Exhibit 10.1

                        COMPOSITE TECHNOLOGY CORPORATION
                                2026 McGaw Avenue
                            Irvine, California 92614



                                                    November __, 2004



Feldman Weinstein LLP, as Custodian
420 Lexington Avenue
New York, New York 10170
Attn:  Robert F. Charron

      Re:   Release of Secured Collateral

Dear Mr. ________:

      Pursuant to Section 2(d) of that certain Custodial and Security  Agreement
("Custodial  Agreement"),   dated  August  17,  2004,  by  and  among  Composite
Technology  Corporation  (the  "Company"),  ____________  Fund ("Fund") and the
other  purchasers   signatory  thereto  (such  other   purchasers,   the  "Other
Purchasers" and collectively  with Fund, the  "Purchasers"),  the Company hereby
requests that Fund consent and agree to:

      1.    the  release to the  Company  of all  Secured  Proceeds  held in the
            Custodial Account by the Custodian that may be allocated pursuant to
            Section 1(g) of the Custodial Agreement to Fund, which amount is set
            forth on the signature page hereto;

      2.    the  release of all  interest  earned with  respect to such  Secured
            Proceeds (the "Interest");

      3.    the withdrawal of the pending  Registration  Statement  currently on
            file with the Commission; and

      4.    amend  the   definition   of  the  "Filing   Date"  of  the  initial
            Registration  Statement  to be filed  pursuant  to the  Registration
            Rights Agreement to be December 31, 2004.

      All capitalized  terms used but not defined herein shall have the meanings
set  forth in the  Custodial  Agreement,  in that  certain  Securities  Purchase
Agreement ("Securities Purchase Agreement"),  dated August 17, 2004 by and among
the  Company  and  the  Purchasers  and  in  that  certain  Registration  Rights
Agreement, dated August 17, 2004 by and among the Company and the Purchasers.

      In  consideration to Fund for the consents and agreements given hereunder,
the Company  shall have  delivered  to Fund a warrant  ("Amendment  Warrant") to
purchase up to  _________  shares of Common  Stock with an exercise  price equal
$3.23,  subject to adjustment  therein,  which warrant shall otherwise be in the
form attached hereto. The Company and Fund agree that the definition of Warrants
in the Securities  Purchase  Agreement is hereby amended to include  therein the
Amendment  Warrant  and as such,  among  other  things,  means  that the  shares
underlying the Amendment  Warrant are deemed  Registrable  Securities  under the
Registration  Rights  Agreement and are subject to all of the covenants of under
the Transaction Documents.


<PAGE>


      The  Company  and Fund  acknowledge  and  agree  that  this  letter  shall
constitute a joint  certificate (as required under Section 2(d) to the Custodial
Agreement)  to the  Custodian  certifying  that  consent to release such Secured
Proceeds has been  obtained for the amount of Secured  Proceeds set forth on the
signature  page  hereto and all  Interest  and that such  amount is the  maximum
amount  permitted to be released on account of Fund pursuant to the terms of the
Custodial  Agreement.  The Custodian may rely on an executed copy of this letter
to release said Secured Proceeds and all Interest per the wire  instructions set
forth on the signature page of the Company hereto.

      Fund  acknowledges and agrees that the Other Purchasers shall be requested
to executed  letters with the same terms and  conditions  as this letter and the
Company  acknowledges  that this  letter  shall not be  deemed  effective  until
letters from all Other  Purchasers  have been obtained by the Company.  Further,
the Company represents, warrants and covenants to Fund that the Other Purchasers
are receiving the same  consideration  as Fund,  pro-rata in proportion to their
respective holdings, and no Purchaser is or will receive more consideration than
any other Purchaser for entering into their respective letter agreements.

      Fund and the Company agree that upon release of such Secured  Proceeds and
all Interest  pursuant to this letter  agreement:  (i) the  Custodial  Agreement
shall be deemed  terminated and all rights Fund had with respect to such Secured
Proceeds and all Interest shall also be terminated;  and (ii) Fund shall release
the Company from all  security  interests  granted  pursuant to Section 3 of the
Custodial  Agreement and shall execute any further  documents or  instruments to
effect such release  (including,  but not limited to terminating any UCC filings
that were made with respect to the Secured Proceeds).

      Except as expressly  set forth above,  all of the terms and  conditions of
the Securities  Purchase Agreement,  the Registration  Rights Agreement,  or any
other  documents  entered into in connection  therewith  shall  continue in full
force and effect after the execution of this letter, and shall not be in any way
changed, modified or superseded by the terms set forth herein.

      This letter may be executed  in any number of  counterparts,  all of which
taken  together shall  constitute  one and the same  instrument and shall become
effective when  counterparts have been signed by each party and delivered to the
other parties  hereto,  it being  understood  that all parties need not sign the
same counterpart. Execution of this letter may be made by delivery by facsimile.

                            ************************


<PAGE>


      IN WITNESS WHEREOF,  the parties hereto have caused this letter to be duly
executed by their respective authorized signatories as of November __, 2004.


                                               Sincerely,

                                               COMPOSITE TECHNOLOGY CORPORATION


                                               By:______________________________
                                                  Benton H Wilcoxon
                                                  Chief Executive Officer

                                                    Wire Instructions:

                                                    Bank:



           Accepted and Agreed:




           By:_____________________________



           Secured Proceeds: $