stock pursuant
to Section 2.1(b)),  shall be the number  determined by dividing (i) the portion
of the Principal  Amount converted into shares of Common Stock, by (ii) the then
applicable Fixed Conversion  Price. For purposes hereof,  subject to Section 3.6
hereof, the initial "FIXED CONVERSION PRICE" means $0.00111.

        (b) Principal Amount Conversion Conditions.  Subject to Sections 2.1(a),
2.2, and 3.2 hereof, the Holder shall convert into shares of Common Stock all or
a portion of the  Principal  Amount due on the  Maturity  Date if the  following
conditions (the  "CONVERSION  CRITERIA") are satisfied:  (i) the average closing
price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market
for the five (5) trading days  immediately  preceding the Maturity Date shall be
greater than or equal to 120% of the Fixed  Conversion Price and (ii) the amount
of such  conversion does not exceed  twenty-five  percent (25%) of the aggregate
dollar  trading  volume of the Common  Stock for the period of  twenty-two  (22)
trading days  immediately  preceding the Maturity Date. If subsection (i) of the
Conversion Criteria is met but subsection (ii) of the Conversion Criteria is not
met as to the entire Principal  Amount,  the Holder shall convert only such part
of the Principal Amount that meets  subsection (ii) of the Conversion  Criteria.
Any portion of the Principal Amount due on the Maturity Date that the Holder has
not been able to convert  into shares of Common Stock due to the failure to meet
the Conversion Criteria,  shall be paid in cash by the Companies on the Maturity
Date at the rate of 100% of the Principal  Amount  otherwise due on the Maturity
Date.

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<PAGE>

        2.2 No Effective Registration.  Notwithstanding anything to the contrary
herein,  none of the Companies'  obligations to the Holder may be converted into
Common Stock unless (a) either (i) an effective current  Registration  Statement
(as defined in the Registration  Rights Agreement) covering the shares of Common
Stock to be issued in connection with satisfaction of such obligations exists or
(ii) an exemption from registration for resale of all of the Common Stock issued
and issuable is available  pursuant to Rule 144 of the Securities Act and (b) no
Event of Default (as hereinafter defined) exists and is continuing,  unless such
Event of Default is cured within any applicable cure period or otherwise  waived
in writing by the Holder.

        2.3 Optional  Redemption  in Cash.  The  Companies  may prepay this Note
("OPTIONAL  REDEMPTION")  by  paying to the  Holder a sum of money  equal to one
hundred percent (100%) of the Principal Amount outstanding at such time together
with accrued but unpaid interest thereon and any and all other sums due, accrued
or payable  to the Holder  arising  under  this Note (the  "REDEMPTION  AMOUNT")
outstanding on the  Redemption  Payment Date (as defined  below).  The Companies
shall  deliver  to the Holder a written  notice of  redemption  (the  "NOTICE OF
REDEMPTION")  specifying the date for such Optional  Redemption (the "REDEMPTION
PAYMENT  DATE"),  which date shall be seven (7) business  days after the date of
the Notice of Redemption (the "REDEMPTION PERIOD"). A Notice of Redemption shall
not be  effective  with respect to any portion of this Note for which the Holder
has previously  delivered a Notice of Conversion (as hereinafter defined) or for
conversions  elected to be made by the Holder pursuant to Section 3.3 during the
Redemption  Period. The Redemption Amount shall be determined as if the Holder's
conversion  elections had been  completed  immediately  prior to the date of the
Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must
be paid in good funds to the Holder.  In the event the Companies fail to pay the
Redemption Amount on the Redemption Payment Date as set forth herein,  then such
Redemption Notice will be null and void.

                                  ARTICLE III
                           HOLDER'S CONVERSION RIGHTS

        3.1 Optional Conversion.  Subject to the terms set forth in this Article
III, the Holder shall have the right, but not the obligation,  to convert all or
any  portion of the issued  and  outstanding  Principal  Amount  and/or  accrued
interest  and fees due and payable into fully paid and  nonassessable  shares of
Common  Stock at the Fixed  Conversion  Price.  The shares of Common Stock to be
issued upon such conversion are herein referred to as, the "CONVERSION Shares."

        3.2 Conversion Limitation.  Notwithstanding anything contained herein to
the contrary,  the Holder shall not be entitled to convert pursuant to the terms
of this Note an amount that would be convertible  into that number of Conversion
Shares  which would  exceed the  difference  between (i) 4.99% of the issued and
outstanding shares of Common Stock and (ii) the number of shares of Common Stock
beneficially  owned by the  Holder For  purposes  of the  immediately  preceding
sentence,  beneficial  ownership  shall be determined in accordance with Section
13(d) of the Exchange Act and Regulation 13d-3 thereunder.  The Conversion Share
limitation  described  in this Section 3.2 shall  automatically  become null and
void  following  notice  to the  Company  upon the  occurrence  and  during  the
continuance of an Event of Default,  or upon 75 days prior notice to the Parent.
Notwithstanding  anything  contained  herein to the contrary,  the provisions of
this  Section  3.2 are  irrevocable  and may not be waived by the  Holder or the
Parent.

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<PAGE>

        3.3  Mechanics  of  Holder's  Conversion.  In the event  that the Holder
elects to convert this Note into Common  Stock,  the Holder shall give notice of
such election by  delivering  an executed and completed  notice of conversion in
substantially the form of Exhibit B hereto  (appropriate  completed) ("NOTICE OF
CONVERSION")  to the  Parent  and such  Notice  of  Conversion  shall  provide a
breakdown in reasonable  detail of the Principal  Amount,  accrued  interest and
fees that are being converted.  On each Conversion Date (as hereinafter defined)
and in  accordance  with its Notice of  Conversion,  the  Holder  shall make the
appropriate  reduction to the  Principal  Amount,  accrued  interest and fees as
entered in its records and shall provide  written  notice  thereof to the Parent
within two (2) business  days after the  Conversion  Date.  Each date on which a
Notice of Conversion is delivered or telecopied to the Parent in accordance with
the provisions hereof shall be deemed a Conversion Date (the "CONVERSION DATE").
Pursuant  to the terms of the  Notice  of  Conversion,  the  Parent  will  issue
instructions  to the transfer agent  accompanied by an opinion of counsel within
one (1)  business day of the date of the delivery to the Parent of the Notice of
Conversion  and shall  cause the  transfer  agent to transmit  the  certificates
representing the Conversion Shares to the Holder by crediting the account of the
Holder's designated broker with the Depository Trust Corporation ("DTC") through
its  Deposit  Withdrawal  Agent  Commission  ("DWAC")  system  within  three (3)
business  days after  receipt by the  Parent of the  Notice of  Conversion  (the
"DELIVERY DATE"). In the case of the exercise of the conversion rights set forth
herein the conversion  privilege  shall be deemed to have been exercised and the
Conversion  Shares  issuable upon such  conversion  shall be deemed to have been
issued upon the date of receipt by the Parent of the Notice of  Conversion.  The
Holder shall be treated for all purposes as the record holder of the  Conversion
Shares,  unless  the Holder  provides  the Parent  written  instructions  to the
contrary.

        3.4 Late Payments. Each Company understands that a delay in the delivery
of the  Conversion  Shares in the form required  pursuant to this Article beyond
the Delivery Date could result in economic loss to the Holder.  As  compensation
to the Holder for such loss, in addition to all other rights and remedies  which
the Holder may have under this Note, applicable law or otherwise,  the Companies
shall,  jointly  and  severally,  pay late  payments  to the Holder for any late
issuance of Conversion  Shares in the form required  pursuant to this Article II
upon conversion of this Note, in the amount equal to $500 per business day after
the  Delivery  Date.  The Company  shall make any payments  incurred  under this
Section in immediately available funds upon demand.

