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                                                                    Exhibit 10.2



October 8, 1996

To International Knife & Saw, Inc.

In reference to our conversation of September 15, 1996 at our offices in
Wuppertal, for which we would again like to thank you, we are pleased to be able
to commit to you, within the framework of our General Conditions (AGB - English
language version enclosed), a working capital line of credit in the amount of
US$ 20,000,000.

Duration:  Initially until December 31, 2000. We will discuss an extension at 
           the appropriate time.

The draw downs must be made via Euro-Credits in amounts of US $1 million or
multiples thereof at a rate of LIBOR + 1.25%. We also charge a commitment fee of
0.25% to be calculated at each quarter end.

As collateral for this line of credit, you must pledge to us your receivables
and inventories. We will provide more specific details about this at a later
date.

As part of our commitment we are assuming that your company will be debt free in
accordance with the proposed restructuring, with the exception of the
$85,000,000 in Senior Subordinated Notes as detailed in the Recapitalization
Agreement.

The following covenants are the condition for the line of credit:

It is agreed, that 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 budget (1996: $14,012,000 ; 1997:
$17,796,000; 1998: $22,041,000; 1999: $25,098,000).

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.

German law governs this agreement: the court of Remscheid

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.