ASSET PURCHASE AGREEMENT

                            ASSET PURCHASE AGREEMENT

      THIS AGREEMENT made this ____ day of April 2006, by and among WHITCO
COMPANY, L.P., a Texas limited partnership ("Seller"), AMERICAN TECHNOLOGIES
GROUP, INC., a Nevada corporation, (or its assignee pursuant to Section 8.7
below) ("Purchaser"), and Laurus Master Fund, Ltd., a Cayman Islands corporation
("Laurus") (solely for purposes of Section 2.4 hereof).

      WHEREAS, on March 15, 2006 (the "Filing Date") Seller filed a Petition
under Chapter 11 of Title 11 of the United States Code ("Bankruptcy Code") case
number: 06-40721-RFN-11 in the Bankruptcy Court (as defined below) and since
that time Seller has remained in possession of certain of its property and is
attempting to preserve its assets pending the sale contemplated herein;

      WHEREAS, pursuant to a series of debt instruments, the Seller as of March
15, 2006 was indebted to Laurus in an aggregate amount of $3,481,019.18,
exclusive of fees, costs and charges;

      WHEREAS, on March 24, 2006 the Bankruptcy Court entered a Consent Order
(i) Authorizing Use of Cash Collateral, (ii) Providing Adequate Protection under
11 U.S.C. Sections 105, 361 and 363, and (iii) Providing for Stay Relief under
11 U.S.C. Section 362(d) (the "March 24 Order");

      WHEREAS, pursuant to the March 24 Order, Laurus holds a valid perfected
first priority lien and security interest in all of the assets of Seller which
liens secure a claim in the amount of $3,481,019.34 as of the Filing Date (the
"Laurus Secured Claim"), exclusive of fees, costs and charges provided for in
the Loan Documents (as defined in the March 24 Order);

      WHEREAS, the parties hereto desire that substantially all of the assets of
Seller be sold to Purchaser and that certain contracts to which Seller is a
party be assumed and assigned, pursuant to this Agreement;

      WHEREAS, in consideration of the assignment to Laurus of the purchase
price for the Assets (as defined in Section 1.1 below), Laurus is willing to
agree to the sale of the Assets pursuant to this Agreement free and clear of the
Laurus Secured Claim so long as it is afforded the rights and protections set
forth herein; and

      NOW THEREFORE, for valuable consideration, including the mutual
representations, warranties and covenants herein contained, the receipt of which
is hereby acknowledged, the parties hereby agree as follows:
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                                   DEFINITIONS

      "Assets" has the meaning set forth in Section 1.1 hereto.

      "Bankruptcy Court" shall mean the United States Bankruptcy Court for the
Northern District of Texas (Ft. Worth Division).

      "Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.

      "GAAP" means United States generally accepted accounting principles as
used by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants, consistently applied and maintained.

      "Intellectual Property" means all (a) patents, patent applications, patent
disclosures, and improvements thereto, (b) trademarks, service marks, trade
dress, logos, trade names, and registrations and applications for registration
thereof, (c) copyrights and registrations and applications for registration
thereof, (d) mask works and registrations and applications for registration
thereof, (e) computer software, data, documentation, (f) trade secrets and
confidential business information (including ideas, formulas, compositions,
inventions (whether patentable or unpatentable and whether or not reduced to
practice), know-how, manufacturing and production processes and techniques,
research and development information, drawings, specifications, designs, plans,
proposals, technical data, copyrightable works, marketing, and business data,
pricing and costs information, business and marketing plans, and customer and
supplier lists and information), (g) other proprietary rights, and (h) copies
and tangible embodiments thereof (in whatever form or medium).

      "Security Interest" means any lien, mortgage, pledge, security interest,
encumbrance, charge, or other lien.

      "Taxes" means any federal, state, local, or foreign income, gross
receipts, capital stock, franchise, profits, withholding, social security,
unemployment, disability, real property, personal property, stamp, excise,
occupation, sales, use, transfer, value added, alternative minimum, estimated,
or other tax, including any interest, penalty, or additional charge thereto,
whether disputed or not.


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                                    ARTICLE I

