Document:

EXHIBIT
10.103

0059DD-99-180DD

 

Loan
Contract

European
Investment Bank (EIB) Global Loan

between

 

	
   

  	
   

  	
  loan account no.: 710/537033344

  

 

	
  South Europe GmbH

  	
   

  	
   

  
	
  01897 GroBrohrsdorf

  	
   

  	
  hereinafter called “borrower”

  

 

and

 

	
  Deutsche Bank AG

  	
   

  	
   

  
	
  Fillale Dresden

  	
   

  	
  hereinafter called “bank”

  

 

Terms and Conditions

 

	
  Loan amount:

  	
  DM 6,000,000.00

  	
   

  	
   

  	
  (in words: six million Deutsche Mark)

  
	
   

  	
   

  	
   

  	
   

  
	
  date of payment

  	
  percentage rate:

  	
  commitment
  commission: 0.25% p.m. (prorata temporis)

  
	
  until 04.30.2000

  	
  100%

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  interest rate %

  	
  fixed until:

  	
  interest due (later)

  	
   

  	
  interest-due date: 1.  03.30.2000

  
	
  p.a.: 6.125 %

  	
  12.31.2004

  	
  monthly x

  	
   

  	
  following dates on: 
  6.30./09.30/

  
	
   

  	
   

  	
  quarterly

  	
   

  	
                                   12.30./03.30.

  
	
   

  	
   

  	
  half-yearly

  	
   

  
	
   

  	
   

  	
  annually

  	
   

  

 

Redemption

 

	
   

  	
  The loan amount shall be redeemed in one amount at
  the end of the term.

  
	
   

  	
   

  
	
   

  	
  The loan amount shall be redeemed in fixed part
  payments including  ...% p.a. plus
  saved interests. (annuity loan).

  
	
   

  	
  The repayment rate includes the redemption amount
  and interests

  
	
   

  	
   

  
	
  X

  	
  The loan amount shall be redeemed in fixed
  redemption rates (redemption loan). 
  The repayment rate includes only the redemption rate.  Interests shall be provided beside it.

  

 

	
  Repayment rate

  	
  due date:

  	
  first due date:

  	
  following rates to be due on:

  
	
   

  	
   

  	
   

  	
   

  
	
  DEM 166,666,67

  	
  monthly

  	
  03.31.2001

  	
  09.30./12.31./3.31./06.30

  
	
   

  	
  quarterly x

  	
   

  	
   

  
	
   

  	
  half-yearly

  	
   

  	
   

  
	
   

  	
  annually

  	
   

  	
   

  

 

The borrower does hereby authorize the bank to charge his account
mentioned hereinafter with the interests and redemption rates at maturity.

 

	
  Account holder

  	
  account no.

  	
  credit institute

  	
  bank code no.

  
	
  South Europe GmbH

  	
  5370333 00

  	
  Deutsche Bank AG

  	
  8707 00 00

  

 

 

Purpose of use (Project)

 

Pursuant to the application for funds of the EIB dated 04.30.1999 which
is considered to be an essential part of this loan contract.

 

New building of a manufacturing facility (building and machinery)

 

 

Securities

 

According to promise of credit dated 05.12./05.12.1999

The a.m. securities shall serve as collateral of the loan.  The details are regulated by the
corresponding contracts concerning the giving of securities.

 

Payment conditions

 

In addition to the conditions stipulated in no. 1 of the Allgemeine
Darlehnsbedingungen (General Loan Conditions) the following payment conditions
have to be fulfilled:

 

	
  The project mentioned in the application attached to
  this contract

  * is being realized/payment according to the construction progress on

  	
  01.17.2000 DM 2,900,000.00

  
	
   

  	
  02.28.2000 DM 1,500,000.00

  
	
   

  	
  04.30.2000 DM 1,600,000.00

  

 

2

 

General Loan Conditions

 

1.             Granting
of the loan

 

This loan shall be refinanced on the basis of global loan funds of the
bank at the European Investment Bank (EIB), head office in Luxembourg, which
were granted by the EIB within the framework of the grant criteria (project).