        3.5  Conversion  Mechanics.  The number of shares of Common  Stock to be
issued upon each  conversion  of this Note shall be  determined by dividing that
portion of the principal  and interest and fees to be converted,  if any, by the
then applicable Fixed Conversion Price.

        3.6 Adjustment  Provisions.  The Fixed  Conversion  Price and number and
kind of  shares or other  securities  to be issued  upon  conversion  determined
pursuant to this Note shall be subject to adjustment  from time to time upon the
occurrence  of  certain  events  during the period  that this  conversion  right
remains outstanding, as follows:

                                       4
<PAGE>

                (a)  Reclassification.  If the  Parent  at any  time  shall,  by
        reclassification or otherwise,  change the Common Stock into the same or
        a different number of securities of any class or classes,  this Note, as
        to the unpaid  Principal  Amount and  accrued  interest  thereon,  shall
        thereafter  be deemed to  evidence  the right to  purchase  an  adjusted
        number of such  securities  and kind of  securities  as would  have been
        issuable as the result of such change with  respect to the Common  Stock
        (i)   immediately   prior   to   or   (ii)   immediately   after,   such
        reclassification or other change at the sole election of the Holder.

                (b) Stock Splits,  Combinations and Dividends.  If the shares of
        Common Stock are subdivided or combined into a greater or smaller number
        of shares of Common Stock,  or if a dividend is paid on the Common Stock
        or any  preferred  stock issued by the Parent in shares of Common Stock,
        the Fixed Conversion Price shall be  proportionately  reduced in case of
        subdivision of shares or stock dividend or proportionately  increased in
        the case of combination of shares,  in each such case by the ratio which
        the total number of shares of Common Stock outstanding immediately after
        such  event  bears  to the  total  number  of  shares  of  Common  Stock
        outstanding immediately prior to such event.

                (c) Share  Issuances.  Subject to the provisions of this Section
        3.6,  if the  Parent  shall  at any  time  prior  to the  conversion  or
        repayment  in full of the  Principal  Amount  issue any shares of Common
        Stock or securities convertible into Common Stock to a Person other than
        the Holder  (except (i) pursuant to Sections  3.6(a) or (b) above;  (ii)
        pursuant to options,  warrants,  or other  obligations  to issue  shares
        outstanding on the date hereof as disclosed to the Holder in writing; or
        (iii)  pursuant  to  options  that  may be  issued  under  any  employee
        incentive stock option and/or any qualified stock option plan adopted by
        the Parent) for a consideration  per share (the "OFFER PRICE") less than
        the Fixed Conversion Price in effect at the time of such issuance,  then
        the Fixed  Conversion  Price  shall be  immediately  reset to such lower
        Offer Price.  For purposes  hereof,  the issuance of any security of the
        Parent  convertible into or exercisable or exchangeable for Common Stock
        shall result in an  adjustment  to the Fixed  Conversion  Price upon the
        issuance of such securities.

                (d)   Computation   of   Consideration.   For  purposes  of  any
        computation respecting consideration received pursuant to Section 3.6(c)
        above, the following shall apply:

                        (i) in the case of the  issuance  of  shares  of  Common
                Stock for cash,  the  consideration  shall be the amount of such
                cash,  provided  that in no case shall any deduction be made for
                any  commissions,  discounts or other  expenses  incurred by the
                Parent  for  any  underwriting  of the  issue  or  otherwise  in
                connection therewith;

                        (ii) in the case of the  issuance  of  shares  of Common
                Stock for a  consideration  in whole or in part other than cash,
                the consideration other than cash shall be deemed to be the fair
                market value thereof as determined in good faith by the Board of
                Directors  of  the  Parent   (irrespective   of  the  accounting
                treatment thereof); and

                        (iii)   upon   any   such   exercise,    the   aggregate
                consideration received for such securities shall be deemed to be
                the  consideration  received  by the Parent for the  issuance of
                such securities plus the additional  minimum  consideration,  if
                any,  to be  received  by the  Parent  upon  the  conversion  or
                exchange   thereof  (the   consideration  in  each  case  to  be
                determined in the same manner as provided in subsections (i) and
                (ii) of this Section 3.6(d)).

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<PAGE>

        3.7  Reservation  of Shares.  During the  period  the  conversion  right
exists,  the Parent will reserve from its authorized and unissued Common Stock a
sufficient  number of shares to provide for the  issuance of  Conversion  Shares
upon the full  conversion  of this Note,  the  Warrants  and the  Options.  Each
Company  represents that upon issuance,  the Conversion  Shares will be duly and
validly  issued,  fully paid and  non-assessable.  Each Company  agrees that its
issuance of this Note shall  constitute full authority to its officers,  agents,
and transfer agents who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary  certificates for the Conversion
Shares upon the conversion of this Note.

        3.8 Registration Rights. The Holder has been granted registration rights
with respect to the Conversion  Shares as set forth in the  Registration  Rights
Agreement.

        3.9 Issuance of New Note.  Upon any partial  conversion  of this Note, a
new Note  containing  the same date and  provisions  of this Note shall,  at the
request  of the  Holder,  be  issued  by the  Companies  to the  Holder  for the
principal  balance of this Note and interest which shall not have been converted
or paid.  Subject to the provisions of Article IV of this Note, no Company shall
pay any costs, fees or any other  consideration to the Holder for the production
and issuance of a new Note.

                                   ARTICLE IV
                                EVENTS OF DEFAULT

        4.1 Events of Default.  The  occurrence of an Event of Default under the
Security  Agreement  shall  constitute an event of default  ("EVENT OF DEFAULT")
hereunder.

        4.2  Default   Interest.   Following  the   occurrence  and  during  the
continuance of an Event of Default,  the Companies shall, jointly and severally,
pay additional interest on the outstanding  principal balance of this Note in an
amount  equal to the  Contract  Rate plus ten percent  (10%) per annum,  and all
outstanding  Obligations,  including unpaid  interest,  shall continue to accrue
interest at such additional interest rate from the date of such Event of Default
until the date such Event of Default is cured or waived.

        4.3 Default Payment. Following the occurrence and during the continuance
of an Event of Default,  the Holder, at its option, may demand repayment in full
of all  Obligations  and/or may elect, in addition to all rights and remedies of
the Holder under the Security  Agreement and the other Ancillary  Agreements and
all  Obligations  of the  Companies  under the Security  Agreement and the other
Ancillary Agreements, to require the Company to make a Default Payment ("DEFAULT
PAYMENT"). The Default Payment shall be 130% of the outstanding principal amount
of the Note,  plus accrued but unpaid  interest,  all other fees then  remaining
unpaid,  and all other amounts payable  hereunder.  The Default Payment shall be
applied  first to any fees due and payable to the Holder  pursuant to the Notes,
the Security Agreement,  and/or the other Ancillary Agreements,  then to accrued
and  unpaid  interest  due on the  Notes and then to the  outstanding  principal
balance of the Notes.  The Default Payment shall be due and payable  immediately
on the date that the Holder has  exercised  its rights  pursuant to this Section
4.3.

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<PAGE>

                                    ARTICLE V
                                  MISCELLANEOUS

        5.1  Conversion  Privileges.  The  conversion  privileges  set  forth in
Article  III shall  remain in full  force and effect  immediately  from the date
hereof  until the date this Note is  indefeasibly  paid in full and  irrevocably
terminated.

