SOUTHWALL TECHNOLOGIES INC /DE/
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<TYPE>EX-10.116.2
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<FILENAME>exh10-1162.htm
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<TITLE>2003 10-K Exhibit 10.116.2</TITLE>
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<B><P ALIGN="RIGHT">Exhibit 10.116.2</P>
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</B><P ALIGN="RIGHT">3975 East Bayshore Road</P></DIR>
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<P ALIGN="RIGHT">&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;         Palo Alto,
California  94303</P>
<P ALIGN="RIGHT">Phone 650.962.9115 x1279</P>
<P ALIGN="RIGHT">Fax 650.967.0182</P>
<P ALIGN="RIGHT">swestra@southwall.com</P>
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<P>December 17, 2003</P>

<P>Mr. Andrew Kwan</P>
<P>Director</P>
<P>Globamatrix Holdings Pte. Ltd.</P>
<P>PSB Science Park Annex</P>
<P>3 Science Park Drive #02-16</P>
<P>Singapore 118223</P>
<P>Singapore</P>

<P>&nbsp;</P>
<P>Dear Andrew,</P>

<P>My apologies for being late in getting this letter to you, summarizing the
meeting we had in Tokyo on October 30<SUP>th</SUP> and 31<SUP>st</SUP> 2003 with
you, Col. Wee, Dennis Capovilla and myself to discuss the existing Distribution
Agreement, dated January 1, 2002. We have agreed to the following:</P>

<P>&nbsp;</P><DIR>

<B><U><P>1. 2003 Purchase Orders</P>
</B></U></DIR>

<P>The Minimum Purchase Amount for 2003 would be $7.6MM , as previously agreed
in the letter of August 28, 2003.  For any discrepancy between this agreed
amount and the projected amount for 2003, additional orders would be placed, or
credit against the 2004 quota would be given.</P>

<P>&nbsp;</P>
<B><U><P>2. 2004 Purchase Orders</B></U> <BR>
</P>
<P>The Minimum Purchase Amount for 2004 is $9MM.</P>

<P>A further incremental amount of $1 MM would be contingent upon:<BR>
     i. Southwall commencing patent infringement litigation with  a &quot;Cease
and desist&quot;   </P>
<P>        letter issued in Q1 '04 to CPF regarding their VS-70;  and</P>
<P>     ii.Introduction of a new film by Southwall with improved durability
(reduced </P>
<P>        corrosion), before the end of Q1  '04.</P>

<B><U><P>&nbsp;</P>
<P>3. Sputtered film-only</B></U><BR>
</P>
<P>GMX could purchase sputtered film only, in addition to the above Minimum
Purchase Amount, without obligation for incremental converted film purchase.<BR>
  <BR>
<B><U>4. Accelerated 2004 purchase orders</B></U><BR>
</P>
<P>Approximately $1MM from 2004 orders were considered for being placed in Q4
2003.  Terms had to be finalized.<BR>
</P>

<P>&nbsp;</P>
<P>Please sign and date this letter below and return a copy to my attention as a
confirmation and agreement of our understanding.</P>

<P>.</P>
<P>Best regards,</P>

<P>&nbsp;</P>
<FONT FACE="Monotype Corsiva" SIZE=6><P>Sicco Westra</P>
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<P>Dr. Sicco W.T. Westra</P>
<P>VP Business Development</P>
<P>Southwall Technologies Inc</P>

<P>&nbsp;</P>
<P>Read and agreed,</P>

<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>Andrew Kwan</P>
<P>Director</P>
<P>Globamatrix Holdings Pte Ltd</P>

<P>&nbsp;</P>
<P>CC: Dennis Capovilla; Tom Hood</P>

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