Common use of Exchange of Note Clause in Contracts

Exchange of Note. Upon surrender by any holder of the Note to the Borrower of the Note, the 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 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 Borrower (provided that in the case of either Purchaser or an institutional Borrower, such holder's own agreement shall be deemed satisfactory to the Borrower), or in case of any such mutilation, upon surrender and cancellation of such Note, the 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. BORROWER: AMERICAN WATER STAR, INC. By: Its: PURCHASER/PURCHASERS: Signature Print Name Soc. Sec. No Signature Print Name Soc. Sec. No. SCHEDULE 1 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO TRANSFER, SALE OR OTHER DISPOSITION OF THIS NOTE MAY BE MADE UNLESS A REGISTRATION STATEMENT WITH RESPECT TO THIS NOTE HAS BECOME EFFECTIVE UNDER SAID ACT, OR THE CORPORATION HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. THIS NOTE IS SUBJECT TO THE TERMS OF THE PURCHASE AGREEMENT BY AND BETWEEN THE CORPORATION AND THE PURCHASERS NAMED THEREIN. AMERICAN WATER STAR, INC. CONVERTIBLE NOTE

Exchange of Note. Upon surrender by any holder of the Note to the Borrower Company of the Note, the Borrower 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 Borrower 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 Borrower Company (provided that in the case of either Purchaser or an institutional Borrowerinvestor, such holder's own agreement shall be deemed satisfactory to the BorrowerCompany), or in case of any such mutilation, upon surrender and cancellation of such Note, the Borrower 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. BORROWERCOMPANY: AMERICAN WATER STAR, INC. By: Its: PURCHASER/PURCHASERS: Signature Print Name Soc. Sec. No Address: Telephone: Facsimile: Signature Print Name Soc. Sec. No. SCHEDULE Telephone: Schedule 1 Purchaser Name Address & Telephone Purchase Price Principal Amount of Note EXHIBIT A FORM OF CONVERTIBLE NOTE [NOT FOR EXECUTION] THIS NOTE HAS 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. NO TRANSFER, SALE OR OTHER DISPOSITION THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE MADE UNLESS A SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT AS TO THIS NOTE HAS BECOME EFFECTIVE OR SUCH SHARES UNDER SAID ACT, ACT AND APPLICABLE STATE SECURITIES LAWS OR THE CORPORATION HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AMERICAN WATER STAR, INC. THAT SUCH REGISTRATION IS NOT REQUIRED. THIS NOTE IS SUBJECT TO THE TERMS OF THE PURCHASE AGREEMENT BY AND BETWEEN THE CORPORATION AND THE PURCHASERS NAMED THEREIN. AMERICAN WATER STAR, INC. 10% CONVERTIBLE NOTENOTE $_______________________ ____________, 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 Borrower Company of the Note, the Borrower 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 Borrower 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 Borrower Company (provided that in the case of either Purchaser or an institutional Borrowerinvestor, such holder's own agreement shall be deemed satisfactory to the BorrowerCompany), or in case of any such mutilation, upon surrender and cancellation of such Note, the Borrower 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. BORROWERCOMPANY: AMERICAN WATER STAR, INC. By: Its: PURCHASER/PURCHASERS: Signature Signature: Signature: Print Name Soc. Sec. No Signature Name: Print Name Name: Soc. Sec. No. Soc. Sec. No. Address: Address: Telephone: Telephone: Facsimile: Facsimile: SCHEDULE 1 Purchaser Name Address & Telephone Purchase Price Principal Amount of Note EXHIBIT A FORM OF CONVERTIBLE NOTE THIS NOTE HAS 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. NO TRANSFER, SALE OR OTHER DISPOSITION THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE MADE UNLESS A SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT AS TO THIS NOTE HAS BECOME EFFECTIVE OR SUCH SHARES UNDER SAID ACT, ACT AND APPLICABLE STATE SECURITIES LAWS OR THE CORPORATION HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AMERICAN WATER STAR, INC. THAT SUCH REGISTRATION IS NOT REQUIRED. THIS NOTE IS SUBJECT TO THE TERMS OF THE PURCHASE AGREEMENT BY AND BETWEEN THE CORPORATION AND THE PURCHASERS NAMED THEREIN. AMERICAN WATER STAR, INC. 25% CONVERTIBLE NOTENOTE $_______________________ ____________, 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 $_____________, with simple interest accruing at the annual rate of twenty-five percent (25%), on ___________, 2003 (six months from the date of issue) (the "Maturity Date"). The following terms shall apply to this Note:

Exchange of Note. Upon surrender by any holder of the Note to the Borrower of the Note, the 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 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 Borrower (provided that in the case of either Purchaser or an institutional Borrowerinvestor, such holder's ’s own agreement shall be deemed satisfactory to the Borrower), or in case of any such mutilation, upon surrender and cancellation of such Note, the 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. BORROWER: AMERICAN WATER STAR, INC. By: ____________________________________ Its: ____________________________________ PURCHASER/PURCHASERS: Signature Signature/s____________________________________ Print Name Name/s__________________________________ Soc. Sec. No Signature _________________________________ Signature/s____________________________________ Print Name Name/s___________________________________ Soc. Sec. No. No __________________________________ SCHEDULE 1 Purchaser Name Address & Telephone Purchase Price Principal Amount of Note EXHIBIT A THIS NOTE HAS 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. NO TRANSFER, SALE OR OTHER DISPOSITION THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE MADE UNLESS A SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT AS TO THIS NOTE HAS BECOME EFFECTIVE OR SUCH SHARES UNDER SAID ACT, ACT AND APPLICABLE STATE SECURITIES LAWS OR THE CORPORATION HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AMERICAN WATER STAR, INC. THAT SUCH REGISTRATION IS NOT REQUIRED. THIS NOTE IS SUBJECT TO THE TERMS OF THE PURCHASE AGREEMENT BY AND BETWEEN THE CORPORATION AND THE PURCHASERS NAMED THEREIN. AMERICAN WATER STAR, INC. CONVERTIBLE NOTENOTE $____________ ____________ , 0000