Document:

Unassociated Document

    
      
        

      

    

    Technology
      Transfer and Service Agreement

    

    Among

     

    
      	
              1.

            	
              Sunfilm
                AG registered at the Commercial Register of the local court of
                Charlottenburg (Berlin),
                HRB 103822 B ("Sunfilm"
                or "Company");

            

    

     

    
      	
              2.

            	
              Southwall
                Europe GmbH, a subsidiary company of Southwall Technologies, Inc.,
                registered at
                the Commercial Register of the local court of Dresden, HRB 17324
                ("SEG");

            

    

     

    
      	
              3.

            	
              Southwall
                Technologies Inc., a company duly incorporated and legally existing
                under
                the laws
                of Delaware, USA
("STI");

            

    

     

    
      	
              4.

            	
              Wolfgang
                Heinze, with his business address at SouthwallstraBe 1, 01900
                GroBrohrsdorf ("Heinze");

            

    

     

    
      	
              5.

            	
              Sicco
                Westra, with his business address at 3788 Fabian Way, Palo Alto CA
                94303,
                USA ("Westra")

            

    

     

    -
      hereinafter referred to collectively as "the
      Parties" -

     

    Preamble

     

    The
      Company's business purpose as resolved by the shareholders of the Company on
      December 14, 2006 is the development, manufacturing and distribution of solar
      modules. The Parties have worked on a concept for a photovoltaic thin film
      manufacturing venture. The solution is based on silicon in amorphous
      and micro-crystalline forms deposited on coated glass substrate using Thin
      Film
Technology.
      The Company intends to establish production facilities in GroBrohrsdorf, Saxony
      and bring photovoltaic applications based on Thin Film Technology into large
      scale production for the photovoltaic
      industry. Applied Materials Inc., a company incorporated in Delaware
("Applied"),
      USA
      is
      willing to supply equipment for such technology and the production facilities.
      STI and SEG, a
      wholly
      owned subsidiary of STI, are willing to make contributions to the above project
      (the "Sunfilm
      Venture") and
      to
      assist in the startup of the Sunfilm Venture upon the terms and conditions
      of this Agreement.

    

    Definitions:

    

    "Class
      1-Know-how" shall
      mean the Know-how defined and identified in Appendix
      A which
      materials
      include data on general photovoltaic applications in addition to those specific
      to Solar Module
      Products. Class 1 Know-how was developed by STI and SEG for a potential
      investment in Photovoltaic
      Facilities and on the production of Solar Module Products.

    

    "Class
      2-Know-how" shall
      mean the Know-how defined and identified in Appendix
      B which
      relates to certain specifics of Thin Film Technology developed over the course
      of STI's business history
      which are judged by STI and SEG, using all reasonable diligence, to be directly
      applicable tothe
      production of Solar Module Products. Class 2 Know-how is utilized in SEG's
      or
      STI's present business
      but not in connection with Solar Module Products.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Know-how"
      shall
      mean the secret technical information relating to the design, building, and
      startup of the Photovoltaic Facilities, and related to the manufacture and
      use
      of Photovoltaic Applications
      based on Thin Film Technology, as more closely defined and identified in
Appendices
      A and B, and
      in
      each case which Know-how is owned by SEG and STI.

    

    "Photovoltaic
      Applications" shall
      mean instruments for the generation of electrical power through the
      exposure to light.

    

    "Photovoltaic
      Facilities" shall
      mean all facilities, including but not limited to building, infrastructure,
      utilities and production equipment for the production of Solar Module
      Products.

    

    "Solar
      Module Products" shall
      mean Photovoltaic Applications in relation to which amorphous and
      microcrystalline silicon deposition on coated glass substrates based on Thin
      Film Technology is used.

    

    "Signing
      Date" shall
      mean the date of this Agreement

    

    "Site"
      shall mean the premises registered in the land register of the local court
      of
      Kamenz, Page 2010
      for
      GroBrohrsdorf, site no: 1656/29 (64,791 sqm) and no: 1656/30 (6,266 sqm) which
      has been first
      acquired by SEG and will subsequently be transferred by SEG to the Company
      for
      the construction
      and operation of the Photovoltaic Facilities.

    

    "Subsidy"
      shall
      mean the financial means to be provided by the State of Saxony, Germany in
      the
amount
      of
      approximately EUR 25 million as a non-refundable grant for the establishment
      of
      the Sunfilm
      Venture, applied for by SEG on the basis of the business plan submitted to
      the
      Sachsische Aufbaubank
      ("SAB") and to be transferred to the Company.

    

    "Technical
      Area" shall
      mean the use of Thin Film Technology for Solar Module Products.

     

    "Territory"
      shall
      mean Germany.

    

    "Thin
      Film Technology" shall
      mean a generic term describing a technology used by Applied, ST1 and
      SEG,
      and many other companies in vacuum deposition of materials on flexible and
      rigid
substrates.

    

    Section
      1

    

    Technology
      Transfer

     

    
      	
              1.1

            	
              SEG
                and STI will, in accordance with the provisions of this Agreement,
                transfer to the Company
                all of their Class 1 -Know-how and knowledge associated with their
                past
                work on Photovoltaic
                Facilities and the production of Solar Module Products in the Technical
                Area and
                grant to the Company a perpetual, royalty-free license for its use
                by the
                Company to design,
                build and operate Photovoltaic Facilities in the Territory, to develop
                and
                manufacture
                Solar Module Products in the Territory, and to distribute the Solar
                Module
                Products worldwide. The Parties acknowledge that SEG and STI do not
                have
                patents or patent
                applications or licenses that relate to Class 1- Know-how, The technology
                transfer is done by transmitting documents in binders and files and
                digital data on media, A listing of these
                documents and media is given in Appendix A. These documents and media
                shall be made
                available to Sunfilm by SEG on the Signing Date. Mr. Sicco Westra
                (see
                3.1.5 below) is
                responsible for the preparation and transfer of Class 1-Know-how
                to the
                Company.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              1.2

            	
              SEG
                and STI will, in accordance with the provisions of this Agreement,
                transfer to the Company
                their Class 2-Know-how and grant to the Company a perpetual, royalty-free
                license
                for its use by the Company to develop and manufacture Solar Module
                Products in the Territory, and to distribute the Solar Module Products
                worldwide. The Class 2-Know-how is listed
                in Appendix B and will be transferred by documents and digital media
                on
                the Signing Date.

            

    

    

    
      	
              1.3

            	
              The
                transfer of the Class 1- Know-how shall be exclusive to the Company
                in the
                Territory
                for a period of 18 months from the Signing Date. During this period,
                SEG
                and STI shall
                not be permitted to use the Class 1 -Know-how in the Technical Area
                or to
                license the Class
                1-Know-how in the Technical Area to third parties for the design
                and
                building of Photovoltaic
                Facilities for Solar Module Products, even if the respective design
                and
                building or
                manufacture and use of solar modules is planned to take place outside
                the
                Territory.

            

    

    

    
      	
              1.4

            	
              The
                transfer of the C lass 2-Know-how shall be exclusive to the Company
                for a
                period of 18
                months from the Signing Date for Solar Module Products. SEG and STI
                shall
                be at all times
                entitled to use the Class 2- Know-how outside the Technical Area
                without
                any restrictions
                by this Agreement.

            

    

    

    
      	
              1.5

            	
              After
                the expiry of the 18 month-period, (i) the Company shall be entitled
                to
                use the Know-how
                as at the date it was transferred on a non-exclusive basis worldwide
                and
                royalty- free;
                (ii) the Company will be permitted to use and license the Class 1-Know-how
                and knowledge
                without any further restriction; and (iii) the Company will be permitted
                to use and
                license the Class 2-Know-how and knowledge without any further
                restriction, provided the
                use or license of the Class 2- Know-how is for Photovoltaic Applications
                only; and (iv) STI
                and SEG will be permitted to use and license the Know-how and knowledge
                without any
                restriction. The Know-how shall be maintained as confidential by
                the
                Parties for a period
                of 18 months from the Signing Date, and the Company shall keep for
                a
                period of three years
                the Class 2- Know-how confidential to the extent the Class 2-Know-how
                is
                not related to
                Photovoltaic Applications, in each case, on the terms and conditions
                set
                out in Section 7 of this
                Agreement.

            

    

    

    
      	
              1.6

            	
              For
                the avoidance of doubt, any patents or patent applications of SEG
                or STI
                which make
                use of any of the Know-how licensed under this Agreement to the Company
                shall in no way
                restrict the Company's rights to use the Know-how as provided for
                in this
                Agreement.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              1.7

            	
              The
                Company acknowledges that pursuant to the terms of a Confidentiality
                Agreement between
                the Parties of even date, it has gained knowledge of the Know-how
                as
                defined in Appendix
                A and B and has checked the listing of the Documents in Appendix
                A and B
                and has determined that these materials when delivered include the
                relevant information for the design,
                building and operation of the Photovoltaic Facilities and the relevant
                information related
                to the manufacture and use of Solar Module Products. The Company
                confirms
                that any knowledge of the Know-how received by Good Energies Investments
                BV and Norsun AS was subject to obligations of
                confidentiality.

            

    

     

    Section
      2

    Improvements
      and new developments

    

    
      	
              2.1

            	
              The
                Company shall not be obligated to inform SEG and STI of any improvements
                and new developments in respect of or otherwise connected to the
                Class 1
                Know-how and shall not
                be obligated to assign or license such improvements to SEG or
                STI.

            

    

    

    
      	
              2.2

            	
              The
                Company shall be the sole owner of such improvements to Class 1 Know-how
                and shall
                be entitled to solely apply for patent protection in its
                discretion.

            

    

    

    
      	
              2.3

            	
              SEG
                and STI shall inform the Company of all improvements achieved in
                connection with
                the Class 2-Know-how listed in Appendix B in the Technical Area during
                the
                18 month period
                following the Signing Date and shall license such improvements to
                the
                Company subject
                to the terms and conditions of this Agreement applicable to Class
                2-Know-how.

            

    

    

    
      	
              2.4

            	
              The
                Company shall inform SEG and STI of all improvements which are achieved
                by
                the Company
                (i) during the 18 month period following the Signing Date; and (ii)
                which
                are in respect of the Class 2-Know-How transferred to the Company
                under
                this Agreement; and (iii)
                which are related to STI and SEG's on-going businesses (other than
                improvements exclusively
                related or connected to Solar Module Products) (the "Class
                2-Improvements") The
                Company shall license Class 2-Improvements to STI and SEG royalty-free
                and
                on a non-exclusive
                basis for use in STI's and SEG's on-going businesses (other than
                business
                related
                or connected to Solar Module Products). The Company, SEG and STI
                shall be
                jointly entitled
                to apply for patent protection regarding Class 2-Improvements, provided
                patent protection
                is not related exclusively to Solar Module Products and the Parties
                will
                take all actions
                and execute all documents necessary or appropriate to enable such
                application. In all other cases of improvements to Class 2-Know-how,
                the
                Company shall be the sole owner of such
                improvements and shall be entitled to solely apply for patent protection
                in its discretion.

            

    

    

    
      	
              2.5

            	
              For
                the avoidance of doubt, nothing in Sections 2.3 or 2.4 shall require
                STI,
                SEG or Sunfilm
                to disclose or grant rights in respect of any know how or information
                in
                respect of which the respective party is under an obligation of
                confidentiality to a third party.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              2.6

            	
              If
                it turns out that SEG and/or STI possess know-how on the Signing
                Date,
                including patents
                or patent applications on or relating to Thin Film Technology which
                are
                not subject to
                this Agreement, but which the Company considers useful for the
                establishment of the Photovoltaic Facilities or the development and
                manufacturing of Solar Module Products, SEG
                and STI agree to license such know-how, patents or patent applications
                to
                the Company
                on a restricted, non-exclusive basis for use in the development and
                manufacture of
                Solar Module Products and for a royalty to be concluded at fair market
                conditions. This right
                to license extends through June 30,
                2008.

            

    

    

    Section
      3

    Services

    

    
      	
              3.1

            	
              SEG
                and STI shall provide the following services to the
                Company:

            

    

    

    
      	
              3.1.1

            	
              SEG
                shall apply for the Subsidy, conduct the application procedure, undertake
                the steps and
                measures required for the approval of the Subsidy, and assess the
                conditions of the approval.
                SEG and the Company will mutually agree whether the conditions of
                the
                approval of the Subsidy are acceptable and if not, whether to appeal
                SEG
                shall conduct the procedure of
                the appeal, if any, and shall, to the extent permitted by the appeal
                process, take into
                account the reasonable comments of the Company in conducting the
                appeal.

            

    

    

    
      	
              3.1.2

            	
              Shortly
                after the approval of the Subsidy has become legally binding, SEG
                shall
                procure the
                transfer of the Subsidy from SEG to the Company. The Parties acknowledge
                mat SAB has
                verbally advised SEG that a transfer of the Subsidy from SEG to the
                Company is permitted.
                The Company shall file the necessary documents for the transfer with
                the
                SAB. SEG
                shall assist in this process. SEG shall use its best reasonable efforts
                to
                ensure that the Company
                finally receives the Subsidy. The Company shall use its best reasonable
                efforts to co-operate
                in this process. SEG, STI, and the Company shall strictly adhere
                to the
                Subsidy regulations
                at all times during this process.

