<PAGE>

Exhibit 10.1



                     FIRST AMENDMENT TO CREDIT AGREEMENT
                     -----------------------------------

         This First Amendment to Credit Agreement (this "Amendment") is made
and entered into as of the 13th day of February, 2003, by and among ZOLTEK
COMPANIES, INC., a Missouri corporation having its chief executive office
and principal place of business located at 3101 McKelvey Road, St. Louis,
Missouri 63044 ("Parent"), ZOLTEK CORPORATION, a Missouri corporation, CAPE
COMPOSITES, INC., a California corporation, ENGINEERING TECHNOLOGY
CORPORATION, a Missouri corporation, and ZOLTEK PROPERTIES, INC., a Missouri
corporation, (individually and collectively hereinafter "Borrowers"; all
references to "Borrowers" or "Borrower" shall mean each and all of the
Borrowers) and SOUTHWEST BANK OF ST. LOUIS (the "Bank"), with an office at
13205 Manchester Road, St. Louis, Missouri 63131.

                            W I T N E S S E T H:

         WHEREAS, Bank, Borrowers and Hardcore Composites Operations, LLC, a
Delaware limited liability company, are parties to that certain Credit
Agreement dated as of May 11, 2001 (the "Agreement"); and

         WHEREAS, Bank and Borrowers desire to amend the Agreement upon and
subject to the terms and conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of the premises, the covenants,
promises and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which hereby is acknowledged,
the parties hereto agree as follows:

     1.  Amendments to the Agreement.
         ---------------------------

                  (a) Hardcore Composites Operations, LLC, a Delaware
         limited liability company ("Hardcore"), is no longer a subsidiary
         of the Parent. Hardcore shall henceforth no longer be a party to,
         or have any liabilities, obligations or duties under, the Agreement
         or any of the other Loan Documents. All references in the Agreement
         and the other Loan Documents to Hardcore shall henceforth be
         disregarded. To the extent it has not already done so, Bank will
         release any and all security interests and/or liens which it may
         have in or on any property or assets of Hardcore.

                  (b) Section 1.01 of the Agreement is hereby amended by
                      ------------
         deleting the definitions of the terms described below and replacing
         them (unless otherwise indicated) with the following, and by adding
         certain new defined terms as set forth below:

                           Accounts - All "Accounts" (as defined in the
                           --------
                  Code) in which the Borrowers now have or hereafter acquire
                  an interest.

                           Borrowing Base - At any date of determination, an
                           --------------
                  amount equal to: (i) eighty percent (80%) of the face
                  amount of Eligible Accounts outstanding at such date; plus
                                                                        ----
                  (ii) the Eligible Inventory Advance Amount; minus (iii)
                                                              -----
                  the aggregate undrawn face amount





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                  of all outstanding letters of credit issued by the Bank
                  for the account of any one or more of the Borrowers. In no
                  event, however, shall the Borrowing Base exceed Five
                  Million Dollars ($5,000,000.00).

                           Eligible Inventory Advance Rate - With respect to
                           -------------------------------
                  Eligible Inventory which is located in the United States
                  and is to be sold by any Borrower to Goodrich Corporation,
                  fifty percent (50%) (measured at cost), and with respect
                  to all other Eligible Inventory, twenty-five percent (25%)
                  (measured at cost.)

                           Inventory Turn Ratio - the definition of
                           --------------------
                  Inventory Turn Ratio contained in the Agreement is hereby
                  deleted in its entirety and not replaced.

                           Maximum Inventory Advance - From and after the
                           -------------------------
                  date hereof, the maximum inventory advance on all Eligible
                  Inventory shall not exceed Three Million Dollars
                  ($3,000,000.00).

