**FACTORING
      AGREEMENT**





Effective
      as of December 31, 2006 (" Effective
      Date "),
      Bradley Rotter, an individual (" Factor ")
      and
      Composite Technology corporation, a Nevada corporation (" Company ")
      agree
      that Factor shall act as Company's factor upon the following terms and
      conditions:





1.  COVERED
      SALES; SECURITY INTEREST





(a)  Company
      hereby assigns and sells to Factor, as absolute owner, and Factor hereby
      purchases from Company, all of the receivables set forth in Schedule
      A attached
      hereto (collectively referred to as the " Purchased
      Accounts ").
      Factor's purchase of and acquisition of title to each Purchased Accounts is
      effective as of the date of this Agreement.





(b)  Factor
      acknowledges Company's intention to obtain financing from certain lenders based
      upon a priority interest in certain collateral, including the Purchased
      Accounts. In the event Factor obtains priority in the Purchased Accounts over
      any such lenders, the Factor agrees to subordinate Factor's position in the
      Purchased Accounts to such lenders' positions therein.





2.  PURCHASE
      PRICE OF PURCHASED ACCOUNTS





The
      purchase price of each of the Purchased Accounts is the amount set forth as
      the
“Purchase Price” in Schedule
      A attached
      hereto (the aggregate purchase price of all of the Purchased Accounts is
      referred to as the “Purchase Price”). The Factor and Company hereby acknowledge
      that the Factor has advanced the Purchase Price for the Purchased Accounts
      as of
      the Effective Date.





3.  INTEREST;
      REPURCHASE OF PURCHASED ACCOUNTS; FEES





(a)  Interest
      shall accrue on the Purchase Price, less any amounts actually paid to the Factor
      by the payees of the Purchased Accounts, at a rate of 10% per annum (calculated
      on the basis of the actual number of days elapsed over a year of 360 days)
      until
      the earlier of: (i) the Purchase Price has been paid in full to the Factor
      by
      the payees of such Purchased Accounts; or (ii) the Company repurchases the
      Purchased Accounts from the Factor.





(b)  Upon
      full
      payment of the Purchase Price made by the payees of the Purchased Accounts,
      the
      Factor shall immediately assign and transfer to Company, as absolute owner,
      the
      Purchased Accounts.





(c)  In
      the
      event the payees of the Purchased Accounts have not fully paid to the Factor
      the
      Purchase Price by March 31, 2007 (the “ Forced
      Repurchase Date ”),
      the
      Company shall repurchase the Purchased Accounts for an amount equal to the
      Purchase Price less any amounts actually paid to the Factor by the payees of
      such Purchased Accounts. In addition, the Company may, from time to time prior
      to the Forced Repurchase Date, repurchase the Purchased Accounts for an amount
      equal to the Purchase Price less any amounts actually paid to the Factor by
      the
      payees of such Purchased Accounts.





(d)  For
      Factor’s services, the Company shall (i) pay to the Factor 2% of the Purchase
      Price at the time of the Company’s repurchase of the Purchased Account; and (ii)
      issue to the Factor a Warrant to purchase 900,000 shares of the Company’s common
      stock at an exercise of $1.06 per share with a 2 year term, subject to the
      approval of the Company’s Board of Directors (the “ Warrant ”);
      and
      (iii) another Warrant to purchase an additional 900,000 shares if the Purchase
      Price is not repurchased by the Company by February 1, 2007. The form of Warrant
      is set forth in Exhibit
      A .








4.  REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY





(a)  Due
      Incorporation and Good Standing .
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Nevada, with full and adequate power to carry
      on
      and conduct its business as presently conducted, and is duly licensed or
      qualified in all foreign jurisdictions wherein the failure to be so qualified
      or
      licensed would reasonably be expected to have a material adverse effect on
      the
      business of the Company.





(b)  Due
      Authorization .
      This
      Agreement is subject to the approval of the Board of Directors of the Company.
      With such approvals in place, the Company will have full right, power and
      authority to enter into this Agreement, to sell the Purchased Accounts
      hereunder, to issue the Warrants, to execute and deliver this Agreement and
      to
      perform all of its duties and obligations under this Agreement. The execution
      and delivery of this Agreement will not, nor will the observance or performance
      of any of the matters and things herein or therein set forth, violate or
      contravene any provision of law or the Company's bylaws or certificate of
      incorporation. Following the Company’s Board approval of this Agreement, all
      necessary and appropriate corporate action on the part of the Company has been
      taken to authorize the execution and delivery of this Agreement. The Company
      shall give notice promptly to the Factor as soon as Board approval has been
      secured for the obligations under the present Agreement.




