Document:

EXHIBIT
      10.23

     

    SHARED
      SERVICES AGREEMENT

     

    THIS
      SHARED SERVICES AGREEMENT
      (this
“Agreement”),
      made as
      of this 1st day of May, 2004, is by and between Century Capital Associates
      LLC,
      having an office at 215 Morris Avenue, Spring Lake, New Jersey 07762 (herein
      referred to as “CCA”), and Medi-Hut Co., Inc., having an office at 215 Morris
      Avenue, Spring Lake, New Jersey 07762 (herein referred to as
“MHUT”);

     

    WITNESSETH:

     

    WHEREAS,
      CCA has
      leased from Trillium Partners LLC (herein referred to as “Prime Landlord”),
      those certain premises (herein referred to as the “Premises”) described in that
      certain Lease Agreement (herein referred to as the “Prime Lease”) dated
      September 28, 2000 between Trillium Partners LLC, as the “Landlord” therein, and
      CCA, as the “Tenant” therein; 

     

    WHEREAS,
      the term
      of the Prime Lease commenced on November 1, 2000 and expires on October 31,
      2005, unless earlier terminated as provided in the Prime Lease; 

     

    WHEREAS,
      CCA is
      permitted to sublease and otherwise share the Premises under the Prime Lease;
      and

     

    WHEREAS,
      MHUT
      desires to sublease a portion of the Premises and otherwise utilize CCA’s
      offices and equipment to conduct business;

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants set forth herein, CCA and MHUT agree
      as
      follows:

     

    1.    Representations
      of CCA.
      CCA
      represents and warrants to MHUT as follows:

     

    	1.1    	
            CCA
              has delivered to MHUT a true, correct and complete copy of the Prime
              Lease
              as amended through the date hereof.

          

     

    	1.2    	
            The
              Prime Lease is presently in full force and effect and CCA is not in
              default under the Prime Lease.

          

     

    	1.3    	
            The
              Prime Landlord has consented to the terms of this
              Agreement.

          

     

    2.    Term.
      The term
      of this Agreement (herein referred to as the “Agreement Term”) shall commence on
      May 1, 2004 (herein referred to as the “Commencement Date”), and shall continue
      until terminated by either party, with or without cause, upon sixty (60) days
      prior written notice, but in no event shall the Agreement Term continue past
      the
      term of the Prime Lease. 

     

    3.    Shared
      Services.
      CCA
      hereby agrees to allow MHUT to occupy three offices approximating 340 square
      feet and to utilize common areas, kitchen, lobby and conference rooms (herein
      referred to as the “Shared Premises”). CCA also agrees to allow MHUT to use
      certain equipment and services as an “all-inclusive” arrangement for the Monthly
      Retainer Fee defined and described in Paragraph 4 hereof. The equipment and
      services shall include telephones, telephone service with direct dial, personal
      voicemail, computer networking, office furniture and high speed internet access
      (herein referred to as the “Shared Equipment”). The Shared Premises and the
      Shared Equipment, collectively, shall be referred to herein as the “Shared
      Services.”

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.    Rental.
      The
      monthly rental for the Shared Services shall be Two Thousand Five Hundred
      Dollars ($2,500.00) (herein referred to as the “Monthly Rental Fee”), which
      shall be paid by MHUT to CCA as follows:

     

    	4.1    	
            Contemporaneously
              with the execution hereof, MHUT shall pay to CCA a refundable services
              retainer in the sum of Two Thousand Five Hundred Dollars ($2,500.00)
              (herein referred to as the “Refundable Services Retainer”). The Refundable
              Services Retainer need not be kept separate and apart from other CCA
              funds. No interest shall be paid on the amount of the Refundable Services
              Retainer and such Refundable Services Retainer may be used by CCA to
              provide Shared Services under this Agreement. MHUT agrees that the
              Refundable Services Retainer shall not be used by MHUT as payment for
              the
              Monthly Rental Fee for the Shared Services without receiving the written
              consent of CCA. In the event MHUT defaults in the performance of any
              of
              the terms hereof, CCA may apply or retain the whole, or any part, of
              the
              Refundable Services Retainer for the payment of any Monthly Retainer
              Fee
              or any other payment due hereunder. If MHUT shall, at the end of the
              Agreement Term, have fully and faithfully complied with all of the
              terms
              of this Agreement, the Refundable Services Retainer, or any balance
              thereof, shall be returned to MHUT within thirty (30) days
              thereafter.

          

     

    	4.2    	
            Commencing
              May 1, 2004, MHUT shall pay to CCA the Monthly Service Fee in the sum
              of
              Two Thousand Five Hundred Dollars ($2,500.00), with such rental fee
              being
              payable on the first (1st)
              day of the month for which the rental fee is being
              paid.

