Document:

EXHIBIT
10.107

 

CUSTOMER’S COPY

Deutsche Bank

LOAN AGREEMENT

 

In the Framework of the

KfW-Beteiligungsfonds (Ost) (117) Programme

 

This Loan Agreement is made

 

between

 

	
  Deutsche Bank Aktiengesellschaft

  
	
  Dresden Branch

  
	
  Glacisstr. 2

  
	
  01099 Dresden

  
	
   

  
	
  - hereinafter called the “Bank” -

  

 

and

 

	
  Southwall Technologies Inc.

  
	
   

  
	
  1029 Corporation Way

  
	
  Palo Alto, CA, 94303

  
	
   

  
	
  - hereinafter called the “Presenter of Capital
  Investment”-

  

 

Article 1: 
Granting of Loan

 

(1)   The bank shall grant a loan earmarked for a
specific purpose to an amount of DEM 2,444,000.00 (in words: German Mark two
million four hundred forty two thousand).

 

(2)   The bank will receive the loan funds from the
Kreditanstalt  für Wiederaufbau (herinafter called “KfW”)
in the framework of the KfW–Beteiligungsfonds
(Ost) program.

 

(3)   Apart from the General Terms and Conditions
of the Bank in the then applicable version, the conditions of the KfW
participation programs, version 12/98 for bank transmission, shall apply to
this loan agreement, both being closely linked to this agreement, as well as
the following conditions:

 

Article 2: 
Earmarking

 

(1)   This loan shall be exclusively used for
funding 100% of the share of the Presenter of Capital Investment to an amount
of 2,442,000.00 in the Southwall Europe GmbH
company, 01897 Großröhrsdorf (hereinafter called “receiver of capital
investment”).

 

(2)   The Presenter of Capital Investment shall
ensure that the funds transmitted to the Receiver of Capital Investment by the
takeover of the share will be exclusively used for strengthening his basis of
equity capital with a view to ensure co-financing of the following activities
in Großröhrsdorf, town, district of Kamenz:

 

 

	
  Machines & equipment:

  	
  DEM

  	
   

  	
  23,100,100.00

  	
   

  
	
  Commercial building costs:

  	
  DEM

  	
   

  	
  15,200,000.00

  	
   

  
	
  Total
  investment under the KfW’s commitment to grant credit:

  	
  DEM

  	
   

  	
  38,300,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The total funding shall be made in the following
  way:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Amount of capital investment:

  	
  DEM

  	
   

  	
  2,442,000.00

  	
   

  
	
  Capital investment of the VMP Venture Management

  	
   

  	
   

  	
   

  	
   

  
	
  Partners GmbH:

  	
  DEM

  	
   

  	
  858,000,00

  	
   

  
	
  Grant /allowance in the framework of GA (joint task

  	
   

  	
   

  	
   

  	
   

  
	
  “improvement of the regional economic structure”)

  	
  DEM

  	
   

  	
  13,404,000.00

  	
   

  
	
  EKE (supplementary equity capital program)

  	
  DEM

  	
   

  	
  4,890,000.00

  	
   

  
	
  Other long-term third party funds

  	
  DEM

  	
   

  	
  13,500,000.00

  	
   

  
	
  Borrower’s own funds

  	
  DEM

  	
   

  	
  3,206,000.00

  	
   

  
	
  Total Funding

  	
  DEM

  	
   

  	
  38,300,000.00

  	
   

  

 

The Presenter of Capital Investment shall monitor the
earmarked use of the funds and provide evidence, accordingly, to both the Bank
and the KfW, on the annexed form upon termination of the project.

The Presenter of Capital Investment shall keep records
on his monitoring of the earmarked use of the participation funds.

 

(3)   The Presenter of Capital Investment shall
notify the Bank instantly on any modification of the amount of capital
investment or of the investment project or of the funding.

 

(4)   In the conditions of the KfW participation
programs, version 12/98 for bank transmission, the KfW reserves the right to
reduce the loan to the bank in due proportion, if the participation does not
come true to the amount envisaged or if the ratio of participation should
change.  The Bank, too, shall have the
right to reduce the loan granted to the Presenter of Capital Investment
accordingly in such case.

If the reduction concerns amounts already paid, the Bank shall immediately
repay the amounts of reduction to the KfW. 
The Presenter of Capital Investment, on his part, undertakes paying the
respective amounts to the Bank immediately.

