This Amendment to the Domestic Factoring Agreement (the " Domestic Amendment")
is entered into as of June 16, 2003 (the "Amendment Date"), by and among PACIFIC
BUSINESS FUNDING, a division of Cupertino National Bank ("Purchaser"), and
Southwall Technologies, Inc. ("Seller").

RECITALS

Seller and Purchaser are parties to that certain Domestic Factoring Agreement
dated as of May 16, 2003 collectively (the " Domestic Agreement"). Each of the
parties hereto desires to amend the Agreement in accordance with the terms of
this Amendment.

NOW, THEREFORE, the parties agree as follows

 1. Section 12, (U): Definitions, "Eligible Accounts" shall be eliminated for
    the Domestic Agreement.
 2. Schedule 1, Section 1.3, Reserve: Change N/A to 30%
 3. Schedule 1, Section 2.5 Other Fees: Eliminate everything except; "All such
    other fees are due upon rendering of services or the incurrence of fees, as
    applicable."
 4. Schedule 1, Section 5(V), (II) (a) Financial Reporting: Eliminate "an income
    statement, statement of cash flows, balance sheets"
 5. Schedule 1, Section 7 Grant of Security Interest In Commercial Tort Claims:
    Add the word "None" on the blank line.

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

 

"PURCHASER"

PACIFIC BUSINESS FUNDING,

a division of Cupertino National Bank

 

By /s/ Melvin L. Robbins

Title Senior Vice President

"SELLER"

SOUTHWALL TECHNOLOGIES, INC.

 

 

By /s/ John Lipscomb

Title V.P. Corporate Controller