Exhibit 10.129

GUARANTY AGREEMENT

 

THIS AGREEMENT, dated as of the 19 day of January, 2004, by and between
Southwall Europe GmbH, an entity incorporated in the State of Saxony, Germany
(the "Guarantor"), and Teijin Limited, a Japanese company having its registered
head office at Osaka Japan ("Teijin").

W I T N E S S E T H:

WHEREAS, Southwall Technologies Inc., a Delaware corporation ("Southwall"), has
entered into the Guaranteed Loan Agreement dated January 19, 2004 pursuant to
which it will repay an obligation of $1,268,827.08 to the Teijin over time in
settlement and satisfaction of all debts owed by Southwall to the Teijin (the
"Loan Agreement"); and

WHEREAS, the Loan Agreement will be beneficial to Guarantor inasmuch as
Guarantor is currently a wholly-owned subsidiary of Southwall; and

WHEREAS, the obligation of Teijin to make the Loan Agreement is subject to the
condition, among others, that the Guarantor shall execute and deliver this
Guaranty Agreement;

NOW, THEREFORE, in consideration of the willingness of Teijin to make the Loan
Agreement to Southwall, and for other good and valuable consideration, receipt
of which is hereby acknowledged by the Guarantor, the Guarantor hereby agrees as
follows:

1. Guaranteed Obligations. The Guarantor does hereby irrevocably and
unconditionally guarantee the due and punctual payment by Southwall according to
the Payment Schedule of its obligations under the Loan Agreement (the
"Guaranteed Obligations").

2. Demand by Teijin. Upon failure by Southwall punctually to pay any Guaranteed
Obligation when due, Teijin may make demand upon the Guarantor for the payment
of such Guaranteed Obligation and the Guarantor binds and obliges itself to make
such payment forthwith upon such demand.

3. Waiver of Demands, Notices, Diligence, etc. The Guarantor hereby assents to
all of the terms and conditions of the Guaranteed Obligations and waives:
(a) demand for the payment of the principal of any Guaranteed Obligation or of
any claim for interest or any part of any thereof (other than the demand
provided for in section 2 hereof); (b) notice of the occurrence of a default or
an event of default under any Guaranteed Obligation; (c) protest of the
nonpayment of the principal of any Guaranteed Obligation or of any claim for
interest or any part thereof; (d) notice of presentment, demand and protest;
(e) notice of acceptance of any guaranty herein provided for or of the terms and
provisions thereof or hereof by Teijin; (f) notice of any indulgences or
extensions granted to Southwall or any successor to Southwall or any person or
party which shall have assumed the obligations of Southwall; (g) any requirement
of diligence or promptness on the part of Teijin in the enforcement of any of
its rights under the provisions of any Guaranteed Obligation or this Guaranty
Agreement; (h) any enforcement of any Guaranteed Obligation; (i) any right which
the Guarantor might have to require Teijin to proceed against Southwall or any
other guarantor of the Guaranteed Obligations or to realize on any collateral
security therefor; and (j) any and all notices of every kind and description
which may be required to be given by any statute or rule of law in any
jurisdiction. The waivers set forth in this section 3 shall be effective
notwithstanding the fact that Southwall ceases to exist by reason of its
liquidation, merger, consolidation or otherwise.

4. Obligations of Guarantor Unconditional. The obligations of the Guarantor
under this Guaranty Agreement shall be unconditional, irrespective of the
validity, regularity or enforceability of any Guaranteed Obligation, and shall
not be affected by any action taken under any Guaranteed Obligation in the
exercise of any right or remedy therein conferred, or by any failure or omission
on the part of Teijin to enforce any right given thereunder or hereunder or any
remedy conferred thereby or hereby, or by any waiver of any term, covenant,
agreement or condition of any Guaranteed Obligation or this Guaranty Agreement,
or by any release of any security or any other guaranty at any time existing for
the benefit of any Guaranteed Obligation, or by the merger or consolidation of
Southwall, or by sale, lease or transfer by Southwall to any person of any or
all of its respective properties, or by any action of Teijin granting indulgence
or extension to, or waiving or acquiescing in any default by, Southwall or any
successor to Southwall or any person or party which shall have assumed its
respective obligations, or by reason of any disability or other defense of
Southwall or any successor to Southwall, or by any modification, alteration, or
by any circumstance whatsoever (with or without notice to or knowledge of the
Guarantor) which may or might in any manner or to any extent vary the risk of
the Guarantor hereunder, it being the purpose and intent of the Guarantor that
the obligations of the Guarantor hereunder shall be absolute and unconditional
under any and all circumstances and shall not be discharged except by payment as
herein provided, and then only to the extent of such payment.

