SC 13D/A 1 d644022_13d-a.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A Amendment No. 4 (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1 (a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Southwall Technologies Inc. -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $.001 per share -------------------------------------------------------------------------------- (Title of Class of Securities) 844909101 -------------------------------------------------------------------------------- (CUSIP Number) Robert Van Grover Seward & Kissel LLP One Battery Park Plaza New York, New York 10004 212-574-1200 -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 31, 2005 -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13(d)-1(f) or 13(d)-1(g), check the following box |_|. The Information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of the section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 844909101 1 NAME OF REPORTING PERSONS Needham & Company, LLC S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Intentionally Omitted) 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 2,009,807 OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 2,009,807 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,009,807 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.1% 14 TYPE OF REPORTING PERSON* BD CUSIP No. 844909101 1 NAME OF REPORTING PERSONS Needham Investment Management L.L.C. S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Intentionally Omitted) 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 1,428,000 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 1,428,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,428,000(1) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.4% 14 TYPE OF REPORTING PERSON* IA ---------- (1) Due to an internal restructuring, Needham Investment Management, L.L.C. serves as investment manager to various series of The Needham Funds, Inc. and certain private investment funds that hold 1,428,000 shares of common stock of the Issuer ("Shares"). Needham Investment Management L.L.C. may be deemed to beneficially own by virtue of its position as investment adviser to these series and funds. CUSIP No. 844909101 1 NAME OF REPORTING PERSONS George A. Needham S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Intentionally Omitted) 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS PF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 35,000 OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 13,889,112 9 SOLE DISPOSITIVE POWER 35,000 10 SHARED DISPOSITIVE POWER 13,889,112 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 13,889,112 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |X| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 42.4% 14 TYPE OF REPORTING PERSON* IN CUSIP No. 844909101 ---------------------------------- 1 NAME OF REPORTING PERSONS Needham Capital Partners II, L.P. S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Intentionally Omitted) 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 3,258,068 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 3,258,068 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,258,068 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.0% 14 TYPE OF REPORTING PERSON* PN CUSIP No. 844909101 1 NAME OF REPORTING PERSONS Needham Capital Partners III, L.P. S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Intentionally Omitted) 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 5,703,716 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 5,703,716 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,703,716 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.4% 14 TYPE OF REPORTING PERSON* PN CUSIP No. 844909101 1 NAME OF REPORTING PERSONS Needham Capital Partners IIIA L.P. S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Intentionally Omitted) 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 589,054 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 589,054 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 589,054 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.8% 14 TYPE OF REPORTING PERSON* PN CUSIP No. 844909101 1 NAME OF REPORTING PERSONS Needham Capital Partners II (Bermuda), L.P. S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Intentionally Omitted) 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 456,700 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 456,700 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 456,700 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.4% 14 TYPE OF REPORTING PERSON* PN CUSIP No. 844909101 1 NAME OF REPORTING PERSONS Needham Capital Partners III (Bermuda), L.P. S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Intentionally Omitted) 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 1,136,767 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 1,136,767 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,136,767 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.5% 14 TYPE OF REPORTING PERSON* PN CUSIP No. 844909101 1 NAME OF REPORTING PERSONS Needham Capital Management L.L.C. S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Intentionally Omitted) 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 9,550,838 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 9,550,838 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,550,838 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 29.2% 14 TYPE OF REPORTING PERSON* PN CUSIP No. 844909101 1 NAME OF REPORTING PERSONS Needham Capital Management (Bermuda) L.L.C. S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (Intentionally Omitted) 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 1,593,467 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 1,593,467 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,593,467 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.9% 14 TYPE OF REPORTING PERSON* PN Pursuant to Rule 13d-1 under the Securities Exchange Act of 1934, as amended Item 1. Security and Issuer. This Statement on Schedule 13D/A (this "Statement") relates to the common stock, par value $0.001 per share (the "Common Stock") and Series A 10% Cumulative Preferred Stock ("Series A Preferred Stock"), of Southwall Technologies Inc., a Delaware corporation (the "Company"). The principal executive offices of the Company are located at 1029 Corporation Way, Palo Alto, California 94303. Item 2. Identity and Background. (a)-(c) and (f) This Statement is filed by Needham & Company, LLC, a Delaware limited liability company ("Needham & Co."), Needham Investment Management L.L.C., a Delaware limited liability company ("NIM"), George A. Needham, a natural person who is a U.S. citizen, Needham Capital Partners II, L.P., a Delaware limited partnership ("NCPII"), Needham Capital Partners III, L.P, a Delaware limited partnership ("NCPIII"), Needham Capital Partners IIIA, L.P, a Delaware limited partnership ("NCPIIIA"), Needham Capital Partners II (Bermuda), L.P., a Bermuda limited partnership ("NCPIIB"), Needham Capital Partners III (Bermuda), L.P., a Bermuda limited partnership ("NCPIIIB"), Needham Capital Management L.L.C., a Delaware limited liability company ("NCM"), and Needham Capital Management (Bermuda) L.L.C., a Bermuda limited liability company ("NCMB"). Needham & Co., NIM, George A. Needham, NCPII, NCPIII, NCPIIIA, NCPIIB, NCPIIIB, NCM and NCMB are collectively referred to in this Statement as the "Reporting Persons." The principal business office and mailing address of the Reporting Persons is c/o Needham & Company, LLC, 445 Park Avenue, New York, New York 10022. Needham & Co. is an investment banking, securities and asset management firm. The business of NIM is serving as the investment manager or general partner of certain private investment partnerships and certain private investment funds. The business of NCM is serving as the general partner of NCPII, NCPIII and NCPIIIA, each of which are private investment partnerships. The business of NCMB is serving as the general partner of NCPIIB AND NCPIIIB, each of which are private investment partnerships. The present principal occupation of George A. Needham is Chairman of the Board and Chief Executive Officer of Needham & Co. The name and principal occupation or employment of the executive officers, directors or general partners of the Reporting Persons are set forth on Schedule I to this Statement. (d) and (e) During the past five years, none of the Reporting Persons or, to the best knowledge of the Reporting Persons, any of the persons listed on Schedule I, (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. As of the date hereof, the Reporting Persons may be deemed to beneficially own 11,355,446 shares of Common Stock and 3,261,666 shares of Series A Preferred Stock. The source of funds used to purchase the securities reported herein was working capital of the Reporting Persons. No borrowed funds were used to purchase the securities, other than any borrowed funds used for working capital purposes in the ordinary course of business. On December 31, 2004, Needham Capital Partners II, L.P., Needham Capital Partners II (Bermuda), L.P., Needham Capital Partners III, L.P., Needham Capital Partners IIIA, L.P., Needham Capital Partners III (Bermuda), L.P. elected to convert all outstanding principal of, and accrued but unpaid interest on, their secured convertible promissory notes (the "Convertible Notes") of Southwall Technologies Inc. ("Southwall") into shares of Series A Preferred Stock. The Convertible Notes by their terms were convertible at the option of the holders into Series A Preferred Stock at a rate of one share for each $1.00 of principal or interest converted. The aggregate principal amount of the Convertible Notes converted by the Note Holders was $4,500,000, and the interest accrued thereon as of the time of conversion was $392,499; therefore, the aggregate number of shares of Series A Preferred Stock issued as a result of the conversions was $4,892,499. In particular, the Convertible Note held by Needham Capital Partners II, L.P., in the original principal amount of $877,058, was converted into 953,557 shares of Series A Preferred Stock; the Convertible Note held by Needham Capital Partners II (Bermuda), L.P., in the original principal amount of $122,942, was converted into 133,665 shares of Series A Preferred Stock; the Convertible Note held by Needham Capital Partners III, L.P. in the original principal amount of $1,535,416, was converted into 1,669,338 shares of Series A Preferred Stock; the Convertible Note held by Needham Capital Partners IIIA, L.P. in the original principal amount of $158,571, was converted into 172,402 shares of Series A Preferred Stock; and the Convertible Note held by Needham Capital Partner III (Bermuda), L.P., in the original principal amount of $306,013, was converted into 332,704 shares of Series A Preferred Stock. The Convertible Notes were originally issued to the Note Holders pursuant to the Amended and Restated Investment Agreement dated February 20, 2004, by and among Southwall, Needham & Company, Inc. and the Note Holders. The Convertible Notes and Series A Preferred Stock issued to the Note Holders upon conversion were issued without registration and only to accredited investors in reliance upon Rule 506 of the Securities Act of 1933, as amended. Item 4. Purpose of Transaction. The Investment Agreement pursuant to which the warrants were issued to Needham & Co. is described in the Schedule 13D filed by the Reporting Persons on March 8, 2003. The Reporting Persons have no plans or proposals which relate to or which would result in or relate to any of the actions specified in paragraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. (a) (1) Needham & Co. owns 2,009,807 shares of Common Stock, which would constitute 6.1% of the issued and outstanding Common Stock. (2) NIM may be deemed to own beneficially the aggregate amount of 1,428,000 shares of Common Stock owned by certain private investment partnerships and certain registered investment companies by virtue of its position as general partner and investment adviser, respectively, of those private investment partnerships and registered investment companies, which amount constitutes 4.4% of the issued and outstanding Common Stock. NIM disclaims beneficial ownership of all of the reported shares of Common Stock owned by the certain private investment partnerships and funds, and the inclusion of these shares of Common Stock in this report shall not be deemed an admission by it of beneficial ownership of such shares for any purpose. (3) George A. Needham may be deemed to beneficially own (i) the shares of Common Stock owned by Needham & Co. by virtue of his position in and share ownership of Needham & Co., (ii) the shares of Common Stock beneficially owned by certain private investment partnerships managed by NIM by virtue of his position as manager of NIM (iii) the Common Stock and Series A Preferred Common Stock owned NCPII, NCPIII and NCPIIIA by virtue of his position as a manager of NCM, the general partner of NCPII, NCPIII, and NCPIIIA, (iv) the Common Stock and Series A Preferred Common Stock beneficially owned by NCPIIB and NCPIIIB by virtue of his position as a manager of NCMB and (v) shares of Common Stock held in personal accounts. The aggregate amount of shares of Common Stock (assuming full conversion of all Series A Preferred Common Stock owned by the Reporting Persons) owned by Mr. Needham is 13,889,112, which constitutes 42.4% of the issued and outstanding shares of Common Stock. Mr. Needham disclaims beneficial ownership of all of the reported shares of Common Stock and the Series A Preferred Common Stock, except to the extent of his pecuniary interest and the inclusion of these shares in this report shall not be deemed an admission by him of beneficial ownership for any purpose, except to the extent of his pecuniary interest. (4) NCPII owns of record and beneficially (i) 953,557 shares of Series A Preferred Stock, which in turn is convertible to 953,557 shares of Common Stock, subject to