        5.2  Cumulative  Remedies.   The  remedies  under  this  Note  shall  be
cumulative.

        5.3 Failure or Indulgence Not Waiver. No failure or delay on the part of
the Holder  hereof in the exercise of any power,  right or  privilege  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other  right,  power or  privilege.  All  rights  and  remedies  existing
hereunder  are  cumulative  to, and not  exclusive  of,  any rights or  remedies
otherwise available.

        5.4 Notices.  Any notice herein  required or permitted to be given shall
be in  writing  and  provided  in  accordance  with the  terms  of the  Security
Agreement.

        5.5 Amendment Provision.  The term "Note" and all references thereto, as
used  throughout  this  instrument,  shall mean this  instrument  as  originally
executed,  or  if  later  amended  or  supplemented,   then  as  so  amended  or
supplemented,  and any successor  instrument as such successor instrument may be
amended or supplemented.

        5.6 Assignability.  This Note shall be binding upon each Company and its
successors  and  assigns,  and shall  inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements  of the  Security  Agreement.  No  Company  may  assign  any of its
obligations under this Note without the prior written consent of the Holder, any
such purported assignment without such consent being null and void.

        5.7 Cost of Collection. In case of any Event of Default under this Note,
the Companies shall,  jointly and severally,  pay the Holder reasonable costs of
collection, including reasonable attorneys' fees.

        5.8 Governing Law, Jurisdiction and Waiver of Jury Trial.

                (a) THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
        ACCORDANCE  WITH THE LAWS OF THE  STATE OF NEW YORK,  WITHOUT  REGARD TO
        PRINCIPLES OF CONFLICTS OF LAW.

                (b) EACH  COMPANY  HEREBY  CONSENTS AND AGREES THAT THE STATE OR
        FEDERAL  COURTS  LOCATED  IN THE  COUNTY OF NEW YORK,  STATE OF NEW YORK
        SHALL HAVE  EXCLUSIVE  JURISDICTION  TO HEAR AND DETERMINE ANY CLAIMS OR
        DISPUTES  BETWEEN ANY COMPANY,  ON THE ONE HAND, AND THE HOLDER,  ON THE
        OTHER  HAND,  PERTAINING  TO  THIS  NOTE OR ANY OF THE  OTHER  ANCILLARY
        AGREEMENTS  OR TO ANY MATTER  ARISING  OUT OF OR RELATED TO THIS NOTE OR
        ANY  OF  THE   ANCILLARY   AGREEMENTS;   PROVIDED,   THAT  EACH  COMPANY
        ACKNOWLEDGES  THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
        A COURT  LOCATED  OUTSIDE OF THE COUNTY OF NEW YORK,  STATE OF NEW YORK;
        AND  FURTHER  PROVIDED,  THAT  NOTHING  IN THIS NOTE  SHALL BE DEEMED OR
        OPERATE TO PRECLUDE THE HOLDER FROM  BRINGING SUIT OR TAKING OTHER LEGAL
        ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS,  TO REALIZE
        ON THE  COLLATERAL  OR ANY OTHER  SECURITY  FOR THE  OBLIGATIONS,  OR TO
        ENFORCE A JUDGMENT OR OTHER  COURT  ORDER IN FAVOR OF THE  HOLDER.  EACH
        COMPANY  EXPRESSLY  SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
        IN ANY  ACTION OR SUIT  COMMENCED  IN ANY SUCH  COURT  AND EACH  COMPANY
        HEREBY  WAIVES  ANY  OBJECTION  WHICH IT MAY  HAVE  BASED  UPON  LACK OF
        PERSONAL  JURISDICTION,  IMPROPER  VENUE OR FORUM NON  CONVENIENS.  EACH
        COMPANY  HEREBY WAIVES  PERSONAL  SERVICE OF THE SUMMONS,  COMPLAINT AND
        OTHER PROCESS  ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE
        OF SUCH  SUMMONS,  COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED
        OR CERTIFIED  MAIL  ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN
        THE  SECURITY  AGREEMENT  AND  THAT  SERVICE  SO MADE  SHALL  BE  DEEMED
        COMPLETED UPON THE EARLIER OF THE COMPANY'S  ACTUAL  RECEIPT  THEREOF OR
        THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

                                       7
<PAGE>

                (c) EACH  COMPANY  DESIRES  THAT ITS  DISPUTES  BE RESOLVED BY A
        JUDGE  APPLYING SUCH  APPLICABLE  LAWS.  THEREFORE,  TO ACHIEVE THE BEST
        COMBINATION OF THE BENEFITS OF THE JUDICIAL  SYSTEM AND OF  ARBITRATION,
        EACH  COMPANY  HERETO  WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
        SUIT, OR PROCEEDING  BROUGHT TO RESOLVE ANY DISPUTE,  WHETHER ARISING IN
        CONTRACT,  TORT,  OR  OTHERWISE  BETWEEN  THE HOLDER  AND/OR ANY COMPANY
        ARISING  OUT  OF,   CONNECTED   WITH,   RELATED  OR  INCIDENTAL  TO  THE
        RELATIONSHIP  ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, ANY
        OTHER ANCILLARY AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

                5.9  Severability.  In the event that any provision of this Note
        is invalid or unenforceable under any applicable statute or rule of law,
        then such  provision  shall be deemed  inoperative to the extent that it
        may conflict therewith and shall be deemed modified to conform with such
        statute or rule of law. Any such  provision  which may prove  invalid or
        unenforceable   under  any  law  shall  not  affect  the   validity   or
        enforceability of any other provision of this Note.

                5.10 Maximum Payments.  Nothing contained herein shall be deemed
        to  establish  or require  the  payment of a rate of  interest  or other
        charges in excess of the maximum  permitted  by  applicable  law. In the
        event that the rate of  interest  required  to be paid or other  charges
        hereunder exceed the maximum rate permitted by such law, any payments in
        excess of such  maximum rate shall be credited  against  amounts owed by
        the Companies to the Holder and thus refunded to the Companies.

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<PAGE>

                5.11 Security  Interest.  The Holder has been granted a security
        interest (i) in certain assets of the Companies as more fully  described
        in the Security  Agreement,  (ii) pursuant to the Stock Pledge Agreement
        dated as of the date  hereof and (iii) in certain  real  property of the
        Term Loan B Guarantors.

                5.12  Construction.  Each  party  acknowledges  that  its  legal
        counsel  participated  in the  preparation of this Note and,  therefore,
        stipulates  that the rule of  construction  that  ambiguities  are to be
        resolved  against  the  drafting  party  shall  not  be  applied  in the
        interpretation of this Note to favor any party against the other.

       [Balance of page intentionally left blank; signature page follows]

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<PAGE>

        IN WITNESS WHEREOF,  the Companies have caused this Secured  Convertible
Term Note to be signed in its name  effective  as of this 7th day of  September,
2005.

                                           AMERICAN TECHNOLOGIES GROUP, INC.

                                           By:__________________________________
                                              Name:
                                              Title:

WITNESS:

----------------------------------

                                           NORTH TEXAS STEEL COMPANY, INC.

                                           By:__________________________________
                                              Name:
                                              Title:

WITNESS:

----------------------------------

                                           OMAHA HOLDINGS CORP.

                                           By:__________________________________
                                              Name:
                                              Title:

WITNESS:

----------------------------------

                                       10
<PAGE>

                                    EXHIBIT A

                                 OTHER COMPANIES

              North Texas Steel Company, Inc., a Texas corporation

                  Omaha Holdings Corp., a Delaware corporation

                                       11
<PAGE>

                                    EXHIBIT B

                              NOTICE OF CONVERSION

      (To be executed by the Holder in order to convert all or part of the
                Secured Convertible Term Note into Common Stock)

[Name and Address of Company]

        The  undersigned  hereby  converts  $_________  of the  principal due on
[specify  applicable  Repayment  Date] under the Secured  Convertible  Term Note
dated as of  September  7, 2005 (the  "NOTE")  issued by  American  Technologies
Group,  Inc. (the "PARENT") and the other Companies named and as defined therein
by delivery of shares of Common Stock of the Parent ("SHARES") on and subject to
the conditions set forth in the Note.