            

    

    

    
      	
              3.1.3

            	
              SEG
                shall arrange and close the Site purchase and shall transfer the
                Site to
                the Company (i)
                as soon as possible after the approval of the transfer of the Subsidy
                to
                the Company has become
                legally effective and (ii) upon written request of the Company. SEG
                shall
                apply for and
                shall take all necessary steps to obtain any official permits needed
                by
                the Company for the
                construction of the Photovoltaic Facilities on the Site. It will
                be a
                condition to the transfer
                of ownership of the Site to the Company that ground assessments must
                be
                undertaken
                to a commercially reasonable extent, including without limitation
                analysis
                of potential
                contamination of the soils or other materials comprising the Site.
                For the
                avoidance of
                doubt, SEG shall be required to transfer the Site to the Company
                before
                the approval of the
                transfer of the Subsidy to the Company if the conditions of the Subsidy
                approval so require
                and the Company has requested the transfer in
                writing.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              3.1.4

            	
              Subject
                to Sections 3.1.5 and 3.1.6, and until March 31, 2007, SEG shall
                supervise
                and oversee
                the engineering, design, and ground assessment of the Site, building,
                purchasing, hiring,
                and other work needed to establish the Photovoltaic Facilities on
                the
                Site, in particular
                SEG shall supervise the engineering process for the construction
                of the
                Photovoltaic
                Facilities and related processes in cooperation with Applied and
                with
                other contractors
                of the Company. After March 31, 2007, STI and SEG will continue to
                provide
                services to the company as outlined above, subject to Section
                4.6.

            

    

    

    
      
        
          	3.1.5	
                  EG
                    shall make available the human resources, in particular Mr. Heinze
                    and Mr.
                    Westra,
                    as reasonably needed to effect SEG's obligations in setting-up
                    the Sunfilm
                    Venture, and
                    shall also facilitate and transfer certain human resources to
                    the Company
                    as outlined below.
                    Until the full transfer of the required human resources to the
                    Company has
                    been accomplished,
                    the services to be rendered by SEG and STI shall be in particular
                    undertaken by
                    Mr. Heinze and Mr Westra (to which they agree) with support from
                    other SEG
                    staff and the
                    Company as required. STI has made and shall continue to make
                    Mr Westra, an
                    employee of
                    STI, available on a full time basis to the Company from the Signing
                    Date
                    to assist in accomplishing
                    the tasks required to meet STI and SEGs' commitments under this
                    Agreement,
                    to establish the Photovoltaic Facilities and to commence working
                    on the
                    Company's
                    behalf as needed to set up the Sunfilm Venture. The Parties shall
                    co-operate (together
                    with Mr Westra) to agree on the terms of relocation of Mr Westra
                    to
                    Dresden as soon as reasonably practicable after the Signing Date,
                    but in
                    any event, it is anticipated by the
                    Parties that he will be based in Dresden for a material period
                    before
                    1st
                    April 2007 to facilitate
                    the start up of the Sunfilm
                    Venture.

                

        

      

    

    

    
      	
              3.1.6

            	
              SEG
                and STI shall also make available in particular Mr. Heinze to the
                Company
                as required
                to accomplish the tasks to meet STI and SEGs' commitments outlined
                in this
                Agreement
                and to establish the Photovoltaic Facilities and work on the Company's
                behalf as needed
                to set up the Sunfilm Venture. SEG shall make available Ms. Andrea
                Brandl
                and Mr. Andreas
                Bock, both currently employees of SEG, to assist Mr. Heinze in rendering
                these services
                (subject always to Ms Brandl and Mr Bock consenting to undertaking
                this
                work).

            

    

    

    With
      effect from April 1, 2007, Mr. Heinze shall be allowed to resign from his
      position as managing
      director of SEG, shall be released from his employment with SEG by STI and
      he
      shall enter into an employment relationship with the Company. Mrs Andrea Brandl
      and Mr. Andreas
      Bock shall be released by SEG to enter into an employment relationship with
      the
Company
      as soon as possible, however no later than April 1, 2007, provided they consent
      to their
      transfer of employment to the Company. With effect from April 1, 2007, Mr.
      Westra shall
      be
      allowed to resign from his position with STI, Mr. Westra shall be released
      from
      his employment
      by STI and he shall enter into an employment relationship with the Company.
      Each
      release shall be covered by a letter outlining the terms of the release to
      each
      of the individuals
      mentioned above allowing them to pursue their duties under this Agreement and
      the
      employment agreements to be entered into by Sunfilm. It is anticipated by
      January 31, 2007
      that
      each of Messrs Heinze and Westra shall separately enter into an employment
      contract
      with the Company. Each contract of employment will only become effective in
      accordance
      with its terms and conditions, but shall become effective no later than April
      1,
2007.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              3.1.7

            	
              STI,
                SEG, Mr. Heinze, and the Company, after consulting with Good Energies
                Investments
                BV and Norsun AS, shall jointly determine if other SEG employees
                should be
                transferred
                to the Company (subject always to such employees consenting in advance
                to
                such
                transfer of employment and that such action does not compromise SEG's
                business commitments).
                These discussions and determinations should be completed by August
                31,
                2007.

            

    

    

    
      	
              3.2

            	
              SEG,
                STI, Mr. Heinze and Mr. Westra shall act in good faith and use their
                best
                reasonable
                efforts to facilitate the progress of the Sunfilm Venture and shall
                keep
                the Company
                informed of all material developments relevant to the Sunfilm
                Venture.

            

    

    

    
      	
              3.3

            	
              SEG
                shall pay the installments of the purchase price for the Site when
                due
                under the Site purchase
                agreement and shall transfer the Site to the Company as outlined
                in
                Section 3.1.3 above.
                Upon transfer of the Site, the Company shall reimburse SEG for the
                purchase price (or
                part thereof) for the Site to the extent such price has already been
                paid
                by SEG. However, the Company shall not be obligated to take over
                the Site
                and SEG will remain responsible for the
                Site purchase agreement and the obligations, in particular the payment
                obligations, contained therein, if (i) the Site turns out to be materially
                contaminated or the grounds assessments
                have not been undertaken to the satisfaction of the Company; or (ii)
                the
                Subsidy is
                not validly transferred to the Company; or (iii) if the Sunfilm Venture
                does not proceed for any
                other reason; or (iv) if the Sunfilm Venture is terminated on or
                before
                September 1, 2007. SEG may only withdraw from the Site purchase agreement
                if (i) this Agreement is terminated
                in accordance with its terms (including failure to achieve any of
                the
                conditions set
                out in Section 6.1; or (ii) the Subsidy is not validly transferred
                to the
                Company by August 31,
                2007; or (iii) the Company agrees in writing that SEG may so withdraw.
                In
                all other cases,
                SEG may only withdraw from the Site purchase agreement, if simultaneously
                a Site purchase agreement is concluded between the seller of the
                Site and
                the Company.

            

    

    

    Section
      4

    Consideration

    

    
      	
              4.1

            	
              The
                Company shall pay to SEG and STI for the transfer of the Know-how
                and the
                services
                to be rendered pursuant to this Section and Section 3 above an amount
                totaling:

            

    

    

    USD
      3,000,000 plus statutory German VAT

    

    (in
      words: US Dollar three million)

    

    (hereinafter:
      the "Consideration")

    

    The
      payment of the Consideration shall be made in installments which are linked
      to
      the achievement
      of milestones as set out below. Failure to achieve any one of the milestones
      does not
      jeopardize any proceeding or previous payment of installments save as set out
      in
      Section 4.3.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Further,
      if one or more of the dates for completion of a milestone in the table below
      changes due
      to
      reasons which are beyond the control of STI and SEG, provided that such date
      change does
      not
      jeopardize the realization of the Sunfilm Venture, then the payment of the
      relevant installment
      shall be made at the completion of the process for which the payment of
      the

    

    installment
      was due to be made, subject always to the overriding principle that all of
      milestones
      4.1.1 to 4.1.4 must be accomplished in all material respects by August 31,
      2007
      at the
      latest.

    

    Failure
      to achieve any one of the milestones also does not jeopardize any subsequent
      payment of
      funds
      to STI and SEG to the extent that the other milestones listed at 4.1.1 through
      4.1.4 are
      achieved in accordance with this clause 4.1 and are all achieved in all material
      respects before
      August 31, 2007. If any milestones (other than the milestone item set out in
      4.1.2.2 -Applied
      Contract- and the milestone set out in Section 4.1.5) are completed after August
      31, 2007,
      SEG
      and/or STI are not entitled to any payment in respect of those milestones unless
      the
      Company agrees otherwise in writing.

    

    

    
      	 	
              Milestones 

            	
              Amount

              (in
                USD) 

            	
              Dates 

            
	4.1.1.1	
              Execution
                of satisfactory documentation
                (including Appendix A and
                B); and 

            	
              1,000,000 

            	
              Signing
                Date of this Agreement 

            
	4.1.1.2	
              Approval
                of the Subsidy for SEG ("Fordermittelzusage");
                and 

            	
               

            	
               

            
	4.1.1.3	
              Conclusion
                of the Site purchase agreement
                by SEG and payment of the first
                installment of the purchase price by
                SEG. 

            	 	
               

            
	4.1.2.1	
              Approval
                of the Subsidy for the Company
                ("Fordermittelzusage")
                including
                completion of all transfer requirements
                by SEG; and 

            	
              500,000 

            	
              1
                April 2007 

            
	4.1.2.2	
              Conclusion
                of an equipment purchase and
                development roadmap contract between
                the Company and Applied; and 

            	
               

            	
               

            
	4.1.2.3	
              Site
                transfer to the Company and preparatory
                work for the construction of
                the Photovoltaic Facilities Finished. 

            	
               

            	
               

            
	4.1.3	
              Entering
                into an employment relationship
                between the Company and
                Messrs, Heinze, Westra, and Bock and
                Ms. Brandl and transfer to the Company. 

            	
              500,000 

            	
              1
                April 2007 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	4.1.4.1	
              All
                permits for the construction and operation
                of the Photovoltaic Facilities granted;
                and 

            	
              500,000 

            	
              30
                June 2007 

            
	4.1.4.2	
              Design
                of the Photovoltaic Facilities finished. 

            	
               

            	
               

            
	4.1.5	
              Start
                of production of PV thin film tandem
                modules at the Photovoltaic Facilities. 

            	
              500,000 

            	
              31
                March 2008 

            

    

    

    
      	
              4.2

            	
              If
                the transfer of the Subsidy to the Company is not received due to
                reasons
                which are outside
                the control of SEG and STI, installments of the Consideration already
                paid
                in respect of
                achievement of relevant milestones will not be required to be
                repaid.

            

    

    

    
      	
              4.3

            	
              If
                SEG withdraws from the Site purchase agreement in violation of this
                Agreement, all Consideration is deemed to be fully forfeited and
                the
                Company is released from any further payment
                obligations under this Agreement and any installments of the Consideration
                and the purchase price for the Site already paid by the Company will
                be
                immediately due and owing
                for repayment by STI or SEG (as the case may be) to the Company.
                SEG and
                STI will be
                jointly and severally liable for the repayment of all such payments
                to the
                Company.

            

    

    

    
      	
              4.4

            	
              In
                respect of milestone 4.1.3 above regarding the transfer of specified
                staff
                to the Company,
                individual employment contracts are scheduled to be concluded by
                April 1,
                2007. If
                Ms. Brandl or Mr. Bock do not agree to transfer their employment
                to the
                Company from SEG,
                such refusal will not jeopardize any of the payments of Consideration
                already made to STI
                or SEG assuming that the Sunfilm Venture still proceeds and such
                failure
                is not a material
                deterrent to the success of the Sunfilm
                Venture.

            

    

    

    
      	
              4.5

            	
              The
                payments set out in Section 4.1 are to be made in cash to STI to
                the Wells
                Fargo Bank,
                ABA Number 121000248, Swift Code WFBIUS6S Beneficiary Account No:
                4121148894 within 10 days after the later of (i) STI or SEG has provided
                evidence reasonably
                satisfactory to the Company that the respective milestones were properly
                fulfilled
                and (ii) a respective invoice has been submitted by STL Such invoice
                shall
                not contain
                VAT, but shall make reference to the German reverse charge procedure
                as
                set out in a
                draft invoice the Company shall submit to STI shortly after the Signing
                Date. Any payment shall
                be deemed a payment to SEG and STI hereunder. The allocation of the
                Consideration between SEG and STI shall be the responsibility of
                STL

            

    

    

    
      	
              4.6

            	
              After
                March 31, 2007, SEG and STI shall continue to facilitate the establishment
                of the Company
                and the Sunfilm Venture at the cost of the Company, on the following
                basis: (i) any
                services and/or costs incurred by STI or SEG must be approved in
                writing
                in advance by the Company; and (ii) such services and/or costs will
                not
                relate to activities to be undertaken and
                services to be rendered by SEG and/or STI to achieve the milestones
                outlined in Sections
                4.1.1.1 to 4.1.1.3, 4.1.2.1, 4.1.2.3, 4.1.4.1, and 4.1.4.2
                above.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              4.7

            	
              Subject
                to the Company's prior approval of all of such costs in writing,
                the
                Company shall
                promptly reimburse SEG and STI (as the case may be) for any payments
                made
                or other direct
                expenses incurred by STI or SEG on the Company's behalf to third
                parties
                such as contractors, suppliers and other parties for engineering
                design
                work. Reimbursement shall be
                made promptly on provision by STI or SEG of the appropriate copies
                of
                invoices together with
                satisfactory evidence of payment, provided the Site has first been
                transferred to the Company.

