Document:

EXHIBIT 4.12

                             FUNDS ESCROW AGREEMENT

      This Agreement is dated as of the ____ day of September,  2005 among North
Texas Steel Company, Inc., a Texas corporation ("NTSCO"),  American Technologies
Group, Inc., a Delaware  corporation  ("ATG"),  Omaha Holdings Corp., a Delaware
corporation  ("Omaha",  and collectively with NTSCO and ATG, the "Companies" and
each a "Company, Laurus Master Fund, Ltd. (the "Purchaser"), and Loeb & Loeb LLP
(the "Escrow Agent"):

                              W I T N E S S E T H:
                              - - - - - - - - - -

      WHEREAS,  Purchaser has advised Escrow Agent that (a) each Company and the
Purchaser have entered into a Security  Agreement  ("Security  Agreement"),  (b)
each  Company  has issued in favor of  Purchaser  the  Secured  Revolving  Note,
Secured  Convertible  Minimum  Borrowing Note,  Secured  Convertible Term Note A
("Term Note A") and Secured Convertible Term Note B (collectively, the "Notes"),
(c) ATG has issued to the Purchaser an option ("Option"),  (d) ATG has issued to
the Purchaser a common stock purchase  warrant  ("Warrant")  and (e) ATG and the
Purchaser  have  entered  into a  Registration  Rights  Agreement  covering  the
registration  of ATG's common stock  underlying  Term Note A, the Option and the
Warrant ("Registration Rights Agreement"); and

      WHEREAS,  the Companies and the Purchaser wish the Purchaser to deliver to
the Escrow Agent copies of the Documents (as hereafter defined) and the Escrowed
Payment  (as  hereafter  defined)  to be held and  released  by Escrow  Agent in
accordance with the terms and conditions of this Agreement; and

      WHEREAS,  the Escrow Agent is willing to serve as escrow agent pursuant to
the terms and conditions of this Agreement;

      NOW THEREFORE, the parties agree as follows:

                                   ARTICLE I

                                 INTERPRETATION

      1.1.  Definitions.  Whenever used in this  Agreement,  the following terms
shall have the meanings set forth below.

            (a)  "Agreement"  means this  Agreement,  as amended,  modified  and
supplemented from time to time by written agreement among the parties hereto.

            (b) "Closing Payment" means the closing payment to be paid to Laurus
Capital Management, L.L.C., the fund manager, as set forth on Schedule A hereto.

            (c) "Documents" means copies of the Security  Agreement,  the Notes,
the Warrant, the Option and the Registration Rights Agreement.

            (d) "Escrowed Payment" means $12,000,000.

<PAGE>

      1.2. Entire  Agreement.  This Agreement  constitutes the entire  agreement
among the  parties  hereto  with  respect to the  matters  contained  herein and
supersedes all prior agreements, understandings, negotiations and discussions of
the parties,  whether oral or written. There are no warranties,  representations
and other  agreements  made by the parties in connection with the subject matter
hereof except as specifically set forth in this Agreement.

      1.3.  Extended  Meanings.  In this Agreement  words importing the singular
number include the plural and vice versa;  words importing the masculine  gender
include  the  feminine  and  neuter  genders.  The  word  "person"  includes  an
individual,  body  corporate,  partnership,  trustee or trust or  unincorporated
association, executor, administrator or legal representative.

      1.4.  Waivers and  Amendments.  This  Agreement may be amended,  modified,
superseded,  cancelled, renewed or extended, and the terms and conditions hereof
may be waived,  in each case only by a written  instrument signed by all parties
hereto, or, in the case of a waiver, by the party waiving compliance.  Except as
expressly  stated  herein,  no delay on the part of any party in exercising  any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right,  power or privilege  hereunder
preclude  any other or future  exercise of any other  right,  power or privilege
hereunder.

      1.5.  Headings.  The division of this Agreement  into articles,  sections,
subsections  and paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or  interpretation  of this
Agreement.

