Exhibit
99.3





**CONTINUING
      SECURITY AGREEMENT****WELLS
      FARGO HSBC TRADE BANK**
    **RIGHTS
      TO PAYMENT AND INVENTORY**
 
 1. **GRANT
OF SECURITY INTEREST** . For
valuable consideration, the undersigned SOUTHWALL
TECHNOLOGIES INC., a Delaware corporation , or any
of them if more than one debtor ("Debtor"), hereby grants and transfers to WELLS
FARGO HSBC TRADE BANK, NATIONAL ASSOCIATION ("Trade Bank") a security interest
in all accounts, deposit accounts, accounts receivable, chattel paper,
instruments, documents and general intangibles (collectively called "Rights to
Payment"), now existing or at any time hereafter, and prior to the termination
hereof, arising (whether they arise from the sale, lease or other disposition of
inventory or from performance of contracts for service, manufacture,
construction, repair or otherwise or from any other source whatsoever),
including all securities, guaranties, warranties, indemnity agreements,
insurance policies and other agreements pertaining to the same or the property
described therein, and in all goods returned by Debtor's customers, together
with a security interest in all inventory, goods held for sale or lease or to be
furnished under contracts for service, goods so leased or furnished, raw
materials, component parts, work in process or materials used or consumed in
Debtor's business and all warehouse receipts, bills of lading and other
documents evidencing goods owned or acquired by Debtor, and all goods covered
thereby, now or at any time hereafter, and prior to the termination hereof,
owned or acquired by Debtor, wherever located, and all products thereof
(collectively called "Inventory"), whether in the possession of Debtor,
warehousemen, bailees or any other person and whether located at Debtor's places
of business or elsewhere (with all Rights to Payment and Inventory referred to
herein collectively as the "Collateral"), together with whatever is receivable
or received when any of the Collateral or proceeds thereof are sold, leased,
collected, exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, including without limitation, all Rights to Payment,
including returned premiums, with respect to any insurance relating to any of
the foregoing, and all Rights to Payment with respect to any cause of action
affecting or relating to any of the foregoing (hereinafter called
"Proceeds").
 
 2. **OBLIGATIONS
SECURED** . The
obligations secured hereby are the payment and performance of: (a) all
present and future Indebtedness of Debtor to Trade Bank; (b) all
obligations of Debtor and rights of Trade Bank under this Agreement; and
(c) all present and future obligations of Debtor to Trade Bank of other
kinds. The word "Indebtedness" is used herein in its most comprehensive sense
and includes any and all advances, debts, obligations and liabilities of Debtor,
or any of them, heretofore, now or hereafter made, incurred or created, whether
voluntary or involuntary and however arising, whether due or not due, absolute
or contingent, liquidated or unliquidated, determined or undetermined, and
whether Debtor may be liable individually or jointly with others, or whether
recovery upon such Indebtedness may be or hereafter becomes
unenforceable.
 
 3. **TERMINATION** . This
Agreement will terminate upon the performance of all obligations of Debtor to
Trade Bank, including without limitation, the payment of all Indebtedness of
Debtor to Trade Bank existing or committed by Trade Bank at the time Trade Bank
receives written notice from Debtor of the termination of this
Agreement.
 
 4. **OBLIGATIONS
OF TRADE BANK** . Trade
Bank has no obligation to make any loans hereunder. Any money received by Trade
Bank in respect of the Collateral may be deposited, at Trade Bank's option, into
a non-interest bearing account over which Debtor shall have no control, and the
same shall, for all purposes, be deemed Collateral hereunder.
 