 

2.             Payment
conditions

 

The loan shall be paid out as soon as the project to be financed will
be approved by the EIB within the framework of the grant criteria.

 

In addition to the aforementioned payment conditions, another payment
condition will be that the agreed securities will be given.

 

3.             Project
tying

 

The borrower shall undertake to use the loan in order to carry out or
finance the project specified under “Project specification” in the application
for financial means of the EIB.

 

In the event of a considerable reduction of the estimated investment
costs during the investment period a proportional amount of the loan shall be
returned.  Alternatively, additional
projects of the borrower eligible for a grant may be approved until the loan
will reach 50%, at the most, of the approved investment costs.

 

4.             Commitment
commissions

 

In case the payment of the loan will not be made until the agreed date
of payment for reasons the borrower is responsible for, the borrower must pay
the agreed commitment commission from this date on until the actual date of
use.

 

5.             Interest
rate

 

The agreed interest rate shall be paid on the loan from the date of the
first payment on the interest–due dates.

 

For redemption loans and loans including a redemption at the end of the
term, the borrower will be informed about the interests by means of an account
and shall be paid in addition to the agreed redemption.

 

6.             Default
interest

 

In case interest, redemption or accessory claim amounts will not, or
not fully, be available to the bank at maturity, the interest rate will be
increased by 2.5 % p.a. for the duration of the default, calculated for

 

3

 

the overdue amount, unless a higher loss arose to it.  The borrower shall reserve itself the proof
that no loss arose to the bank at all, or that it is much lower.

 

7.             Obligations
of the borrower

 

The borrower shall undertake

 

a)                                      to
carry out the project completely;

 

b)                                     to
maintain, repair and, if necessary, renew all plants build up, and equipment
purchased, within the framework of the project as regards the maintenance of
their normal operational capability and capacity;

 

c)                                      to
sufficiently insure all plants, machinery, facilities, stocks and the like
against the usual risks during the term of the loan and to pay the insurance
contributions in due time;

 

d)                                     to
allow and make it possible to the bank and the persons nominated by the EIB to
visit the sites, plants and works belonging to the investment as well as to
make any audit they consider to be appropriate as far as this may be reasonably
required;

 

e)                                      to
guarantee that not more than 50% of the estimated investment costs will be
refinanced for the project via the EIB and not more than 90 % via the EIB and
other funds of the European Union.

 

8.             Information,
reports, audit rights

 

The bank shall be entitled to check the use of the tied loan of the
borrower, to visit the sites and to inspect the business records and
books.  It may require any information
relevant to monitor the project and to abide by the loan conditions.

 

The borrower shall inform the bank about its financial situation, it
will submit its annual statements of accounts regularly and inform about any
essential changes of its business and financial situation immediately and of
its own accord.

 

The bank shall be entitled to make all documents available to the EIB
and to give any information to it which the EIB may reasonably require as
regards the financing and implementation of the project.

 

9.             Right
of termination of the bank

 

The bank may terminate the loan for cause without complying with a
period of notice and it may, if necessary, require an immediate repayment, in
particular, if

 

a)                                      the
borrower acquired the loan wrongly – in particular, by giving unfounded
information - , if he doesn’t carry out the promoted project or if he does not
fulfil his duty to inform and report pursuant to item 8;

 

b)                                     the
borrower considerably deviates from the investment and financing plan as it was
outlined in the application for the granting of a loan, without the bank having
approved this change;

 

4

 

c)                                      the
borrower infringes essential obligations based on this contract, in particular
pursuant to item 7, despite being requested in writing not to do so;

 

d)                                     at
an unsuccessful request, including the setting of a time limit, the conditions
for the payment of the loan will not be fulfilled;

 

e)                                      at
an unsuccessful request, including the setting of a time limit, the loan will
not be taken;

 

(f)                                    at
the written request for payment the borrower is at least in one month default
with the payment of an interest or redemption rate;

 

g)                                     the
borrower has already received a refinancing of the EIB via the bank or any
other bank for the project mentioned in the application.

 

 

10.          Assignment
of rights

 

The bank shall be entitled to assign as collateral to the EIB the
claims including any additional rights and afforded securities based on the
granting of this loan.

