Exhibit 10.136.1

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
                  DATED AS OF DECEMBER 18, 2003

This First Amendment to Loan and Security Agreement Dated
As Of December 18, 2003 ("Amendment") is made as of April 29, 2004 by and
between Pacific Business Funding, a division of Greater Bay Bank N.A. successor
to Cupertino National Bank ("PBF") and Southwall Technologies Inc., a Delaware
corporation ("Borrower") and amends that certain Loan and Security Agreement
dated as of December 18, 2003 (the "Agreement") by and between PBF and Borrower,
with respect to the following facts:

RECITALS

1. PBF and Borrower entered into credit facilities
(collectively, the "Loan") pursuant to the terms of the Agreement. The Loan is
evidenced by the Agreement and that certain Secured Promissory Note dated
December 18, 2003 in the original principal amount of $3,000,000 (the "Note")
which has a maturity date of May 5, 2004 ("Maturity Date") and which as of April
29, 2004 had an unpaid principal balance owing of $2,978,473.71, together with
all accruing interest, fees, costs and expenses provided in the Loan Documents,
as defined below.
2. To secure Borrower's obligations to PBF, Borrower has
granted to PBF a security interest in certain of Borrowers assets ("Collateral")
pursuant to the Agreement and that certain Intellectual Property Security
Agreement dated as of May 16, 2003 (the "IP Security Agreement"), executed by
Borrower in favor of PBF (collectively, the "Security Agreement") and was
perfected by the filing of (i) a UCC-1 Financing Statement filed July 30, 2001
as file number 10820626 in the office of the Secretary of State of the state of
Delaware ("DE-UCC"), and (ii) an assignment document recorded January 17, 2001
at Reel No 011461 and Frame No. 0892, in the United States Patent and Trademark
Office ("PTO Recordation"). Pursuant to the Security Agreement, the DE-UCC and
the PTO Recordation, PBF has a valid, perfected lien of first priority upon the
Collateral.
3. This Amendment, the Agreement, the Note, the Security
Agreement, the DE-UCC, and the PTO Recordation together with any other documents
executed by or among the parties in connection with the Loan, and any and all
amendments and modifications thereto shall be collectively referred to as the
Loan Documents.
4. Borrower requests that PBF extend the Maturity Date to
May 5, 2005. Borrower has assured PBF that Borrower shall perform in accordance
with this Amendment and the other Loan Documents. Although PBF is under no
obligation to do so, PBF is willing to extend the Maturity Date to May 5, 2005
on the terms and conditions set forth in the Agreement and this Amendment,
provided all security interests and liens under the Loan Documents shall
continue to exist and remain in full force and effect.

AGREEMENT

NOW THEREFORE, in consideration of the foregoing and for
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1. Definitions. Capitalized terms not otherwise
defined in this Amendment shall have the meaning set forth in the Loan
Documents.
2. Acknowledgment. Borrower acknowledges the truth
and accuracy of each of the facts and legal relations contained in the Recitals
to this Amendment.
3. Amendment to Agreement. The Agreement is hereby
amended as follows.
4. Payments. Borrower shall pay the following sums to
PBF in good funds:
5. Release of Claims.
6. Terms and Conditions of Agreement. Borrower
further acknowledges that the Loan Documents are binding and enforceable
according to their terms, and that PBF has no obligation to extend the Maturity
Date. Borrower agrees that, except as expressly amended herein, all the terms
and conditions of the Loan Documents remain in full force and effect, including
without limitation the grants of security interests therein. Borrower confirms
that the terms of the Agreement and the IP Security Agreement govern the
security interest granted to PBF in the Collateral and the Collateral secures
all debts of Borrower to PBF. Borrower hereby acknowledges and reiterates its
authorization to PBF to file and record such Financing Statements and other
instruments as PBF may deem necessary or desirable from time to time to perfect
or continue the perfection of its security interest in the Collateral.
7. Choice
of Law and Venue, Jury Trial Waiver.
8. Successors. The parties
hereto expressly agree and covenant that this Amendment shall inure to the
benefit of and be binding upon their respective representatives, successors,
trustees and assigns. With the exception of the foregoing, this Amendment is not
for the benefit of any other parties apart from PBF and Borrower.
9. Entire Agreement. This
Amendment contains the entire agreement between the parties pertaining to the
subject matter herein, and supersedes any and all prior and/or contemporaneous
oral or written negotiations, agreements, representations, and understandings,
with respect to such subject matter.
10. Attorneys Fees.
Borrower shall reimburse PBF for all attorneys fees and expenses incurred in the
preparation or negotiation of this Amendment.
11. Execution in Counterparts. This Amendment may be
executed in an original or one or more counterparts, each of which shall
constitute a duplicate original. Executed counterparts transmitted by
facsimile shall be effective as original signatures.

IN WITNESS WHEREOF, PBF and Borrower have executed this
Amendment as of the date set forth in the preamble.

|Southwall Technologies Inc., a Delaware corporation     | Pacific Business Funding, a division of Greater Bay Bank
N.A.
|------------------------------------------------------- | -------------------------------------------------------------
|By: /s/ Maury AustinName:MAURY AUSTINTitle: Interim CFO | By:/s/ Ron ErnstName: RON ERNSTTitle: Senior Credit Officer  





CONSENT

Needham & Company, Inc. (in the capacities set forth
below) hereby consents to this First Amendment To Loan And Security Agreement
Dated As Of December 18, 2003 and agrees that all terms and conditions of the
written agreements heretofore entered into between Needham & Company, Inc.
and PBF (including without limitation that certain Subordination Agreement dated
February 20, 2004 and that certain Pledge Agreement dated February 20, 2004)
remain in full force and effect.

| | Needham & Company, Inc., a corporation, For Itself and In
Its Capacity As Administrative Agent Of And For The Benefit Of The Convertible
Note Purchasers
| | --------------------------------------------------------------------------------------------------------------------------------------------------------
| | By: /s/ Glen W. Albenese                                                                                                                                
| | Its: CFO                                                                                                                                                

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