                           Obligations - All Loans and all other advances,
                           -----------
                  debts, liabilities, obligations, covenants and duties
                  owing, arising, due or payable from the Borrowers to the
                  Bank of any kind or nature, present or future, whether or
                  not evidenced by any note, letter of credit, guaranty or
                  other instrument, whether arising under this Agreement or
                  any of the other Loan Documents or otherwise and whether
                  direct or indirect (including, without limitation, those
                  acquired by assignment), absolute or contingent, primary
                  or secondary, joint, several or joint and several, due or
                  to become due, now existing or hereafter arising and
                  however acquired, and all replacements, renewals,
                  extensions and other modifications of any of the
                  foregoing. The term includes, without limitation, all
                  interest, charges, expenses, fees, attorneys' fees and any
                  other sums chargeable to the Borrowers under any of the
                  Loan Documents. The term also includes any of the
                  foregoing that arise after the filing of a petition by or
                  against any Borrower under any bankruptcy or similar law,
                  even if the Obligations do not accrue because of the
                  automatic stay under Bankruptcy Code Section 362 or
                  otherwise.

                           Permitted Debt - Without duplication, any of the
                           --------------
                  following:

                           (i)      Debt to trade creditors and normal
                                    expense accruals incurred in the
                                    ordinary course of the Borrowers'
                                    business;

                           (ii)     Debt to the Bank;

                           (iii)    Debt secured by Permitted Liens;

                           (iv)     Debt which is subordinated to the
                                    Obligations pursuant to the terms of a
                                    subordination agreement satisfactory to
                                    the Bank in its sole discretion;

                           (v)      Debt existing on the date of this
                                    Agreement and disclosed on Schedule 1.01
                                                               -------------
                                    (Existing Permitted Debt) of this
                                    -------------------------
                                    Agreement (and any extensions, renewals,
                                    refinancings and replacements thereof in
                                    a principal amount not in excess of the
                                    amount of such Debt outstanding
                                    immediately prior to the effectiveness
                                    of such extension, renewal, refinancing
                                    or replacement);


                                   - 2 -

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                           (vi)     Debt incurred by any Borrower resulting
                                    solely from such Borrower's guaranty of
                                    the debt or other obligations of another
                                    Borrower;

                           (vii)    Debt issued by Parent pursuant to that
                                    certain Subordinated Convertible
                                    Debenture Purchase Agreement dated as of
                                    February 13, 2003 (the "Debenture
                                    Agreement"); provided, however that the
                                    principal amount of such indebtedness
                                    shall not exceed at any time, in the
                                    aggregate, $10,000,000.00, which
                                    Debenture Agreement contains express
                                    terms satisfactory to the Bank that the
                                    debentures issued thereunder are
                                    subordinate to the Obligations; and

                           (viii)   other Debt approved in advance by the
                                    Bank in writing.

                           Restricted Payment. With respect to any Borrower,
                           ------------------
                  any purchase, redemption or other acquisition for value of
                  any shares of its stock or any warrants, rights or options
                  to acquire any such shares, now or hereafter outstanding.

                  (c) Section 2.01 of the Agreement is hereby deleted in its
                      ------------
         entirety and replaced by the following:

                           2.01. TOTAL CREDIT FACILITY. Subject to the
                                 ---------------------
                  following terms and conditions of this Agreement, the Bank
                  agrees to make a total credit facility of up to
                  $8,500,000.00 available to the Borrowers.

                  (d) Section 2.03 of the Agreement is hereby deleted in its
                      ------------
         entirety and replaced by the following:

                           2.03. TERM LOAN. The Bank shall make a Term Loan
                                 ---------
                  to the Borrowers in the principal amount of Three Million
                  Five Hundred Thousand Dollars ($3,500,000.00), which shall
                  be evidenced by and repayable in accordance with the terms
                  of the Term Loan Note. The proceeds of the Term Loan shall
                  be used by the Borrowers solely for purposes of the
                  Borrowers' general working capital needs and general
                  corporate purposes to the extent not inconsistent with the
                  terms of this Agreement.