            

    

     

    Section
      5

    Warranties
      of SEG and STI

    

    
      	
              5.1

            	
              SEG
                and STI declare that they are not aware of any legal deficiencies
                of the
                Know-how. SEG
                and STI warrant that (i) they have maintained and will maintain the
                secrecy of the Know-how
                for the 18-month period provided for herein and (ii) that the Know-how
                specified
                in Appendices A and B comprises all of their know-how in the Technical
                Area which
                is relevant for the construction of the Photovoltaic Facilities and
                the
                development and manufacturing
                of the Solar Module Products (such warranties together with the warranty
                contained
                in Section 5.2 the "Warranties"). STI and SEG declare to
                the Company that each of
                them will not enter into any other Agreement or carry on any activity
                relating to the Know How
                during the 18-month period discussed
                herein.

            

    

    

    
      
        
          	5.2	
                  EG
                    and STI jointly and severally warrant to the Company, and each of Mr.
                    Heinze and Mr.
                    Westra severally warrant to the Company that as at the date of
                    this
                    Agreement, (i) they are
                    not aware of any information which is materially significant
                    and which the
                    Company should
                    have been made aware of at the time of making its decision to
                    undertake
                    the Sunfilm Venture
                    or which could otherwise materially prejudice the success of
                    the Sunfilm
                    Venture; and
                    (ii) to the best of their knowledge, all information which has
                    been made
                    available to the Company
                    before conclusion of this Agreement is complete and correct in
                    all
                    material respects.

                

        

      

    

    

    
      	
              5.3

            	
              If
                it turns out that any of the above Warranties is not correct, SEG
                and/or
                STI shall, at the Company's
                option, either (i) put the Company in such position as the Company
                would
                have been in had the Warranties been true, accurate and complete
                in every
                respect (restitution in kind), or (ii) failing to have cured the
                breach of
                a Warranty within a period of three months after the notification
                of such
                breach by the Company, compensate the Company as follows: the
                Company is released from any further payment obligations under this
                Agreement; and payments
                already made pursuant to Section 4 above shall be returned. SEG and
                STI
                will be jointly
                and severally liable for the above payments to the Company. The release
                and return of
                payments as provided for in this Section 5.3 shall be the sole and
                exclusive remedy of Sunfilm
                for a breach of the above Warranties in the context of Section 5.3
                (ii).

            

    

    

    Except
      as
      expressly set forth in this Section 5,
      payments
      made pursuant to Section 4 are non-refundable. To the extent legally
      permissible, STI or SEG's liability for any breach of Warranty,
      or for any claim arising out of or related to this Agreement, shall not exceed
      the return of payments provided for in Section 4.1 actually received by SEG
      or
      STL

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      rights and obligations of the Parties under the agreements regarding the
      purchase and transfer of the Site remain untouched.

     

    Section
      6

    Conditions
      Precedent

    

    
      	
              6.1

            	
              The
                Parties agree that this Agreement is subject to the following conditions
                precedent:

            

    

     

    
      	
              6.1.1

            	
              Legally
                binding approval of the Subsidy to SEG in the amount of approximately
                EUR
                25
                million by the State of Saxony.

            

    

     

    
      	
              6.1.2

            	
              Conclusion
                of employment contracts between the Company and Mr. Heinze and Mr.
                Westra.

            

    

     

    
      	
              6.1.3

            	
              Approval
                of Good Energies Investments BV's Investment Committee, and of the
                respective
                boards of directors of each of STI, Good Energies Investments BV
                and
                Norsun AS,
                and Sunfilm's supervisory board.

            

    

     

    
      	
              6.1.4

            	
              Conclusion
                of the Site purchase by SEG for the Photovoltaic
                Facilities.

            

    

     

    
      	
              6.2

            	
              Either
                of the Company or SEG may terminate the Agreement if the conditions
                precedent have not been fulfilled by April 15, 2007 or by such a
                later
                date SEG and the Company agree upon.
                In addition, the Company may terminate the Agreement on or prior
                to
                September 1, 2007,
                if:

            

    

     

    
      	
            	-	
              the
                Site turns out to be materially
                contaminated;

            

    

     

    
      	
            	-	
              the
                Site cannot be transferred to the Company under the same terms and
                conditions concluded
                between SEG and the seller of the
                Site;

            

    

     

    
      	
            	-	
              the
                application to transfer the Subsidy to the Company is rejected or
                for any
                reason the Company is not entitled to receive approval of the transfer
                of
                the Subsidy, regardless of whether
                the application to transfer the Subsidy has been filed or
                not;

            

    

     

    
      	
            	-	
              an
                equipment purchase and development roadmap contract between the Company
                and Applied
                has not been concluded and negotiations on the conclusion of such
                contract
                have
                been terminated;

            

    

     

    
      	
            	-	
              Mr.
                Heinze and /or Mr. Westra (i) are, for any reason, not available
                and do
                not work on the
                Company's behalf as needed to set up the Sunfilm Venture with effect
                from
                the Signing
                Date; or (ii) do not enter into an employment relationship with the
                Company as provided
                for in their respective employment agreements; or (iii) materially
                breach
                or have
                breached their duties under this Agrement or their employment
                agreements;

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	-	
              the
                key permits for the construction and operation of the Photovoltaic
                Facilities at the Site
                have not been granted;

            

    

     

    
      	
            	-	
              SEG
                or STI has disclosed the Know-how or SEG or STI starts to establish
                its
                own Photovoltaic Facilities, in each case prior to the expiration
                of the
                18 months period;

            

    

     

    
      	
            	-	
              SEG
                or STI commits any material breach of this Agreement, in particular
                in the
                case of any
                breach of Warranty as set out in Section 5, and fails to remedy such
                breach (if capable
                of remedy) within 14 days of receipt of written notice of such breach
                from
                the Company;

            

    

     

    
      	
            	-	
              in
                the case that the Know-how turns out to be subject to third party
                rights;
                the
                realization of the Sunfilm Venture fails for any other reason;
                or

            

    

     

    
      	
            	-	
              insolvency
                proceedings have been initiated regarding the business or assets
                of SEG or
                STI and have not been dismissed within three months of their initiation
                or
                if either of SEG or STI ceases to conduct business or becomes unable
                to
                pay its debts as they fall due.

            

    

     

    
      	
              6.3

            	
              SEG
                and/ or STI may terminate the Agreement if insolvency proceedings
                have
                been initiated
                regarding the business or assets of the Company and have not been
                dismissed within three months of their initiation or if the Company
                ceases
                to conduct business or becomes
                unable to pay its debts as they fall
                due.

            

    

     

    
      
        
          	6.4	
                  In
                    the event of termination, this Agreement shall forthwith become
                    void and
                    there shall be
                    no liability on the part of the Company, its respective officers
                    or
                    directors, or shareholders,
                    except that the stipulations contained in Section 6.5 shall survive
                    the
                    termination
                    hereof. The same shall apply to the payment obligations of SEG
                    in the
                    context of the
                    Site purchase which shall survive termination of this Agreement,
                    unless
                    SEG withdraws from
                    the Site purchase in accordance with this
                    Agreement.

                

        

      

    

     

    
      	
              6.5

            	
              If
                this Agreement is terminated for any reason whatsoever, each party
                will
                return to the other
                party on a timely basis all documents, agreements, instruments or
                other
                written information
                concerning the other parties that was obtained from such other
                party.

            

    

     

    Section
      7

    Confidentiality

    

    
      	
              7.1

            	
              The
                Parties have already signed confidentiality agreements in respect
                of the
                Sunfilm Venture.
                The Parties agree to keep confidential, and to not make available
                to any
                third party, information
                of any kind obtained in connection with the proposed Sunfilm Venture,
                in
                particular
                the Know-how. This shall include any technical, financial or any
                other
                information
                relevant for the business operations as well as details of the clients
                of
                the Parties or
                any other details regarding business operations of the Parties
                (hereinafter referred to as the
                "Information").
                This
                shall also include the terms and conditions of this Agreement and
                any
                other agreement concluded in respect of the Sunfilm
                Venture.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
              7.2

            	
              The
                Parties shall not use the Information obtained under this Agreement
                or
                during the negotiation
                of this Agreement for any purposes other than the purpose(s) set
                out in
                this Agreement
                and otherwise for the establishment, creation and operation of the
                Sunfilm
                Venture.

            

    

    

    
      	
              7.3

            	
              Any
                information rightfully obtained by a party from another source or
                already
                known to a
                party before the conclusion of this Agreement or already state of
                the art
                or otherwise publicly
                available prior to the signing of this Agreement shall be excluded
                from
                the above confidentiality
                obligations. The obligations of confidentiality, non-use and nondisclosure
                under
                this Agreement shall also not apply to such portions of the Information
                that (a) are or become
                generally available to the public other than as a result of a disclosure
                by the receiving
                party or its permitted disclosees in breach of this Section 7; (b)
                become
                available to
                the receiving party or its representatives on a non-confidential
                basis
                from a source other than
                the disclosing party or its representatives, provided that such source
                is
                not to the receiving
                party's knowledge bound by a obligation of confidence to the disclosing
                party; or (c)
                were known to the receiving party on a non-confidential basis prior
                to
                their disclosure to the
                receiving party or its representatives by the disclosing pary or
                its
                representatives; or (d) is independently developed or generated by
                the
                receiving party or its
                representatives.

            

    

    

    
      	
              7.4

            	
              The
                receiving party shall be entitled to disclose Information to the
                extent
                required by (a) an
                order of any court of competent jurisdiction or competent judicial,
                regulatory or government
                body; (b) the rules of any listing authority or stock exchange; or
                (c) law
                or regulation. In the event that the receiving party or anyone to
                whom the
                receiving party transmits
                the Information pursuant to this Agreement becomes compelled (including
                without
                limitation by oral question, interrogatories, requests for information
                or
                documents, subpoena,
                civil investigative demand or otherwise) to disclose any of the
                Information, the receiving party will, if so allowed by the terms
                of the
                requirement to disclose, provide the disclosing
                party with prompt written notice so that the disclosing party may
                seek a
                protective order
                or other appropriate remedy, or waive compliance with the provisions
                of
                this Section. In
                the event that such protective order or other remedy is not obtained,
                or
                that the disclosing party
                waives compliance with the provisions of this Section 7, the receiving
                party or its representatives
                will furnish only that portion of the Information which is legally
                required and
                the receiving party will exercise its best efforts to obtain reasonable
                assurances that confidential
                treatment will be accorded to such
                Information.

            

    

    

    
      	
              7.5

            	
              The
                Parties shall ensure that its staff and employees as well as any
                other
                persons who are granted
                access to Information on behalf of one of the Parties shall be informed
                of
                and understand
                the above confidentiality
                obligations.

            

    

    

    
      	
              7.6

            	
              The
                confidentiality obligations shall remain in force for a period of
                18
                months from the Signing Date, unless otherwise provided for in this
                Agreement.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
              7.7

            	
              Until
                March 31, 2008 neither party will actively solicit the employment
                of the
                employees of the
                other party, unless otherwise stated in this Agreement or agreed
                between
                the Company and
                SEG, The placing of an advertisement of a post available to a member
                of
                the public generally
                shall not constitute a breach of this Section 7.7, save that this
                exception shall not apply
                in the cases of Mr Heinze, Mr. Westra, Ms Brandl or Mr Bock once
                their
                employment has
                transferred to Sunfilm as contemplated in this
                Agreement.

            

    

     

    Section
      8

    Costs

     

    Except
      as
      otherwise set out in this Agreement each party shall bear its own expenses
      in
      connection with
      this
      Agreement and the negotiations of the agreements, including costs of
      consultants, advisors,
      attorneys and travel expenses.

     

    Section
      9

    Final
      Provisions

     

    
      	
              9.1

            	
              The
                statements contained in this Agreement have been agreed upon by the
                Parties and, therefore,
                shall constitute binding obligations of either
                Party.

            

    

     

    
      	
              9.2

            	
              For
                the avoidance of doubt, this Agreement neither constitutes an employment
                relationship
                with the Company and Mr. Heinze and Mr. Westra, nor does it refer
                any
                rights to
                Mr, Heinze and Mr. Westra to enter into an employment relationship
                with
                the Company,

            

    

     

    
      	
              9.3

            	
              Alterations
                and amendments to the Agreement must be in writing. This will also
                apply
                to a
                waiver of the requirement for written
                form.

            

    

     

    
      	
              9.4

            	
              The
                Parties will mutually agree upon the wording and structure of any
                public
                announcement
                or press release regarding this
                Agreement.