      1.6. Law Governing this Agreement; Consent to Jurisdiction. This Agreement
shall be governed by and construed in  accordance  with the laws of the State of
New York without regard to principles of conflicts of laws.  With respect to any
suit,  action or proceeding  relating to this  Agreement or to the  transactions
contemplated  hereby  ("Proceedings"),  each party hereto irrevocably submits to
the exclusive jurisdiction of the courts of the County of New York, State of New
York and the United States  District  court located in the County of New York in
the State of New York. Each party hereto hereby irrevocably and  unconditionally
(a) waives trial by jury in any  Proceeding  relating to this  Agreement and for
any related  counterclaim  and (b) waives any objection which it may have at any
time to the laying of venue of any Proceeding brought in any such court,  waives
any claim that such Proceedings  have been brought in an inconvenient  forum and
further waives the right to object, with respect to such Proceedings,  that such
court does not have jurisdiction over such party. As among the Companies and the
Purchaser,  the  prevailing  party shall be  entitled to recover  from the other
party its reasonable  attorneys' fees and costs. In the event that any provision
of this  Agreement  is  determined  by a court of competent  jurisdiction  to be
invalid or  unenforceable,  then the  remainder of this  Agreement  shall not be
affected and shall remain in full force and effect.

      1.7.  Construction.   Each  party  acknowledges  that  its  legal  counsel
participated  in the  preparation of this Agreement 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 Agreement to
favor any party against the other.

                                       2
<PAGE>

                                   ARTICLE II

                APPOINTMENT OF AND DELIVERIES TO THE ESCROW AGENT

      2.1. Appointment. Companies and Purchaser hereby irrevocably designate and
appoint  the  Escrow  Agent as their  escrow  agent for the  purposes  set forth
herein,  and the Escrow Agent by its  execution  and delivery of this  Agreement
hereby accepts such appointment under the terms and conditions set forth herein.

      2.2. Copies of Documents to Escrow Agent. On or about the date hereof, the
Purchaser shall deliver to the Escrow Agent copies of the Documents  executed by
the Companies to the extent it is a party thereto.

      2.3.  Delivery of Escrowed  Payment to Escrow Agent.  On or about the date
hereof, the Purchaser shall deliver to the Escrow Agent the Escrowed Payment.

      2.4.  Intention to Create Escrow Over the Escrowed Payment.  The Purchaser
and the  Companies  intend that the Escrowed  Payment shall be held in escrow by
the Escrow Agent and released from escrow by the Escrow Agent only in accordance
with the terms and conditions of this Agreement.

                                   ARTICLE III

                                RELEASE OF ESCROW

      3.1.  Release of Escrow.  Subject to the  provisions  of Section  4.2, the
Escrow Agent shall release the Escrowed Payment from escrow as follows:

            (a) Promptly  following receipt by the Escrow Agent of (i) copies of
the fully executed  Documents and this Agreement,  (ii) the Escrowed  Payment in
immediately   available  funds,   (iii)  joint  written   instructions   ("Joint
Instructions")  executed by the Companies  and the  Purchaser  setting forth the
payment  direction  instructions  with respect to the Escrowed  Payment and (iv)
Escrow Agent's verbal  instructions  from David Grin and/or Eugene Grin (each of
whom is a director of the  Purchaser)  indicating  that all  closing  conditions
relating to the Documents  have been  satisfied and directing  that the Escrowed
Payment  be  disbursed  by  the  Escrow  Agent  in  accordance  with  the  Joint
Instructions, then the Escrowed Payment shall be deemed released from escrow and
shall be promptly disbursed in accordance with the Joint Instructions. The Joint
Instructions shall include, without limitation,  Escrow Agent's authorization to
retain from the Escrowed  Payment  Escrow Agent's fee for acting as Escrow Agent
hereunder  and the Closing  Payment for delivery to Laurus  Capital  Management,
L.L.C. in accordance with the Joint Instructions.

            (b) Upon receipt by the Escrow  Agent of a final and  non-appealable
judgment,  order, decree or award of a court of competent jurisdiction (a "Court
Order")  relating  to the  Escrowed  Payment,  the Escrow  Agent shall remit the
Escrowed  Payment in accordance  with the Court Order.  Any Court Order shall be
accompanied by an opinion of counsel for the party presenting the Court Order to
the Escrow Agent (which  opinion shall be  satisfactory  to the Escrow Agent) to
the  effect  that the  court  issuing  the Court  Order is a court of  competent
jurisdiction and that the Court Order is final and non-appealable.

                                       3
<PAGE>

      3.2.  Acknowledgement of Companies and Purchaser;  Disputes. The Companies
and the Purchaser  acknowledge that the only terms and conditions upon which the
Escrowed  Payment are to be released  from escrow are as set forth in Sections 3
and 4 of  this  Agreement.  The  Companies  and  the  Purchaser  reaffirm  their
agreement to abide by the terms and conditions of this Agreement with respect to
the release of the Escrowed Payment.  Any dispute with respect to the release of
the  Escrowed  Payment  shall be resolved  pursuant to Section 4.2 or by written
agreement between the Companies and Purchaser.