          

     

    	4.3    	
            MHUT
              shall pay all fees as herein provided promptly at the times and in
              the
              manner herein specified. If any amount is not paid within five (5)
              days
              after its due date, MHUT shall pay interest on such amount from the
              date
              on which it was due until the date on which it is actually paid at
              the
              rate of ten percent (10%) per annum. Notwithstanding the foregoing,
              CCA
              agrees to allow MHUT to defer payment of all Monthly Service Fees,
              without
              interest, until MHUT has received cumulative cash proceeds exceeding
              Five
              Hundred Thousand Dollars ($500,000) from either an investment, sale
              of
              assets or through the settlement of pending
              litigation.

          

     

    	4.4    	
            If,
              under any provision of the Prime Lease, any additional rent shall be
              payable by CCA to Prime Landlord directly attributable to services
              ordered
              by or activities undertaken by or on behalf of MHUT in connection with
              this Agreement or on account of MHUT’s default hereunder, then MHUT shall
              pay such additional rent on demand by CCA. MHUT may be directed by
              CCA to
              pay such additional rent directly to Prime
              Landlord.

          

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    5.    Prime
      Lease; Covenants of the Parties. Except
      to
      the extent not otherwise inconsistent with the agreements and understandings
      expressed in this Agreement or applicable only to the original parties to the
      Prime Lease, the terms, provisions, covenants, and conditions of the Prime
      Lease
      are hereby incorporated herein by reference subject to the following
      understandings:

     

    	5.1    	
            To
              the extent that any of the Prime Lease sections conflict or are
              inconsistent with the provisions of this Agreement, whether or not
              such
              inconsistency is expressly noted herein, the provisions of this Agreement
              shall in all instances prevail over the Prime
              Lease.

          

     

    	5.2    	
            CCA
              agrees to perform all of its obligations under the Prime
              Lease.

          

     

    	5.3    	
            Should
              CCA receive a notice of default or any other notice from the Prime
              Landlord, CCA shall provide prompt notice and forward a copy of such
              notice to MHUT.

          

     

    	5.4    	
            Upon
              the termination of this Agreement, MHUT shall surrender the Shared
              Premises and the Shared Equipment to CCA in the condition in which
              the
              Shared Premises and the Shared Equipment were received from CCA on
              the
              Commencement Date, except for ordinary wear and tear and damage by
              casualty or condemnation not the result of the negligent or intentional
              act or omission of MHUT or its officers, agents, employees and invitees.
              CCA shall remain liable to Prime Landlord for any restoration required
              under the terms and conditions of the Prime
              Lease

          

     

    	5.5    	
            If
              the Prime Lease terminates, this Agreement shall terminate and the
              parties
              hereto shall be relieved of any further liability or obligation under
              this
              Agreement.

          

     

    6.    Brokers.
      CCA and
      MHUT each warrants to the other that no broker, agent, salesman or any other
      person is entitled to a commission or similar fee in connection with this
      Agreement.

     

    7.    Use
      of Premises.
      The
      Shared Premises shall be used and occupied only for office space and for no
      other use or purpose.

     

    8.    Warranty
      of Quiet Enjoyment.
      So long
      as MHUT shall observe and perform the covenants and agreements applicable to
      it
      hereunder, MHUT shall, at all times during the Agreement Term, peacefully and
      quietly have and enjoy the possession of the Shared Premises.

     

    9.    Assignment
      and Subletting.
      MHUT
      shall not assign this Agreement or further sublease, rent or share all or any
      part of the Shared Premises without the prior written consent of both the Prime
      Landlord and CCA. 

     

    10.    Governing
      Law.
      This
      Agreement shall be governed and construed in accordance with the laws of the
      State of New Jersey.

     

    11.    Notices.
      All
      notices which may or are to be required to be given by either party on the
      other
      hereunder shall be in writing. All notices shall be sent by hand delivery,
      overnight delivery service or United States mail, to the address hereinbelow
      set
      forth for such party, or to such other place as a party may from time to time
      designate in a written notice to the other.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    To
      CCA:

     

    Century
      Capital Associates LLC

    215
      Morris Avenue

    Spring
      Lake, New Jersey 07762

    Attention:
      Thomas S. Gifford

     

    To
      MHUT:

     

    Medi-Hut
      Co., Inc.

     

    215
      Morris Avenue

    Spring
      Lake, New Jersey 07762

    Attention:
      Allan J. Jones

     

    with
      a
      copy to:

     

    Giordano,
      Halleran & Ciesla, P.C.

    125
      Half
      Mile Road

    P.O.
      Box
      190

    Middletown,
      New Jersey 07748

    Attention:
      Paul T. Colella, Esq.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned representatives of the parties hereto have executed this Agreement
      on behalf of the parties as of the day and year first above
      written.