 

Article 3: 
Payment

 

(1)   The loan shall be paid out 100 per cent.  It shall be fully transmitted to the
Receiver of Capital Investment.  The net
loan shall amount to DEM 2,442,000.00.

(2)   Prior to the payment, the undersigned subsidy
statement for the KfW participation funds, the memorandum of association of the
Receiver of Capital Investment and the annexed Side Letter shall be submitted
to the KfW.

 

(3)   The loan shall be made available as soon as
the Bank will have received the cover funds from the KfW.  The Presenter of Capital Investment is aware
of the fact that the Bank cannot call the cover funds but on maturity of the
payment under the participation agreement and after having submitted a copy of
the undersigned participation agreement to the KfW.

 

2

 

 

(4)   If it turned out after payment, that the
conditions for calling the payment of the loan had not been fully given, the
respective amounts shall immediately be refunded to the Bank which in turn is
obliged to repayment to the KfW.  The
amounts concerned cannot be called again but when the conditions for calling
them have been fulfilled.

 

(5)   The KfW may refuse payment of the loan funds
if the conditions of payment are not fulfilled or if there are any reasons
justifying that the loan be recalled. 
If the Bank does not receive the cover funds from the KfW for any
reason, it shall be released from its obligation of paying out the loan.

 

(6)   As of 08 July 1999, a commitment fee of 0.25%
per month shall be paid upon demand from the KfW on any loan proceeds not

yet paid.

 

(7)   The time of request for funds ends on 08 June
2000.  The Bank shall no longer be bound
to this agreement, if the loan has not been called by that date or if no
extension of the time limit for calling has been granted by the KfW on timely
request.

 

(8)   The loan shall be entered in the books via
special account N° 5390745 30 in the name of Southwall Technologies Inc., Palo
Alto.

 

Article 4: 
Interest Rate

 

(1)   The loan shall be granted on an interest rate
of 5.75% p.a.  The obligation of paying
interest shall begin from the day following the day of payment (day of
transfer) of the loan by the KfW pursuant to Art3 (2).  It shall end the day when the KfW will have
received the amortization payment. 
Payments of interest are due quarterly ex post facto on 31 March, 30
June, 30 September, and 30 December of every year.

 

(2)   With a view to comply with the KfW’s time
requirements, the Bank will debit the account N° 5390745 00 (sic! –
translator’s note) in the name of Southwall Technologies Inc., Palo Alto, in
due time.

 

Article 5: 
Repayment

 

(1)   The loan shall be repaid in a single amount
on 30 June 2009.  Premature repayment
shall not be permissible but after prior consent of the Bank and the KfW.

 

Article 6: 
Accelerated Maturity

 

The loan shall be due for instant repayment, if the
Bank should be obliged to repayment to the KfW or if participation in the
repayment should be recalled.  Premature
repayment of the loan shall require the Bank’s prior content, unless caused by
complete or partial termination of participation by the Receiver of Capital
Investment.  The Bank shall be entitled
to pre–payment indemnity in cases of premature repayment of the loan on
prior consent.

 

3

 

Article 7: 
Consequences of Delay

 

If the Presenter of Capital Investment has failed to
effect any payment (e.g., interest) to the Bank in due time, the Bank shall be
entitled to indemnification for the arrears of 3% p.a. above the then
applicable basic interest rate (as subsequent interest rate of the discount
rate, pursuant to the Discount Transitional Act).

If the delay exceeded one month, the Bank may recall the full amount of the
loan demanding immediate repayment.

 

Article 8: 
Assignment/Providing Security

 

(1)   The Presenter of Capital Investment is aware
of the fact that the Bank will assign the money due under the loan plus any
incidental claims to the KfW.  However,
the Bank shall remain entitled to collecting the assigned receivables in the
course of its orderly business.

 

(2)   The Presenter of Capital Investment shall
assign, by separate statement, all and any claims and rights resulting from the
participation, as far as being financed from this loan, including any
incidental claims (although not the equity participation as such) to the Bank
as security for this loan, independent on whether they have already accrued or
whether are will accrue.  The Receiver
of Capital Investment shall confirm such assignment by separate statement.

 

(3)   The Presenter of Capital Investment shall not
have the right to have security provided without prior consent by the KfW,
unless such security is provided as suretyship or guarantee or the like
provided by shareholders or members of their families with a view to correcting
shifts in property or limitations of liability resulting from the structure of
the Receiver of Capital Investment’s company. 
Securities that have been provided under this paragraph shall be
assigned to the Bank.