            

    

     

    
      
        
          	9.5	
                  The
                    Parties agree that this Agreement is a license of intellectual
                    property
                    subject to section
                    365(n) of the United States Bankruptcy Code. The Parties further
                    agree
                    that upon any
                    election by the Company pursuant to section 365(n)(l)(B) of the
                    United
                    States Bankruptcy
                    Code, the Company shall be entitled to, on its own or through
                    employees,
                    contractors,
                    agents, or otherwise, upgrade, modify and develop derivative
                    works based
                    upon the
                    rights transferred hereunder, and upon the Know-how associated
                    with STI's
                    and SEG's past
                    work on Photovoltaic Facilities and the production of Solar Module
                    Products, subject to the
                    terms of this
                    Agreement.

                

        

      

    

     

    
      	
              9.6

            	
              If
                a provision of this Agreement should be or become partially or entirely
                invalid or unenforceable,
                the validity of the remaining provisions hereof shall not be affected
                thereby. The
                Parties shall be obligated to replace the invalid or unenforceable
                provision with aprovision
                which comes closest to the economic purpose originally intended by
                the
                Parties with
                the invalid or unenforceable provision. The same shall apply in the
                event
                of any omissions
                in this Agreement. Section 139 German Civil Code is expressively
                waived.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              9.7

            	
              The
                statements and agreements contained in this Agreement and all rights
                and
                obligations
                in connection therewith shall be subject to German
                law.

            

    

    

    
      	9.8	
              Unless
                settled amicably, any dispute in respect to this Agreement shall
                be
                finally settled by
                international arbitration. Unless otherwise agreed by the Parties
                the
                dispute shall be finally
                settled under the Rules of Arbitration of the International Chamber
                of
                Commerce. The dispute shall be settled by three arbitrators appointed
                in
                accordance with these rules. The arbitration shall be conducted in
                the
                English language. The arbitration panel shall be situated
                in Frankfurt Germany. 

            

    

    

    

    
      	
              /s/
                illegible

            	 	
              /s/
                illegible

            
	
              Sunfilm
                AG  

            	 	
              Southwall
                Europe GmbH, 

            
	
              represented
                by  

            	 	
              represented
                by 

            
	
              Name:
                Wolfgang Heinze and Klaus 

            	 	
              Name:
                Wolfgang Heinze 

            
	
              Tonnesmann 

            	 	
              Function:
                Geschaftsfuhrer 

            
	
              Function:
                Vorstand and 

            	 	
               

            
	
              Name:
                Sven Hansen 

            	 	 
	
              Function:
                Chairman of the 

            	 	 
	
              Supervisory
                Board 

            	 	 

    

    

    
      	
              /s/
                Wolfgang Heinze

            	 	  
  
 
	
              Wolfgang
                Heinze 

            	 	
              Southwall
                Technologies Inc., 

            
	 	 	
              represented
                by 

            
	 	
               

            	
              Name:
                R. Eugene Goodson 

            
	 	
               

            	
              Function:
                CEO and President 

            
	
               /s/
                Sicco Westra

            	 	 
	
              Sicco
                Westra  

            	 	 
	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              9.7

            	
              The
                statements and agreements contained in this Agreement and all rights
                and
                obligations
                in connection therewith shall be subject to German
                law.

            

    

    

    
      	9.8	
              Unless
                settled amicably, any dispute in respect to this Agreement shall
                be
                finally settled by
                international arbitration. Unless otherwise agreed by the Parties
                the
                dispute shall be finally
                settled under the Rules of Arbitration of the International Chamber
                of
                Commerce. The dispute shall be settled by three arbitrators appointed
                in
                accordance with these rules. The arbitration shall be conducted in
                the
                English language. The arbitration panel shall be situated
                in Frankfurt Germany. 

            

    

    

    

    
      	
              /s/
                illegible

            	 	
              /s/
                illegible

            
	
              Sunfilm
                AG  

            	 	
              Southwall
                Europe GmbH, 

            
	
              represented
                by  

            	 	
              represented
                by 

            
	
              Name:
                Wolfgang Heinze and Klaus 

            	 	
              Name:
                Wolfgang Heinze 

            
	
              Tonnesmann 

            	 	
              Function:
                Geschaftsfuhrer 

            
	
              Function:
                Vorstand and 

            	 	
               

            
	
              Name:
                Sven Hansen 

            	 	 
	
              Function:
                Chairman of the 

            	 	 
	
              Supervisory
                Board 

            	 	 

    

    

    
      	
              /s/
                Wolfgang Heinze

            	 	  
  
 
	
              Wolfgang
                Heinze 

            	 	
              Southwall
                Technologies Inc., 

            
	 	 	
              represented
                by 

            
	 	
               

            	
              Name:
                R. Eugene Goodson 

            
	 	
               

            	
              Function:
                CEO and President 

            
	
               /s/
                Sicco Westra

            	 	 
	
              Sicco
                Westra  

            	 	 
	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              9.7

            	
              The
                statements and agreements contained in this Agreement and all rights
                and
                obligations
                in connection therewith shall be subject to German
                law.

            

    

    

    
      	9.8	
              Unless
                settled amicably, any dispute in respect to this Agreement shall
                be
                finally settled by
                international arbitration. Unless otherwise agreed by the Parties
                the
                dispute shall be finally
                settled under the Rules of Arbitration of the International Chamber
                of
                Commerce. The dispute shall be settled by three arbitrators appointed
                in
                accordance with these rules. The arbitration shall be conducted in
                the
                English language. The arbitration panel shall be situated
                in Frankfurt Germany. 

            

    

    

    

    
      	
              /s/
                illegible

            	 	
              /s/
                illegible

            
	
              Sunfilm
                AG  

            	 	
              Southwall
                Europe GmbH, 

            
	
              represented
                by  

            	 	
              represented
                by 

            
	
              Name:
                Wolfgang Heinze and Klaus 

            	 	
              Name:
                Wolfgang Heinze 

            
	
              Tonnesmann 

            	 	
              Function:
                Geschaftsfuhrer 

            
	
              Function:
                Vorstand and 

            	 	
               

            
	
              Name:
                Sven Hansen 

            	 	 
	
              Function:
                Chairman of the 

            	 	 
	
              Supervisory
                Board 

            	 	 

    

    

    
      	
              /s/
                Wolfgang Heinze

            	 	  
  
 
	
              Wolfgang
                Heinze 

            	 	
              Southwall
                Technologies Inc., 

            
	 	 	
              represented
                by 

            
	 	
               

            	
              Name:
                R. Eugene Goodson 

            
	 	
               

            	
              Function:
                CEO and President 

            
	
               /s/
                Sicco Westra

            	 	 
	
              Sicco
                Westra  

            	 	 
	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              9.7

            	
              The
                statements and agreements contained in this Agreement and all rights
                and
                obligations
                in connection therewith shall be subject to German
                law.

            

    

    

    
      	9.8	
              Unless
                settled amicably, any dispute in respect to this Agreement shall
                be
                finally settled by
                international arbitration. Unless otherwise agreed by the Parties
                the
                dispute shall be finally
                settled under the Rules of Arbitration of the International Chamber
                of
                Commerce. The dispute shall be settled by three arbitrators appointed
                in
                accordance with these rules. The arbitration shall be conducted in
                the
                English language. The arbitration panel shall be situated
                in Frankfurt Germany. 

            

    

    

    

    
      	
              /s/
                illegible

            	 	
              /s/
                illegible

            
	
              Sunfilm
                AG  

            	 	
              Southwall
                Europe GmbH, 

            
	
              represented
                by  

            	 	
              represented
                by 

            
	
              Name:
                Wolfgang Heinze and Klaus 

            	 	
              Name:
                Wolfgang Heinze 

            
	
              Tonnesmann 

            	 	
              Function:
                Geschaftsfuhrer 

            
	
              Function:
                Vorstand and 

            	 	
               

            
	
              Name:
                Sven Hansen 

            	 	 
	
              Function:
                Chairman of the 

            	 	 
	
              Supervisory
                Board 

            	 	 

    

    

    
      	
              /s/
                Wolfgang Heinze

            	 	  
  
 
	
              Wolfgang
                Heinze 

            	 	
              Southwall
                Technologies Inc., 

            
	 	 	
              represented
                by 

            
	 	
               

            	
              Name:
                R. Eugene Goodson 

            
	 	
               

            	
              Function:
                CEO and President 

            
	
               /s/
                Sicco Westra

            	 	 
	
              Sicco
                Westra  

            	 	 
	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              9.7

            	
              The
                statements and agreements contained in this Agreement and all rights
                and
                obligations
                in connection therewith shall be subject to German
                law.

            

    

    

    
      	9.8	
              Unless
                settled amicably, any dispute in respect to this Agreement shall
                be
                finally settled by
                international arbitration. Unless otherwise agreed by the Parties
                the
                dispute shall be finally
                settled under the Rules of Arbitration of the International Chamber
                of
                Commerce. The dispute shall be settled by three arbitrators appointed
                in
                accordance with these rules. The arbitration shall be conducted in
                the
                English language. The arbitration panel shall be situated
                in Frankfurt Germany. 

            

    

    

    

    
      	
              /s/
                illegible

            	 	
              /s/
                illegible

            
	
              Sunfilm
                AG  

            	 	
              Southwall
                Europe GmbH, 

            
	
              represented
                by  

            	 	
              represented
                by 

            
	
              Name:
                Wolfgang Heinze and Klaus 

            	 	
              Name:
                Wolfgang Heinze 

            
	
              Tonnesmann 

            	 	
              Function:
                Geschaftsfuhrer 

            
	
              Function:
                Vorstand and 

            	 	
               

            
	
              Name:
                Sven Hansen 

            	 	 
	
              Function:
                Chairman of the 

            	 	 
	
              Supervisory
                Board 

            	 	 

    

    

    
      	
              /s/
                Wolfgang Heinze

            	 	  
  
 
	
              Wolfgang
                Heinze 

            	 	
              Southwall
                Technologies Inc., 

            
	 	 	
              represented
                by 

            
	 	
               

            	
              Name:
                R. Eugene Goodson 

            
	 	
               

            	
              Function:
                CEO and President 

            
	
               /s/
                Sicco Westra

            	 	 
	
              Sicco
                WestraExhibit 10.144

    
      

    

     

    Exhibit
      10.144

    
      BUSINESS
        FINANCING AGREEMENT

      dated
        as
        of March 29, 2007

      between

      BRIDGE
        BANK, NATIONAL ASSOCIATION

      and

      SOUTHWALL
        TECHNOLOGIES INC., a Delaware corporation ("Borrower').

      

      Borrower
        and Lender agree as follows:

      

      1.    Definitions
        and Construction.

      

      1.1    Definitions.
        In this
        Agreement:

      

      "Account
        Balance"
        means at
        any time the aggregate of the Receivable Amounts of all Eligible Receivables
        at
        such
        time.

      

      "Account
        Debtor"
        has the
        meaning in the California Uniform Commercial Code and includes any person
        liable
        on
        any Receivable, including without limitation, any guarantor of any Receivable
        and any issuer of a letter
        of
        credit or banker's acceptance assuring payment thereof.

      

      "Adjustments"
        means
        all discounts, allowances, disputes, offsets, defenses, rights of recoupment,
        rights of return, warranty claims, or short payments, asserted by or on behalf
        of any Account Debtor with respect to any Receivable.

      

      "Advance"
        means
        any Facility One Advance or Facility Two Advance.

      

      "Advance
        Rate"
        means
        the Facility One Advance Rate or the Facility Two Advance Rate.

      

      "Agreement"
        means
        this Business Financing Agreement.

      

      "Collateral"
        means
        all of Borrower's rights and interest in any and all personal property, whether
        now existing
        or hereafter acquired or created and wherever located, and all products and
        proceeds thereof and accessions
        thereto, including the following: accounts, including health care insurance
        receivables, chattel paper, inventory, equipment, instruments, including
        promissory notes, investment property, documents, deposit accounts, letter
        of
        credit rights, any commercial tort claim of Borrower which is now or hereafter
        identified by Borrower or Lender, general intangibles, and supporting
        obligations.

      

      "Collections"
        means
        all payments from or on behalf of an Account Debtor with respect to
        Receivables.

      

      "Compliance
        Certificate"
        means a
        certificate in the form attached to this Agreement by the chief financial
        officer
        of Borrower certifying that, among other things, the representations and
        warranties set forth in this Agreement are true and correct in all material
        respects as of the date such certificate is delivered.

      

      "Closing
        Date"
        means
        the date on which Lender executes and delivers this Agreement. 

       

      "Credit
        Limit"
        means
        the sum of the Facility One Credit Limit plus the Facility Two Credit
        Limit.

      

      "Default"
        means any Event of Default or any event that with notice, lapse of time or
        otherwise would constitute an Event of Default.

      

      "Eligible
        Receivable"
        means a
        Receivable that satisfies all of the following:

      

      (a)  The
        Receivable has been created by Borrower in the ordinary course of Borrower's
        business and
        without any obligation on the part of Borrower to render any further
        performance.

      

      (b)  There
        are
        no conditions that must be satisfied before Borrower is entitled to receive
        payment of the
        Receivable, and the Receivable does not arise from COD sales, consignments
        or
        guaranteed sales,

      

      (c)  The
        Account Debtor upon the Receivable does not claim any defense to payment
        of the
Receivable,
        whether well founded or otherwise.