 

The borrower is not entitled to assign his rights.

 

 

11.          Costs

 

Any fees, taxes and other costs which may arise now or in future in
connection with the handling of the loan or from the refinancing via the EIB,
also as regards item 3 par.2, shall be borne by the borrower.

 

Additionally, the General Bank Conditions shall apply which may be
inspected in each branch office and will be mailed to you at your request.

 

	
   

  	
   

  
	
  Place, date

  
	
   

  	
   

  
	
  Borrower

  
	
   

  	
   

  
	
  Place, date

  
	
   

  	
   

  
	
  Deutsche Bank AG Filiale Dresden

  	
   

  

 

5EXHIBIT
10.104

 

	
  Copy for the Bank

  	
  IKB Deutsche Industriebank

  
	
   

  	
   

  
	
  Southwall Europe GmbH

  	
   

  
	
  Management

  	
  May
  28, 1999

  
	
   

  	
   

  
	
  01897 Großröhrsdorf

  	
   

  

 

	
  c/o Mr. Otto Stolberg-Stolberg, lawyer

  
	
  Böhmerstr. 3

  
	
   

  
	
  01099 Dresden

  

 

	
  Borrower’s bank file no.: 

  	
  KD 264557

  
	
   

  	
  Dr. Zachariae/Mf/Be

  
	
  Phone:

  	
  030/31009-9026

  
	
  Fax:

  	
  030/31009-8026

  

 

	
  Loan Contract

  	
   

  
	
   

  	
   

  
	
  between

  	
   

  
	
   

  	
   

  
	
  Southwall Europe GmbH

  	
   

  
	
  01825 Großröhrsdorf

  	
  , Dresden

  
	
  (hereinafter called borrower)

  	
   

  
	
   

  	
   

  
	
  and

  	
   

  
	
   

  	
   

  
	
  IKB Deutsche Industriebank AG

  	
  Postfach 11 04 69

  
	
   

  	
  10834 Berlin

  
	
   

  	
  Bank code 300 104 00

  
	
  (hereinafter called borrower’s bank):

  	
   

  

 

	
  The borrower’s bank shall grant to the borrower a
  supplementary equity loan refinanced by Deutsche Ausgleichsbank (DtA)
  amounting to

  
	
   

  	
   

  
	
  DM

  	
      
  4,889,500.00 (net value of the loan)

  
	
   

  	
   

  
	
  After deducting the service charge (no.2.6.) the
  amount payable (net value of the credit) will be

  
	
   

  	
   

  
	
  DM

  	
      
  4,791,710.00.

  
	
   

  	
   

  
	
  The loan shall be granted subject to the following
  conditions:

  

 

1.             Basic
terms

 

1.1.                              The
claim to the payment of the supplementary equity loan can only be raised as
soon as the promotion funds of the borrower’s bank will be made available.

 

1.2.                              The
supplementary equity loan shall be earmarked and may only be used for the
financing of the project for the cofinancing of which it was applied.

 

1.3.                              The
loan funds paid off shall serve the strengthening of the equity basis of the
borrower.  For this reason he does not
need to discharge his liabilities from the Contract if he is unable to do this
from any profits, surplus liquidity or any other assets exceeding the other
debts.  This agreement does not apply to
any claims of any kind set up for and/or lodged by the shareholders of the
borrower, their spouses and lineal relatives, or by majority-owned shareholders
of the persons mentioned before.

 

 

2.             Terms
and conditions

 

2.1.                              The
term of the loan shall be 20 years.

 

It shall begin on
the day when the loan, or the first part amount, will be paid off by Deutsche
Ausgleichsbank.

 

2.2.                              7.10
% interest p.a. shall be paid on the loan (nominal interest rate)

 

In contrast to
this, the initial effective annual interest shall be 7.47 % p.a.  The service charge was charged up against
the full term (no. 2.1.).

 

Furthermore, the
initial effective annual interest was calculated assuming that the nominal interest
rate shall apply for the whole term of the loan pursuant to sentence 1.

