Exhibit 10.13




                                            GUARANTY AGREEMENT
                                         dated September 8, 1997
                      Between the Registrant and The First National Bank of
Chicago


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                                              HURCO GUARANTY


         THIS HURCO GUARANTY,  dated as of September __, 1997, executed by HURCO
COMPANIES,  INC.  (the  "Guarantor"),  in favor of THE  FIRST  NATIONAL  BANK OF
CHICAGO, a national banking association ("FNBC").

         WHEREAS, the Company is the indirect parent of Hurco Europe Limited and
Hurco GmbH Werkzeugmaschinen CIM - Bausteine Vertrieb und Service (collectively,
the "European Subsidiaries"); and

         WHEREAS,  the  European  Subsidiaries  are party  with FNBC to a Letter
Agreement as of even date herewith (the "European Facility"),  pursuant to which
FNBC  may  lend  to the  European  Subsidiaries  amounts  not to  exceed  in the
aggregate at any time outstanding the Dollar  Equivalent (as defined therein) of
$5,000,000; and

         WHEREAS,  it is a  condition  to  the  effectiveness  of  the  European
Facility and to other loan  transactions  between the Company and  affiliates of
FNBC that the Company  guarantee  payment and  performance of all obligations of
the  European  Subsidiaries  under  the  European  Facility  (collectively,  the
"Obligations") pursuant to this Guaranty Agreement.

         NOW,  THEREFORE,  for  valuable  consideration,  receipt  of  which  is
acknowledged,   and  as  further   consideration  to  FNBC  to  enter  into  the
transactions  contemplated by the European Facility (together with this Guaranty
and all other documents,  agreements,  instruments and certificates  executed in
connection therewith, the "Operative Documents"), the Guarantor agrees with FNBC
as follows:

         1. Guaranty of  Obligations.  (a) The Guarantor  hereby  absolutely and
unconditionally,  as primary obligor and not merely as surety, (i) guarantees to
FNBC the prompt  payment of the  principal of and any and all accrued and unpaid
interest  on  the  Obligations   when  due,   whether  by  scheduled   maturity,
acceleration or otherwise, all in accordance with the terms of this Guaranty and
the other  Operative  Documents,  including  amounts  due  under any  extensions
thereof or substitutions therefor, and all other amounts which may be payable by
the  Company or the  Guarantor  to FNBC in  connection  with or  pursuant to the
Operative   Documents,    including   without   limitation   default   interest,
indemnification  payments,  and  all  costs  and  expenses  incurred  by FNBC in
connection with enforcing any obligations of the European Subsidiaries or either
of them or the Guarantor  hereunder or thereunder,  including without limitation
the reasonable fees and  disbursements  of counsel for FNBC, and (ii) guarantees
the prompt  performance  and  observance  of each term,  covenant  or  agreement
contained  herein or  therein to be  performed  or  observed  on the part of the
European Subsidiaries or either of them or the Guarantor.

                  (b) If for any reason any duty, agreement or obligation of the
European  Subsidiaries  or either of them shall not be  performed or observed as
provided for in the Operative  Documents,  or if any amount  payable under or in
connection with the Obligations  shall not be paid in full when the same becomes
due and payable,  the  Guarantor  undertakes to perform or cause to be performed
promptly each of such duties,  agreements and  obligations  and to pay forthwith
each such amount to FNBC,  regardless  of any defense or setoff or  counterclaim
which  the  European  Subsidiaries  or either  of them may have or  assert,  and
regardless of any other condition or contingency.

         2. Nature of Guaranty.  This Guaranty is an absolute and  unconditional
and  irrevocable  guaranty of payment and not a guaranty  of  collection  and is
wholly  independent  of and in addition to other rights and remedies of FNBC and
is not contingent upon FNBC pursuing any such rights and remedies,  such pursuit
being  hereby  waived by the  Guarantor.  This  Guaranty  covers all present and
future  Obligations,  whether direct or indirect and absolute or contingent,  of
whatever nature and however arising or evidenced.

