AMENDMENT NO. 10 TO LOAN AND SECURITY AGREEMENT

This Amendment No. 10 to Loan and Security Agreement (“ Amendment ”) is made and entered into as of March 5, 2009 by and between Electroglas, Inc. , a Delaware corporation (“ Borrower ”) and   Comerica Bank (“ Bank ”).

Recitals

A.            Borrower and Bank have entered into that certain Loan and Security Agreement dated as of July 16, 2004, as amended by Amendment No. 1 to Loan and Security Agreement dated as of January 24, 2005, Amendment No. 2 to Loan and Security Agreement dated as of July 13, 2005, Amendment No. 3 to Loan and Security Agreement dated as of April 25, 2006, Amendment No. 4 to Loan and Security Agreement dated as of September 6, 2006, Amendment No. 5 to Loan and Security Agreement dated as of January 22, 2007, Amendment No. 6 to Loan and Security Agreement dated as of March 26, 2007, a Seventh Amendment to Loan and Security Agreement dated as of April 24, 2007, an Amendment No. 8 to Loan and Security Agreement dated as of June 27, 2008, and an Amendment No. 9 to Loan and Security Agreement dated as of December 8, 2008 (collectively, the “ Loan Agreement ”) pursuant to which Bank has agreed to extend and make available to Borrower certain credit facilities.

B.            Borrower desires that Bank amend the Loan Agreement upon the terms and conditions more fully set forth herein.

C.            Subject to the representations and warranties of Borrower herein and upon the terms and conditions set forth in this Amendment, Bank is willing to so amend the Loan Agreement.

D.            This Amendment, the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement), together with all other documents entered into or delivered pursuant to any of the foregoing, in each case as originally executed or as the same may from time to time be modified, amended, supplemented, restated or superseded, are hereinafter collectively referred to as the “ Loan Documents . ”

Agreement

Now, Therefore , in consideration of the foregoing recitals and the mutual covenants herein set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, Borrower and Bank hereby agree to amend the Loan Agreement as follows:

1.   Definitions.   Unless otherwise defined herein, all terms defined in the Loan Agreement have the same meaning when used herein.

2.   Amendment .  The definition of “Obligations” contained in Exhibit A to the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“ Obligations ” means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrower pursuant to this Agreement or any other Loan Document, and all amounts owed to Bank by Borrower in connection with automatic clearing house transactions, Letters of Credit, or corporate credit cards, in each case whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Borrower to others that Bank may have obtained by assignment or otherwise.

3.   Availability to Borrow Under the Revolving Line and Corporate Credit Cards .  Notwithstanding anything to the contrary contained in the Loan Agreement and other Loan Documents, Borrower may not request (i) any Advances under the Revolving Line, (ii) any new Letters of Credit to be issued, or (iii) any new corporate credit cards from Bank or advances under such credit cards, provided that Borrower may request advances under any existing corporate credit cards up to $25,000 in the aggregate (the “ Corporate Credit Card Advances ”).  Bank’s commitment to make Advances, issue Letters of Credit or make advances under any corporate credit cards (except as set forth in the previous sentence) is hereby terminated.

4.   Extension of Maturity of Existing Letters of Credit .  The maturity date of the following Letters of Credit is hereby extended to the dates set forth below:

Letter of Credit # 638864                                                                November 10, 2010

Letter of Credit # 599018                                                                July 15, 2010

5.   Cash Collateralization of Obligations .  Borrower shall at all times maintain a money market account (Account Number 1892-62865-0) with Bank with a balance (the “Required Balance”) equal to or greater than the aggregate amount of the Obligations. Such money market account and all amounts held therein, together with all proceeds thereof, interest paid thereon, and substitutions therefor, and all accounts, securities, instruments, securities entitlements and financial assets arising out of any of the foregoing, are the “Cash Collateral”.  Without in any way limiting the grant of a security interest in the Collateral pursuant to the Loan Agreement, Borrower hereby grants and pledges to Bank a continuing security interest in all presently existing and hereafter acquired or arising Cash Collateral, to secure prompt repayment of any and all Obligations and to secure prompt performance by Borrower of each of its covenants and duties under the Loan Documents.  Bank shall retain control over the Cash Collateral up to the Required Balance to secure the Obligations until such Obligations have been satisfied in full.  Borrower hereby authorizes Bank to place restrictions on Borrower’s ability to withdraw amounts from accounts holding the Cash Collateral in order to ensure that such Required Balance is