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                                                                   EXHIBIT 10.13
Recording Requested by and:
When Recorded Return to:

Thompson & Knight LLP
1700 Pacific, Suite 3300
Dallas, TX 75201
Attention: Craig B. Anderson


                             MODIFICATION AGREEMENT
                           (SECOND AMENDMENT TO LEASE)

        This MODIFICATION AGREEMENT (this "AGREEMENT") is made as of February 8,
2000, by BNP LEASING CORPORATION, a Delaware corporation ("BNP"), and
ELECTROGLAS, INC., a Delaware corporation ("ELECTROGLAS")

                                 R E C I T A L S

        A. BNP and Electroglas executed a Lease Agreement dated as of March 31,
1997 (as subsequently amended, the "LEASE"), which was amended and supplemented
by a Construction Funding Agreement (First Amendment to Lease Agreement) dated
July 1, 1998 (the "FIRST LEASE AMENDMENT"), and which Lease covered, among other
things, the real property described therein. A Short Form of Lease dated March
31, 1997 was recorded as Document No. 13654978 in the Official Records of Santa
Clara County, California (the "MEMORANDUM OF LEASE"). (The real property
described in Exhibit A to the Lease, save and except any portion thereof no
longer covered by the Lease, and any and all other real or personal property
from time to time covered by the Lease and included within the "Property" as
defined therein are hereinafter collectively referred to as the "PROPERTY".)

        B. BNP and Electroglas executed a Purchase Agreement dated as of March
31, 1997 (as subsequently amended, the "PURCHASE AGREEMENT"), which Lease
covered, among other things, the Property. A Memorandum of Purchase Agreement
dated March 31, 1997 was recorded as Document No. 13654979 in the Official
Records of Santa Clara County, California (the "MEMORANDUM OF PURCHASE
AGREEMENT").

        C. In connection with the construction of the Construction Projects,
Electroglas has requested that a portion of the Land, consisting of
approximately 4,766 square feet as described in Exhibit A (the "RELEASED
PARCEL"), be released from the terms and conditions of the Lease and be conveyed
by BNP to the Redevelopment Agency of the City of San Jose ("BUYER"), pursuant
to the terms of the Purchase and Sale Agreement and Escrow Instructions dated
January 10, 2000 between BNP and Buyer (the "PURCHASE AND SALE AGREEMENT").

        D. BNP and Electroglas now desire to modify the Lease, on and subject to
the terms and conditions set forth below.

        NOW, THEREFORE, in consideration of the above recitals and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

1.      Definitions. Capitalized terms used in this Agreement and not otherwise
        defined herein shall have the meanings given to them in the original
        Lease and previous amendments thereto.


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2.      Modifications.

        a.     The definition of "Land" as defined in the Lease, the Memorandum
               of Lease, and Memorandum of Purchase Agreement is amended to
               refer to the Land as described in the original Lease, the
               Memorandum of Lease, and Memorandum of Purchase Agreement save
               and except the Released Parcel.

        b.     The definition of each of "Property" and "Real Property" as
               defined in the Lease, the Memorandum of Lease, and Memorandum of
               Purchase Agreement as it relates to the Land is amended to
               exclude the Released Parcel.

        c.     All references to the Land or the Real Property in the Purchase
               Agreement, the Pledge Agreement, and the Construction Funding
               Agreement and all documents executed in connection therewith
               (including the Memorandum of Lease and Memorandum of Purchase
               Agreement) are modified accordingly to exclude the Released
               Parcel.

3.      Proceeds from the Sale of the Released Parcel. All proceeds received by
        BNP from the sale of the Released Parcel pursuant to the Purchase and
        Sale Agreement shall be treated as Qualified Payments under the Lease.

4.      Execution of Purchase and Sale Agreement. Contemporaneously with the
        execution of this Agreement, BNP is executing the Purchase and Sale
        Agreement at the request of Electroglas, and in connection therewith
        Electroglas represents and warrants that BNP may lawfully convey the
        Released Parcel to the Buyer and may thereafter convey the remainder of
        the Property to another party, all without violating any platting or
        subdivision ordinance, regulation or other law applicable to the
        Property. Without limiting the foregoing, Electroglas confirms its
        indemnification obligations to BNP as provided in Sections 5.(d) and
        7.(a) of the Lease, as they relate to the sale of the Released Parcel
        and the performance of BNP's obligations, representations and warranties
        pursuant to the terms of the Purchase and Sale Agreement.

5.      Ratification. The Lease, as amended by this Agreement, is hereby
        ratified and confirmed in all respects.

6.      Entire Agreement. This Agreement and the documents and agreements
        referred to herein set forth the entire agreement between the parties
        concerning the subject matter hereof and no amendment or modification of
        this Agreement shall be binding or valid unless expressed in a writing
        executed by both parties hereto.

7.      Successors and Assigns. All of the covenants, agreements, terms and
        conditions to be observed and performed by the parties hereto shall be
        applicable to and binding upon their respective heirs, personal
        representatives, successors and, to the extent assignment is permitted
        under the Lease, their respective assigns.