   PURCHASE AND SALE OF ASSETS; ASSIGNMENT AND ASSUMPTION OF CERTAIN CONTRACTS

      1.1 Purchased Assets. Subject to and upon the terms and conditions set
forth herein, the Seller agrees to and will sell, transfer, assign and deliver
to the Purchaser at the Closing (as hereinafter defined), and the Purchaser
agrees to and will purchase, acquire and take assignment and delivery of, all
the assets of the Seller except for the "Excluded Assets" described in Section
1.3 below (the "Assets"). Without limiting the foregoing, the Assets shall
include, but not be limited to (a) all inventory, work in progress, equipment,
machinery and other tangible personal property utilized by the Seller's business
prior to its bankruptcy filing, (b) all of the Seller's licenses, permits,
certificates of authority, authorizations, approvals, registrations, franchises
and similar consents granted or issued by any governmental or regulatory
authority as shall exist as of the Closing Date; (c) all telephone numbers
utilized by the Seller, (c) all customer deposits and other prepaid expenses;
(d) all goodwill and going-concern value relating to the Seller as shall exist
as of the Closing Date, (e) all of the Seller's Intellectual Property, (f) all
cash and cash equivalents of Seller existing on or after March 25, 2006, except
any cash or cash equivalents derived from accounts receivable or other assets
that arose from the operation of the Seller's business on or prior to March 24,
2006, all accounts receivable of Seller arising from the operation of the
Seller's business from and after March 25, 2006 in excess the first $41,800 of
such accounts receivables, (h) all books and records of Seller and (g) all other
assets of the Seller as shall exist as of the Closing date other than "Excluded
Assets" as specifically defined in Section 1.3 below.

       1.2 Assignments and Assumption of Certain Contracts.

            1.2.1 Bankruptcy Filing. Seller shall forthwith take all actions
necessary to seek an order from the Bankruptcy Court authorizing Seller to
assume the executory contracts necessary to preserve the value of the Assets to
be identified by the parties hereto (the "Assumed Contracts") which Assumed
Contracts includes those Assumed Contracts identified in Exhibit 1.2.1 hereto.
Notwithstanding any provision in this Agreement or any other writing to the
contrary, Buyer is assuming only the liabilities actually undertaken by it by
order of the Bankruptcy court and is not assuming any other liability or
obligation of Seller (or any predecessor of Seller or any prior owner of all or
part of its businesses and assets) of whatever nature, whether presently in
existence or arising hereafter.

            1.2.2 Taxes and Prorations. Seller shall be responsible for all ad
valorem taxes or assessments relating to the Assets for taxable periods up to
and including the Closing Date, regardless of when the same shall become due and
payable, and such taxes shall be pro-rated between Seller and Purchaser as of
the Closing Date or within a reasonable time thereafter. All expense items
including but not limited to insurance, rents, utility charges, and any prepaid
agreements shall be prorated between Seller and Purchaser as of the Closing
Date.


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            1.2.3 Other Closing Costs. Seller and Purchaser shall each remain
liable for their own closing expenses including attorney's fees.

      1.3 Excluded Assets. Anything to the Contrary in Sections 1.1
notwithstanding, the Purchased Assets shall exclude:

            1.3.1 Claims for relief under any of the avoiding powers provided
for under Chapter 5 of the Bankruptcy Code.

            1.3.2 Employee Benefit Plans of the Seller.

            1.3.3 The originals of all of Seller's partnership books and records
provided, however, that copies of all such records shall be included in the
Assets sold to Purchaser.

            1.3.4 All cash of the Seller as of close of business on March 24,
2006 and any cash derived from accounts receivable of Seller created on or
before March 24, 2006.

            1.3.5 All accounts receivable of the Seller created on or before
March 24, 2006.

            1.3.6 The proceeds of accounts receivable of Seller created after
March 24, 2006 in an aggregate amount of $41,800.00.

                                   ARTICLE II

                                  PURCHASE PRICE

      2.1 Purchase Price. The purchase price due from Purchaser to Seller for
the sale of the Assets and the assumption and assignment of the Assumed
Contracts shall consist of (i) a warrant to purchase 3,750,000 shares of
Purchaser common stock in the form attached hereto as Exhibit 2 (the "Warrant")
which shall have a deemed value for purposes of this Agreement of $1,500,000;
(ii) a credit in the full amount due as of the Closing date on a DIP loan to be
made by Purchaser to Seller; and (iii) all amounts necessary to cure any
defaults under any of the Assumed Contracts (the "Purchase Price").

      2.2 Allocation of the Purchase Price Among the Purchased Assets. The
Purchase Price shall be allocated, for tax purposes, among each item or class of
the Assets pursuant to Exhibit 2.2 hereof. The Seller and the Purchaser agree
that they will prepare and file any notice or other filings required pursuant to
Section 1060 of the Internal Revenue Code of 1986, as amended, and that any such
notices or filings will be prepared based on such tax allocation of the Purchase
Price.

      2.3 Employment of Seller's Personnel. The Seller will use its good faith
best efforts to persuade its employees to make themselves available for
employment by the Purchaser. Any employment of Seller's personnel by Purchaser
shall be in the sole discretion of Purchaser in the exercise of its business
judgment. It is not the intent of this section to make Seller's employees third
party beneficiaries to this Agreement. Purchaser is not assuming any of Seller's
employment liabilities that have accrued, including but not limited to, unpaid
FICA, FUTA, unemployment tax, pension or profit sharing plan contributions,
employee fringe benefits, bonuses or incentive programs of any type or accrued
and/or unpaid vacation time or allowances, nor is Purchaser acquiring any
interest or obligation under any Employee Benefit Plans of Seller.