 

2.3.                              The
nominal interest rate mentioned in no. 2.2. shall be fixed until the end of the
10th year of the term of the loan. 
After this, the borrower’s bank shall be entitled to adjust the nominal
interest rate according to the refinancing conditions of the DtA that will be
valid at this time pursuant to § 315 par. 1 Civil Code.  The borrower shall be informed about the
amendment of the nominal interest rate in time before the end of the 10th year.

 

2.4.                              The
loan shall be redeemed after the end of 10 years in 20 equal half-year rates
each amounting to DM 244,475.00.

 

2.5.                              The
interests and redemption shall be due half-yearly subsequently on 06.30. and
12.30. of each year.

 

2.6.                              In
order to cover any costs arising in connection with the handling of the loan
application to the borrower’s bank, if necessary, to their central bank, and to
the Deutsche Ausgleichsbank a nonrecurrent, term-independent service charge
amounting to 2 o. h. of the loan net amount shall be charged.  The service charge shall be deducted when
the loan or the first part amount will be paid.

 

The borrower’s
bank shall charge the borrower a service charge of the amount mentioned before
also if he does not take up the loan or if the loan promise can not be
maintained for reasons for which the Deutsche Ausgleichsbank, the borrower’s
bank or, if necessary, the central bank are not responsible.

 

2.7.                              The
borrower’s bank shall be entitled to assign the amount of the loan for security
to the DtA.  In this case, the
borrower’s bank or the central bank shall be entitled — under the proviso of revocation at any time — to enforce the assigned credit
amount (fiduciary) in his own name.

 

2.8.                              The
total amount of the part payments to be paid by the borrower for the redemption
of the loan and for the payment of the interests and other expenses shall be:

 

	
  Loan amount

  	
   

  	
  DM

  	
   

  	
  4,889,500.00

  
	
  Interests (2.2.)

  	
   

  	
  DM

  	
   

  	
  5,174,530.71

  
	
  Service charge (2.6.)

  	
   

  	
  DM

  	
   

  	
  97,790.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  DM

  	
   

  	
  10,161,820.71

  

 

The service charge
mentioned in the above list shall be deducted when the loan or the first part
amount will be paid.

 

The total amount was
determined on the basis of the loan conditions valid when the Contract was
concluded.  It may change in particular
by the changed interest rate from the 11th term year (no. 2.3.).

 

2

 

The total amount was
determined on the basis of the loan conditions valid when the Contract was
concluded.  It may change in particular
by the changed interest rate from the 11th term year (no. 2.3.).

 

 

2.9.                              On
05.04.1999 (file no. 30491 14791 000841494 F) the Deutsche Ausgleichsbank
granted to the borrower’s bank a refinancing promise concerning the granting of
a supplementary equity loan.  The
figures in this Contract, in particular as regards no. 2.2., 2.4. and 2.8. were
estimated assuming that the loan would value with the final borrower from the
date of the aforementioned promise by the Deutsche Ausgleichsbank.

 

2.10.                        When he
applied, the borrower undertook to pay commitment commissions in case he will
not call the funds, at the latest, until the end of the second month following
the granting by the Deutsche Ausgleichsbank. 
The date of receipt of the call at the Deutsche Ausgleichsbank shall be
decisive.  The borrower’s bank shall be
bound to its promise for the period of one year — from the date mentioned under item 2.9.

 

2.11.                        In case
any essential items of the project will change or the planned financing
compared to the investment and financing scheme, the borrower shall inform the
borrower’s bank about it immediately. 
This shall also apply for the case that the legal form or the shares
will change.  In coordination with the
DtA the borrower’s bank will check if and, if necessary, to which extent the
loan promise may be maintained in this case.

 

3.             Call
and use of funds

 

3.1.                              The
loan may only be called if the requirements for an immediate use according to
the terms will be met, the financing of the whole project be guaranteed and any
terms and conditions be met.