adjustments applicable to the Series A Preferred Stock, and (ii) 2,304,511 shares of Common Stock. Assuming full conversion of the Series A Preferred Stock, NCPII would own of record 3,258,068 shares of Common Stock, which would constitute 10.0% of the issued and outstanding Common Stock. (5) NCPIII owns of record and beneficially (i) 1,669,338 shares of Series A Preferred Stock, which in turn is convertible to 1,669,338 shares of Common Stock, subject to adjustments applicable to the Series A Preferred Stock, and (ii) 4,034,378 shares of Common Stock. Assuming full conversion of the Series A Preferred Stock, NCPIII would own of record 5,703,716 shares of Common Stock, which would constitute 17.4% of the issued and outstanding Common Stock. (6) NCPIIIA owns of record and beneficially (i) 172,402 shares of Series A Preferred Stock, which in turn is convertible to 172,402 shares of Common Stock, subject to adjustments applicable to the Series A Preferred Stock, and (ii) 416,552 shares of Common Stock. Assuming full conversion of the Series A Preferred Stock, NCPIIIA would own of record 589,054 shares of Common Stock, which would constitute 1.8% of the issued and outstanding Common Stock. (7) NCPIIB owns of record and beneficially (i) 133,665 shares of Series A Preferred Stock, which in turn is convertible to 133,665 shares of Common Stock, subject to adjustments applicable to the Series A Preferred Stock, and (ii) 323,035 shares of Common Stock. Assuming full conversion of the Series A Preferred Stock, NCPIIB would own of record 456,700 shares of Common Stock, which would constitute 1.4% of the issued and outstanding Common Stock. (8) NCPIIIB owns of record and beneficially (i) 332,704 shares of Series A Preferred Stock, which in turn is convertible to 332,704 shares of Common Stock, subject to adjustments applicable to the Series A Preferred Stock, and (ii) 804,063 shares of Common Stock. Assuming full conversion of the Series A Preferred Stock, NCPIIIB would own of record 1,136,767 shares of Common Stock, which would constitute 3.5% of the issued and outstanding Common Stock. (9) NCM may be deemed to own beneficially the Common and Series A Preferred Stock owned by NCPII and, NCPIII by virtue of its position as general partner of those Reporting Persons, and accordingly may be deemed to beneficially own the 9,550,838 shares of Common Stock, which amount constitute 29.2% of the issued and outstanding Common Stock. NCM disclaims beneficial ownership of all of the reported shares of Common Stock owned by NCPII, NCPIII, and the inclusion of these shares of Common Stock in this report shall not be deemed an admission by it of beneficial ownership of such shares for any purpose. (10) NCMB may be deemed to own beneficially the Common and Series A Preferred Stock owned by certain Bermuda private investment partnerships virtue of its position as general partner to those Bermuda private partnerships, and accordingly may be deemed to beneficially own the 1,593,467 shares of Common Stock, which amount constitute 4.9% of the issued and outstanding Common Stock. NCMB disclaims beneficial ownership of all of the reported shares of Common Stock owned by the certain Bermuda partnerships, and the inclusion of these shares of Common Stock in this report shall not be deemed an admission by it of beneficial ownership of such shares for any purpose. (b) Needham & Co. has the sole power to direct the vote and disposition of 2,009,807 shares of Common Stock. NIM, the general partner of certain private investment partnerships and investment adviser of registered investment companies has shared power to direct the vote and disposition of 1,428,000 shares of Common Stock directly owned by those private investment partnerships and those registered investment companies. NCM, the general partner of NCPII, and NCPII have shared power to direct the vote and disposition of 3,258,068 shares of Common Stock and Common Stock issuable upon the conversion of the Series A Preferred Stock. NCM, the general partner of NCPIII, and NCPIII have shared power to direct the vote and disposition of 5,703,716 shares of Common Stock and Common Stock issuable upon the conversion of the Series A Preferred Stock. NCM, the general partner of NCPIIIA, and NCPIIIA have shared power to direct the vote and disposition of 589,054 shares of Common Stock and Common Stock issuable upon the conversion of the Series A Preferred Stock. NCMB, the general partner of NCPIIB, and NCPIIB have shared power to direct the vote and disposition of 456,700 shares of Common Stock and Common Stock issuable upon the conversion of the Series A Preferred Stock. NCMB, the general partner of NCPIIIB, and NCPIIIB have