     

    CENTURY
      CAPITAL ASSOCIATES LLC

     

     

    By: 
      /s/
      Thomas S. Gifford

    
      
        

      

    

    Name:  
      Thomas
      S.
      Gifford

    Title:    
      Managing
      Member and Vice President

     

     

    MEDI-HUT
      CO., INC.

     

     

    By: 
      /s/
      Allan
      J. Jones

    
      
        

      

    

    Name:  
      Allan
      J.
      Jones

    Title:    
      Vice
      President

     

     

    
      
         

      

        -5-Leonard M. Shulman - Bar No. 126349
Mark Bradshaw - Bar No. 192540
SHULMAN HODGES & BASTIAN LLP
26632 Towne Centre Drive, Suite 300
Foothill Ranch, California 92610-2808
Telephone:      (949) 340-3400
Facsimile:      (949) 340-3000

General Counsel for the Debtor and Debtor in Possession
Composite Technology Corporation, a Nevada corporation

                         UNITED STATES BANKRUPTCY COURT
               CENTRAL DISTRICT OF CALIFORNIA, SANTA ANA DIVISION

In re                                    Case No.  SA 05-13107 JR

COMPOSITE TECHNOLOGY CORPORATION,        Chapter  11
a Nevada corporation,

                                         STIPULATION RESOLVING CLAIM
                                         ASSERTED BY RONALD MORRIS
                                         (CLAIM NO. 90) AND AMERICA CHINA
Debtor.                                  TECHNOLOGY SYSTEMS LLC, SUCCESSOR
                                         IN INTEREST TO WANG CHEN, WANG FENG
                                         AND EDWARD SKONEZNY dba SWW (CLAIM
                                         NO. 91) AND TAKING HEARING ON CLAIM
                                         OBJECTION MOTION OFF CALENDAR; AND
                                         ORDER THEREON

                                         Date:    TBA
                                         Time:    TBA
                                         Place:   Courtroom 5A
                                                  Ronald Reagan Federal Building
                                                  and United States Courthouse
                                                  411 West Fourth Street
                                                  Santa Ana, California 92701
-------------------------------------

         TO THE HONORABLE JOHN E. RYAN, UNITED STATES BANKRUPTCY JUDGE:

      Composite Technology Corporation, a Nevada corporation ("Debtor") on the
one hand, and Ronald Morris ("Morris") and America China Technology Systems LLC,
Successor in interest to Wang Chen, Wang Feng and Edward Skonezny (collectively
"ACTS") on the other hand, hereby agree and stipulate based on the following
recitals. Morris and ACTS are sometimes collectively referred to herein as the
"ACTS Parties".

                                       1
<PAGE>

                                    RECITALS

      A. The Debtor filed a voluntary petition for relief under Chapter 11 of
Title 11 of the United States Bankruptcy Code on May 5, 2005 ("Petition Date").
The Debtor is continuing in the operation and management of its business
pursuant to Bankruptcy Code Sections 1107 and 1108.

      B. The Debtor provides engineering, product design, manufactured products
and other services related to full commercial design, production and
installation of Debtor's products for the global electrical utility industry,
all of which are designed to improve the performance and capacity of
transmission and distribution power lines.

      C. On or about August 5, 2005, Morris filed a general unsecured claim in
this case in the amount of $192,660 ("Morris Claim"), which was assigned Claim
No. 90 by the Court.

      D. Attached to the Morris Claim is a copy of a Consulting Services
Agreement with an Effective Date of September 17, 2003 ("Consulting Agreement").
Also attached to the Morris Claim is an Invoice dated August 5, 2005 asserting a
balance owing of $192,660.

      E. The Debtor asserts that the Consulting Agreement was terminated shortly
after being signed and that Morris is not entitled to any compensation related
to the Consulting Agreement. In addition, the Debtor asserts that the only
services Morris has been involved with on behalf of the Debtor resulted from
Morris' participation in ACTS whose claim is also subject to objection. Morris
disputes the Debtors' grounds for objecting to the Morris Claim.

      F. On or about August 5, 2005, ACTS filed a general unsecured claim in
this case in the amount of $10,000,000 ("ACTS Claim"), which was assigned Claim
No. 91 by the Court.

      G. The ACTS Claim is based on alleged services performed and related
expenses incurred arising under an Agreement with Debtor dated March 6, 2002, a
copy of which is attached to the ACTS Claim. The Agreement was between the
Debtor, Wang Chen, Wang Feng and Edward Skonezny (the three individuals were
collectively known as "SWW"). The Agreement was assigned to ACTS through an
Agreement of Assignment and Assumption effective as of April 1, 2002, a copy of
which is also attached to the ACTS Claim.