 

3.2.                              In
case the loan will not be used according to the terms until, at the latest, the
end of the second month following the call, it must be returned
immediately.  The funds may only be
called again if the requirements for an immediate use will be met.  From the date of receipt of the return
remittance with the Deutsche Ausgleichsbank until the first call, a waiver or a
revocation of the promise a commitment commission of 0.25 o. h. of the nominal
loan amount must be paid for each month started, however, at the longest until
the end of the period of the year mentioned in no. 2.9. sentence 1; in the case
of a prolongation until the end of the prolonged period.

 

3.3.                              The
borrower must confirm the use of the loan funds according to the terms on the
funds and application of funds statement attached to this Contract at the
latest nine months after full payment of the loan funds, and he must account
for it to the borrower’s bank, on request also to the Deutsche Ausgleichsbank.

 

4.             Obligation
to disclose and audit privileges

 

4.1.                              The
borrower shall immediately notify the borrower’s bank of any event that could
endanger the object of the subsidy or the duly serving of the loan.  In particular, the borrower shall notify the
borrower’s bank if he intends to do the following:

 

	
  a)

  	
   

  	
  change the legal form,
  the shares or the object of the enterprise.

  
	
  b)

  	
   

  	
  change the business
  financing.

  
	
  c)

  	
   

  	
  change the management.

  
	
  d)

  	
   

  	
  let, lease, sell, close
  down or relocate the enterprise or important parts of it.

  

 

4.2.                              The
borrower shall make available to the Deutsche Ausgleichsbank as well as to the
borrower’s bank, at any time on request, however, at least once a year without
express request, annual statements of accounts, corporate reports and auditing
reports and/or other documents and data suitable to audit the financial
conditions which allow a current insight into the financial situation of his
business.  The borrower shall, at any
time, render information to the Federal Government or its representative

 

3

 

as well as to the
Deutsche Ausgleichsbank requested by them in connection with the supplementary
equity loan and keep records.

 

4.3.                              The
borrower shall permit, at any time, an audit by the Federal Government,
Deutsche Ausgleichsbank, the borrower’s bank, the General Accounting Office or
its representative as regards the granted loan and permit them to inspect his
books and business records for this purpose.

 

4.4.                              The
borrower shall bear all costs resulting from any audit becoming necessary or
any prosecution of claims arising from the loan contract.

 

5.             Recall
by the borrower’s bank

 

The borrower’s
bank shall have the right to recall the loan for good cause for prompt
repayment; this applies in particular if

 

a)                                      the
co-financing enterprise will be closed down, sold, let, leased or relocated
from the New Federal States or Berlin (East), fully or in essential parts, or
if the objective of the subsidy will fail in another way;

b)                                     the
borrower will not meet his obligations pursuant to § 18 KWG (Law concerning the
Credit System) as well as no. 4.2. and 4.3. of this Contract;

c)                                      the
loan was granted on the basis of incorrect or incomplete information of the
borrower, was called without meeting the requirements mentioned in no. 3.1.,
was not used according to the objective of the subsidy or if the statement on
the application of the funds mentioned in no.3.3. was not made in defiance of a
reminder.

 

If the amount of
the loan was assigned to the DtA (see item 2.7.) the recall shall be subject to
the approval of the DtA.

 

6.             Recall
by the borrower

 

6.1.                              The
borrower shall have the right, keeping a three-months’ period of notice, to
repay the loan on a nonscheduled basis fully or in part amounts which must be
full DM 1,000.— or EURO 500.—or
a multiple of it by 03.31. or 09.30. of each year.  Nonscheduled part repayments shall be appropriated to the rates
due last according to the repayment schedule unless the borrower requests, in
writing, a reduction of the running repayment rates with an unchanged overall
term.

 

6.2.                              The
recall must be submitted in writing to the borrower’s bank.  In case of an unscheduled repayment without
meeting the period of notice mentioned in no.6.1. sentence 1, an interest rate
mentioned in no.2.2. must be paid on the repaid amounts until the next possible
term of notice.

 

7.             Default
of the borrower

 

In the event of
default, interests amounting to the base interest rate plus 5% points shall be
charged to the borrower on arrears of any kind as damages.