 5. **REPRESENTATIONS
AND WARRANTIES** . Debtor
represents and warrants to Trade Bank that: (a) Debtor is the owner and has
possession or control of the Collateral and Proceeds; (b) Debtor has the
right to grant a security interest in the Collateral and Proceeds; (c) all
Collateral and Proceeds are genuine, free from liens, adverse claims, setoffs,
default, prepayment, defenses and conditions precedent of any kind or character,
except as heretofore disclosed to Trade Bank in writing; (d) all statements
contained herein and, where applicable, in the Collateral are true and complete;
(e) no financing statement covering any of the Collateral or Proceeds, and
naming any secured party other than Trade Bank, is on file in any public office;
(f) all persons appearing to be obligated on Rights to Payment and Proceeds
have authority and capacity to contract and are bound as they appear to be;
(g) all property subject to chattel paper has been properly registered and
filed in compliance with law and to perfect the interest of Debtor in such
property; and (h) all Rights to Payment and Proceeds comply with all
applicable laws concerning form, content and manner of preparation and
execution, including where applicable Federal Reserve Regulation Z and any
State consumer credit laws.
 
 6. **COVENANTS
OF DEBTOR** .
 
 6.1
    **Debtor
      Agrees in General**:
      (i) to pay Indebtedness secured hereby when due; (ii) to
      indemnify Trade Bank against all losses, claims, demands, liabilities and
      expenses of every kind caused by property subject hereto; (iii) to
      pay all costs and expenses, including reasonable attorneys' fees, incurred
      by Trade Bank in the perfection, preservation, realization, enforcement
      and exercise of its rights, powers and remedies hereunder; (iv) to
      permit Trade Bank to exercise its powers; (v) to execute and deliver
      such documents as Trade Bank deems necessary to create, perfect and
      continue the security interests contemplated hereby; and (vi) not to
      change its chief place of business or the places where Debtor keeps any of
      the Collateral or Debtor's records concerning the Collateral and Proceeds
      without first giving Trade Bank written notice of the address to which
      Debtor is moving same.
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  6.2
    **Debtor
      Agrees with Regard to the Collateral and Proceeds**:
      (i) to insure Inventory and, where applicable, Rights to Payment with
      Trade Bank as loss payee, in form and amounts, under agreements, against
      risks and liabilities, and with insurance companies satisfactory to Trade
      Bank; (ii) not to use any Inventory for any unlawful purpose or in
      any way that would void any insurance required to be carried in connection
      therewith; (iii) not to remove Inventory from Debtor's premises
      without Trade Bank's prior written consent and upon such terms and
      conditions as Trade Bank may require, except for deliveries to buyers in
      the ordinary course of Debtor's business and except Inventory which
      consists of mobile goods as defined in the California Uniform Commercial
      Code, in which case Debtor agrees not to remove or permit the removal of
      the Inventory from its state of domicile for a period in excess of seventy
      five (75) calendar days; (iv) not to permit any lien on the
      Collateral or Proceeds, including without limitation, liens arising from
      the storage of Inventory, except in favor of Trade Bank; (v) not to
      sell, hypothecate or dispose of any of the Collateral or Proceeds, or any
      interest therein, except sales of Inventory to buyers in the ordinary
      course of Debtor's business, without Trade Bank's prior written consent;
      (vi) to furnish reports to Trade Bank of all acquisitions, returns,
      sales and other dispositions of Inventory in such form and detail and at
      such times as Trade Bank may require; (vii) to permit Trade Bank to
      inspect the Collateral at any time; (viii) to keep, in accordance
      with generally
      accepted accounting principles, complete and accurate records regarding
      all Collateral and Proceeds, and to permit Trade Bank to inspect the same
      and make copies thereof at any reasonable time; (ix) if requested by
      Trade Bank, to receive and use reasonable diligence to collect Rights to
      Payment and Proceeds, in trust and as the property of Trade Bank, and to
      immediately endorse as appropriate and deliver such Rights to Payment and
      Proceeds to Trade Bank daily in the exact form in which they are received
      together with a collection report in form satisfactory to Trade Bank;
      (x) not to commingle Rights to Payment, Proceeds or collections
      thereunder with other property; (xi) to give only normal allowances
      and credits and to advise Trade Bank thereof immediately in writing if
      they affect any Rights to Payment or Proceeds; (xii) on demand, to
      deliver to Trade Bank returned property resulting from, or payment equal
