INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

 

                                                                    EXHIBIT 4.10

 

                    INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

         THIS INTELLECTUAL PROPERTY SECURITY AGREEMENT (the "Agreement"),  dated

as of September ___,  2005, is made by NORTH TEXAS STEEL COMPANY,  INC., a Texas

corporation  ("NTSCO"),  OMAHA HOLDINGS CORP., a Delaware corporation ("Omaha"),

and AMERICAN TECHNOLOGIES GROUP, INC., a Nevada corporation ("ATG" together with

NTSCO and Omaha, each a "Grantor" and collectively, the "Grantors"), in favor of

LAURUS MASTER FUND, LTD. ("Laurus").

 

         WHEREAS, pursuant to that certain Security and Purchase Agreement dated

as of the date  hereof by and among  Grantors  and  Laurus (as from time to time

amended,   restated,   supplemented   or  otherwise   modified,   the  "Security

Agreement"),  Laurus has agreed to make the Loans for the  benefit of  Grantors;

and

 

         WHEREAS,  Laurus is  willing to make the Loans as  provided  for in the

Security  Agreement,  but only upon the condition,  among others,  that Grantors

shall have executed and delivered to Laurus this Agreement;

 

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants

herein contained and for other good and valuable consideration,  the receipt and

sufficiency  of which are hereby  acknowledged,  each Grantor  hereby  agrees as

follows:

 

         Section 1. DEFINED TERMS. All capitalized  terms used but not otherwise

defined herein have the meanings given to them in the Security Agreement.

 

         Section  2.  GRANT  OF  SECURITY  INTEREST  IN  INTELLECTUAL   PROPERTY

COLLATERAL.  To secure the complete and timely payment of all the Obligations of

Grantors now or hereafter existing from time to time, each Grantor hereby grants

to Laurus a continuing first priority security interest in all of such Grantor's

right,  title and interest  in, to and under the  following,  whether  presently

existing or hereafter created or acquired (collectively, the "Collateral"):

 

                           (a) all of its Patents  and Patent  Licenses to which

                  it is a  party  including  those  referred  to on  Schedule  I

                  hereto;

 

                           (b) all of its Trademarks  and Trademark  Licenses to

                  which it is a party including those referred to on Schedule II

                  hereto;

 

                           (c) all of its Copyrights  and Copyright  Licenses to

                  which it is a party  including  those  referred to on Schedule

                  III hereto;

 

                           (d) all reissues,  continuations or extensions of the

                  foregoing;

 

                           (e) all goodwill of the business  connected  with the

                  use of, and symbolized by, each Patent,  each Patent  License,

                  each  Trademark,  each Trademark  License,  each Copyright and

                  each Copyright License; and

 

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                           (f)  all  products  and  proceeds  of the  foregoing,

                  including,  without  limitation,  any  claim  by such  Grantor

                  against  third  parties  for  past,   present  or  future  (i)

                  infringement  or  dilution  of any  Patent or Patent  licensed

                  under  any  Patent  License,   (ii)  injury  to  the  goodwill

                  associated  with any Patent or any Patent  licensed  under any

                  Patent  License,   (iii)   infringement  or  dilution  of  any

                  Trademark or Trademark  licensed under any Trademark  License,

                  (iv) injury to the goodwill  associated  with any Trademark or

                  any  Trademark  licensed  under  any  Trademark  License,  (v)

                  infringement   or  dilution  of  any  Copyright  or  Copyright

                  licensed under any Copyright  License,  and (vi) injury to the

                  goodwill  associated  with  any  Copyright  or  any  Copyright

                  licensed under any Copyright License.

 

         Section 3. REPRESENTATIONS AND WARRANTIES.  Each Grantor represents and

warrants  that such  Grantor  does not have any  interest  in, or title to,  any

Patent,  Trademark or Copyright  except as set forth in Schedule I,  Schedule II

and Schedule III, respectively,  hereto. Each Grantor's Patents,  Trademarks and

Copyrights are valid and enforceable, are solely owned by a Grantor and there is

no claim that the use of any of them  violates  the rights of any third  person.

This  Agreement  is  effective  to  create a valid  and  continuing  Lien on and

perfected  security  interests  in  favor  of  Laurus  in all of each  Grantor's

Patents,  Trademarks and Copyrights  and such perfected  security  interests are

enforceable  as such as against any and all creditors of, and  purchasers  from,

each Grantor.  Upon filing of this Intellectual Property Security Agreement with

the United States Patent and  Trademark  Office and the United States  Copyright

Office and the filing of appropriate financing statements,  all action necessary

or desirable  to protect and perfect  Laurus'  Lien on each  Grantor's  Patents,

Trademarks and Copyrights shall have been duly taken.

 

         Section 4.  COVENANTS.  Each Grantor  covenants  and agrees with Laurus

that from and after the date of this  Agreement and until the  expiration of the

Term:

 

                           (a) Such Grantor shall notify Laurus  immediately  if

                  it  knows  or has  reason  to know  that  any  application  or

                  registration  relating to any Patent,  Trademark  or Copyright

                  (now or hereafter existing) may become abandoned or dedicated,

                  or of any adverse determination or development  (including the