                                       2
<PAGE>

      H. The Debtor asserts that other than the Agreement, no other agreements
relating to the ACTS Claim exist between the Debtor and ACTS. The ACTS Parties
dispute this contention.

      I. The consideration to be earned by ACTS is stated in the Agreement to be
based on a joint venture contemplated to be formed between the Debtor and
Jiangsu Far East Group Company Ltd. in the City of Yixing, Jiangsu Province,
People's Republic of China, or any subsidiary or other affiliate entity
controlled directly by Jiangsu Far East Group Company Ltd. (collectively "Far
East"). Although the Debtor and Far East entered into three separate memoranda
of understanding ("MOU") over the course of several years, the Debtor asserts
that no joint venture was formed and no evidence is attached to the ACTS Claim
to support that a joint venture was ever formed with Far East or any related
entity. As such, the Debtor has asserted that ACTS is not entitled to any
compensation related to the Agreement. ACTS disputes the Debtor's theory that no
joint venture was formed with Far East and that ACTS has not earned a commission
under the Agreement.

      J. On September 22, 2005 the Debtor filed its Motion Objecting to Claim 90
by Morris and Claim No. 91 by ACTS ("Claims Objection Motion"). A hearing on the
Claims Objections Motion was originally scheduled for October 25, 2005 at 2:30
P.M., but was agreed by the Parties to be continued to a mutually acceptable
date in November 2005.

      K. In order to eliminate the need for costly litigation of the Morris
Claim and the ACTS Claim (collectively the "ACTS Parties' Claims"), the Debtor
and the ACTS Parties desire to settle and resolve any and all disputes, claims,
actions, causes of action, demands and damages regarding the ACTS Parties'
Claims.

                                    AGREEMENT

      WHEREFORE, the Debtor and the ACTS Parties (collectively the "Parties")
agree that it is in their mutual best interests to resolve any and all potential
disputes regarding the ACTS Parties' Claims, in consideration of the promises,
the mutual obligations and undertakings set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Parties, the Parties hereto agree as follows:

                                       3
<PAGE>

      1. Date of Agreement. This Agreement is dated for identification purposes
as of October 14, 2005.

      2. Recitals. The recitals set forth above are incorporated herein to
describe the context in which this Agreement is made, and to provide information
respecting the Parties' disputes and transactions and litigation, including by
an illustrative but not complete description of events and allegations that
reflect the divergent positions of the Parties hereto in the foregoing matters.
Neither the recitals, nor any other provisions of this Agreement, are or should
be construed or interpreted to be concessions, admissions, or used as evidence
for any purpose either for or against the interest of any of the Parties hereto,
consistent with Evidence Code Section 1152.

      3. Allowance and Payment of the ACTS Parties' Claims. The ACTS Parties'
Claims shall be allowed and paid as follows ("Allowed Claim"):

            a. The ACTS Parties shall receive a commission equal to three
percent (3%) of Net Sales Revenue (defined below) on the sale of ACCC Core
(defined below) to Far East for use in the People's Republic of China for a
period of five (5) years commencing on the date of the first Far East purchase
order ("Far East Commission").

            b. The ACTS Parties shall receive a commission equal to one half of
one percent (0.5%) of Net Sales Revenues of ACCC Core (defined below) for use in
the People's Republic of China and which are derived from sales to buyers that
are based in the People's Republic of China other than Far East ("Non-Far East
Entity(ies)") for a period of five (5) years commencing on date of the first
purchase order from a Non-Far East Entity ("Non-Far East Entity Commission").

            c. For purposes of this Agreement "ACCC Core" means composite core
product for electrical transmission cables as manufactured by Debtor or any of
Debtor's subsidiaries (collectively, "Company") or by an authorized licensee of
Company.

                                       4
<PAGE>

            d. For purposes of this Agreement "Net Sales Revenue" means revenues
actually received by Company in conjunction with the sale of ACCC Core and the
ACCC Core portion of any electrical transmission cables containing ACCC Core
("ACCC Cable") to Far East or a Non-Far East Entity for use in the People's
Republic of China, less the following costs:

            (1)   packaging costs incurred by Company;

            (2)   insurance fees and transportation charges incurred by Company;

            (3)   duties and sales taxes incurred by Company in conjunction with
                  the sale, importation, and use of the ACCC Core and ACCC Cable
                  products; and

            (4)   any applicable charges paid by Company for product warranty
                  coverage; and

            (5)   the stranded ACCC Cable component.

            e. The Far East Commission and Non-Far East Entity Commission
(collectively the "Settlement Commission") shall be paid on a quarterly basis.

            f. As and for an advance payment on future anticipated Settlement
Commission to be earned, the ACTS Parties shall be provided by the Debtor with
two hundred thousand (200,000) shares of Debtor's common stock to be issued on
the Plan Effective Date(1) pursuant to Bankruptcy Code Section 1145 in a single
certificate, which certificate shall not contain any transfer restrictions
("Stock"). The Stock shall be issued in the name of "American China Technology
Systems LLC" and shall be delivered within ten (10) days of its issuance to
counsel for ACTS, Sheppard Mullin Richter & Hampton LLP, to the attention of
Alan H. Martin, 650 Town Center Drive, Fourth Floor, Costa Mesa, California
92626.