      

      (d)  The
        Receivable is not the obligation of an Account Debtor who has asserted or
        may
        assert any counterclaims
        or offsets against Borrower (including offsets for any "contra accounts"
        owed by
        Borrower to the
        Account Debtor for goods purchased by Borrower or for services performed
        for
        Borrower).

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (e)  The
        Receivable represents a genuine obligation of the Account Debtor and to the
        extent any credit
        balances exist in favor of the Account Debtor, such credit balances shall
        be
        deducted in calculating the
        Receivable Amount.

      

      (f)  Borrower
        has sent an invoice to the Account Debtor in the amount of the
        Receivable.

      

      (g)  Borrower
        is not prohibited by the laws of the state where the Account Debtor is located
        from bringing
        an action in the courts of that state to enforce the Account Debtor's obligation
        to pay the Receivable.
        Borrower has taken all appropriate actions to ensure access to the courts
        of the
        state where the
        Account Debtor is located, including, where necessary, the filing of a Notice
        of
        Business Activities Report
        or
        other similar filing with the applicable state agency or the qualification
        by
        Borrower as a foreign corporation
        authorized to transact business in such state.

      

      (h)  The
        Receivable is owned by Borrower free of any title defects or any liens or
        interests of others except the security interest in favor of Lender, and
        Lender
        has a perfected, first priority security interest in such
        Receivable.

      

      (i)  The
        Account Debtor on the Receivable is not any of the following: (i) an employee,
        affiliate, parent
        or
        subsidiary of Borrower, or an entity which has common officers or directors
        with
        Borrower; (ii) the
        U.S.
        government or any agency or department of the U.S. government unless Lender
        agrees in writing to accept the Receivable, Borrower complies with the
        procedures in the Federal Assignment of Claims Act of
        1940
        (41 U.S.C.§15) with respect to the Receivable, and the underlying contract
        expressly provides that neither
        the U.S. government nor any agency or department thereof shall have the right
        of
        set-off against Borrower;
        (iii) any person or entity located in a foreign country, other than Canada
        or a
        Permitted Foreign Entity
        (to the extent that the Receivables relating to such Permitted Foreign Entity
        (or Entities) are billed and collected out of the United States) unless (A)
        the
        Receivable is supported by an irrevocable letter of credit
        issued by a bank acceptable to Lender, (B) if requested by Lender, the original
        of such letter of credit
        and/or any usance drafts drawn under such letter of credit and accepted by
        the
        issuing or confirming bank have been delivered to Lender, and (C) is otherwise
        acceptable to Lender; or (iv) an Account Debtor as
        to
        which thirty-five percent (35%) or more of the aggregate dollar amount of
        all
        outstanding Receivables
        owing from such Account Debtor have not been paid within 90 days from invoice
        date.

      

      (j)  The
        Receivable is not in default. A Receivable will be considered in default
        if any
        of the following
        occur: (i) the Receivable is not paid within 90 days from its invoice date;
        (ii)
        the Account Debtor obligated
        upon the Receivable suspends business, makes a general assignment for the
        benefit of creditors,
        or fails to pay its debts generally as they come due; or (iii) any petition
        is
        filed by or against the Account
        Debtor obligated upon the Receivable under any bankruptcy law or any other
        law
        or laws for the relief
        of
        debtors;

      

      (k)  The
        Receivable does not arise from the sale of goods that remain in Borrower's
        possession or under
        Borrower's control.

      

      (l)  The
        Receivable is not evidenced by a promissory note or chattel paper, nor is
        the
        Account Debtor
        obligated to Borrower under any other obligation that is evidenced by a
        promissory note.

      

      (m)  The
        Receivable is not that portion of Receivables due from an Account Debtor
        that is
        in excess of
        thirty-five percent (35%) of Borrower's aggregate dollar amount of all
        outstanding Receivables.

      

      (n)  The
        Receivable is otherwise acceptable to Lender. 

      

      "Event
        of Default"
        has the
        meaning set forth in Section 9.1.

      

      "Facility
        Fee"
        means a
        fee equal to 1% of the Credit Limit due upon execution of this Agreement
        and
        annually thereafter.

      

      "Facility
        One Advance"
        means
        any advance made pursuant to Section 2.1.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      "Facility
        One Advance Rate"
        means
        100%,

      

      "Facility
        One Borrowing Base"
        means
        the face amount of the Standby Letter of Credit.

      

      "Facility
        One Credit Limit"
        means
        $3,000,000.

      

      "Facility
        One Finance Charge"
        means
        for each Reconciliation Period an interest amount equal to the Facility
        One Finance Charge Percentage of the average daily balance of Facility One
        Advances outstanding during
        such Reconciliation Period.

      

      "Facility
        One Finance Charge Percentage"
        means a
        rate per year equal to Lender's Prime Rate minus 1.75
        percentage points plus an additional five percentage points during any period
        that an Event of Default has occurred
        and is continuing.

      

      "Facility
        One Funding Request"
        means a
        writing signed by an authorized representative of Borrower requesting
        a Facility One Advance.

      

      "Facility
        One Overadvance"
        means
        the total amount of the Facility One Advances then outstanding exceeds the
        lesser of the Facility One Credit Limit or the Facility One Borrowing
        Base.

      

      "Facility
        One Termination Fee"
        means a
        payment equal to one percent (1%) of the Facility One Credit Limit.

      

      ''Facility
        Two Advance"
        means
        any advance made pursuant to section 2.2.

      

      "Facility
        Two Advance Rate"
        means
        80% or such greater or lesser percentage as Lender may from time to time
        establish in its sole discretion upon notice to Borrower.

      

      "Facility
        Two Borrowing Base"
        means at
        any time the product of the Account Balance and the Facility Two Advance
        Rate.

      

      "Facility
        Two Credit Limit"
        means
        $3,000,000.

      

      "Facility
        Two Finance Charge"
        means
        for each Reconciliation Period an interest amount equal to the Facility
        Two Finance Charge Percentage of the average daily balance of the Facility
        Two
        Advances outstanding
        during such Reconciliation Period.

      

      "Facility
        Two Finance Charge Percentage"
        means a
        rate per year equal to Lender's Prime Rate plus 1.75 percentage
        points plus an additional five percentage points during any period that an
        Event
        of Default has occurred
        and is continuing.

      

      "Facility
        Two Funding Request"
        means a
        writing signed by an authorized representative of Borrower requesting
        a Facility Two Advance that accurately identifies the Eligible Receivables
        and
        Receivable Amounts, and
        includes for each such Receivable the correct amount owed by the Account
        Debtor,
        the name and address of the Account Debtor, the invoice number, the invoice
        date
        and the account code.

      

      "Facility
        Two Overadvance"
        means
        the total amount of the Facility Two Advances then outstanding exceeds the
        lesser of the Facility Two Credit Limit or the Facility Two Borrowing
        Base.

      

      "Facility
        Two Sub-limit"
        means
        $2,000,000.

      

      "Facility
        Two Termination Fee"
        means a
        payment equal to one percent (1%) of the Facility Two Credit Limit.

      

      "Finance
        Charge"
        means
        the Facility One Finance Charge and the Facility Two Finance Charge.

       

      "Lender"
        means Bridge Bank, National Association, and its successors and assigns.
        

       

      "Letter
        of Credit"
        has the
        meaning set forth in Section 2.2.5.

       

      "Maturity
        Date"
        means
        March 28, 2008.

      

      "Obligations"
        means
        all liabilities and obligations of Borrower to Lender of any kind or nature,
        present or future,
        arising under or in connection with this Agreement or under any other document,
        instrument or agreement,
        whether or not evidenced by any note, guarantee or other instrument, whether
        arising on account or
        by
        overdraft, whether direct or indirect (including those acquired by assignment)
        absolute or contingent, primary
        or secondary, due or to become due, now owing or hereafter arising, and however
        acquired; including, without
        limitation, all Advances, Finance Charges, fees, interest, expenses,
        professional fees and attorneys' fees.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      "Overadvance"
        means a
        Facility One Overadvance or a Facility Two Overadvance.

      

      "Permitted
        indebtedness"
        means
        (a) indebtedness under this Agreement, (b) trade payables to the extent
not
        more
        than 45 days past due, (c) endorsements of instruments and other payment
        items
        for collection in the ordinary
        course of business, (d) indebtedness included in the financial statements
        of the
        Borrower included with the Borrower's SEC Form 10-K filed with the Securities
        and Exchange Commission with respect to the fiscal year ending December 31,
        2006, and (e) additional purchase money indebtedness (including capital leases)
        incurred to acquire capital assets and not exceeding $100,000 in total principal
        amount at any time outstanding.

      

      "Permitted
        Foreign Entity"
        means
        Pilkington, St. Gobain Sekurit, E.I. DuPont, Huper Optik USA, Mitsui
Chemical,
        Guardian Llodio Uno or V-Kool.

      

      "Primary
        Collateral"
        means
        the Standby Letter of Credit, the Receivables, inventory, deposit accounts,
        and
any
        direct or indirect proceeds of any one or more of the foregoing.

      

      "Prime
        Rate"
        means
        for any day, a variable rate of interest, per annum, most recently published
        by
        the Wall Street Journal, as the "prime rate," provided that if such day is
        not a
        business day, the Prime Rate for such
        day
        shall be such rate on such transactions on the next preceding business day
        as so
        published in the Wall
        Street Journal on the next succeeding business day.

      

      "Receivable
        Amount"
        means as
        to any Receivable, the amount due from the Account Debtor after deducting
        all discounts, credits, offsets, payments or other deductions of any nature
        whatsoever, whether or not
        claimed by the Account Debtor.

      

      "Receivables"
        means
        all Borrower's rights to payment, whether now existing or hereafter arising,
        including accounts,
        chattel paper, instruments, contract rights, documents, general intangibles,
        letters of credit, drafts, support
        obligations, and bankers acceptances.

      

      "Reconciliation
        Date"
        means
        the last calendar day of each Reconciliation Period. 

      

      "Reconciliation
        Period"
        means
        each calendar month.

      

      "Standby
        Letter of Credit"
        means a
        standby letter of credit (i) naming Lender as beneficiary, (ii) in an
amount
        equal to or greater than the Facility One Credit Limit, (iii) with an expiry
        date no sooner than 60 days following
        the Maturity Date, (iv) issued by a financial institution with a rating of
        BBB
        or better, and (v) otherwise in
        form
        and substance acceptable to Lender in its sole discretion.

      

      "Supplier"
        means
        any supplier of property (including intellectual property) or services to
        Borrower (whether by
        sale,
        lease, license or otherwise) which is acceptable to Lender.

      

      "Termination
        Fee"
        means
        the Facility One Termination Fee and the Facility Two Termination
        Fee.

      

      1.2    Construction:

      

      (a)  In
        this
        Agreement: (i) references to the plural include the singular and to the singular
        include the
        plural; (ii) references to any gender include any other gender; (iii) the
        terms
        "include" and "including" are
        not
        limiting; (iv) the term "or" has the inclusive meaning represented by the
        phrase
        "and/or," (v) unless otherwise
        specified, section and subsection references are to this Agreement, and (vi)
        any
        reference to any
        statute, law, or regulation shall include all amendments thereto and revisions
        thereof.

      

      (b)  Neither
        this Agreement nor any uncertainty or ambiguity herein shall be construed
        or
        resolved using
        any
        presumption against either Borrower of Lender, whether under any rule of
        construction or otherwise.
        On the contrary, this Agreement has been reviewed by each party hereto and
        their
        respective counsel.
        In case of any ambiguity or uncertainty, this Agreement shall be construed
        and
        interpreted according
        to the ordinary meaning of the words used to accomplish fairly the purposes
        and
        intentions of all parties
        hereto.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (c)  Titles
        and section headings used in this Agreement are for convenience only and
        shall
        not be used
        in
        interpreting this Agreement.

      

      
        	
                2.

              	
                Advances

              

      

      

      
        	 	
                2.1.

              	
                Facility
                  One.

              

      

      

      
        	
              	2.1.1.	
                Funding
                  Requests.
                  Borrower may request that Lender make an advance (each, a "Facility
                  One
                  Advance")
                  by delivering to Lender a Facility One Funding Request. Lender
                  shall be
                  entitled to rely on all the information provided by Borrower to
                  Lender on
                  or with the Facility One Funding Request
                  and to rely on the signature on any Facility One Funding Request
                  as an
                  authorized signature of Borrower.

              

      

      

      
        	
              	2.1.2.	
                Upon
                  the approval by Lender of any Facility One Funding Request, Lender
                  shall
                  make an Advance
                  to Borrower in the requested amount; provided
                  that in no event shall Lender be obligated to make any Facility
                  One
                  Advance that results in an Facility One Overadvance or while
                  any Overadvance is outstanding.

              

      

      

      
        	 	
                2.2.

              	
                Facility
                  Two.

              

      

      

      
        	 	
                2.2.1.

              	
                Funding
                  Requests.
                  Borrower may request that Lender make an advance (each, a "Facility
                  Two
                  Advance")
                  by delivering to Lender a Facility Two Funding Request. Lender
                  shall be
                  entitled to rely on all the information provided by Borrower to
                  Lender on
                  or with the Funding Request and to
                  rely on the signature on any Facility Two Funding Request as an
                  authorized
                  signature of Borrower.