 

(4)   The following kind of security for the
portion of the loan made available under the Bank’s commitment shall
additionally be used or provided, - in accordance with separate agreement also
beyond the purpose of security -:

 

Mortgaging deposited
values

 

(5)   The joint liability of securities pursuant to
the General Terms and Conditions and/or special agreement shall remain
unaffected.

 

Article 9: 
Interest Surcharge

 

(1)   The interest rate payable by the Presenter of
Capital Investment pursuant to Art. 4 §(1) shall increase by 3% p.a.
retrospectively from the day of payment under Art. 14 §(1) (a) or (b), or, in
the cases under Art. 14 §(1) (c), (e) or (f) from the day of the event that
lead to the termination, however, to at least 2% p.a. over the then applicable
basic interest rate (as subsequent interest rate of the discount rate, pursuant
to the Discount Transitional Act). 
Payment of the interest is due on first demand of the Bank.

 

4

 

(2)   The above interest surcharge shall be charged
also if the Presenter of Capital Investment does not use the funds made
available to him immediately for the earmarked purpose or if he does not return
them in case of missing possibilities of using them or if he fails notifying
the Bank on a necessary reduction, calculated as from the time of the
respective breach of duty.

 

Article 10: 
Indemnity

 

(1)   In accordance with the KfW’s commitment to
grant credit to the Bank, the Bank shall be indemnified to a percentage of 50%
of the liability for the loan, subject to subclause 2., 7. §§(1) – (7) of the
Conditions of the KfW-Beteiligungsfonds
(Ost) for bank transmission.

 

(2)   The Presenter of Capital Investment shall not
be indemnified against liability.  The
Bank will assert outstanding accounts against the Presenter of Capital
Investment and transfer the share of the proceeds that exceeds its share in the
liability to the KfW.

 

(3)   Complementing subclause 7 (6) of the
Conditions of the KfW-Beteiligungsfonds
(Ost) for bank transmission in their version 12/98, the Presenter of
Capital Investment shall be obliged to pay completely the interests agreed on
till the deficiency.

 

(4)   The Presenter of Capital Investment shall
notify the Bank on any receipt of reflux after maturity of the loan and to pay
out such reflux to the Bank.

 

Article 11: 
Duties to Provide Information

 

(1)   The Presenter of Capital Investment shall be
obliged to submit one copy of his annual financial statements (annual balance
sheet and profit and loss account), unless the Presenter of Capital Investment
be a private person, and those of the Presenter of Capital Investment himself,
together with the necessary comments, to the Bank once in a year.  The Bank shall transmit these documents to
the KfW.  In the case of any delay in
the preparation of the annual financial statements, interim figures shall be
submitted.  The Presenter of Capital
Investment shall immediately notify the Bank on any essential event occurring
to himself or to the Receiver of Capital Investment, particularly on any change
in the amount of participation or on the relationship between partners or on
the participation quota.  As regards the
Receiver of Capital Investment, this shall also apply to any take–over or
disposal of participations in other enterprises, as well as to concluding or
canceling or amending of partnership agreements, and to transferring the
Receiver of Capital Investment in whole or in part.

 

(2)   The Bank, and also the KfW upon coordination
with the Bank, shall have the right any time to verify the Presenter of Capital
Investment’s use of the earmarked loan by examining the business records and
the books of the Presenter of Capital Investment and by obtaining information
on his financial situation.  The KfW
shall have the right to have a certified public accountant do such verification
and examination with the Bank and the Presenter of Capital Investment at the
expense of the Presenter of Capital Investment.  The Presenter of Capital Investment shall ensure that such rights
of verification and examination can also be exercised towards the Receiver of
Capital Investment as regards the refinanced participation of the KfW and the
Bank.

 

5

 

In view of the
right of verification and examination conferred to the Federal Audit Office
pursuant to Art. 91 of the Federal Budget Regulations, the Presenter of Capital
Investment shall ensure that he obtains all documents from the Receiver of
Capital Investment which the Federal Audit Office deems necessary.

 

Article 12: 
Participation Agreement

 

(1)   The Presenter of Capital Investment shall be
obliged to refer explicitly to the KfW-Beteiligungsfonds
(Ost) program in the agreement to be concluded between him and the
Receiver of Capital Investment.