5. Subordination of Claims of Guarantor. Any claims against Southwall to which
the Guarantor may be or become entitled (including, without limitation, claims
by subrogation or otherwise by reason of any payment or performance by the
Guarantor in satisfaction and discharge, in whole or in part, of its obligations
under this Guaranty Agreement) shall be and hereby are made subject and
subordinate to the prior payment or performance in full of the Guaranteed
Obligations.

6. Reinstatement. This Agreement shall continue to be effective, or be
reinstated, as the case may be, if at any time any amount received by Teijin in
respect of the Guaranteed Obligations is rescinded or must otherwise be restored
or returned by Teijin upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of Southwall or the Guarantor or upon the appointment of an
intervenor or conservator of, or trustee or similar official for, Southwall or
the Guarantor or any substantial part of any of their respective properties, or
otherwise, all as though said payments had not been made.

7. Notices. Except as otherwise provided herein, all notices to the Guarantor or
Teijin shall be in writing and shall be deemed to have been sufficiently given
or served for all purposes hereof if personally delivered or mailed by first
class mail, postage prepaid, as follows:

(a) if to the Guarantor:

Southwall Europe GmbH

___________________________________

___________________________________

___________________________________

with a copy to:

Southwall Technologies Inc.

3975 East Bayshore Road

Palo Alto, CA 94304

Attn: Chief Executive Officer

(b) if to Teijin:

Atn: General Manager

Film Business Group, Teijin Limited

 1. ,Uchisaiwaicho 2-chome, Chiyoda-ku

Tokyo 100-8585, Japan ____________________________

or at such other address as the party to whom such notice or demand is directed
may have designated in writing to the other party hereto. A notice shall be
deemed to have been given upon the earlier to occur of (i) ten (10) days after
the date on which it is deposited in the mail or (ii) receipt by the party to
whom such notice is directed.

8 Notarial deed. Immediately upon the execution of this Agreement, SEG shall
execute and record in the appropriate office(s) in Germany a notarial deed
memorializing the terms of this Agreement, in form and substance approved by
Teijin in the exercise of its reasonable commercial judgment.

9. Transfer of SEG Business. SEG shall not sell, assign, transfer or otherwise
dispose of any material portion of its business, or enter into any merger or
other transaction involving a change of control over SEG, without first (a)
giving Tejin not less than fifteen days prior written notice, and (b) providing
Teijin with security or other assurances of the performance of SEG's obligations
under this Agreement, in form and substance approved by Teijin in the exercise
of its reasonable commercial judgment.

 

10. Miscellaneous. This Guaranty Agreement shall inure to the benefit of and be
binding upon Teijin and the Guarantor and their respective successors and
assigns. In case any provision in this Guaranty Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby. This
Guaranty Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which shall be an
original, but all of which together shall constitute one instrument.

1 1. Governing Law. This Guaranty Agreement, including the validity hereof and
the rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by the laws of Germany

 

 

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IN WITNESS WHEREOF, the parties have executed this Guaranty Agreement as a
sealed instrument as of the date first above written.

SOUTHWALL EUROPE GMBH

 

 

By________________________________________

(Title)

 

 

 

TEIJIN LIMITED

 

 

By________________________________________

Takashi Yamagishi

Teijin Group Executive Officer

Deputy General Manager

Films Business Group (Title)

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