              

      

      

      
        	 	
                2.2.2.

              	
                Acceptance
                  of Receivables.
                  Lender has no obligation to make any Facility Two Advances and
                  may
                  exercise its sole discretion in determining whether any Receivable
                  is an
                  Eligible Receivable before
                  making any Facility Two Advance. Upon the approval by Lender of
                  any
                  Funding Request,
                  Lender shall make a Facility Two Advance to Borrower in the requested
                  amount; provided
                  that in no event shall Lender be obligated to make any Facility
                  Two
                  Advance that results
                  in an Facility Two Overadvance or while any Overadvance is
                  outstanding.

              

      

      

      
        	 	
                2.2.3.

              	
                Rights
                  in Respect of Receivables.
                  Lender shall have the exclusive right to receive all Collections
                  on the Receivable and no Adjustments will be made without the Lender's
                  consent. Lender
                  shall have, with respect to any goods related to the Receivables,
                  all the
                  rights and remedies
                  of an unpaid seller under the California Uniform Commercial Code
                  and other
                  applicable
                  law, including the rights of replevin, claim and delivery, reclamation
                  and
                  stoppage in transit.

              

      

      

      
        	 	
                2.2.4.

              	
                Due
                  Diligence.
                  Lender may at any time and from time to time contact Account Debtors
                  and
                  other
                  persons obligated or knowledgeable in respect of Receivables to
                  confirm
                  the Receivable Amount
                  of such Receivables, to determine whether Receivables constitute
                  Eligible
                  Receivables, and
                  for any other purpose in connection with this Agreement. Lender
                  may audit
                  Borrower's Receivables
                  and any and all records pertaining to the Collateral, at Lender's
                  sole
                  discretion and at
                  Borrower's expense.

              

      

      

      
        	
              	2.2.5.	
                Letters
                  of Credit.
                  Lender may issue letters of credit (each, a "Letter of Credit")
                  for
                  Borrower's account not exceeding the Facility Two Sub-limit; provided
                  that, after taking into account the face
                  value of such Letter of Credit, (i) the total amount outstanding
                  under
                  Sections 2.2.5, 2.2.6 and
                  2.2.7 will not exceed the Facility Two Sub-limit unless such excess
                  is
                  cash collateralized in a form and manner and with such documentation
                  that
                  is acceptable to Lender, and (ii) the total amount of all outstanding
                  Facility Two Advances (including amounts deemed to be Facility
                  Two
                  Advances
                  under Sections 2.2.5, 2.2.6 and 2.2.7) will not exceed the lesser
                  of the
                  Borrowing Base
                  and the Facility Two Credit Limit. Each Letter of Credit expiring
                  after
                  the Maturity Date must
                  be secured by unencumbered cash maintained with Lender in an amount
                  not
                  less than 100%
                  of the face amount of each such Letter of Credit. Borrower agrees
                  to
                  execute any further documentation
                  in connection with the Letters of Credit as Lender may request.
                  The face
                  amount
                  of any Letter of Credit issued hereunder shall be deemed to be
                  a Facility
                  Two Advance, shall reduce, on a dollar-for-dollar basis, the amount
                  available for other Facility Two Advances, and
                  shall be repaid by Borrower in accordance with the provisions of
                  this
                  Agreement.

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
              	2.2.6.	
                Foreign
                  Exchange.
                  Borrower may enter in foreign exchange forward contracts with Lender
                  under
                  which Borrower commits to purchase from or sell to Lender a set
                  amount of
                  foreign currency more than one business day after the contract
                  date (an
                  "FX Forward Contract"); provided
                  that, after taking into account the portion of such FX Forward
                  Contract
                  that is deemed to be a Facility Two Advance hereunder, (i) the
                  total
                  amount outstanding under Sections 2.2.5, 2.2.6
                  and 2.2.7 will not exceed the Facility Two Sub-limit unless such
                  excess is
                  cash collateralized
                  in a form and manner and with such documentation that is acceptable
                  to
                  Lender, and
                  (ii} the total amount of all outstanding Facility Two Advances
                  (including
                  amounts deemed to be
                  Facility Two Advances under Sections 2.2.5, 2.2.6 and 2.2.7} will
                  not
                  exceed the lesser of the
                  Borrowing Base and the Facility Two Credit Limit. Ten percent (10.0%)
                  of
                  the amount of each outstanding FX Forward Contract shall be deemed
                  to be a
                  Facility Two Advances hereunder,
                  shall decrease, on a dollar-for-dollar basis, the amount available
                  for
                  other Facility Two
                  Advances, and shall be repaid by Borrower in accordance with the
                  provisions of this Agreement.
                  Lender may terminate the FX Forward Contracts if an Event of Default
                  occurs and is continuing.

              

      

      

      
        	 	
                2.2.7.

              	
                Cash
                  Management Services.
                  For the purpose of utilizing Lender's cash management products,
                  Lender may
                  make Facility Two Advances to Borrower in an amount not exceeding
                  Facility
                  Two Sub-limit; provided
                  that, after taking into account the amount of any such Advance
                  to be made
                  pursuant
                  to this Section, (i) the total amount outstanding under Sections
                  2.2.5,
                  2.2.6 and 2.2.7 will
                  not exceed the Facility Two Sub-limit unless such excess is cash
                  collateralized in a form and manner
                  and with such documentation that is acceptable to Lender, and (ii)
                  the
                  total amount of all
                  outstanding Facility Two Advances (including amounts deemed to
                  be Facility
                  Two Advances under Sections 2.2.5, 2.2.6 and 2.2.7) will not exceed
                  the
                  lesser of the Borrowing Base and the Facility Two Credit Limit.
                  Lender's
                  cash management services may include merchant services, direct
                  deposit of payroll, business credit card, and check cashing services
                  identified in various cash
                  management services agreements related to such services (the "Cash
                  Management Services").
                  Advances provided pursuant to this Section 2.2.7 shall be deemed
                  to be a
                  Facility Two
                  Advances hereunder, shall decrease, on a dollar-for-dollar basis,
                  the
                  amount available for other
                  Facility Two Advances, and shall be repaid by Borrower in accordance
                  with
                  the provisions of
                  this Agreement.

              

      

      

      
        	
              	2.2.8.	
                Condition
                  Precedent to Facility Two Advances.
                  Notwithstanding anything to the contrary in this Agreement or any
                  related
                  document, Borrower will not request, and Lender will not provide
                  any
                  Facility
                  Two Advances until Borrower has delivered (or caused to be delivered)
                  to
                  Lender a fully executed
                  subordination agreement in form and substance acceptable to Lender
                  in is
                  sole discretion,
                  which agreement shall subordinate all Indebtedness to, and liens
                  in favor
                  of, any applicant
                  or account party to the Standby Letter of Credit to that owing
                  to or in
                  favor of Lender
                  created pursuant to this Agreement or any related
                  document.

              

      

      

      
        	 	
                2.3.

              	
                It
                  shall be a condition to each Advance that (a) all of the representations
                  and warranties set forth in Section
                  6 are true and correct on the date of such Advance as though made
                  at and
                  as of each such date
                  and (b) no Default has occurred and is continuing, or would result
                  from
                  such Advance.

              

      

      

      
        	
              	2.4.	
                Subject
                  to the terms of this Agreement, the principal amount of Advances
                  may be
                  repaid and reborrowed
                  by Borrower at any time prior to the Maturity
                  Date.

              

      

      

      
        	
                3.

              	
                Collections,
                  Charges and Remittances.

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	
                3.1.

              	
                Collections.
                  Lender shall credit Collections with respect to Receivables received
                  by
                  Lender to Borrower's
                  Account Balance within three business days of the date received.
                  At
                  Lender's discretion, all Collections
                  received by Lender may either be (a) credited to Borrower's deposit
                  account with Lender, or
                  (b) applied to repay the Advances and other Obligations. Once all
                  Obligations have been paid in full,
                  Lender agrees to remit to Borrower the remaining amount of Collections
                  it
                  receives. Lender has no duty
                  to do any act other than to turn over such amounts as required
                  above. If
                  an item of Collections is not
                  honored or Lender does not receive good funds for any reason, the
                  amount
                  of any application shall be
                  reversed as if the Collections had not been received and Finance
                  Charges
                  under Section 3.2 shall accrue
                  thereon.

              

      

      

      
        	 	
                3.2.

              	
                Finance
                  Charges.
                  On
                  the 10th
                  day of each month until payment In full of any principal outstanding
                  under
                  this facility, Borrower shall pay to Lender the Finance Charge
                  for the
                  Reconciliation Period then ended.
                  Lender may deduct the accrued Finance Charges from Borrower's checking
                  account maintained
                  with Lender.

              

      

      

      
        	 	
                3.3.

              	
                Fees.

              

      

      

      (a)    Facility
        Fee.
        Borrower
        shall pay the Facility Fee to Lender promptly upon the execution of this
        Agreement
        and upon each anniversary hereof during the continuance of this
        facility.

      

      (b)    Termination
        Fees.
        In the
        event that this Agreement is terminated prior to the Maturity Date, Borrower
        shall pay the Termination Fee to Lender; provided that such Termination Fee
        shall be waived if this
        Agreement is termination in connection with Borrower's entry into a new and
        comparable financing agreement
        with Lender.

      

      
        	 	
                3.4.

              	
                Reporting.
                  Within 15 days after the end of each Reconciliation Period, Lender
                  shall
                  send to Borrower a
                  report covering the transactions for that Reconciliation Period,
                  including
                  the amount of all Collections,
                  Adjustments made by Lender, Finance Charges, and other fees and
                  charges.
                  The accounting
                  shall be deemed correct and conclusive unless Borrower makes written
                  objection to Lender
                  within 30 days after the Lender mails the accounting to
                  Borrower.

              

      

      

      
        	 	
                3.5.

              	
                Adjustments.
                  In
                  the event of a breach of Sections 6 or 7, or in the event any Adjustment
                  or dispute is asserted
                  by any Account Debtor, Borrower shall promptly advise Lender and
                  shall,
                  subject to the Lender's
                  approval, resolve such disputes and advise Lender of any adjustments.
                  Lender shall have the
                  right, at any time, to take possession of any rejected, returned,
                  or
                  recovered personal property. If such
                  possession is not taken by Lender, Borrower is to resell it for
                  Lender's
                  account at Borrower's expense
                  with the proceeds made payable to Lender. While Borrower retains
                  possession of any returned
                  goods, Borrower shall segregate said goods and mark them as property
                  of
                  Lender.

              

      

      

      
        	 	
                3.6.

              	
                Lockbox
                  Account .Collection Services.
                  Borrower and Lender shall immediately enter into an agreement
                  acceptable to Lender (the "Lockbox Agreement"). Borrower shall
                  use the
                  lockbox address as
                  the remit to and payment address for all of Borrower's Collections
                  and it
                  will be considered an immediate
                  Event of Default if this does not occur or is not operational within
                  45
                  days of the date of this Agreement
                  AH Collections received to the lockbox will be deposited to a non-interest
                  bearing bank- control
                  account maintained with Lender and Borrower will not have access
                  to that
                  account. Borrower will
                  (i) immediately notify, transfer and deliver to Lender all Collections
                  Borrower receives and (ii) deliver
                  to Lender a detailed cash receipt's journal on Friday of each week
                  until
                  the lockbox is operational.
                  Additionally, Lender may request that Account Debtor's pay (by
                  wire
                  transfer or otherwise)
                  Collections to Lender directly.

              

      

      

      
        	4.	
                Repayment.
                  The Borrower will pay interest as set forth in Section 3.2. The
                  Borrower
                  will repay in full any
                  principal, interest or other charges outstanding under this Agreement
                  no
                  later than the Maturity Date.

              

      

      

      
        	 	
                4.1.

              	
                Recourse.
                  Advances and the other Obligations shall be with full recourse
                  against
                  Borrower.

              

      

      

      
        	 	
                4.2.

              	
                Overadvances.
                  Upon any occurrence of an Overadvance, Borrower shall immediately
                  pay down
                  the Advances
                  so that, after giving effect to such payments, no Overadvance
                  exists.

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	
                4.3.

              	
                Borrower's
                  Payment.
                  When any Overadvance or other amount owing to Lender becomes due,
                  Lender
                  shall inform Borrower of the manner of payment which may be any
                  one or
                  more of the following
                  in Lender's sole discretion: (a) in cash immediately upon demand
                  therefor;
                  (b) by deduction from
                  or offset against the amount that otherwise would be forwarded
                  to Borrower
                  in respect of any further Advances that may be made by Lender;
                  (c) by
                  debiting any deposit account maintained by Borrower with Lender
                  or (d) by
                  any combination of the foregoing as Lender may from time to time
                  choose.