                  (e) Section 3.01(a) of the Agreement is hereby deleted in
                      ---------------
         its entirety and replaced by the following (with the remaining
         subsections of Section 3.01 remaining unchanged):
                        ------------

                           3.01. INTEREST AND CHARGES.
                                 --------------------

                                    (a) Interest shall accrue on the
                  principal amount of the Revolving Credit Note outstanding
                  and the Term Loan Note outstanding at the end of each day
                  at a fluctuating rate per annum equal to the Prime Rate in
                  effect on such day plus two percent (2%). After the date
                                     ----
                  hereof, the foregoing fluctuating rate of interest shall
                  be increased or decreased, as the case may be, by an
                  amount equal to any increase or decrease in the Prime
                  Rate, with such adjustments to be effective as of the
                  opening of business on the day that any such change in the
                  Prime Rate becomes effective. Interest shall be calculated
                  on a daily basis (computed on the actual number of days
                  elapsed over a year of 360 days), commencing on the date
                  the initial Loan is made.


                                   - 3 -

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<PAGE>

                  (f) Section 3.02 of the Agreement is hereby deleted in its
                      ------------
         entirety and replaced by the following:

                           3.02 TERM OF REVOLVING CREDIT FACILITY. Subject
                                ---------------------------------
                  to the Bank's right to cease making Loans to the Borrowers
                  at any time upon or after the occurrence and during the
                  continuation of any Default or Event of Default, the
                  Borrowers shall be entitled to request advances under the
                  Revolving Credit Note for the period from the date hereof
                  to and including January 31, 2004. In no event may the
                  Borrowers terminate this Agreement until the Borrowers
                  have repaid all Loans and otherwise paid and performed
                  their Obligations hereunder. All indemnities given by the
                  Borrowers to the Bank under any of the Loan Documents
                  shall survive the repayment of the Loans and the
                  termination of this Agreement.

                  (g) Section 3.03 of the Agreement is hereby deleted in its
                      ------------
         entirety and replaced by the following:

                           3.03 PAYMENTS. Except where evidenced by notes or
                                --------
                  other instruments issued or made by the Borrowers to the
                  Bank specifically containing payment provisions which are
                  in conflict with this Section 3.03 (in which event the
                                        ------------
                  conflicting provisions of such notes or other instruments
                  shall govern and control), that portion of the Obligations
                  consisting of:

                                    (a) Principal payable on account of the
                           Revolving Credit Loan shall be payable by the
                           Borrowers to the Bank immediately upon the
                           earliest to occur of (i) the date or dates for
                           payment as specified in the Revolving Credit
                           Note, (ii) the occurrence of any event described
                           in Section 3.04 hereof which requires the payment
                              ------------
                           of principal on the Loans (but only after the
                           Term Loan has been repaid in full), (iii) the
                           occurrence and continuance of an Event of Default
                           in consequence of which the Bank elects to
                           accelerate the maturity and payment of any of the
                           Obligations, (iv) termination of this Agreement
                           for any reason, or (v) January 31, 2004 (the
                           "Revolving Loan Maturity Date"); provided,
                           however, that if the principal balance of
                           Revolving Credit Loan outstanding at any time
                           shall exceed the Borrowing Base at such time, the
                           Borrowers shall, on demand, repay the Revolving
                           Credit Loan in an amount sufficient to reduce the
                           aggregate unpaid principal amount of such
                           Revolving Credit Loans by an amount equal to such
                           excess;

                                    (b) Principal payable on account of the
                           Term Loan shall be payable by the Borrower to the
                           Bank immediately upon the earliest to occur of
                           (i) the date or dates for payment as specified in
                           the Term Note, which shall call for quarterly
                           principal payments in the amount of $100,000.00
                           each, (ii) the occurrence of any event described
                           in Section 3.04 hereof which requires the payment
                              ------------
                           of principal on the Loans, (iii) the occurrence
                           and continuance of an Event of Default in
                           consequence of which the Bank elects to
                           accelerate the maturity and payment of any of the
                           Obligations, (iv) termination of this Agreement
                           for any reason, or (v) February 13, 2005 (the
                           "Term Loan Maturity Date");

                                    (c) Interest accrued on the Loans shall
                           be due on the earliest to occur of (i) the first
                           day of each month (for the immediately preceding
                           month)