      4. Waiver by the ACTS Parties of Rights to a Distribution From the Estate.
Subject to the terms and conditions set forth herein, except for their rights
under this Agreement and/or any rights derived therefrom, the ACTS Parties
hereby waive all claims against the Debtor's Estate, including any proofs of
claims that may have already been filed against the Estate, any rights to a
distribution from the Estate, and/or any rights for options or warrants for the
Debtor's common stock. In other words, it is the intent of the Parties to this
Agreement that upon full and timely performance of the obligations arising under
this Agreement in payment of the Allowed Claim, the ACTS Parties shall have no
rights to any distribution of proceeds from the Estate, issuance of any stock of
the Debtor or to file any claims for money against the Estate.

------------------------
      (1) "Plan Effective Date" means the date not later than thirty days
following the date upon which the order confirming the Plan ("Confirmation
Order") becomes a Final Order; provided, however, that, if an appeal of the
Confirmation Order is timely filed, the Debtor may elect to cause the Plan to
become effective, notwithstanding the pendency of such appeal, so long as no
stay of the Confirmation Order is in effect, by filing with the Bankruptcy Court
a notice of such election, in which event the Plan will become effective as
provided in the Plan.

                                       5
<PAGE>

      5. Other Covenants. ACTS Parties agree: (1) that they will maintain the
confidential nature of any information they have learned about the Debtor's
business and products; and (2) that they shall not solicit any business partner,
customer or affiliate of the Debtor (a) to violate any business arrangement with
the Debtor, or (b) in any manner that would directly or indirectly assist any
person or company in competition with the business of the Debtor, or (c) that
would cause harm to the Debtor. Furthermore, the ACTS Parties agree (i) that
they will not represent any competing bare overhead electrical cable products in
China, and (ii) that they will not interfere with the business of the Debtor in
any manner.

      6. Acceptance and Support of the Plan by the ACTS Parties. Pursuant to
this Agreement, and conditioned on the Bankruptcy Court's approval of this
Agreement and the settlement stated herein, the ACTS Parties (a) shall submit
Ballots voting to accept the Debtor's Third Amended Chapter 11 Plan of
Reorganization dated July 7, 2005 and filed on July 13, 2005 (the "Plan"); (b)
shall withdraw any previously filed objections to the Plan, and shall not file
any new objections to confirmation of the Plan; and (c) shall support
confirmation of the Plan.

      7. Complete Release of Claims by the ACTS Parties Against the Debtor
Parties. Except as otherwise expressly stated or reserved in this Agreement, and
contingent upon the performance by the Debtor of its obligations under this
Agreement, the ACTS Parties and their respective parents and subsidiaries, and
their officers, directors, agents, employees, attorneys or representatives, and
their predecessors and successors, in law or in equity (collectively, the "ACTS
Release Parties"), hereby release and forever discharge the Debtor and the
Estate and their officers, including but not limited to Benton H. Wilcoxon and
C. William Arrington, their directors, agents, employees, attorneys or
representatives, and their predecessors and successors, in law or in equity
(collectively, the "Debtor Parties"), from any and all claims, demands, causes
of action, obligations, damages, liabilities, which the ACTS Release Parties
might or could assert against the Debtor Parties which arise out of, are
connected with, or are incidental to any claims, demands, or causes of action,
which arose in favor of the ACTS Release Parties and against the Debtor Parties
prior to the date of this Agreement (collectively the "ACTS Parties Released
Claims").

                                       6
<PAGE>

      8. Waiver of Section 1542 by the ACTS Parties. With respect to the claims
made the subject of release and discharge pursuant to this Agreement, the ACTS
Release Parties hereby acknowledge the provisions of California Civil Code
section 1542, which states: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. The ACTS Release Parties hereby
waive any and all rights which may be conferred upon them by virtue of Civil
Code section 1542 or any similar provision or body of law. In this regard, the
ACTS Release Parties acknowledge that facts in addition to or different from
those which are now known or believed to exist may hereafter be discovered with
respect to the subject matter of the ACTS Parties Released Claims and that this
release will remain fully enforceable notwithstanding such discovery.