      to, such allowances or credits on any Rights to Payment or Proceeds or to
      execute such documents and do such other things as Trade Bank may
      reasonably request for the purpose of perfecting, preserving and enforcing
      its security interest in such returned property; (xiii) from time to
      time, when requested by Trade Bank, to prepare and deliver a schedule of
      all Collateral and Proceeds subject to this Agreement and to assign in
      writing and deliver to Trade Bank all accounts, contracts, leases and
      other chattel paper, instruments, documents and other evidences thereof;
      (xiv) in the event Trade Bank elects to receive payments of Rights to
      Payment or Proceeds hereunder, to pay all expenses incurred by Trade Bank
      in connection therewith, including expenses of accounting, correspondence,
      collection efforts, reporting to account or contract debtors, filing,
      recording, record keeping and expenses incidental thereto; and
      (xv) to provide any service and do any other acts which may be
      necessary to maintain, preserve and protect all Collateral and, as
      appropriate and applicable, to keep all Collateral in good and saleable
      condition, to deal with the Collateral in accordance with the standards
      and practices adhered to generally by users and manufacturers of like
      property, and to keep all Collateral and Proceeds free and clear of all
      defenses, rights of offset and
counterclaims.
  7. **POWERS
OF TRADE BANK** . Debtor
appoints Trade Bank its true attorney in fact to perform any of the following
powers, which are coupled with an interest, are irrevocable until termination of
this Agreement and may be exercised from time to time by Trade Bank's officers
and employees, or any of them, whether or not Debtor is in default: (a) to
perform any obligation of Debtor hereunder in Debtor's name or otherwise;
(b) to give notice of Trade Bank's rights in the Collateral and Proceeds,
to enforce the same and make extension agreements with respect thereto;
(c) to release persons liable on Collateral or Proceeds and to give
receipts and acquittances and compromise disputes in connection therewith;
(d) to release security; (e) to resort to security in any order;
(f) to prepare, execute, file, record or deliver notes, assignments,
schedules, designation statements, financing statements, continuation
statements, termination statements, statements of assignment, applications for
registration or like papers to perfect, preserve or release Trade Bank's
interest in the Collateral and Proceeds; (g) to receive, open and read mail
addressed to Debtor; (h) to take cash, instruments for the payment of money
and other property to which Trade Bank is entitled; (i) to verify facts
concerning the Collateral and Proceeds by inquiry of obligors thereon, or
otherwise, in its own name or a fictitious name; (j) to endorse, collect,
deliver and receive payment under instruments for the payment of money
constituting or relating to Proceeds; (k) to prepare, adjust, execute,
deliver and receive payment under insurance claims, and to collect and receive
payment of and endorse any instrument in payment of loss or returned premiums or
any other insurance refund or return, and to apply such amounts received by
Trade Bank, at Trade Bank's sole option, toward repayment of the Indebtedness or
replacement of the Collateral; (l) to exercise all rights, powers and
remedies which Debtor would have, but for this Agreement, with respect to all
Collateral and Proceeds subject hereto; (m) to enter onto Debtor's premises
in inspecting the Collateral; (n) to make withdrawals from and to close
deposit accounts or other accounts with any financial institution, wherever
located, into which Proceeds may have been deposited, and to apply funds so
withdrawn to payment of the Indebtedness; (o) to preserve or release the
interest evidenced by chattel paper to which Trade Bank is entitled hereunder
and to endorse and deliver evidences of title incidental thereto; and
(p) to do all acts and things and execute all documents in the name of
Debtor or otherwise, deemed by Trade Bank as necessary, proper and convenient in
connection with the preservation, perfection or enforcement of its rights
hereunder.
 
 8. **PAYMENT
OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS** . Debtor
agrees to pay, prior to delinquency, all insurance premiums, taxes, charges,
liens and assessments against the Collateral and Proceeds, and upon the failure
of Debtor to do so, Trade Bank at its option may pay any of them and shall be
the sole judge of the legality or validity thereof and the amount necessary to
discharge the same. Any such payments made by Trade Bank shall be obligations of
Debtor to Trade Bank, due and payable immediately upon demand, together with
interest at a rate determined in accordance with the provisions of Section 12
hereof, and shall be secured by the Collateral and Proceeds, subject to all
terms and conditions of this Agreement.
 
