Southwall to Supply XIR to American Glass Products Under Exclusive Five-Year Agreement.

Business Editors & Automotive Writers

PALO ALTO, Calif.--(AutomotiveWire)--June 26, 2000

Southwall Technologies, Inc. (Nasdaq:SWTX), a global supplier of thin film coatings for architectural, automotive and electronic glass products, announced today the signing of a five-year, $2.5 million agreement with American Glass Products (AGP). Southwall will supply XIR(R) film to AGP, which currently produces bullet-resistant glass parts for more than 180 automobile models worldwide.

Laminated into automotive glass, XIR(R) film reflects infrared heat, reducing solar heat gain and increasing passenger comfort. The glass also significantly retards the degradation of interior leathers and fabrics and provides a health benefit by delivering a 99 percent barrier to harmful ultraviolet rays. Under the exclusive supply agreement, Southwall will provide XIR(R) film for all of AGP's automotive glass for an estimated 30 percent of the world's bullet-resistant car market.

"By including XIR(R) film into our existing bullet-resistant composite, we are able to significantly improve passenger comfort by reducing solar heat penetration into the vehicle," said Arturo Mannheim, general manager of AGP. "The reduction in interior heat also translates into improved vehicle performance and efficiency as a result of reduced air-conditioning needs. Most importantly, the XIR(R) film maintains an even temperature distribution in the glass which translates into higher anti-ballistic performance when compared to conventional bullet-resistant glass without XIR(R)."

"We are extremely pleased with AGP's decision to expand its application of XIR(R) film into 100 percent of its bullet-resistant glazing," said Thomas Hood, president of Southwall Technologies. "With the addition of our XIR(R) film into its world-class technology, AGP has established itself as the finest producer of automotive bullet-resistant glass in the world."

Southwall Technologies designs and produces technologically advanced thin film coatings that selectively absorb, reflect or transmit electromagnetic radiation. Southwall products are used in a number of architectural, automotive and electronic products to enhance optical and thermal performance characteristics, improve comfort and reduce energy costs. Southwall exports advanced thin film coatings to more than 25 countries around the world for use in products manufactured by such companies as Audi, BMW, DaimlerChrysler, Renault, Peugeot-Citroen, Volvo, Mitsubishi Electric and Samsung.

AGP is the world's leading manufacturer of automotive bullet-resistant glazing products with existing production facilities located in Colombia, Mexico and Peru, and sales offices operating in the United States, Japan, Brazil and Mexico. Active in glass fabrication for more than 40 years, AGP produces high-quality bullet-resistant glass to the automotive industry, several branches of the United States Armed Forces, the Central Intelligence Agency, Drug Enforcement Agency, the Vatican and the Japanese Maritime Safety Agency.

Southwall Technologies can be found on the Internet at www.southwall.com. The company can be reached via telephone at [phone]. AGP can be found on the Internet at www.agpglass.com.

This press release may contain forward-looking statements as that term is defined in the Private Securities Reform Act of 1995, including, without limitation, statements regarding the Company's expectations, beliefs, intentions or strategies regarding the future. We cannot assure you that future events will not prevent Southwall from receiving all of the benefits of the agreement with AGP or that the agreement will be profitable to Southwall. All forward-looking statements included in the document are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. Further risks are detailed in the Company's filings with the Securities and Exchange Commission, including those set forth in the Company's most recent Form 10-K and Quarterly Reports on Form 10-Q.