1.    Date of Conversion:      _______________________

2.    Shares To Be Delivered:  _______________________

                                               AMERICAN TECHNOLOGIES GROUP, INC.

                                            By:_________________________________

                                            Name:_______________________________

                                            Title:______________________________

                                       12
<PAGE>EXHIBIT 4.6

                                           REGISTRATION RIGHTS AGREEMENT

                  This Registration  Rights Agreement (this "Agreement") is made
and  entered  into  as  of  September  ____,   2005,  by  and  between  American
Technologies  Group,  Inc., a Nevada  corporation  (the  "Company"),  and Laurus
Master Fund, Ltd. (the "Purchaser").

                  This  Agreement is made  pursuant to the  Security  Agreement,
dated as of the date hereof, by and among the Purchaser, the Company and various
subsidiaries of the Company (as amended,  modified or supplemented  from time to
time, the "Security Agreement"),  and pursuant to the Notes, the Options and the
Warrants referred to therein.

                  The Company and the Purchaser hereby agree as follows:

         1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Security  Agreement  shall have the meanings  given such
terms in the Security Agreement. As used in this Agreement,  the following terms
shall have the following meanings:

                  "Commission" means the Securities and Exchange Commission.

                  "Common Stock" means shares of the Company's common stock, par
value $0.01 per share.

                  "Effectiveness  Date"  means,  (i) with respect to the initial
Registration  Statement required to be filed hereunder, a date no later than one
hundred and twenty (120) days following the date hereof and (ii) with respect to
each additional Registration Statement required to be filed hereunder, a date no
later than thirty (30) days following the applicable Filing Date.

                  "Effectiveness  Period"  has the  meaning set forth in Section
2(a).

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended, and any successor statute.

                  "Filing Date" means,  with respect to (1) the Loans  evidenced
by a Minimum  Borrowing Note made on the initial funding date, the date which is
forty-five  (45) days  after the date  hereof,  (2) the  shares of Common  Stock
issued to the Purchaser upon exercise of an Option, the date which is forty-five
(45) days after the issuance of each such Option, (3) the shares of Common Stock
issuable  to the  Purchaser  upon  exercise  of a  Warrant,  the  date  which is
forty-five  (45) days after the issuance of such  Warrant,  (4) each  $3,000,000
tranche of Revolving  Loans  evidenced by a Minimum  Borrowing Note funded after
the date hereof,  the date which is  forty-five  (45) days after such funding of
such  additional  tranche of Revolving  Loans  evidenced by a Minimum  Borrowing
Note, (5) the Loans  evidenced by Term Note A, the date which is forty-five (45)
days after the date hereof,  and (6) the shares of Common Stock  issuable to the
Holder as a result of adjustments to the Fixed Conversion Price made pursuant to
Section 2.6 of the Revolving Note,  Section 3.6 of the Minimum  Borrowing Notes,
Section 3.6 of Term Note A, Section 4 of the Warrant, Section 4 of the Option or
otherwise,  in each case forty-five (45) days after the occurrence of such event
or the date of the adjustment of the Fixed Conversion Price.

<PAGE>

                  "Holder"  or  "Holders"  means  the  Purchaser  or  any of its
affiliates or transferees to the extent any of them hold Registrable Securities,
other then those purchasing Registrable Securities in a market transaction.

                  "Indemnified Party" has the meaning set forth in Section 5(c).

                  "Indemnifying  Party"  has the  meaning  set forth in  Section
5(c).

                  "Proceeding" means an action,  claim,  suit,  investigation or
proceeding   (including,   without  limitation,   an  investigation  or  partial
proceeding, such as a deposition), whether commenced or threatened.

                  "Prospectus"  means the prospectus  included in a Registration
Statement  (including,  without  limitation,  a  prospectus  that  includes  any
information  previously  omitted from a prospectus filed as part of an effective
registration  statement  in  reliance  upon  Rule  430A  promulgated  under  the
Securities Act), as amended or supplemented by any prospectus  supplement,  with
respect  to  the  terms  of  the  offering  of any  portion  of the  Registrable
Securities covered by such Registration Statement,  and all other amendments and
supplements to the  Prospectus,  including  post-effective  amendments,  and all
material  incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

                  "Registrable  Securities"  means the  shares  of Common  Stock
issuable upon the conversion of each Minimum  Borrowing Note or upon exercise of
the Options and the Warrants.

                  "Registration  Statement"  means each  registration  statement
required to be filed hereunder, including the Prospectus therein, amendments and
supplements to such  registration  statement or  Prospectus,  including pre- and
post-effective  amendments,  all exhibits thereto, and all material incorporated
by reference  or deemed to be  incorporated  by  reference in such  registration
statement.

                  "Rule  144"  means  Rule  144  promulgated  by the  Commission
pursuant to the  Securities  Act, as such Rule may be amended from time to time,
or any similar rule or regulation  hereafter  adopted by the  Commission  having
substantially the same effect as such Rule.

                  "Rule  415"  means  Rule  415  promulgated  by the  Commission
pursuant to the  Securities  Act, as such Rule may be amended from time to time,
or any similar rule or regulation  hereafter  adopted by the  Commission  having
substantially the same effect as such Rule.

                  "Securities Act" means the Securities Act of 1933, as amended,
and any successor statute.

                  "Security Agreement" has the meaning given to such term in the
Preamble hereto.

                  "Trading  Market"  means any of the NASD OTC  Bulletin  Board,
NASDAQ SmallCap Market,  the Nasdaq National Market, the American Stock Exchange
or the New York Stock Exchange

                                       2
<PAGE>

                  "Warrants"  means the Common Stock  purchase  warrants  issued
pursuant to the Security Agreement.

         2. Registration.

                  (a) On or prior to each Filing Date, the Company shall prepare
and file with the Commission a Registration  Statement  covering the Registrable
Securities for a selling  stockholder resale offering to be made on a continuous
basis  pursuant to Rule 415. Each  Registration  Statement  shall be on Form S-3
(except  if the  Company  is not  then  eligible  to  register  for  resale  the
Registrable  Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance  herewith).  The Company shall cause each
Registration  Statement  to become  effective  and remain  effective as provided
herein.  The Company shall use its reasonable  commercial  efforts to cause each
Registration  Statement to be declared  effective  under the  Securities  Act as
promptly as possible  after the filing  thereof,  but in any event no later than
the Effectiveness Date. The Company shall use its reasonable  commercial efforts
to keep each Registration  Statement continuously effective under the Securities
Act  until  the date  which  is the  earlier  date of when  (i) all  Registrable
Securities  covered by such  Registration  Statement  have been sold or (ii) all
Registrable  Securities  covered  by  such  Registration  Statement  may be sold
immediately  without  registration  under the  Securities Act and without volume
restrictions  pursuant  to Rule  144(k),  as  determined  by the  counsel to the
Company  pursuant to a written  opinion  letter to such  effect,  addressed  and
acceptable to the Company's  transfer agent and the affected  Holders (each,  an
"Effectiveness Period").

