Exchange of Note Clause Samples

Exchange of Note. The Holder of this Note shall, at Maker’s option, exchange any or all of the face amount of the Note, plus any accrued and unpaid interest thereon, into the applicable dollar amount of any other securities issued by the Company in connection with the Financing. Upon such exchange, this Note will be immediately cancelled upon delivery of these securities and the Holder shall receive the securities issued to the investors in the Financing.

Exchange of Note. The Parties agree that solely in consideration of the surrender of the Note Portion, that:

Exchange of Note. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of the mutilated Note, the Company at its expense shall execute and deliver, in lieu of this Note, a new Note of the same form and amount.

Exchange of Note. Upon receipt of a written notice of loss, theft, destruction, or mutilation of a Note, and upon surrendering such Note for cancellation if mutilated, execute and

Exchange of Note. Upon receipt of a written notice of loss, theft, destruction, or mutilation of a Note, and upon surrendering such Note for cancellation if mutilated, execute and deliver a new Note or a Note of like tenor in lieu of such lost, stolen, destroyed, or mutilated Note. Any Note issued pursuant to this Section 6.11 shall be dated so that neither gain nor loss of interest shall result therefrom.

Exchange of Note. As promptly as practicable following the date of ---------------- the Qualifying Equity Financing, the Lender shall deliver the Note to the Company. The conversion of the Note shall be deemed to have been effected immediately upon the closing of the Qualifying Equity Financing, and at such time the rights of the Lender to receive principal and interest shall cease, and the Lender shall be treated for all purposes as the record holder of the number of shares of Common Stock or Preferred Stock, as the case may be, into which this Note converts in accordance herewith. As promptly as practicable after the receipt of the Note from Lender, the Company shall cause to be issued and delivered to the Lender a certificate or certificates for the number of shares of Common Stock or Preferred Stock, as the case may be, issuable upon conversion of the Note. Such certificate or certificates shall bear such legends required, in the opinion of counsel for the Company, under applicable securities laws.

Exchange of Note. Upon surrender by any holder of the Note to the Company of the Note, the Company at its expense will issue in exchange therefor, and deliver to such holder, a new Note or Notes, in such principal amount or amounts as may be requested by such holder. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any Note, and in case of any such loss, theft or destruction, upon delivery of an indemnity agreement satisfactory to the Company (provided that in the case of either Purchaser or an institutional investor, such holder's own agreement shall be deemed satisfactory to the Company), or in case of any such mutilation, upon surrender and cancellation of such Note, the Company at its expense will issue and deliver to any such holder a new Note of like tenor, in lieu of such lost, stolen, destroyed or mutilated Note. The parties hereto have executed this Agreement as of the date first set forth above. COMPANY: AMERICAN WATER STAR, INC. By: Its: Signature Print Name Soc. Sec. No Address: Telephone: Facsimile: Signature Print Name Soc. Sec. No. Telephone: THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR, IF APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK 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 OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO AMERICAN WATER STAR, INC. THAT SUCH REGISTRATION IS NOT REQUIRED. $_______________________ ____________, 20___ Las Vegas, Nevada FOR VALUE RECEIVED, AMERICAN WATER STAR, INC., a Nevada corporation (hereinafter called the "Company"), hereby promises to pay to ___________________________, whose address is _________________________________________________ (the "Holder") on order, without demand, the principal sum of $_____________, bearing interest at the rate of ten percent (10%) per annum, on _________________, 2003 (the "Maturity Date") (six (6) months following the issuance of this Note). The following terms shall apply to this Note:

Exchange of Note. At any time, and from time to time, upon surrender of such Note at its office, the Company will deliver in exchange therefor, without expense to the holder, except as set forth below a Note for the same aggregate principal amount as the then unpaid principal amount of the Note so surrendered, in the denomination of $1,000,000 or integral multiples thereof (except as may be necessary to reflect any principal amount not evenly divisible by $1,000,000) as such holder shall specify, dated as of the date to which interest has been paid on the Note so surrendered or, if such surrender is prior to the payment of any interest thereon, then dated as of the date of issue, payable to such Person or Persons as may be designated by such holder, and otherwise of the same form and tenor as the Note so surrendered for exchange. The Company may require the payment of a sum sufficient to cover any stamp tax or governmental charge imposed upon such exchange or transfer.

Exchange of Note. The Note is exchangeable for an equal aggregate principal amount of note of different authorized denominations, each containing identical terms as this Note (except for the principal amounts thereof) as requested by the Holder surrendering the same. No service charge will be made for such registration or transfer or exchange. This Note may be repaid at any time without any prepayment penalty.