              

      

      

      5.    Power
        of Attorney.
        Borrower
        irrevocably appoints Lender and its successors and assigns as Borrower's
        true and lawful attorney in fact, and authorizes Lender, at Borrower's sole
        expense, whether or not there
        has
        been an Event of Default, to (i) receive and open all mail addressed to Borrower
        for the purpose of collecting
        the Receivables; (ii) endorse Borrower's name on any checks or other forms
        of
        payment on the Receivables;
        (iii) execute on behalf of Borrower any and ail instruments, documents,
        financing statements and the
        like
        to perfect Lender's interests in the Receivables and Collateral; (iv) debit
        Borrower's checking account maintained
        with Lender for any and all Obligations due under this Agreement; (v) sell,
        assign, transfer, pledge,
        compromise, or discharge the whole or any part of the Collateral; (vi) demand,
        collect, receive, sue, and
        give
        releases to any Account Debtor for the monies due or which may become due
        upon
        or with respect to the Receivables and to compromise, prosecute, or defend
        any
        action, claim, case or proceeding relating to the Collateral,
        including the filing of a claim or the voting of such claims in any bankruptcy
        case, all in Lender's name or Borrower's name, as Lender may choose; and
        (vii)
        prepare, file and sign Borrower's name on any notice,
        claim, assignment, demand, draft, or notice of or satisfaction of lien or
        mechanics' lien or similar document
        with respect to the Collateral; and (viii) do all acts and things necessary
        or
        expedient, in furtherance of
        any
        such purposes, except that the powers enumerated in clauses (iv) through
        (vi)
        above shall be exercised on
        when
        an Event of Default has occurred and is continuing.

      

      6.    Representations
        and Warranties.
        Borrower
        represents and warrants:

      

      (a)   
        With
        respect to each Receivable included in determining the Account Balance:

      

      (i)    it
        is the
        owner with legal right to sell, transfer and assign it;

      

      (ii)    The
        correct Receivable Amount is on the Funding Request and is not disputed;
        

      

      (iii)    Such
        Receivable is an Eligible Receivable;

      

      (iv)    Lender
        has
        the right to endorse and/ or require Borrower to endorse all payments received
        on such
        Receivable; and

      

      (v)    No
        representation, warranty or other statement of Borrower in any certificate
        or
        written statement
        given to Lender contains any untrue statement of a material fact or omits
        to
        state a material fact necessary
        to make the statement contained in the certificates or statement not
        misleading.

      

      (b)  Borrower
        is duly existing and in good standing in its state of formation and qualified
        and licensed to do
        business in, and in good standing in, any state in which the conduct of its
        business or its ownership of property requires that it be
        qualified.

      

      (c)  The
        execution, delivery and performance of this Agreement has been duly authorized,
        and does not conflict
        with Borrower's organizational documents, nor constitute an default under
        any
        material agreement by which Borrower is bound. Borrower is not in default
        under
        any agreement to which it is a party or by which it is bound
        the
        effect of which could be reasonable expected to be a material adverse effect
        on
        Borrower.

      

      (d)  Borrower
        has good title to the Collateral and all inventory is in all material respects
        of good and marketable quality, free from material defects,

      

      (e)  Borrower's
        name, form of organization, chief executive office, and the place where the
        records concerning
        all Receivables and Collateral are kept is set forth at the beginning of
        this
        Agreement, Borrower is located
        at its address for notices set forth in this Agreement.

      

      (f)  If
        Borrower owns, holds or has any interest in, any copyrights (whether registered,
        or unregistered), patents
        or trademarks, and licenses of any of the foregoing, such interest has been
        specifically disclosed and identified
        to Lender in writing.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                7.

              	
                Covenants.
                  Borrower will:

              

      

      

      (a)  Maintain
        its corporate existence and good standing in its jurisdictions of incorporation
        and maintain its
        qualification in each jurisdiction necessary to Borrower's business or
        operations.

      

      (b)  Give
        Lender at least 30 days prior written notice of changes to its name,
        organization, chief executive
        office or location of records,

      

      (c)  Pay
        all
        its taxes including gross payroll, withholding and sales taxes when due and
        will
        deliver satisfactory
        evidence of payment to Lender if requested.

      

      (d)  Promptly
        provide to Lender a written report if payment of any Receivable does not
        occur
        within 60 days
        of
        its due date and including the reasons for the delay.

      

      (e)  Give
        Lender copies of all Forms 10-K, 10-Q and 8-K (or equivalents) within 5 days
        of
        filing with the Securities
        and Exchange Commission, while any Advance is outstanding.

       

      (f)  Execute
        any further instruments and take further action as Lender requests to perfect
        or
        continue Lender's
        security interest in the Collateral or to effect the purposes of this
        Agreement.

      

      (g)  Provide
        Lender with a Compliance Certificate no later than 5 days following each
        quarter
        end or as requested
        by Lender.

      

      (h)  Immediately
        notify, transfer and deliver to Lender all Collections Borrower
        receives.

      

      (i)  Not
        create, incur, assume, or be liable for any indebtedness other than Permitted
        Indebtedness.

      

      (j)  Immediately
        notify Lender if Borrower hereafter obtains any interest in any copyrights,
        patents, trademarks
        or licenses that are significant in value or are material to the conduct
        of its
        business or the value of any
        Receivable.

      

      
        	 	
                (k)

              	
                Provide
                  to Lender:

              

      

      

      (i)
        as
        soon as available but no later than 5 days following the 15th and the last
        day
        of every month, accounts receivable aging reports together with a borrowing
        base
        certificate in form and substance acceptable to
        Lender
        setting forth the Eligible Receivables and Receivable Amounts
        thereof;

      

      (ii)
        as
        soon as available but no later than 30 days after the end of each month,
        company
        prepared financial
        statements and accounts payable aging reports together with a compliance
        certificate in form and substance
        acceptable to Lender;

      

      (iii)
        as
        soon as available but no later than 30 days prior to the last day of Borrower's
        fiscal year, annual
        operating and financial projections approved by Borrower's board of
        directors;

      

      (iv)
        as
        soon as available but no later than 180 days following the last day of
        Borrower's fiscal year, Borrower's financial statements together with an
        unqualified opinion on the financial statements by a certified public
        accounting firm acceptable to Lender;

      

      (v)
        copies of all other filings with the Securities and Exchange Commission;
        and

      

      (vi)
        such
        other information and documents that Lender reasonably requests from time
        to
        time.

      

      (l)  Maintain
        its primary deposit accounts with Lender and not maintain any deposit account
        with any other
        depositary unless; (i) Lender has a valid perfected first priority security
        interest in such deposit account and
        (ii)
        such depositary has entered into a "control" agreement with, and in form
        and
        substance satisfactory to, Lender
        with respect to such deposit account.

      

      (m)  Provide
        to Lender promptly upon the execution hereof, the following documents in
        form
        and substance
        satisfactory to Lender in its sole discretion: (i) the Standby Letter of
        Credit.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (n)  Not
        to
        obtain or permit to remain outstanding any Facility Two Advance
        if:,

      

      (i)  Borrower
        has failed to
        maintain a minimum current ratio of (A) 1.00:1:00 for each month through
        May 31, 2007, and (B) 1.25:1.00 beginning with the month ending June 30,
        2007
        and for each
        month thereafter; or

      

      (ii)  Borrower
        has incurred a
        net loss during any fiscal quarter ending after September 30, 2006, of $400,000
        or more.

      

      (o)  Borrower
        must at all
        times insure all of the tangible Collateral and carry such other business
        insurance,
        with insurers acceptable to Lender, in such form and amounts as Lender may
        reasonably require and that are customary and in accordance with standard
        practices for Borrower's industry and locations, and Borrower shall provide
        evidence of such insurance to Lender. Borrower will cause all such insurance
        policies to
        name
        Lender as an additional loss payee within 30 days of the Closing Date and
        thenceforth must contain a lenders
        loss payee endorsement in form acceptable to Lender, Upon receipt of the
        proceeds of any such insurance,
        Lender shall apply such proceeds in reduction of the Obligations as Lender
        shall
        determine in good faith,
        provided that no Default or Event of Default has occurred and is continuing.
        If
        Borrower fails to provide or
        pay
        for any insurance, Lender may, but is not obligated to, obtain the same at
        Borrower's expense. Borrower shall promptly deliver to Lender copies of all
        material reports made to insurance companies.

      

      (p)  Borrower
        must at all
        times maintain liability insurance with insurers acceptable to Lender, in
        such
form
        and
        amounts as Lender may reasonably require and that are customary and in
        accordance with standard practices
        for Borrower's industry and locations, and Borrower shall provide evidence
        of
        such insurance to Lender.
        Borrower will cause all such liability insurance policies to name Lender
        as an
        additional insured within 30
        days
        of the Closing Date.

      

      (q)  Permit
        Lender from time
        to time hereafter to audit Borrower's Receivables at Borrower's expense.
        Such
        audits will be conducted prior to the Closing Date and every six months
        thereafter or as otherwise requested
        by Lender.

      

      8.    Security
        Interest.
        To
        secure the prompt payment and performance to Lender of all of the Obligations,
        Borrower
        hereby grants to Lender a continuing security interest in the Collateral.
        Borrower is not authorized to sell,
        assign, transfer or otherwise convey any Collateral without Lender's prior
        written consent, except for the sale
        of
        finished inventory in the Borrower's usual course of business and the sale
        of
        inventory and related property
        (other than receivables) to Sunfilm AG pursuant to the Technology Transfer
        and
        Service Agreement between
        Borrower and Sunfilm AG. Borrower agrees to sign any instruments and documents
        requested by Lender
        to
        evidence, perfect, or protect the interests of Lender in the Collateral,
        Borrower agrees to deliver to Lender
        the originals of all instruments, chattel paper and documents evidencing
        or
        related to Receivables and other
        Collateral. Borrower shall not grant or permit any lien or security interest
        in
        the Primary Collateral or any interest
        therein.

      

      
        	
                9.

              	
                Default
                  and Remedies.

              

      

      

      
        	
                9.1.

              	
                Events
                  of Default.
                  The occurrence of any one or more of the following shall constitute
                  an
                  Event of Default hereunder.

              

      

      

      (a)    Failure
        to Pay.
        Borrower
        fails to make a payment under this Agreement.

      

      (b)    Lien
        Priority.
        Lender
        fails to have an enforceable first lien (except for any prior liens to which
        Lender
        has consented in writing) on or security interest in the Primary
        Collateral.

      

      (c)    False
        information.
        Borrower
        (or any guarantor) has given Lender materially false or misleading information
        or representations.

      

      (d)    Death.
        If
        Borrower is a partnership, any general partner dies or becomes legally
        incompetent; or
        any
        guarantor dies or becomes legally incompetent.

      

      (e)    Bankruptcy.
        Borrower
        (or any guarantor) files a bankruptcy petition, a bankruptcy petition is
        filed
        against Borrower (or any guarantor) or Borrower (or any guarantor) makes
        a
        general assignment for the
        benefit of creditors.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (f)    Receivers.
        A
        receiver or similar official is appointed for a substantial portion of
        Borrower's (or any
        guarantor's) business, or the business is terminated.

      

      (g)    Judgments.
        Any
        judgments or arbitration awards are entered against Borrower (or any
guarantor),
        or Borrower (or any guarantor) enters into any settlement agreements with
        respect to any litigation
        or arbitration, in an aggregate amount of $50,000 or more in excess of any
        insurance coverage.

      

      (h)    Material
        Adverse Change.
        A
        material adverse change occurs in Borrower's (or any guarantor's)
        (i) business condition, operations, properties or prospects, (financial or
        otherwise), or (ii) ability to repay the credit or otherwise perform its
        obligations under this Agreement.

      

      (i)    Cross-default.
        Any
        default occurs under any agreement or agreements in connection with any
credit
        aggregating more than $100,000 Borrower (or any guarantor) or any of Borrower's
        related entities or affiliates has obtained from anyone else or which Borrower
        (or any guarantor) or any of Borrower's related entities
        or affiliates has guaranteed.

      

      (j)    Other
        Default under,
        (r)
        Borrower fails to meet the conditions of, or fails to perform any obligation
        under, any term of this Agreement not specifically referred to above, (ii)
        any
        default occurs under
        any
        guaranty, subordination agreement, security agreement, deed of trust, mortgage,
        or (fit) this Agreement
        or any other document required by or delivered in connection with this Agreement
        is contested or
        invalidated in any respect.

      

      (k)    Other
        Agreements.
        Borrower
        (or any guarantor) or any of Borrower's related entities or affiliates
        fails to meet the conditions of, or fails to perform any obligation under
        any
        other agreement Borrower (or any guarantor) or any of Borrower's related
        entities or affiliates has with Lender or any affiliate of Lender and such
        failure continues for 30 days.

      

      (I)    Other
        Breach Under Agreement.
        Borrower
        fails to meet the conditions of, or fails to perform any
        obligation under, any term of this Agreement not specifically referred to
        above.

      

      
        	 	
                9.2.

              	
                Remedies.
                  Upon the occurrence and during the continuance of an Event of Default,
                  (1)
                  without implying any
                  obligation to do so, Lender may cease making Advances or extending
                  any
                  other financial accommodations
                  to Borrower; (2) all or a portion of the Obligations shall be,
                  at the
                  option of and upon demand
                  by Lender, or with respect to an Event of Default described in
                  Section 9.1
                  (e), automatically and without
                  notice or demand, due and payable in full; and (3) Lender shall
                  have and
                  may exercise all the rights
                  and remedies under this Agreement and under applicable law, including
                  the
                  rights and remedies of a
                  secured party under the California Uniform Commercial Code, all
                  the power
                  of attorney rights described in
                  Section 5 with respect to all Collateral, and the right to collect,
                  dispose of, sell, lease, use, and realize upon
                  all Receivables and all Collateral in any commercial reasonable
                  manner.