      9. Complete Release of Claims by the Debtor Parties Against the ACTS
Parties. Except as otherwise expressly stated or reserved in this Agreement, and
contingent upon the ACTS Parties' performance of their obligations under this
Agreement, the Debtor Parties hereby release and forever discharge the ACTS
Release Parties from any and all claims, demands, causes of action, obligations,
damages, and liabilities which the Debtor Parties might or could assert against
the ACTS Release Parties which arise out of, are connected with, or are
incidental to any claims, demands, or causes of action, which arose in favor of
the Debtor Parties and against the ACTS Release Parties prior to the date of
this Agreement (collectively the "Debtor Parties Released Claims").

                                       7
<PAGE>

      10. Waiver of Section 1542 by the Debtor. With respect to the claims made
the subject of release and discharge pursuant to this Agreement, the Debtor
Parties hereby acknowledge the provisions of California Civil Code section 1542,
which states: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR. The Debtor Parties hereby waive any and all
rights which may be conferred upon them by virtue of Civil Code section 1542 or
any similar provision or body of law. In this regard, the Debtor Parties
acknowledge that facts in addition to or different from those which are now
known or believed to exist may hereafter be discovered with respect to the
subject matter of the Debtor Parties Released Claims and that this release will
remain fully enforceable notwithstanding such discovery.

      11. Consultation with Counsel. All Parties hereto acknowledge and
represent that they have had the opportunity to consult with legal counsel
before entering into this settlement and executing this Agreement. The Parties,
and each of them, understand the meaning of this Agreement and expressly consent
that this Agreement shall be given full force and effect according to each and
all of its express terms and provisions, including those relating to the release
of unknown and unsuspected claims, demands, and causes of action. All Parties
acknowledge that they are executing and delivering this Agreement after having
received from legal counsel of their own choosing legal advice as to their
respective rights hereunder and the legal effect hereof.

      12. Reliance. Except as set forth herein, the Parties hereto acknowledge
that they have relied solely upon their own judgment, belief and knowledge of
the existence, nature and extent of each claim, demand, or cause of action that
each party may have against the other, and that each such party has not been
influenced to any extent in entering into this Agreement by any representation
or statement regarding any such claim, demand, or cause of action made by any
other party hereto.

      13. Attorneys' Fees and Costs. All Parties hereto shall bear their own
attorneys' fees, expenses, and costs incurred in connection with the disputes
between the Parties hereto and in the preparation of this Agreement. In the
event of any action or proceeding brought by either party against the other
under this Agreement, the prevailing party shall be entitled to recover for the
fees of its attorneys in such action or proceeding, including costs of appeal,
if any, in such amount as the court may adjudge reasonable as attorneys' fees.

------------------------
      (2) "Final Order" means an order of the Bankruptcy Court order which has
not been reversed, stayed, modified, or amended, and as to which: (a) the time
to appeal, petition for certiorari, or move for reargument or rehearing has
expired and as to which no appeal, petition for certiorari, or other proceeding
for reargument or rehearing shall then be pending; or (b) any right to appeal,
petition for certiorari, reargument, or rehearing shall have been waived in
writing in form and substance satisfactory to the Debtor; or (c) any appeal,
petition for certiorari, reargument or rehearing has been resolved by the
highest court to which the order or judgment was appealed timely or from which
certiorari, reargument, or rehearing was sought.

                                       8
<PAGE>

      14. Execution of Additional Documents. The Parties agree that they will
execute any and all additional documents and take all additional steps which may
be necessary or convenient to consummate this settlement and accomplish the
purposes thereof.

      15. Integration of Entire Agreement. This Agreement contains the entire
agreement of the Parties, and no representations, warranties, inducements, or
promises not included herein by express provision or contained in a document or
instrument identified herein and executed contemporaneously herewith shall be
binding on any party hereto.

      16. Authority to Sign. Each individual executing this Agreement on behalf
of a corporation, partnership, or other entity represents that he or she is duly
authorized to execute and deliver this Agreement on behalf of the corporation,
partnership, or entity and agrees to deliver evidence of his or her authority
and power if requested by the other party.

      17. Bankruptcy Court Approval. This Agreement is subject to approval by
the Bankruptcy Court and entry of Final Orders(2) approving this Agreement and
confirming the Plan.

                                       9
<PAGE>

      18. No Admission Against Interest. Until completion of the actions
contemplated by this Agreement, nothing contained in this Agreement or
negotiations and communications leading up to it shall be construed as
admissions against the interest of any of the Parties hereto. Except to enforce
this Agreement, the terms of this Agreement including, without limitation, the
recitals, representations and releases made by any Party shall have no force or
effect and will not be binding upon, enforceable against or deemed an admission
or acknowledgment of any fact by any Party except upon the completion of the
actions contemplated in this Agreement. This Agreement shall not be admissible
as evidence in any action or proceeding except one to enforce this Agreement, or
to carry forward the actions contemplated herein.