                                   ARTICLE IV

                           CONCERNING THE ESCROW AGENT

      4.1. Duties and  Responsibilities  of the Escrow Agent. The Escrow Agent's
duties  and  responsibilities  shall  be  subject  to the  following  terms  and
conditions:

            (a) The Purchaser and the Companies  acknowledge  and agree that the
Escrow Agent (i) shall not be required to inquire  into  whether the  Purchaser,
the  Companies  or any other party is entitled to receipt of any Document or all
or any  portion  of the  Escrowed  Payment;  (ii)  shall not be  called  upon to
construe or review any Document or any other  document,  instrument or agreement
entered into in  connection  therewith;  (iii) shall be  obligated  only for the
performance  of such  duties as are  specifically  assumed by the  Escrow  Agent
pursuant to this Agreement; (iv) may rely on and shall be protected in acting or
refraining  from  acting  upon  any  written  notice,  instruction,  instrument,
statement,  request or document  furnished to it  hereunder  and believed by the
Escrow Agent in good faith to be genuine and to have been signed or presented by
the proper person or party, without being required to determine the authenticity
or  correctness  of any fact stated  therein or the propriety or validity or the
service  thereof;  (v) may assume that any person  purporting  to give notice or
make any  statement or execute any document in  connection  with the  provisions
hereof has been duly  authorized to do so; (vi) shall not be responsible for the
identity,  authority  or rights of any  person,  firm or  company  executing  or
delivering or purporting to execute or deliver this Agreement or any Document or
any funds deposited  hereunder or any endorsement thereon or assignment thereof;
(vii)  shall not be under  any duty to give the  property  held by Escrow  Agent
hereunder  any greater  degree of care than  Escrow  Agent gives its own similar
property;   and  (viii)  may  consult  counsel   satisfactory  to  Escrow  Agent
(including, without limitation, Loeb & Loeb, LLP or such other counsel of Escrow
Agent's  choosing),  the  opinion  of  such  counsel  to be  full  and  complete
authorization and protection in respect of any action taken, suffered or omitted
by Escrow Agent  hereunder in good faith and in  accordance  with the opinion of
such counsel.

            (b) The  Purchaser  and the  Companies  acknowledge  that the Escrow
Agent is acting  solely as a  stakeholder  at their  request and that the Escrow
Agent shall not be liable for any action taken by Escrow Agent in good faith and
believed  by  Escrow  Agent to be  authorized  or  within  the  rights or powers
conferred upon Escrow Agent by this  Agreement.  The Purchaser and the Companies
hereby, jointly and severally,  indemnify and hold harmless the Escrow Agent and
any of Escrow Agent's partners,  employees,  agents and representatives from and
against any and all actions  taken or omitted to be taken by Escrow Agent or any
of them hereunder and any and all claims,  losses,  liabilities,  costs, damages
and expenses  suffered and/or incurred by the Escrow Agent arising in any manner
whatsoever out of the  transactions  contemplated  by this Agreement  and/or any
transaction related in any way hereto, including the fees of outside counsel and
other  costs and  expenses of  defending  itself  against  any  claims,  losses,
liabilities,  costs,  damages and expenses arising in any manner  whatsoever out
the transactions  contemplated by this Agreement and/or any transaction  related
in any way hereto, except for such claims, losses,  liabilities,  costs, damages
and  expenses  incurred  by reason of the Escrow  Agent's  gross  negligence  or
willful misconduct.  The Escrow Agent shall owe a duty only to the Purchaser and
Companies under this Agreement and to no other person.

                                       4
<PAGE>

            (c) The  Purchaser  and the  Companies  shall  jointly and severally
reimburse the Escrow Agent for its reasonable  out-of-pocket expenses (including
counsel fees (which  counsel may be Loeb & Loeb LLP or such other counsel of the
Escrow  Agent's  choosing)  incurred in connection  with the  performance of its
duties and  responsibilities  hereunder,  which  shall not  (subject  to Section
4.1(b)) exceed $2,500.