                                   - 4 -

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                           with respect to the Revolving Credit Loan,
                           computed through the last calendar day of the
                           preceding month, and quarterly (for the
                           immediately preceding quarter) with respect to
                           the Term Loan, computed through the last calendar
                           day of the preceding quarter (as more fully
                           described in the Term Loan Note), (ii) the
                           occurrence of an Event of Default in consequence
                           of which the Bank elects to accelerate the
                           maturity and payment of the Obligations, (iii)
                           termination of this Agreement for any reason or
                           (iv) the Revolving Loan Maturity Date or the Term
                           Loan Maturity Date, respectively, as the case may
                           be; provided, however, that the Borrowers hereby
                           irrevocably authorize the Bank, in the Bank's
                           sole discretion, to advance to or on behalf of
                           the Borrowers, and to charge to the Borrowers'
                           Loan Account as a Revolving Credit Loan, a sum
                           sufficient each month to pay all interest accrued
                           on the Obligations during the immediately
                           preceding month to the extent such interest is
                           not otherwise timely paid by the Borrowers;

                                    (d) Costs, fees and expenses payable
                           pursuant to this Agreement or the other Loan
                           Documents shall be payable by the Borrowers, on
                           demand, to the Bank or to any other Person
                           designated by the Bank and the Borrowers hereby
                           authorize the Bank, in the Bank's sole
                           discretion, to advance to or on behalf of the
                           Borrowers, and to charge the Borrowers' Loan
                           Account as a Revolving Credit Loan, all such
                           costs, fees and expenses to the extent not
                           otherwise timely paid by the Borrowers; and

                                    (e) The balance of the Obligations
                           requiring the payment of money, if any, shall be
                           payable by the Borrowers to the Bank as and when
                           provided in this Agreement or the other Loan
                           Documents, or if no specific provision for
                           payment is made, on demand.

                  (h) Section 6.01.(j) of the Agreement is hereby deleted in
                      ----------------
         its entirety and replaced by the following:

                                    (j) Books and Records; Inspection; Bank
                                        -----------------------------------
                           Audits. Maintain complete and accurate books and
                           ------
                           financial records in accordance with GAAP; during
                           normal working hours permit the Bank and Persons
                           designated by the Bank to visit and inspect its
                           properties and to conduct any environmental tests
                           or audits thereon, to inspect its books and
                           financial records (including its journals,
                           orders, receipts and correspondence which relates
                           to its Accounts), and to discuss its affairs,
                           finances and Accounts and operations with its
                           directors, officers, employees and agents and its
                           independent public accountants; and permit the
                           Bank and Persons designated by the Bank to
                           perform audits of such books and financial
                           records and of the Accounts and inventory of the
                           Borrowers when and as requested by the Bank; and
                           pay to the Bank or Persons designated by the Bank
                           an audit fee based on the Bank's then current
                           audit rate (which rate is presently $650.00 per
                           day) plus expenses for each such audit. Without
                           limiting the foregoing, until the Borrowers
                           receive written notice from the Bank to the
                           contrary, Bank shall perform, at the expense of
                           the Borrowers, quarterly audits of the Accounts
                           and the inventory of the Borrowers.


                                   - 5 -

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                  (i) Section 6.01.(m) of the Agreement is hereby deleted in
                      ----------------
         its entirety and replaced by the following:

                                    (m) Location of Collateral, Borrower
                                        --------------------------------
                           Name and State of Organization. Keep all
                           ------------------------------
                           Collateral, other than inventory in transit and
                           motor vehicles, at one or more of the locations
                           set forth on Schedule 6.01(m) and not remove any
                                        ----------------
                           Collateral therefrom except for, for so long as
                           there exists no Event of Default, (i) inventory
                           sold in the ordinary course of the Borrowers'
                           business, and (ii) dispositions of obsolete
                           equipment to the extent permitted under this
                           Agreement. Each Borrower's exact legal name and
                           all tradenames are as set forth on Schedule
                                                              --------
                           6.01(m) and no Borrower shall change any such
                           -------
                           names without giving the Bank at least thirty
                           (30) days prior written notice. Each Borrower's
                           State of incorporation or organization is as set
                           forth in the opening paragraph of this Agreement
                           and no Borrower shall change its State of
                           incorporation or organization without giving the
                           Bank at least thirty (30) days prior written
                           notice.

                  (j) Section 6.02 of the Agreement is hereby amended by
                      ------------
         adding the following new subpart (k):

                           (k) Restricted Payments. Make or commit to make
                               -------------------
                  any Restricted Payment.

                  (k) Section 6.03 of the Agreement is hereby deleted in its
                      ------------
         entirety and replaced by the following:

                           6.03 SPECIFIC FINANCIAL COVENANTS. So long as any
                                ----------------------------
                  Obligations remain unpaid or the Bank shall have any
                  commitment to extend credit to or for the benefit of the
                  Borrowers, unless otherwise consented to in writing by the
                  Bank:

                                    (a) Minimum Working Capital. Parent
                                        -----------------------
                           shall maintain at all times, on a consolidated
                           basis, Minimum Working capital of not less than
                           $18,000,000.00.

                                    (b) Debt Coverage Ratio. Parent shall
                                        -------------------
                           not permit its Debt Coverage Ratio, on a
                           consolidated basis and measured as at the end of
                           each fiscal quarter of the Borrowers, to be less
                           than the ratio set forth below for the relevant
                           time period:

<TABLE>
<CAPTION>
                                        Quarter Ending             Debt Coverage Ratio
                                        --------------             -------------------
                                        <S>                        <C>
                                        12/31/02                   Compliance waived
                                        3/31/03                    0.75 to 1.0
                                        6/30/03                    1.0 to 1.0
                                        9/30/03 and thereafter     1.25 to 1.0
</TABLE>

                                    (c) Current Ratio. Parent shall at all
                                        -------------
                           times maintain, on a consolidated basis, a
                           minimum Current Ratio of no less than 1.75 to
                           1.0.

                                    (d) Capital Expenditures. Borrowers
                                        --------------------
                           shall not make Capital Expenditures which exceed,
                           in the aggregate and on a consolidated basis,
                           during any fiscal year of the Borrowers,
                           $3,000,000.00.


                                   - 6 -

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                  (l) Section 7.01.(g) of the Agreement is hereby deleted in
                      ----------------
         its entirety and replaced by the following:

                                    (g) The Borrowers shall (i) fail to pay
                           any Debt in a principal amount in excess of
                           $150,000.00 (other than the Debt described in
                           Sections 7.01(a), 7.01(b) and 7.01(c) above) of
                           ----------------  -------     -------
                           the Borrowers, or any interest or premium
                           thereon, when due (whether by scheduled maturity,
                           required prepayment, acceleration, demand or
                           otherwise), and such failure shall continue after
                           any applicable grace period specified in the
                           agreement or instrument relating to such Debt, or
                           (ii) fail to perform or observe any covenant or
                           condition on its part to be performed or observed
                           under any agreement or instrument relating to any
                           such Debt when required to be performed or
                           observed, and such failure shall continue after
                           the applicable grace period, if any, specified in
                           such agreement or instrument, if the effect of
                           such failure to pay or perform or observe is to
                           accelerate or to permit the acceleration of the
                           maturity of such Debt; or any such Debt shall be
                           declared to be due and payable or required to be
                           prepaid (other than by a regularly scheduled
                           required prepayment) prior to the stated maturity
                           thereof as a result of a default by a Borrower,
                           or (iii) without limiting the foregoing in any
                           manner, there shall occur and be continuing an
                           Event of Default (as such term is defined
                           therein) under the Debenture Agreement which is
                           not cured or waived within any applicable grace
                           or cure period; or

                  (m) Schedule 1.01 to the Credit Agreement is hereby
                      -------------
         deleted in its entirety and the Schedule 1.01 attached to this
                                         -------------
         Amendment is hereby substituted in lieu thereof.