         3. Waivers and Other Agreements.  The Guarantor hereby  unconditionally
(a)  waives  any  requirement  that  FNBC,  in the event of any  default  by the
European  Subsidiaries  or either of them,  first make demand  upon,  or seek to
enforce  remedies  against,  the European  Subsidiaries or either of them before
demanding payment under or seeking to enforce this Guaranty,  (b) covenants that
this Guaranty will not be discharged  except by complete payment and performance
of all  Obligations of the European  Subsidiaries or either of them to FNBC, (c)
agrees that this Guaranty  shall remain in full force and effect  without regard
to,  and  shall  not  be  affected  or  impaired  by,  without  limitation,  any
invalidity,  irregularity  or  unenforceability  in  whole  or in  part  of this
Agreement or any other Operative Document, or any limitation on the liability of
the European Subsidiaries or either of them thereunder, or any limitation on the
method or terms of payment  which may now or  hereafter  be caused or imposed in
any manner  whatsoever,  (d) waives  diligence,  presentment  and  protest  with
respect  to, and any notice of default or  dishonor in the payment of any amount
at any time payable by the European  Subsidiaries  or either of them under or in
connection with the Obligations, and further waives any requirement of notice of
acceptance of, or other  formality  relating to, this  Guaranty,  and (e) agrees
that the amounts  guaranteed  hereunder  shall  include any amounts  paid by the
European  Subsidiaries  or either of them or the  Guarantor to FNBC which may be
required to be returned to the payor or to its  representative  or to a trustee,
custodian  or receiver for the  European  Subsidiaries  or either of them or the
Guarantor.

         4. Obligations  Absolute.  The obligations,  covenants,  agreements and
duties of the Guarantor  under this Guaranty shall not be released,  affected or
impaired by any of the following,  whether or not  undertaken  with notice to or
consent of the Guarantor:  (a) any assignment or transfer,  in whole or in part,
of the  Obligations,  or (b) any waiver by FNBC, or by any other person,  of the
performance or observance by the European  Subsidiaries or either of them of any
of the  agreements,  covenants,  terms or conditions  contained in the Operative
Documents,  or (c) any indulgence in or the extension of the time for payment by
the European  Subsidiaries  or either of them of any amounts payable under or in
connection with this Agreement or any other Operative  Document,  or of the time
for  performance  by the  European  Subsidiaries  or either of them of any other
obligations  under or arising  out of the  Operative  Documents  or any  related
document,  or  the  extension  or  renewal  thereof,  or (d)  the  modification,
amendment  or waiver from time to time of this  Guaranty or any other  Operative
Document, any such modification, amendment, or waiver being expressly authorized
without  further notice to or consent of the European  Subsidiaries or either of
them or the Guarantor, or (e) the voluntary or involuntary liquidation, sale, or
other  disposition  of all or  substantially  all of the assets of the  European
Subsidiaries  or either  of them or any  receivership,  insolvency,  bankruptcy,
reorganization, or other similar proceedings affecting the European Subsidiaries
or either of them or any of its assets,  or (f) the release of any  security for
the  Obligations,  or the impairment of or failure to perfect an interest in any
such security,  or (g) the merger or consolidation of the European  Subsidiaries
or either of them or the Guarantor with any other person,  or (h) the release or
discharge of the European  Subsidiaries  or either of them or the Guarantor from
the  performance  or observance of any  agreement,  covenant,  term or condition
contained in the Operative Documents by operation of law, or (j) any other cause
whether  similar or  dissimilar  to the  foregoing  (other than full payment and
performance  of the  Obligations)  which  would  release,  affect or impair  the
obligations,  covenants,  agreements or duties of the European  Subsidiaries  or
either of them or the Guarantor hereunder or thereunder.

