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 March 6, 2007 (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.
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.
3.3 Mechanics of Xxxxxx'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.
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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.
4
(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)).
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.
5
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.
(b) EACH COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY
COMPANY, ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS
NOTE OR ANY OF THE OTHER ANCILLARY AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS NOTE OR ANY OF THE ANCILLARY AGREEMENTS; PROVIDED, THAT EACH
COMPANY ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND
FURTHER PROVIDED, THAT NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO
PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY
OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE HOLDER. EACH COMPANY EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT
AND EACH COMPANY HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK
OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH COMPANY
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN THE SECURITY AGREEMENT AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY'S
ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID.
7
(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.
8
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:
___________________________________
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
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: _____________________________
