Exhibit 10.2




                      THIRD AMENDMENT TO EUROPEAN FACILITY

          Between the Registrant and The First National Bank of Chicago

                              dated August 17, 1999


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                        THE FIRST NATIONAL BANK OF CHICAGO,
                                  London Branch

                        THE FIRST NATIONAL BANK OF CHICAGO,
                                Frankfurt Branch

                          90 Long Acre, Convent Garden

                                 London WC2E 9RB

                                     England

                           Dated as of August 17, 1999

Hurco Europe Limited
Hurco GmbH Werkzeugmaschinen

  CIM-Bausteine Vertrieb und Service
Hurco B.V.
Hurco S.A.R.L.

                                      Re:  Third Amendment to European Facility

Ladies and Gentlemen:

         This letter  amends the letter  agreement  with you dated  September 8,
1997  (as  amended,  the  "European  Facility"),  and is being  entered  into in
conjunction  with the Third Amendment to Amended and Restated  Credit  Agreement
and Amendment to Reimbursement Agreement of even date herewith with your parent,
Hurco Companies, Inc. (the "Amendment").

         (a)      The first paragraph of the European Facility is amended and
restated to read as follows:

         Concurrently  herewith,  Hurco Companies,  Inc., an Indiana corporation
which directly or indirectly owns 100% of you ("Hurco Companies"), and Bank One,
Indiana,  National  Association,  a national banking  association  (successor in
interest  by merger to NBD  Bank,  N.A.)  ("Bank  One,  Indiana")  and Bank One,
Michigan,  a Michigan  banking  corporation  (formerly known as NBD Bank) ("Bank
One,  Michigan"),  have entered into that  certain  Amended and Restated  Credit
Agreement  and  Amendment  to  Reimbursement  Agreement,  dated as of even  date
herewith  (as  amended,  the  "Credit  Agreement").  This  letter sets forth our
agreement with respect to the working  capital  credit  facility which The First
National Bank of Chicago, London Branch, and The First National Bank of Chicago,
Frankfurt Branch (collectively,  "FCNBD"), are willing to establish for you (the
"Facility").   (References  to  "you"  and  "your"  in  this   agreement   mean,
individually and not collectively, Hurco Europe Limited, a corporation organized
and existing  under the laws of England and Wales ("Hurco  Europe"),  Hurco GmbH
Werkzeugmaschinen  CIM - Bausteine  Vertrieb und Service ("Hurco  GmbH"),  Hurco
B.V. ("Hurco BV"), a limited  liability  company organized under the laws of the
Netherlands,  and Hurco S.A.R.L. ("Hurco S.A.R.L."), a limited liability company
organized under the laws of France.
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         (b)      The definition of "Expiration  Date" contained in Section 7 of
the European  Facility is amended and restated to read as follows:

                           "Expiration  Date"  means  the  earlier  to  occur
of (a)  May 1,  2002,  and (b) the  date  on  which  the Authorization shall be
terminated pursuant to Paragraph 12.

         (c)      All references in the European Facility to "NBD" are replaced
with "Bank One, Indiana."

         (d)      All references in the European Facility to "NBD Michigan" are
replaced with "Bank One, Michigan."

         Should  the  foregoing  be  agreeable  to you,  as it is to us,  please
indicate your  agreement and  acceptance by executing and returning the enclosed
copy of this letter,  whereupon the European Facility shall be amended as herein
provided,  and  references  to the  European  Facility  shall be to the European
Facility as so amended.  Except as amended hereby,  the European  Facility shall
remain in full force and effect.

                                                      Very truly yours,

                                                      THE FIRST NATIONAL BANK OF
                                                      CHICAGO, London Branch

                                                    By:_________________________

                                                        Its:  Vice President

                                                      THE FIRST NATIONAL BANK OF
                                                      CHICAGO, Frankfurt Branch

                                                    By:_________________________

                                                         Its:  Vice President

Agreed and accepted:

HURCO EUROPE LIMITED

By:      ________________________
         Roger J. Wolf
         Its:     Director

Dated as of ________, 1999


HURCO GmbH WERKZEUGMASCHINEN

CIM-BAUSTEINE VERTRIEB UND
SERVICE

By:      ________________________

         Its:  General Manager

Dated as of ________, 1999
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HURCO B. V.

By:      ________________________

         Its:  Managing Director

And By:  ______________________

         Its:  Managing Director

Dated as of ________, 1999


HURCO S.A.R.L.

By:      ________________________

         Its:  General Manager

Dated as of ________, 1999




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