         5.  Remedies of FNBC. In the event that any of the  Obligations  is not
promptly  paid by the  European  Subsidiaries  or either of them when it becomes
due, upon demand or otherwise,  the holder  thereof may require the Guarantor to
pay all or any  portion  of the  outstanding  principal  balance  thereof,  with
interest thereon to date of payment, without regard to any security for or other
guaranty of such indebtedness;  provided, however, that nothing herein contained
shall prevent FNBC from instituting legal proceedings with respect to any of the
Obligations  with or without making the European  Subsidiaries or either of them
or the  Guarantor  a party  to the  suit or from  exercising  any  other  rights
available  to it,  and only the net  proceeds  therefrom,  after  deducting  all
charges  and  expenses,  shall  be  applied  to  reduce  the  amount  due on the
Obligations.

         6. Subrogation  Agreement.  If the Guarantor makes a payment in respect
of the  Obligations,  it shall be  subrogated to the rights of the payee against
the European  Subsidiaries  with  respect to such  payment;  provided,  that the
Guarantor  hereby waives its rights to any payment by way of  subrogation  until
all the Obligations shall have been paid or performed in full.

         7. Representations and Warranties.  As of the date hereof and as of the
date of each loan or other advance made by FNBC to the European  Subsidiaries or
either of them, the Guarantor represents and warrants that:

                  (a)  Corporate   Existence  and  Power.  The  Guarantor  is  a
corporation duly organized, validly existing and in good standing under the laws
of State of Indiana and is duly  qualified  to do  business  in each  additional
jurisdiction  where such  qualification  is necessary  under  applicable law and
where failure to be so duly qualified  would have a material,  adverse effect on
the  financial  condition of the  Guarantor.  The  Guarantor  has all  requisite
corporate  power to own its properties and to carry on its business as now being
conducted  and as proposed  to be  conducted,  and to execute  and deliver  this
Guaranty and to engage in the transactions contemplated by this Guaranty.

                  (b)  Corporate   Authority.   The   execution,   delivery  and
performance  by the Guarantor of this Guaranty are within its corporate  powers,
have been duly  authorized  by all  necessary  corporate  action  and are not in
contravention of any law, rule or regulation, or of any judgment,  decree, writ,
injunction,  order or award of any arbitrator,  court or governmental authority,
or of the terms of the  Guarantor's  charter or by-laws,  or of any  contract or
undertaking to which the Guarantor is a party or by which it or its property may
be bound or affected.

                  (c)      Binding Effect.  This Guaranty is the legal, valid 
and binding obligation of
the Guarantor, enforceable against the Guarantor in accordance with its terms.

         8. Covenants.  The Guarantor  agrees that,  until all Obligations  have
been  satisfied,  unless  FNBC  shall  otherwise  consent in  writing,  it shall
preserve and maintain its corporate  existence,  rights,  privileges,  licenses,
franchises  and permits and qualify and remain  qualified as a validly  existing
corporation in good standing in each jurisdiction in which such qualification is
necessary under applicable law and where failure to be so qualified would have a
material adverse effect on the financial condition of the Guarantor.

         9. Remedies.  (a) Upon the occurrence and during the continuance of any
Event of Default (as defined in any of the  Operative  Documents),  FNBC may, in
addition to the remedies provided in the Operative Documents, enforce its rights
either  by  suit  in  equity,  or by  action  at law,  or by  other  appropriate
proceedings,  whether for the specific  performance (to the extent  permitted by
law) of any  covenant or agreement  contained in this  Guaranty or in aid of the
exercise of any power  granted in this  Guaranty and may enforce  payment  under
this Guaranty and any of its other rights available at law or in equity.