                  If: (i) any Registration Statement is not filed on or prior to
the applicable Filing Date for such Registration Statement;  (ii) a Registration
Statement  filed  hereunder is not declared  effective by the  Commission by the
applicable  Effectiveness  Date;  (iii) after a Registration  Statement is filed
with and  declared  effective by the  Commission,  a  Discontinuation  Event (as
hereafter defined) shall occur and be continuing, or such Registration Statement
ceases to be  effective  (by  suspension  or  otherwise)  as to all  Registrable
Securities to which it is required to relate at any time prior to the expiration
of the Effectiveness  Period applicable to such Registration  Statement (without
being succeeded  immediately by an additional  Registration  Statement filed and
declared  effective),  for a period of time  which  shall  exceed 30 days in the
aggregate  per year or more than 20  consecutive  calendar  days  (defined  as a
period  of 365  days  commencing  on the date  such  Registration  Statement  is
declared  effective);  or (iv) the Common  Stock is not listed or quoted,  or is
suspended  from  trading  on any  Trading  Market  for a  period  of  three  (3)
consecutive  Trading Days (provided the Company shall not have been able to cure
such trading  suspension within 30 days of the notice thereof or list the Common
Stock on another Trading Market);  (any such failure or breach being referred to
as an  "Event,"  and for  purposes  of clause (i) or (ii) the date on which such
Event  occurs,  or for purposes of clause (iii) the date which such 30 day or 20
consecutive  day period (as the case may be) is  exceeded,  or for  purposes  of
clause  (iv) the date on which such three (3)  Trading  Day period is  exceeded,
being  referred to as "Event  Date"),  then as partial relief for the damages to
the Purchaser by reason of the  occurrence of any such Event (which remedy shall
not be  exclusive  of any other  remedies  available  at law or in equity),  the
Company shall pay to the Purchaser,  as liquidated damages and not as a penalty,

                                       3
<PAGE>

for each day that an Event has  occurred  and is  continuing,  an amount in cash
equal to one-thirtieth  ((1)/30th) of the product of (A) the original  principal
amount  of  each  applicable  Minimum  Borrowing  Note  multiplied  by  (B)  the
Applicable  Percentage (as hereafter  defined).  For purposes  hereof,  the term
"Applicable Percentage" means (i) for the first thirty (30) day period following
the occurrence and during the continuance of such Event,  one percent (1%), (ii)
for the second thirty (30) day period  following the  occurrence  and during the
continuance of such Event, one and one-half percent (1.5%) and (iii) thereafter,
two percent (2%).  In the event the Company fails to make any payments  pursuant
to this Section 2(b) in a timely  manner,  such payments  shall bear interest at
the rate of 1.5% per month (prorated for partial months) until paid in full.

                  (b) Within three business days of the Effectiveness  Date, the
Company shall cause its counsel to issue a blanket  opinion in the form attached
hereto as Exhibit A, to the transfer  agent  stating that the shares are subject
to an effective  registration  statement and can be reissued free of restrictive
legend upon notice of a sale by the Purchaser and  confirmation by the Purchaser
that it has complied with the prospectus  delivery  requirements,  provided that
the Company has not advised the  transfer  agent  orally or in writing  that the
opinion  has been  withdrawn.  Copies of the  blanket  opinion  required by this
Section 2(c) shall be delivered to the Purchaser within the time frame set forth
above.

         3. Registration Procedures.  If and whenever the Company is required by
the provisions  hereof to effect the registration of any Registrable  Securities
under the Securities Act, the Company will, as expeditiously as possible:

                  (a)  prepare  and file  with  the  Commission  a  Registration
Statement with respect to such  Registrable  Securities,  respond as promptly as
possible to any comments received from the Commission,  and use its best efforts
to cause such  Registration  Statement  to become and remain  effective  for the
Effectiveness Period with respect thereto, and promptly provide to the Purchaser
copies of all filings and Commission letters of comment relating thereto;

                  (b) prepare and file with the Commission  such  amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to comply with the  provisions  of the  Securities
Act with respect to the  disposition of all  Registrable  Securities  covered by
such Registration  Statement and to keep such Registration  Statement  effective
until the expiration of the Effectiveness Period applicable to such Registration
Statement;

                  (c)  furnish  to the  Purchaser  such  number of copies of the
Registration  Statement and the  Prospectus  included  therein  (including  each
preliminary  Prospectus)  as the Purchaser  reasonably may request to facilitate
the public sale or disposition  of the  Registrable  Securities  covered by such
Registration Statement;

                  (d) use its  commercially  reasonable  efforts to  register or
qualify the  Purchaser's  Registrable  Securities  covered by such  Registration
Statement under the securities or "blue sky" laws of such  jurisdictions  within
the United States as the Purchaser may reasonably  request,  provided,  however,
that the Company shall not for any such purpose be required to qualify generally
to transact  business as a foreign  corporation in any jurisdiction  where it is
not so  qualified  or to  consent  to  general  service  of  process in any such
jurisdiction;

                                       4
<PAGE>

                  (e)  list  the   Registrable   Securities   covered   by  such
Registration Statement with any securities exchange on which the Common Stock of
the Company is then listed;

                  (f)  immediately  notify  the  Purchaser  at any  time  when a
Prospectus  relating  thereto is required to be delivered  under the  Securities
Act,  of the  happening  of any event of which the Company  has  knowledge  as a
result of which the Prospectus contained in such Registration Statement, as then
in effect,  includes an untrue  statement of a material fact or omits to state a
material fact required to be stated  therein or necessary to make the statements
therein not misleading in light of the circumstances then existing; and

                  (g) make  available  for  inspection  by the Purchaser and any
attorney,  accountant  or other agent  retained by the  Purchaser,  all publicly
available,  non-confidential  financial and other records,  pertinent  corporate
documents  and  properties  of the Company,  and cause the  Company's  officers,
directors  and  employees  to supply all  publicly  available,  non-confidential
information  reasonably  requested by the  attorney,  accountant or agent of the
Purchaser.

         4.  Registration  Expenses.  All  expenses  relating  to the  Company's
compliance  with Sections 2 and 3 hereof,  including,  without  limitation,  all
registration  and filing fees,  printing  expenses,  fees and  disbursements  of
counsel and independent  public  accountants for the Company,  fees and expenses
(including  reasonable  counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD,  transfer taxes,  fees of
transfer  agents and  registrars,  fees of, and  disbursements  incurred by, one
counsel  for the  Holders  (not  to  exceed  $7,500)  are  called  "Registration
Expenses".  All  selling  commissions  applicable  to the  sale  of  Registrable
Securities,  including any fees and  disbursements of any special counsel to the
Holders  beyond those included in  Registration  Expenses,  are called  "Selling
Expenses." The Company shall only be responsible for all Registration Expenses.

         5.       Indemnification.

                  (a)  In  the  event  of  a  registration  of  any  Registrable
Securities under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless  each Holder,  and its officers,  directors and each
other  person,  if any,  who  controls  such  Holder  within the  meaning of the
Securities Act,  against any losses,  claims,  damages or liabilities,  joint or
several,  to which such  Holder,  or such persons may become  subject  under the
Securities  Act or  otherwise,  insofar  as  such  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof) arise out of or are based upon any
untrue  statement or alleged untrue  statement of any material fact contained in
any  Registration   Statement  under  which  such  Registrable  Securities  were
registered under the Securities Act pursuant to this Agreement,  any preliminary
Prospectus or final Prospectus contained therein, or any amendment or supplement
thereof,  or arise out of or are based upon the omission or alleged  omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading,  and will reimburse such Holder, and each
such  person for any  reasonable  legal or other  expenses  incurred  by them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability or action;  provided,  however, that the Company will not be liable in
any such  case if and to the  extent  that  any  such  loss,  claim,  damage  or
liability  arises out of or is based upon an untrue  statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished  by or on  behalf  of the  Purchaser  or any such  person  in  writing
specifically for use in any such document.

