EXHIBIT 10.20.21



                      Third Amendment to Credit Agreement
                               dated July 31, 1995
                      between the Registrant and NBD Bank
                     

































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                      THIRD AMENDMENT TO CREDIT AGREEMENT


     THIS THIRD AMENDMENT TO CREDIT  AGREEMENT,  dated as of July 31, 1995 (this
"Third Amendment"),  between HURCO COMPANIES,  INC., an Indiana corporation (the
"Company"), and NBD BANK, a Michigan banking corporation (the "Bank").

                                    RECITALS

     A. The parties hereto have entered into a Credit Agreement and Amendment to
Term Loan  Agreement,  dated as of March  24,  1994,  as  amended  (the  "Credit
Agreement"), which is in full force and effect.

     B. The Company  desires to amend the Credit  Agreement as herein  provided,
and the Bank is  willing  to so amend  the  Credit  Agreement  on the  terms and
conditions set forth herein.

                                   AGREEMENT

     Based upon these recitals, the parties agree as follows:

     1.  AMENDMENT.  Upon the Company  satisfying  the  conditions  set forth in
paragraph 4 (the date that this occurs being called the "effective  date"),  the
Credit Agreement shall be amended as follows:

          (A) The term "Automatic Termination Date" in Section 1.1 of the Credit
          Agreement is amended to read as follows:  "AUTOMATIC TERMINATION DATE"
          means November 1, 1996.

          (B) New Sections 7.1(i) and 7.1(l) are added, to read as follows:

          (I) MOST  FAVORED  LENDER.  In the event that the Company  shall enter
          into any  modification of the PML Note Agreement or any other contract
          or agreement  pursuant to which the Company shall have available to it
          a credit  facility (a "Credit  Agreement"),which  increases  the fees,
          expenses,  interest  rate spreads over prime rate,  LIBOR rate, or any
          other such base rate or any other  charges which are or may be payable
          to a  lender  pursuant  to  a  Credit  Agreement  (but  excluding  (I)
          reimbursements for actual out-of-pocket  expenses of the lender or its
          counsel and excluding reasonable commitment fees to obtain,  increase,
          or extend or renew a credit  facility,  including  lines of credit and
          term loan facilities,  default rate interest,  and reasonable fees and
          expenses or costs  actually  incurred  for  collection  arising out of
          default  under any Credit  Agreement  AND (II) ANY  INCREASES IN FEES,
          EXPENSES, INTEREST RATE SPREADS, BASE RATES OR OTHER CHARGES RESULTING
          SOLELY FROM THE OPERATION OF SECTION 6.14 OF THE PML NOTE AGREEMENT OR
          ANY  COMPARABLE  PROVISION  OF ANY OTHER  CREDIT  AGREEMENT)  over the
          interest rate spreads, fees, charges, and expenses provided for in the
          PML Note  Agreement or such other  Credit  Agreement,  as  applicable,
          then,  effective  as of the date of such  increase,  the amount of the
          increase in the interest rate spread (i.e., the number of basis points
          added to the  interest  rate  spread),  if any,  shall be added to the
          interest rate payable to NBD under the Notes issued in connection with
          this Agreement,  as amended,  and as and when the amount  representing
          the increase of fees,  expenses,  and/or charges,  if any, becomes due
          and payable under the Credit Agreement, the Company shall pay to NBD a
          comparable  amount as a fee.  In no event will the fee  payable to NBD

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          pursuant  to the  foregoing  exceed  the  amount of the  corresponding
          increase in fee, charge,  or expense payable under the modified Credit
          Agreement.  Failure of the Company to make the  payments  which become
          due and  payable  under  this  Section  shall  constitute  an Event of
          Default under Section  8.1(a).  Upon any increase in the interest rate
          to be charged under the Notes  pursuant to this  Section,  the Company
          shall execute such  amendments to the Notes and this  Agreement as NBD
          may  reasonably  request to confirm and  evidence  the increase in the
          interest rate.