            (d)  The  Escrow  Agent  may at any  time  resign  as  Escrow  Agent
hereunder by giving five (5) business days prior written  notice of  resignation
to the Purchaser and the  Companies.  Prior to the effective date of resignation
as specified in such  notice,  the  Purchaser  and  Companies  will issue to the
Escrow Agent a Joint  Instruction  authorizing  delivery of the  Documents,  the
Escrowed Payment to a substitute  Escrow Agent selected by the Purchaser and the
Companies.  If no  successor  Escrow  Agent is named  by the  Purchaser  and the
Companies,  the Escrow Agent may apply to a court of competent  jurisdiction  in
the State of New York for appointment of a successor  Escrow Agent,  and deposit
the  Documents,  the  Escrowed  Payment  with the clerk of any such court and/or
otherwise  commence an  interpleader  or similar action for a  determination  of
where to deposit the same.

            (e) The Escrow Agent does not have and will not have any interest in
the Documents, the Escrowed Payment, but is serving only as escrow agent, having
only possession thereof.

            (f) The Escrow  Agent  shall not be liable  for any action  taken or
omitted  by it in good  faith and  reasonably  believed  by it to be  authorized
hereby or within  the  rights or powers  conferred  upon it  hereunder,  nor for
action taken or omitted by it in good faith,  and in  accordance  with advice of
counsel  (which  counsel  may be Loeb & Loeb,  LLP or such other  counsel of the
Escrow  Agent's  choosing),  and shall not be liable for any  mistake of fact or
error of judgment or for any acts or  omissions of any kind except to the extent
any such liability arose from its own willful misconduct or gross negligence.

            (g) This Agreement sets forth  exclusively  the duties of the Escrow
Agent  with  respect to any and all  matters  pertinent  thereto  and no implied
duties or obligations shall be read into this Agreement.

            (h) The Escrow  Agent shall be  permitted  to act as counsel for the
Purchaser  or the  Companies,  as the  case  may be,  in any  dispute  as to the
disposition of the Documents, the Escrowed Payment, in any other dispute between
the Purchaser and the Companies, whether or not the Escrow Agent is then holding
the  Documents,  the Escrowed  Payment and  continues to act as the Escrow Agent
hereunder.

                                       5
<PAGE>

            (i) The provisions of this Section 4.1 shall survive the resignation
of the Escrow Agent or the termination of this Agreement.

      4.2. Dispute Resolution;  Judgments.  Resolution of disputes arising under
this Agreement shall be subject to the following terms and conditions:

            (a) If  any  dispute  shall  arise  with  respect  to the  delivery,
ownership,  right of possession or disposition  of the  Documents,  the Escrowed
Payment,  or if the  Escrow  Agent  shall in good faith be  uncertain  as to its
duties or rights  hereunder,  the  Escrow  Agent  shall be  authorized,  without
liability  to anyone,  to (i)  refrain  from  taking  any  action  other than to
continue to hold the Documents,  the Escrowed Payment pending receipt of a Joint
Instruction from the Purchaser and the Companies,  (ii) commence an interpleader
or similar  action,  suit or proceeding  for the resolution of any such dispute;
and/or  (iii)  deposit the  Documents,  the  Escrowed  Payment with any court of
competent jurisdiction in the State of New York, in which event the Escrow Agent
shall give written  notice  thereof to the Purchaser and the Companies and shall
thereupon be relieved and discharged  from all further  obligations  pursuant to
this Agreement.  The Escrow Agent may, but shall be under no duty to,  institute
or defend any legal  proceedings  which  relate to the  Documents,  the Escrowed
Payment.  The Escrow Agent shall have the right to retain  counsel if it becomes
involved in any disagreement, dispute or litigation on account of this Agreement
or  otherwise  determines  that it is necessary  to consult  counsel  which such
counsel  may be Loeb & Loeb LLP or such  other  counsel  of the  Escrow  Agent's
choosing.

            (b) The Escrow Agent is hereby  expressly  authorized to comply with
and obey any Court  Order.  In case the Escrow  Agent obeys or  complies  with a
Court Order, the Escrow Agent shall not be liable to the Purchaser and Companies
or to any other person, firm, company or entity by reason of such compliance.

                                    ARTICLE V

                                 GENERAL MATTERS

      5.1.  Termination.  This escrow shall  terminate upon  disbursement of the
Escrowed  Payment in accordance with the terms of this Agreement or earlier upon
the agreement in writing of the Purchaser  and Companies or  resignation  of the
Escrow Agent in accordance with the terms hereof.