                                       5
<PAGE>

                  (b)  In  the  event  of  a  registration  of  the  Registrable
Securities  under the Securities Act pursuant to this  Agreement,  the Purchaser
will  indemnify and hold harmless the Company,  and its officers,  directors and
each other  person,  if any, who controls the Company  within the meaning of the
Securities Act,  against all losses,  claims,  damages or liabilities,  joint or
several,  to which the  Company or such  persons  may become  subject  under the
Securities  Act or  otherwise,  insofar  as  such  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof) arise out of or are based upon any
untrue  statement or alleged  untrue  statement  of any material  fact which was
furnished in writing by the  Purchaser to the Company  expressly for use in (and
such  information is contained in) the  Registration  Statement under which such
Registrable Securities were registered under the Securities Act pursuant to this
Agreement,  any preliminary Prospectus or final Prospectus contained therein, or
any  amendment  or  supplement  thereof,  or arise out of or are based  upon the
omission or alleged  omission to state  therein a material  fact  required to be
stated therein or necessary to make the statements  therein not misleading,  and
will  reimburse  the Company and each such  person for any  reasonable  legal or
other expenses  incurred by them in connection with  investigating  or defending
any such loss, claim, damage, liability or action,  provided,  however, that the
Purchaser  will be liable in any such  case if and only to the  extent  that any
such loss,  claim,  damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information  furnished in writing to the Company by or on behalf
of the Purchaser specifically for use in any such document.  Notwithstanding the
provisions of this  paragraph,  the Purchaser shall not be required to indemnify
any  person or entity in excess  of the  amount of the  aggregate  net  proceeds
received by the  Purchaser in respect of  Registrable  Securities  in connection
with any such registration under the Securities Act.

                  (c)  Promptly  after  receipt  by a party  entitled  to  claim
indemnification hereunder (an "Indemnified Party") of notice of the commencement
of any action,  such Indemnified Party shall, if a claim for  indemnification in
respect thereof is to be made against a party hereto obligated to indemnify such
Indemnified Party (an "Indemnifying  Party"),  notify the Indemnifying  Party in
writing thereof,  but the omission so to notify the Indemnifying Party shall not
relieve it from any liability which it may have to such Indemnified  Party other
than under this Section 5(c) and shall only relieve it from any liability  which
it may have to such  Indemnified  Party  under this  Section  5(c) if and to the
extent the Indemnifying  Party is prejudiced by such omission.  In case any such
action shall be brought  against any  Indemnified  Party and it shall notify the
Indemnifying Party of the commencement  thereof, the Indemnifying Party shall be
entitled  to  participate  in and,  to the extent it shall  wish,  to assume and
undertake  the defense  thereof with counsel  satisfactory  to such  Indemnified
Party,  and, after notice from the Indemnifying  Party to such Indemnified Party
of its election so to assume and undertake the defense thereof, the Indemnifying
Party shall not be liable to such Indemnified  Party under this Section 5(c) for
any legal expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof; if the Indemnified Party retains its own counsel, then
the  Indemnified  Party shall pay all fees,  costs and expenses of such counsel,
provided,  however,  that, if the defendants in any such action include both the
Indemnified  Party and the  Indemnifying  Party and the Indemnified  Party shall
have reasonably  concluded that there may be reasonable defenses available to it
which are different  from or additional to those  available to the  Indemnifying

                                       6
<PAGE>

Party or if the interests of the Indemnified  Party  reasonably may be deemed to
conflict with the interests of the  Indemnifying  Party,  the Indemnified  Party
shall have the right to select one  separate  counsel  and to assume  such legal
defenses and otherwise to  participate  in the defense of such action,  with the
reasonable expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the Indemnifying Party as incurred.

                  (d) In order to provide for just and equitable contribution in
the  event of joint  liability  under  the  Securities  Act in any case in which
either (i) the Purchaser, or any officer,  director or controlling person of the
Purchaser,  makes a claim for indemnification  pursuant to this Section 5 but it
is judicially  determined (by the entry of a final judgment or decree by a court
of competent  jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such  indemnification may not be enforced in such
case  notwithstanding  the fact that this Section 5 provides for indemnification
in such case, or (ii)  contribution  under the Securities Act may be required on
the part of the Purchaser or such officer, director or controlling person of the
Purchaser in  circumstances  for which  indemnification  is provided  under this
Section 5; then,  and in each such case,  the  Company  and the  Purchaser  will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after  contribution  from others) in such proportion so that the
Purchaser is responsible only for the portion represented by the percentage that
the  public  offering  price  of its  securities  offered  by  the  Registration
Statement bears to the public  offering price of all securities  offered by such
Registration  Statement,  provided,  however,  that,  in any such case,  (A) the
Purchaser  will not be required to contribute any amount in excess of the public
offering  price  of  all  such  securities   offered  by  it  pursuant  to  such
Registration  Statement;  and (B) no  person  or  entity  guilty  of  fraudulent
misrepresentation  (within  the  meaning  of  Section  10(f) of the Act) will be
entitled  to  contribution  from any person or entity who was not guilty of such
fraudulent misrepresentation.

         6. Representations and Warranties.

                  (a) The Common Stock is  registered  pursuant to Section 12(b)
or 12(g) of the Exchange Act and,  except with respect to certain  matters which
the Company has  disclosed to the  Purchaser  on Schedule  12(u) to the Security
Agreement,  the  Company  has  timely  filed  all  proxy  statements,   reports,
schedules,  forms,  statements  and other  documents  required to be filed by it
under the Exchange Act. The Company has filed (i) its Annual Report on Form 10-K
for the fiscal year ended  December  31, 2004 and (ii) its  Quarterly  Report on
Form 10-Q (collectively, the "SEC Reports"). Each SEC Report was, at the time of
its filing,  in substantial  compliance with the  requirements of its respective
form and none of the SEC Reports,  nor the financial  statements  (and the notes
thereto)  included in the SEC  Reports,  as of their  respective  filing  dates,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements  therein,
in light of the  circumstances  under which they were made, not misleading.  The
financial  statements  of the Company  included in the SEC Reports  comply as to
form in all material  respects with applicable  accounting  requirements and the
published rules and regulations of the Commission or other  applicable rules and
regulations with respect thereto.  Such financial  statements have been prepared
in accordance with generally accepted accounting  principles ("GAAP") applied on
a consistent  basis during the periods  involved (except (i) as may be otherwise
indicated in such financial  statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or

                                       7
<PAGE>

may be  condensed)  and fairly  present in all material  respects the  financial
condition,  the results of operations  and the cash flows of the Company and its
subsidiaries,  on a consolidated basis, as of, and for, the periods presented in
each such SEC Report.

                  (b) The  Common  Stock is listed  for  trading on the Over the
Counter  Bulletin Board and satisfies all  requirements  for the continuation of
such listing. The Company has not received any notice that its Common Stock will
be delisted  from the Over the Counter  Bulletin  Board or that the Common Stock
does not meet all requirements for the continuation of such listing.

                  (c) Neither the Company,  nor any of its  affiliates,  nor any
person acting on its or their behalf, has directly or indirectly made any offers
or sales of any  security  or  solicited  any offers to buy any  security  under
circumstances  that would cause the offering of the  Securities  pursuant to the
Security  Agreement  to be  integrated  with prior  offerings by the Company for
purposes of the  Securities Act which would prevent the Company from selling the
Common Stock  pursuant to Rule 506 under the  Securities  Act, or any applicable
exchange-related stockholder approval provisions, nor will the Company or any of
its  affiliates  or  subsidiaries  take any action or steps that would cause the
offering of the Common Stock to be integrated with other  offerings  (other than
such concurrent offering to the Purchaser).