          (l) COMMON  COVENANTS.  During the  period  from May 1, 1996,  through
          October 31, 1996, the Company agrees to immediately and  automatically
          grant NBD the same loan covenants,  including financial covenants, and
          terms it grants PML or any  replacement  lender  therefor  during such
          period,  if such  covenants  and terms are  different  in kind or more
          restrictive  (on the Company) than NBD's existing  covenants or terms.
          If the Company  defaults in the  performance  of such new covenants or
          terms, an Event of Default shall arise under Section 8.1(c).

          (C) Section  7.2(c)(iii) is amended by adding the following  after the
          phrase "second fiscal quarter of fiscal year 1996":

                  ,and $1,500,000 in the aggregate during the fiscal year 1996

          (D) Section  7.2(e) is amended by adding the phrase  "through July 30,
          1996"  after the word  "thereafter"  in the  column  entitled  "Fiscal
          Period  Ended",  and adding the following  dates and amounts under the
          headings "Fiscal Period Ended" and "Calculated Amount":

               FISCAL PERIOD ENDED                             CALCULATED AMOUNT

                July 31, 1996                                      $6,500,000

                October 31, 1996                                   $7,000,000

          (E) Section  7.2(e) is further  amended by adding the following to the
          end of the subsection:

                  ,  provided,  however,  that in the event there is any capital
                  contribution  or cash infused by shareholders or third parties
                  to  the  Company  ("Equity  Infusion"),  then  the  Calculated
                  Amounts set forth above for the fiscal period during which the
                  Equity  Infusion  is made and each  fiscal  period  thereafter
                  shall  be  increased  by  85%  of the  amount  of  the  Equity
                  Infusion.

          (F)  Section  7.2(I) is  amended by  deleting  the phrase "at any time
          thereafter." and substituting the following:

                  from November 1, 1994, through July 30, 1996, or to exceed 4.5
                  to 1.0 from July 31, 1996,  through  October 30,  1996,  or to
                  exceed  4.0  to 1.0  on  October  31,  1996,  or at  any  time
                  thereafter,  provided, however, that in the event there is one
                  or more Equity Infusions which aggregate at least  $3,000,000,
                  then the Company shall not permit such ratio to exceed 3.55 to
                  1.0 on July 31, 1996, or at any time thereafter.


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          (G) Section  7.2(m) is amended by adding the  following  at the end of
          that subsection:

                  ,  or  (iv)  if  the  aggregate   purchase   price  and  other
                  acquisition costs of all such Capital Expenditures made by the
                  Company or any of its Subsidiaries during the third and fourth
                  fiscal  quarters of fiscal year 1996,  when  combined with all
                  other Capital Expenditures made during that fiscal year, would
                  exceed $1,750,000

     2.  REFERENCES TO CREDIT  AGREEMENT.  From and after the effective  date of
this Third Amendment, references to the Credit Agreement in the Credit Agreement
and all other  documents  issued under or with  respect  thereto (as each of the
foregoing is amended hereby or pursuant hereto) shall be deemed to be references
to the Credit Agreement as amended hereby.
       
     3.  REPRESENTATIONS AND WARRANTIES.  The Company represents and warrants to
the Bank that:

          (a)  (I)  The  execution,  delivery  and  performance  of  this  Third
          Amendment and all agreements and documents  delivered  pursuant hereto
          by the Company have been duly  authorized by all  necessary  corporate
          action and do not and will not violate any provision of any law, rule,
          regulation, order, judgment,  injunction, or award presently in effect
          applying to it, or of its  articles  of  incorporation  or bylaws,  or
          result  in a breach of or  constitute  a  default  under any  material
          agreement,  lease or  instrument to which the Company is a party or by
          which  it or  its  properties  may  be  bound  or  affected;  (ii)  no
          authorization,  consent,  approval,  license, exemption or filing of a
          registration  with any  court or  governmental  department,  agency or
          instrumentality  is or  will  be  necessary  to the  valid  execution,
          delivery or performance by the Company of this Third Amendment and all
          agreements and documents  delivered  pursuant  hereto;  and (iii) this
          Third  Amendment and all agreements and documents  delivered  pursuant
          hereto by the Company are the legal, valid and binding  obligations of
          the  Company,  enforceable  against  it in  accordance  with the terms
          thereof.

