EXHIBIT 10.3


 





EXCHANGE AGREEMENT


This Exchange Agreement (this “Agreement”)
is entered into and effective as of July 16, 2012, (the “Effective Date”) by and between Clean Wind Energy Tower, Inc.,
a Nevada corporation (the “Company”), and collectively, A. Hugo DeCesaris of Maryland, Thomas S. Fowler Jr. of Maryland,
and Norma H. Akel of North Carolina individuals. (the “Holder”).


WHEREAS, the Holder is the holder
of two Promissory Notes, that of Stein Sperling Bennett DeJong Driscoll PC in the principal amount of $60,000, and Porter, LeVay
and Rose, Inc. in the principal amount of $15,000.00, issued by the Company to the Holder (as Lender thereunder), issued on and
dated December 30, 2011, a copy of which is attached hereto as Exhibit A (the “Promissory Note”).


WHEREAS, the entire principal
amount of the Promissory Note was due and payable on September 30,2012 , and no amount thereof has been paid as of the Effective
Date.


WHEREAS, the Company is presently
unable to pay the balance owed under the Promissory Note.


WHEREAS, pursuant to Section 3(a)(9)
of the Securities Act of 1933, as amended (the “Act”), the Company desires to exchange with the Holder, and the Holder
desires to exchange with the Company, the remaining principal amount of the Promissory Note and all amounts owed thereunder for
shares of Common Stock, on the terms and conditions of and as more fully described in this Agreement. Simultaneous with this Agreement,
the Company is entering into a similar exchange agreement with another shareholder of the Company.


NOW, THEREFORE, in consideration
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of
which are hereby acknowledged, the Company and the Holder agree as follows:


1.Exchange of
Note for Shares. On the Effective Date, the Holder will transfer and deliver the entire Promissory Note to the Company
and the Company will issue to Holder 7,500,000 shares of Common Stock, distributed as follows; 2,250,000 shares to A. Hugo DeCesaris,
2,250,000 share to Thomas S. Fowler Jr. and 3,000,000 shares to Norman H. Akel, such shares together with the shares being issued
to the other shareholder referenced above being approximately equal to (but under no circumstance whatsoever more than) 9.99% of
the total number of shares of Common Stock outstanding on the Effective Date (the “Exchange Shares”), in exchange for
such portion of the Promissory Note and all rights thereunder plus any and all claims arising out of or relating to such portion
of the Promissory Note, including without limitation any accrued but unpaid interest thereon and any right to receive a pro rata
portion of the fruits of 50% from designated well. The exchanged portion of the Promissory Note shall be cancelled for all purposes
as of the Effective Date, whether or not the original is returned to the Company for cancelation. The number of Exchange Shares
delivered pursuant to this Section 1 is subject to adjustment as set forth in Section 2.


2.Delivery of
Exchange Shares. All Exchange Shares shall be duly authorized, validly issued, fully paid, non-assessable and free of any pre-emptive
rights. All Exchange Shares shall be issued by the Company in electronic form, freely tradable, without restriction on resale,
and credited immediately by the Company to the Deposit/Withdrawal at Custodian (DWAC) account with Depository Trust Company (DTC)
under its Fast Automated Securities Transfer (FAST) Program specified by the Holder or its designee, time being of the essence.



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3.Representations
and Warranties of Company. The Company hereby makes the following representations and warranties to the Holder, with the understanding
and acknowledgment that the Holder will rely on such representations and warranties in effecting transactions in securities of
the Company:


(a)Power and Authority.
The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada. The
Company has the corporate power and authority to execute, deliver and perform all of its obligations under the Agreement, and to
issue, sell and deliver the Exchange Shares. The execution, delivery and performance of the Agreement have been duly authorized
by all necessary corporate action on the part of the Company and the Agreement has been duly executed and delivered by the Company.


(b)Exchange Shares.
As of the Effective Date, there are 238,009,917 shares of Common Stock issued and outstanding. The Exchange Shares are duly authorized,
validly issued, fully paid and non-assessable. The issuance of the Exchange Shares is not and will not be subject to any statutory
or contractual preemptive rights of any stockholder of the Company. The Exchange Shares are being issued to the Holder by the Company
in compliance with all applicable federal and state securities laws and regulations. The Holder acquired and fully paid for the
Exchange Shares on July 16, 2012 by purchasing the Promissory Note for cash. The Exchange Shares are freely tradable, without restriction
on resale, pursuant to Rule 144 as promulgated under the Act, as the date of issuance of the Exchange Shares will tack to the initial
issuance date of the Promissory Note. The resale of the Exchange Shares by the Holder will not conflict with or result in a violation
of Section 5 of the Act including any rules or regulations promulgated thereunder.


(c)No Liens.
The Exchange Shares are free and clear of all pledges, security interests, liens, charges, encumbrances, agreements, claims, rights
of first refusal, preemptive rights, or other restrictions and options of whatever nature (collectively, “Liens”).
Upon consummation of the transaction contemplated hereby, the Holder will acquire good and valid title to the Exchange Shares free
and clear of all Liens.


(d)No Conflicts.
The execution and delivery of the Agreement by the Company does not, and the Company’s performance of its obligations hereunder
will not (i) violate the certificate of incorporation, bylaws, or other organizational or governing documents of Company, as in
effect on the date hereof, (ii) violate in any material respect any federal or state law, rule or regulation, or judgment, order
or decree of any state or federal court or governmental or administrative authority, in each case that is applicable to the Company
or its properties or assets and which could have a material adverse effect on the Company’s business, properties, assets,
financial condition or results of operations or prevent the performance by the Company of the Agreement, or (iii) require the authorization,
consent, approval of or other action of, notice to or filing or qualification with, any state or federal governmental authority.


