Common use of Exchange of Note Clause in Contracts

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. Upon surrender by any holder of the Note to the Company Borrower of the Note, the Company Borrower 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 Borrower 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 Borrower (provided that in the case of either Purchaser or an institutional investor, such holder's ’s own agreement shall be deemed satisfactory to the CompanyBorrower), or in case of any such mutilation, upon surrender and cancellation of such Note, the Company Borrower 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. COMPANYBORROWER: AMERICAN WATER STAR, INC. By: ____________________________________ Its: Signature ____________________________________ PURCHASER/PURCHASERS: Signature/s____________________________________ Print Name Name/s__________________________________ Soc. Sec. No Address: Telephone: Facsimile: Signature _________________________________ Signature/s____________________________________ Print Name Name/s___________________________________ Soc. Sec. No. Telephone: No __________________________________ SCHEDULE 1 Purchaser Name Address & Telephone Purchase Price Principal Amount of Note EXHIBIT A 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. AMERICAN WATER STAR, INC. CONVERTIBLE NOTE $_______________________ _____________ , 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. 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 Signature: Signature: Print Name Soc. Sec. No AddressName: TelephonePrint Name: Facsimile: Signature Print Name Soc. Sec. No. Soc. Sec. No. Address: Address: Telephone: Telephone: Facsimile: Facsimile: 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 with simple interest accruing at the annual rate of ten twenty-five percent (1025%) per annum), on _________________, 2003 (six months from the date of issue) (the "Maturity Date") (six (6) months following the issuance of this Note). The following terms shall apply to this Note:

Exchange of Note. Upon surrender by any holder of the Note to the Company Borrower of the Note, the Company Borrower 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 Borrower 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 Borrower (provided that in the case of either Purchaser or an institutional investorBorrower, such holder's own agreement shall be deemed satisfactory to the CompanyBorrower), or in case of any such mutilation, upon surrender and cancellation of such Note, the Company Borrower 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. COMPANYBORROWER: 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 HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO TRANSFER, OR, IF APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION SALE OR OTHER DISPOSITION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE MADE UNLESS A REGISTRATION STATEMENT AS WITH RESPECT TO THIS NOTE OR SUCH SHARES HAS BECOME EFFECTIVE UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS ACT, OR THE CORPORATION HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO AMERICAN WATER STAR, INC. THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. $_______________________ ____________, 20___ Las Vegas, Nevada FOR VALUE RECEIVED, AMERICAN WATER STAR, INCTHIS NOTE IS SUBJECT TO THE TERMS OF THE PURCHASE AGREEMENT BY AND BETWEEN THE CORPORATION AND THE PURCHASERS NAMED THEREIN., 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: