Document:

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                                                                  Exhibit 4.3

                             SECURITY AGREEMENT
                             ------------------

         SECURITY AGREEMENT (as amended, supplemented or otherwise modified
from time to time, the "AGREEMENT"), dated as of October 14, 2004, among
Zoltek Vegyipari Reszvenytarsasag, a corporation formed under the laws of
the Republic of Hungary, whose registered office is at H-2537 Nyergesujfalu,
Varga Jozsef ter 1., registered by the Court of Komarom-Esztergom county
acting as Court of Registration under registration No. 11-10-001447 (the
"CHARGOR"), the lenders signatory hereto (each lender including their
respective successors, endorsees, transferees and assigns, a "SECURED
PARTY", and collectively, the "SECURED PARTIES") and Omicron Master Trust, a
Bermuda business trust, as administrative agent for the Lenders under the
Loan Agreement referred to below (in such capacity, the "ADMINISTRATIVE
AGENT").

                            W I T N E S S E T H:
                            - - - - - - - - - -

         WHEREAS, pursuant to the credit agreement dated as of May 15, 2001,
as amended, between Raiffeisen Bank Rt. whose registered office is at H-1054
Budapest, Akademia u. 6. ("RAIFFEISEN") and the Chargor, Raiffeisen has
granted a credit facility ("RAIFFEISEN FACILITY") in a principal amount
equal to HUF 3,155,000,000 to the Chargor and pursuant to the loan agreement
dated as of March 4, 2004, as amended, between Magyar Export-Import Bank Rt.
whose registered office is at H-1065 Budapest, Nagymezo u. 46-48.
("EXIMBANK") and the Chargor, Eximbank has granted a loan ("EXIMBANK
FACILITY") in a principal amount equal to USD 1,600,000 to the Chargor (The
Raiffeisen Facility and the Eximbank Facility collectively the "EXISTING
FACILITIES").

         WHEREAS, there are Existing Liens (as defined below) in favor of
Raiffeisen and certain affiliates thereof and Eximbank over certain
movables, immovables and receivables of the Chargor to secure the payment
obligations of the Chargor under the Existing Facilities.

         WHEREAS, Zoltek Companies, Inc., whose chief executive office is
located at 3101 McKelvey Road, St. Louis, Missouri 63044 and whose U.S.
Federal Tax Identification Number is 43-1311101 (the "BORROWER"), each
Secured Party and the Administrative Agent desire to enter into the Loan and
Warrant Agreement ("LOAN AGREEMENT") on the date hereof, pursuant to which
each Secured Party agrees severally to make a loan to the Borrower in a
principal amount equal to the Loan Amount (as defined below) which shall be
evidenced by the issuance by the Borrower to such Secured Party of one of
the Borrower's Senior Secured 7% Convertible Notes, due 42 months from
issuance, in the Loan Amount owing to such Secured Party (each a "NOTE" and,
collectively with each Note of each other Secured Party, the "NOTES").

         WHEREAS, in connection with the Loan Agreement and the Notes, the
Chargor and each Secured Party desire to execute this Agreement, the
Guarantee Agreement and the Mortgage Agreement.

         WHEREAS, the Chargor desires to repay from the Loan Amounts the
loans under the Existing Facilities to the extent they are secured by the
assets belonging to the Chargor's carbon

fiber business, that is, USD 10,400,000 from the Raiffeisen Facility
("RAIFFEISEN PREPAYMENT") and USD 1,600,000 from the Eximbank Facility
("EXIMBANK PREPAYMENT").

         WHEREAS, as a condition of entering into the transactions
contemplated by the Loan Agreement and the Notes, Raiffeisen, certain
affiliates of Raiffeisen, Eximbank, the Chargor, the Secured Parties and the
Administrative Agent entered into an agreement ("WAIVER AGREEMENT") on the
date hereof, pursuant to which Raiffeisen, its affiliates and Eximbank
agreed to deliver to the Administrative Agent certain waivers and other
documents which are needed for the termination of the Existing Liens upon
the Collateral (as defined below) to be encumbered by the New Liens, in
accordance with the terms set forth therein.

         WHEREAS, in order to induce the Secured Parties to enter into the
transactions contemplated by the Loan Agreement and the Notes, the Chargor
has agreed to create Security Interests on the Collateral (as defined below)
by execution of this Agreement.

         NOW, THEREFORE, in consideration of the agreements herein contained
and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:

         1.       Certain Definitions.
                  -------------------

                  (a) As used in this Agreement, the following terms have
the meanings specified below:

                  "AGGREGATE LOAN AMOUNTS" means the aggregate of the Loan
         Amounts owing to all Secured Parties set out in Schedule A attached
                                                         ----------
         hereto as inseparable part of this Agreement.

                  "CARBON FIBER SITES" has the meaning set forth in
         Section 5(c).

                  "CHARGE REGISTER" means the registry kept by the Hungarian
         Chamber of Notaries Public (or such other registry as from time to
         time applicable) for the registration of non-possessory charges on
         movable property.

                  "CIVIL CODE" means Act IV of 1959 of the Civil Code of the
Republic of Hungary, as amended.

                  "COLLATERAL" has the meaning set forth in Section 2.

                  "GOOD INDUSTRY PRACTICE" means at any time, in respect of
         any person, the exercise of that degree of skill, diligence,
         prudence, foresight and operating practice which would reasonably
         and ordinarily be expected from a skilled and experienced operator
         in the same type of business and undertaking as such person at such
         time.

                  "LAND REGISTER" means the land register kept by the Land
         Bureaux of District Esztergom (in Hungarian: "Esztergomi Korzeti
         Foldhivatal").

                                     2

                  "LOAN AMOUNT" means the amount set opposite the name of
         each Secured Party in Schedule A attached hereto.
                               ----------

                  "OBLIGATIONS" means, with respect to each Secured Party,
         the due and punctual payment of (i) the Loan Amount owing to such
         Secured Party, having a maturity date of the 42nd month anniversary
         of issuance of the Note and (ii) interest (including interest on
         the outstanding amount of the Note at a rate 7% percent per annum
         payable in cash quarterly in arrears on each March 31, June 30,
         September 30 and December 31 or as otherwise agreed in the Note and
         interest on overdue amounts, whether accrued during the pendency of
         any bankruptcy, insolvency, receivership or other similar
         proceeding, regardless of whether allowed or allowable in such
         proceeding), when due, whether at maturity, by acceleration, upon
         one or more dates set for prepayment or otherwise, and (iii) all
         other monetary obligations, including without limitation in respect
         of fees, commissions, costs, expenses and indemnities, whether
         primary, secondary, direct, contingent, fixed or otherwise
         (including monetary obligations incurred during the pendency of any
         bankruptcy, insolvency, receivership or other similar proceeding,
         regardless of whether allowed or allowable in such proceeding), of
         the Borrower to such Secured Party under any of the Transaction
         Documents.

                  "PERMITTED LIENS" means the following:

                         (i)    Any Liens existing on the date hereof and
         specifically disclosed in Schedule B attached hereto as inseparable
                                   ----------
         part of this Agreement ("EXISTING LIENS"), provided that after the
                                                    -------- ----
         10th day following the date on which the amounts of Raiffeisen
         Prepayment and Eximbank Prepayment have been credited in full to the
         accounts set forth in the Waiver Agreement ("SPECIFIED DATE"):

                         (x)    all Existing Liens specified in Sections 1 and 2
                         (other than those specified in Sections 1 (e) and (f))
                         of Schedule B shall cease to be "Permitted Liens"; and

                         (y)    all Existing Liens specified in Section 3 of
                  Schedule B shall cease to be "Permitted Liens", unless a
                  request for cancellation of such Existing Lien has been
                  filed by the Chargor with, and recorded by the Land Register
                  in accordance with the terms of the Waiver Agreement, in
                  which case the Existing Lien shall cease to be "Permitted
                  Liens" after the 60th day following the Specified Date;

                         (ii)   Liens in favor of the Secured Parties and/or
         the Administrative Agent pursuant to the Transaction Documents; and

                         (iii)  Liens arising by mandatory provisions of
         applicable laws.

                  "PERMITTED TRANSFER" means any conveyance, sale, lease,
         transfer, license or disposition (each a "TRANSFER") by Chargor of:

                         (i)    inventory or upgrade or exchange of
         machinery, in either case, in the ordinary course of business and
         for usual and ordinary prices;

                                     3

                         (ii)   any assets in the ordinary course of
         business which are replaced by substitute assets acquired or
         leased; or

                         (iii)  licenses and similar arrangements for the
         use of the property of Chargor in the ordinary course of business;
         or

                         (iv)   any assets for fair market value, provided
                                                                  --------
         that immediately after giving effect to each such Transfer, the
         fair market value (with respect to each such asset, determined on
         or about the date of the Transfer thereof) of all assets subject to
         Transfer pursuant to this clause (iv) would not exceed $350,000; or

                         (v)    with prior written consent of the Secured
         Parties, not to be unreasonably withheld.

                  "SALE VALUE" means, with respect to any Collateral, the
         value thereof (expressed in U.S. Dollars) as proposed by the
         Administrative Agent and agreed to by the Chargor, provided that in
                                                            --------
         the event that the Chargor shall not have agreed to any such
         proposal within 5 days thereof, the value ascribed to the
         Collateral by the Chargor in its latest calculation of the value
         thereof (expressed in U.S. Dollars) for purposes of demonstrating
         that there is no Default under paragraph (xxi) of the defined term
         "Event of Default" contained in the Notes, to the extent agreed to
         by the Administrative Agent for purposes of determining "Sale
         Value", further provided that in the event that the Administrative
                 ------- --------
         Agent shall not agree to any such value ascribed thereto by the
         Chargor, the maximum value thereof (expressed in U.S. Dollars)
         determined by any independent valuation expert of recognized
         standing selected by the Administrative Agent using any reasonable
         method as would, in the reasonable judgment of such expert, allow
         for either of the following to occur, in accordance with the other
         terms and conditions of this Agreement, within no more than three
         months of the date such expert sends notice of the amount of such
         valuation to each of the Administrative Agent and the Chargor: (i)
         the sale or other disposition of such Collateral, or (ii) the entry
         by the Administrative Agent into an agreement with a reputable and
         financially sound third party for the purchase or assignment of
         such Collateral by such third party within no more than three
         months of the date of such agreement.

                  "TRADING DAY" means (i) a day on which the common stock of
         the Borrower, $0.01 par value per share, and any securities into
         which such common stock may hereafter be reclassified ("COMMON
         STOCK") is traded on a Trading Market (other than the OTC Bulletin
         Board), or (ii) if the Common Stock is not traded on a Trading
         Market, a day on which the Common Stock is traded in the
         over-the-counter market, as reported by the OTC Bulletin Board or
         the National Quotation Bureau Incorporated, or (iii) if the Common
         Stock is not traded on a Trading Market, a day on which the Common
         Stock is quoted in the over-the-counter market as reported by the
         National Quotation Bureau Incorporated (or any similar organization
         or agency succeeding to its functions of reporting prices);
         provided, that in the event that the Common Stock is not listed or
         quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day
         shall mean any day except Saturday, Sunday and any day that is a
         federal legal holiday or a day on which banking

                                     4

         institutions in the State of New York are authorized or required by
         law or other governmental action to close.

                  "TRADING MARKET" means Nasdaq National Market, the OTC
         Bulletin Board or any of the New York Stock Exchange, the American
         Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap
         Market on which the Common Stock is then listed or quoted.

         (b) Terms used in this Agreement but not otherwise defined in this
Agreement that are defined in the Loan Agreement shall have the respective
meanings given such terms in the Loan Agreement as in effect on the date
hereof and, by signing this Agreement, the Chargor acknowledges having
received and reviewed a copy of the Loan Agreement.

                  2.     Grant of Security Interests. As an inducement for each
                         ---------------------------
Secured Party to enter into the transactions contemplated by the Transaction
Documents and to secure the complete and timely payment, performance and
discharge in full, as the case may be, of the Obligations owing to such
Secured Party, each Secured Party and the Chargor hereby create in favor of
such Secured Party in accordance with Section 266 of the Civil Code a
non-possessory floating security interest (each a "SECURITY INTEREST" and
collectively the "SECURITY INTERESTS") in and to all of the assets of the
Chargor associated with its carbon fiber operations (without specifying each
tangible, intangible, movable, immovable asset or other assets or rights
comprising such assets), whether now owned or hereafter created or acquired
and wherever located (collectively, the "COLLATERAL"), except for any
equipment or fixture acquired by the Chargor after the date hereof provided
                                                                   --------
that it does not constitute improvements or accessions on, additions to any
----
existing equipment and fixture set forth in Schedule C attached hereto.

                  3.     Registration of Security Interests. Each Security
                         ----------------------------------
Interest shall be created by its registration in the Charge Register. Each
Security Interest shall be effective from the date of its registration or,
in case of any Collateral acquired or created by the Chargor hereafter, from
such time as the Chargor acquires the right of disposal over such
Collateral, in each case until such time when that Collateral is disposed of
in accordance with Section 266 of the Civil Code and the provisions of this
Agreement. The Chargor shall, immediately after the Security Interests
having come into effect, register in its accounting system and indicate in
all of its financial reports the fact that the Security Interests are
created over the Collateral.

                  4.     Ranking; Application for Registration. Each Security
                         -------------------------------------
Interest shall rank pari passu with each other Security Interest. The
Chargor and each Secured Party hereby request the notary public to register
the first ranking Security Interests in the Charge Register over the
Collateral by a single registration of (i) the Administrative Agent as a
representative of the Secured Parties opposite to the heading
"chargeholder", (ii) the Aggregate Loan Amounts opposite to the heading
"amount of the secured debt" and (iii), opposite to the heading "notes" a
reference that each Security Interest on Collateral shall be several by
indicating each Secured Party and the Obligation owing to such Secured
Party.

                  5.     Representations, Warranties, Covenants and Agreements
                         -----------------------------------------------------
of the Chargor. The Chargor represents and warrants to, and covenants and
--------------
agrees with, each of the Secured Parties as follows:

                                     5

                  (a)    The Chargor has the requisite corporate power and
authority to enter into this Agreement and to otherwise carry out its
obligations thereunder. The execution, delivery and performance by the
Chargor of this Agreement and the registration of the Security Interests in
the Charge Register in accordance with this Agreement have been duly
authorized by all necessary action on the part of the Chargor and no further
action is required by the Chargor.

                  (b)    The Chargor is the sole (and if required by law)
registered owner of the Collateral, free and clear of all Liens (other than
Permitted Liens), and is fully authorized to grant the Security Interests in
and to pledge the Collateral. So long as this Agreement shall be in effect,
the Chargor shall not enter into any charge agreement covering any portion
of the Collateral (except for agreements constituting Permitted Liens or
charge in favor of the Secured Parties) without the prior consent of the
Administrative Agent.

                  (c)    The Chargor has no place of business or offices where
its respective books of account and records are kept (other than temporarily
at the offices of its attorneys or accountants) or places where Collateral
is stored or located, except as set forth on Schedule D attached hereto as
                                             ----------
inseparable part of this Agreement (the "CARBON FIBER SITES").

                  (d)    The Chargor has no knowledge of any claim that any
Security Interest or the Chargor's ownership of any Collateral or any
interest therein violates the rights of any third party. There has been no
adverse decision of which the Chargor is aware as to the Chargor's exclusive
(or nonexclusive, as the case may be) rights to use the Collateral in any
jurisdiction, and, to the knowledge of the Chargor there is no proceeding
involving said rights pending or threatened before any court, judicial body,
administrative or regulatory agency, arbitrator or other governmental
authority.

                  (e)    The Chargor shall at all times maintain its books of
account and records relating to the Collateral at its principal place of
business and its Collateral at the Carbon Fiber Sites and may not relocate
such books of account and records and the Collateral unless it delivers to
the Administrative Agent at least 30 days prior to such relocation (i)
written notice of such relocation and the new location thereof (which must
be within the United States or the Republic of Hungary) and (ii) evidence
that appropriate steps have been taken to maintain in favor of each Secured
Party a valid, perfected and continuing first priority lien in the
Collateral, securing the Obligations owing to such Secured Party.

                  (f)    Upon registration of the Security Interests in the
Charge Register, this Agreement creates in favor of each Secured Party a
valid and perfected first priority security interest in the Collateral.
Except for the registration of the Security Interests in the Charge
Register, no authorization or approval of or filing with or notice to any
governmental authority or regulatory body is required either: (i) for the
grant by the Chargor of, or the effectiveness of, the Security Interests
granted hereby or for the execution, delivery and performance of this
Agreement by the Chargor or (ii) for the perfection of or exercise by such
Secured Party of its rights and remedies hereunder.

                  (g)    The execution, delivery and performance of this
Agreement does not conflict with or cause a breach or default, or an event
that with or without the passage of time or notice, shall constitute a
breach or default, under any agreement to which the Chargor is a party

                                     6

or by which the Chargor is bound. No consent (including, without limitation,
from stock holders or creditors of the Chargor) is required for the Chargor to
enter into and perform its obligations hereunder, other than consents
already obtained by the Chargor.

                  (h)    The Chargor shall at all times maintain the Security
Interests provided for hereunder as valid and perfected first priority
security interests in the Collateral in favor of each Secured Party and
insure that such Security Interests remain senior to all existing and
hereafter created security interests and Liens. The Chargor hereby agrees to
defend the same against any and all persons.

                  (i)    The Chargor shall promptly notify the Administrative
Agent of the acquisition of any specific Collateral which may be charged by
registration into specific registries other than the Charge Register, and
execute and deliver all documents and generally perform any other action
reasonably requested by the Administrative Agent which are necessary to
create and register such specific non-possessory charge.

                  (j)    Unless by operation of mandatory provisions of laws,
the Chargor shall protect the Collateral and will not allow any material
Collateral to be abandoned, forfeited or dedicated to the public without the
prior written consent of the Administrative Agent. Except pursuant to
Section 15 hereof and other than Permitted Liens and Permitted Transfers,
the Chargor will not transfer, pledge, hypothecate, encumber, license, sell
or otherwise dispose of any of the Collateral without the prior written
consent of the Administrative Agent.

                  (k)    The Chargor shall keep the Collateral adequately
insured in favor of the Administrative Agent (for the benefit of the Secured
Parties), as its and/or their interest may appear, against all risks which
are customary for Hungarian companies carrying out similar activities to
insure.

                  (l)    The Chargor shall maintain the Collateral in
accordance with their intended purpose and Good Industry Practice so as to
protect it from any material reduction in value and any and all material
damages..

                  (m)    The Chargor shall, within ten (10) days of obtaining
knowledge thereof, advise the Administrative Agent, in sufficient detail, of
any claim, event, physical or legal fact that may adversely impact any
material portion of the Collateral, and shall take all action necessary to
protect the Collateral.

                  (n)    The Chargor shall promptly execute and deliver to the
Secured Parties such further deeds, mortgages, assignments, security
agreements or other instruments, documents, certificates and assurances and
take such further action as necessary to perfect, protect or enforce any
Security Interest.

                  (o)    The Chargor shall permit the Administrative Agent and
its representatives and agents, upon prior written notice by the
Administrative Agent (acting upon instruction of any Secured Party), to
monitor whether the Chargor operates its carbon fiber business in accordance
with Good Industry Practice, including the right to enter the Chargor's
premises to inspect the Collateral at any time during normal business hours,
and to make copies of records pertaining to any material item of Collateral
as may be reasonably requested by the Administrative Agent

                                     7

(acting upon instruction of any Secured Party) from time to time, all of
which shall be at the sole cost and expense of (i) if an Event of Default
shall have occurred and be continuing at the inception of such inspection,
the Chargor, or (ii) in all other events, the Secured Party initiating such
inspection.

                  (p)    The Chargor shall promptly notify the Administrative
Agent in reasonable detail upon becoming aware of any attachment,
garnishment, execution or other legal process levied against any Collateral
and of any other information received by the Chargor that reasonably would
be expected to have an adverse impact on the Collateral as a whole, any
Security Interest or the rights and remedies of the Secured Parties
hereunder.

                  (q)    The Chargor shall not use or permit any Collateral to
be used unlawfully or in violation of any provision of this Agreement or any
applicable statute, regulation or ordinance or any policy of insurance
covering the Collateral where violation is reasonably likely to have a
material adverse effect on the Secured Parties' rights in the Collateral or
Secured Parties' ability to foreclose on the Collateral.

                  (r)    The Chargor shall not cause or suffer to exist any
Lien on the Collateral other than Permitted Liens without the prior written
consent of the Administrative Agent.

                  (s)    The Chargor shall notify the Administrative Agent of
any change in the Chargor's name, identity, chief place of business, chief
executive office or residence within 30 days of such change.

         6.       [Reserved]

         7.       [Reserved]

         8.       Rights and Remedies Upon Default. Upon the occurrence and
                  --------------------------------
during the continuation of any Event of Default and the delivery to the
Borrower of an Event Notice, the Administrative Agent (on behalf of, and for
the benefit of each Secured Party) shall become entitled to seek
satisfaction from the Collateral on the third Trading Day following the date
of delivery of the Event Notice and the Administrative Agent shall have the
right to exercise all of the remedies conferred hereunder, under the Notes,
and the Administrative Agent shall have all the rights and remedies of a
secured creditor under the Civil Code. Without limitation, the
Administrative Agent shall have the following rights and powers:

                  (a)    The Administrative Agent shall have the right to seek
satisfaction of all of the Obligations owing to the Secured Parties from the
Collateral via court execution, as provided under Section 255 (1) of the
Civil Code.

                  (b)    The Administrative Agent shall have the right to
assign, sell, or otherwise dispose of and deliver all or any part of the
Collateral (or designate a person who officially deals with granting loans
against security and/or organizing public sales to do so) as provided under
Sections 257 and 258 of the Civil Code, at public or private sale or
otherwise, for a purchase price not less than the Sale Value, in U.S.
Dollars (or an equivalent amount in any other currency selected by the
Administrative Agent), for cash or on credit or for future delivery, in such
portion or portions and at such time or times within a maximum period of 15
months from the date of the

                                     8

Event Notice giving rise thereto, and at such place or places, and upon such
terms and conditions as the Administrative Agent may deem commercially
reasonable and as are in compliance with any applicable laws. Upon each such
sale, assignment or other transfer of Collateral, the Administrative Agent
and/or any Secured Party may purchase all or any part of the Collateral
being sold, free from and discharged of all trusts, claims, right of
redemption and equities of the Chargor, which are hereby waived and
released.

                  (c)    The Administrative Agent shall have the right to seek
satisfaction from the Collateral in such other manner as shall be permitted
by the applicable laws at time of exercising such right.

                  (d)    The Administrative Agent may, in order to implement
the assignment, sale or other disposition of any of the Collateral pursuant
to this Section, execute and deliver (pursuant to the authority provided for
in Section 13 on behalf of the Chargor one or more instruments of assignment
of the Collateral in form suitable for filing, recording or registration in
any jurisdictions as the Secured Parties may determine advisable.

         9.       Applications of Proceeds; Expenses. (a) The proceeds of any
                  ----------------------------------
such sale or other disposition of the Collateral hereunder shall be applied
first, to the reasonable expenses of retaking, holding, storing, processing
and preparing for sale, selling, and the like (including, without
limitation, any taxes, fees and other costs incurred in connection
therewith) of the Collateral, to the reasonable attorneys' fees and expenses
incurred by the Administrative Agent and/or Secured Parties in enforcing its
rights hereunder and in connection with collecting, storing (if applicable)
and disposing of the Collateral, and then to satisfaction of the
Obligations, and to the payment of any other amounts required by applicable
law, after which the Secured Parties shall pay to the Chargor any surplus
proceeds. If, upon the sale or other disposition of the Collateral, the
proceeds thereof are insufficient to pay all amounts to which the Secured
Parties are legally entitled, the Chargor will not be liable for the
deficiency. To the extent permitted by applicable law, the Chargor waives
all claims, damages and demands against the Secured Parties arising out of
the repossession, removal, retention or sale of the Collateral, unless due
to the gross negligence or willful misconduct of the Administrative Agent
and/or Secured Parties.

                  (b)    The Chargor agrees to pay all out-of-pocket fees,
costs and expenses reasonably incurred in connection with the registration
of the Security Interests in the Charge Register, including, without
limitation, any partial releases and/or termination statements related
thereto or any expenses of any searches reasonably required by the
Administrative Agent. The Chargor shall also pay all other claims and
charges (other than Permitted Liens) which in the reasonable opinion of the
Administrative Agent and/or Secured Parties would reasonably be expected to
prejudice, imperil or otherwise affect the Collateral or any Security
Interest therein. The Chargor will also, upon demand, pay to the
Administrative Agent and/or Secured Parties the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which the Administrative Agent and/or
Secured Parties may incur in connection with the inspection, custody or
preservation of, or the sale of, collection from, or other realization upon,
any of the Collateral.

                                     9

         10.      Responsibility for Collateral. The Chargor shall maintain and
                  -----------------------------
protect the Collateral as a whole and provide without delay, upon occurrence
of any material adverse change in the value of the Collateral, adequate
security for the Obligations.

         11.      Security Interests Absolute. In the event that at any time any
                  ---------------------------
transfer of any Collateral or any payment received by the Secured Parties
hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance
under any applicable bankruptcy or insolvency laws, or shall be deemed to be
otherwise due to any party other than the Secured Parties, then, in any such
event, the Chargor's obligations hereunder shall survive, and shall not be
discharged or satisfied by any prior payment thereof, but shall remain a
valid and binding obligation enforceable in accordance with the terms and
provisions hereof. The Chargor waives all right to require the Secured
Parties to proceed against any other person or to apply any Collateral which
the Secured Parties may hold at any time, or to marshal assets, or to pursue
any other remedy. The Chargor waives any defense arising by reason of the
application of the statute of limitations to any obligation secured hereby.

         12.      Term of Security Interest. Each Security Interest shall
                  -------------------------
terminate on the date on which all payments under the respective Note have
been made in full or otherwise converted pursuant to the terms thereof and
the respective Obligations have been paid or discharged in full. Upon such
termination, the respective Secured Party, at the request and at the expense
of the Chargor, will join in executing any termination statement required
for cancellation of the Security Interest from the Charge Register or
otherwise evidencing termination of the Security Interest. The Chargor shall
be responsible for filing such termination notice with the Charge Register.

         13.      Power of Attorney; Further Assurances. (a) The Chargor hereby
                  -------------------------------------
authorizes the Administrative Agent and each Secured Party, and their
respective officers, agents, successors or assigns with full power of
substitution, as the Chargor's true and lawful attorney-in-fact, with power,
in the name of the Chargor, to, after the occurrence and during the
continuance of an Event of Default, (i) endorse any notes, checks, drafts,
money orders, or other instruments of payment (including payments payable
under or in respect of any policy of insurance) in respect of the Collateral
that may come into its possession; (ii) to sign and endorse any invoice,
freight or express bill, bill of lading, storage or warehouse receipts,
drafts against Chargor, assignments, verifications and notices in connection
with accounts, and other documents relating to the Collateral; (iii) to pay
or discharge taxes, liens, security interests or other encumbrances at any
time levied or placed on or threatened against the Collateral; (iv) to
demand, collect, receipt for, compromise, settle and sue for monies due in
respect of the Collateral; and (v) generally, to do, at the option of such
Secured Party or the Administrative Agent, as the case may be, and at the
Chargor's expense, at any time, or from time to time, all acts and things
which such Secured Party or the Administrative Agent, as the case may be,
deems necessary to protect, preserve and realize upon the Collateral and the
Security Interests granted therein, in order to effect the intent of this
Agreement and the Notes, all as fully and effectually as the Chargor might
or could do; and the Chargor hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof.

                  (b)    On a continuing basis, the Chargor will make, execute,
acknowledge, deliver, file and record, as the case may be, with the Charge
Register all such instruments, and

                                     10

take all such action as necessary to perfect any Security Interest granted
hereunder and otherwise to carry out the intent and purposes of this
Agreement, or for assuring and confirming to the Secured Parties the grant
or perfection of a first priority security interest in all the Collateral.

                  (c)    The Chargor hereby appoints each Secured Party and the
Administrative Agent as the Chargor's attorney-in-fact, with full authority
in the place and stead of the Chargor and in the name of the Chargor, from
time to time to file with the Charge Register, any amendments of the data
recorded in the Charge Register with respect the Security Interest.

         14.      Administrative Agent. The Administrative Agent shall give
                  --------------------
prompt notice to each Secured Party of each notice or request required or
permitted to be given to the Administrative Agent by the Chargor pursuant to
the terms of this Agreement. The Administrative Agent will distribute to
each Secured Party each instrument and other agreement received for its
account and copies of all other communications received by the
Administrative Agent from the Chargor for distribution to the Secured
Parties by the Administrative Agent in accordance with the terms of this
Agreement. Notwithstanding anything herein contained to the contrary, all
notices to and communications with the Chargor under this Agreement shall be
effected by the Secured Party through the Administrative Agent.

         15.      Conditions for Sale of Collateral by Chargor. The Chargor
                  --------------------------------------------
shall be entitled to sell all or a portion of the Collateral to an unaffiliated
purchaser for a net purchase price which is equal to or greater than the
fair market value of such Collateral (the "PURCHASE PRICE") if such
purchaser shall deliver the Purchase Price to the Secured Parties (on a
pro-rata basis) in payment of the Borrower Prepayment Amount (as defined in
the Notes) for the prepayment of such portion of the outstanding principal
amount of Notes held by the Secured Parties for which such Borrower
Prepayment Amount shall apply. Upon the Secured Parties' unconditional
receipt of the Purchase Price, the Secured Parties' liens in any item of
Collateral that is subject of the foregoing sale shall automatically
terminate and the Secured Parties shall cooperate with the Chargor in making
the filing with the Charge Register in order to evidence such termination.
Notwithstanding anything herein to the contrary, if, as a result of a
potential sale of Collateral pursuant to the immediately preceding sentence,
there shall remain an outstanding principal amount of Notes (including
accrued interest thereon) then held by the Secured Parties, then such sale
shall only be permitted if it would result in the receipt by the Secured
Parties of a Borrower Prepayment Amount sufficient to prepay no less than
50% of the outstanding principal balance of the Notes.

         16.      Notices. Any and all notices or other communications or
                  -------
deliveries hereunder (including without limitation any Event Notice) shall
be in writing and shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 12:00
p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section on a day that is
not a Trading Day or later than 12:00 p.m. (New York City time) on any
Trading Day, (iii) the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given, in each case if
delivered to the following addresses:

                                     11

If to the Borrower (this address being set forth solely for the purposes of
evidencing the date of deemed receipt by the Borrower of an Event Notice in
the application of Section 8 hereunder):

                           Zoltek Companies, Inc.
                           3101 McKelvey Rd.
                           St. Louis, Missouri 63044
                           Facsimile No.:  (314) 291-9082
                           Attention: Chief Financial Officer

If to the Chargor:         Zoltek Vegyipari Reszvenytarsasag
                           H-2537 Nyergesujfalu
                           Varga Jozsef ter 1.
                           Hungary
                           Facsimile No.: +36 33 536 150
                           Attn: Gyorgy Bakos, Chief Financial Officer

     With a copy to:       Thompson Coburn LLP
                           One US Bank Plaza
                           St. Louis, Missouri  63101
                           Facsimile No.:  (314) 552-7000
                           Attn: Thomas A. Litz, Esq.

                                    and

                           Zoltek Companies, Inc.
                           3101 McKelvey Rd.
                           St. Louis, Missouri 63044
                           Facsimile No.:  (314) 291-9082
                           Attention:  Chief Financial Officer

If to any
Secured Party:        To the address set forth under such Secured Party's name
                      on its signature page hereto.

If to the
Administrative
Agent:                To the address set forth under the Administrative Agent's
                      name on its signature page hereto.

         17.      Other Security. To the extent that the Obligations are now or
                  --------------
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other
entity, then the Secured Parties shall have the right, in their sole
discretion, to pursue, relinquish, subordinate, modify or take any other
action with respect thereto, without in any way modifying or affecting any
of the Secured Parties' rights and remedies hereunder.

                                     12

         18.      Miscellaneous. (a) No course of dealing between the Chargor
                  -------------
and the Administrative Agent or any Secured Party, nor any failure to
exercise, nor any delay in exercising, on the part of the Administrative
Agent or any Secured Party, any right, power or privilege hereunder, under
the Notes or under this Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege
hereunder or thereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.

                  (b)    All of the rights and remedies of the Administrative
Agent and the Secured Parties with respect to the Collateral, whether
established hereby, by the Notes or by any other agreements, instruments or
documents or by law shall be cumulative and may be exercised singly or
concurrently.

                  (c)    This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and is intended to
supersede all prior negotiations, understandings and agreements with respect
thereto. Except as specifically set forth in this Agreement, no provision of
this Agreement may be modified or amended except by a written agreement
signed by the parties hereto.

                  (d)    In the event that any provision of this Agreement is
held to be invalid, prohibited or unenforceable in any jurisdiction for any
reason, unless such provision is narrowed by judicial construction, this
Agreement shall, as to such jurisdiction, be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drawn so as not
to be invalid, prohibited or unenforceable. If, notwithstanding the
foregoing, any provision of this Agreement is held to be invalid, prohibited
or unenforceable in any jurisdiction, such provision, as to such
jurisdiction, shall be ineffective to the extent of such invalidity,
prohibition or unenforceability without invalidating the remaining portion
of such provision or the other provisions of this Agreement and without
affecting the validity or enforceability of such provision or the other
provisions of this Agreement in any other jurisdiction.

                  (e)    The Administrative Agent and each Secured Party agree
that neither this Agreement nor any provision hereof may be waived, amended,
supplemented or otherwise modified by the Administrative Agent or such
Secured Party except in accordance with the terms of Section 8.4 of the Loan
Agreement.

                  (f)    This Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and assigns.

                  (g)    Each party shall take such further action and execute
and deliver such further documents as may be necessary or appropriate in
order to carry out the provisions and purposes of this Agreement.

                  (h)    This Agreement shall be construed in accordance with
the laws of the Republic of Hungary. The parties hereto irrevocably agree
that the Hungarian courts shall have jurisdiction to settle any dispute,
suit, action or proceedings which may arise out of or in connection with
this Agreement.

                                     13

                  (i)    This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile signature were the
original thereof.

                                     14

         IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed on the day and year first above written.

                                ZOLTEK VEGYIPARI
                                RESZVENYTARSASAG

                                By:
                                   -------------------------------
                                   Name:
                                   Title:

                                     15

         IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed on the day and year first above written.

                                OMICRON MASTER TRUST, as Administrative Agent

                                By:
                                   -------------------------------
                                   Name:
                                   Title:

                                U.S. Federal Tax Identification No.

                                Address for Notice:

                                     16

         IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed on the day and year first above written.

                                [SECURED PARTY]

                                By:
                                   -------------------------------
                                   Name:
                                   Title:

                                U.S. Federal Tax Identification No.:

                                Registered Office:

                                Address for Notice:

                                [SECURED PARTY]

                                By:
                                   -------------------------------
                                   Name:
                                   Title:

                                U.S. Federal Tax Identification No.:

                                Registered Office:

                                Address for Notice:

                                     17<PAGE>

                                                                 Exhibit 4.4

                             MORTGAGE AGREEMENT
                             ------------------

         MORTGAGE AGREEMENT (as amended, supplemented or otherwise modified
from time to time, the "AGREEMENT"), dated as of October 14, 2004, among
Zoltek Vegyipari Reszvenytarsasag, a corporation formed under the laws of
the Republic of Hungary and whose registered office is at H-2537
Nyergesujfalu, Varga Jozsef ter 1., registered by the Court of
Komarom-Esztergom county acting as Court of Registration under registration
No. 11-10-001447; statistical number: 11186542-2430-114-11 (the
"MORTGAGOR"), the lenders signatory hereto (each lender including their
respective successors, endorsees, transferees and assigns, a "SECURED
PARTY", and collectively, the "SECURED PARTIES") and Omicron Master Trust, a
Bermuda business trust, as administrative agent for the Lenders under the
Loan Agreement referred to below (in such capacity, the "ADMINISTRATIVE
AGENT").

                            W I T N E S S E T H:
                            - - - - - - - - - -

         WHEREAS, pursuant to the credit agreement dated as of May 15, 2001,
as amended, between Raiffeisen Bank Rt. whose registered office is at H-1054
Budapest, Akademia u. 6. ("RAIFFEISEN") and the Mortgagor, Raiffeisen has
granted a credit facility ("RAIFFEISEN FACILITY") in a principal amount
equal to HUF 3,155,000,000 to the Mortgagor and pursuant to the loan
agreement dated as of March 4, 2004, as amended, between Magyar
Export-Import Bank Rt. whose registered office is at H-1065 Budapest,
Nagymezo u. 46-48. ("EXIMBANK") and the Mortgagor, Eximbank has granted a
loan ("EXIMBANK FACILITY") in a principal amount equal to USD 1,600,000 to
the Mortgagor (The Raiffeisen Facility and the Eximbank Facility
collectively the "EXISTING FACILITIES").

         WHEREAS, there are Existing Liens (as defined below) in favor of
Raiffeisen and certain affiliates thereof and Eximbank over certain
movables, immovables and receivables of the Mortgagor to secure the payment
obligations of the Mortgagor under the Existing Facilities.

         WHEREAS, Zoltek Companies, Inc., whose chief executive office is
located at 3101 McKelvey Road, St. Louis, Missouri 63044 and whose U.S.
Federal Tax Identification Number is 43-1311101 (the "BORROWER"), each
Secured Party and the Administrative Agent desire to enter into the Loan and
Warrant Agreement ("LOAN AGREEMENT") on the date hereof, pursuant to which
each Secured Party agrees severally to make a loan to the Borrower in a
principal amount equal to the Loan Amount (as defined below) which shall be
evidenced by the issuance by the Borrower to such Secured Party of one of
the Borrower's Senior Secured 7% Convertible Notes, due 42 months from
issuance, in the Loan Amount owing to such Secured Party (each a "NOTE" and,
collectively with each Note of each other Secured Party, the "NOTES").

         WHEREAS, in connection with the Loan Agreement and the Notes, the
Mortgagor and each Secured Party desire to execute this Agreement, the
Guarantee Agreement and the Security Agreement.

         WHEREAS, the Mortgagor desires to repay from the Loan Amounts the
loans under the Existing Facilities to the extent they are secured by the
assets belonging to the Mortgagor's carbon fiber business, that is, USD
10,400,000 from the Raiffeisen Facility ("RAIFFEISEN PREPAYMENT") and USD
1,600,000 from the Eximbank Facility ("EXIMBANK PREPAYMENT").

         WHEREAS, as a condition of entering into the transactions
contemplated by the Loan Agreement and the Notes, Raiffeisen, certain
affiliates of Raiffeisen, Eximbank, the Mortgagor, the Secured Parties and
the Administrative Agent entered into an agreement ("WAIVER AGREEMENT") on
the date hereof, pursuant to which Raiffeisen, its affiliates and Eximbank
agreed to deliver to the Administrative Agent certain waivers and other
documents which are needed for the termination of the Existing Liens upon
the Real Properties (as defined below) to be encumbered by the New Liens, in
accordance with the terms set forth therein.

         WHEREAS, in order to induce the Secured Parties to enter into the
transactions contemplated by the Loan Agreement and the Notes, the Mortgagor
has agreed to execute and deliver to the Secured Parties and the
Administrative Agent this Agreement.

         NOW, THEREFORE, in consideration of the agreements herein contained
and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:

         1.       Certain Definitions.
                  -------------------

                  (a)    As used in this Agreement, the following terms have
the meanings specified below:

                  "CIVIL CODE" means Act IV of 1959 of the Civil Code of the
         Republic of Hungary, as amended.

                  "DECREE" means decree No. 109/1999. (XII. 29.) of the
         Ministry of Agriculture and Regional Development on the execution of
         Act CXLI of 1997 on the Land Register.

                  "LOAN AMOUNT" means the amount set opposite the name of
         each Secured Party in Schedule A attached hereto as inseparable
         part of this Agreement.

                  "OBLIGATIONS" means, with respect to each Secured Party,
         the due and punctual payment of (i) the Loan Amount owing to such
         Secured Party, having a maturity date of the 42nd month anniversary
         of issuance of the Note and (ii) interest (including interest on
         the outstanding amount of the Note at a rate 7 % percent per annum
         payable in cash quarterly in arrears on each March 31, June 30,
         September 30 and December 31 or as otherwise agreed in the Note and
         interest on overdue amounts, whether accrued during the pendency of
         any bankruptcy, insolvency, receivership or other similar
         proceeding, regardless of whether allowed or allowable in such
         proceeding), when due, whether at maturity, by acceleration, upon
         one or more dates set for prepayment or otherwise, and (iii) all
         other monetary obligations, including without limitation in respect
         of fees, commissions, costs, expenses and indemnities, whether
         primary, secondary, direct, contingent, fixed or otherwise
         (including monetary obligations incurred during the pendency of any
         bankruptcy, insolvency, receivership or other similar proceeding,
         regardless of whether allowed or allowable in such proceeding), of
         the Borrower to such Secured Party under any of the Transaction
         Documents.

                  "PERMITTED LIENS" means the following:

                                     2

                         (i)    any Liens existing on the date hereof and
         specifically disclosed in Schedule B attached hereto as inseparable
                                   ----------
         part of this Agreement ("EXISTING LIENS"), provided that after the
                                                    -------- ----
         10th day following the date on which the amounts of Raiffeisen
         Prepayment and Eximbank Prepayment have been credited in full to the
         accounts set forth in the Waiver Agreement ("SPECIFIED DATE"), all
         Existing Liens shall cease to be "Permitted Liens", unless a request
         for cancellation of such Existing Lien has been duly filed by the
         Mortgagor with, and recorded by the Land Register until the Specified
         Date, in which case the Existing Lien shall cease to be "Permitted
         Liens" after the 60th day following the Specified Date;

                         (ii)   Liens in favor of the Secured Parties and/or the
         Administrative Agent pursuant to the Transaction Documents; and

                         (iii)  Liens arising by mandatory provisions of
         applicable laws.

                  "REAL PROPERTIES" means the parcels of real
         property specified in Schedule C attached hereto as inseparable
                               ----------
         part of this Agreement, all being registered in the Land Register
         kept by the Land Bureaux of District Esztergom (in Hungarian:
         "Esztergomi Korzeti Foldhivatal") (the "LAND BUREAUX").

                  "SALE VALUE" means, with respect to all or any portion of
         the Real Properties, the value thereof (expressed in U.S. Dollars)
         as proposed by the Administrative Agent and agreed to by the
         Mortgagor, provided that in the event that the Mortgagor shall not
                    --------
         have agreed to any such proposal within 5 days thereof, the value
         ascribed thereto by the Mortgagor in its latest calculation of the
         value thereof (expressed in U.S. Dollars) for purposes of
         demonstrating that there is no Default under paragraph (xxi) of the
         defined term "Event of Default" contained in each of the Notes, to
         the extent agreed to by the Administrative Agent for purposes of
         determining "Sale Value", further provided that in the event that
                                   ------- --------
         the Administrative Agent shall not agree to any such value ascribed
         thereto by the Mortgagor, the maximum value thereof (expressed in
         U.S. Dollars) determined by any independent valuation expert of
         recognized standing selected by the Administrative Agent using any
         reasonable method as would, in the reasonable judgment of such
         expert, allow for either of the following to occur, in accordance
         with the other terms and conditions of this Agreement, within no
         more than three months of the date such expert sends notice of the
         amount of such valuation to each of the Administrative Agent and
         the Mortgagor: (i) the sale or other disposition thereof, or (ii)
         the entry by the Administrative Agent into an agreement with a
         reputable and financially sound third party for the purchase
         thereof by such third party within no more than three months of the
         date of such agreement.

                  "TRADING DAY" means (i) a day on which the common stock of
         the Borrower, $0.01 par value per share, and any securities into
         which such common stock may hereafter be reclassified ("COMMON
         STOCK") is traded on a Trading Market (other than the OTC Bulletin
         Board), or (ii) if the Common Stock is not traded on a Trading
         Market, a day on which the Common Stock is traded in the
         over-the-counter market, as reported by the OTC Bulletin Board or
         the National Quotation Bureau Incorporated, or (iii) if the Common
         Stock is not traded on a Trading Market, a day on which the Common
         Stock is

                                     3

         quoted in the over-the-counter market as reported by the
         National Quotation Bureau Incorporated (or any similar organization
         or agency succeeding to its functions of reporting prices);
         provided, that in the event that the Common Stock is not listed or
         quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day
         shall mean any day except Saturday, Sunday and any day that is a
         federal legal holiday or a day on which banking institutions in the
         State of New York are authorized or required by law or other
         governmental action to close.

                  "TRADING MARKET" means Nasdaq National Market, the OTC
         Bulletin Board or any of the New York Stock Exchange, the American
         Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap
         Market on which the Common Stock is then listed or quoted.

                  (b)    Terms used in this Agreement but not otherwise defined
in this Agreement that are defined in the Loan Agreement shall have the
respective meanings given such terms in the Loan Agreement as in effect on
the date hereof and, by signing this Agreement, the Mortgagor acknowledges
having received and reviewed a copy of the Loan Agreement.

         2.       Grant of Mortgages. As an inducement for each Secured Party
                  ------------------
to enter into the transactions contemplated by the Transaction Documents and
to secure the complete and timely payment, performance and discharge in
full, as the case may be, of the Obligations owing to such Secured Party,
each Secured Party and the Mortgagor hereby create in favor of such Secured
Party in accordance with Section 262 (1) of the Civil Code a several
mortgage (each a "MORTGAGE" and collectively the "MORTGAGES") on all of the
Real Properties.

         3.       Registration of Mortgages. Each Mortgage shall be created by
                  -------------------------
its registration in the Land Register kept by the Land Bureaux. The Mortgagor
shall, immediately after the Mortgages shall have been registered, record in
its accounting system and indicate in all of its financial reports the fact
that the Mortgages are created over the Real Properties.

         4.       Ranking; Application for Registrations. Each Mortgage
                  --------------------------------------
shall rank pari passu with each other Mortgage. The Mortgagor and the
Secured Parties hereby jointly request the Land Bureaux to register each
Mortgage in the Land Register in favor of the respective Secured Party over
each Real Property to secure the Obligations owing to such Secured Party and
simultaneously record a note that each Mortgage shall rank pari passu with
each other Mortgage. The Mortgagor and the Secured Parties hereby jointly
request the Land Bureaux to record in accordance with Section 38 of the
Decree that each Mortgage shall rank ahead of and shall not be subject to
any Permitted Lien. The Mortgagor hereby irrevocably gives its consent to
such registrations. The Debtor and the Secured Parties hereby authorize the
Administrative Agent to apply for the registration of the Mortgages in the
Land Register. The Administrative Agent shall immediately notify the
Mortgagor and the Secured Parties of submitting the application by sending a
copy thereof sealed by the Land Bureaux to certify the delivery of such
application.

         5.       Representations, Warranties, Covenants and Agreements
                  -----------------------------------------------------
of the Mortgagor. The Mortgagor represents and warrants to, and covenants
----------------
and agrees with, each of the Secured Parties as follows:

                                     4

                  (a)    The Mortgagor has the requisite corporate power and
authority to enter into this Agreement and to otherwise carry out its
obligations thereunder. The execution, delivery and performance by the
Mortgagor of this Agreement and the registration of the Mortgages in
accordance with this Agreement have been duly authorized by all necessary
action on the part of the Mortgagor and no further action is required by the
Mortgagor.

                  (b)    The Real Properties constitute all of the real
property (a) in which the Mortgagor has an interest, and (b) upon which the
Mortgagor currently conducts its carbon fiber business.

                  (c)    The Mortgagor is the sole owner of the Real
Properties, free and clear of any Liens (including any right recorded in the
Land Register to establish a Lien having the priority rank of such record)
other than Permitted Liens, and is fully authorized to grant the Mortgages
under this Agreement. No registration of any Lien has been or shall be,
before submitting the application for registration of the Mortgages,
requested (or authorized to do so) by the Mortgagor covering the Real
Properties. So long as this Agreement shall be in effect, the Mortgagor
shall not file (or authorize the filing of) a request for registration of
any Lien covering the Real Properties (other than request for registration
of the Mortgages) without the prior consent of the Administrative Agent.

                  (d)    The Mortgagor has no knowledge of any claim that any
Mortgage or the Mortgagor's use of any Real Property violates the rights of
any third party. There has been no adverse decision of which the Mortgagor
is aware as to the Mortgagor's exclusive right to use the Real Properties,
and, to the knowledge of the Mortgagor there is no proceeding involving said
rights pending or threatened before any court, judicial body, administrative
or regulatory agency, arbitrator or other governmental authority.

                  (e)    Upon registration of the Mortgages in the Land
Register, this Agreement creates in favor of each Secured Party a valid
mortgage on the Real Properties, securing the payment and satisfaction in
full of the Obligations owing to such Secured Party, which is prior to all
other Liens now existing or hereafter created or arising on the Real
Properties. Except for the registration of the Mortgages in the Land
Register, no authorization or approval of or filing with or notice to any
governmental authority or regulatory body is required either: (i) for the
grant by the Mortgagor of, or the effectiveness of, the Mortgages granted
hereby or for the execution, delivery and performance of this Agreement by
the Mortgagor or (ii) for the perfection of or exercise by the
Administrative Agent and the Secured Parties of their rights and remedies
hereunder.

                  (f)    The execution, delivery and performance of this
Agreement does not conflict with or cause a breach or default, or an event
that with or without the passage of time or notice, shall constitute a
breach or default, under any agreement to which the Mortgagor is a party or
by which the Mortgagor is bound. No consent (including, without limitation,
from stock holders or creditors of the Mortgagor) is required for the
Mortgagor to enter into and perform its obligations hereunder, other than
consents already obtained by the Mortgagor.

                  (g)    The Mortgagor shall at all times maintain the
Mortgages provided for hereunder as valid and perfected first priority
Mortgages on the Real Properties in favor of each

                                     5

Secured Party and insure that such Mortgages remain senior to all existing
and hereafter created Liens. The Mortgagor shall safeguard and protect the
Real Properties. The Mortgagor hereby agrees to defend the same against any
and all persons.

                  (h)    Unless by operation of mandatory provisions of laws,
the Mortgagor will not allow any Real Property to be forfeited or dedicated
to the public without the prior written consent of the Administrative Agent.
Except pursuant to Section 15 hereof, the Mortgagor will not transfer,
pledge, hypothecate, encumber, license, sell or otherwise dispose of any of
the Real Properties without the prior written consent of the Administrative
Agent.

                  (i)    The Mortgagor shall keep the Real Properties
adequately insured in favor of the Administrative Agent (for the benefit of
the Secured Parties) against all risks which is customary for Hungarian
companies carrying out similar activities to insure.

                  (j)    The Mortgagor shall keep and preserve the Real
Properties in good condition, unless where the failure to comply with the
foregoing provisions does not result in an adverse effect on the value of
the Real Properties or on the Secured Parties' Mortgage therein.