 

(2)   The Presenter of Capital Investment shall be
obliged to conclude the participation agreement in a way complying with the
stipulations of this loan agreement and of the Conditions of the KfW-Beteiligungsfonds (Ost) program for
bank transmission.

 

(3)   The Presenter of Capital Investment and the
Receiver of Capital Investment shall mutually agree on a remuneration for
participation customary in the market.

An appropriate portion of the remuneration for participation shall be agreed on
dependent on the profit.

 

(4)   The participation agreement shall stipulate
that the Receiver of Capital Investment may terminate participation any time in
whole or in part with 12 months’ notice. 
If the participation relationship is terminated, the capital which the
Presenter of Capital Investment had made available to the Receiver of Capital
Investment by virtue of this agreement shall be repaid to the Presenter of
Capital Investment in one single amount proportionally to the share called in.

 

(5)   The Presenter of Capital Investment shall
stipulate his right to be repaid the capital placed at the Receiver of Capital
Investment’s disposal in a way that in the case of a settlement or bankruptcy
his claim will rank after the other creditors of the company but before the
claims of the shareholder(s) and his/their relatives.

 

(6)   In the participation agreement, the Presenter
of Capital Investment shall reserve the right to make legal transactions and
legal acts, which exceed the scope of ordinary business operations and which
might have an considerable impact on the financial and earnings situation of
the Receiver of Capital Investment, dependent on his prior consent.

The Presenter of Capital Investment shall reserve the right to terminate the
participation agreement prematurely for important reasons, particularly for
reasons mentioned under Art. 14 §(1) (b), (c), or (g).  He shall notify the Bank immediately on such
termination.

 

(7)   The participation agreement shall stipulate
the right of the Bank and the KfW any time to verify the use of the earmarked
loan, to examine the business records and the books of the Receiver of Capital
Investment, and to obtain information on his financial situation.

 

(8)   Prior to the payment of the loan valuta, a
copy of the undersigned participation agreement shall be submitted to the Bank
to be transmitted to the KfW.  The
agreement must not give any grounds for objection.

 

6

 

(9)   Any modifications of the participation
agreement shall require the KfW’s consent in writing.

 

Article 13: 
Modifications Requiring Consent

 

(1)   The Presenter of Capital Investment shall
have to obtain the KfW’s prior consent via the Bank, if he wishes to reduce or
terminate participation before the time of repayment fixed in the promise of
credit.

 

(2)   Claims from this loan agreement shall not be
assigned or mortgaged but on the KfW’s consent.  The same applies to any claims from the participation agreement;
the Presenter of Capital Investment shall reach mutual agreement with the
Receiver of Capital Investment to this respect.

 

Article 14: 
The Bank’s Right of termination

 

(1)   The Bank shall have the right any time to
recall the loan for important reasons and to demand immediate repayment of the
loan valuta, including accrued interest, particularly if

 

(a) the Presenter of Capital Investment has
obtained the loan wrongfully or if the loan has not been used for the purpose
it was earmarked for;

 

(b) the conditions of the assumption of the
participation had not been given or the funds from the participation had not
been used for the purpose it was earmarked for,

 

(c) the conditions of granting the loan or of share
takeover have subsequently changed or become inapplicable (e.g., because of
sale of the enterprise or units of the enterprise of the Receiver of Capital
Investment, or change of the status of ownership or participation
relationship), or in any of the cases of termination of the participation
relationship,

 

(d) the Presenter of Capital Investment has made
wrong statements on his financial situation, or if his financial situation has
essentially worsened or if his property is considerably endangered or if other
extraordinary conditions occur that endanger or delay or render impossible the
fulfillment of the Presenter of Capital Investment’s obligation from this loan
agreement,

 

(e) the Presenter of Capital Investment violated
one of his other obligations under this agreement,

 

(f)  a condition occurred which gives the Presenter
of Capital Investment the right of exceptional termination under the
agreement.  For such case the Bank
reserves the right of termination even if the Presenter of Capital Investment
should not make use of his right of termination.