      5.2.  Notices.  All notices,  requests,  demands and other  communications
required or permitted  hereunder shall be in writing and shall be deemed to have
been duly given one (1) day after being sent by telecopy (with copy delivered by
overnight courier, regular or certified mail):

                                       6
<PAGE>

      If to any Company, to:

            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 the Purchaser, to:

           Laurus Master Fund, Ltd.
           c/o Laurus Capital Management, L.L.C.
           825 Third Avenue, 14th Fl.
           New York, New York 10022
           Attention: John E. Tucker, Esq.
           Telephone: (212) 541-4434
           Facsimile: (212) 541-5800

      If to the Escrow Agent, to:

            Loeb & Loeb LLP
            345 Park Avenue
            New York, New York 10154
            Telephone: (212) 407-4000
            Facsimile: (212) 407-4990
            Attention: Scott J. Giordano, Esq.

or to such other  address as any of them shall give to the others by notice made
pursuant to this Section 5.2.

      5.3.  Interest.  The Escrowed Payment shall be held in an interest bearing
account nor will interest be payable in connection therewith.

      5.4. Assignment;  Binding Agreement.  Neither this Agreement nor any right
or  obligation  hereunder  shall be  assignable  by any party  without the prior
written consent of the other parties  hereto.  This Agreement shall inure to the
benefit of and be binding  upon the parties  hereto and their  respective  legal
representatives, successors and assigns.

                                       7
<PAGE>

      5.5.  Invalidity.  In the  event  that  any one or more of the  provisions
contained  herein,  or the  application  thereof  in any  circumstance,  is held
invalid,  illegal, or unenforceable in any respect for any reason, the validity,
legality and  enforceability of any such provision in every other respect and of
the  remaining  provisions  contained  herein  shall not be in any way  impaired
thereby,  it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

      5.6. Counterparts/Execution.  This Agreement may be executed in any number
of counterparts and by different  signatories  hereto on separate  counterparts,
each of which,  when so  executed,  shall be deemed  an  original,  but all such
counterparts shall constitute but one and the same agreement. This Agreement may
be executed by facsimile transmission.

      [Signature Page to Follow; Remainder of Page Intentionally Left Blank]

                                       8
<PAGE>

      IN WITNESS  WHEREOF,  the parties  hereto have  executed this Funds Escrow
Agreement as of the date and year first above written.

                                   COMPANIES:

                                   NORTH TEXAS STEEL COMPANY, INC.

                                   By:_________________________________
                                   Name:
                                   Title:

                                   AMERICAN TECHNOLOGIES GROUP, INC.

                                   By:_________________________________
                                   Name:
                                   Title:

                                   OMAHA HOLDINGS CORP.

                                   By:_________________________________
                                   Name:
                                   Title:

                                   PURCHASER:

                                   LAURUS MASTER FUND, LTD.

                                   By:_________________________________
                                   Name:
                                   Title:

                                   ESCROW AGENT:

                                   LOEB & LOEB LLP

                                   By:_________________________________
                                   Name:
                                   Title:

<PAGE>

                      SCHEDULE A TO FUNDS ESCROW AGREEMENT

--------------------------------------   ---------------------------------------
PURCHASER                                PRINCIPAL NOTE AMOUNT
--------------------------------------   ---------------------------------------
LAURUS MASTER FUND, LTD.                 $7,000,000 Secured Revolving Note
c/o M&C Corporate Services Limited
P.O. Box 309 GT                          $3,000,000 Secured Convertible Term
Ugland House                             Note A
George Town
South Church Street                      $2,000,000 Secured Convertible Term
Grand Cayman, Cayman Islands             Note B
Fax:  345-949-8080
--------------------------------------   ---------------------------------------
TOTAL                                    $12,000,000
--------------------------------------   ---------------------------------------

--------------------------------------   ---------------------------------------
FUND MANAGER                             CLOSING PAYMENT
--------------------------------------   ---------------------------------------
LAURUS CAPITAL MANAGEMENT, L.L.C.        Closing payment payable in connection
825 Third Avenue, 14th Floor             with investment by Laurus Master Fund,
New York, New York 10022                 Ltd. for which Laurus Capital
Fax:  212-541-4434                       Management, L.L.C. is the Manager
--------------------------------------   ---------------------------------------
TOTAL                                    $450,000
--------------------------------------   ---------------------------------------