shared power to direct the vote and disposition of 1,136,767 shares of Common Stock and Common Stock issuable upon the conversion of the Series A Preferred Stock. George A. Needham may be deemed to have shared power to direct the vote and disposition of (i) the shares of Common Stock owned by Needham & Co., and the shares of Common Stock owned by Needham & Co., by virtue of his position in and share ownership of Needham & Co., (ii) the shares of Common Stock issuable upon the conversion of the Series A Preferred Stock and Common Stock owned directly by NCPII, NCPIII and NCPIIIA because he serves as a manager of NCM, the general partner of NCPII, NCPIII and NCPIIIA, (iii) the shares of Common Stock issuable upon the conversion of the Series A Preferred Stock the Common Stock owned directly by NCPIIB and NCPIIIB because he serves as a manager of NCMB, the general partner of NCPIIB and NCPIIIB, and (iv) shares of Common Stock held in personal accounts. Mr. Needham disclaims beneficial ownership of the shares of Common Stock owned by Needham & Co., NIM, NCPII, NCPIII, NCPIIIA and NCPIIIB. (c) The Reporting Persons did not effect any transactions in the securities of the Company during the past 60 days. (d) and (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with respect to Securities of the Issuer. Other than as described in Item 4 above, to the knowledge of the Reporting Persons, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 with respect to any securities of the Company. Item 7. Material to be Filed as Exhibits. 1. Joint Filing Agreement SIGNATURE After reasonable inquiry and to the best knowledge and belief of the undersigned, the information set forth in this statement is true, complete and correct. Dated: February 14, 2006 NEEDHAM & COMPANY, LLC By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: Chief Financial Officer /s/ George A. Needham --------------------- George A. Needham NEEDHAM INVESTMENT MANAGEMENT L.L.C. By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: Chief Financial Officer NEEDHAM CAPITAL PARTNERS II, L.P. By: Needham Capital Management L.L.C., its general partner By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner NEEDHAM CAPITAL PARTNERS III, L.P. By: Needham Capital Management L.L.C., its general partner By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner NEEDHAM CAPITAL PARTNERS IIIA, L.P. By: Needham Capital Management L.L.C., its general partner By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner NEEDHAM CAPITAL PARTNERS II (BERMUDA), L.P. By: Needham Capital Management (Bermuda) L.L.C., its general partner By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner NEEDHAM CAPITAL PARTNERS III (BERMUDA), L.P. By: Needham Capital Management (Bermuda) L.L.C., its general partner By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner ' NEEDHAM CAPITAL MANAGEMENT, L.L.C. By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner NEEDHAM CAPITAL MANAGEMENT (BERMUDA), L.L.C. By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner Schedule I Executive Officers and Directors of Needham & Company, LLC NAME OF OFFICER PRINCIPAL EMPLOYMENT/OFFICE OR DIRECTOR BUSINESS ADDRESS WITH NEEDHAM & COMPANY, LLC --------------- ---------------- --------------------------- George A. Needham c/o The Needham Group, Inc. President of Needham Asset 445 Park Avenue Management, LLC New York, New York 10022 John J. Prior, Jr. c/o Needham & Company, LLC Managing Director, 445 Park Avenue President & Chief Executive New York, New York 10022 Officer Chad W. Keck c/o Needham & Company, LLC Managing Director, 445 Park Avenue Vice-Chairman New York, New York 10022 Warren M. Foss c/o Needham & Company, LLC Managing Director, Chairman 445 Park Avenue New York, New York 10022 Mark Van Valkenburgh c/o Needham & Company, LLC Managing Director, 445 Park Avenue Institutional Sales New York, New York 10022 Sean Dwyer c/o Needham & Company, LLC Managing Director, Sales & 445 Park Avenue Trading New York, New York 10022 John Lazo c/o Needham & Company, LLC Managing Director, OTC & 445 Park Avenue Listed Trading New York, New York 10022 Theodor J. Kundtz c/o Needham & Company, LLC Managing Director, Director 445 Park Avenue of Research New York, New York 10022 Glen W. Albanese c/o Needham & Company, LLC Managing Director, Chief 445 Park Avenue Financial Officer New York, New York 10022 Andre R. Horn c/o Needham & Company, LLC Director 445 Park Avenue New York, New York 10022 Edgar F. Heizer, Jr. c/o Needham & Company, LLC Director 445 Park Avenue New York, New York 10022 Eugene R. White c/o Needham & Company, LLC Director 445 Park Avenue New York, New York 10022 Bernard H. Lirola c/o Needham & Company, LLC