 9. **EVENTS
OF DEFAULT** . The
occurrence of any of the following shall constitute an "Event of Default" under
this Agreement: (a) any default in the payment or performance of any
obligation, or any defined event of default, under (i) any contract or
instrument evidencing any Indebtedness, or (ii) any other agreement between
any Debtor and Trade Bank, including without limitation any loan agreement,
relating to or executed in connection with any Indebtedness; (b) any
representation or warranty made by any Debtor herein shall prove to be
incorrect, false or misleading in any material respect when made; (c) any
Debtor shall fail to observe or perform any obligation or agreement contained
herein; (d) any attachment or like levy on any property of any Debtor; and
(e) Trade Bank, in good faith, believes any or all of the Collateral and/or
Proceeds to be in danger of misuse, dissipation, commingling, loss, theft,
damage or destruction, or otherwise in jeopardy or unsatisfactory in character
or value.
 
 10. **REMEDIES** . Upon
the occurrence of any Event of Default, Trade Bank shall have the right to
declare immediately due and payable all or any Indebtedness secured hereby and
to terminate any commitments to make loans or otherwise extend credit to Debtor.
Trade Bank shall have all other rights, powers, privileges and remedies granted
to a secured party upon default under the California Uniform Commercial Code or
otherwise provided by law, including without limitation, the right to contact
all persons obligated to Debtor on any Collateral or Proceeds and to instruct
such persons to deliver all Collateral and/or Proceeds directly to Trade Bank.
All rights, powers, privileges and remedies of Trade Bank shall be cumulative.
No delay, failure or discontinuance of Trade Bank in exercising any right,
power, privilege or remedy hereunder shall affect or operate as a waiver of such
right, power, privilege or remedy; nor shall any single or partial exercise of
any such right, power, privilege or remedy preclude, waive or otherwise affect
any other or further exercise thereof or the exercise of any other right, power,
privilege or remedy. Any waiver, permit, consent or approval of any kind by
Trade Bank of any default hereunder, or any such waiver of any provisions or
conditions hereof, must be in writing and shall be effective only to the extent
set forth in writing. It is agreed that public or private sales, for cash or on
credit, to a wholesaler or retailer or investor, or user of property of the
types subject to this Agreement, or public auction, are all commercially
reasonable since differences in the sales prices generally realized in the
different kinds of sales are ordinarily offset by the differences in the costs
and credit risks of such sales. While an Event of Default exists:
(a) Debtor will deliver to Trade Bank from time to time, as
requested by Trade Bank, current lists of all Collateral and Proceeds;
(b) Debtor will not dispose of any of the Collateral or Proceeds except on
terms approved by Trade Bank; (c) at Trade Bank's request, Debtor will
assemble and deliver all Collateral and Proceeds, and books and records
pertaining thereto, to Trade Bank at a reasonably convenient place designated by
Trade Bank; and (d) Trade Bank may, without notice to Debtor, enter onto
Debtor's premises and take possession of the Collateral. With respect to any
sale by Trade Bank of any Collateral subject to this Agreement, Debtor hereby
expressly grants to Trade Bank the right to sell such Collateral using any or
all of Debtor's trademarks, trade names, trade name rights and/or proprietary
labels or marks.
 
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 11. **DISPOSITION
OF COLLATERAL AND PROCEEDS** . Upon
the transfer of all or any part of the Indebtedness, Trade Bank may transfer all
or any part of the Collateral or Proceeds and shall be fully discharged
thereafter from all liability and responsibility with respect to any of the
foregoing so transferred, and the transferee shall be vested with all rights and
powers of Trade Bank hereunder with respect to any of the foregoing so
transferred; but with respect to any Collateral or Proceeds not so transferred,
Trade Bank shall retain all rights, powers, privileges and remedies herein
given. Any proceeds of any disposition of any of the Collateral or Proceeds, or
any part thereof, may be applied by Trade Bank to the payment of expenses
incurred by Trade Bank in connection with the foregoing, including reasonable
attorneys' fees, and the balance of such proceeds may be applied by Trade Bank
toward the payment of the Indebtedness in such order of application as Trade
Bank may from time to time elect.
 