                  (b) Upon the  occurrence  and  during the  continuance  of any
Event of Default (as defined in any of the Operative Documents),  FNBC is hereby
authorized  at any time and from time to time,  without  notice to the Guarantor
(any  requirement for such notice being expressly  waived by the Guarantor),  to
set off and apply against any and all of the  obligations  of the Guarantor then
or thereafter  existing  under this  Guaranty all deposits  (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by FNBC to or for the credit or the account of the  Guarantor and
any  property  of  the  Guarantor  from  time  to  time  in  FNBC's  possession,
irrespective  of whether or not FNBC  shall have made any demand  hereunder  and
although such  obligations  may be contingent and unmatured.  The rights of FNBC
under this  paragraph  are in addition to other rights and remedies  (including,
without limitation, other rights of setoff) which FNBC may have.

                  (c) To the extent that it lawfully may, the  Guarantor  agrees
that it will not at any time  insist  upon or plead,  or in any manner  whatever
claim or take any benefit or advantage of any applicable present or future stay,
extension or moratorium  law, which may affect  observance or performance of the
provisions of this Guaranty or any Operative  Document;  nor will it claim, take
or insist upon any benefit or advantage  of any present or future law  providing
for the evaluation or appraisal of any security for its obligations hereunder or
the obligations under the Operative Documents prior to any sale or sales thereof
which may be made under of by virtue of any  instrument  governing the same; nor
will it, after any such sale or sales,  claim or exercise  any right,  under any
applicable law, to redeem any portion of such security so sold.

         10. Severability; Enforceability. If any one or more provisions of this
Guaranty  should be  invalid,  illegal  or  unenforceable  in any  respect,  the
validity,  legality and  enforceability  of the remaining  provisions  contained
herein shall not in any way be affected, impaired, or prejudiced thereby. If any
portion  of the  obligations  of the  Guarantor  under  this  Guaranty  shall be
determined by a court of competent jurisdiction to be invalid,  unenforceable or
avoidable,  the  remaining  portion of the  Guarantor's  obligations  under this
Guaranty shall not in any way be affected,  impaired,  or prejudiced thereby and
shall remain valid and enforceable to the fullest extent permitted by applicable
law. If all or any portion of the  Guarantor's  obligations  under this Guaranty
would  otherwise  be  determined  by a court  of  competent  jurisdiction  to be
invalid,  unenforceable or avoidable under Section 548 of the federal Bankruptcy
Code  or  under  a   similar   applicable   law  of  any   jurisdiction,   then,
notwithstanding  any other  provisions  of the  Guaranty  to the  contrary,  the
Guarantor's  obligation or portion  thereof under this Guaranty shall be limited
to the greatest of (i) the value of any quantifiable  economic benefits accruing
to the  Guarantor as a result of this  Guaranty,  (ii) an amount equal to 95% of
the excess on the date the  relevant  liabilities  were  incurred of the present
fair  saleable  value  of the  Guarantor's  assets  over the  amount  of all the
Guarantor's  liabilities,  contingent or otherwise, and (iii) the maximum amount
for which this Guaranty is determined to be enforceable.

         11. Amendments, Etc. This Guaranty may be amended from time to time and
any provision  hereof may be waived by the parties hereto.  No such amendment or
waiver of any  provision of this  Guaranty  nor consent to any  departure by the
Guarantor  therefrom shall in any event be effective unless the same shall be in
writing and signed by FNBC, and then such amendment,  waiver or consent shall be
effective only in the specific  instance and for the specific  purpose for which
given.

         12. Notices. All notices and other communications hereunder shall be in
writing and shall be delivered or sent to the Guarantor at One  Technology  Way,
Indianapolis,  IN 46268,  ATTN:  Chief  Financial  Officer,  Facsimile No. (317)
328-2811,  and to FNBC at 90 Long Acre, Covent Garden, London WC2E 9RB, ENGLAND,
or to such other address as may be designated by the Guarantor or FNBC by notice
to the other party hereto. All notices and other  communications shall be deemed
to have been given at the time of actual delivery thereof to such address, or if
sent by certified or registered mail, postage prepaid,  to such address,  on the
third day after the date of mailing,  provided,  however,  that  notices to FNBC
shall not be effective until received.