                  (k)    The Mortgagor shall, within ten (10) days of obtaining
knowledge thereof, advise the Administrative Agent, in sufficient detail, of
the occurrence of any event which would have a material adverse effect on
the value of the Real Properties or on any Mortgage therein.

                  (l)    The Mortgagor shall promptly execute and deliver to
the Secured Parties such further deeds, mortgages, assignments, security
agreements or other instruments, documents, certificates and assurances and
take such further action as necessary to perfect, protect or enforce any
Mortgage in the Real Properties.

                  (m)    The Mortgagor shall permit the Administrative Agent
and its representatives and agents upon prior written notice by the
Administrative Agent (acting upon instruction of any Secured Party) to
inspect the Real Properties at any time during normal business hours, and to
make copies of records pertaining thereto as may be reasonably requested by
the Administrative Agent (acting upon instruction of any Secured Party) from
time to time, all of which shall be at the sole cost and expense of (i) if
an Event of Default shall have occurred and be continuing at the inception
of such inspection, the Mortgagor, or (ii) in all other events, the Secured
Party initiating such inspection.

                  (n)    The Mortgagor shall promptly notify the Administrative
Agent in sufficient detail upon becoming aware of any attachment,
garnishment, execution or other legal process levied against any Real
Property and of any other information received by the Mortgagor that
reasonably would be expected to have an adverse affect on the value of any
Real Property, any Mortgage or the rights and remedies of the Secured
Parties hereunder.

                  (o)    The Mortgagor shall not use or permit any Real
Property to be used unlawfully or in violation of any provision of this
Agreement or any applicable statute, regulation or ordinance or any policy
of insurance covering the Real Properties where violation is reasonably
likely to have a material adverse effect on the Secured Parties' rights in
the Real Properties or the Administrative Agent's or any Secured Party's
ability to foreclose on any Real Property.

                                     6

                  (p)    The Mortgagor shall not cause or suffer to exist any
Lien in or to any of the Real Properties other than Permitted Liens without
the prior written consent of the Administrative Agent.

                  (q)    The Mortgagor shall notify the Administrative Agent of
any change in the Mortgagor's name, identity, chief place of business, chief
executive office or residence within 30 days of such change.

         6.       [Reserved]

         7.       [Reserved]

         8.       Rights and Remedies Upon Default. Upon the occurrence
                  --------------------------------
and during the continuation of any Event of Default and the delivery to the
Borrower of an Event Notice, the Administrative Agent (on behalf of, and for
the benefit of each Secured Party) shall become entitled to seek
satisfaction from the Real Properties on the third Trading Day following the
date of delivery of the Event Notice and the Administrative Agent shall have
the right to exercise all of the remedies conferred hereunder, under the
Notes, and the Administrative Agent shall have all the rights and remedies
of a secured creditor under the Civil Code. Without limitation, the
Administrative Agent shall have the following rights and powers:

                  (a)    The Administrative Agent shall have the right to seek
satisfaction of all of the Obligations owing to the Secured Parties from the
Real Properties via court execution, as provided under Section 255 (1) of
the Civil Code.

                  (b)    The Administrative Agent shall have the right to take
possession of the Real Properties in accordance with Sections 257 and 258
(1) of the Civil Code. The Administrative Agent shall have the right to
assign, sell, or otherwise dispose of and deliver all or any part of the
Real Properties (or designate a person who officially deals with granting
loans against security and/or organizing public sales to do so) as provided
under Sections 257 and 258 of the Civil Code, at public or private sale or
otherwise, for a purchase price not less than the Sale Value, in U.S.
Dollars (or an equivalent amount in any other currency selected by the
Administrative Agent), for cash or on credit or for future delivery, in such
parcel or parcels and at such time or times within a maximum period of 15
months from the date of the Event Notice giving rise thereto, and at such
place or places, and upon such terms and conditions as the Administrative
Agent may deem commercially reasonable and as are in compliance with any
applicable laws. Upon each such sale, assignment or other transfer of any
Real Properties, the Administrative Agent and/or any Secured Party may
purchase all or any part of the Real Properties being sold, free from and
discharged of all trusts, claims, right of redemption and equities of the
Mortgagor, which are hereby waived and released.

                  (c)    The Administrative Agent may, in order to implement
the assignment, sale or other disposition of any Real Property pursuant to
this Section, execute and deliver (pursuant to the authority provided for in
Section 13) on behalf of the Mortgagor one or more instruments of assignment
of the Real Property in form suitable for filing, recording or registration
in any jurisdictions as the Secured Parties may determine advisable.

                                     7

         9.       Applications of Proceeds; Expenses. (a) The proceeds of
                  ----------------------------------
any such sale or other disposition of any Real Property hereunder shall be
applied first, to the reasonable expenses of retaking, holding, storing,
processing and preparing for sale, selling, and the like (including, without
limitation, any taxes, fees and other costs incurred in connection
therewith) of that Real Property, to the reasonable attorneys' fees and
expenses incurred by the Administrative Agent and/or Secured Parties in
enforcing its rights hereunder, and then to satisfaction of the Obligations,
and to the payment of any other amounts required by applicable law, after
which the Secured Parties shall pay to the Mortgagor any surplus proceeds.
If, upon the sale or other disposition of the Real Properties, the proceeds
thereof are insufficient to pay all amounts to which the Secured Parties are
legally entitled, the Mortgagor will not be liable for the deficiency. To
the extent permitted by applicable law, the Mortgagor waives all claims,
damages and demands against the Secured Parties arising out of the
repossession, removal, retention or sale of the Real Properties, unless due
to the gross negligence or willful misconduct of the Administrative Agent
and/or Secured Parties.

                  (b)    The Mortgagor agrees to pay all out-of-pocket fees,
costs and expenses reasonably incurred in connection with the registration
of the Mortgages in the Land Register, including, without limitation, any
partial releases and/or termination statements related thereto or any
expenses of any searches reasonably required by the Administrative Agent.
The Mortgagor shall also pay all other claims and charges which in the
reasonable opinion of the Administrative Agent and/or Secured Parties would
reasonably be expected to prejudice, imperil or otherwise affect the Real
Properties or any Mortgage. The Mortgagor will also, upon demand, pay to the
Administrative Agent and/or Secured Parties the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which the Administrative Agent and/or
Secured Parties may incur in connection with the inspection or sale of, or
other realization upon, any of the Real Properties.

         10.      Responsibility for Real Properties. The Mortgagor
                  ----------------------------------
shall assume all liabilities and responsibility in connection with all Real
Properties and provide without delay, upon occurrence of any material
adverse change in the value of any Real Property, adequate security of the
Obligations.

         11.      Mortgages Absolute. In the event that at any time the
                  ------------------
transfer of any Real Property or any payment received by the Secured Parties
hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance
under any applicable bankruptcy or insolvency laws, or shall be deemed to be
otherwise due to any party other than the Secured Parties, then, in any such
event, the Mortgagor's obligations hereunder shall survive, and shall not be
discharged or satisfied by any prior payment thereof, but shall remain a
valid and binding obligation enforceable in accordance with the terms and
provisions hereof. The Mortgagor waives all right to require the Secured
Parties to proceed against any other person or to apply any Real Property
which the Secured Parties may hold at any time, or to marshal assets, or to
pursue any other remedy. The Mortgagor waives any defense arising by reason
of the application of the statute of limitations to any obligation secured
hereby.

         12.      Term of Mortgage. Each Mortgage shall terminate on the
                  ----------------
date on which all payments under the respective Note have been made in full
or otherwise converted pursuant to

                                     8

the terms thereof and the respective Obligations have been paid or
discharged in full. Upon such termination, the respective Secured Party, at
the request and at the expense of the Mortgagor, will join in executing any
termination statement required for cancellation of the Mortgage from the
Land Register or otherwise evidencing termination of the Mortgage. The
Mortgagor shall be responsible for filing such termination notice with the
Land Bureaux.

         13.      Power of Attorney; Further Assurances. (a) The
                  -------------------------------------
Mortgagor hereby authorizes the Administrative Agent and each Secured Party,
and their respective officers, agents, successors or assigns with full power
of substitution, as the Mortgagor's true and lawful attorney-in-fact, with
power, in the name of the Mortgagor, to, after the occurrence and during the
continuance of an Event of Default, (i) pay or discharge taxes, liens,
Mortgages or other encumbrances at any time levied or placed on or
threatened against the Real Properties; (ii) to demand, collect, receipt
for, compromise, settle and sue for monies due in respect of the Real
Properties; and (iii) generally, to do, at the option of such Secured Party
or the Administrative Agent, as the case may be, and at the Mortgagor's
expense, at any time, or from time to time, all acts and things which such
Secured Party or the Administrative Agent, as the case may be, deems
necessary to protect, preserve and realize upon the Real Properties and the
Mortgages granted thereover, in order to effect the intent of this Agreement
and the Notes, all as fully and effectually as the Mortgagor might or could
do; and the Mortgagor hereby ratifies all that said attorney shall lawfully
do or cause to be done by virtue hereof.