Managing Director, Co-Head 445 Park Avenue of Corporate Finance New York, NY 10022 David S. Schechner c/o Needham & Company, LLC Managing Director, Co-Head 445 Park Avenue of Corporate Finance New York, NY 10022 Schedule I Needham Investment Management L.L.C. is the sole general partner of: (a) Needham Emerging Growth Partners, L.P., (b) Needham Contrarian Fund, L.P., and (c) Needham Emerging Growth Partners (Caymans), L.P., and is the investment adviser of: (a) various series of The Needham Funds, Inc., and (b) The Needham Funds. Needham Capital Management L.L.C. is the sole general partner of (a) Needham Capital Partners II, L.P., (b) Needham Capital Partners III, L.P. and (c) Needham Capital Partners IIIA, L.P. Needham Capital Management (Bermuda) L.L.C. is the sole general partner of (a) Needham Capital Partners II (Bermuda), L.P. and (b) Needham Capital Partners III (Bermuda), L.P. The members and principals of Needham Investment Management L.L.C. are: PRINCIPAL EMPLOYMENT/ NAME OF OFFICER OFFICE WITH NEEDHAM OR DIRECTOR BUSINESS ADDRESS & COMPANY, INC. ----------- ---------------- --------------------- George A. Needham c/o Needham & Company, LLC Chairman of the Board 445 Park Avenue & Chief Executive New York, New York 10022 Officer James K. Kloppenburg c/o Needham Asset Management, LLC Managing Director, 445 Park Avenue Portfolio Manager New York, New York 10022 Glen W. Albanese c/o Needham & Company, LLC Managing Director, 445 Park Avenue Chief Financial New York, New York 10022 Officer The general partners of Needham Capital Management L.L.C. are: PRINCIPAL EMPLOYMENT/ NAME OF OFFICER OFFICE WITH NEEDHAM OR DIRECTOR BUSINESS ADDRESS & COMPANY, INC. ----------- ---------------- ----------------------- George A. Needham c/o Needham & Company, LLC Chairman of the Board & 445 Park Avenue Chief Executive Officer New York, New York 10022 John J. Prior, Jr. c/o Needham & Company, LLC Managing Director, 445 Park Avenue Corporate Finance New York, New York 10022 Thomas P. Shanahan c/o Needham Asset Management, LLC Managing Director, 445 Park Avenue Needham Asset New York, New York 10022 Management, LLC Glen W. Albanese c/o Needham & Company, LLC Managing Director, 445 Park Avenue Chief Financial Officer New York, New York 10022 The general partners of Needham Capital Management (Bermuda) L.L.C. are: PRINCIPAL EMPLOYMENT/ NAME OF OFFICER OFFICE WITH NEEDHAM OR DIRECTOR BUSINESS ADDRESS & COMPANY, INC. ----------- ---------------- ----------------------- George A. Needham c/o Needham & Company, LLC Chairman of the Board & 445 Park Avenue Chief Executive Officer New York, New York 10022 John J. Prior, Jr. c/o Needham & Company, LLC Managing Director, 445 Park Avenue Corporate Finance New York, New York 10022 Thomas P. Shanahan c/o Needham Asset Management, LLC Managing Director, 445 Park Avenue Needham Asset New York, New York 10022 Management, LLC Glen W. Albanese c/o Needham & Company, LLC Managing Director, 445 Park Avenue Chief Financial Officer New York, New York 10022 JOINT FILING AGREEMENT In accordance with Rule 13d-1(f) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the common shares of beneficial interest, par value $.001 per share, of Southwall Technologies Inc., a Delaware corporation, and that this Agreement may be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of the 14th day of February, 2006. NEEDHAM & COMPANY, LLC By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: Chief Financial Officer /s/ Glen W. Albanese -------------------- George A. Needham NEEDHAM INVESTMENT MANAGEMENT L.L.C. By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: Chief Financial Officer NEEDHAM CAPITAL PARTNERS II, L.P. By: Needham Capital Management L.L.C., its general partner By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner NEEDHAM CAPITAL PARTNERS III, L.P. By: Needham Capital Management L.L.C., its general partner By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner NEEDHAM CAPITAL PARTNERS IIIA, L.P. By: Needham Capital Management L.L.C., its general partner By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner NEEDHAM CAPITAL PARTNERS II (BERMUDA), L.P. By: Needham Capital Management (Bermuda) L.L.C., its general partner By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner NEEDHAM CAPITAL PARTNERS III (BERMUDA), L.P. By: Needham Capital Management (Bermuda) L.L.C., its general partner By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner NEEDHAM CAPITAL MANAGEMENT, L.L.C. By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner NEEDHAM CAPITAL MANAGEMENT (BERMUDA), L.L.C. By: /s/ Glen W. Albanese ------------------------ Name: Glen W. Albanese Title: General Partner 22312 0001 644022