                  (d) The Options,  Warrants, the Notes and the shares of Common
Stock which the Purchaser may acquire pursuant to the Options,  Warrants and the
Notes are all restricted  securities  under the Securities Act as of the date of
this  Agreement.  The Company  will not issue any stop  transfer  order or other
order  impeding the sale and delivery of any of the  Registrable  Securities  at
such time as such  Registrable  Securities  are registered for public sale or an
exemption from registration is available, except as required by federal or state
securities laws.

                  (e) The  Company  understands  the  nature of the  Registrable
Securities  issued on the Closing Date and issuable upon the  conversion of each
Note and the  exercise  of each  Warrant  and  Option  and  recognizes  that the
issuance of such  Registrable  Securities may have a potential  dilutive effect.
The  Company  specifically   acknowledges  that  its  obligation  to  issue  the
Registrable Securities is binding upon the Company and enforceable regardless of
the  dilution  such  issuance  may  have on the  ownership  interests  of  other
shareholders of the Company.

                  (f)  Except  for  agreements  made in the  ordinary  course of
business,  there is no agreement  that has not been filed with the Commission as
an exhibit to a registration  statement or to a form required to be filed by the
Company under the Exchange Act, the breach of which could reasonably be expected
to have a material and adverse  effect on the Company and its  subsidiaries,  or
would  prohibit or otherwise  interfere with the ability of the Company to enter
into and perform any of its  obligations  under this  Agreement  in any material
respect.

                  (g) The Company will at all times have authorized and reserved
a sufficient  number of shares of Common Stock for the full  conversion  of each
Note and exercise of the Warrants.

                                       8
<PAGE>

         7. Miscellaneous.

                  (a) Remedies.  In the event of a breach by the Company or by a
Holder, of any of their respective obligations under this Agreement, each Holder
or the  Company,  as the case may be, in addition to being  entitled to exercise
all rights  granted  by law and under  this  Agreement,  including  recovery  of
damages,  will be  entitled  to specific  performance  of its rights  under this
Agreement.

                  (b) No Piggyback on Registrations. Except as and to the extent
set forth on Schedule  7(b) hereto,  neither the Company nor any of its security
holders  (other than the Holders in such capacity  pursuant  hereto) may include
securities  of  the  Company  in  any  Registration  Statement  other  than  the
Registrable  Securities,  and the Company  shall not after the date hereof enter
into any  agreement  providing  any such  right for  inclusion  of shares in the
Registration  Statement  to any of its  security  holders.  Except as and to the
extent specified in Schedule 7(b) hereto, the Company has not previously entered
into any agreement  granting any registration  rights with respect to any of its
securities to any Person that have not been fully satisfied.

                  (c) Compliance.  Each Holder covenants and agrees that it will
comply  with the  prospectus  delivery  requirements  of the  Securities  Act as
applicable to it in connection with sales of Registrable  Securities pursuant to
any Registration Statement.

                  (d)  Discontinued  Disposition.  Each  Holder  agrees  by  its
acquisition of such  Registrable  Securities that, upon receipt of a notice from
the Company of the  occurrence of a  Discontinuation  Event (as defined  below),
such  Holder  will  forthwith   discontinue   disposition  of  such  Registrable
Securities  under the  applicable  Registration  Statement  until such  Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement or until it is advised in writing  (the  "Advice") by the Company that
the use of the applicable  Prospectus  may be resumed,  and, in either case, has
received copies of any additional or supplemental  filings that are incorporated
or deemed to be  incorporated  by reference in such  Prospectus or  Registration
Statement.  The  Company  may  provide  appropriate  stop  orders to enforce the
provisions   of  this   paragraph.   For  purposes  of  this  Section   7(d),  a
"Discontinuation  Event" shall mean (i) when the Commission notifies the Company
whether there will be a "review" of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company shall
provide true and complete  copies thereof and all written  responses  thereto to
each of the Holders); (ii) any request by the Commission or any other Federal or
state governmental  authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by the
Commission of any stop order suspending the  effectiveness of such  Registration
Statement covering any or all of the Registrable Securities or the initiation of
any  Proceedings  for that  purpose;  (iv) the  receipt  by the  Company  of any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction,  or the  initiation  or  threatening  of any  Proceeding  for such
purpose;  and/or (v) the  occurrence  of any event or passage of time that makes
the financial statements included in such Registration  Statement ineligible for
inclusion  therein  or any  statement  made in such  Registration  Statement  or
Prospectus or any document  incorporated or deemed to be incorporated therein by

                                       9
<PAGE>

reference  untrue in any material respect or that requires any revisions to such
Registration  Statement,  Prospectus or other  documents so that, in the case of
such  Registration  Statement  or  Prospectus,  as the case may be,  it will not
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated therein or necessary to make the statements  therein,
in light of the circumstances under which they were made, not misleading.

                  (e)  Piggy-Back  Registrations.  If at  any  time  during  any
Effectiveness Period there is not an effective  Registration  Statement covering
all  of  the  Registrable   Securities   required  to  be  covered  during  such
Effectiveness  Period and the Company  shall  determine to prepare and file with
the  Commission  a  registration  statement  relating to an offering for its own
account or the account of others under the  Securities  Act of any of its equity
securities,  other than on Form S-4 or Form S-8 (each as  promulgated  under the
Securities Act) or their then  equivalents  relating to equity  securities to be
issued solely in connection  with any  acquisition  of any entity or business or
equity  securities  issuable in connection  with stock option or other  employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen (15) days after receipt of such notice, any
such Holder  shall so request in  writing,  the  Company  shall  include in such
registration  statement  all or any  part of such  Registrable  Securities  such
Holder  requests to be  registered,  to the extent the Company may do so without
violating  registration  rights  of  others  which  exist as of the date of this
Agreement,  subject to customary  underwriter cutbacks applicable to all holders
of  registration  rights and subject to obtaining  any  required  consent of any
selling stockholder(s) to such inclusion under such registration statement.

                  (f) Amendments and Waivers.  The provisions of this Agreement,
including  the  provisions  of this  sentence,  may not be amended,  modified or
supplemented,  and waivers or consents to departures from the provisions  hereof
may not be given,  unless the same shall be in writing and signed by the Company
and the Holders of the then outstanding Registrable Securities.  Notwithstanding
the  foregoing,  a waiver or consent to depart from the  provisions  hereof with
respect to a matter that relates  exclusively  to the rights of certain  Holders
and that does not directly or indirectly  affect the rights of other Holders may
be given by Holders  of at least a majority  of the  Registrable  Securities  to
which such waiver or consent relates; provided,  however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.