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      2.4 Consent of Laurus. Laurus agrees that on the Closing Date, it will
consent to the sale of the Assets to the Purchaser free and clear of the Laurus
Secured Claim in consideration of the following:

      (a) The assignment to Laurus by the Seller of the Warrant pursuant to an
assignment agreement in form and substance satisfactory to Laurus, which Seller
hereby agrees to execute and deliver at the Closing; and

      (b) Purchaser's covenant pursuant to this Section 2.4(b) that it will use
reasonable best efforts to collect for the benefit of Laurus the Seller's
accounts receivable that arose from operation of the Seller's business on or
before March 24, 2006 (the "Laurus Receivables") and shall remit such
collections to Laurus on a weekly basis. Purchaser shall provide Laurus with a
statement on a weekly basis setting forth the amount collected, the remaining
uncollected portion of the Laurus Receivables and an aging for the Laurus
Receivables. Payments received for any of Seller's accounts receivable shall be
credited against the oldest customer invoices. In addition, Purchaser covenants
that the first $41,800.00 of accounts receivable that it creates from and after
March 25, 2006 shall be collected by the Purchaser for the benefit of Laurus and
shall promptly be remitted to Laurus in repayment of Laurus' advance of such
amount to the Seller after the Filing Date. At any time on notice to Purchaser,
Laurus may take over the collection of the Laurus Receivables.

                                   ARTICLE III

                        BANKRUPTCY COURT APPROVAL; CLOSING

      3.1 Filings with Bankruptcy Court. Promptly after the execution of this
Agreement, but in no event later than three days thereafter, Seller shall file
with the Bankruptcy Court a motion for approval of this Agreement in a form
reasonably acceptable to Purchaser and Laurus, which shall include approval of
the sale of the Assets, free and clear of all liens, claims, encumbrances and
interests, and of the assumption and assignment of the Assumed Contracts.


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            3.1.1 Entry of Order. An order of the Bankruptcy Court approving the
sale and any applicable assumption and assignment of the Assumed Contracts shall
be entered not later than 30 calendar days after the Motion requesting such sale
order has been filed (the "Sale Order"). If the Sale Order is not entered within
that period of time, then there shall be a failure of a condition precedent to
Purchaser's obligations herein, and Purchaser may terminate this Agreement
without further obligation hereunder. The Sale Order shall contain a provision
pursuant to Bankruptcy Code Section 363(m) that the reversal or modification
thereof on appeal does not affect the validity of such sale to Purchaser and
shall further provide that the Bankruptcy Court will retain jurisdiction with
respect to disputes between the parties hereto relating to this Agreement.

      3.2 Press Release. Seller and Purchaser shall issue a joint press release
upon the execution of this Agreement. The content of any such press release
shall be reasonably agreed upon by both Seller and Purchaser. No press release
will be issued by either Seller or Purchaser unless a reasonable effort is made
to agree upon the content thereof.

      3.3 Closing. The parties shall close (the "Closing") the transaction
contemplated by this Agreement (the "Transaction") as soon as reasonably
practical after the entry of the Sale Order. The Closing shall take place at the
offices of Seller or by facsimile and overnight courier for the convenience of
the parties. All computations, adjustments, and transfers for the purposes
herein shall be effective as of 12:01 a.m. on the date of Closing (the "Closing
Date"). Time is of the essence of this Agreement.

      3.4 Closing Documents to be Delivered by Seller. At the Closing and
thereafter, at no cost or expense to the Seller, if reasonably requested by
Purchaser, the Seller shall tender to Purchaser fully executed deeds,
affidavits, assignments, bills of sale and other documentation as Purchaser's
attorneys may reasonably require for all Assets, including, but not limited to,
the following items:

            3.4.1 Bill of Sale covering the Assets being conveyed.

            3.4.2 Assignments of exectory agreements and other contracts as
required by Section 1.2.1.

            3.4.3 Actual possession of the Assets.

            3.4.4 All of Seller's books and records and the executed originals
of all lease agreements, service contracts, warranties, maintenance agreements
and other documents affecting the Assets.

            3.4.5 Such other documents as may be reasonably requested by
Purchaser in connection with the conveyance of the Assets and the continued
effective operation thereof.

      3.5 Closing Documents To Be Delivered By Purchaser. At Closing, the
Purchaser shall tender to Seller such documentation as Seller's attorneys may
reasonably require in connection with the sale of the Assets, including, but not
limited to, the following items:


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            3.5.1. The Warrant and a related Registration Rights Agreement
substantially in the attached hereto as Exhibit 3 and Purchaser's consent to the
assignment of