 

(g) or if, concerning the property of the Receiver
of Capital Investment or his successor in title or his inheritance:

 

7

 

1.   wrong information has been given,

 

2.   insolvency proceedings (e.g., bankruptcy proceedings) have been
instituted or refused for lack of assets,

 

3.   judicial composition or other official proceedings have been
instituted that will lead to excluding individual execution,

 

4.   an extra judicial settlement (compromise involving additional time
for payment, quota arrangement or winding–up composition arrangement) has
been concluded, consented to by all creditors or a group of creditors
comparable with one another,

 

5.   a judicial composition has not lead to full satisfaction for
reason of repayment of the participation amount,

 

6.   the economic situation is so unfavorable that the Receiver of
Capital Investment has suspended his payments altogether or to a substantial
extent.

 

(2)   If the loan becomes due, pursuant to §(1) of
this article or, prematurely due, pursuant to Art. 6, the Presenter of Capital
Investment shall also pay an amount to the Bank which is equivalent to the
interest that should have to be paid on the loan from the date of actual
repayment until the final due date, taking into account the income from
interest the Bank might have had if it had invested the amount of the credit in
the meantime.  The Presenter of Capital
Investment shall also bear any other expenses in connection with the
termination.

 

(3)   The stipulation of Art. 7 (consequences of
delay) shall apply accordingly.

 

(4)   The Bank shall be free to exercise its rights
by virtue of these articles; non–use of such rights shall not be deemed a
waiver of title.

 

(5)   If the Bank exercises its right of
termination under §(1), the Presenter of Capital Investment shall instantly
terminate participation, provided that this is permissible under the stipulations
of Art. 12 §(6) clause 2.

 

Article 15: 
Miscellaneous

 

Possible license fees payable by the Receiver of
Capital Investment to the Presenter of Capital Investment shall not be paid but
after prior consent of the KfW.

 

Article 16: 
Place of Fulfillment and Jurisdiction

 

Place of fulfillment and Jurisdiction shall be
Leipzig.

 

8

 

Article 17: 
Final Provisions

 

(1)   If any one or more of the provisions hereof
is or becomes invalid or unenforceable in whole or in part, the validity of the
remaining provisions hereof shall not be in any way affected.  In such case, the parties to this agreement
shall amend the agreement accordingly.

 

(2)   Any amendment or modification of this
agreement and all statements and communications made between the parties to
this agreement in the context of this agreement shall be furnished in writing.

 

The Presenter of Capital Investment is requested to declare his consent
to this loan agreement by signing it in a legally binding way and returning the
annexed copies of this letter.

 

	
  Dresden, 14 Aug. 1999

  	
   

  	
  Deutsche Bank AG

  
	
   

  	
   

  	
  Dresden Branch

  
	
   

  	
   

  	
  (signature)

  

 

Herewith I declare my consent to all conditions and provisions of this
loan agreement:

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (place)

  	
   

  	
  (date)

  	
   

  	
  Southwall Technologies
  Inc.

  	
   

  

 

	
  Annexes:

  	
   

  	
  1) “Conditions of the KfW participation programs for
  bank transmission”

  
	
   

  	
   

  	
  2) “Proof of Employment of Funds” form

  
	
   

  	
   

  	
  3) Contract on the Assignment of Claims

  
	
   

  	
   

  	
  4) Consent to the Assignments

  

 

[SEAL]

 

	
  Übersetzungs- & Dohnetscherburo

  
	
  Rosenstrass 77

  01159 Drasden

  Tel/Fax 0351 434

  Funktel, 0172/39 64 046

  	
  

  
	
  ARIANA DRESDEN

  

 

9

 

SIDE LETTER

 

Supplement to the partnership agreement of

 

Dear Sirs,

 

We are writing to you with reference to the above partnership
agreement.

 

The capital stock of DM 3,300,000.– has been refinanced from the
KfW-Beteiligungsfonds Ost):

 

	
  - Southwall Technologies Inc.

  	
   

  	
  DM 2,442,000.00

  
	
  - VMP Venture Management Partners GmbH

  	
   

  	
  DM   
  858,000.00

  

 

Herewith we acknowledge the general conditions of participation
programs for bank transmission, version 12/98.

 

	
   

  	
   

  	
   

  
	
  Southwall Technologies Inc.

  	
   

  	
  Southwall Europe GmbH

  
	
   

  	
   

  	
   

  
	
  Southwall Technologies Inc.

