Document:

EXHIBIT 4.16

THIS NOTE AND THECOMMON  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.

                              CONVERTIBLE TERM NOTE

      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        GRYPHON         MASTER        FUND        L.P.,         c/o
____________________________________________, Fax: ______________ (the "Holder")
or its  registered  assigns or  successors  in interest,  the sum of Two Hundred
Fifty Thousand Dollars ($250,000), together with any accrued and unpaid interest
hereon, on _______________, 2006 (the "Maturity Date") if not sooner paid.

      This  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).

      The  following  terms  shall  apply to this Note.  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").

                                    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 twelve percent (12%) (the "Contract  Rate").
Interest  shall  be (i)  calculated  on the  basis of a 360 day  year,  and (ii)
payable  monthly,  in  arrears,  commencing  on  September  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.

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      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,  par value  $0.001,  of the Parent (the
"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.

      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.

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      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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      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:

            (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.

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            (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
common  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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            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,  along with any other
rights and  remedies of the Holder under the  Security  Agreement  and any other
Ancillary  Agreement 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 Note,  the  Security  Agreement,  and/or  the  other  Ancillary
Agreements,  then to accrued and unpaid interest due on the Note and then to the
outstanding  principal balance of the Note. 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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                                    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.

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                  (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.

                  (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 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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            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,  and (ii) 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.

            5.12 Subordination. The Obligations and liabilities of the Companies
to the Holder are subordinated in favor of Laurus Master Fund, Ltd.  pursuant to
the terms and conditions of certain Subordination Agreement dated as of the date
hereof, as the same may be amended, modified and supplemented from time to time.

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

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

                                         AMERICAN TECHNOLOGIES GROUP, INC.

                                         By:  ____________________________
                                         Name:    ________________________
                                         Title:   ________________________

WITNESS:

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                                         NORTH TEXAS STEEL COMPANY, INC.

                                         By:______________________________
                                         Name:  __________________________
                                         Title:  _________________________

WITNESS:

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

                                         OMAHA HOLDINGS CORP.

                                         By:______________________________
                                              Name:  _____________________
                                              Title:  ____________________

WITNESS:

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

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                                    EXHIBIT A

                                 OTHER COMPANIES

              North Texas Steel Company, Inc., a Texas corporation

                  Omaha Holdings Corp., a Delaware corporation

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                                    EXHIBIT B

                              NOTICE OF CONVERSION

        (To be executed by the Holder in order to convert all or part of
   the 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 Convertible Term Note dated as of
_______________________ 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:    _______________________

                                             GRYPHON MASTER FUND L.P.

                                             By:_______________________________
                                             Name:_____________________________
                                             Title:____________________________EXHIBIT 4.17

                          REGISTRATION RIGHTS AGREEMENT

      This Registration  Rights Agreement (this "Agreement") is made and entered
into as of  ______________,  2005, by and between American  Technologies  Group,
Inc., a Nevada  corporation (the "Company"),  and Gryphon Master Fund, L.P. (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 Note,  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
$0.001 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 Loan  evidenced  by the 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,  and (4) the shares of Common  Stock  issuable to the
Holder as a result of adjustments to the Fixed Conversion Price made pursuant to
Section 3.6 of the Note,  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.

      "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).

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      "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 the 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.

      "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").

                                       2
<PAGE>

      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,
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.

                                       3
<PAGE>

      (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;

      (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

                                       4
<PAGE>

      (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.

      (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.

                                       5
<PAGE>

      (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
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
<PAGE>

      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 by
and  between  the Company  and  Gryphon  Master  Fund L.P.  (attached  hereto to
Schedule  7(b)),  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
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.

                                       7
<PAGE>

      (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 Note and the shares of Common Stock which
the Purchaser may acquire pursuant to the Options, Warrants and the Note 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
issuable  upon the  conversion  of the Note and the exercise of the Warrants and
Options 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.

      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.

                                       8
<PAGE>

      (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
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.

                                       9
<PAGE>

      (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:

            If to Company:               American Technologies Group, Inc.
                                         P.O. Box 90
                                         Monrovia, CA 91016
                                         Phone: (626) 357-5000

            with a copy to               _____________________________

                                         _____________________________

                                         _____________________________

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

                                 10
<PAGE>

            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 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.

                                       11
<PAGE>

      (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  Registration  Rights
Agreement as of the date first written above.

                        AMERICAN TECHNOLOGIES GROUP, INC.

                        By:_____________________________
                        Name:___________________________
                        Title:____________________________

                        GRYPHON MASTER FUND, L.P.

                        By:______________________________
                        Name:____________________________
                        Title:_____________________________

                        Address for Notices:

                                       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

                                                                   Shares
Selling Stockholder                   R/N/O                     Being Offered

<PAGE>

                                  Schedule 7(b)

                           Piggyback on Registrations

REGISTRATION  RIGHTS  GRANTED TO LAURUS MASTER FUND LTD PURSUANT TO THE ATTACHED
AGREEMENTS

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