(c)  Enforceability .
      Upon
      the Company’s Board approval of this Agreement, this Agreement will be validly
      executed and delivered by the Company and will constitute the legal, valid
      and
      binding obligations of the Company enforceable against it in accordance with
      its
      respective terms, subject to applicable bankruptcy, insolvency, reorganization
      or similar laws relating to or affecting the enforcement of creditors’ right and
      to the availability of the remedy of specific performance.




(d)  Compliance
      with Laws .
      The
      nature and transaction of the Company's business and operations and the use
      of
      its properties and assets do not, and during the term of this Agreement shall
      not, violate or conflict with in any material respect any applicable law,
      statute, ordinance, rule, regulation or order of any kind or
      nature.




(e)  Absence
      of Conflicts .
      The
      execution, delivery and performance by the Company of this Agreement, and the
      transactions contemplated hereby, do not constitute a breach or default, or
      require consents under, any agreement, permit, contract or other instrument
      to
      which the Company is a party, or by which the Company is bound or to which
      any
      of the assets of the Company is subject, or any judgment, order, writ, decree,
      authorization, license, rule, regulation, or statute to which the Company is
      subject.




5.  REPRESENTATIONS
      AND WARRANTIES OF THE FACTOR





(a) Due
      Authorization .
      The
      Factor has full power and authority and has taken all action necessary to
      authorize the Factor to execute, deliver and perform the Factor’s obligations
      under this Agreement. This Agreement is the legal, valid and binding obligation
      of the Factor in accordance with its terms.








(b) Accredited
      Investor .
      The
      Factor is an Accredited Investor as that term is defined in Regulation D
      promulgated under the Securities Act of 1933, as amended (the “ Securities
      Act ”).





(c) Investment
      Experience .
      The
      Factor has not authorized any Person to act as the Factor’s Purchaser
      Representative (as that term is defined in Regulation D of the General Rules
      and
      Regulations under the Securities Act) in connection with this transaction.
      The
      Factor has such knowledge and experience in financial, investment and business
      matters that the Factor is capable of evaluating the merits and risks of the
      prospective investment in the securities of the Company. The Factor has
      consulted with such independent legal counsel or other advisers as the Factor
      has deemed appropriate to assist the Factor in evaluating the proposed
      investment in the Company.





(d) Adequate
      Means .
      The
      Factor (i) has adequate means of providing for the Factor’s current financial
      needs and possible contingencies; and (ii) can afford (a) to hold unregistered
      securities for an indefinite period of time as required; and (b) sustain a
      complete loss of the entire amount of the subscription.





(e) Access
      to Information .
      The
      Factor has been afforded the opportunity to ask questions of, and receive
      answers from the officers and/or directors of the Company acting on its behalf
      concerning the terms and conditions of this transaction and to obtain any
      additional information, to the extent that the Company possesses such
      information or can acquire it without unreasonable effort or expense, necessary
      to verify the accuracy of the information furnished; and has had such
      opportunity to the extent the Factor considers it appropriate in order to permit
      the Factor to evaluate the merits and risks of an investment in the Company.
      It
      is understood that all documents, records and books pertaining to this
      investment have been made available for inspection, and that the books and
      records of the Company will be available upon reasonable notice for inspection
      by investors during reasonable business hours at its principal place of
      business. The foregoing shall in no way be deemed to limit the ability of the
      Factor to rely on the representations and warranties set forth herein or
      incorporated herein by reference.





(f) No
      Resale .
      The
      Warrants (“ Securities ”)
      are
      being acquired solely for the account of the Factor for the Factor’s investment
      and not with a view to, or for resale in connection with, any distribution
      in
      any jurisdiction where such sale or distribution would be precluded.





(g) Legend .
      The
      Factor hereby acknowledges and agrees that the Company may insert the following
      or similar legend on the face of the certificates evidencing the Common Stock
      (including Common Stock underlying the Warrants) purchased by the Factor if
      required in compliance with the Securities Act or state securities
      laws:





“These
      securities have not been registered under the Securities Act of 1933, as amended
      (the “Securities Act”), or any state securities laws and may not be sold or
      otherwise transferred or disposed of except pursuant to an effective
      registration statement under the Securities Act and any applicable state
      securities laws, or an opinion of counsel satisfactory to counsel to the issuer
      that an exemption from registration under the Securities Act and any applicable
      state securities laws is available.”








(h)  General
      Solicitation .
      The
      Factor is not acquiring the Securities as a result of any advertisement,
      article, notice or other communication regarding the Securities published in
      any
      newspaper, magazine or similar media or broadcast over television or radio
      or
      presented at any seminar or any other general solicitation or general
      advertisement.