      19. Counterparts. This Agreement may be executed in any number of
original, fax, or copied counterparts, and all counterparts shall be considered
together as one agreement. A faxed or copied counterpart shall have the same
force and effect as an original signed counterpart. Each of the Parties hereby
expressly forever waives any and all rights to raise the use of a fax machine to
deliver a signature, or the fact that any signature or agreement or instrument
was transmitted or communicated through the use of a fax machine, as a defense
to the formation of a contract.

      20. Binding. Subject to the terms and conditions set forth herein, this
Stipulation shall be binding on the Parties hereto when each such Party has
executed at least one counterpart.

      21. Ownership of Claims. Each of the Parties to this Agreement expressly
warrants and represents that it is the sole and lawful owner of all right,
title, and interest in and to every claim and other matter which it purports to
release herein, and it has not assigned or transferred, or purported to assign
or transfer to any person or entity any claims or other matters herein released.

      22. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective Parties and their heirs,
executors, administrators, agents, representatives, successors and assigns.

      23. Governing Law. This Agreement is to be governed by and construed in
accordance with federal bankruptcy law, to the extent applicable, and where
state law is implicated, the laws of the State of California shall govern.

      24. Jurisdiction of the Bankruptcy Court. Should any dispute arise
regarding this Agreement, the Bankruptcy Court shall have exclusive jurisdiction
to determine the same.

      25. Headings. The headings of all sections of this Agreement are inserted
solely for the convenience of reference and are not a part of and are not
intended to govern, limit, or aid in the construction or interpretation of any
term or provision hereof.

                                       10
<PAGE>

      26. No Third Party Beneficiaries. This Agreement is made by the Parties
solely for the benefit of themselves and the other persons and entities
affiliated with one or more Parties who are described in this Agreement. No
other person or entity may claim any rights or benefits under this Agreement,
and no third party benefits are conferred by or arise from the provisions of
this Agreement.

      27. Hearing on Objection Taken Off Calendar. The hearing on the Debtor's
Claims Objection Motion, which was originally scheduled for October 25, 2005 at
2:30 P.M. and was previously agreed by the Parties to be continued to a mutually
acceptable date in November 2005, shall be taken off calendar.

      IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.

                                       AMERICA CHINA TECHNOLOGY SYSTEMS LLC,
                                       SUCCESSOR IN INTEREST TO WANG CHEN,
                                       WANG FENG AND EDWARD SKONEZNY

                                       By: Ronald Morris
                                       Its Authorized Agent

                                       Ronald Morris, in his individual capacity

                                       COMPOSITE TECHNOLOGY CORPORATION, a
                                       Nevada corporation

                                       Benton H Wilcoxon,
                                       Chief Executive Officer

APPROVED AS TO FORM.

                                       11
<PAGE>

                                       SHEPPARD MULLIN RICHTER & HAMPTON LLP

                                       Alan H. Martin
                                       Attorneys for
                                       America China Technology Systems LLC,
                                       Successor in interest to Wang Chen,
                                       Wang Feng and Edward Skonezny
                                       SHULMAN HODGES & BASTIAN LLP

                                       Leonard M. Shulman
                                       Mark Bradshaw
                                       Attorneys for the Debtor and Debtor in
                                       Possession
                                       Composite Technology Corporation

                                      ORDER

         IT IS SO ORDERED.

Dated:

                                       JOHN E. RYAN
                                       UNITED STATES BANKRUPTCY JUDGE

                                       12
<PAGE>

                                PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF ORANGE

I am employed in the City of Foothill Ranch, County of Orange, State of
California. I am over the age of 18 years and not a party to the within action.
My business address is 26632 Towne Centre, Suite 300, Foothill Ranch, California
92610.

On October , 2005, I served the documents named below on the parties as follows:

DOCUMENT(S) SERVED:    STIPULATION RESOLVING CLAIMS ASSERTED BY RONALD MORRIS
                       (CLAIM NO. 90) AND AMERICAN CHINA TECHNOLOGY SYSTEMS
                       LLC, SUCCESSOR IN INTEREST TO WANG CHEN, WANG FENG AND
                       EDWARD SKONEZNY dba SWW (CLAIM NO. 91) AND TAKING
                       HEARING ON CLAIM OBJECTION MOTION OFF CALENDAR; AND
                       ORDER THEREON

SERVED UPON:           SEE THE ATTACHED SERVICE LIST

|X|   (BY MAIL) I caused each such envelope, with postage thereon fully prepaid,
      to be placed in the United States mail at Foothill Ranch, California. I am
      readily familiar with the practice of Shulman Hodges & Bastian LLP for
      collection and processing of correspondence for mailing, said practice
      being that in the ordinary course of business, mail is deposited in the
      United States Postal Service the same day as it is placed for collection.
      I am aware that on motion of party served, service is presumed invalid if
      postal cancellation date or postage meter date is more than one day after
      date of deposit for mailing in affidavit.