                  (n) Schedule 5.01(p) to the Credit Agreement is hereby
                      ----------------
         deleted in its entirety and the Schedule 5.01(p) attached to this
                                         ----------------
         Amendment is hereby substituted in lieu thereof.

                  (o) Schedule 6.01(m) to the Credit Agreement is hereby
                      ----------------
         deleted in its entirety and the Schedule 6.01(m) attached to this
                                         ----------------
         Amendment is hereby substituted in lieu thereof.


     2.  Conditions To Execution Of This Amendment. Any provision contained
         -----------------------------------------
herein or in the Agreement to the contrary notwithstanding, Bank's execution
of this Amendment is subject to the following:

                  (a) Bank shall have first received a certified copy of the
         resolutions of Borrower, duly adopted at a meeting duly held
         authorizing the execution, delivery and performance of this
         Amendment in accordance with its terms;

                  (b) All representations and warranties made in the
         Agreement and herein shall be true and correct in all material
         respects as of the date hereof and, by execution of this Amendment,
         each Borrower hereby certifies same to Bank;

                  (c) No Borrower shall have defaulted, or taken or failed
         to take any action which, unless corrected, would give rise to a
         default on any of its obligations to Bank;

                  (d) No action or omission exists as of the date hereof
         which constitutes, or which, with the passage of time, would
         constitute a Default or Event of Default, and each Borrower shall
         have certified the same to Bank by a duly authorized officer;

                  (e) Each Borrower shall be in compliance with all
         covenants of the Agreement, as amended;

                  (f) All documents and filings necessary to maintain and
         perfect Bank's security interest in the collateral provided for in
         the Loan Documents shall be in full force and effect, and all
         actions necessary to maintain and perfect the same shall have been
         taken;

                  (g) No material adverse change in the financial condition
         of the Borrowers taken as a whole shall have occurred since January
         10, 2003;

                  (h) Bank shall have received the following documents, duly
         executed and delivered by all parties thereto, and otherwise
         satisfactory in form and content to Bank and its counsel


                                   - 7 -

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<PAGE>

                           (i)      An Amended and Restated Revolving Credit
                                    Note in the form of Exhibit A attached
                                                        ---------
                                    hereto (which shall also serve as the
                                    revised Exhibit A of the Agreement);
                                            ---------

                           (ii)     An Amended and Restated Term Loan Note
                                    in the form of Exhibit B attached hereto
                                                   ---------
                                    (which shall also serve as the revised
                                    Exhibit B of the Agreement);
                                    ---------

                           (iii)    A non-refundable modification fee in the
                                    aggregate amount of $75,000.00;

                           (iv)     An Amended and Restated Equipment Lease
                                    (or similar modification document)
                                    between the Borrowers and the Bank with
                                    respect to the equipment and related
                                    items utilized by the Borrowers at the
                                    Borrowers' nitrogen plant located in
                                    Abilene Texas;

                           (v)      A photocopy of a fully executed original
                                    of the Subordinated Convertible
                                    Debenture Purchase Agreement, and
                                    evidence that Parent has received an
                                    amount not less than $8,000,000.00 with
                                    respect to the sale of such debentures;

                           (vi)     The favorable written opinion of
                                    Thompson Coburn, LLP, counsel to the
                                    Borrowers, to the Bank regarding the
                                    Borrowers, the Loan Documents and the
                                    transactions contemplated by this
                                    Agreement and the other Loan Documents;
                                    and

                           (vii)    A good standing certificate from the
                                    Secretary of State for the
                                    organizational State of each Borrower.

                  (i) No pending or threatened litigation or other
         proceeding or investigation shall exist which could reasonably be
         expected to have a material adverse effect on the prospects,
         operation or financial condition of the Borrowers taken as a whole;
         and

                  (j) The Borrowers shall pay the costs and expenses of Bank
         (including reasonable attorneys' fees and expenses) in connection
         with the negotiation, preparation, execution and delivery of this
         Amendment and all other matters herein provided for or required in
         connection with this Amendment.