  	
   

  	
   

  

 

[SEAL]

 

	
  Übersetzungs- & Dolmetscherburo

  
	
  Rosenstrass 77

  01159 Drasden

  Tel/Fax 0351 434

  Funktel, 0172/39 64 046

  	
  

  
	
  ARIANA DRESDEN

  

 

10EXHIBIT
10.108

 

 

For the Bank

For the borrower

 

 

	
  IKB Deutsche Industriebank AG

  
	
  Niederlassung Berlin

  
	
  Postfach 11 04 69

  
	
   

  
	
  10834 Berlin

  

 

 

Declaration
of assent

 

 

KD 264557 Mf/Be

 

 

We confirm our assent to your approval concerning

 

 

credit 5 of 07.10.2000

 

 

to which your General Bank Conditions known to us apply.

 

We request you to transfer the loan money at our expense and risk, as
soon as the payment requirements are met, to:

 

	
  Bank account no.

  	
   

  
	
   

  	
   

  
	
  Bank:

  	
  Bank identification number:

  
	
   

  	
   

  
	
  Account holder

  	
   

  

 

 

	
  Dresden,

  
	
   

  
	
  Southwall Europe GmbH

  
	
  - Management -

  
	
   

  

 

 

	
   

  	
  IKB
  Deutsche Industriebank

  

 

 

	
  Southwall Europe GmbH

  	
   

  	
   

  
	
  Management

  	
   

  	
  KD 264557

  
	
  Louis-Braille-Str. 5

  	
   

  	
  Mf/Re

  
	
   

  	
   

  	
  Dr. Heiko Zacharias

  
	
   

  	
   

  	
   

  
	
  01099 Dresden

  	
   

  	
  Telephone: 
  030/31009-9086

  
	
   

  	
   

  	
  Fax: 
  030/31009-8095

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  July 10, 2000

  

 

 

Ladies and gentlemen,

 

referring to our talk we like to offer a credit (credit 5) to you:

 

 

	
  Net amount of credit:

  	
   

  	
  EUR 511,291.88

  
	
   

  	
   

  	
   

  
	
  Percentage rate:

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  
	
  Interest rate:

  	
   

  	
  7.1% p. a.

  
	
   

  	
   

  	
   

  
	
  Method of computation of interests:

  	
   

  	
  360 days divided by 360

  
	
   

  	
   

  	
   

  
	
  Interest-due date:

  	
   

  	
  quarterly afterwards by 03.31., 06.30., 09.30. and
  12.31. every year

  
	
   

  	
   

  	
   

  
	
  Redemption

  	
   

  	
  11 redemption rates amounting to EUR 42,607.66 and a
  last rate amounting to EUR 42,607.62 quarterly

  first rate 06.30.2001

  last rate 03.31.2004

  
	
   

  	
   

  	
   

  
	
  Damages for delayed payment:

  	
   

  	
  On amounts coming in late we will compute your
  interests on the basis of the level of the respective base interest rate
  pursuant to § 1 Diskontsatz-Überleitungs-Gesetz (Transitory Law concerning discount
  rates) plus 5% p.a.

  
	
   

  	
   

  	
   

  
	
  Reservation:

  	
   

  	
  The duty to pay expires if the payment requirements
  will not be met by 04.07.2001.

  
	
   

  	
   

  	
   

  
	
  Credit commission:

  	
   

  	
  0.25% per month on non-valued net credit amounts
  from 08.01.2000 on, payable on the basis of our requirements.

  
	
   

  	
   

  	
   

  
	
  General promise crediting

  	
   

  	
  We grant this credit to you by crediting it against
  our general promise dated 05.08.2000.

  
	
   

  	
   

  	
   

  
	
  Use of Credit

  	
   

  	
  The credit shall be exclusively used for the
  financing of the additional investments including costs of EUR 3,600,000.00
  (DM 7,000,000.00) in your manufacturing facility in Grossroehrsdorf pursuant
  to the “Capital Project List” on hand.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The financing is provided by a credit of Deutsche
  Bank Aktiengesellschaft amounting to DM 1,500,000. ––; subsidies

  

 

2

 

	
   

  	
   

  	
  allowance totaling DM 2,500,000. ––;
  credits of our bank totaling DM 1,500,000 (including this credit) and the
  rest by own funds (also in so far as lower subsidies should be promised).