(e)Listing Requirements.
The Company is not in violation of the listing requirements of the stock exchange upon which the Common Stock is listed and has
no knowledge of any facts that would reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.


(f)No Registration.
The exchange of the Promissory Note for the Exchange Shares is being consummated without registration under the Act pursuant to
the exemption from registration contained in Section 3(a)(9) of the Act. The Company has not engaged in any general solicitation
or engaged or agreed to compensate any broker or agent in connection with the transactions contemplated by this Agreement. None
of the Company, its subsidiaries, any of their affiliates, and any person acting on their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration
of any of the Exchange Shares under the Act.



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(g)No Integration.
None of the Company, its subsidiaries, any of their affiliates, and any person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the
exchange transaction contemplated by this Agreement to be integrated with any prior or contemporaneous offerings by the Company
for purposes of Act. None of the Company, its subsidiaries, their affiliates, and any person acting on their behalf will take any
action referred to in the preceding sentence that would require registration of any of the Exchange Shares under the Act or cause
the exchange transaction contemplated by this Agreement to be integrated with any prior or contemporaneous offerings of the Company.


(h)No Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, its affiliates, or any of their respective properties, or the Exchange Shares, before
or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”), which adversely affects or challenges, or could adversely affect or challenge, the legality,
validity or enforceability of this Agreement or the Exchange Shares. The Company has not been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not
been, and to the knowledge of the Company there is not pending or contemplated, any investigation by the Securities and Exchange
Commission (“SEC”) involving the Company or any of its officers or directors.


(i)SEC Filings.
The Company is current in its filings of all reports, schedules, forms, statements, and other documents required to be filed by
it with the SEC, and all such reports were true, complete and accurate in all material respects on the date of filing thereof,
and none contained a false statement of material fact, or failed to state a material fact necessary to make any of the statements
therein not misleading.


4.Representations
and Warranties of Holder. The Holder hereby makes the following representations and warranties to the Company:


(a)The Holder is
the sole legal and beneficial owner of the Promissory Note free and clear of any Liens or any claims of third parties. The Holder
has owned the Promissory Note beneficially and of record since August 8, 2008, the date of its original acquisition from the Company.
The consideration paid by the Holder for the Promissory Note was cash.


(b)The Holder is
an “accredited investor” as defined in Regulation D under the Act.


(c)The Holder has
made all investigations that the Holder deems necessary or desirable in connection with the transactions contemplated by this Agreement
and has had an opportunity to ask questions of and receive answers from the Company and, alone or together with the Holder’s
advisors, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks
of the Holder’s investment in the Exchange Shares.


(d)The Holder is
not now, and has not at any time been, an officer, director, or more than 10% shareholder of the Company or in any other way an
“affiliate” of the Company as that term is defined in Rule 144(a)(1) under the Act.


(e)The Holder is
not aware of or in possession of any material, non-public information about the Company.



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5.Disclosure
of Transaction. The Company shall, on or before 8:30 a.m. Eastern time on the first business day after the Effective Date,
issue a press release and Current Report on Form 8-K disclosing all material terms of the transactions contemplated hereby and
attaching this Agreement as an exhibit.


6.Miscellaneous.


(a)Further Assurances.
Each party hereto shall promptly execute and deliver such further agreements and instruments, and take such further actions, as
the other party may reasonably request in order to carry out the purpose and intent of this Agreement.


(b)Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally
or by facsimile transmission (with subsequent letter confirmation by mail) or two days after being mailed by certified or registered
mail, postage prepaid, return receipt requested, to the parties, their successors in interest or their assignees at the addresses
set forth following the signature page hereto or at such other addresses as the parties may designate by written notice in the
manner aforesaid.


(c)Governing Law.
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than
the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that such party is not personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.


(d)Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement. In the event that any signature is delivered by facsimile or other electronic transmission, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or other electronic signature page were an original thereof.


(e)Expenses.
Except as otherwise set forth in Section 2 hereof, each party hereto shall bear its own costs and expenses, including, without
limitation, attorneys’ fees, incurred in connection with this Agreement and the transactions contemplated hereby.


(f)Complete Agreement.
This Agreement, together with the exhibits hereto, contains the entire agreement and understanding of the parties, and supersedes
all prior and contemporaneous agreements, term sheets, letters, discussions, communications and understandings, both oral and written,
which the parties acknowledge have been merged into this Agreement. No party, representative, attorney or agent has relied upon
any collateral contract, agreement, assurance, promise, understanding or representation not expressly set forth hereinabove. The
parties hereby expressly waive all rights and remedies, at law and in equity, directly or indirectly arising out of or relating
to, or which may arise as a result of, any person or entity’s reliance on any such assurance.



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(g)Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.



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IN WITNESS WHEREOF,
the parties hereto have caused this Exchange Agreement to be duly executed by their respective authorized signatories as of the
date first indicated above.


Company:


Clean Wind Energy Tower, Inc.


 


 


 


 


By: /s/ Ronald W.
Pickett 


 


Name: Ronald W. Pickett 


 


Title: CEO, President 


 


 


Holder:


   


   


	 	/s/ A. Hugo DeCesaris
	 	A. Hugo DeCesaris
	 	 
	 	 
	 	/s/Thomas S. Fowler Jr.
	 	Thomas S. Fowler Jr
	 	 
	 	 
	 	 
	 	 /s/Norman H. Akel
	 	 Norman H. Akel


   


   


   








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