--------------------------------------   ---------------------------------------
WARRANT RECIPIENT                        WARRANTS IN CONNECTION WITH OFFERING
--------------------------------------   ---------------------------------------
LAURUS MASTER FUND, LTD.                 __________ Warrants in connection with
c/o M&C Corporate Services Limited       investment by Laurus Master Fund, Ltd.
P.O. Box 309 GT
Ugland House
George Town
South Church Street
Grand Cayman, Cayman Islands
Fax:  345-949-8080
--------------------------------------   ---------------------------------------
TOTAL                                    ___________ Warrants
--------------------------------------   ---------------------------------------

--------------------------------------   ---------------------------------------
OPTION RECIPIENT                         OPTIONS IN CONNECTION WITH OFFERING
--------------------------------------   ---------------------------------------
LAURUS MASTER FUND, LTD.                 __________ Options issuable in
c/o M&C Corporate Services Limited       connection with investment by Laurus
P.O. Box 309 GT                          Master Fund, Ltd.
Ugland House
George Town
South Church Street
Grand Cayman, Cayman Islands
Fax:  345-949-8080
--------------------------------------   ---------------------------------------
TOTAL                                    ______________ Options
--------------------------------------   ---------------------------------------

                                       9EXHIBIT 4.13

                            LAURUS MASTER FUND, LTD.
                          825 Third Avenue, 14th Floor
                            New York, New York 10022

                                                               September 6, 2005

Omaha Holdings Corp.
450 Las Olas Boulevard, Suite 1100
Fort Lauderdale, Florida 33301

North Texas Steel Company, Inc.
412 West Bolt Street
Fort Worth, Texas 76110

American Technologies Group, Inc.
1110 S. Fifth Avenue
Monrovia, California  91016

      Re:   Common Stock of American Technologies Group, Inc.

Ladies and Gentlemen:

      Reference  is made to (a) the  Security  Agreement  dated  as of the  date
hereof (as the same may be amended, supplemented, restated or modified from time
to time, the "Security  Agreement") by and among Omaha Holdings Corp. ("Omaha"),
North Texas Steel Company,  Inc.  ("NTSCO"),  American  Technologies Group, Inc.
("ATG",  together with Omaha and NTSCO, each a "Company" and  collectively,  the
"Companies")  and Laurus  Master Fund,  Ltd.  ("Laurus")  and (b) the  Ancillary
Agreements  (as  defined in the  Security  Agreement)  and all other  documents,
instruments and agreements  executed in connection  therewith (together with the
Security Agreement and the Ancillary Agreement,  collectively, the "Documents").
All  capitalized  terms used but not otherwise  defined herein have the meanings
given to them in the Security Agreement.

      By your signatures below, each Company agrees that, until such time as the
shareholders of ATG approve an increase in the amount of authorized common stock
of ATG to an  aggregate  amount of not less than  15,000,000,000  shares,  which
amount  shall be  sufficient  to  provide  for the  conversion  of the Notes and
exercise of the Options and the Warrants, each reference in the Documents to the
issuance of a number of shares of common  stock of ATG to Laurus shall be deemed
to refer to the issuance of shares of Series D  Convertible  Preferred  Stock of
ATG to  Laurus,  in each  case,  in an amount  equal to the  number of shares of
common stock of ATG referred to therein divided by 10,000, at a price multiplied
by 10,000; provided,  however, with respect to the Secured Convertible Term Note
B, the ach  reference in the  Documents to the issuance of a number of shares of
common stock of ATG to Laurus shall be deemed to refer to the issuance of shares
of Series F Convertible  Preferred  Stock of ATG to Laurus,  in each case, in an
amount  equal to the number of shares of common stock of ATG referred to therein
divided by 10,000, at a price multiplied by 10,000.

<PAGE>

      Except as expressly provided herein, nothing contained herein shall act as
a waiver or excuse of performance of any obligations contained in the Documents.
No waiver, modification or amendment of any provision of this agreement shall be
effective unless specifically made in writing and duly signed by the party to be
bound  thereby.  This letter  agreement  shall be governed by and  construed  in
accordance with the laws of the State of New York.

                                       Very truly yours,

                                       LAURUS MASTER FUND, LTD.

                                       By:________________________________
                                          Name:
                                          Title:

The foregoing is hereby accepted and agreed to as of the date set forth above:

NORTH TEXAS STEEL COMPANY, INC.

By:___________________________
         Name:
         Title:

OMAHA HOLDINGS CORP.

By:___________________________
         Name:
         Title:

AMERICAN TECHNOLOGIES GROUP, INC.

By:___________________________
         Name:
         Title:

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