Translation of Letter Dated May 12, 1999

From:    Deutsche Bank, Mr. Bauermann and 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

Confirmation of Current Lines of Credit

Dear Mr. Meyer:

We refer to our credit  commitment of October 8, 1996; our letter of January 19,
1999; and the discussions we have had with you in recent weeks.

We are pleased to confirm  that,  within the  framework of our general  business
conditions  (AGB), we are making available to you a short-term line of credit in
the amount of US $13,000,000 for operating needs.  Drawdowns on the line will be
handled via  Euro-Credits  in minimum amounts of $1 million at LIBOR + 1.25% per
annum.  If at least 50% of the credit line has not been drawn down, then we will
charge a commitment fee of 0.25%.

You commit to us that no third  parties have any rights to your  receivables  or
inventories. Upon our demand for such, you agree to grant us these rights.

In addition, the following covenants are a condition of our credit commitment:

o    You will pledge fixed assets as  additional  collateral,  in the event that
     the result in the  consolidated  financial  statements  before interest and
     taxes (EBIT) is more than 30% under the original  plan (1998:  $22,041,000;
     1999 $25,098,000).

o    You must  provide  quarterly  financial  information  and annual  financial
     statements to us. The year end financial statements must be presented to us
     no later than 4 months after year end.

o    German law and German courts govern this agreement.

This credit  commitment is valid until further  notice,  assuming  constant good
financial conditions.

Please sign the enclosed copy of this letter to indicate your agreement and send
it back to us.

We thank  you for  your  trust  in us and  hope  for a  smooth  and  trustworthy
relationship.