                  (g) Notices.  Any notice or request  hereunder may be given to
the Company or the Purchaser at the  respective  addresses set forth below or as
may  hereafter be specified in a notice  designated as a change of address under
this Section 7(g). Any notice or request  hereunder shall be given by registered
or certified  mail,  return receipt  requested,  hand delivery,  overnight mail,
Federal  Express or other  national  overnight  next day carrier  (collectively,
"Courier") or telecopy  (confirmed by mail).  Notices and requests  shall be, in
the case of those by hand delivery,  deemed to have been given when delivered to
any  party to whom it is  addressed,  in the case of those by mail or  overnight
mail,  deemed to have been  given  three (3)  business  days after the date when
deposited  in the  mail or with the  overnight  mail  carrier,  in the case of a
Courier, the next business day following timely delivery of the package with the
Courier,  and, in the case of a telecopy,  when confirmed.  The address for such
notices and communications shall be as follows:

                                       10
<PAGE>

                  If to any Company:    American Technologies Group, Inc.
                                        PO Box 90
                                        Monrovia, California 91016
                                        Attention:     Dr. Gary Fromm, CEO
                                        Telephone:     (626) 357-5000
                                        Facsimile:     _________________________

                  with a copy to:       Sichenzia Ross Friedman Ference LLP
                                        1065 Avenue of the Americas, 21st Floor
                                        New York, New York 10018
                                        Attention:     Gregory Sichenzia, Esq.
                                        Telephone:     (212) 930-9700
                                        Facsimile:     (212) 930-9725

                  If to a Purchaser:    To the   address  set forth  under  such
                                        Purchaser  name on the  signature  pages
                                        hereto.

                  If to any other
                  Person who is
                  then the registered
                  Holder:               To the address of such Holder as it
                                        appears in the stock transfer books of
                                        the Company

or such other address as may be  designated  in writing  hereafter in accordance
with this Section 7(g) by such Person.

                  (h) Successors and Assigns.  This Agreement shall inure to the
benefit of and be binding upon the successors  and permitted  assigns of each of
the parties and shall inure to the benefit of each  Holder.  The Company may not
assign its rights or obligations  hereunder without the prior written consent of
each Holder.  Each Holder may assign their  respective  rights  hereunder in the
manner  and to the  Persons  as  permitted  under the  Notes and the  Securities
Purchase Agreement with the prior written consent of the Company,  which consent
shall not be unreasonably withheld.

                  (i) Execution and Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and, all of which taken  together  shall  constitute  one and the
same  agreement.  In the event that any  signature  is  delivered  by  facsimile
transmission,  such  signature  shall create a valid  binding  obligation of the
party  executing  (or on whose behalf such  signature is executed) the same with
the same  force and  effect as if such  facsimile  signature  were the  original
thereof.

                  (j) Governing Law, Jurisdiction and Waiver of Jury Trial. This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of New York applicable to contracts made and performed in such
State,  without  regard to  principles  of conflicts of law. The Company  hereby
consents  and agrees that the state or federal  courts  located in the County of
New  York,  State of New York  shall  have  exclusion  jurisdiction  to hear and
determine  any  Proceeding  between  the  Company,  on the  one  hand,  and  the
Purchaser,  on the other hand,  pertaining  to this  Agreement  or to any matter
arising out of or related to this  Agreement;  provided,  that the Purchaser and
the Company  acknowledge that any appeals from those courts may have to be heard
by a court  located  outside of the County of New York,  State of New York,  and

                                       11
<PAGE>

further  provided,  that nothing in this Agreement shall be deemed or operate to
preclude the Purchaser from bringing a Proceeding in any other  jurisdiction  to
collect the obligations,  to realize on the Collateral or any other security for
the  obligations,  or to enforce a judgment or other court order in favor of the
Purchaser.  The  Company  expressly  submits  and  consents  in  advance to such
jurisdiction  in any  Proceeding  commenced  in any such court,  and the Company
hereby  waives  any  objection  which it may have  based  upon lack of  personal
jurisdiction,  improper venue or forum non conveniens. The Company hereby waives
personal service of the summons,  complaint and other process issued in any such
Proceeding and agrees that service of such summons,  complaint and other process
may be made by  registered  or  certified  mail  addressed to the Company at the
address  set forth in  Section  7(g) and that  service  so made  shall be deemed
completed upon the earlier of the Company's  actual receipt thereof or three (3)
days after deposit in the U.S. mails, proper postage prepaid. The parties hereto
desire that their disputes be resolved by a judge applying such applicable laws.
Therefore,  to achieve the best  combination  of the  benefits  of the  judicial
system and of arbitration,  the parties hereto waive all rights to trial by jury
in any Proceeding  brought to resolve any dispute,  whether arising in contract,
tort,  or otherwise  between the  Purchaser  and/or the Company  arising out of,
connected with,  related or incidental to the relationship  established  between
then in connection with this Agreement.  If either party hereto shall commence a
Proceeding to enforce any provisions of this Agreement,  the Security  Agreement
or any other Ancillary  Agreement,  then the prevailing party in such Proceeding
shall be reimbursed by the other party for its  reasonable  attorneys'  fees and
other  costs and  expenses  incurred  with the  investigation,  preparation  and
prosecution of such Proceeding.

                  (k)  Cumulative  Remedies.  The remedies  provided  herein are
cumulative and not exclusive of any remedies provided by law.

                  (l)  Severability.   If  any  term,  provision,   covenant  or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall use their  reasonable  efforts to find and  employ an  alternative
means to achieve the same or substantially  the same result as that contemplated
by such term,  provision,  covenant or restriction.  It is hereby stipulated and
declared to be the  intention of the parties  that they would have  executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

                  (m)  Headings.   The  headings  in  this   Agreement  are  for
convenience  of  reference  only and  shall not limit or  otherwise  affect  the
meaning hereof.

       [Balance of page intentionally left blank; signature page follows]

                                       12
<PAGE>

                  IN WITNESS  WHEREOF,  the parties have  executed  this Minimum
Borrowing Note Registration Rights Agreement as of the date first written above.

                                        AMERICAN TECHNOLOGIES GROUP, INC.

                                        By:_____________________________
                                        Name:___________________________
                                        Title:____________________________

                                        LAURUS MASTER FUND, LTD.

                                        By:______________________________
                                        Name:____________________________
                                        Title:_____________________________

                                        Address for Notices:

                                        825 Third Avenue, 14th Floor
                                        New York, New York 10022
                                        Attention:  David Grin
                                        Facsimile:  212-541-4434

                                       13
<PAGE>

                                    EXHIBIT A

                                               ____________, 200___

[Continental Stock Transfer
& Trust Company
Two Broadway
New York, New York  10004
Attn:  William Seegraber]

                  Re:      Registration Statement on Form [S-3]

Ladies and Gentlemen:

         As counsel to American  Technologies  Group, Inc., a Nevada corporation
(the  "Company"),  we have  been  requested  to  render  our  opinion  to you in
connection  with the resale by the  individuals or entitles listed on Schedule A
attached  hereto (the  "Selling  Stockholders"),  of an aggregate of  __________
shares (the "Shares") of the Company's Common Stock.

         A  Registration  Statement  on Form [S-3] under the  Securities  Act of
1933,  as  amended  (the  "Act"),  with  respect to the resale of the Shares was
declared effective by the Securities and Exchange Commission on [date]. Enclosed
is the Prospectus dated [date].  We understand that the Shares are to be offered
and sold in the manner described in the Prospectus.

         Based upon the foregoing,  upon request by the Selling  Stockholders at
any time while the registration  statement remains effective,  it is our opinion
that  the  Shares  have  been  registered  for  resale  under  the  Act  and new
certificates evidencing the Shares upon their transfer or re-registration by the
Selling  Stockholders may be issued without  restrictive  legend. We will advise
you if the registration  statement is not available or effective at any point in
the future.

                                        Very truly yours,

                                        [Company counsel]

                                       14
<PAGE>

                                   Schedule A

<TABLE>
<CAPTION>
                                                                                               Shares
          Selling Stockholder                            R/N/O                              Being Offered
          -------------------                            -----                              -------------
<S>                                                     <C>                              <C>

</TABLE>

                                       15
<PAGE>

                                  Schedule 7(b)

                           Piggyback on Registrations

         None.

                                       16

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