|_|   (BY FACSIMILE) Pursuant to C.R.C. 2009(i), I either caused, or had someone
      cause, the transmitting machine to properly transmit the attached
      documents to the facsimile numbers shown on the service list. The
      above-referenced document was transmitted by facsimile transmission and
      the transmission was reported as completed and without error.

|_|   (BY FEDERAL EXPRESS OR OVERNITE EXPRESS) I am readily familiar with the
      practice of Shulman Hodges & Bastian LLP for collection and processing of
      documents for overnight delivery and know that the document(s) described
      herein will be deposited in a box or other facility regularly maintained
      by such overnight delivery company for overnight delivery.

|_|   (BY PERSONAL SERVICE) I delivered to an authorized courier or driver
      authorized by ASAP Corporate Service to receive documents to be delivered
      on the same date. A proof of service signed by the authorized courier will
      be filed forthwith.

|_|   (STATE) I declare under penalty of perjury under the laws of the State of
      California that the above is true and correct.

|X|   (FEDERAL) I declare that I am employed in the office of a member of the
      bar of this court, at whose direction this service was made.

Executed on October      , 2005, at Foothill Ranch, California.

                                 Lorre E. Clapp

<PAGE>

                                  SERVICE LIST

Interested Party
----------------
Michael Hauser, Esq.
Office of the United States Trustee
Ronald Reagan Federal Building
and United States Courthouse
411 West Fourth Street Suite 9041
Santa Ana, CA 92701-8000

Debtor
------
Composite Technology Corporation
Attn C William Arrington, St VP
2026 McGaw Ave
Irvine, CA 92614

Attorneys for the Unsecured Creditors Committee
-----------------------------------------------
Mike D. Neue, Esq.
Irell & Manella LLP
840 Newport Center Drive, Suite 400
Newport Beach, CA  92660-6324

Attorney for Ronald Morris and American China
Technology Systems LLC
---------------------------------------------
Alan H Martin Esq
Sheppard Mullin Richter & Hampton LLP
650 Town Center Drive Fourth Floor
Costa Mesa, CA 92626

<PAGE>

--------------------------------------------------------------------------------
In re                      (SHORT TITLE)                CHAPTER 11 CASE NUMBER:

COMPOSITE TECHNOLOGY CORPORATION,                       SA 05-13107 JR
a Nevada corporation,

Debtor.
--------------------------------------------------------------------------------

                      NOTICE OF ENTRY OF JUDGMENT OR ORDER
                           AND CERTIFICATE OF MAILING

TO ALL PARTIES IN INTEREST ON THE ATTACHED SERVICE LIST:

1.    You are hereby notified, pursuant to Local Bankruptcy Rule
      9021-1(a)(1)(E), that a judgment or order entitled (specify):

      STIPULATION RESOLVING CLAIMS ASSERTED BY RONALD MORRIS (CLAIM NO. 90) AND
      AMERICAN CHINA TECHNOLOGY SYSTEMS LLC, SUCCESSOR IN INTEREST TO WANG CHEN,
      WANG FENG AND EDWARD SKONEZNY dba SWW (CLAIM NO. 91) AND TAKING HEARING ON
      CLAIM OBJECTION MOTION OFF CALENDAR; AND ORDER THEREON

      was entered on (specify date): __________________________.

2.    I hereby certify that I mailed a copy of this notice and a true copy of
      the order or judgment to the persons and entities on the attached service
      list on (specify date): __________________________.

Dated:                                 JON D. CERETTO
                                       CLERK OF THE BANKRUPTCY COURT

                                       By: ____________________________________
                                                       Deputy Clerk

<PAGE>

                                  SERVICE LIST

Interested Party
----------------
Michael Hauser, Esq.
Office of the United States Trustee
Ronald Reagan Federal Building
and United States Courthouse
411 West Fourth Street Suite 9041
Santa Ana, CA 92701-8000

Debtor
------
Composite Technology Corporation
Attn C William Arrington, St VP
2026 McGaw Ave
Irvine, CA 92614

Attorneys for the Debtor
------------------------
Leonard M. Shulman, Esq.
Shulman Hodges & Bastian LLP
26632 Towne Center Drive Suite 300
Foothill Ranch, CA 92610

Attorneys for the Unsecured Creditors Committee
-----------------------------------------------
Mike D. Neue, Esq.
Irell & Manella LLP
840 Newport Center Drive, Suite 400
Newport Beach, CA  92660-6324

Attorney for Ronald Morris and American China
Technology Systems LLC
---------------------------------------------
Alan H Martin Esq
Sheppard Mullin Richter & Hampton LLP
650 Town Center Drive Fourth Floor
Costa Mesa, CA 92626

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