Exhibit 10.1
COMPOSITE TECHNOLOGY CORPORATION
0000 XxXxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
November __, 2004
Xxxxxxx Xxxxxxxxx LLP, as Custodian
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx
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.
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.
************************
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:______________________________
Xxxxxx X Xxxxxxxx
Chief Executive Officer
Wire Instructions:
Bank:
Accepted and Agreed:
By:_____________________________
Secured Proceeds: $