          (b)  After  giving  effect to the  amendments  contained  herein,  the
          representations  and  warranties  contained  in Article VI (other than
          Section 6.5) of the Credit Agreement are true and correct on and as of
          the effective date hereof with the same force and effect as if made on
          and as of such effective date.
                 
          (c) No Event of Default has occurred and is  continuing  or will exist
          under the Credit Agreement as of the effective date hereof.

     4.  CONDITIONS  TO  EFFECTIVENESS.  This Third  Amendment  shall not become
effective until the Bank has received the following  documents and the following
conditions have been satisfied,  each in form and substance  satisfactory to the
Bank:

          (a)  Copies,  certified  as of the  effective  date  hereof,  of  such
          corporate documents of the Company as the Bank may request,  including
          articles of  incorporation,  bylaws (or certifying as to the continued
          accuracy of the  articles  of  incorporation  and  by-laws  previously
          delivered  to  the  Bank),  and  incumbency  certificates,   and  such
          documents  evidencing  necessary  corporate action by the Company with
          respect to this Third
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          Amendment  and all other  agreements or documents  delivered  pursuant
          hereto as the Bank may request;

          (b) A Third  Amendment to Amended and Restated Note  Agreement of even
          date herewith  between the Company and Principal Mutual Life Insurance
          Company ("PML"), in form and substance satisfactory to the Bank;

          (c) A Third Amendment to Intercreditor,  Agency, and Sharing Agreement
          of even date herewith among the Company,  the Bank,  PML, and the Bank
          as Agent for the Bank and PML, in form and substance  satisfactory  to
          the Bank;

          (d) A  Confirmation  of Guaranty of even date  herewith  executed  and
          delivered by the Guarantor in favor of the Bank;

          (e) A Fourth  Amendment  to European  Facility of even date  hereweith
          among  Hurco  Europe,  Hurco  GmbH  and  the  Bank,  together  with  a
          Confirmation of Guaranty of even date herewith executed by the Company
          in favor of the Bank; and

          (f) Such  additional  agreements and documents,  fully executed by the
          Company, as are reasonably requested by the Bank.

     5.  MISCELLANEOUS.  The terms used but not  defined  herein  shall have the
respective  meanings  ascribed  thereto  in  the  Credit  Agreement.  Except  as
expressly  amended hereby,  the Credit  Agreement and all other documents issued
under or with respect  thereto are hereby ratified and confirmed by the Bank and
the Company and shall  remain in full force and effect,  and the Company  hereby
acknowledges  that  it has no  defense,  offset  or  counterclaim  with  respect
thereto.

     6.  COUNTERPARTS.  This Third  Amendment  may be  executed in any number of
counterparts,  all of which taken  together  shall  constitute  one and the same
instrument  and any of the parties  hereto may execute  this Third  Amendment by
signing any such counterpart.

     7.  EXPENSES.  The Company  agrees to pay and save the Bank  harmless  from
liability  for all costs and  expenses  of the Bank  arising  in respect of this
Third  Amendment,  including  the  reasonable  fees and  expenses of  Dickinson,
Wright,  Moon,  Van Dusen & Freeman,  counsel to the Bank,  in  connection  with
preparing and reviewing  this Third  Amendment  and any related  agreements  and
documents.

     8. GOVERNING LAW. This Third Amendment is a contract made under,  and shall
be  governed  by and  construed  in  accordance  with,  the laws of the State of
Michigan  applicable to contracts made and to be performed  entirely within such
state and without giving effect to the choice law principles of such state.










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     IN WITNESS WHEREOF,  the parties hereto have caused this Third Amendment to
be duly executed and delivered as of the date first written above.

HURCO COMPANIES, INC.                             NBD BANK


By: /s/ Roger J. Wolf                             By: /s/ Bruce Thomson
---------------------                             ---------------------
Its: Sr. Vice President & CFO                     Its:  Vice President