 

8.             Notification
of the Deutscher Bundestag (Parliament) and the European Commission

 

The borrower shall
express his approval that the Deutsche Ausgleichsbank will disclose, in a given
instance, to the Federal Government, and this one to the House Ways and Means
Committee of the Deutscher Bundestag, his name as well as the amount and the
objective of the supplementary equity loan in a confidential way if the House
Ways and Means Committee requests it. 
If the House Ways and Means Committee received such information, the
Federal Government may also disclose this information to other competent
committees of the Deutscher Bundestag in a confidential way as well.  In the event of a supplementary equity

 

4

 

loan higher than
DM 500,000.— or EURO 250,000. — the borrower shall express his approval that
his name, the major field of activity and the amount of the supplementary
equity loan will be disclosed to the European Commission in a confidential way
in order to facilitate their work pursuant to sec. 93 EC-Treaty.

 

9.             Miscellaneous

 

9.1.                              The
following shall be parts of the loan contract:

 

•      Guidelines of the Federal Ministry of
Economic Affairs and Technology

•      Annex to the Loan Contract (special conditions,
amendments)

 

In other respects, the General Bank Conditions of the
borrower’s bank shall apply subsidiarily.

 

9.2.                              Any
collateral covenants to the Contract were not made — also not orally.  Any amendments to this Contract must be made
in writing.

 

9.3.                              The
claims of the borrower from this Contract are not assignable, not pledgeable
and not subject to attachment.

 

9.4.                              In
case one provision of this Contract is ineffective, the other provisions of
this Contract shall remain unaffected. 
The contracting parties shall undertake to replace the ineffective
provision in such a case according to the meaning of this Contract, by mutual
agreement, by another provision by which the intended objective of the Contract
may be achieved, as far as it is possible, in a way being good in law.

 

9.5.                              In
the event of insolvency proceedings on the property of the borrower the
borrower’s bank or the DtA shall enforce the claim against the funds as
subordinated debts in the meaning of § 39 par. 2 Insolvency Order.

 

	
   

  	
  ,

  	
   

  	
   

  	
  IKB Deutsche
  Industriebank AG

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (borrower)

  	
   

  	
  (borrower’s
  bank)

  

 

5

 

	
  Loan Contract of 05.04.1999

  
	
  Between

  
	
  Southwall Europe GmbH

  
	
  and

  
	
  IKB Deutsche Industriebank AG

  	
   

  	
  10834 Berlin

  
	
   

  	
   

  	
  Bank code 300 104 00

  

 

Supplementary equity program

Liability bond of the shareholders of the borrower

 

For all obligations of the borrower from this Contract
we/I as shareholders/shareholder assume joint liability according to the
following shares/following share:

 

List of shareholders (share in %), signatures (place,
date)

 

 

	
  Southwall Technologies Inc., Palo Alto

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
					

 

Loan Contract

 

6

 

We hereby certify to have received one copy each of
the deed.

 

	
  Berlin, 

  	
   

  	
   

  	
  VMP Venture Management Partners GmbH

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (signature of
  shareholder)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Southwall
  Technologies Inc.

  
	
   

  	
   

  	
   

  	
  - management -

  
	
  Palo Alto,

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (signature of
  shareholder)

  
					

 

7

 

	
  Annex to the Loan Contract

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  To Southwall Europe GmbH

  	
   

  	
   

  
	
  01825 Grossröhrsdorf

  	
   

  	
  , Dresden

  

 

 

Special terms and conditions:

 

Before calling the funds the borrower’s bank must
satisfy itself whether the following requirement(s) was(were) met:

 

The provision of security for the DtA loan being faced
with the EKE loan will not be done by first (i.e., lying within the credit
line) dry mortgage.  The overall
financing is guaranteed, allowances and grants were granted and the equity of
about DM 5,3 million was used.

 

If this or any of the aforementioned requirements can
not be met we request you to inform us immediately.  Then we will check whether the promise may be maintained.

 

Before we will be able to pay the loan we still need
the following information/documents:

Detailed terms and conditions of the shareholder’s
loan amounting to ThDM 2,060.

 

If the required information/documents will result in a
basically different assessment, we will check if or up to which amount we may
maintain our credit promise.

 

Additional remarks:             no

 

8

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