Following is the code: (File1.txt exists !)
Code:

BREAK ON
DEBUG ON

$InputFile = "file1.txt"
$OutputFile = "file2.txt"
$counter = 0

$Handle1 = FreeFileHandle()
$Handle2 = FreeFileHandle()

If Open($Handle2, $OutputFile,5) = 0	
	? "Counter value: " + $counter
Else
	beep
Endif

If Open($Handle1, $InputFile,2) = 0
  $x = ReadLine($Handle1)
  While @ERROR = 0
    $counter = $counter + 1	
    ? "Line read: [" + $x + "]"
    $y = INSTR($x, "1102")
    If ($y!=0)
    	$z = WriteLine($Handle2,$x)
    EndIf
    $x = ReadLine($Handle1)
  Loop
  ? $counter
  ? @SERROR
  $rc=Close ($Handle1)
Else
  ? @SERROR
  Beep
EndIf

$rc=Close($Handle2)