Translation of Letter Dated January 19, 1999

From:    Deutsche Bank, Mr. Jakobi
         Blumenstrasse 13, 42849 Remscheid, Germany

To:      International Knife & Saw, Inc., Mr. Thomas Meyer
         C/O IKS Klingelnberg GmbH
         In der Fleute 18, 42897 Remscheid, Germany

Credit Lines

Dear Mr. Meyer:

In reference to our discussions in recent weeks, we hereby confirm to you within
the  framework  of our  General  Conditions  (AGB)  that  we have  committed  to
International Knife & Saw, Inc. a total credit line including  guarantees in the
amount of DEM  74,175,000.00  since November 1998. With regard to the individual
loans and collaterals, we refer to the respective agreements.

We are prepared to commit DEM 52 Million out of the above mentioned total credit
line to the IKS Klingelnberg  GmbH Group, as long as International  Knife & Saw,
Inc. agrees to convert at least DEM 10 million of its inter-company  loan to IKS
Klingelnberg  GmbH into a capital  contribution.  By doing this, the minimum 30%
equity  requirement  agreed upon in October 1996 will continue to be maintained,
along with the other  agreements.  We would provide this credit line without the
guarantee of International Knife & Saw, Inc.

We hope that this meets your needs and look forward to a  continuing  smooth and
trustworthy relationship.