              

      

      

      10.    Accrual
        of Interest.
        If any
        amount owed by Borrower hereunder is not paid when due, including, without
        limitation, amounts due under Section 3.3, Overadvances, amounts due under
        Section 11, and any other Obligations, such amounts shall bear interest at
        a per
        annum rate equal to the per annum rate of the Finance
        Charges until the earlier of (r) payment in good funds or (ii) entry of a
        final
        judgment thereof, at which time
        the
        principal amount of any money judgment remaining unsatisfied shall accrue
        interest at the highest rate
        allowed by applicable law. All interest and Finance Charges hereunder calculated
        at an annual rate shall be based on a year of 360 days, which results in
        a
        higher effective rate of interest than if a year of 365 or 366 days
        were
        used.

      

      11.    Fees,
        Costs and Expenses: Indemnification.
        The
        Borrower will pay to Lender upon demand all fees, costs
        and
        expenses (including fees of attorneys and professionals and their costs and
        expenses) that Lender incurs
        or
        may from time to time impose in connection with any of the following: (a)
        preparing, negotiating, administering,
        and enforcing this Agreement or any other agreement executed in connection
        herewith, including
        any amendments, waivers or consents in connection with any of the foregoing,
        (b)
        any litigation or dispute (whether instituted by Lender, Borrower or any
        other
        person) in any way relating to the Receivables, the
        Collateral, this Agreement or any other agreement executed in connection
        herewith or therewith, (c)
        enforcing any rights against Borrower or any guarantor, or any Account Debtor,
        (d) protecting or enforcing its
        interest in the Receivables or the Collateral, (e) collecting the Receivables
        and the Obligations, or (f) the representation
        of Lender in connection with any bankruptcy case or insolvency proceeding
        involving Borrower, any
        Receivable, the Collateral, any Account Debtor, or any guarantor. Borrower
        shall
        indemnify and hold Lender
        harmless from and against any and all claims, actions, damages, costs, expenses,
        and liabilities of any nature
        whatsoever arising in connection with any of the foregoing.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      12.    Integration,
        Severability, Waiver, and Choice of Law.
        This
        Agreement and any related security or other
        agreements required by this Agreement, collectively: (a) represent the sum
        of
        the understandings and agreements
        between Lender and Borrower concerning this credit; (b} replace any prior
        oral
        or written agreements
        between Lender and Borrower concerning this credit; and (c) are intended
        by
        Lender and Borrower
        as the final, complete and exclusive statement of the terms agreed to by
        them.
        In the event of any conflict between this Agreement and any other agreements
        required by this Agreement, this Agreement will prevail.
        If any provision of this Agreement is deemed invalid by reason of law, this
        Agreement will be construed
        as not containing such provision and the remainder of the Agreement shall
        remain
        in full force and effect. Lender retains ail of its rights, even if it makes
        an
        Advance after a default. If Lender waives a default, it may
        enforce a later default. Any consent or waiver under, or amendment of, this
        Agreement must be in writing,
        and no such consent, waiver, or amendment shall imply any obligation by Lender
        to make any subsequent
        consent, waiver, or amendment. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED
        IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA.

      

      13.    Notices.
        All
        notices shall be given to Lender and Borrower at the addresses or faxes set
        forth on the signature
        page of this Agreement and shall be deemed to have been delivered and received:
        (a) if mailed, three (3) calendar days after deposited in the United States
        mail, first class, postage pre-paid, (b) one (1) calendar
        day after deposit with an overnight mail or messenger service; or (c) on
        the
        same date of confirmed transmission
        if sent by hand delivery, telecopy, telefax or telex.

      

      14.    Jury
        Trial.
        EACH
        PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
        OF
        ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN CONNECTION WITH THE
        OBLIGATIONS OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
        DEALINGS
        OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY OBLIGATION, OR
THE
        TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
        ARISING,
        AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY
        AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
        SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS
        AGREEMENT
        MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT
        AS
        WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER
OF
        THEIR
        RIGHT TO TRIAL BY JURY. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS
REVIEWED
        THIS WAIVER, HAS DETERMINED FOR ITSELF THE NECESSITY TO REVIEW THE SAME
WITH
        ITS
        LEGAL COUNSEL, AND KNOWINGLY AND VOLUNTARILY WAIVES ALL RIGHTS TO A JURY
        TRIAL.

      

      
        	
                15.

              	
                Reference
                  Provision.

              

      

      

      (a)    The
        parties prefer that any dispute between them be resolved in litigation subject
        to a Jury Trial Waiver
        as
        set forth in the Loan Documents (defined below), but the California Supreme
        Court has held that pre-dispute
        Jury Trial Waivers not authorized by statute are unenforceable. This Reference
        Provision will be applicable
        until: (i) the California Supreme Court holds that a pre-dispute Jury Trial
        Waiver provision similar to that contained in the Loan Documents is valid
        or
        enforceable; or (ii) the California Legislature enacts a statute which
        becomes law, authorizing pre-dispute Jury Trial Waivers of the type in the
        Loan
        Documents and, as a result,
        such waivers become enforceable. In addition, this Reference Provision, if
        not
        already applicable as otherwise
        provided herein, will become applicable, if a Court, contrary to a choice
        of law
        provision contained in the
        Loan
        Documents, holds that the Saws of the State of California apply to the Loan
        Documents.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)    Other
        than (i) nonjudicial foreclosure of security interests in real or personal
        property, (ii) the appointment
        of a receiver or (iii) the exercise of other provisional remedies (any of
        which
        may be initiated pursuant
        to applicable law), any controversy, dispute or claim (each, a "Claim") between
        the parties arising out of
        or
        relating to this Agreement or any other document, instrument or agreement
        between Lender and the undersigned
        (collectively in this Section, the "Loan Documents"), will be resolved by
        a
        reference proceeding in California
        in accordance with the provisions of Section 638 et seq. of the California
        Code
        of Civil Procedure ("CCP"),
        or their successor sections, which shall constitute the exclusive remedy
        for the
        resolution of any Claim,
        including whether the Claim is subject to the reference proceeding. Except
        as
        otherwise provided in the
        Loan
        Documents, venue for the reference proceeding will be in the Superior Court
        or
        Federal District Court in
        the
        County or District where the real property, if any, is located or in a County
        or
        District where venue is otherwise
        appropriate under applicable law (the "Court").

      

      (c)    The
        referee shall be a retired Judge or Justice selected by mutual written agreement
        of the parties. If
        the
        parties do not agree, the referee shall be selected by the Presiding Judge
        of
        the Court (or his or her representative).
        A request for appointment of a referee may be heard on an ex parte or expedited
        basis, and the
        parties agree that irreparable harm would result if ex parte relief were
        not
        granted. The referee shall be appointed
        to sit with all the powers provided by law. Pending appointment of the referee,
        the Court has power to
        issue
        temporary or provisional remedies.

      

      (d)    The
        parties agree that time is of the essence in conducting the reference
        proceedings. Accordingly, the referee shall be requested, subject to change
        in
        the time periods specified herein for good cause shown, to (a)
        set
        the matter for a status and trial-setting conference within fifteen (15)
        days
        after the date of selection of the
        referee, (b) if practicable, try all issues of law or fact within ninety
        (90)
        days after the date of the conference and
        (c)
        report a statement of decision within twenty (20} days after the matter has
        been
        submitted for decision.

      

      (e)    The
        referee will have power to expand or limit the amount and duration of discovery.
        The referee may
        set
        or extend discovery deadlines or cutoffs for good cause, including a party's
        failure to provide requested
        discovery for any reason whatsoever. Unless otherwise ordered based upon
        good
        cause shown, no party shall be entitled to "priority" in conducting discovery,
        depositions may be taken by either party upon seven
        (7)
        days written notice, and all other discovery shall be responded to within
        fifteen (15) days after service. All disputes relating to discovery that
        cannot
        be resolved by the parties shall be submitted to the referee
        whose decision shall be final and binding.

      

      (f)    Except
        as
        expressly set forth in this Agreement, the referee shall determine the manner
        in
        which the reference proceeding is conducted including the time and place
        of
        hearings, the order of presentation of evidence,
        and all other questions that arise with respect to the course of the reference
        proceeding. All proceedings
        and hearings conducted before the referee, except for trial, shall be conducted
        without a court reporter,
        except that when any party so requests, a court reporter will be used at
        any
        hearing conducted before the
        referee, and the referee will be provided a courtesy copy of the transcript.
        The
        party making such a request
        shall have the obligation to arrange for and pay the court reporter. Subject
        to
        the referee's power to award
        costs to the prevailing party, the parties will equally share the cost of
        the
        referee and the court reporter at trial.

      

      (g)    The
        referee shall be required to determine all issues in accordance with existing
        case law and the statutory laws of the State of California. The rules of
        evidence applicable to proceedings at law in the State of California
        will be applicable to the reference proceeding. The referee shall be empowered
        to enter equitable as
        well
        as legal relief, provide all temporary or provisional remedies, enter equitable
        orders that will be binding on the parties and rule on
        any
        motion which would be authorized in a trial, including without limitation
        motions for
        summary judgment or summary adjudication. The referee shall issue a decision
        and
        pursuant to CCP §644
        the
        referee's decision shall be entered by the Court as a judgment or an order
        in
        the same manner as if the
        action had been tried by the Court. The final judgment or order or from any
        appealable decision or order entered
        by the referee shall be fully appealable as provided by law. The parties
        reserve
        the right to findings of fact,
        conclusions of laws, a written statement of decision, and the right to move
        for
        a new trial or a different judgment,
        which new trial, if granted, is also to be a reference proceeding under this
        provision.

      

      (h)    If
        the
        enabling legislation which provides for appointment of a referee is repealed
        (and no successor
        statute is enacted), any dispute between the parties that would otherwise
        be
        determined by reference procedure will be resolved and determined by
        arbitration. The arbitration will be conducted by a retired
        judge or Justice, in accordance with the California Arbitration Act §1280
        through §1294.2 of the CCP as amended
        from time to time. The limitations with respect to discovery set forth above
        shall apply to any such arbitration
        proceeding.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (i)    THE
        PARTIES RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED UNDER THIS REFERENCE
        PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING
        (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN
CHOICE,
        EACH PARTY KNOWINGLY AND VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT AGREES
        THAT
        THIS REFERENCE PROVISION WILL APPLY TO ANY DISPUTE BETWEEN THEM WHICH ARISES
        OUT
        OF OR
        IS RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS.

      

      16.    Termination.
        No
        termination of the availability of financial accommodations under this Agreement
        shall
        affect Lender's security interest in the Receivables and other Collateral,
        and
        this Agreement shall continue
        to be effective, and Lender's rights and remedies hereunder shall survive
        any
        such termination, until all
        transactions entered into and Obligations incurred hereunder or in connection
        herewith have been completed
        and satisfied in full. Upon the Maturity Date or such early date of the
        termination of the availability of
        financial accommodations under this Agreement, Borrower shall immediately
        repay
        all Advances then outstanding.

      

      17.    Promotional
        Materials.
        Lender
        may issue press releases, advertisements, and other promotional materials
        describing the benefits and general attributes of the financial and related
        services provided by Lender
        to
        Borrower. Lender has the right to identify Borrower by name in those
        materials.

      

      18.    Other
        Agreements.
        Any
        security agreements, liens and/or security interests securing payment of
        any
obligations
        of Borrower owing to Lender or its affiliates also secure the Obligations,
        and
        are valid and subsisting
        and are not adversely affected by execution of this Agreement. An Event of
        Default under this Agreement
        constitutes a default under other outstanding agreements between Borrower
        and
        Lender or its affiliates.

      

      [Remainder
        of Page Intentionally Left Blank]

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, Borrower and Lender have executed this Agreement on the
        day and
        year above written.

      

      
        	 BORROWER:	 	 	
                LENDER:

              
	 	 	 	 	 
	 SOUTHWALL
                TECHNOLOGIES INC.	 	 	
                BRIDGE
                  BANK, NATIONAL ASSOCIATION

              
	 	 	 	 	 
	
                By

              	
                /s/
                  Sylvia Kamenski

              	 	
                By

              	
                /s/
                  Lee Shodiss

              
	
                Name:

              	
                Sylvia
                  Kamenski

              	 	
                Name:

              	
                Lee
                  Shodiss

              
	
                Title:

              	
                VP
                  of Finance

              	 	
                Title:

              	
                Senior
                  Vice President

              
	 	 	 	 	 
	 Address
                for Notices:	 	 Address
                for Notices:
	 Attn:	 	 Attn:
                Lee Shodiss
	 3788
                Fabian Way	 	 55
                Almaden Blvd.
	 Palo
                Alto, CA 94303	 	 San
                Jose, CA 95113
	 Fax:
                (650) 798-1410	 	 Fax:
                (408) 423-8510

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]