     3.  Representations and Warranties. The Borrowers hereby represent and
         ------------------------------
warrant to Bank that:

                  (a) All representations and warranties made by the
         Borrowers in the Agreement are true and correct in all material
         respects as if they had been made on the date hereof.

                  (b) No Default or Event of Default exists within the
         meaning of the Agreement.

                  (c) The officers of the Borrowers executing this Amendment
         shall be fully authorized to do so, and all corporate actions
         necessary or proper to authorize the execution of this Amendment
         have been duly done, taken and performed. No consent, authorization
         or approval of any other Person is necessary for the due execution
         and delivery by any Borrower of this Amendment and the performance
         by any Borrower of the terms hereof and thereof. This



                                   - 8 -

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<PAGE>

         Amendment is executed and delivered in accordance with any laws and
         regulations applicable hereto and thereto, and is the legal, valid
         and binding obligation of each Borrower, enforceable in accordance
         with its terms.

                  (d) The execution, delivery, and performance, in
         accordance with its terms, of this Amendment will not violate any
         provision of any Borrower's organizational documents, any law, or
         any applicable judgment or regulation of any court or of any public
         or governmental agency, officer, or authority, and will not
         conflict with, result in a breach of or default under, or result in
         the creation of any lien, charge or encumbrance upon any of the
         property or assets of any Borrower (except for the security
         interest created by the Loan Documents) under any indenture,
         mortgage, contract, deed of trust, or other agreement to which any
         Borrower is a party or by which any Borrower or any of its
         properties or assets is or may be bound.

     4.  Entire Agreement. This Amendment and the Agreement embody the entire
         ----------------
agreement between the parties respecting the subject matter hereof and
supersede all prior agreements, proposals, communications and understandings
relating to such subject matter. The terms of the Amendment shall be
considered a part of the Agreement as if fully set forth therein.

     5.  Miscellaneous. This Amendment shall be binding upon the Borrowers
         -------------
and their respective successors and the Bank and its successors and assigns.
The Section headings are furnished for the convenience of the parties and
are not to be considered in the construction or interpretation of this
Amendment or the Agreement. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument. Capitalized terms not defined
herein shall have the meanings set forth in the Agreement. This Agreement
shall be a contract made under and governed by the laws of the State of
Missouri applicable to contracts made and to be performed entirely within
such State.

     6.  No Other Amendments. In case of a conflict between the terms of this
         -------------------
Amendment and the Agreement, the terms of this Amendment control. Except as
expressly set forth in this Amendment, the terms of the Agreement remain
unchanged and in full force and effect. The following notice is given
pursuant to Section 432.045 of the Missouri Revised Statutes; nothing
contained in such notice shall be deemed to limit or modify the terms of the
Loan Documents:

ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW
SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWERS) AND US (BANK) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN
WRITING TO MODIFY IT.


                          [SIGNATURE PAGE FOLLOWS]



                                   - 9 -

<PAGE>
<PAGE>

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.

                                    BORROWERS:

                                    ZOLTEK COMPANIES, INC.
                                    By: /s/ Zsolt Rumy
                                    Name: Zsolt Rumy
                                    Title: President


                                    ZOLTEK CORPORATION
                                    By: /s/ Zsolt Rumy
                                    Name: Zsolt Rumy
                                    Title: President


                                    CAPE COMPOSITES, INC.
                                    By: /s/ Zsolt Rumy
                                    Name: Zsolt Rumy
                                    Title: President


                                    ENGINEERING TECHNOLOGY CORPORATION
                                    By: /s/ Zsolt Rumy
                                    Name: Zsolt Rumy
                                    Title: President


                                    ZOLTEK PROPERTIES, INC.
                                    By: /s/ Zsolt Rumy
                                    Name: Zsolt Rumy
                                    Title: President


                                    BANK:

                                    SOUTHWEST BANK OF ST. LOUIS
                                    By: /s/ Robert S. Witterschein
                                    Name: Robert S. Witterschein
                                    Title: Senior Vice President




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