8.      Further Modifications. From and after the date of this Agreement, in all
        documents related to this transaction references to the "Lease",
        "Purchase Agreement", "Pledge Agreement", or the "Construction Funding
        Agreement" are intended to mean the Lease, Purchase Agreement, Pledge
        Agreement, or Construction Funding Agreement, as the case may be, as
        amended hereby. In


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        addition, all documents related to this transaction using capitalized
        terms, the definitions of which terms are modified hereby, shall be
        deemed amended hereby to incorporate the same modifications to such
        capitalized terms.

9.      Execution in Counterparts. To facilitate execution, this Agreement may
        be executed in as many identical counterparts as may be required. It
        shall not be necessary that the signature of, or on behalf of, each
        party, or that the signature of all persons required to bind any party,
        appear on each counterpart. All counterparts, taken together, shall
        collectively constitute a single instrument. It shall not be necessary
        in making proof of this Agreement to produce or account for more than a
        single counterpart containing the respective signatures of, or on behalf
        of, each of the parties hereto. Any signature page to any counterpart
        may be detached from such counterpart without impairing the legal effect
        of the signatures thereon and thereafter attached to another counterpart
        identical thereto except having attached to it additional signature
        pages.

10.     Recitals. The recitals contained herein are incorporated by this
        reference.


        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                     BNP LEASING CORPORATION,
                                     a Delaware corporation

                                     By: /s/ David C. Schad
                                         -------------------------------------
                                           David C. Schad, President


                                     ELECTROGLAS, INC., a Delaware corporation

                                     By: /s/ A Stegall
                                         -------------------------------------
                                           Armand Stegall, Chief Financial
                                           Officer and Vice President of
                                           Finance


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                      CONSENT AND AGREEMENT OF PARTICIPANT

          The undersigned Participant hereby consents to the execution and
delivery of this Agreement and the modifications and amendments provided
therein. Participant hereby ratifies and confirms in all respects the
Participation Agreement, and agrees that its obligations and covenants
thereunder shall continue in full force and effect.

                                      BANQUE NATIONALE DE PARIS

                                      By: /s/ Gavin S. Holles
                                         -------------------------------------
                                            Gavin S. Holles, Vice President

                                      By: /s/ Stuart Darby
                                         -------------------------------------
                                            Stuart Darby, Assistant Vice
                                            President


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STATE OF TEXAS                  )
                                )
COUNTY OF DALLAS                )


On February 14, 2000, before me, Kathryn Hackett, personally appeared David C.
Schad, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature /s/ Kathryn Hackett

[Notary Seal affixed here]


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STATE OF CALIFORNIA                      )
                                         )SS
COUNTY OF Santa Clara                    )


On February 10, 2000, before me, Avaline Dolores Squier, a Notary Public in and
for said state, personally appeared A. Stegall, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Signature /s/ Avaline Dolores Squier

[Notary Seal affixed here]


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STATE OF CALIFORNIA                     )
                                        )
COUNTY OF San Francisco                 )


On February 17th, 2000, before me, Andrew Albright, personally appeared Gavin
S. Holles and Stuart Darby, (or proved to me on the basis of satisfactory
evidence) to be the persons whose names are subscribed to the within instrument
and acknowledged to me that they executed the same in their authorized capacity,
and that by their signature on the instrument the persons, or the entity upon
behalf of which the persons acted, executed the instrument.

WITNESS my hand and official seal.

Signature /s/ Andrew F. Albright

[Notary Seal affixed here]


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                                    EXHIBIT A

                              PROPERTY DESCRIPTION

REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:

Being a portion of the 6.70 acre parcel of land as shown upon that certain
Record of Survey filed for record October 24, 1950 in Book 29 of Maps at page 6,
Santa Clara County Records;

Commencing at an angle in the centerline of Piercy Road as shown upon that
certain Record of Survey filed for record March 14, 1984 in Book 525 of Maps at
pages 52 through 59, Santa Clara County Records, from which point a monument in
said centerline of Piercy Road bears North 44 degrees 33'30" East, 2011.10 feet
(North 44 degrees 33'30" East, 2011.15 feet as shown on said Record of Survey);

Thence North 23 degrees 37'49" West, 21.54 feet to the northerly line of said
Piercy Road;

Thence along said northerly line, South 89 degrees 34'15" West, 1037.38 feet to
the True Point of Beginning;

Thence continuing along said northerly line, South 89 degrees 34'15" West,
152.87 feet;

Thence North 35 degrees 48'27" West, 151.93 feet to a point of cusp;

Thence Southeasterly along a curve to the left, from which the center bears
North 54 degrees 11'33" East, having a radius of 270.00 feet, through a central
angle of 54 degrees 37'19", an arc length of 257.40 feet;

Thence North 84 degrees 34'15" East, 102.10 feet to a point of cusp;

Thence Westerly along a curve to the left, from which the center bears South 00
degrees 25'45" East, having a radius of 330.00 feet, through a central angle of
14 degrees 16'57", an arc length of 82.26 feet to the True Point of Beginning.

Containing 4,766 square feet of land, more or less.

                                                              [Seal containing:
                       Licensed Land Surveyor State of California in first Ring
                          Steve W. Danner No. 5106 Exp. 6-30-03 in center ring]
                                                            /s/ Steve W. Danner


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Diagram of Parcel Map