 12. **COSTS,
EXPENSES AND ATTORNEYS' FEES** . Debtor
shall pay to Trade Bank immediately upon demand the full amount of all payments,
advances, charges, costs and expenses, including reasonable attorneys' fees (to
include outside counsel fees and all allocated costs of Trade Bank's in-house
counsel), incurred by Trade Bank in exercising any right, power, privilege or
remedy conferred by this Agreement or in the enforcement thereof, including any
of the foregoing incurred in connection with any bankruptcy proceeding relating
to Debtor or the valuation of the Collateral and/or Proceeds, including without
limitation, the seeking of relief from or modification of the automatic stay or
the negotiation and drafting of a cash collateral order. All of the foregoing
shall be paid by Debtor with interest at a rate per annum equal to the greater
of ten percent (10%) or the Prime Rate in effect from time to time. The "Prime
Rate" is a base rate that Wells Fargo Bank, N.A. from time to time establishes
and which serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto.
 
 13. **STATUTE
OF LIMITATIONS** . Until
all Indebtedness shall have been paid in full, the power of sale and all other
rights, powers, privileges and remedies granted to Trade Bank hereunder shall
continue to exist and may be exercised by Trade Bank at any time and from time
to time irrespective of the fact that the Indebtedness or any part thereof may
have become barred by any statute of limitations, or that the personal liability
of Debtor may have ceased, unless such liability shall have ceased due to the
payment in full of all Indebtedness secured hereunder.
 
 14. **MISCELLANEOUS** . The
obligations of Debtor are joint and several; presentment, protest, notice of
protest, notice of dishonor and notice of nonpayment are waived with respect to
any Proceeds to which Trade Bank is entitled hereunder; any right to direct the
application of payments or security for any Indebtedness of Debtor, or
indebtedness of customers of Debtor, and any right to require proceedings
against others or to require exhaustion of security are waived; and consent to
extensions, forbearances or alterations of the terms of Indebtedness, the
release or substitution of security, and the release of guarantors is given with
respect to Proceeds subject to this Agreement; provided however, that in each
instance Trade Bank believes in good faith that the action in question is
commercially reasonable in that it does not unreasonably increase the risk of
nonpayment of the Indebtedness to which the action applies. Until all
Indebtedness shall have been paid in full, no Debtor shall have any right of
subrogation or contribution, and each Debtor hereby waives any benefit of or
right to participate in any of the Collateral or Proceeds or any other security
now or hereafter held by Trade Bank.
 
 15. .
 
 16. **NOTICES** . All
notices, requests and demands required under this Agreement must be in writing,
addressed to Trade Bank at the address specified in any other loan documents
entered into between Debtor and Trade Bank and to Debtor at the address of its
chief executive office (or personal residence, if applicable) specified below or
to such other address as any party may designate by written notice to each other
party, and shall be deemed to have been given or made as follows: (a) if
personally delivered, upon delivery; (b) if sent by mail, upon the earlier of
the date of receipt or three (3) days after deposit in the U.S. mail, first
class and postage prepaid; and (c) if sent by telecopy, upon
receipt.
 
 17. **GOVERNING
LAW; SUCCESSORS, ASSIGNS** . This
Agreement shall be governed by and construed in accordance with the laws of the
State of California, and shall be binding upon and inure to the benefit of the
heirs, executors, administrators, legal representatives, successors and assigns
of the parties.
 
 18. **SEVERABILITY
OF PROVISIONS** . If any
provision of this Agreement shall be held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or any remaining provisions of this Agreement.
 
 Debtor
warrants that its chief executive office (or personal residence, if applicable)
is located at the following address:
 3975
      East Bayshore Road, Palo Alto, CA 94303
  
 IN
WITNESS WHEREOF, this Agreement has been duly executed as of
______________________, 2005
   “BORROWER”
      
      SOUTHWALL
      TECHNOLOGIES INC.
      
      By:
      ___________________________
      
      Title:
      __________________________
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