         13.  Conduct No Waiver;  Remedies  Cumulative.  The  obligations of the
Guarantor  under this Guaranty are continuing  obligations  and a fresh cause of
action shall arise in respect of each event of default  hereunder.  No course of
dealing  on the part of FNBC,  nor any delay or  failure  on the part of FNBC in
exercising any right, power or privilege  hereunder shall operate as a waiver of
such right, power or privilege or otherwise prejudice FNBC's rights and remedies
hereunder; nor shall any single or partial exercise thereof preclude any further
exercise  thereof or the exercise of any other  right,  power or  privilege.  No
right or remedy  conferred  upon or  reserved  to FNBC  under this  Guaranty  is
intended  to be  exclusive  of any other  right or remedy,  and every  right and
remedy shall be cumulative  and in addition to every other right or remedy given
hereunder or now or hereafter existing under any applicable law. Every right and
remedy given by this Guaranty or by applicable law to FNBC may be exercised from
time to time and as often as may be deemed expedient by FNBC.

         14.  Reliance  on  and  Survival  of  Various  Provisions.  All  terms,
covenants,  agreements,  representations  and  warranties of the Guarantor  made
herein or in any certificate or other document  delivered  pursuant hereto shall
be deemed to be material  and to have been relied upon by FNBC,  notwithstanding
any investigation heretofore or hereafter made by FNBC or on FNBC's behalf.

         15.  Successors and Assigns.  The rights and remedies of FNBC hereunder
shall inure to the benefit of, and the duties and  obligations  of the Guarantor
hereunder  shall be  binding  upon  their  respective  successors  and  assigns,
provided that the Guarantor may not assign its duties and obligations  hereunder
without FNBC's consent.

         16.  Governing  Law. This  Guaranty is a contract  made under,  and the
rights and  obligations  of the  parties  hereunder,  shall be  governed  by and
construed in  accordance  with,  the laws of the State of Indiana  applicable to
contracts to be made and to be performed entirely with such State.

         17. Definitions;  Headings. Terms used but not defined herein and which
are  defined  in the  Operative  Documents  shall have the  respective  meanings
ascribed  thereto  in the  Operative  Documents.  The  headings  of the  various
subdivisions  hereof are for  convenience  of reference only and shall in no way
modify any of its terms or provisions hereof.

         18.  Construction  of Certain  Provisions.  All  computations  required
hereunder  and all  financial  terms used herein  shall be made or  construed in
accordance with generally accepted accounting  principles unless such principles
are  inconsistent  with  the  express  requirements  of  this  Guaranty.  If any
provision of this  Guaranty  refers to any action to be taken by any person,  or
which such person is prohibited from taking,  such provision shall be applicable
whether such action is taken  directly or indirectly by such person,  whether or
not expressly specified in such provision.

         19. Waiver of Jury Trial.  FNBC and the Guarantor,  after consulting or
having had the opportunity to consult with counsel,  knowingly,  voluntarily and
intentionally  waive any right either of them may have to a trial by jury in any
litigation based upon or arising out of this Guaranty or any related  instrument
or agreement or any of the  transactions  contemplated  by this  Guaranty or any
course of conduct,  dealing,  statements (whether oral or written) or actions of
either of them.  Neither FNBC nor the Guarantor  shall seek to  consolidate,  by
counterclaim or otherwise, any such action in which a jury trial has been waived
with any other  action in which a jury trial  cannot be or has not been  waived.
These  provisions  shall not be deemed to have been  modified  in any respect or
relinquished  by either  FNBC or the  Guarantor  except by a written  instrument
executed by both of them.



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         IN WITNESS  WHEREOF,  the Guarantor has caused this Guaranty to be duly
executed and delivered as of the day and year first above written.


                                                     HURCO COMPANIES, INC.


                                                     By:      /s/ Roger J. Wolf
                               Its:_______________