6. COVENANTS:
      REGISTRATION RIGHTS





(a)  If
      the
      Company prepares and files a Registration Statement under Act or otherwise
      registers securities under the Act as to any of its securities (other than
      under
      a Registration Statement pursuant to Form S-8 or Form S-4) (each such filing,
      a
      " Registration
      Statement "),
      it
      will give written notice by registered mail, at least 20 days prior to the
      filing of such Registration Statement to the Factor of its intention to do
      so.
      The Company shall include all shares of common stock underlying the Warrants
      (the “ Registrable
      Securities ”)
      in
      such Registration Statement with respect to which the Company has received
      written requests for inclusion therein within 15 days of actual receipt of
      the
      Company's notice.





(b)  In
      the
      event of an underwritten registered offering the managing underwriter(s) advise
      the Company in writing that in their opinion the number of Registrable
      Securities exceeds the number of Registrable Securities which can be sold
      therein without adversely affecting the marketability of the offering, the
      Company will cause the Company to include in such registration the number of
      Registrable Securities requested to be included which in the opinion of such
      underwriter(s) can be sold without adversely affecting the marketability of
      the
      offering, pro rata among the respective holders thereof on the basis of the
      amount of Registrable Securities owned by each such holder.





7.  MISCELLANEOUS


(a) Successors
      and Assigns .
      Subject
      to the exceptions specifically set forth in this Agreement, the terms and
      conditions of this Agreement shall inure to the benefit of and be binding upon
      the respective executors, administrators, heirs, successors and assigns of
      the
      parties. This Agreement may be assigned solely by the Factor.


(b) Titles
      and Subtitles .
      The
      titles and subtitles of the Sections of this Agreement are used for convenience
      only and shall not be considered in construing or interpreting this
      agreement.


(c) Notices .
      Any
      notice, request or other communication required or permitted hereunder shall
      be
      in writing and shall be delivered personally or by facsimile (receipt confirmed
      electronically) or shall be sent by a reputable express delivery service or
      by
      certified mail, postage prepaid with return receipt requested, addressed as
      follows:





if
                to the Company, to:
            
            if
                to the Factor, to:Composite
                Technology Corporation
              2026
                McGaw Avenue
              Irvine,
                California 92614
              Attn:Chief
                Executive Officer
              Fax:(949)
                660-1533
            
            Bradley
                Rotter
              850
                Corbett Ave., Suite 6
              San
                Francisco, CA 94131








Either
      party hereto may change the above specified recipient or mailing address by
      notice to the other party given in the manner herein prescribed. All notices
      shall be deemed given on the day when actually delivered as provided above
      (if
      delivered personally or by facsimile, provided that any such facsimile is
      received during regular business hours at the recipient's location) or on the
      day shown on the return receipt (if delivered by mail or delivery
      service).


(d) Governing
      Law .
      This
      Agreement shall be governed by and construed in accordance with the domestic
      laws of the State of California without giving effect to any choice of law
      or
      conflict of law provision or rule (whether of the State of California or any
      other jurisdiction) that would cause the application of the laws of any
      jurisdiction other than the State of California. The parties hereto hereby
      agree
      that any suit or proceeding arising under this Agreement, or in connection
      with
      the consummation of the transactions contemplated hereby, shall be brought
      solely in a federal or state court located in the County of Orange and State
      of
      California.




(e) Waiver
      and Amendment .
      Any
      term of this Agreement may be amended, waived or modified with the written
      consent of the Company and the Factor.




(f) Remedies .
      The
      rights and remedies of the Factor described herein shall be cumulative and
      not
      restrictive of any other rights or remedies available under any other
      instrument, at law or in equity.





IN
      WITNESS WHEREOF, the undersigned caused this Agreement to be
      signed.





**FACTOR:**








______________________________


Bradley
      Rotter


850
      Corbett Ave., Ste. 6


San
      Francisco, Ca. 94131








**Company:**





**COMPOSITE
      TECHNOLOGY CORPORATION**











By:  ___________________________________________


Name:  Benton
      Wilcoxon


Title:  Chief
      Executive Officer








SCHEDULE
      A


PURCHASED
      ACCOUNTS








Purchase
                Accounts Description
            Balance
                Due
            Purchase
                PriceCTC
                Sales Order No. 06-100073-SO-GEN; Date 9/25/06 (General Cable Purchase
                Order 59-140756)
            $
                539,124.43
            $
                328,645.42CTC
                Sales Order No. 06-100069-SO-MOH; 11/24/06; (Mohave Electric Order
                80720)
            $
                925,372.78
            $
                564,098.96CTC
                Sales Order No. 06-100038-SO-JIA; Date 9/2/06; $1,497,014 with balance
                of
                remaining of $642,557.95 (Jiangsu New Far East Cable Co.)
            $
                642,557.95
            $
                391,697.57CTC
                Sales Order No. 06-100074-SO-GEN; Date 9/6/06; (General Cable PO
                59-137261)
            $
                845,744.14
            $
                515,558.05Total
            $2,952,799.30
            $1,800,000.00