  
	
   

  	
   

  	
   

  
	
  Guarantee of the whole commitment with the exception
  of credit 2

  	
   

  	
  The credits promised, or still to be promised, by
  Deutsche Bank and us amounting to DM 1,500,000. –– for the
  financing of these additional investments will be included in the security
  pool contract entered into by you and your shareholder dated
  08.04./09./18.1999 including the supplementary agreement I dated
  09.02./12.16./15.1999.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The guarantee is provided including the
  aforementioned security pool contract by:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  another guarantee of
  Southwall Technologies Inc., Palo Alto, CA, USA amounting to DM 3,000,000.00;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  statement of
  abandonment of claims amounting to DM 1,500,000.00;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  trust receipt
  transaction concerning fixed assets to be purchased within the framework of
  the agreed trust agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  You will receive all contract forms including
  annexes for the implementation of the guarantee from Deutsche Bank AG within
  the framework of the credit agreements to be concluded with it and held in
  trust by it when they will be returned.

  
	
   

  	
   

  	
   

  
	
  Paying out procedure:

  	
   

  	
  We will pay out the credit after own funds amounting
  to at least EUR 767,000.00 will have been used in advance and when the
  investment progress will be demonstrated and as soon as the following will be
  presented to us:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  your declaration of assent pursuant to the enclosed
  form;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a supplementary agreement to the existing security
  pool contract legally concluded by you, your shareholders and Deutsche Bank
  AG in Dresden regarding the credits mentioned above;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a confirmation of the pool leader; Deutsche Bank AG,
  that the agreed security was furnished;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a photocopy of the notice concerning the subsidies
  for the investment grant of Sächsische 
  Aufbaubank which should not cause any concerns on our part.

  
	
   

  	
   

  	
   

  
	
  Additional elements of the contract

  	
   

  	
  Our “General Bank Conditions” already agreed

  
	
   

  	
   

  	
   

  
	
  Obligation to inform , right to audit and inspect

  	
   

  	
  We refer to the stipulations agreed with you
  concerning credit 1; they also apply to this case.

  
	
   

  	
   

  	
   

  
	
  Other documents to be submitted 

  	
   

  	
  Photocopies of all security documents to be included
  for us in trust as well; we requested them already.

  
	
   

  	
   

  	
   

  
	
  Acceptance

  	
   

  	
  until 08.03.2000 by using the enclosed declaration
  of assent.

  

 

3

 

We are glad to be able to support your investments by this credit.

 

 

	
  Kind regards,

  
	
   

  
	
  IKB Deutsche Industriebank AG

  
	
  /Sig./

  
	
   

  
	
  Annexes

  

 

4

 

NÖRR STIEFENHOFER LUTZ

RECHTSANWÄLTE
STEUERBERATER WIRTSCHAFTSPRÜFER

 

	
  Via courier

  	
   

  	
  Otto Stolberg-Stolberg

  
	
  Southwall Technologies Inc.

  	
   

  	
  Rechtsanwalt

  
	
  Mr. Thomas G. Hood

  	
   

  	
  Louis-Braille-Str. 5

  
	
  1029 Corporation Way

  	
   

  	
  01099 Dresden

  
	
  Palo Alto, California 94303

  	
   

  	
   

  
	
  USA

  	
   

  	
   

  
	
   

  	
   

  	
  Telefon:  
  0351-81660-11

  
	
   

  	
   

  	
  Zentrale: 
  0351-81660-0

  
	
   

  	
   

  	
  Telefax : 
  0351-81660-81

  
	
   

  	
   

  	
  nsldd@noerr.de

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Unser Zeichen: 
  OST/000/mko

  
	
   

  	
   

  	
  0147DD-99-111DD

  

 

Dresden, January 4, 2001

 

Re:          Southwall
Europe GmbH

 

 

Dear Tom,

 

hereinwith I send you the copy of the letter of IKB of December 19,
2000 as well as the declaration of consent. 
The original of the letter is withheld at me and put into the file of
original contracts.

 

The English translation of both is attached.

 

If you agree, please sign the two version of declaration of Consent and
send them back to me.  Than I will
forward one version to the bank.  Please
send one version in advance via fax.

 

Thanks in advance.

 

I would like to take the opportunity to mention that I have not yet
received the letter of Deutsche Bank of December 18, 2000 signed by you, which
I sent you on December 21, 2000 via courier.

 

	
  Best regards

  
	
  NÖRR STIEFENHOFER LUTZ

  
	
   

  
	
  /s/ Otto Stolberg-Stolberg 

  
	
  Otto Stolberg-Stolberg

  
	
  Rechtsanwalt

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]