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                                OPTION AGREEMENT

         This Option Agreement ("Agreement") is made this August 13th of 2003 by
and between  Composite  Technology  Corporation  ("the  Company") and C. William
Arrington,  ("Arrington"), of 4026 Rivoli, Newport Beach, California 92660, USA,
and replaces a previous option agreement made in June 11th, 2001 by Transmission
Technology Corporation ("TTC"), a Nevada corporation.

          WHEREAS,  under that certain  employment  understanding in June, 2001,
between TTC and Arrington,  wherein TTC agreed to provide  Arrington with 40,000
options of TTC common stock; and

         WHEREAS,  under the  November  3, 2001  Reorganization  Plan  Agreement
involving the reverse  acquisition  by TTC of CTC (formerly  ElDorado  Financial
Group, Inc., a Nevada corporation) the common shares TTC were all convertible to
common shares of CTC,  which would equate to 635,216  shares of CTC common stock
under the Company share option plan ("Option Plan") to the benefit of Arrington;
and

         WHEREAS,  CTC has agreed to provide  Arrington  with options to acquire
Company  shares  under  its  share  option  plan  and  in  satisfaction  of  its
obligations  under the Option  Plan,  the Company has  granted to  Arrington  an
option to  purchase  six hundred and  thirty-five  thousand  and two hundred and
sixteen (635,216) shares of the Company's common stock, subject to the terms and
conditions of this Agreement.

         NOW, THEREFORE, the parties agree as follows:

1.       Option

         The Company  grants to Arrington  the right to purchase  ("Option")  an
aggregate  of six hundred and  thirty-five  thousand and two hundred and sixteen
(635,216) shares of the Company's common stock ("Shares") at the price set forth
in Section 4 below.  The vested  portion of the Option may be  exercised  at any
time,  whether in a single transaction or in multiple  transactions,  and in the
amounts and at the times determined by Arrington.

2.       Vesting

         The  original  agreement  with TTC called for the vesting  over 5 years
commencing  with the first  installment on the date of the agreement of June 11,
2001 with the next fifth being due the yearly  anniversary  and so forth. In the
last  shareholders  meeting it was agreed that these  options  were  granted and
vested in total as of that date in February  2003,  such that they are all fully
vested under the Company's Stock Plan at this time.


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         The vested portion of the Option shall be nonforfitable,  and shall not
be  affected  by the  termination  of  employment,  the death or  disability  of
Arrington, or for any other reason. Notwithstanding the foregoing, if the entire
portion of this Option has not been  exercised  as of  December  31,  2011,  the
unexercised portion shall lapse and shall be of no force or effect.

3.       Effect of Termination of Employment

         If Arrington voluntarily terminates employment without cause, or if the
Company  terminates  employment  due  to  Arrington's  breach,  then  as of  the
effective  date of such  termination  the  unvested  portion of the Option shall
terminate and shall be of no force or effect.  This paragraph shall not apply to
any  voluntary  termination  by  Arrington  as a result of a Change  in  Control
specified in Section 7 below.

         If the Company voluntarily  terminates  employment without cause, or if
Arrington terminates employment due to the Company's breach, or if employment is
terminated  due to death or disability  of  Arrington,  then as of the effective
date of such termination the unvested portion of the Option shall be immediately
and fully vested.

         The  termination of employment  shall not affect  Arrington's  right to
exercise  the vested  portion of the  Option at any time prior to  December  31,
2011.

4.       Purchase Price

         The purchase price for each Share subject to the Option  (including any
additional Shares granted to Arrington under Section 8 below) shall be $0.35.

5.       Manner of Exercise

         If at any time  Arrington  elects  to  exercise  all or any part of the
vested  portion  of the  Option,  it shall so notify  Company in  writing.  Such
written notice shall specify the number of Shares to be purchased,  and shall be
accompanied  by cash or a check equal to the full purchase  price for all Shares
purchased.  "Full  purchase  price"  means  the  per-share  price in  Section  4
multiplied by the number of Shares purchased.

6.       Issuance of Certificates

         As soon as practicable after the exercise of any portion of the Option,
the Company shall deliver to Arrington a  certificate  evidencing  the Shares so
purchased.  Upon such  delivery  Arrington  shall have all rights,  powers,  and
interests  of a  shareholder  of the  Company  with  respect  to the  Shares  so
acquired.

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7.       Change in Control

         Notwithstanding Section 2 above, in the event of a Change in Control of
the Company the unvested  portion of the Option  shall be fully and  immediately
vested as of the earlier of (i) the date any proposed Change in Control has been
approved by the Company's board of directors, whether or not all of the terms of
such  transaction  have been  determined,  (ii) the date  Change in Control  has
actually  occurred,  or (iii) the occurrence of an event specified in subsection
(c) below.

         As used herein, "Change in Control" shall mean any of the following:

                  (a)      The sale or transfer of more than fifty percent (50%)
                           of the  assets of the  Company,  whether  in a single
                           transaction or a series of  transactions  during a 12
                           month period.

                  (b)      The sale or transfer  to any person or Common  Group,
                           or  acquisition  by any  person or Common  Group,  of
                           twenty  percent  (20%)  or  more  of the  outstanding
                           common  stock  of the  Company,  whether  in a single
                           transaction  or a  series  of  transactions.  "Common
                           Group"  means five or fewer  persons  related in some
                           manner.  This  subsection  shall  not apply to common
                           stock  acquired  by C.  William  Arrington  or Benton
                           Wilcoxon.

                  (c)      The   death,   disability,   retirement,   or   other
                           termination of employment of C. William Arrington.

8.       Nonalienation.

         Neither of the Option nor any  rights  thereunder  may be  transferred,
assigned,  pledged or  hypothocated  in any way,  whether by operation of law or
otherwise, and shall not be subject to execution, attachment or similar process.

9.       Entire Agreement

         This  Agreement  represents  the entire  agreement  of the parties with
respect  to  the  subject   matter   hereof,   and   supercedes   any  prior  or
contemporaneous written or oral agreement with respect thereto.

10.      Choice of Law

         This  Agreement  shall  be  governed  by  the  laws  of  the  State  of
California.

11.      Amendment

         This Agreement may be amended only by a writing executed by the parties
hereto.


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12.      Attorney's Fees

         In the event either party incurs legal expenses to enforce or interpret
any  provision  of this  Agreement,  the  prevailing  party shall be entitled to
recover its legal expenses, including, without limitation, reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party shall be entitled.

         In WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.

COMPOSITE TECHNOLOGY CORPORATION

By:
         -----------------------------------------------
         Benton H Wilcoxon, Chairman and CEO

By:
         -----------------------------------------------
         C. William Arrington, Director and President



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