ALLIANCE AGREEMENT



     This Alliance Agreement ("AGREEMENT") is entered into as of the 29th day of

October, 2002, by and among Hardinge Inc., a New York corporation ("HARDINGE"),

BPT IP, LLC, a Delaware limited liability company ("BPT"), and Bridgeport

Machines Limited, a limited liability company incorporated in England and Wales

("BML").



                              PRELIMINARY STATEMENT



     Hardinge, BML and BPT Holdings, Inc., the parent corporation of BPT,

previously entered into that certain Letter of Intent dated as September 16,

2002 (the "LOI"), pursuant to which the parties agreed to pursue negotiations

towards a definitive agreement based on a Memorandum of Understanding attached

to the LOI (the "MOU"). The parties now desire to enter into this Agreement in

furtherance of their business relationships. Therefore, intending to be legally

bound by this Agreement, and in consideration of the mutual promises set forth

below, and other good and valuable consideration, the receipt and sufficiency of

which is acknowledged by the parties, Hardinge, BPT and BML agree as follows:



                                    AGREEMENT



     Section 1.  DEFINITIONS. As used in this Agreement, each of the defined

terms set forth below has the following meaning:



     ACCESSORY means an accessory product, the purpose of which is to augment

the function of a Product, and does not include a Spare.



     AFFILIATE means, with respect to a particular entity, any other entity

directly or indirectly controlling, controlled by or under common control with,

such entity. For purposes of this definition, "control" means the ownership or

control, by contract or otherwise, of more than 50% of the voting securities of

an entity, or the right to appoint or elect a majority of the Board of Directors

of an entity.



     BMI means Bridgeport Machines, Inc., a debtor in possession.



     BMI PRODUCT SERVICES means service engineering and technical support

services ***********************************************************************

**** for products produced prior to the date of this Agreement by the

Connecticut facility of BMI, such products including but not being limited to

knee mills and the XV range of Vertical Machine Centers.



     BML PROGRAM MANAGER means the person designated from time to time by BML to

perform certain obligations on behalf of BML as contemplated in Section 2 below.



     CHANGE OF CONTROL TRANSACTION is defined in Section 10.3.



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{****} Confidential treatment requested and the redacted material has been

       separately filed with the Commission.



                                       -1-

{Page}



     CONTROL is defined in Section 10.3.



     COPYRIGHTS means the United States copyrights listed on SCHEDULE A to this

Agreement, as that Schedule may be amended from time to time by the parties.



     ELMIRA FACILITY means the office, manufacturing, warehousing and

distribution facility owned by Hardinge located at One Hardinge Drive, Elmira,

New York.



     FORCE MAJEURE EVENT is defined in Section 6.4.



     GOVERNING DOCUMENTS means with respect to any entity, (a) the articles or

certificate of incorporation, formation or association, and bylaws of a

corporation; (b) all shareholders' agreements, voting agreements, joint venture

agreements, registration rights agreements or other agreements or documents

relating to the organization, management or operation of such corporation or

relating to the rights, duties and obligations of the shareholders of such

corporation, or any operating agreement incorporating any or all of the

foregoing elements; and (c) any amendment or supplement to any of the foregoing.



     HARDINGE PROGRAM MANAGER means the person designated from time to time by

Hardinge to perform certain obligations on behalf of Hardinge as contemplated in

Section 2 below.



     INTELLECTUAL PROPERTY RIGHTS means the Patent Rights, Marks and Copyrights,

collectively.



     KNEE MILL PRODUCTS means products falling under the description "Milling

machines, knee-type, UK customs tariff codes 845951 00 (numerically controlled)

and 845959 00 (other) as defined in section XVI of the UK Customs Tariff volume

2, section VI.



     MARKS means the United States and Canadian trademarks and trade names

listed on SCHEDULE A to this Agreement, as that Schedule may be amended from

time to time.



     NET SALES means the gross sales price actually charged in the sale of a (i)

Product, (ii) a Spare, (iii) an Accessory or (iii) any other item bearing any

Mark, less:



     (i)     customary trade, quantity or ************** (other than in respect

of sales to BML, BPT or their Affiliates), rebates, and non-affiliated brokers'

or agents' commissions actually allowed and taken;



     (ii)    freight and other transportation costs, including insurance

charges, and duties, tariffs, sales and excise taxes and other governmental

charges based directly on sales, turnover or delivery of the specified Products

and actually paid or allowed; and



     (iii)   in the case of Products, Accessories and Spares only, amounts

charged for Product Services sold at the same time as the specified Products,

Accessories or Spares, PROVIDED that any such Product Services are separately

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