Domestic Credit Facility Amendment

EXHIBIT 10.1

FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 26, 2004 (this " Amendment "), is between HURCO COMPANIES, INC., an Indiana corporation (the " Borrower ") and BANK ONE, NA, a national banking association with its main office in Chicago, Illinois (the " Bank ").

INTRODUCTION
A. The Borrower and the Bank have entered into the Third Amended and Restated Credit Agreement and Amendment to Reimbursement Agreement dated as of December 1, 2003 (the " Credit Agreement ").
B. The Borrower desires to amend the Credit Agreement as herein provided, and the Bank is willing to so amend the Credit Agreement on the terms set forth herein.
NOW, THEREFORE, in consideration of the premises, the parties hereto agree as follows:

ARTICLE 1. AMENDMENTS TO AGREEMENT
1.1 In Section 1.1, a new definition of "Hurco BV" is added and the definitions of "Collateral Documents", "Facility Termination Date", "Hurco GmbH Facility", "Loan Documents", and "Pledge Agreement" are amended to read as follows:
"Collateral Documents" means, collectively, the Pledge Agreement and all other agreements granting a Lien in favor of the Bank securing the Secured Obligations, as any of the foregoing may be amended or modified from time to time, including any and all other security agreements, mortgages and pledge agreements delivered hereafter.
"Facility Termination Date" means January 31, 2008.
"Hurco BV" means Hurco B.V., a limited liability company organized under the laws of the Netherlands, and an indirect wholly-owned subsidiary of the Borrower.
"Hurco GmbH Facility" means a credit facility of Hurco GmbH and Hurco BV in a maximum principal amount of Three Million Euros obtained from Dresdner Bank or any affiliate or successor thereof which may be secured by assets of Hurco GmbH and Hurco BV and an unsecured guaranty of payment of the Borrower.
"Loan Documents" means this Agreement, the Facility LC Applications, any Notes issued pursuant to Section 2.15, the Reimbursement Agreement, the Collateral Documents, the Guaranty, the Hurco Guaranty, and all other agreements and documents executed or delivered in connection with any of the foregoing at any time, as each may be amended or modified from time to time.
"Pledge Agreement" means the Amended and Restated Pledge and Security Agreement dated as of October 26, 2004, executed by the Borrower in favor of the Bank.
1.2 Section 2.1(a) is amended to read as follows:
(a) From and including the Effective Date and prior to the Facility Termination Date, the Bank agrees, on the terms set forth in this Agreement, to (i) make Advances to the Borrower in Agreed Currencies from time to time, and (ii) issue Facility LCs upon the request of the Borrower, in Dollar Amounts not to exceed in aggregate principal amount at any time outstanding, (A) at and during such time as the Total Funded Debt/EBITDA Ratio is less than or equal to 3.0 to 1.0, the amount of the Commitment as of the date any such Advance is made, and (B) at and during such time as the Total Funded Debt/EBITDA Ratio exceeds 3.0 to 1.0, the lesser of (x) the amount of the Borrowing Base as of the close of business on the last day of the month next preceding the date any such Advance is made and (y) the amount of the Commitment as of the date any such Advance is made. In any event, the aggregate principal amount of Facility LCs outstanding at any time shall not exceed the amount of the Commitment in effect at such time, and all Floating Rate Loans shall be made and Facility LCs shall be issued in Dollars. Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow at any time prior to the Facility Termination Date. The Commitment to extend credit hereunder shall expire on the Facility Termination Date. The Bank will issue Facility LCs hereunder on the terms set forth in Section 2.18.
1.3 Section 2.5(d) is amended to read as follows:
(d) Mandatory Prepayments . Notwithstanding anything in this Agreement to the contrary, if at any time the aggregate Dollar Amount of the Outstanding Credit Exposure (calculated, with respect to those Advances denominated in Agreed Currencies other than Dollars, as of the most recent Computation Date with respect to each such Advance) exceeds the Commitment or, at and during such time as the Total Funded Debt/EBITDA Ratio exceeds 3.0 to 1.0, the Borrowing Base, and upon written notice from the Bank of such occurrence, the Borrower shall immediately repay Advances in an aggregate principal amount sufficient to eliminate any such excess, to be applied first to amounts outstanding under the Loan, and then to the Facility LC Collateral Account.
1.4 Section 2.20(a) is amended to read as follows:
(a) Reserved.
1.5 Section 5.20 is amended to read as follows:
5.20 Borrowing Base . At and during such time as the Total Funded Debt/EBITDA Ratio exceeds 3.0 to 1.0, all accounts receivable and inventory of the Borrower represented or reported by the Borrower to be, or are otherwise included in, Eligible Finished Goods Inventory, Eligible Trade Receivables, Eligible Extended Receivables, and Eligible Inventory comply in all respects as of the date reported with the requirements therefor set forth in the definition thereof, and the computation of the Borrowing Base set forth in each Borrowing Base Certificate submitted during such time is true and correct.
1.6 Sections 6.1(ii), (vii) and (viii) are amended to read as follows:
(ii) Within 45 days after the close of each fiscal quarter, for itself and its Subsidiaries, consolidated and consolidating unaudited balance sheets as at the close of each such fiscal quarter and consolidated and consolidating profit and loss and reconciliation of surplus statements and a statement of cash flows for the period from the beginning of such fiscal year to the end of such fiscal quarter (except that consolid ...