                  (b)    On a continuing basis, the Mortgagor will make,
execute, acknowledge, deliver, file and record, as the case may be, with the
Land Register all such instruments, and take all such action as necessary to
perfect any Mortgage granted hereunder and otherwise to carry out the intent
and purposes of this Agreement, or for assuring and confirming to the
Secured Parties the grant or perfection of a first priority Mortgage in the
Real Properties, subject only to Permitted Prior Mortgages.

                  (c)    The Mortgagor hereby appoints each Secured Party and
the Administrative Agent as the Mortgagor's attorney-in-fact, with full
authority in the place and stead of the Mortgagor and in the name of the
Mortgagor, from time to time to file with the Land Register, any amendment
of the data recorded in the Land Register with respect the Mortgage.

         14.      Administrative Agent. The Administrative Agent shall
                  --------------------
give prompt notice to each Secured Party of each notice or request required
or permitted to be given to the Administrative Agent by the Mortgagor
pursuant to the terms of this Agreement. The Administrative Agent will
distribute to each Secured Party each instrument and other agreement
received for its account and copies of all other communications received by
the Administrative Agent from the Mortgagor for distribution to the Secured
Parties by the Administrative Agent in accordance with the terms of this
Agreement. Notwithstanding anything herein contained to the contrary, all
notices to and communications with the Mortgagor under this Agreement shall
be effected by the Secured Party through the Administrative Agent.

         15.      Conditions for Sale of Real Properties by Mortgagor.
                  ---------------------------------------------------
The Mortgagor shall be entitled to sell any or all Real Properties to an
unaffiliated purchaser for a net purchase price which is equal to or greater
than the fair market value of such Real Properties (the "PURCHASE PRICE") if
such purchaser shall deliver the Purchase Price to the Secured Parties (on a
pro-rata

                                     9

basis) in payment of the Borrower Prepayment Amount (as defined in the
Notes) for the prepayment of such portion of the outstanding principal
amount of Notes held by the Secured Parties for which such Borrower
Prepayment Amount shall apply. Upon the Secured Parties' unconditional
receipt of the Purchase Price, the Mortgage shall automatically terminate
with respect to the Real Properties so sold and the Secured Parties shall
cooperate with the Mortgagor in making the filings with the Land Register in
order to evidence such termination. Notwithstanding anything herein to the
contrary, if, as a result of a potential sale of the Real Property pursuant
to the immediately preceding sentence, there shall remain an outstanding
principal amount of Notes (including accrued interest thereon) then held by
the Secured Parties, then such sale shall only be permitted if it would
result in the receipt by the Secured Parties of a Borrower Prepayment Amount
sufficient to prepay no less than 50% of the outstanding principal balance
of the Notes.

         16.      Notices. Any and all notices or other communications
                  -------
or deliveries hereunder (including without limitation any Event Notice)
shall be in writing and shall be deemed given and effective on the earliest
of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section
prior to 12:00 p.m. (New York City time) on a Trading Day, (ii) the next
Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in this Section
on a day that is not a Trading Day or later than 12:00 p.m. (New York City
time) on any Trading Day, (iii) the Trading Day following the date of
mailing, if sent by internationally recognized overnight courier service, or
(iv) upon actual receipt by the party to whom such notice is required to be
given, in each case if delivered to the following addresses:

If to the Borrower (this address being set forth solely for the purposes of
evidencing the date of deemed receipt by the Borrower of an Event Notice in
the application of Section 8 hereunder):

                           Zoltek Companies, Inc.
                           3101 McKelvey Rd.
                           St. Louis, Missouri 63044
                           Facsimile No.:  (314) 291-9082
                           Attention: Chief Financial Officer

If to the Mortgagor:

                           Zoltek Vegyipari Reszvenytarsasag
                           H-2537 Nyergesujfalu
                           Varga Jozsef ter 1.
                           Hungary
                           Facsimile No.: +36 33 536 150
                           Attn: Gyorgy Bakos, Chief Financial Officer

With a copy to:

                           Thompson Coburn LLP
                           One US Bank Plaza
                           St. Louis, Missouri  63101

                                     10

                           Facsimile No.:  (314) 552-7000
                           Attn: Thomas A. Litz, Esq.

                                    and

                           Zoltek Companies, Inc.
                           3101 McKelvey Rd.
                           St. Louis, Missouri 63044
                           Facsimile No.:  (314) 291-9082
                           Attention: Chief Financial Officer

If to any
Secured Party:        To the address set forth under such Secured Party's name
                      on its signature page hereto.

If to the
Administrative
Agent:                To the address set forth under the Administrative Agent's
                      name on its signature page hereto.

         17.      Other Security. To the extent that the Obligations are
                  --------------
now or hereafter secured by property other than the Real Properties or by
the guarantee, endorsement or property of any other person, firm,
corporation or other entity, then the Secured Parties shall have the right,
in their sole discretion, to pursue, relinquish, subordinate, modify or take
any other action with respect thereto, without in any way modifying or
affecting any of the Secured Parties' rights and remedies hereunder.

         18.      Miscellaneous. (a) No course of dealing between the
                  -------------
Mortgagor and the Administrative Agent or any Secured Party, nor any failure
to exercise, nor any delay in exercising, on the part of the Administrative
Agent or any Secured Party, any right, power or privilege hereunder, under
the Notes or under this Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege
hereunder or thereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.

                  (b)    All of the rights and remedies of the Administrative
Agent and the Secured Parties with respect to the Real Properties, whether
established hereby, by the Notes or by any other agreements, instruments or
documents or by law shall be cumulative and may be exercised singly or
concurrently.

                  (c)    This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and is intended to
supersede all prior negotiations, understandings and agreements with respect
thereto. Except as specifically set forth in this Agreement, no provision of
this Agreement may be modified or amended except by a written agreement
signed by the parties hereto.

                                     11

                  (d)    In the event that any provision of this Agreement is
held to be invalid, prohibited or unenforceable in any jurisdiction for any
reason, unless such provision is narrowed by judicial construction, this
Agreement shall, as to such jurisdiction, be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drawn so as not
to be invalid, prohibited or unenforceable. If, notwithstanding the
foregoing, any provision of this Agreement is held to be invalid, prohibited
or unenforceable in any jurisdiction, such provision, as to such
jurisdiction, shall be ineffective to the extent of such invalidity,
prohibition or unenforceability without invalidating the remaining portion
of such provision or the other provisions of this Agreement and without
affecting the validity or enforceability of such provision or the other
provisions of this Agreement in any other jurisdiction.

                  (e)    The Administrative Agent and each Secured Party agree
that neither this Agreement nor any provision hereof may be waived, amended,
supplemented or otherwise modified by the Administrative Agent or such
Secured Party except in accordance with the terms of Section 8.4 of the Loan
Agreement.

                  (f)    This Agreement shall be binding upon and inure to the
benefit of each party hereto and its successors and assigns.

                  (g)    Each party shall take such further action and execute
and deliver such further documents as may be necessary or appropriate in
order to carry out the provisions and purposes of this Agreement.

                  (h)    This Agreement shall be construed in accordance with
the laws of the Republic of Hungary. The parties hereto irrevocably agree
that the Hungarian courts shall have jurisdiction to settle any dispute,
suit, action or proceedings which may arise out of or in connection with
this Agreement.

                  (i)    This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile signature were the
original thereof.

                                     12

         IN WITNESS WHEREOF, the parties hereto have caused this Mortgage
Agreement to be duly executed on the day and year first above written.

                                   ZOLTEK VEGYIPARI RESZVENYTARSASAG

                                   By:
                                      ------------------------------------
                                      Name:
                                      Title:

                                     13

         IN WITNESS WHEREOF, the parties hereto have caused this Mortgage
Agreement to be duly executed on the day and year first above written.

                                   OMICRON MASTER TRUST, as Administrative Agent

                                   By:
                                      ------------------------------------
                                      Name:
                                      Title:

                                   U.S. Federal Tax Identification No.

                                   Address for Notice:

                                     14

         IN WITNESS WHEREOF, the parties hereto have caused this Mortgage
Agreement to be duly executed on the day and year first above written.

                                   [SECURED PARTY]

                                   By:
                                      ------------------------------------
                                      Name:
                                      Title:

                                   U.S. Federal Tax Identification No.

                                   Registered Office:

                                   Address for Notice:

                                   [SECURED PARTY]

                                   By:
                                      ------------------------------------
                                      Name:
                                      Title:

                                   U.S. Federal Tax Identification No.

                                   Registered Office:

                                   Address for Notice:

                                     15

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